{"id": "1128835", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.6580 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 15449 OF 2004 ESSCO FABS PVT. LTD. & ANR. ... APPELLANTS VERSUS STATE OF HARYANA & ANR. ... RESPONDENTS WITH CIVIL APPEAL NO.6581 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 15544 OF 2004 THE PANIPAT TEACHERS (RECOGNISED SCHOOLS)HOUSING CO-OPEATIVE SOCIETY LTD. & ANR. ... APPELLANTS VERSUS STATE OF HARYANA & ORS. ... RESPONDENTS WITH CONTEMPT PETITION NO. 30 OF 2007 IN CIVIL APPEAL NO.6580 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 15449 OF 2004 ESSCO FABS PVT. LTD. & ANR. ... PETITIONERS VERSUS STATE OF HARYANA & ANR. ... RESPONDENTS J U D G M E N T C.K. THAKKER, J. 1. Leave granted. 2. Both these appeals are filed by the appellants being aggrieved and dissatisfied with the judgment and order dated April 02, 2004, passed by the High Court of Punjab & Haryana in Civil Writ Petition Nos. 1853 of 2003 and 2077 of 2002. 3. To appreciate the controversy raised in the present appeals, relevant facts in nutshell may be noted. 4. According to the appellant Essco Fabs Pvt. Ltd. (`Essco' for short), the Government of Haryana intended to acquire land for public purpose, viz., for utilization of land as residential, commercial and industrial area in Sector Nos. 11, 12 and 25 Part-II by Haryana Urban Development Authority (`HUDA' for short). For the said purpose, the Government issued a notification under sub-section (1) of Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as `the Act') on December 15, 1982. The land mentioned in the said notification situated in village Kheri Nangal was sought to be acquired. A final notification under Section 6 of the Act was issued on June 20, 1984. However, the land acquisition proceedings could not be completed within the stipulated period and the notifications lapsed and the land stood released. 5. It was the case of Essco that it bought the land which was sought to be acquired earlier for expansion of its Export Unit. According the appellant, it is engaged in manufacturing and exporting rugs, cushions, bed-spreads, bath mats, fabrics, kitchen towel, aprons, pot holders, gloves, mitten, curtains, napkins, carpets, etc. It is Export Oriented Unit and earns foreign exchange by export of goods manufactured in its unit. In the year 1992, it exported materials over Rs.2 crores. The appellant has stated that on June 6, 1991, it made an application to the Director, Town & Country Planning, Haryana for permission for change of user of land. All necessary documents were appended to the application. The Director, however, vide an order dated September 5, 1991, rejected the permission on several grounds. One of the grounds weighed with the Director for refusing the permission was that the land in question was proposed to be acquired. The appellant has produced a copy of the application as also an order of rejection thereof in the present proceedings. But even thereafter no proceedings for acquisition of land were initiated for many years. 6. On August 1, 2001 i.e. after about twenty years of the first notification of 1982 and nine years after rejection of prayer of the appellant for change of user, the Government of Haryana again issued notification under sub- section (1) of Section 4 of the Act for acquisition of land for the development and utilization for construction of road connecting Sanauli Road with G.T. Road for Sector 25 Part- II B, Urban Estate Panipat by HUDA. The land of the appellant situated in village Kheri Nangal was sought to be included in the notification. Moreover, `urgency clause' under Section 17 of the Act was applied and a valuable right of raising objections under Section 5-A of the Act was taken away in an arbitrary manner. On the very next day i.e. on August 2, 2001, final notification under Section 6 of the Act was issued by the Government. 7. It is the case of the appellant that the preliminary notification under sub-section (1) of Section 4 of the Act was required to be published in the manner laid down in the Act. But it had not been published before issuance of final notification under Section 6 of the Act. The final notification was, therefore, illegal and the appellant could not be deprived of his property in a manner not known to law. The right of the appellant to own, possess and enjoy the property is not merely a Common Law right but also constitutional right under Article 300A of the Constitution which has a `flavour of fundamental right'. The acquisition proceedings, being not in consonance with law were vitiated and liable to be quashed. 8. The appellant, hence, filed Civil Writ Petition No. 1853 of 2003 in the High Court of Punjab & Haryana by invoking Article 226 of the Constitution praying therein for quashing and setting aside acquisition proceedings. The High Court entertained the petition and granted status quo with regard to possession of the land in question. Finally, however, by the impugned judgment it dismissed the petition. The said order is challenged by the appellant in this Court. 9. The other appeal is filed by the Panipat Teachers (Recognized Schools) Housing Co-operative Society Ltd. (`society' for short) challenging the acquisition proceedings. It was the case of the society that pursuant to the representation made by the society, the State Government released 53 kanals and 8 marlas of land by executing an agreement dated October 19, 1985 and by granting land in favour of the society on conditions mentioned in the agreement. Possession of land was handed over to the society. The land was demarcated and was carved out into plots reserving requisite space for school, parks, temple, overhead water tank, roads, green belt etc. The society got the site plan designed strictly in accordance with HUDA Rules. The society invested huge amount, approximately Rs.26 lakhs, for developing the land laying down sewer pipe lines, RCC Water pipe lines, construction of roads and boundary walls etc. The site plan, however, has not been cleared by the office of the Director, Town & Country Planning, Haryana despite numerous attempts by the appellant-society. It is alleged by the society that the matter was kept pending for oblique and ulterior purposes on lame and untenable excuses. It is also stated by the society that HUDA published public notice in `Daily Bhaskar' dated November 10, 2000 demanding development charges thereby acknowledging that the society's land has been rightly developed for teachers' colony. The public notice informed and instructed those land/plot owners who were in arrears to pay all the balance development charges and outstanding dues. No dues were shown as against the appellant-society. Thus, there is nothing due and payable to HUDA by the appellant. 10. Ignoring all these material facts and with a view to cause serious prejudice to the appellant-society, a notification under sub- section (1) of Section 4 of the Act had been issued by the State for acquisition of land. 11. We have already stated facts relating to the issuance of preliminary notification, application of urgency clause under Section 17 and issuance of final notification under Section 6 of the Act while narrating the facts in the first case of Essco. It is, therefore, not necessary to repeat all those facts in the second matter. 12. The appellant-society, in the circumstances, approached the High Court by filing Civil Writ Petition No. 2077 of 2002 which was also decided along with the petition of Essco and the petition of the appellant- society also came to be dismissed. 13. Third writ petition (Civil Writ Petitin No. 3324 of 2003) was filed by M/s Lord Shiva Exports, Panipat which also met with the same fate. Lord Shiv Exports, however, has not approached this Court. 14. Notices were issued by this Court and interim relief was granted. Respondents thereafter appeared, affidavits and further affidavits were filed and the matters were ordered to be posted for final hearing. That is how the matters are before us. 15. We have heard learned counsel for the parties. 16. The learned counsel for the appellants Essco and Teachers' society have challenged the acquisition on several grounds. It was contended that the land was not needed for public purpose as set out in the notification of 2001 and, hence, the acquisition is not legal or lawful. Moreover, initially an action was taken for acquisition of land before more than a quarter century in the year 1982. Final notification was also issued after more than one and half year of preliminary notification, but even thereafter, nothing was done by the State and the proceedings lapsed. Again, in 1991, when Essco applied for change of user of land, the prayer was turned down, inter alia, on the ground that the land in question was proposed to be acquired for public purpose. Nothing was done by the State for about a decade. Only in August, 2001, notification under Section 4 was issued. It was strongly urged by the learned counsel for the appellants that preliminary notification was issued on August 1, 2001 and urgency clause was applied though there was no urgency at all. The notification was published in the official gazette thereafter and in two daily newspapers on August 10 and 12, 2001. Final notification under Section 6, however, was issued immediately on the next day i.e. on August 2, 2001, of the issuance of preliminary notification under sub-section (1) of Section 4. It was contended that on the facts of the case, no urgency clause could have been invoked. Even otherwise, the action was bad and de hors the Act since the conditions laid down in sub-section (4) of Section 17 of the Act have not been complied with inasmuch as there was neither grave urgency nor unforeseen emergency. It was submitted that there was lethargy on the part of officers of the Government in not taking steps for more than twenty years. The State cannot take undue advantage of its negligence or inaction and deprive the owners of their right to property in purported exercise of power of eminent domain. The Act is an expropriatory legislation which deprives a person of his property without his consent. The provisions of the Act, hence, have to be construed strictly. It was submitted that Section 5A confers a valuable right on the owners of land of submitting objections against proposed acquisition and such right cannot be taken away or curtailed by the State. On the facts of the case, invocation of urgency clause was not only uncalled for being contrary to law but otherwise arbitrary and unreasonable and on that ground also, the proceedings are liable to be quashed. It was urged that the expression `the date of publication' has been defined in sub-section (1) of Section 4 of the Act. While construing the said connotation under Section 17, same meaning as contemplated under Section 4(1) has to be given. Since the final notification under Section 6 had not been published as required by the Act after `the last date of publication' of notification under Section 4(1), the action is unlawful and is liable to be set aside. It was asserted that no notice as required by Section 9 of the Act had been issued nor payment of 80 percent of the compensation as required by sub-section (3A) of Section 17 had been paid. There was also total non-application of mind on the part of the State Government in not considering the Government policy of granting exemption to functional units dealing with handloom and other industries. On that count also, the proceedings are liable to be dropped. 17. On behalf of Teachers' Society, the learned counsel adopted all the contentions raised on behalf of Essco. The learned counsel, however, further submitted that the society prayed for allotment of land and the prayer was granted. An agreement was entered into between the Authority and the society, possession of land was handed over to the society, which has spent substantial amount of several lakhs for development. Necessary permission was sought so that construction can be made which was also granted by the Authorities, requisite charges which were to be paid had already been paid and no dues had been shown so far as the appellant- society is concerned and yet the impugned action has been taken mala fide and with ulterior motive though the land is not required for public purpose. It was also submitted that even according to the authorities, the land of the appellant-society does not come in `road line'. It is situate at about 24 meters away (23.94 meters) from road line. It was, therefore, submitted that the proceedings should be declared against the provisions of law and may be quashed. 18. Learned counsel for the respondents, on the other hand, submitted that the action of the authorities is legal, lawful and in consonance with law. It was urged that the land was required for public purpose, viz., for construction of road. For acquisition of land, therefore, a notification was issued. It was submitted that there is no element of mala fide or colourable exercise of power which is clear form the fact that even in early eighties, the land was sought to be acquired. Since the proceedings could not be completed within the stipulated period, they lapsed. That, however, does not mean that the land was not needed for public purpose or that the public purpose disappeared or vanished. The counsel submitted that it was further clear when the prayer of Essco for change of user of land in 1991 was rejected. The applicant was told at that time also that the land was required for public purpose. According to the counsel, Government machinery took some time but it cannot be concluded that the land was not required by the State and only with a view to deprive the appellants of their ownership rights acquisition proceedings had been initiated. 19. Regarding notification of August 1, 2001 and August 2, 2001 under Sections 4 and 6 of the Act respectively, it was submitted that both the notifications were in consonance with law. A preliminary notification under sub- section (1) of Section 4 of the Act was issued showing the intention of the State for acquisition of land for public purpose. Since the acquisition was for construction of road, it was covered by Section 17 of the Act and urgency clause was rightly invoked and in exercise of power under sub-section (4) of Section 17, inquiry contemplated by Section 5A of the Act had been dispensed with. The action was in consonance with law and no grievance can be made contending that the inquiry as contemplated by Section 5A and hearing of objections were illegally dispensed with by the authorities. All actions were consistent with the provisions of the Act and the appellants have no right to make complaint against those actions. It was, therefore, submitted that the High Court was wholly right in dismissing the writ petitions and the appeals have no substance. 20. Before we deal with the matter on merits, it would be appropriate if we notice the relevant provisions of the Act. As the Preamble shows, the Act has been enacted with a view \"to amend the law for the acquisition of land for public purposes (and for Companies)\". Section 3 is a `definition clause' of various expressions used in the Act. Clause (f) defines `public purpose' and the definition is `inclusive' in nature. Purposes mentioned in Clauses (i) to (viii) are in the nature of `public purpose' and the land can be acquired for any such purpose. Part II (Sections 4 to 17) deals with `Acquisition'. Section 4 enables the appropriate Government to issue preliminary notification for acquisition of land needed or likely to be needed for public purposes. The said section is relevant and reads thus; Section 4 - Publication of preliminary notification and powers of officers thereupon-- (1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose or for a company a notification to that effect shall be published in the Official Gazette 1[and in two daily newspapers circulating in that locality of which at least one shall be in the regional language and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality 1[the last of the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of publication of the notification. (2) Thereupon it shall be lawful for any officer, either, generally or specially authorised by such Government in this behalf, and for his servants and workmen,-- to enter upon and survey and take levels of any land in such locality; to dig or bore in the sub-soil; to do all other acts necessary to ascertain whether the land is adapted for such purpose; to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon; to mark such levels, boundaries and line by placing marks and cutting trenches, and, where otherwise the survey cannot be completed and the levels taken and the boundaries and line marked, to cut down and clear away any part of any standing crop, fence or jungle: Provided that no person shall enter into any building or upon any enclosed court or garden attached to a dwelling-house (unless with the consent of the occupier thereof) without previously giving such occupier at least seven days' notice in writing of his intention to do so. 21. Section 5A is a salutary provision and enables any person interested in the land which is notified under sub-section (1) of Section 4 as being needed or likely to be needed for a public purpose to lodge objections against the proposed acquisition. It is equally important provision and may be reproduced' Section 5A - Objections : Hearing of objections--(1) Any person interested in any land which has been notified under section 4, Sub-section (1), as being needed or likely to be needed for a public purpose or for a company may, within thirty days from the date of the publication of the notification, object to the acquisition of the land or of any land in the locality, as the case may be. (2) Every objection under sub-section (1) shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard in person or by any person authorised by him in this behalf or by pleader and shall, after hearing all such objections and after making such further inquiry, if any, as he thinks necessary, either make a report in respect of the land which has been notified under section 4, sub-section (1), or make different reports in respect of different parcels of such land, to the appropriate Government, containing his recommendations on the objections, together with the record of the proceedings held by him, for the decision of that Government. The decision of the Appropriate Government on the objections shall be final. (3) For the purposes of this section, a person shall be deemed to be interested in land who would be entitled to claim an interest in compensation if the land were acquired under this Act. 22. Then comes Section 6 which authorizes the appropriate Government to issue final notification as to declaration that the land is required for public purpose. The said section is also material and reads as under; 6. Declaration that land is required for a public purpose.-(1) Subject to the provisions of Part VII of this Act, when the Appropriate Government is satisfied after considering the report, if any, made under section 5A, sub-section (2), that any particular land is needed for a public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders an different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4, sub-section (!), irrespective of whether one report or different reports has or have been made (wherever required) under section 5-A, sub-section (2): Provided that no declaration in respect of any particular land covered by a notification under section 4, sub-section (1),-- (i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 but before the commencement of the Land Acquisition (Amendment) Act, 1984 shall be made after the expiry of three years from the date of the publication of the notification; or (ii) published after the commencement of the Land Acquisition (Amendment) Act, 1984, shall be made after the expiry of one year from the date of the publication of the notification: Provided further that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by a company, or wholly or partly out of public revenues or some fund controlled or managed by a local authority. Explanation 1.-In computing any of the periods referred to in the first proviso, the period during which any action or proceeding to be taken in pursuance of the notification issued under Section 4, sub-section (1), is stayed by an order of a Court shall be excluded. Explanation 2.-Where the compensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by the State, such compensation shall be deemed to be compensation paid out of public revenues. (2) Every declaration shall be published in the Official Gazette, and in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last of the date of such publication and the giving of such public notice, being hereinafter referred to as the date of publication of the declaration), and such declaration shall state] the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and where a plan shall have been made of the land, the place where such plan may be inspected. (3) The said declaration shall be conclusive evidence that the land is needed for a public purpose or for a Company, as the case may be; and, after making such declaration the Appropriate Government may acquire the land in manner hereinafter appearing. 23. Section 9 requires issuance of notice to persons interested. Section 11 requires enquiry to be made and award to be passed by Collector. Section 16 authorises the Collector to take possession of the land acquired under the Act. Thereupon, the land vests absolutely in the Government free from all encumbrances. 24. Section 17 is an exception to the normal rule of acquisition of land and deals with cases of urgency and emergency. The provision is of extreme importance and may be quoted in extenso. 17. Special powers in cases of urgency.-(1) In cases of urgency, whenever the Appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9, sub-section (1), take possession of any waste or arable land needed for a public purpose]. Such land shall thereupon vest absolutely in the Government, free from all encumbrances. (2) Whenever, owing to any sudden change in the channel of any navigable river or other unforeseen emergency, it becomes necessary for any Railway administration to acquire the immediate possession of any land for the maintenance of their traffic or for the purpose of making thereon a river-side or ghat station, or of providing convenient connection with or access to any such station, or the appropriate Government considers it necessary to acquire the immediate possession of any land for the purpose of maintaining any structure or system pertaining to irrigation, water supply, drainage, road communication or electricity,] the Collector may, immediately after the publication of the notice mentioned in sub-section (1) and with the previous sanction of the appropriate Government, enter upon and take possession of such land, which shall thereupon vest absolutely in the Government free from all encumbrances. Provided that the Collector shall not take possession of any building or part of a building under this sub- section without giving to the occupier thereof at least forty-eight hours' notice of his intention so to do, or such longer notice as may be reasonably sufficient to enable such occupier to remove his movable property from such building without unnecessary inconvenience. (3) In every case under either of the preceding sub-sections the Collector shall at the time of taking possession offer to the persons interested, compensation for the standing crops and trees (if any) on such land and for any other damage sustained by them caused by such sudden dispossession and not excepted in section 24; and, in case such offer is not accepted, the value of such crops and trees and the amount of such other damage shall be allowed for in awarding compensation for the land under the provisions herein contained. (3A) Before taking possession of any land under sub-section (1) or sub- section (2), the Collector shall, without prejudice to the provisions of sub-section (3),- (a) tender payment of eighty per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and (b) pay it to them, unless prevented by some one or more of the contingencies mentioned in section 31, sub-section (2), and where the Collector is so prevented, the provisions of section 31, sub-section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section. (3-B) The amount paid or deposited under sub-section (3A), shall be taken into account for determining the amount of compensation required to be tendered under section 31, and where the amount so paid or deposited exceeds the compensation awarded by the Collector under section 11, the excess may, unless refunded within three months from the date of the Collector's award, be recovered as an arrear of land revenue. (4) In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub- section (1) or sub-section (2) are applicable, the appropriate Government may direct that the provisions of section 5A shall not apply, and, if it does not so direct, a declaration may be made under section 6 in respect of the land at any time after the date of the publication of the notification under section 4, sub-section (1). 25. Whereas Part III relates to `Reference to Court and procedure thereon', Parts IV and V deal with `Apportionment of compensation' and `Payment', respectively. 26. It is vehemently contended on behalf of the appellants that on the facts and in the circumstances of the case, the respondents could not have invoked `urgency clause' by scuttling enquiry and dispensing with hearing of objections under Section 5A of the Act. It was submitted that no action could have been taken in view of the circumstances mentioned earlier. As early as in 1982 proceedings were initiated for acquisition of land but they were allowed to be lapsed in spite of final notification under Section 6 of the Act by not taking appropriate actions in time. Again, in 1991, when Essco Fabs applied for change of user of land, request was turned down on the ground that the land was likely to be needed for public purpose. It was, therefore, submitted that when preliminary notification under Section 4 was issued in 2001, there was no urgent need or compelling necessity nor it was a matter of urgency or emergency under Section 17 of the Act which could justify the action and the proceedings are liable to be quashed. 27. We find considerable force in the above argument of the learned counsel for the appellants. The scheme of the Act is clear which provides for issuance of preliminary notification under sub-section (1) of Section 4 of the Act empowering the appropriate Government to issue such notification for acquisition of land needed or likely to be needed for any public purpose. Since the property belongs to a private individual, unless there is a `public purpose' as defined in clause (f) of Section 3 of the Act, no acquisition of land can be made. It is in exercise of power of eminent domain that a sovereign may acquire property which does not belong to him. In the circumstances, as a general rule, before exercise of power of eminent domain, law must provide an opportunity of hearing against the proposed acquisition. Even without a specific provision to that effect, general law requires raising of objections by and affording opportunity of hearing to the owner of the property. The Land Acquisition (Amendment) Act, 1923 (Act 38 of 1923), however, expressly made such provision by inserting Section 5A in the Act. It is, therefore, clear that after issuance of preliminary notification under Section 4 before and final notification under Section 6 of the Act, the appropriate Government is enjoined to hear persons interested in the property before he is deprived of his ownership rights. But then there may be cases of `urgency' or `unforeseen emergency' which may brooke no delay for acquisition of such property in larger public interest. The Legislature, therefore, thought it appropriate to deal with such cases of exceptional nature and in its wisdom enacted Section 17. 28. Whereas sub-section (1) of Section 17 deals with cases of `urgency', sub-section (2) of the said section covers cases of `sudden change in the channel of any navigable river or other unforeseen emergency'. But even in such cases i.e. cases of `urgency' or `unforeseen emergency', enquiry contemplated by Section 5A cannot ipso facto be dispensed with which is clear from sub-section (4) of Section 17 of the Act. 29. Sub-section (4) of Section 17 is an enabling provision and it declares that if in the opinion of the appropriate Government, the provisions of sub-section (1) or (2) are applicable, it may direct that the provisions of Section 5A would not apply. It is, therefore, clear that the Legislature has contemplated that there may be `urgencies' or `unforeseen emergencies' and in such cases, private properties may be acquired. But, it was also of the view that normally even in such cases, i.e. cases of urgencies or unforeseen emergencies, the owner of property should not be deprived of his right to property and possession thereof without following proper procedure of law as contemplated by Section 5A of the Act unless the urgency or emergency is of such a nature that the Government is convinced that holding of enquiry or hearing of objections may be detrimental to public interest. 30. In this connection, both the parties invited our attention to several decisions. We will deal with some of the important decisions. 31. In Nandeshwar Prasad & Anr. V. State of Uttar Pradesh & Ors, (1964) 3 SCR 425, the land was acquired by the Government for public purpose, viz. the Kanupur Development Board under the Kanpur Urban Area Development Act, 1945. The Court considered the scheme of the Act that after issuance of preliminary notification under Section 4 of the Act, objections are to be heard under Section 5A of the persons interested in the property and thereafter final notification under Section 6 can be issued. The Court, however, noted that to that procedure, there is an exception under Section 17 which enables the Government to apply urgency clause. Where an action is taken under sub-section (4) of Section 17 of the Act, it is not necessary to follow procedure laid down in Section 5A and notification under Section 6 can be issued without report from the Collector as envisaged by Section 5A. 32. The Court stated; \"It will be seen that s. 17(1) gives power to the Government to direct the Collector, though no award has been made under s. 11, to take possession of any waste or arable land needed for public purpose and such land thereupon vests absolutely in the Government free from all encumbrances. If action is taken under s. 17(1), taking possession and vesting which are provided in s. 16 after the award under s. 11 are accelerated and can take place fifteen days after the publication of the notice under s.9. Then comes s. 17(4) which provides that in case of any land to which the provisions of sub-s. (1) are applicable, the Government may direct that the provisions of s. 5-A shall not apply and if it does so direct, a declaration may be made under s. 6 in respect of the land at any time after the publication of the notification under s. 4(1). It will be seen that it is not necessary even where the Government makes a direction under s. 17(1) that it should also make a direction under s. 17(4). If the Government makes a direction only under s. 17(1) the procedure under s. 5-A would still have to be followed before a notification under s. 6 is issued, though after that procedure has been followed and a notification under s. 6 is issued the Collector gets the power to take possession of the land after the notice under s. 9 without waiting for the award and on such taking possession the land shall vest absolutely in Government free from all encumbrances. It is only when the Government also makes a declaration under s. 17(4) that it becomes unnecessary to take action under s. 5-A and make a report thereunder. It may be that generally where an order is made under s.17(1), an order under s. 17(4) is also passed; but in law it is not necessary that this should be so. It will also be seen that under the Land Acquisition Act an order under s. 17 (1) or s. 17(4) can only be passed with respect to waste or arable land and it cannot be passed with respect to land which is not waste or arable and on which buildings stand\". (emphasis supplied) 33. From the above observations, it is clear that even in cases falling under or covered by sub-sections (1) and (2) of Section 17 of the Act and the Government intends to acquire land in cases of `urgency' or `unforeseen emergency', it is still required to follow procedure under Section 5A of the Act before issuance of final notification under Section 6 of the Act. It is only when the Government also makes a declaration under sub- section (4) of Section 17 that it becomes unnecessary to take recourse to procedure under Section 5A of the Act. 34. Nandeshwar Prasad was decided by a three Judge Bench. 35. Recently, in Union of India & Ors. v. Mukesh Hans, (2004) 8 SCC 14, a similar question came up for consideration before a three Judge Bench. There land was sought to be acquired at Mehrauli by the appropriate Government for organizing Anjuman-Saire-e-Gul- Faroshan. Proceedings were initiated under the Act and urgency clause was applied. The notification mentioned the public purpose as `Planned Development of Delhi'. It was also stated that Lt. Governor was of the opinion that Section 17(1) of the Act was applicable to the acquisition and he directed to dispense with inquiry under Section 5A of the Act. Simultaneously, a declaration under Section 6 was issued. Intrested parties approached the High Court of Delhi, inter alia, on the ground that decision to dispense with inquiry contemplated by Section 5A of the Act was vitiated by non-application of mind. The High Court upheld the contention and quashed the proceeding. The aggrieved Union approached this Court. 36. It was contended on behalf of the Union that in case of urgency, it was open to the appropriate Government to dispense with inquiry under Section 5A by invoking sub- section (4) of Section 17 of the Act. It was also contended that the urgency contemplated by sub-sections (1) or (2) of Section 17 of the Act was `by itself' sufficient to invoke sub- section (4) of Section 17. 37. Negativing the contention and referring to Nandeshwar Prasad and other judgments, the Court held; \"A careful perusal of the above Section shows that Sub-section (1) of Section 17 contemplates taking possession of the land in the case of an urgency without making an award but after the publication of Section 9(1) notice and after the expiration of 15 days of publication of Section 9(1) notice. Therefore it is seen that if the appropriate Government decides that there is an urgency to invoke Section 17(1) in the normal course Section 4(1) notice will have to be published, Section 6 declaration will have to be made and after completing the procedure contemplated under Sections 7 and 8, 9 (1) notice will have to be given and on expiration of 15 days from the date of such notice the authorities can take possession of the land even before passing of an award. Sub-section (2) of Section 17 contemplates a different type of urgency inasmuch as it should be an unforeseen emergency. Under this Section if the appropriate Government is satisfied that there is such unforeseen emergency the authorities can take possession of the land even without waiting fort 15 days period contemplated under Section 9(1). Therefore, in cases, where Government is satisfied that mere is an unforeseen emergency it will have to in the normal course, issue a Section 4(1) notification, hold 5A inquiry, make Section 6 declaration, and issue Section 9(1) notice and possession can be taken immediately thereafter without waiting for the period of 15 days prescribed under Section 9(1) of the Act. Section 17(4) as noticed above provides that in cases where the appropriate Government has come to the conclusion that there exists an urgency or unforeseen emergency as required under Sub-sections (1) or (2) of Section 17 it may direct that the provisions of Section 5A shall not apply and if such direction is given then 5A inquiry can be dispensed with and a declaration may be made under Section 6 on publication of 4(1) notification possession can be made\". 38. The Court, therefore, proceeded to state; \"A careful perusal of this provision which is an exception to the normal mode of acquisition contemplated under the Act shows mere existence of urgency or unforeseen emergency though is a condition precedent for invoking Section 17(4) that by itself is not sufficient to direct the dispensation of 5A inquiry. It requires an opinion to be formed by the concerned government that along with the existence of such urgency or unforeseen emergency there is also a need for dispensing with 5A inquiry which indicates that the Legislature intended that the appropriate government to apply its mind before dispensing with 5A inquiry. It also indicates the mere existence of an urgency under Section 17(1) or unforeseen emergency under Section 17(2) would not by themselves be sufficient for dispensing with 5A inquiry. If that was not the intention of the Legislature then the latter part of Sub-section (4) of Section 17 would not have been necessary and the Legislature in Section 17(1) and (2) itself could have incorporated that in such situation of existence of urgency or unforeseen emergency automatically 5A inquiry will be dispensed with. But then that is not language of the Section which in our opinion requires the appropriate Government to further consider the need for dispensing with 5A inquiry in spite of the existence of unforeseen emergency. This understanding of ours as to the requirement of an application of mind by the appropriate Government while dispensing with 5A inquiry does not mean mat in and every case when there is an urgency contemplated under Section 17(1) and unforeseen emergency contemplated under Section 17(2) exists that by itself would not contain the need for dispensing with 5A inquiry. It is possible in a given case the urgency noticed by the appropriate Government under Section 17(1) or the unforeseen emergency under Section 17(2) itself may be of such degree that it could require the appropriate Government on that very basis to dispense with the inquiry under Section 5A but then there is a need for application of mind by the appropriate Government that such an urgency for dispensation of the 5A inquiry is inherent in the two types of urgencies contemplated under Section 17 (1) and (2) of the Act\". 39. The learned counsel for the respondent authorities, however, strongly relied upon a two Judge Bench decision of this Court in Jai Narain & Ors. v. Union of India & Ors., (1996) 1 SCC 9. In Jai Narain, the Court held that the question of `urgency' or `unforeseen emergency' is the mater which is entirely based on `subjective satisfaction of the Government' and the Courts do not interfere unless the reasons given are wholly irrelevant and there is non- application of mind. If the public purpose, on the face of it shows that the land is needed urgently, that by itself is relevant circumstance for justifying the action under Section 17(4) of the Act. 40. Again, a similar view was taken by a two Judge Bench in Chameli Singh & Ors., v. State of U.P. & Anr., (1996) 2 SCC 549. In Chameli Singh, land was acquired for public purpose, namely, construction of houses for dalits. Urgency clause under Section 17 was applied which was challenged by the land- owners. Holding that the urgency clause was rightly applied and inquiry under Section 5A of the Act has been correctly dispensed with, the Court observed that acquisition of land for providing houses to dalits, tribes and poor would be sufficient to invoke Section 17 of the Act and the land-owners cannot challenge the validity of such acquisition on the ground that inquiry under Section 5A cannot be dispensed with. 41. The Court stated; \"It would thus be seen that this Court emphasised the holding of an inquiry on the facts peculiar to that case. Very often the officials, due to apathy in implementation of the policy and programmes of the Government, themselves adopt dilatory tactics to create cause for the owner of the land to challenge the validity or legality of the exercise of the power to defeat the urgency existing on the date of taking decision under Section 17(4) to dispense with Section 5-A inquiry. It is true that there was pre- notification and post-notification delay on the part of the officers to finalise and publish the notification. But those facts were present before the Government when it invoked urgency clause and dispensed with inquiry under Section 5A. As held by this Court, the delay by itself accelerates the urgency: Larger the delay, greater be the urgency. So long as the unhygienic conditions and deplorable housing needs of Dalits, Tribes and the poor are not solved or fulfilled, the urgency continues to subsist When the Government on the basis of the material, constitutional and international obligation, formed its opinion of urgency, the Court, not being an appellate forum, would not disturb the finding unless the court conclusively finds the exercise of the power male fide. Providing house sites to the Dalits, Tribes and the poor itself is a national problem, and a constitutional obligation. So long as the problem is not solved and the need is not fulfilled, the urgency continues to subsist. The State is expending money to relieve the deplorable housing condition in which they live by providing decent housing accommodation with better sanitary conditions. The lethargy on the part of the officers for pre and post-notification delay would not render the exercise of the power to invoke urgency clause invalid on that account\". 42. In First Land Acquisition Collector & Ors., v. Nirodhi Prakash Gangoli & Anr., (2002) 4 SCC 160, a two Judge Bench again observed that case of existence of urgency under Section 17 of the Act is a matter of subjective satisfaction of appropriate Government and a decision of Government to dispense with inquiry under Section 5A by invoking urgency provision can be challenged only on the ground of non- application of mind or mala fide exercise of power by the Government. Burden is always on the person alleging mala fide to prove it on the basis of specific materials. So long as the purpose of acquisition continues to exist, exercise of power under Section 17 cannot be held to be mala fide. Mere delay of the Government subsequent to its decision to dispense with inquiry under Section 5A by exercising power under Section 17 would not invalidate the decision. 43. On the basis of above decisions, it was submitted that once a decision has been taken by the State Government to apply urgency clause, the decision of the Government cannot be interfered with by a Court exercising writ jurisdiction. 44. In our judgment, from the above case law, it is clear that normal rule for acquisition of land under the Act is issuance of notification under sub-section (1) of Section 4, hearing of objections under Section 5A and issuance of final notification under Section 6 of the Act. Award will be made by the Collector, notice has to be issued to the land- owners or the person interested and thereafter possession can be taken. Section 17, no doubt, deals with special situations and exceptional circumstances covering cases of `urgency' and `unforeseen emergency'. In case of `urgency' falling under sub-section (1) of Section 17 or of `unforeseen emergency' covered by sub-section (2) of Section 17, special powers may be exercised by appropriate Government but as held by a three Judge Bench decisions before more than four decades in Nandeshwar Prasad and reiterated by a three Judge Bench decision in Mukesh Hans, even in such cases, inquiry and hearing of objections under Section 5A cannot ipso facto be dispensed with unless a notification under sub-section (4) of Section 17 of the Act is issued. The legislative scheme is amply clear which merely enables the appropriate Government to issue such notification under sub- section (4) of Section 17 of the Act dispensing with inquiry under Section 5A if the Government intends to exercise the said power. The use of the expression `may' in sub-section (4) of Section 17 leaves no room of doubt that it is discretionary power of the Government to direct that the provisions of Section 5A would not apply to such cases covered by sub-section (1) or (2) of Section 17 of the Act. 45. In our opinion, therefore, the contention of learned counsel for the respondent authorities is not well founded and cannot be upheld that once a case is covered by sub-section (1) or (2) of Section 17 of the Act, sub-section (4) of Section 17 would necessarily apply and there is no question of holding inquiry or hearing objections under Section 5A of the Act. Acceptance of such contention or upholding of this argument will make sub-section (4) of Section 17 totally otiose, redundant and nugatory. 46. It is true that in Chameli Singh and Jai Narain, a two Judge Bench has observed that acquisition of land for housing accommodation or for construction of residential quarters for dalits and tribals can be said to be of an urgent nature falling under Section 17(1) of the Act. But as already held in Nandeshwar Prasad and Mukesh Hans, even in such cases, procedure required to be followed under Section 5A cannot be dispensed with unless notification under sub-section (4) of Section 17 is issued. In Mukesh Hans, the Court also held that the provision cannot be pressed in service by officers who were negligent and due to their lethargy, proceedings could not be initiated for a quite long time. 47. In the instant case, the facts are eloquent. Initial action of acquisition of land was taken as early as in 1982 but the proceedings lapsed. In 1991, when Essco made an application praying for change of user of land, it was rejected on the ground that the land was likely to be required for public purpose. Nothing, however, was done for about a decade. It is only in 2001 that again Notification under Section 4 was issued and urgency clause was applied. We are, therefore, satisfied that the ratio lad down in Mukesh Hans squarely applies to the facts of the case. No urgency clause could have been invoked by the respondents and inquiry and hearing of objections provided by Section 5A of the Act could not have been dispensed with. The actions of issuance of urgency clause under sub-section (4) of Section 17, dispensing with inquiry under Section 5A and issuance of final notification under sub-section (1) of Section 6 are required to be quashed and they are accordingly quashed. 48. The learned counsel for the appellant also contended that even if it is held that the respondent could have issued final notification without holding inquiry and hearing of objections under Section 5A of the Act, the notification under Section 6 of the Act is illegal and unlawful in view of the fact that the said notification has not been issued after the last of the dates of the publication and giving of public notice referred to as \"the date of publication of the notification\" under sub-section (1) of Section 4 of the Act. 49. It was submitted that even the said point is concluded by a decision of this Court in State of Uttar Pradesh & Ors. v. Radhey Shyam Nigam & Ors, (1989) 1 SCC 591. 50. The learned counsel for the respondents, on the other hand, relying on State of Haryana & Anr. v. Raghubir Dayal, (1995) 1 SCC 133 and Mohan Singh & Ors. v. International Airport Authority of India & Ors., (1997) 9 SCC 132 submitted that if urgency clause under Section 17(4) is applied by the appropriate Government, final notification under Section 6 of the Act can be issued on the next day of the issuance of preliminary notification under Section 4 of the Act. In the case on hand, the said procedure is followed. Notification under Section 4 was issued on August 1, 2001. Urgency clause was applied and the case was covered by Section 17 (4) of the Act. On the very next day i.e. on August 2, 2001, final notification under Section 6 was issued. Therefore, the procedure required by law has been strictly followed as held by this Court in Raghubir Dayal and Mohan Singh. 51. We would have entered into the said question had it been absolutely necessary for us to decide it in the case on hand. But as observed hereinabove, we are of the view that the appellants are entitled to succeed on the first ground that on the facts and in the circumstances of the case, the appropriate Government was not justified in invoking urgency clause under sub-section (4) of Section 17 of the Act by dispensing with inquiry and hearing of objections under Section 5A of the Act and the final notification issued under Section 6 of the Act deserves to be set aside on that ground alone, we express no opinion one way or the other on the interpretation of the expression \"the date of publication of the notification\" used in sub-section (1) of Section 4, sub-section (4) of Section 17 and Section 6 of the Act. 52. For the foregoing reasons, both the appeals are allowed. The action of the respondent authority of dispensing with the inquiry and hearing of objections under Section 5A and issuance of final notification under Section 6 of the Act is hereby quashed and set aside. It is, however, open to the authorities to take appropriate action after following normal procedure laid down in the Act. 53. Appeals are accordingly allowed with costs. CONTEMPT PETITION NO.30 OF 2007 IN C.A.NO. ............... OF 2008 @ S.L.P. (C)NO. 15449 OF 2004 54. In the light of judgment in the above appeals, the contempt petition stands disposed of. .........................................................J. (C.K. THAKKER) NEW DELHI, .........................................................J. NOVEMBER 07, 2008. (D.K. 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{"id": "450185", "text": "PETITIONER: B. SHAH Vs. RESPONDENT: PRESIDING OFFICER, LABOUR COURT, COIMBATORE & ORS. DATE OF JUDGMENT12/10/1977 BENCH: SINGH, JASWANT BENCH: SINGH, JASWANT KRISHNAIYER, V.R. CITATION: 1978 AIR 12 1978 SCR (1) 701 1977 SCC (4) 334 ACT: Interpretation of social security legislation for women-Duty of the court. Right to payment of maternity benefits-Connotation of the term \"week\" in sub. ss. (1) and (3) of s. 5 read with ss. 2 (1), 3 (n) and 4 of the Maternity Benefits Act (Act LIII of 1961). Whether computation of the maternity benefits prescribed by the Act has to be made taking a week as signifying a cycle of seven days including a Sunday or a cycle of seven days minus a Sunday which is a wageless day- Paragraphs 1 and 2 of Art. 4 of Convention 103 of Maternity Protection Convention (Revised) 1952 adopted by the General Conference of the International Labour Organisation. HEADNOTE: Respondent No. 2 working in \"Mount Stuart Estate\" belonging to the appellant was allowed leave of absence on maternity leave. After her delivery, the appellant paid her on account of maternity benefit an amount equivalent to what she would have earned on the basis of her average daily wages in 72 working days falling within 12 weeks of the maternity period excluding 12 Sundays being wageless holidays which fell during the period of the respondent's actual absence immediately preceding and including the day of her delivery and the 6 weeks immediately following that day. The claim for the benefit of the entire period of 12 weeks, that is, for 84 days on the plea that a week consisted of 7 days having been refused, the respondent moved the Labour Court, Coimbatore, which by its order dated February 26, 1969, allowed the said claim. The appellant moved the High Court tinder Art. 226 of the Constitution challenging the decision of the Labour Court. The single Judge of the High Court allowed the petition holding that 12 weeks for which maternity benefit is provided for in sub- section (3) of s. 5 of the Act must be taken to mean 12 weeks of work and the computation of the benefit had to be made with reference to the actual days on which the woman would have worked but for her inability. Aggrieved by this decision. the respondent filed an appeal under cl. 15 of the Letters Patent and the Division Bench set aside the orders of the single Judge. Dismissing the appeal by special leave, the Court, HELD : (1) In interpreting provisions of beneficial pieces of legislation which is intended to achieve the object of doing social justice to woman workers employed in the plantations and which squarely fall within the purview of Article 42 of the Constitution, the beneficent rule of construction which would enable the woman worker not only to subsist but also to make up her dissipated' energy. nurse her child, preserve her efficiency as a worker and maintain the level of her previous efficiency and output has to be adopted by the Court. [708 H, 709 A-B] (2)The provisions of s. 5 of the Maternity Benefits Act make it clear that a woman worker who expects a child is entitled to maternity benefit for a maximum period of 12 weeks which is split up into two periods viz., prenatal and post-natal. The first one is the prenatal or ante-natal period is limited to the period of woman's actual absence extending upto 6 weeks immediately preceding and including the day on which her delivery occurs and the second one which is post-natal compulsory period consists of 6 weeks immediately following the day of delivery. The Act does not contain any definition of the word \"week\". It has to be understood in its ordinary dictionary meaning. In the context of sub-s. (1)and (3) of s. 5 of the Act, the term has to be taken to signify a cycle of 7 days including Sundays. By using the words, namely, \"for the period of her actual absence immediately preceding and including the day of her delivery and for the 6 weeks immediately following that day's the Legislature intended that computation of maternity benefit is to be made for the entire Period of the woman worker's actual absence, that is, for all the days including Sundays which may be wageless holidays failing within that 702 period and not only for intermittent period of 6 days thereby excluding Sundays failing within that period. The word \"period\" occurring in s. 5(1) of the Act emphasises the continuous running of time and recurrence of 7 days. It is also conformity with Paragraphs 1 and 2 of Article 4 of Convention No. 103 concerning Maternity Protection Convention (Revised) 1952 adopted by the General Conference of the International Labour Organisation. [707 D-E, 908 A, E-F, H, 709 B-C] (3)Computation of maternity benefit is to be made for all the days including Sundays and rest days which may be wageless holidays comprised in the actual period of absence of the woman extending upto 6 weeks preceding and including the day of delivery as also for all the days falling within the 6 weeks immediately following the day of delivery thereby ensuring that the woman workers get for the said period not only the amount equal to hundred per cent of the wages which who was previously earning in terms of s. 3(n) of the Act but also the benefit of the wages for all the Sundays and rest days falling within the aforesaid two periods which would ultimately be conducive to the interest of both the woman worker and her employer. [709 D-F] Malayalam Plantations Ltd. Cochin v. Inspector of Plantations Mundakayam & Ors. [1975] Lab. 1. C. 848--A.I.R. 1975 Kerala 86, over-ruled. JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1649 of 1975. Appeal by Special Leave from the Judgment and Order dated 24-4-1974 of the Madras High Court in Writ Appeal No. 165 of 1972. G.B. Bai, P. K. Kurian, D. N. Mishra and K. J. John for the Appellant. K. N. Bhat (A. C.) for Respondent No. 2. The Judgment of the Court was delivered by JASWANT SINGH, J. This appeal by special leave which is directed against the judgment and order dated April 24, 1974 of the Letters Patent Bench of the High Court of Judicature at Madras reversing the judgment and order dated April 19, 1971 of the Single Judge of that Court passed in writ petition No. 3822 of 1969 presented under Article 226 of the Constitution raises a complex but an interesting question relating to the construction of the phrases \"maternity benefit........ for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day\" occurring in section 5(1) of the Maternity Benefits Act, 1961 (Act LIII of 1961) (hereinafter referred to as 'the Act') which in view of section 2(1) of the Act is the law applicable even to women workers employed in plantations. It appears that in October, 1967, Subbammal, respondent No. 2 herein, who is a woman worker employed in Mount Stuart Estate (hereinafter referred to as 'the establishment'), which is carrying on plantation industry, was allowed leave of absence by the establishment on the basis of a notice given by her of her expected delivery which actually took place on December 16, 1967. After her delivery, the respondent was paid by her employers on account of maternity benefit an amount equivalent to what she would have earned on the basis of her average daily wage in 72 working days falling within twelve week's of the maternity period. While calculating the aforesaid amount of maternity benefit, the establishment admittedly excluded twelve Sundays being wageless holidays, which fell during the period of the respondent's actual absence immediately preceding and including the day of her delivery and the six weeks immediately following that day. Dissatisfied with this computation, the respondent made a representation to her employers claiming maternity benefit for the entire period of twelve weeks under the Act. i.e. for 84 days on the plea that a week consisted of seven days. As her demand did not evoke a favourable response, the respondent applied to the Labour Court, Coimbatore, under section 33C(2) of the Industrial Disputes Act for redress of her grievance. The claim preferred by the respondent was resisted by the appellant herein who contended that the respondent was admittedly working and was being paid only for six days in a week and that a pregnant woman worker is entitled to maternity benefit for 72 days which are the normal working days in twelve weeks and not for 84 days, as no wage is payable for the seventh day of the week i.e. Sunday, which is a nonworking wageless holiday. By its order dated February 26, 1969, the Labour Court allowed the claim of the respondent. Thereupon the establishment moved the High Court at Madras under Article- 226 of the Constitution challenging the, decision of the Labour Court contending that the claim made by the respondent was untenable as normally a worker works only for six days in a week and the maternity benefit had to be computed only for 72 days. As against this, the respondent pleaded that the computation had to be made not with reference to the actual number of working days but with reference to total number of days covered by twelve weeks i.e. 84 days. The Single Judge of the High Court to whom the case was assigned allowed the petition holding that twelve weeks for which maternity benefit is provided for in subsection (3) of section 5 of the Act must be taken to mean twelve weeks of work and the computation of the benefit had to be made with reference to the actual days on which the woman would have worked but for her inability. Aggrieved by this decision, the respondent filed an appeal under clause 15 of the Letters Patent which, as already stated, was allowed by the Letters Patent Bench of the High Court observing that the maternity benefit which the respondent was entitled to receive was for the period of her absence before delivery including the day of delivery and also six weeks thereafter, each week consisting of seven days including Sundays. Dissatisfied with this decision, the establishment has, already stated, come up in appeal to this Court by special leave. We have heard Mr. Pai, learned counsel for the appellant as also Mr. Bhatt, who in view of the default in appearance of respondent No. 2 and the importance of the point involved in the case was appointed as amicus cruaie. We place on record our deep appreciation of the valuable assistance rendered to us by both of them. Assailing the judgment and order under appeal, Mr. Pai has urged that since legislative intent, as revealed from the scheme of section 5(1) of the Act is to compensate the woman worker who expects delivery for the loss that her forced absence from work on account of pregnancy and confinement may entail, the liability which has to be imposed on her employer cannot exceed the amount that she would have earned if she had not been compelled to avail of the maternity leave and since Sunday is a non-working wageless day, the employer cannot be made to pay for that day. He has further urged that since under section 5 (1) of the Act, the maternity benefit has to be computed with reference to the period of the workers' actual absence thereby meaning absence on days on which there was work excluding Sundays and the term 'week\" in the context of 'sub-sections (1) and (3) of section 5 of the Act is to be under stood as a week of work consisting of six days and in the instant case, respondent No. 2 was working and earning wages for six days in a week, the seventh day being a wageless holiday, her claim cannot be sustained. In support of his contention. Mr. Pai has referred us to the Full Bench decision of the Kerala High Court in Malayalam Plantations Ltd. Cochin v. Inspector of Plantation Mundakayam & Ors.(1), and to Convention No. 103 concerning Maternity Protection Convention (Revised), 1952 adopted by the General Conference of the International Labour Organisation. Mr. Bhatt has, on the other hand, urged that the scheme of section 5 of the Act clearly indicates that a woman worker who expects delivery had to be paid maternity benefit for all the seven days of the week including Sundays falling within the ante-natal and post-natal periods specified in the section. For a proper determination of the question involved in the appeal, it would, we think, be useful to refer to certain provisions of the Act which have a bearing on the subject matter of the controversy before US. Section 2(1) of the Act makes the Act applicable to every establishment being a factory, mine or plantation (including any such establishment belonging to Government and to every establishment wherein persons are employed for the exhibition of equastrain acrobatic and other performance. Sub-section (2) of section 2 of the Act specifically excludes the applicability of the provisions of the Act to any factory or other establishment to which the provisions of the Employees State Insurance Act, 1948 apply for the time being. Section 3(n) of the Act defines \"wages\" as under :- \"3(n).--Wages means all remuneration paid or payable in cash to a woman, if the terms of the contract of employment, express or implied, were fulfilled and includes- (1) such cash allowances (including dearness allowance and house rent allowance) as a woman is for the time being entitled to; (2) incentive bonus; and (3) the money value of the concessional supply of food-grains and other articles, but does not include- (i)any bonus other than incentive bonus; (ii)over-time earnings and any deduction or payment on account of fines; (iii)any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the woman under any law for the time being in force; and (1) (1975) Lab. I. C. 848=A.I.R. 1975 Ker. 86. (iv) any gratuity payable on the termination of service\". The above definition, it would be noted, does not restrict the meaning of the term \"wages\" to contractual wages but gives the term a composite meaning covering all remunerations in the nature of cash allowances, incentive bonus and the money value of the concessional supply of foodgrains and other articles. Section 4 of the Act which prohibits the employment of, or work by, woman during certain period lays down :- \"4. Employment of, or work by, woman prohibited during certain period.-(1) No employer shall knowingly employ a woman in any establishment during the six weeks immediately following the day of her delivery or her mis- carriage. (2) No woman shall work in any establishment during the six weeks immediately following the day of her delivery or miscarriage. (3) Without prejudice to the provisions of section 6, no pregnant woman shall, on a request being made by her in this behalf, be required by her employer to do during the period specified in sub-section (4) any which is of an arduous nature or which involves long hours of standing, or which in any way is likely to interfere with her pregnancy or the normal development of the foetus, or is likely to cause her miscarriage or otherwise to adversely affect her health. (4) The period referred to in sub-section (3) shall be- (a) the period of one month immediately preceding the period of six weeks, before the date of her expected delivery; (b) any period during the said period of six weeks for which the pregnant woman does not avail of leave of absence under section 6\". Section 5 of the Act which confers right to payment of maternity benefit on a woman worker provisions:- \"5. Right to payment of maternity benefit.- (1)Subject to the provisions of this Act, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day. EXPLANATION.-For the purpose of this sub- section, the average daily wage means the average of the woman's wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity, or one rupee a day, whichever is higher. (2)No woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than one hundred and sixty days in the twelve months immediately preceding the date of her expected delivery. Provided that the qualifying period of one hundred and sixty days aforesaid shall not apply to a woman who has immigrated into the State of Assam and was pregnant at the time of the immigration. EXPLANATION.-For the purpose of calculating under this sub-section, the days on which a woman has actually worked in the establishment, the days for which she has been laid off during the period of twelve months immediately preceding the date of her expected delivery shall be taken into account. (3)The maximum period for which any woman shall be entitled to maternity benefit shall be twelve weeks, that is to say, six weeks up to and including the day of her delivery and six weeks immediately following that day Provided that where a woman dies during this period, the maternity benefit shall be payable only for the days up to and including the day of her death. Provided further that where a woman, having delivered of a child, dies during her delivery or during the period of six weeks immediately following the date of her delivery, leaving behind in either case the child, the employer shall be liable for the maternity benefit for the entire period of six weeks immediately following the day of her delivery but if the child also dies during the said period, then, for the days upto and including the day of the death of the child.\" Section 6 of the Act which deals with notice of claim for maternity benefit and payment thereof is to the following effect :- \"6. Notice of claim for maternity benefit and payment thereof.-(1) Any woman employed in an establishment and entitled to maternity benefit under the provisions of this Act may give notice in writing in such form as may be prescribed, to her employer, stating that her maternity benefit and any other amount to which she may be entitled under this Act may be paid to her or to such person as she may nominate in the notice and that she will not work in any establishment during the period for which she receives' maternity benefit. (2)In the case of a woman who is pregnant, such notice shall state the date from which she will be absent from work, not being a date earlier than six weeks from the date of her expected delivery. (3)Any woman who has not given the notice when she was pregnant may give such notice as soon as possible after the delivery. (4)On receipt of the notice, the employer shall permit such woman to absent herself from the establishment until the expiry of six weeks after the day of her delivery. (5)The amount of maternity benefit for the period preceding the date of her expected delivery shall be paid in advance by the employer to the woman on production of such proof as may be prescribed that the woman is pregnant, and the amount due for the subsequent period shall be paid by the employer to. the woman within forty-eight hours of production of such proof as may be prescribed that the woman has been delivered of a child. (6)The failure to give notice under this section s not disentitle a woman to maternity benefit or any other amount under this Act if she is otherwise entitled to such benefit or amount and in any such case, an Inspector may either of his own motion or on an application made to him by the woman, order the payment of such benefit of amount within such period as may be specified in the order\". The provisions of section 5 of the Act quoted above make it clear that a woman worker who expects a child is entitled to maternity benefit for a maximum period of twelve weeks which is split up into two periods viz. prenatal and post-natal. The first one i.e. prenatal or ante-natal period is limited to the period of woman's actual absence extending upto six weeks immediately preceding and including the day on which her delivery occurs and the second one which is postnatal compulsory period consists of six weeks immediately following the day of delivery. The benefit has to be calculated for the aforesaid two periods on the basis of the average daily wage. According to the Explanation appended to section 5(1) of the Act, the average daily wage has to be computed taking into consideration the average of the woman's wager,. payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity, or one rupee a day, whichever is higher. For fixing the average daily wage, it has therefore first to be ascertained whether the wages with were paid or were payable to the woman was for 'time work' or for 'piece work'. It has next to be ascertained as to what were the cash wages paid or payable to her in terms of the definition contained in section 3 (n) of the Act for the days on which she worked during the period of three- calendar months immediately preceding the date of delivery, reckoned according to the British calendar month. The total wages thus worked out are to be divided by the number of days in the aforesaid three calendar months in order to arrive at the average daily wage. After thus finding out the average daily wage, the liability of the employer in respect of the maternity benefit has to be calculated in terms of section 5 of the Act for both ore-natal and post- natal period indicated above. The real though difficult question that calls for determination by us is as to what is the connotation of the term \"week\" occurring in sub-sections (1) and (3) of section 5 of the Act and whether the computation of the maternity benefit prescribed by the Act for the a foresaid two periods has to be made taking a \"week\" as signifying a cycle of seven days including a Sunday or a cycle of seven days minus a Sunday which is said to be a wageless day, As the Act does not contain any definition of the word \"week\", it has to be understood in its ordinary dictionary sense. In the Shorter Oxford English Dictionary (Third Edition), the word \"week\" has been described as meaning \"the cycle of seven days, recognized in the calendar of the Jews and thence adopted in the calendars of Christian Mohammedan and various other peoples. A space of seven days, irrespective of the time from which it is reckoned. Seven days as a term for periodical payments (of wager,, rent, or the like), or as a unit of reckoning for time of work or service.\" In Webster's New World Dictionary (1962 Edition), the meaning of the word \"week\" is given as \"a period of seven days, especially one beginning with Sunday and ending with Saturday; the hours or days of work in a seven-day period.\" In Stroud's Judicial Dictionary (Third Edition), it is stated that (1) \"though a week usually means any consecutive seven days, it will sometimes be interpreted to mean the ordinary notion of a week reckoning from Sunday to Sunday and (2) probably, a week usually means seven clear days.\" A \"week\" according to Halsbury's Laws of England (Third Edi- tion) Volume 37 at p. 84 is. strictly the time between midnight on Saturday and the same hour on the next succeeding Saturday, but the term is also applied to any period of seven successive days. Bearing in mind the above mentioned dictionary or popular meaning of the term \"week\", we think that in the context of sub-sections (1) and (3) of section 5 of the Act, the term has to be taken to signify a cycle of seven days including Sundays. The language in which the aforesaid sub-sections are couched also shows that the Legislature intended that computation of maternity benefit is to be made for the entire period of the woman worker's actual absence i.e. for all the days including Sundays which may be wageless holidays falling within that period and not only for intermittent periods of six days thereby excluding Sundays falling within that period for if it were not so, the Legislature instead of using the words \"for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day\" would have used the words \"for the working days falling within the period of her actual absence immediately preceding and including the day of her delivery and the six weeks immediately following that day but excluding the wageless days\". Again the word \"period\" occurring in section 5(1) of the Act is a strong word. It seems to emphasize, in our judgment, the continuous running of time and recurrence of the cycle of seven days. It has also to be borne in mind in this connection that in inter- preting provisions of beneficial pieces of legislation like the one in hand which is intended to achieve the object of doing social justice to women workers employed in the plantations and which squarely fall within the purview of Article 42 of the Constitution, the beneficent rule of construction which would enable the woman worker not only to subsist but also to make up her dissipated energy, nurse her child, preserve her efficiency as a worker and maintain the level of her previous efficiency and output has to be adopted by the Court. The interpretation placed by us on the phraseology of sub- sections (1) and (3) of section 5 of the Act appears to us to be in conformity not only with the legislative intendment but also with Paragraphs 1 and 2 of Article 4 of Convention No. 103 concerning Maternity Protection Convention (Revised), 1952 adopted by the General Conference of the International Labour Organisation which are extracted below for facility of reference:- \"Article 4 : 1. While absent from work on maternity leave in accordance with the provisions of Article 3, the woman shall be entitled to receive cash and medical benefits. 2. The rates of cash benefit shall be fixed by national laws or regulations so as to ensure benefit sufficient for the full and healthy maintenance of herself and her child in according with a suitable standard of living.\" Thus we are of opinion that computation of maternity benefit has to be made for all the days including Sundays and rest days which may be wageless holidays comprised in the actual period of absence of the woman extending upto six weeks preceding and including the day of delivery as also for all the days falling within the six weeks immediately following the day of delivery thereby ensuring that the woman worker gets for the said period not only the amount equaling 100 per cent of the wages which she was previously earning in terms of section 3 (n) of the Act but also the benefit of the wages for all the Sundays and rest days falling within the aforesaid two periods which would ultimately be conducive to the interests of both the woman worker and her employer. In view of what we have stated above, we cannot uphold the view of the law expressed by the Full Bench of Kerala High Court in Malayalam Plantations Ltd. Cochin v. Inspector of Plantations Mundakayam & Ors. (supra). In the result, the appeal fails and is hereby dismissed. Although costs have to be paid by appellant to respondent No. 2 in terms of the Court's order dated October 30, 1975, yet in view of the fact that the said respondent has not chosen to appear at the hearing, of the case and Mr. K. N. Bhat has assisted the Court as amicus curiae, we direct the appellant to pay Rs. 1,000/- to Mr. Bhat as his fee. S.R. 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{"id": "13370078", "text": "1 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.88 OF 2021 (arising out of SLP (Crl.)No.10247/2019) AJAY KUMAR @ BITTU & ANR. ...APPELLANT(S) VERSUS STATE OF UTTARAKHAND & ANR. ..RESPONDENT(S) JUDGMENT ASHOK BHUSHAN,J. Leave granted. 2. This appeal has been filed against the judgment of the High Court of Uttarakhand dated 27.09.2019, by which judgment High Court had dismissed the Criminal Revision filed by the appellants. The Criminal Revision was filed by the appellants against the order dated 17.08.2019 passed by Additional District Judge, Laksar, by which the appellants were Signature Not Verified summoned by the Court under Section 319 Cr.P.C. Digitally signed by ARJUN BISHT Date: 2021.01.29 14:20:50 IST Reason: 3. Brief facts of the case necessary to be noted for deciding this appeal are:- i. The appellant was made an accused in FIR No.175/2015 at Police Station Kotwali, Laksar, Haridwar, under Section 147, 148, 149, 323, 324, 307, 452, 504 and 506 IPC along with six other accused. An FIR No.176/2016 was also registered in the same Police Station under Section 147, 148, 149, 307, 452, 504, 506 IPC in which the complainant with other accused were arrayed. The Police after carrying out the investigation submitted a chargesheet exonerating the appellants. Investigation officer after investigation expunged the names of Bittoo and Jyoti, the appellants from the list of accused from the chargesheet. ii. The Trial began in case No.228 of 2016 in which informant Pahal Singh was examined as PW-1. In his Statement, Pahal Singh implicated all accused including the appellants but no specific role was assigned to the appellants. Statement was also recorded by PW-2, Monu, in which he implicated the appellants. An application under Section 319 Cr.P.C. was filed by the informant before the Session Judge praying that appellant be also summoned in the case. Learned Session Judge after noticing in detail the statements made by PW-1 and PW-2 made in the Court rejected the application by order dated 21.06.2018. Against the order dated 21.06.2018, Pahal Singh, the informant, filed the Criminal Revision No.304 of 2018 before the High Court. iii. The High Court relying on the judgment of this Court reported in Rajesh and others versus State of Haryana, (2019) 6 SCC 368, allowed the Revision and directed the application under Section 319 Cr.P.C. to be considered afresh. Following is the operative portion of the order passed by the High Court in paragraph 7; \u201c7. After having considered the aforesaid ratio and also the reasons which have been assigned by the Additional Sessions Judge, Laksar, Haridwar, this Court is of the view that the revision deserves to be allowed and the same is consequently allowed. The order dated 21.06.2018 passed by the learned Additional Sessions Judge, Laksar, District Haridwar in Sessions Trial No.228 of 2016, State v. Chandra Pal and others is quashed. The matter is remitted back to the Additional Sessions Judge, Laksar, District Haridwar, to reconsider the application paper No.53 (ka/1) in the light of ratio as propounded by the Hon\u2019ble Apex Courts Judgment in Rajesh\u2019 case (Supra).\u201d iv. After the Order of the High Court dated 11.07.2019 in the Criminal Revision, Learned Session Judge again considered the application under Section 319 Cr.P.C. Learned Session Judge referring to the observations made by the High Court in paragraph 5 as well as the judgment of this Court in Rajesh and others versus State of Haryana(Supra) allowed the application and summoned the appellants by Order dated 17.08.2019. The Trial Court issued a bailable warrant against the appellants on 05.09.2019 and after bailable warrant being served when they did not appear on 18.09.2019, Non-Bailable warrant was issued to the appellants and a Notice under Section 446 Cr.P.C. was issued as to why the amount of sureties being not realised from two sureties Arun Kumar and Chandra Pal. The appellants filed Criminal Revision before the High Court against the order dated 17.08.2019 of the Additional Session Judge summoning them. v. The High Court dismissed the Revision noticing a subsequent order dated 18.09.2019 by which notice has been issued under Section 446 Cr.P.C. The High Court took the view that the Revision was filed on 23.09.2019 but the order passed by the Court on 18.09.2019 has not been brought on record, hence, there is concealment of not placing the order on record. The High Court further observed that since the proceeding in pursuance to allowing the application under Section 319 Cr.P.C. has already been initiated, in which the revisionists have already invoked the jurisdiction of the Revisional Court in which order dated 18.09.2019 has been passed, the Revision is to be dismissed. Aggrieved by the order of the High Court dated 27.09.2019, this appeal has been filed. 4. We have heard the learned counsel for the parties and have perused the record. 5. The principles for exercise of power under Section 319 Cr.P.C. by Criminal Court are well settled. The Constitution Bench of this Court in Hardeep Singh versus State of Punjab and others, (2014) 3 SCC 92, has elaborately considered all contours of Section 319 Cr.P.C. This Court has held that Power under Section 319 Cr.P.C. is a discretionary and extra-ordinary power which has to be exercised sparingly. This Court further held that the test that has to be applied is one which is more than prima facie case as exercised at the time of framing of charge, but short of satisfaction to an extent that the evidence, if goes unrebutted, would lead to conviction. In paragraph 105 and 106, following has been laid down: - \u201c105. Power under Section 319 CrPC is a discretionary and an extraordinary power. It is to be exercised sparingly and only in those cases where the circumstances of the case so warrant. It is not to be exercised because the Magistrate or the Sessions Judge is of the opinion that some other person may also be guilty of committing that offence. Only where strong and cogent evidence occurs against a person from the evidence led before the Court that such power should be exercised and not in a casual and cavalier manner. 106. Thus, we hold that though only a prima facie case is to be established from the evidence led before the court, not necessarily tested on the anvil of cross-examination, it requires much stronger evidence than mere probability of his complicity. The test that has to be applied is one which is more than prima facie case as exercised at the time of framing of charge, but short of satisfaction to an extent that the evidence, if goes un-rebutted, would lead to conviction. In the absence of such satisfaction, the court should refrain from exercising power under Section 319 CrPC. In Section 319 CrPC the purpose of providing if \u201cit appears from the evidence that any person not being the accused has committed any offence\u201d is clear from the words \u201cfor which such person could be tried together with the accused.\u201d The words used are not \u201cfor which such person could be convicted\u201d. There is, therefore, no scope for the court acting under Section 319 CrPC to form any opinion as to the guilt of the accused.\u201d 6. The Two-Judge Bench of this Court again reiterated the same ratio in Rajesh and others versus State of Haryana (Supra) which judgment has also been relied by the High Court in the impugned judgment. 7. Now we may notice the reason which persuaded the High Court to reject the Revision. After noticing the facts of the case, the High Court proceeded to consider the revision and recorded its reason for dismissing it in following words: - \u201cAlthough a reference has been made in paragraph 10 of the application filed in support of the revision to the effect that the proceedings was taken by the present revisionists before the Sessions Court and an order of 18.09.2019 has been passed, whereby, the notices have been issued to the present revisionists under Section 446 of Cr.P.C. This order passed by the Court below is that of 18.09.2019. the copy of the said order was received by the revisionists on 21.09.2019, as would be apparent from the folio annexed with the certified copy of the order dated 18.09.2019 as supplied by the learned counsel for the revisionist during the course of arguments to this Court, though it is not part of the Criminal Revision. The revision itself was filed on 23.09.2019. The said order passed by the Court under Section 446, has not been brought on record. Hence, this Court is of the view that apart from the fact that there is a concealment by not placing the order on record, which otherwise has been procured by the revisionist prior to the filing of the revision and furthermore, since the proceedings in pursuance to allowing the application under Section 319 CrPC has already been initiated, in which the revisionist has already invoked the jurisdiction of the Revisional court, in which the order dated 18.09.2019 has been passed. In view of the already ongoing proceedings before the Sessions Court prior to the filing of the present revision, this court is of the view that no simultaneous challenge to the impugned order dated 17.08.2019 summoning the revisionists under Section 319 of CrPC would be tenable before this Court till the order dated 18.09.2019, passed in the proceedings at the behest of the present revisionist, subsist. Consequently, this revision lacks merit and the same is dismissed as it is not sustainable before this Court.\u201d 8. A perusal of the judgment of the High Court indicates that the High Court did not examine the correctness of the order dated 17.08.2019 by which the appellants were summoned by Additional District Judge under Section 319 Cr.P.C., rather has dismissed the Criminal Revision on basis of a subsequent fact i.e. order dated 18.09.2019 by which notice has been issued under Section 446 Cr.P.C. The High Court further took the view that since the proceedings in pursuance of Section 319 Cr.P.C. have already been initiated and that no simultaneous challenge to the impugned order dated 17.08.2019 summoning the revisionists under Section 319 Cr.P.C. would be tenable before the High Court till the order dated 18.09.2019 passed in proceedings at the behest of revisionist subsist. 9. We may now notice the nature of the proceedings subsequent to the order dated 17.08.2019 by which the appellants were summoned. The appellant has brought on record the order sheet of the Court along with the application for additional documents. The order sheet indicates that although the summons was served on the appellants but they have not appeared, hence, bailable warrant of Rs.10,000/- was issued against the appellants. Order dated 05.09.2019 is to the following effect:- \u201c Sd/- illegible 05.09.2019 Arun Kumar Chandrapal Record is produced. Accused Sandeep Singh appearance dispensed through his Jitender counsel Kashim Ansari. Allowed. Gautam Remaining accused Arun, Chandrapal, Jitender and Gautam are present. Summon is duly served on accused Jyoti and Bittu. Accused Jyoti and Bittu are absent. The bailable warrant of Rs.10,000/- be issue against Jyoti and Bittu for 18.09.2019. Sd/- illegible Ambika Pant Additional Session Judge Laksar, District Haridwar.\u201d 10. Subsequently on 18.09.2019 the case was again taken by the Additional District Judge and following order was passed:- Sd/- illegible 18.09.2019 Arun Kumar Chandrapal The file is produced. Accused Singh Chandrapal Gautam, Jitender and Jitender Sandeep are present. Gautam The Bailable warrants issued against accused Jyoti and Bittu are returned after being served. Accused Jyoti and Bittu are absent even after service of Bailable warrants. Therefore, non bailable warrants are issued against Jyoti and Bittu to ensure their presence. Accused Jyoti and Bittu are not being produced before the Court inspite of sureties given by the guarantors. The surety of accused Bittu is Accused Arun Kumar and the surety of accused Jyoti is her father accused Chandrapal and the another surety is accused Arun. Both of them are present in the Court. Therefore, the Bail bonds executed by them are forfeited for not producing Accused Bittu and Jyoti before the Court. Therefore, notice under section 446 CrPC is being issued with the intent that why the amount if surety be not realized from them. The case be produced for appearance of accused Jyoti and Bittu and for the explanation by the guarantors on 30.09.2019. Sd/- illegible Ambika Pant Additional Session Judge Laksar, District Haridwar.\u201d 11. The proceedings which were taken on 05.09.2019 and 18.09.2019 are proceedings consequent to and subsequent to the order dated 17.08.2019. The subsequent proceeding in no manner can be a ground to not consider the correctness and validity of order dated 17.08.2019. We are of the considered opinion that the High Court completely erred in refusing to consider the correctness of the order dated 17.08.2019 on the ground that on 18.09.2019 notice under Section 446 Cr.P.C. has been issued. As and when it is found that order dated 17.08.2019 could not have been passed in exercise of jurisdiction under Section 319 Cr.P.C., all subsequent proceedings thereto shall automatically come to an end. 12. The view of the High Court which is recorded in following words:- \u201c\u2026this court is of the view that no simultaneous challenge to the impugned order dated 17.08.2019 summoning the revisionists under Section 319 of Cr.P.C. would be tenable before this Court till the order dated 18.09.2019, passed in the proceedings at the behest of present revisionist, subsist.\u201d cannot be said to be correct view. 13. The order dated 18.09.2019 by which the Court has directed appearance of the accused appellant is to be taken to its logical end but that order cannot provide a shield of protection to earlier order dated 17.08.2019 by which appellant has been summoned. 14. The subsequent proceedings of the court which have been brought on record indicate that the appellant no.2 and 1 have appeared before the Court and have also been granted bail. . 15. One of the grounds taken in this appeal is that appellant No.1 is Juvenile at the date of incident, his Date of Birth being 01.04.2000. The above ground also needs to be considered by the High Court. 16. We thus are of the view that the impugned judgment of the High Court dated 27.09.2019 is unsustainable and deserves to be set aside. We order accordingly. The Criminal Revision of the appellants be considered afresh by the High Court in accordance with the law. The appeal is allowed. \u2026\u2026\u2026\u2026\u2026......................J. ( ASHOK BHUSHAN ) \u2026\u2026\u2026\u2026\u2026......................J. ( R. SUBHASH REDDY ) \u2026\u2026\u2026\u2026\u2026.......................J. ( M.R. 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{"id": "83838189", "text": "C.M.A(MD)No.310 of 2020 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATE ON WHICH RESERVED :31.08.2020 DATE ON WHICH PRONOUNCED :15.09.2020 CORAM: THE HONOURABLE MR.JUSTICE M.SATHYANARAYANAN and THE HONOURABLE MR.JUSTICE P.RAJAMANICKAM C.M.A.(MD).No.310 of 2020 and C.M.P.(MD).No.4035 of 2020 1.Gomathi 2.Minor S.Surya : Appellants /Respondents (Minor 2nd appellant rep. by his mother, the 1st appellant herein) Vs. Sacraties : Respondent/Petitioner Prayer: This Civil Miscellaneous Appeal is filed under Section 19(1) of the Family Courts Act, 1984, against the fair and decretal order dated 03.10.2018 passed in I.A.No.173 of 2016 in H.M.O.P.No.35 of 2014 on the file of the Family Court, Tiruchirapalli. For Appellants : Mr.M.P.Senthil For Respondent : Mr.S.Jeyavel -------- 1/21 \f C.M.A(MD)No.310 of 2020 JUDGMENT (Judgment of the Court was delivered by P.RAJAMANICKAM, J.) This Civil Miscellaneous Appeal has been filed by the petitioners/appellants against the order passed by the Family Court, Tiruchirapalli in I.A.No.173/2016 in H.M.O.P.No.35 of 2014, dated 03.10.2018. 2. The respondent herein, who is the husband of the first appellant and father of the second appellant herein, has filed H.M.O.P.No.227/2010 on the file of the Sub-Judge, Tiruchirapalli, seeking divorce against the first appellant herein on the ground of cruelty. The said H.M.O.P was transferred to the Court of Family Judge, Tiruchirapalli and renumbered as H.M.O.P.No.35 of 2014. During pendency of the said petition, the appellants herein have filed an application in I.A.No.252 of 2015 under Section 7(1) of the Family Courts Act r/w Section 25 of the Hindu Marriage Act, 1955 and Sections 20 and 26 of the Protection of Women from Domestic Violence Act, 2005 (23 of 2005) to direct the respondent to pay a sum of Rs.10,000/- to the first appellant herein and Rs. 5,000/- to the second appellant herein towards monthly maintenance, education, medical expenses or any other lump sum by way of permanent alimony to the first appellant herein. They also filed another application in I.A.No.173/2016 C.M.A(MD)No.310 of 2020 under Section 24 of the Hindu Marriage Act, 1955 r/w Sections 20 and 26 of the Protection of Women from Domestic Violence Act, 2005 (43 of 2005) (Herein after referred as 'DV Act') to direct the respondent to pay a sum of Rs.7,500/- to the first appellant herein for her maintenance and medical expenses and Rs. 5,000/- to the second appellant herein for his maintenance and educational expenses till orders passed in I.A.No.252 of 2015. 3.The respondent herein opposed the aforesaid petitions by filing counters. 4. During enquiry in I.A.No.173 of 2016, on either side, no oral evidence has been adduced. On the side of the petitioners, Exs.P.1 to P.5 were marked as exhibits. On the side of the respondent, Exs.R.1 to R.5 were marked as exhibits. 5.The learned Family Court Judge, Tiruchirapalli, after considering the materials placed before him found that since the petitioners herein have already got an order for maintenance in their favour by invoking the provision under Section 20 of D.V Act in D.V.C.No.107 of 2016 on the file of the Additional Mahila Court, Tiruchirapalli, they are precluded from filing another C.M.A(MD)No.310 of 2020 petition seeking the relief of interim maintenance by invoking the very same provision of Section 20 of D.V Act. Accordingly, he dismissed I.A.No.173 of 2016 by the order dated 03.10.2018. Feeling aggrieved, the petitioners have filed the present Civil Miscellaneous Appeal. 6.Heard Mr.M.P.Senthil, learned counsel for the appellants/petitioners and Mr.S.Jeyavel, learned counsel for the respondent. 7.The points for consideration in this civil miscellaneous appeal are as follows:- i)Whether the petitioners are precluded from seeking interim maintenance by invoking the Provisions of Section 24 of the Hindu Marriage Act r/w Sections 20 and 26 of Protection of Women from Domestic Violence Act on the ground that they already got order for payment of maintenance in D.V proceedings i.e., in D.V.C.No.107 of 2016? ii)Whether the learned Family Court Judge was right in dismissing the I.A.No.173/2016 in H.M.O.P.No.35/2014? C.M.A(MD)No.310 of 2020 8. Point Nos.1 & 2:- The learned counsel for the appellants has submitted that the learned Family Court Judge erred in dismissing the application for interim maintenance without adverting to the circumstances under which the petitioners have filed the said application. He further submitted that the learned Family Court Judge failed to consider that as per Section 26 of the DV Act, any relief available under Sections 18 to 22 of the DV Act may also be sought in any legal proceeding, before a Civil Court, Family Court or a Criminal Court. He further submitted that the learned Family Court Judge failed to consider that as per Section 24 of the Hindu Marriage Act, the first appellant is entitled to seek interim maintenance in the divorce proceedings. He further submitted that neither the DV Act nor the Hindu Marriage Act prohibits seeking interim maintenance as additional relief. He further submitted that if any amount was awarded towards maintenance in any of the proceedings, the same has to be taken into account in the subsequent proceedings and after considering the same, if the Court finds that the maintenance already awarded in the previous proceedings is not sufficient, it can direct the respondent to pay additional amount towards maintenance or if the Court finds that maintenance already awarded in the previous proceedings itself is sufficient, it can dismiss the C.M.A(MD)No.310 of 2020 petition, but in stead of doing so, the Court should not have dismissed the petition on the ground that already maintenance was awarded in the previous proceedings. He further submitted that since the right to claim maintenance is a basic right, the learned Family Court Judge ought not to have dismissed the appellants' application and therefore, he prayed to allow the appeal and set aside the orders passed by the learned Family Court Judge and allow the I.A.No.173 of 2016 in H.M.O.P.No.35 of 2014, on the file of the Family Court, Tiruchirappalli. 9.Per contra, the learned counsel appearing for the respondent has submitted that the first petitioner has filed an application under Section 12 of the DV Act in S.T.C.No.644/2009 on the file of the Judicial Magistrate No.6, Tiruchirapalli, seeking reliefs under Sections 18, 19 and 20 of the DV Act. He further submitted that the said application was subsequently transferred to the Chief Judicial Magistrate, Tiruchirapalli and renumbered as S.T.C.No.2/2015 and thereafter, it was again transferred to Additional Mahila Court, Tiruchirappalli and renumbered as D.V.C.No.107/2016. He further submitted that the learned Additional Mahila Court, Tiruchirapalli, taking into consideration the first appellant and her children are residing in respondent's house and salary of the respondent, by the order dated 29.12.2016 in D.V.C.No. C.M.A(MD)No.310 of 2020 107/2016, has directed the respondent herein to pay a sum of Rs.3,000/- towards maintenance to the first petitioner per month and Rs.2,000/- towards maintenance per month to each of her minor sons and totally, a sum of Rs. 7,000/- was awarded and the said amount should be paid from the date of filing of the petition. He further submitted that challenging the said order, the respondent has filed Crl.A.No.15 of 2017 on the file of the Principal Sessions Court, Tiruchirapalli and the learned Principal Sessions Judge, by the judgment dated, 16.08.2017, has modified the order passed by the trial Court by holding that maintenance amount of Rs.7,000/- will be payable only from the date of order of the trial Court namely 29.12.2016 and not from the date of petition before the trial court namely 05.12.2008. He further submitted that challenging the said portion of the order, the first appellant has filed Crl.R.C.(MD).No. 815/2017 before this Court and this Court, by the order dated 27.03.2018, has allowed the said criminal revision setting aside the order passed by the learned Principal Sessions Judge and restored the order passed by the learned Trial Court and hence, the order passed by the learned Judicial Magistrate/Additional Mahila Court, Tiruchirapalli in D.V.C.No.107/2016 with regard to the maintenance has become final. He further submitted that if the petitioners felt that the order passed by the learned Additional Mahila Court in D.V.C.No. 107/2016 requires alteration or modification, due to change of circumstances, C.M.A(MD)No.310 of 2020 they have to file proper application before the same Court by invoking Section 25(2) of the DV Act and in stead of that, they cannot file another application before the another Court for the same relief. He further submitted that filing of the multiple applications seeking maintenance before the different forums would amount to abuse of process of Court and therefore, he prayed to dismiss the Civil Miscellaneous Appeal. 10.This Court has carefully considered the rival submissions made on either side and perused the documents available on record carefully. 11.It is seen from the typed set of papers filed by the appellants that the first appellant herein has filed an application under Section 12 of the DV Act in S.T.C.No.644 of 2009 on the file of the Judicial Magistrate No.6, Tiruchirapalli, seeking certain reliefs including maintenance under Sections 18, 19 and 20 of the DV Act. The said case was subsequently transferred to the Chief Judicial Magistrate Court, Tiruchirapalli and renumbered as S.T.C.No. 2/2015 and thereafter, it was again transferred to the Additional Mahila Court, Tiruchirapalli and renumbered as D.V.C.No.107/2016. During pendency of the said proceedings under the DV Act, the respondent herein has filed H.M.O.P.No.227 of 2010 on the file of the Sub Court, Tiruchirapalli against the C.M.A(MD)No.310 of 2020 first appellant herein seeking divorce on the ground of cruelty and the said petition was subsequently transferred to the Family Court, Tiruchirapalli and renumbered as H.M.O.P.No.35/2014 and the same is still pending. Whileso, the learned Judicial Magistrate /Additional Mahila Court, Tiruchirapalli, by the order dated 29.12.2016, has allowed the D.V.C.No.107 of 2016 and granted the reliefs under Sections 18, 19 and 20 of DV Act and also directed the respondent herein to pay Rs.3,000/- per month to the first appellant and Rs.2,000/- each per month to her two children (totally a sum of Rs.7,000/- per month) towards maintenance from the date of petition. Challenging the said order, the respondent herein has filed Crl.A.No.15 of 2017 before the Sessions Court, Tiruchirapalli and the learned Principal Sessions Judge by the judgment dated 16.08.2017 has modified the order passed by the trial court by holding that the maintenance amount of Rs.7,000/- per month will be payable only from the date of order of the trial court, namely 29.12.2016 and not from the date of petition before the trial court namely 05.12.2008. Challenging the said portion of the order, the first appellant herein has filed Crl.R.C.(MD).No.815 of 2017 before this Court. This Court, by the order dated 27.03.2018 has allowed the said criminal revision case and set aside the judgment passed by the learned Principal Sessions Judge in Crl.A.No.15 of 2017 and restored the order passed by the learned Judicial Magistrate/Additional Mahila Court, Tiruchirapalli in C.M.A(MD)No.310 of 2020 D.V.C.No.107 of 2016, dated 29.12.2016. So, the order passed by the learned Additional Mahila Court, Tiruchirapalli in D.V.C.No.107 of 2016 has become final. 12.It appears that during pendency of the DV proceedings, the appellants herein have filed an application in I.A.No.252/2015 under Section 7(1) of the Family Courts Act r/w Section 25 of the Hindu Marriage Act and Sections 20 and 26 of the DV Act to direct the respondent to pay a sum of Rs. 10,000/- for the first appellant herein and Rs.5,000/- for the second appellant herein towards monthly maintenance, education and medical expenses or any other lump sum by way of permanent alimony for the first appellant herein. 13.At this juncture, Section 25 of the Hindu Marriage Act, 1955, may be extracted as under: \u201c25.Permanent alimony and maintenance (1) Any court exercising jurisdiction under this Act may, at the time of passing any decree or at any time subsequent thereto, on application made to it for the purpose by either the wife or the husband, as the case may be, order that the respondent shall [***] pay to the applicant for her or his maintenance and support such gross sum or such monthly or periodical sum for a term not exceeding the life of the applicant as, having regard to the respondent's own income and other C.M.A(MD)No.310 of 2020 property, if any, the income and other property of the applicant [****], the conduct of the parties and other circumstances of the case], it may seem to the court to be just, and any such payment may be secured, if necessary, by a charge on the immovable property of the respondent. (2) If the court is satisfied that there is a change in the circumstances of either party at any time after it has made an order under sub-section (1), it may at the instance of either party, vary, modify or rescind any such order in such manner as the court may deem just. (3) If the court is satisfied that the party in whose favour an order has been made under this section has remarried or, if such party is the wife, that she has not remained chaste, or, if such party is the husband, that he has had sexual intercourse with any woman outside wedlock, [it may at the instance of the other party vary, modify or rescind any such order in such manner as the court may deem just].\u201d 14.So, it is clear that Section 25 (1) of the said Act empowers the Court, while passing any decree, to consider the status of the parties and whether any arrangement needs to be made in favour of the wife or the husband; and by way of permanent alimony, an order granting maintenance can also be passed by the Court. It is also clear that at any time, subsequent to the passing of decree also, the Court can order for granting maintenance on application made to it by either wife or the husband. C.M.A(MD)No.310 of 2020 15.But, in this case, the appellants herein have filed I.A.No.252/2015, seeking permanent alimony even during pendency of the H.M.O.P. They also filed another application in I.A.No.173/2016 under Sections 24 of the Hindu Marriage Act r/w Sections 20 and 26 of the DV Act to direct the respondent to pay a sum of Rs.7,500/- for the first appellant herein towards her maintenance and medical expenses and Rs.5,000/- for the second appellant herein towards monthly maintenance and educational expenses till suitable orders are passed in I.A.No.252/2015. In the affidavit filed in support of I.A.No.173/2016, the first appellant herein has stated that when arguments were advanced in I.A.No. 252/2015, on 11.05.2016, it was raised by the Court that she has sought for permanent alimony in that application and it cannot be taken up as an interim measure and directed the parties to take up that application along with main case. Further, she has stated that though it was represented by her that the relief sought for in I.A.No.252 of 2015 claimed as permanent alimony, it can be restricted to an interim alimony and when she was prepared to make an endorsement to that extent in that application, the trial court was not inclined to entertain her plea and opined to take up that application viz., I.A.No.252 of 2015 along with I.A.No.251/2015 (Compensation application) and main application jointly. She further averred that since she and her children are striving hard to meet both ends, she filed I.A.No.173 of 2016 seeking interim C.M.A(MD)No.310 of 2020 maintenance. 16.As already pointed out that as per Section 25(1) of the Hindu Marriage Act, 1955, the Court is empowered to pass order with regard to permanent alimony at the time of passing any decree in the H.M.O.P. If the Court did not exercise the said power and grant permanent alimony at the time of passing a decree in H.M.O.P, subsequently also can grant alimony on application filed by either wife or husband. Therefore, the application in I.A.No.252/2015 itself is misconceived. Under the said circumstances, the application in I.A.No.173 of 2016 seeking interim maintenance till the disposal of I.A.No.252/2015 is also misconceived. So, the application in I.A.No.173 of 2016 as framed is not maintainable. 17.Even assuming that the application in I.A.No.173 of 2016 has to be read that it was filed seeking interim maintenance till the disposal of main H.M.O.P, even then also, the said petition is not maintainable, because the said relief is only an interim relief. Admittedly, already, the first appellant has filed an application under Section 12 of the DV Act seeking reliefs under Sections 18, 19 and 20 of the DV Act for herself and for her two minor sons in STC.No. 644/2009 on the file of the Judicial Magistrate No.6, Tiruchirapalli and C.M.A(MD)No.310 of 2020 subsequently, the same was transferred to the Court of Chief Judicial Magistrate, Tiruchirapalli and renumbered as STC.No.2 of 2015 and thereafter, it was again transferred to the Additional Mahila Court, Tiruchirapalli and renumbered as D.V.C.No.107 of 2016 and in the said proceedings, the learned Judicial Magistrate/ Additional Mahila Court, Tiruchirapalli, by the order, dated 29.07.2016 has allowed the said application and granted protection order and also directed the respondent to pay Rs.3,000/- per month to the first appellant and Rs.2,000/- each per month to her two children (Totally Rs.7,000/- per month) towards maintenance from the date of petition. Challenging the said order, the respondent has filed Crl.A.No.15/17 before the Sessions Court, Tiruchirapalli and the learned Principal Sessions Judge, by the judgment dated 16.08.2017 has modified the order passed by the trial court by holding that the maintenance amount of Rs.7,000/- will be payable only from the date of order of the trial court namely 29.12.2016 and not from the date of petition before the trial court namely 05.12.2008. Challenging the said portion of the order alone, the first appellant herein has filed Crl.R.C.(MD).No.815/2017 before this Court. This Court, by the order dated 27.03.2018 has allowed the said criminal revision case and set aside the judgment passed by the learned Principal Sessions Judge, Tiruchirapalli in Crl.A.No.15/17, dated 16.08.2017 and restored the order passed by the learned Chief Judicial Magistrate/Additional Mahila Court, C.M.A(MD)No.310 of 2020 Tiruchirapalli in D.V.C.No.107/2016, dated 29.12.2016. If the first appellant herein felt that the maintenance awarded by the learned Judicial Magistrate/Additional Mahila Court, Tiruchirapalli in D.V.C.No.107 of 2016 is not adequate, she would have filed an appeal before the Sessions Court, but she has not filed any appeal. On the contrary, it was only the respondent has filed an appeal against the order of the learned Additional Mahila Court, Tiruchirapalli. So, it appears that the appellants did not have any grievance with regard to the maintenance amount awarded by the learned Judicial Magistrate/Additional Mahila Court, Tiruchirappalli in D.V.C.No.107/2016. The order passed by the learned Judicial Magistrate/Additional Mahila Court, Tiruchirappalli in D.V.C.No.107/2016 under Section 20 of DV Act is permanent in nature, whereas, the relief asked by the petitioners in I.A.No.173/2016 in H.M.O.P.No.35 of 2014 is only an interim relief. Therefore, this Court is of the view that they cannot seek interim relief, after getting permanent relief. 18.At this juncture, it would be relevant to refer to the decision in Rakesh Malhotra Vs Krishna Malhotra (MANU/SC/0338/2020 : 2020 (1) RCR (Criminal) 1019), wherein, in a matrimonial proceeding initiated by the wife seeking dissolution of marriage under Section 13(1) (i-a) & (i-b) of the Hindu Marriage Act, 1955, a decree for dissolution was passed by the Court of C.M.A(MD)No.310 of 2020 First Additional District Judge, Vidisha (M.P) on 20.02.2013 and also passed an order for granting permanent alimony. Some time, in the year 2005, an application seeking maintenance under Section 125 of Cr.P.C was preferred by the wife and the same was dismissed by the concerned Court by the order dated 30.06.2014. The wife challenged the said order by way of criminal revision before the High Court. The High Court by the order dated 14.12.2017 has allowed the revision and directed the husband to pay a sum of Rs.5,000/- per month towards maintenance. Challenging the said order, the husband has filed an appeal before the Honourable Supreme Court. The Hon'ble Supreme Court has held that since the basic order was passed by the concerned court under Section 25(1) of the Hindu Marriage Act, by very nature, the order of modification / variation can also be passed by the concerned court exercising power under Section 25(2) or 25(3) of the said Act. It also held that the remedy so prescribed ought to be exercised rather than creating multiple channels of remedy seeking maintenance and finally set aside the order passed by the High Court. The relevant portion of the said decision is extracted hereunder:- \u201cSince the Parliament has empowered the Court under Section 25(2) of the Act and kept a remedy intact and made available to the concerned party seeking modification, the logical sequittor would be that the remedy so prescribed ought to be exercised rather than creating multiple channels of remedy seeking maintenance. One can understand the situation where C.M.A(MD)No.310 of 2020 considering the exigencies of the situation and urgency in the matter, a wife initially prefers an application under Section 125 of the Code to secure maintenance in order to sustain herself. In such matters the wife would certainly be entitled to have a full- fledged adjudication in the form of any challenge raised before a Competent Court either under the Act or similar such enactments. But the reverse cannot be the accepted norm.\u201d 19.Though the aforesaid decision has been rendered by interpreting the provisions of Section 125 of Cr.P.C and Section 25 of the Hindu Marriage Act, the law laid down in the said decision will squarely apply to this case also. 20.In this case, as already pointed out, the appellants herein got an order for payment of maintenance in the DV proceedings under Section 20 of the DV Act and the said relief is permanent in nature. If the appellants feel that due to change of circumstances, the said order requires modification or alteration, they can very well approach the same Court and get appropriate relief by invoking Section 25(2) of the DV Act or they can request the Family Court to exercise the power under Section 25(1) of the Hindu Marriage Act at the time of passing a decree in the H.M.O.P or they can file a regular suit and ask for charge over the property and that is most secured one. In stead of that, they cannot file another application before the another forum that too in the nature of C.M.A(MD)No.310 of 2020 interim relief. 21.Since the petitioners have filed I.A.No.173 of 2016 under Section 26 of the DV Act also, it is relevant to extract the said provision. \u201c26.Relief in other suits and legal proceedings.- (1) Any relief available under Sections 18, 19, 20, 21 and 22 may also be sought in any legal proceedings, before a civil Court, family Court or a criminal Court, affecting the aggrieved person and the respondent whether such proceeding was initiated before or after the commencement of this Act. (2)Any relief referred to in sub-section (1) may be sought for in addition to and along with any other relief that the aggrieved person may seek in such suit or legal proceeding before a civil or criminal Court. (3)In case any relief has been obtained by the aggrieved person in any proceedings other than a proceeding under this Act, she shall be bound to inform the Magistrate of the grant of such relief.\u201d. 22. A bare perusal of the aforesaid provision would show that the aggrieved person may also seek any relief under Sections 18 to 22 of DV Act in any legal proceedings before a Civil Court/Family Court or Criminal Court as additional reliefs. As per the Sub-Section (3) of Section 26 of the DV Act, in C.M.A(MD)No.310 of 2020 case, any relief has been obtained by the aggrieved person, in any proceedings, other than a proceeding under the DV Act, she shall be bound to inform the Magistrate of the grant of such relief. So, it is clear that as per Section 26(1) of the DV Act, the reliefs under Sections 18 to 22 of DV Act should have been asked before filing petition under Section 12 of the DV Act before the concerned Magistrate. If any such petition filed and if any relief is obtained, then only, aggrieved person can inform the said fact to the Magistrate, at the time of disposal of the application under Section 12 of the DV Act, but the reversed procedure is not prescribed. In this case, the petitioner already got an order in the petition properly filed under Section 12 of the DV Act before the Additional Mahila Court, Tiruchirappalli and that being so, they are not entitled to file petition before the Family Court by invoking the provision under Section 26(1) of the DV Act, seeking interim relief. Therefore, this Court is of the view that the learned Family Court Judge has rightly dismissed the application in I.A.No.173 of 2016. Hence, this Civil Miscellaneous Appeal is liable to be dismissed. Accordingly, the points 1 & 2 are answered against the appellants. 23. In the result, this Civil Miscellaneous Appeal is dismissed, confirming order dated 03.10.2018 passed by the learned Judge, Family Court, Tiruchirapalli in I.A.No.173 of 2016 in H.M.O.P.No.35 of 2014. No costs. It is C.M.A(MD)No.310 of 2020 open to the appellants to file petition under Section 25(2) of the DV Act for modification/variation before the Additional Mahila Court, Tiruchirappalli or they can request the Family Court to exercise the power under Section 25(1) of the Hindu Marriage Act at the time of passing a decree in H.M.O.P.No.35 of 2014 or they can file a regular suit and ask for charge over the property, if they so advised. Consequently, connected miscellaneous petition is also dismissed. (M.S.N.J.,) (P.R.M.J.,) 15.09.2020 Index :yes/No Internet :yes VS To 1. The Family Court, Tiruchirapalli. 2. The Section Officer, VR Section, Madurai Bench of Madras High Court, Madurai. Note: In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the Advocate/litigant concerned. C.M.A(MD)No.310 of 2020 M.SATHYANARAYANAN.J. AND P.RAJAMANICKAM,J. 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{"id": "1670685", "text": "1 CRA-10721-2019 The High Court Of Madhya Pradesh CRA-10721-2019 (KARANSINGH Vs THE STATE OF MADHYA PRADESH) 16 Indore, Dated : 01-10-2021 Heard through Video Conferencing. Shri Anil Ojha, learned counsel for the appellant. Shri Prateek Patwardhan, learned Panel Lawyer for the respondent/State. Learned counsel for the State is directed to seek instructions regarding the total period of jail incarceration of the appellant from the concerned jail. List after four weeks. (ROHIT ARYA) JUDGE RJ Signature Not Verified VerifiedDigitally Digitally signed by SAN REENA JOSEPH Date: 2021.10.01 18:27:30 IST", "spans": [{"start": 2, "end": 16, "label": "CASENO"}, {"start": 21, "end": 49, "label": "COURT"}, {"start": 50, "end": 64, "label": "CASENO"}, {"start": 84, "end": 107, "label": "RESP"}, {"start": 128, "end": 138, "label": "DATE"}, {"start": 178, "end": 187, "label": "A.COUNSEL"}, {"start": 229, "end": 247, "label": "R.COUNSEL"}, {"start": 474, "end": 484, "label": "JUDGE"}, {"start": 579, "end": 589, "label": "DATE"}]}
{"id": "374386", "text": "PETITIONER: TARULATA SYAM AND ORS. Vs. RESPONDENT: COMMISSIONER OF INCOME-TAX, WEST BENGAL DATE OF JUDGMENT28/04/1977 BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH BHAGWATI, P.N. FAZALALI, SYED MURTAZA CITATION: 1977 AIR 1802 1977 SCR (3) 697 1977 SCC (3) 305 ACT: Indian Income Tax Act, 1922--S. 2(6A)(e)--Scope of. Company a s. 23A Company in which public are not sub- stantially interested --Had accumulated profits--Gave loan to a shareholder--Loan repaid before end of the financial year--Loan if dividend within s. 2(6A)(e). HEADNOTE: Under section 2(6A)(e).of the Indian Income-tax Act, 1922, the term dividend includes any payment by a company not being a company in which the public are substantially interested within the meaning of s. 23A of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder to the extent to which the company in either case possesses accumulated profits. According to s. 12(1A) of the Act, income from other sources includes dividends. Sub-section (lB) of s. 12 provides any payment by a company to a shareholder by way of advance or loan which would have been treated as dividend within the meaning of s. 2(6A)(e) in any previous year relevant to any assess- ment year prior to the assessment year ending on the 31st day of March, 1956 had that clause been in force in that year, shall be treated as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of such previous year. The provisions of S. 2(6A)(e) and s. 12(lB) had been borrowed and adopted with certain alterations from s. 108(2) of the Commonwealth Income Tax Assessment Act of Australia the last limb of which provided that payment to a shareholder by way of advance or loan was to be treated as dividend paid by the company on the last day of the year of income of the company in which payment was made. The appellant-assessee was a shareholder and Managing Director of a Private Ltd. Company. In the calendar year 1956 (assessment year 195758), the assessee withdrew in cash from the company a sum of Rs. 4.97 lakhs, which was less than the accumulated profits of the company. Before the end of the year, the assessee repaid the whole amount. Deduct- ing a sum of Rs. 1.59 lakhs which was credited to the asses- see's account by way of dividend in the company's books, the Income-tax Officer treated the balance of Rs. 2.72 lakhs as dividend income in the ,assessee's hands and grossed up the amount under s. 16(2). appeal, the Accountant Member of the Appellate Tribunal held that any payment made as envisaged in s. 2(6A)(e) became dividend and must be treated as the assessee's income and no subsequent repayment could take it out of the mischief of the provision. The Judicial Member on the other band held that since total income of the asses- see during the relevant previous year could be computed and assessed only at the end of that year any advance or loan taken during the interim periods of the previous year would have to. be ignored. On reference the President agreed with the Accountant Member. The High Court answered the reference in favour of the Revenue. 698 were taken and (ii) the last limb of s. 108(1) of the Aus- tralian Act should be read into the Indian Act because what was explicit in. s. 108(1) of the Australian Act is implicit in s. 2(6A),(e) and s. 12(lB) of the Indian Act. Dismissing the appeal, HELD: The fiction created by s. 2(6A)(e) read with s. 12(lB) of the Act is attracted as soon as all the conditions necessary for its application exist in a case. [707 C] 1. In Navnit Lal C. Javeri v.K.K. Sen, Appellate Assist- ant Commissioner Income-tax [1965] 1 SCR 909, this Court held that the combined effect of these two provisions is that three kinds of payments made to a shareholder of a company are treated as taxable dividend to the extent of the accumulated profits held by the company, namely, payments made to the shareholder by way of advance or loan, pay- ments made on his behalf and payments made for his individu- al benefit. The five conditions to be satisfied are: (i) The company must be one in which the public are not substan- tially interested within the meaning of s. 23A; (ii) The borrower must be a shareholder at the date when the loan was advanced; (iii) The loan advanced can be deemed to be divi- dend only to the extent of the accumulated profit on the date of the loan; (iv) The loan must not have been advanced by the company is the ordinary course of its business and (v) The loan must have remained outstanding at the com- mencement of the shareholder's previous year in relation to the assessment year 1955-56. [707 D-G] In the instant case the company was a controlled company within the meaning of s. 23A; the assessee was its share- holder; the company possessed \"accumulated profits\" in excess of the amount paid to the assessee during the previ- ous years; and the company's business was not money lending. The last condition was not applicable because it was a transitory provision applicable to the assessment year 1955-56 only while the assessment year in this case was 1957-58. [708 A] 2. (a) The language of ss. 2(6A)(e) and 12(lB) is clear and unambiguous. There is no scope for importing into the statute words which are not there. Such importation would be not to construe it but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. [708 H] (b) No justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute has been made out. (c) The Indian Legislature has deliberately omitted to use in ss. 2(6A)(e) and 12(lB) words analogous to those in the last limb of s. 108(1) of the Australian Act. When ss. 2(6A)(e) and 12(lB) were inserted by Finance Act, 1955, Parliament must have been aware of the provision contained in s. 108 of the Australian Act. In spite of such aware- ness, Parliament has not thought it fit to borrow the whole hog what is said in s. 108(1) no far as the last limb of that section is concerned. Our Parliament imported only a very restricted version, and incorporated the same as the 5th condition in s. 12(lB) to the effect, that the payment deemed as dividend shall be treated as dividend received by him in the previous year relevant to the assessment year ending on the 31st March, 1956 if such loan or advance remained outstanding on the last day of such previous year The word \"such\" prefixed to the previous year shows that the application of this clause is confined to the assessment year ending on 31st March, 1956. [709 C-D] In the instant case the assessment year did not end on 31st March, 1956 which showed that the Legislature has deliberately not made the subsistence of the loan or advance or its being outstanding on the last date of the previous year relevant to the assessment year, a prerequisite for raising the statutory fiction. In other words, even if the loan or advance ceased to, be 699 outstanding at the end of the previous year, it could still be deemed as dividend if the other four conditions factually existed to the extent of the accumulated profits possessed by the company. [709 E-F] (d) Under s. 3 which is the charging section, the previ- ous year is the unit of time on which the assessment is based. As the taxability of income is related to its re- ceipt or accrual in the previous year, the moment dividend is received whether, actual or deemed, income taxable under the residuary head, \"income from other sources\", arises. The charge being on accrual or receipt, the statutory fic- tion created by ss. 2(6A)(e) and s. 12(lB) would come into operation at the time of payment by way of advance or loan provided the other conditions are satisfied. [709 G-H] JUDGMENT: CIVIL APPELLATE JURISDICTION: C.A. No. 147 of 1972. (Appeal by Special Leave from the Judgment and Order dated 19.2.1971 of the Calcutta High Court in Income Tax Ref. No. 98/67) G.C. Sharma, D.N. Mukherjee, A. K. Ganguly and G.S. Chatterjee, for the appellants. B.B. Ahuja and R.N. Sachthey, for respondent. G.C. Sharma, D.K. Jain, Anup Sharma, S.P. Nayar and Miss K. Jaiswal for the Intervener. The Judgment of the Court was delivered by SARKARIA J. Whether any payment by a Company, not being a Company in which the public are subsantially interested within the meaning of s. 23A, of any sum by way of advance or loan to a shareholder, not exceeding the accumulated profits possessed by the Company, is to be deemed as his dividend under Section 2(6A) (e) read with Section 12(lB) of the Income-tax Act, 1922, even if that advance or loan is subsequently repaid in its entirely during the relevant previous year in which it was taken, is the only question that falls to be determined in this appeal by special leave. The assessment year is 1957-58, and the corresponding previous year is the calendar year 1956. The assessee is a shareholder and the Managing Director of M/s. Dolaguri Tea Co. (P) Ltd. The Company is admittedly one in which the public are not substantially interested within the meaning of s. 23A of the Indian Income-tax Act, 1922 (for short, the Act). At the commencement of the previous year, there was in the books of the Company a credit balance of Rs. 65,246/- in the assessee's account, which had been brought' forward from the earlier year. Between the 11th January and the 12th November, 1956, the assessee withdrew in cash from time to time from the Company, amounts, aggregating Rs. 4,97,442/-. The first two cash amounts of Rs. 3,50,000/- and Rs. 40,400/-, were taken by the assessee on 11.1.1966. Deducting therefrom the opening balance of Rs. 65,246/- and two more item, namely, Rs. 1,40,000/- being outstand- ing dividends declared on 31.12.1955 of his major son, and transferred to his account, and a further dividend of Rs. 19,493/- credited to his account from Kathoni Tea Estate, there remained a sum of Rs. 2,72,703/- to the debit of the assessee in the books of the Company as on the 12th November, 1956. On December 29, 1956, the assessee paid back to the Company a sum of Rs. 1,90,000/-. On December 31, 1956, his account was credited with another sum of Rs. 80,000/- in respect of the dividend due to him and his wife, and with a further sum of Rs. 29,326/- for hypotecation. In this manner before the end of the previous year, the assessee's account was credited with an aggregated amount of Rs. 2,99,326/- which exceeded the debit balance of Rs. 2,72,70,3/- as on November 12, 1956.. Thus at the end of the relevant previous year, no advance or loan was due to the Company by the assessee. The Income-tax Officer found that the accumulated prof- its of the Company as on January 1, 1956, amounted to Rs. 6,83,005. He, therefore, deducted the two aforesaid items of Rs. 1,40,000/- and Rs. 19,493/-, aggregating Rs. 1,59,493/-, from the amount paid in cash to the assessee and treated the balance of Rs. 2,72,703/- as the net 'dividend' income in the hands of the assessee within the meaning of Section 2 (6A)(e). The/income-tax Officer grossed up that amount under Section 16(2) and gave credit for tax in ac- cordance with that Section to the assessee. The assessee's appeal to the Appellate Assistant Commissioner having failed, he preferred a further appeal to the Income-tax Appellate Tribunal. There was a divergence of opinion between the Members of the Tribunal. The Ac- countant Member took the view that the moment a payment is made as envisaged in Section 2(6A)(c) it becomes clothed with the character of a dividend and has to be treated as such income of the assessee, and no subsequent action or repayment by the share-holder can take it out of the mis- chief of this provision. He therefore held that the sum of Rs. 2,72,703/- was taxable dividend under Section 2(6A)(e). The Judicial Member expressed a contrary opinion. In his view, the total income of the assessee during the rele- vant previous year could be computed and assessed only at the end of that year; it could not be computed at interim periods during the previous year. \"If it is found that although the shareholder had taken by way of advance or loan an amount from the Company during the course of a previous year but had returned the same to the Company before the close of that previous year, it can only be said while computing the shareholder's total income at the end of that previous year that no advance or loan from the 23A Company of which he was a shareholder stood for his benefit at the time relevant for computation of his total income. The advances or loans taken during the interim periods of the previous year would just have to be ignored.\" On these premises, the Judicial Member came to the conclusion that the sum of Rs. 2,72,703/- grossed up to Rs. 3,19,245/-, was not a dividend within the fiction under Section 2(6A) (e) of the Act. On account of this difference of opinion, the following question was referred to the President of the Tribunal: \"Whether on the facts and in the circum- stances of the case, the sum of Rs. 2,72,703/- net (Rs. 3,19,245/- gross) is to be treated as dividend income in the hands of the assessee within the meaning of Section 2(6A) (e) ?\" The President agreed with the Accountant Member and held that an \"advance or loan received by the shareholder of a Private Company forthwith assumes the character of a divi- dend and becomes his income by virtue of the fiction created by Section 2(6A) (e) and it ceases to be a liability for the purpose of taxation, although the assessee may, in fact or in law, remain liable to the Company to- repay it. If the assessee repays the loan subsequently, such repayment would not liquidate or reduce the quantum of the income which had already accrued as such repayment is not be al- lowed as a permissible deduction under Section 12(2). On these premises he answered the question in the affirma- tive. In accordance with the majority opinion, the Tribunal dismissed the assessee's appeal, but, at his instance, referred the same question for opinion to the High Court under Section 66(1) of the Act. The High Court held that the tax was attracted at the point of time when the said loan was borrowed by the share- holder and it was immaterial whether the loan was repaid before the end of the accounting year or not. On this reasoning it answered the question in favour of the Revenue and against the assessee. Hence this appeal by the assessee. Before dealing with the contentions canvassed, it is necessary to have a look at the general scheme and the relevant provisions of the Act, Section 2 (6A)(e) of the Act reads as follows: (6A) \"dividend\" includes--- (a) to (d) .. (e) any payment by a company, not being a company in which the public are substantially interested within the meaning of section 23A of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either case possesses accumulated profits; but \"dividend\" does not include- (i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of any share issued for full cash consideration where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets; (ii) any advance or loan made to a share- holder by a company in the ordinary course of its business where the lending of money is a substantial part of the business of the compa- ny; (iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of clause (e), to the extent to which it is so set off; Explanation. The expression \"accumulated profits\", wherever it occurs in this clause, shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day of March, 1948, and be-fore the 1st day of April, 1956; Sub-section (15) defines 'total income' as meaning \"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 is the charging section. Two of the princi- ples deducible from the Section are: (1 ) That the tax is levied on the total income of the assessable entity; (2) That each previous year is a distinct unit of time for the purpose of assessment, and the profits made or liabilities or losses incurred before or after the relevant previous year are wholly immaterial in assessing the profits of that year unless there is a statu- tory provision to the contrary. Section 4 (1 ) so far as it is material reads as follows: \"Section 4(1): Subject to the provisions of this Act, the total' income of any previous year of any person includes all income, prof- its and gains from whatever source derived which- (a) are received or are deemed to be re- ceived in the taxable territories in such year by or on behalf of such person, or (b) if such person is resident in the taxa- ble territories during such year,-- (i) accrue or arise or any deemed to accrue or arise to him in the taxable territories during such year, or (ii) accrue or arise to him without the taxable territories during such year, or (iii) ........ (c) if such person is not resident in the taxable territories during such year, accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year: (emphasis supplied) \"Provided that .. ... .. ..\" The principles deducible from Sec. 4(1) are: (1 ) The charge is on accrual or receipt basis. Such receipt or accrual may be actual or statutory, i.e. the result of any statutory fiction created by the Act. (2) If a particular amount of income is taxed under any of the clauses (a), (b) or (c) of the sub-section the same amount cannot be taxed under any other clause either in the same year or in a different year. That is to say, income which is taxed on accrual under clause (b) (ii) cannot be taxed again on receipt under clause (a) or on remittance under clause (b)(iii) (see Kanga and Palkhiwa- la, Vol. I, 1959 Edition, page 153). (3) The receipt spoken of in this clause is the first receipt after the accrual of the income See the decision of this Court in Keshav Mills v. Commissioner of Income- tax(1)]. Sub-section (1) of Sec. 4 also highlights the basic principle embodied in the charging section 3, that the accrual or receipt of income (actual or deemed) is taxed with regard to the relevant previous year. Section 12 deals with the residuary head: \"Income from other sources\". Its sub-section (1A) says that: \"Income from other sources shah include 'dividends'. Sub-section (lB) in crucial. It provides: \"Any payment by a company to a share- holder by way of advance or loan which would have been treated as a dividend within the meaning of clause (e) of sub-section (6A) of section 2 in any previous year relevant to any assessment year prior to the assessment year ending on the 31st day of March, 1956 had that clause been in force in that year, shall be treated as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of such previous year\". Sub-section (2), inter alia lays down that in computing any income by way of dividend, allowance shah be given for any reasonable sum paid by way of commission or remuneration to a banker or any other person realising such dividend on behalf of the assessee. It is to be noted that sub-section (6A) of section 2 and subsections (1A) and (lB) u/s 12 were inserted in the Act by the Finance Act, 1955, with effect from the 1 st April, 1956. In the relevant assessment year, Section 16(2) of the Act was operative and ran as follows: \"16(2) For the purpose of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or (1) [1953] 23 I.T.R. 230. distributed to him, and shall be increased to such amount as would, if income-tax (but not super-tax) at the rate applicable to the total income of the company ..... for the finan- cial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed were deducted therefrom, be equal to the amount of the dividend.\" Mr. G.C. Sharma, Counsel for the appellants contends that the scope of the fiction created by Sec. 2(6A)(e) should be confined to those advances and loans only, which are not repaid but remain subsisting at the end of the previous year in which they were taken. It is argued that the sole object of this provision is to curb the evil of distributing profits under the guise of loans or advances; that if an advance or loan is repaid in the same accounting year, it cannot be said that it was a device for distribu- tion of profits. It is submitted that only in the case of an advance or loan which remains outstanding at the end of the accounting year, Sec. 2(6A) (e) raises an irrebutable presumption that it was a payment of dividend under the cloak of a loan. It is maintained that if this construc- tion of Sec. 2(6A)(e) is not adopted, it will lead to ex- tremely oppressive, unreasonable and anamolous results, including double taxation. To illustrate his point Counsel compares and contrasts the position of a shareholder who promptly, after a short period, repays the loan in the same year, with one who does not do so but allows it to remain outstanding and be carried over to the next year, and there- after a dividend is declared. If the interpretation adopted by the High Court is correct---says Mr. Sharma--the share- holder in the prior case who had promptly repaid the loan would not be entitled under sub-clause (iii) of Clause (e) of s. 2(6A) to set off any part of the subsequently declared dividend against the loan which he had repaid earlier, but will have to pay double tax on the same item, once on it as deemed dividend and then on it as declared dividend. His liability cannot be reduced to the extent of the dividend; because at the date on which the dividend was declared, no loan was outstanding against which. it could be set off. As against the former, the latter shareholder who makes full use of the loan and does not repay any part of the loan in the same year, but leaves it unpaid till a dividend is declared next year, will get relief by set off of the subse- quently declared dividend, in whole or in part against the loan outstanding against him. Another example cited by Mr. Sharma is of a case where the accumulated profit, say is Rs. 9,000/- and the share- holder takes an advance or loan of Rs. 3,000/- and he repays it after a week, and again gets the same amount (Rs. 3,000/-) back as a loan, and again repays it after a week, and again retakes the same amount as loan--all the three loans being taken and repaid, in the same year. If the unrestricted interpretation of the provision, sought by the Revenue were to be adopted, the same amount of loan in all the three transactions of loan would be subjected to triple taxation. Such an absurd and oppressive result, says the Counsel, would be against the intendment of the provi- sion and inconsistent with the scheme of the Act which generally aims avoids double taxation. The upshot of the arguments of Mr. Sharma is that under the Act, only that item or entity is taxable which is rationally capable of being considered as the income of the assessee; that an advance or loan which is genuine and not a subterfuge for payment of dividend and is not subsisting or outstanding at the end of the previous year on account of its repayment by the shareholder cannot reasonably be deemed to be his dividend income within the contemplation of s. 2(6A)(e) read with s. 12 of the Act. Mr. Sharma has taken us through various decisions having a bearing on the problem. The cases referred to, discussed or sought to be distinguished by him are: K.M.S. Lakshman Aiyar v. Assistant Income-tax Officer,(1) Navnit Lal C. Javeri v.K.K. Sen, Appellate Assistant Commissioner, Income-tax, Bombay;(2) Commissioner of Income-tax, Madras v.K. Srini- vasan; (3) Walchand & Co. Ltd. v. Commissioner of Income- tax, Bombay;(4) Commissioner, Income-tax Bombay v.R.K. Badiani. (5) Mr. Sharma also has referred to Sec. 108 of the Commonwealth income-tax Act as in force in Australia, and submitted that since the substance of Sec. 2(6A)(e) and s. 12(lB) has been borrowed from s.108 of the said Act and the object of these provisions in the two enactments is the same, it will not be illegitimate to determine and circum- scribe the scope of the fiction created by the provision in question in the light of the principles indicated in Sec. 108 of the Commonwealth Act. On the other hand, Mr. Ahuja appearing for the Revenue, submits that sub-clause (iii) which permits a set off against a loan deemed as dividend, does not apply in cases where the dividend is not declared in the same accounting year because to hold otherwise would be against the basic scheme ingrained in ss. 3 and 4 of the Act, according to which the unit of time for the purpose of assessment is the previous year of the assessee. Mr. Ahuja further maintains that even if during the same accounting year after repayment of the loan, a dividend is declared, sub-clause (iii) will apply, and the Income-tax Officer will not be debarred from reducing, in an appropriate case, the amount treated by him as 'dividend' under clause (e) of s. 2(6A) to the extent of the subsequently declared dividend, on the principle of notional set off underlying sub-clause (iii). The point sought to be made out is that since the treatment of the loan to the assessee shareholder as his dividend rests on a legal fiction, it will not be an illegitimate use of sub- clause (iii) to allow a notional set off to meet such a situation. Thus construed, says the Counsel, there would be no anomaly. Mr. Ahuja further submitted that s. 2(6A)(e) was enact- ed to suppress the evil of receiving profits or dividends under the guise of loans by the shareholders of a controlled Company, as such a malpractice resulted in evasion of tax. This provision, it is urged should be construed in a manner which suppresses the mischief and advances the remedy. It is maintained that the language of the provisions in question (1) [1959] XL I.T.R.469 (Mad.) (2) [19651 1, SCR 909-56 I.T.R. 198. (3) (1963) 50, ITR 788 (Mad). (4) 100 I.T.R. 598(Bom). (5) [1970] 76 I.T.R. 369 (Bom). is plain and unambiguous and no question of seeking external aid for its interpretation arises; the Court must give effect to it regardless of the hardship, if any, resulting therefrom. The sum and substance of his arguments is, that since all the factual ingredients necessary for raising the fiction contemplated by s. 2(6A) (e) and s. 12(lB) have been found to exist by the Income-tax authorities and the Tribu- nal, the loan had to be treated as the assessee's dividend income, the moment it was received, and the subsequent repayment of the loan could not neutralise or take it out of that category of 'income'. Counsel has drawn our attention to the observations of this Court in Navnit Lal C. Javeri v. K.K. Sen, Appellate Assistant Commissioner of Income-tax (supra). He has further adopted the reasoning of the Bombay High Court in Walchand & Co. v. Commissioner of Income-tax, Bombay (supra)- Section 2(6A)(e) and s. 12(lB) were inserted in the Act by. the Finance Act 1955 which came into operation on 1-4- 1955. These provisions seem to have been adapted, and borrowed with alterations, from s. 108 of the Commonwealth Income-tax Assessment Act in force in Australia. Section 108 reads as follows: \"Loans to shareholders, (1 ) If amounts are paid or assets distributed by a private company to any of its shareholders by way of advances or loans, or payments are made by the company on behalf of or for the individual benefit of, any of its shareholders, so much, if any, of the amount or value of those ad- vances, loans or payments, as, in the opinion of the Commissioner, represents distributions of income shall, for the proposes of this Act other than the purposes of Division 11A of Part III and Division 4 of Part VI be deemed to be dividends paid by the company on the last day of the year of income of the company in which the payment or distribution is made. (2) Where the amount or value of an advance, loan or payment is deemed, under the last preceding sub-section, to be a dividend paid by a company to a shareholder, and the company subsequently sets off the whole or a part of a dividend distributed by it in satis- faction in whole or in part of that advance, loan or payment, that dividend shall, to the extent to which it is so set off, be deemed, not to be a dividend for any purpose of this Act.\" It will be seen that under s. 108( 1 ) formation of \"the opinion of the Commissioner\" is the sine qua non for bring- ing this provision into provision into operation. It has been held be the Australian Board of Review that the mere fact that a shareholder in a private Company has become indebted to it, does not justify the formation of the opin- ion by the Commissioner such as is indicated in sub-section (1) of s. 108. \"There must be something that goes beyond a mere debt automatically arising upon a taking of accounts and which points to a subterfuge whereby a payment which, upon examination, is found to relate to the income of the Company and to represent the distribution thereof, is made to appear to be a loan or advance\" (I.C.T.B.R. (N.S.) Case No.80.) It is noteworthy that at least in one material aspect the Indian law is different from that under s. 108(1) of the Commonwealth Act as explained and interpreted by the Board in the case mentioned above. Under s. 108, the raising of the fiction is dependent upon a positive finding recorded by the Commissioner of Income-tax that the payment represents distribution of the Company's. income. But s. 2 (6A) (e) and s. 12 of the Act do not leave this question to the adjudica- tion of the income-tax authorities. Parliament has itself, in the exercise of its legislative judgment, raised a con- clusive presumption, that in all cases where loans are advanced to a shareholder in a Private Ltd. Company' having accumulated profits, the advances should be deemed to be the dividend income of the shareholder. It is this presumption juris et de jure which is the foundation of the statutory fiction incorporated in s. 2(6A)(e).. Thus s. 108 of the Commonwealth Act appears to be more reasonable and less harsh than its Indian counterpart. From the above discussion it emerges clear that the fiction created 2(6A) (e) read with s. 12(lB) of the Act is inexora- bly attracted as soon as all the conditions necessary for its application exist in a case. In Navnit Lags case (supra), this Court, after an analysis of these provisions, listed these conditions, as follows: \"... the combined effect of these two provisions is that three kinds of payments made to the. shareholder of a company to which the said provisions apply, are treated as taxable dividend to the extent of the accumu- lated profits held by the :company. These three kinds of payments are: (1 ) payments made to the shareholder by way of advance or loan, (2) payments made on his behalf and (3) payments made for his individual benefit. There are five conditions which must be satis- fied before section 12(lB) can be invoked against a shareholder. The first condition is that the company in -question must be one in which the public are not 'substantially interested within the meaning of section 23A as it stood in the year in which the loan was advanced. The second condition is that the borrower must be a shareholder at the date 'when the loan was advanced; it is immaterial what the extent of his shareholding is. The third condition is that the loan advanced to a shareholder by such a company can be deemed to be dividend only to the extent to which it is shown that the company possessed accumulated profit at the date of the loan. This is an important limit prescribed by the relevant section. The fourth condition is that the loan must not have been advanced by' the company in the ordinary course of its busi- ness. In other word's, this provision would not apply to cases where the company which advances a loan to its shareholder earnes on the business of money lending itself; and the last condition is that the loan must have remained outstanding at the commencement of the shareholders previous year in relation to the assessment year 1955-56.\" (emphasis supplied) The first four conditions factually exist in the instant case. The last condition is not applicable because it was a transitory provision 6--707 SCI 77 applicable to the assessment year 1955-56 only, while we are concerned with the assessment year 1957-58 and the previous year is the calendar year 1956. There is no dispute that the company is a controlled (Private Ltd.) company in which the public are not substantially interested within the meaning of s. 23A. Further-the assessee is admittedly a shareholder and Managing Director of that Company. It is also beyond controversy that at all material times, the company possessed \"accumulated profits\" in excess of the amount which the assessee-shareholder was paid during the previous year. The Income-tax Officer found that on January 1, 1956, the accumulated profits of the Company amounted to Rs. 6,83,005/- while from, 11.1.1956 to 12.11.1956, the assessee received in cash from time to time from the Company payments aggregating Rs. 4,97,449/-. After deducting the opening credit balance and some other items credited to his account, the Income-tax Officer found that in the previous year the assessee share-holder had received a net payment of Rs. 2,72,703/- by way of loan or advance from the Compa- ny. The Company's' business is not money lending and it could not be said that the loans had been advanced by the company in the ordinary course of its business. Thus all the factual conditions for raising statutory fiction created by ss.2(6A)(e) and 12(IB) appeared to have been satisfied in the instant case. Mr. Sharma, however, contends that in order to attract the statutory fiction one other essential condition is, that the loan or advance must be outstanding at the end of the previous year, and if the loan had ceased to exist owing to repayment or otherwise before the end of the year-as in the present case-the fiction cannot be invoked. In this connec- tion, Counsel has again referred to the last limb of s. 108 (1) of the Commonwealth Income-tax Act, according to which, the payment to a shareholder by way of advance or loan is to be treated as a dividend paid by the Company on the last day of the year of income of the Company in which the payment is made. It is urged that the principle in the last limb of sub- section (1) of s. 108 of the Commonwealth Act should also be read into. the Indian statute, It is maintained that the omission of such words from ss. 2(6A) (e) and 12(lB) does not show that the intendment of the Indian Legislature was different. According to the Counsel what is implicit in s. 108(1) of the Commonwealth Act, is implicit in ss. 2(6A)(e) and 12(1B) and the general scheme of the Act which re- quires that the assessment is to be made on the basis of total income of the whole previous year. Such a view concludes Mr. Sharma, would also be in consonance with reason and justice. We have given anxious thought to the persuasive argu- ments of Mr. Sharma. His arguments, if accepted, will certainly soften the rigour of this extremely drastic provi- sion and bring it more in conformity with logic and equity. But the language of ss. 2(6A) (e) and 12(1B) is clear and unambiguous. There is no scope for importing into the statute words which are not there. Such importation would be, not to construe, but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicase v. I.R.C.(1) at p. 71, that \"in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no. presumption as to a tax. nothing is to be read in, nothing is to be implied. One can only look fairly at the language used\". Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however great the hardship may appear to. the judicial mind to be. In our opinion, the Indian Legislature has deliberately omitted to use in ss. 2(6A)(e) and 12(lB) words analogous to those in the last limb of sub-section (1) of s. 108 of the Commonwealth Act. When Sections 2(6A) (e) and 12(lB) were inserted by the Finance Act, 1955, Parliament must have been aware of the provision contained in s. 108 of the Common- wealth Act. In spite of such awareness, Parliament has not thought it fit to borrow whole hog what is said in s. 108 (1 ) of the Commonwealth Act. So far as the last limb of s. 108(1) is concerned, our Parliament imported only a very restricted version and incorporated the same as the 'fifth condition' in sub-s. (lB) of s. 12 to the effect, that the \"payment deemed as dividend shall be treat- ed as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956 if such loan or advance remains outstanding on the last day of such previous year\". The word \"such\" pre- fixed to the \"previous year\" shows that the application of this clause is confined to the assessment year ending on 31-3-1956. In the instant case we are not concerned with the assessment year ending on 31-3-56. This highlights the fact that the Legislature has deliberately not made the subsist- ence of the loan or advance, or its being outstanding on the last date of the previous year relevant to the assessment year, a prerequisite for raising the statutory fiction. In other words, even if the loan or advance ceases to be outstanding at the end of the previous year, it can still be deemed as a 'dividend' if the other four conditions factual- ly exist, to the extent of the accumulated profits possessed by the Company. At the commencement of this judgment we have noticed some general principles, one of which is, that the previous year is the unit of time on which the assessment is based (s. 3). As the taxability of an income is related to its receipt or accrual in the previous year, the moment a dividend is received whether it is actual dividend declared by the company or is a deemed dividend, income taxable under the residuary head, \"income from other sources\", arises. The charge being on accrual or receipt the statutory fiction created by s. 2(6A)(e) and s.12(IB) would come into opera- tion at the time of the payment by way of advance or loan, provided the other conditions are satisfied. (1) (1921)1,K.B. 64 atp. 71. We do not propose to examine the soundness or otherwise of the illustrations given by Mr. Sharma since they are founded on assumed facts which do not exist in the present case. For the foregoing reasons we would answer the question posed in favour of the Revenue and dismiss this appeal with costs. P.B.R. 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{"id": "146535534", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.9684 OF 2011 BANGALORE INTERNATIONAL AIRPORT AREA PLANNING AUTHORITY \u2026.Appellant VERSUS BIRLA SUPER BULK TERMINAL (NOW A UNIT OF ULTRA TECH CEMENT LTD.) AND ORS. \u2026.Respondents JUDGMENT R. BANUMATHI, J. This appeal arises out of the judgment dated 21.10.2005 passed by the High Court of Karnataka at Bangalore in Writ Appeal No.3688 of 2002 in and by which the High Court has set aside the order passed by the Single Judge thereby setting aside the betterment fee levied by the KTCP by holding that the very acquisition under the Industrial Area Development Act involve change of land use and development by KIADB and while so, Signature Not Verified further levy of betterment fee under Section 18 of the KTCP is not Digitally signed by MAHABIR SINGH Date: 2018.11.27 16:57:16 IST Reason: sustainable. 2. Brief facts of the case which led to filing of this appeal are that the provisions of Karnataka Town and Country Planning (KTCP) Act, 1961 to provide for regulation of planned growth of land use and development and for making and execution of town planning schemes in the State of Karnataka. The State Government, by virtue of powers conferred under Section 4-A of the KTCP Act, issued Notification No.HUD142 MNX 95 dated 12.01.1996 declaring the area shown in the Schedule to the said notification as \u2018Bangalore International Airport Planning Area\u2019 w.e.f. 12.01.1996. On the same day, the State Government issued another Notification No.HUD 142 MSX 95 constituting the appellant as the Planning Authority for the said local planning area. The State Government by Notification dated 14.05.1997 added some other villages including the villages in question in Doddaballapur Taluk in the planning area of the appellant. 3. Respondent No.1 approached the State Government to approve a project to establish the Cement Terminal near Bangalore which was approved by the Single Window Agency by its clearance order dated 29.11.1996. By exercising powers under Sections 3(1) and 1(3) of KIAD Act, the Karnataka Industrial Areas Development Board (KIADB), issued a Notification on 03.07.1997 declaring some areas as industrial areas. Respondent No.1 was allotted lands by KIADB in Thippapura, Veerapura, Bashettinalli of Doddaballapur Taluk vide allotment letter dated 12/13.01.1998. Subsequently, respondent No.1 was asked to take possession of the said lands vide letter dated 29.05.1998 by KIADB and accordingly, possession certificate was issued on 16.07.1998 and respondent No.1 took possession on 16.7.1998. 4. On 8.6.1998, Respondent No.1 applied to Appellant authority seeking permission for construction of Bulk Cement Terminal. The Appellant inspected the spot along with KIADB Special Land Acquisition Officer, Urban Planning Director and Deputy Metropolitan Commissioner. By letter dated 17.9.1998, R-1 was informed by the Appellant that on inspecting the land once again and being satisfied that there is an approach road measuring 15 feet to the proposed land, it was decided to approve the development plan as per Rules. The Appellant also informed Respondent No.1 to pay betterment charges @ Rs. 75 per sq. mtr., inspection charges @ Rs. 150 per hectare, building construction charges, penalty @ Rs. 150 per hectare and road charges @ Rs. 1 lakh per acre totalling Rs.1,48,29,173/- pertaining to the sanctioning of the Development Plan consisting of the plans of storage, packing and administrative-office buildings. 5. Respondent No.1 objected to the demand by a letter dated 16.10.1998 stating that it had already made payment to KIADB towards allotment of lands, and therefore, development fee for constructing the commercial establishment is not necessary. Appellant issued notice dated 08.12.1998 under section 15 (4) of KTCP Act stating that as per Section 15 (1) of the KTCP Act, every development has to be proceeded only after getting necessary Commencement Certificate from the Appellant. It was stated in the notice that records reveal that no permission has been obtained as required under the provisions of KTCP Act. KTCP asked respondent No. 1 to stop work and discontinue use of the property and to show cause as to why action should not be taken to remove or pull down the work and to restore the land to its original condition. 6. Respondents No. 1 and 2 filed Writ Petitions No. 37717- 719/1998 dated 14.12.1998 before the High Court challenging the said notice dated 17.9.1998 and notice dated 8.12.1998. Respondent No.1 contended that the appellant has no authority to demand any development charges since the lands in the question were allotted in favour of Respondent No.1 by the KIADB, under the provisions of Karnataka Industrial Areas Development (KIAD) Act. The Single Judge of the High Court dismissed the Writ Petitions holding that in view of the declarations issued under section 4-A of the KTCP Act, the lands in question continue to be within the planning area. The Single Judge further held that when respondent No. 1 itself has submitted to the jurisdiction of the appellant by making an application for sanction of plan and for permission and while so, it is not open for them to say that the appellant has no jurisdiction or authority to demand development charges. The learned Single Judge held that by virtue of the power conferred on the appellant under Section 18, the appellant has rightly demanded the development charges having permitted Respondent No. 1 to use the land for establishment of an industry. 7. In the appeal filed by the respondents No. 1 and 2, the Division Bench held that KIAD Act is a special Act enacted for securing the establishment of industries in the State of Karnataka and the industrial area is governed by the provisions of the Act. The High Court further held that for the industrial plots allotted by KIADB, the change of land use and the development thereof comes under the purview of the special enactment KIAD Act and not under the general law of KTPC Act and the provisions of special Law will prevail over the provisions of the general Law. The High Court held that the only requirement for respondent No.1 is to obtain clearance from the appellant to show that the construction of the industrial unit is in conformity with the zonal regulations, etc. and this requirement does not in any way attract the provisions of Section 18 of the KTCP Act so as to empower the appellant to levy conversion fee/betterment fees. 8. Ms. Kiran Suri, learned senior counsel for the appellant submitted that the High Court erroneously held that Sections 14, 15 and 18 of the KTCP Act are not applicable to the lands acquired under the KIAD Act. The learned senior counsel submitted that the provisions of KIAD Act mainly deals with the declaration of an area as an industrial area and the acquisition of the lands for the purpose of industrial development and allotment of the said land and there are no provisions in the KIAD Act with regard to the construction thereon or the developmental activities to be carried out in the industrial sites and one has to fall back upon the provisions of the KTCP Act for carrying on any development activities over the said land which brings into action Sections 14 and 15 of the KTCP Act for seeking permission and the power of the Planning Authority to levy the betterment fee under Section 18 of the KTCP Act. The learned senior counsel further submitted that the provisions of KTCP Act govern the entire planning and development of the buildings within the State of Karnataka including the industrial area falling within the planning area of the appellant authority and Section 18 of the KTCP Act automatically comes into play empowering the appellant to charge the betterment fees. It was submitted that the areas of operation of KTCP Act and KIAD Act are entirely different with different aims and objectives and therefore, the principle of interpretation of \u201cspecial Act prevails over general Act\u201d (Generalia Specialibus Non Derogant) would have no application and the same has been wrongly applied by the High Court and the Division Bench erred in reversing the judgment of the Single Judge. 9. Per contra, Mr. Bharat Sangal, learned counsel for the first respondent submitted that once the area is allotted to KIAD Board, the acquisition and the allotment being for industrial purpose which involves the change of land use and its development is controlled by the KIAD Board and the provisions of KIAD Act and it falls outside the purview of KTCP Act. The learned counsel for the first respondent further submitted that KIAD being a Special law, it will override the provisions of Sections 14, 15 and 18 of KTCP Act and a general law like KTCP Act cannot defeat the provisions of the special Law to the extent to which they are in conflict. The learned counsel further submitted that the moment the land was acquired for industrial purpose, it assumes the character of industrial area and no further conversion and development is required and hence, there is no question of conversion fee/betterment fee be paid to KTCP and the entire field is covered by KIAD Act and KIADB Regulations which exclude the application and operation of KTCP Act, 1966. 10. The learned counsel appearing for the fifth respondent-KIADB submitted that once an area or land is acquired and declared as an industrial area under Section 3(1) of KIAD Act, the said area gets demarcated for industrial use and the KIADB is duty bound to develop the area for industrial activities and the ancillary area by virtue of the powers and functions under Section 14(C) of KIAD Act. There is no further requirement to apply for change of land use under the KTCP Act. It was further submitted that when any industrial area is set up by KIADB, all infrastructure facilities are also installed and the cost and the expenditure incurred by the KIADB is passed on to the entrepreneurs or allottees who intend to set up facilities for industrial activity in the State of Karnataka and there is no question of payment of conversion charges/betterment fee under Section 18 of the KTCP Act. 11. We have carefully considered the rival contentions and perused the impugned judgment and materials placed on record. Upon consideration of the materials placed on record, the following points arise for determination in this appeal:- (i) Whether the High Court was right in holding that Sections 14, 15 and 18 of the KTCP Act are not applicable when the lands are declared as industrial areas under Section 3 of KIAD Act and the payment of betterment fees for the purported development works under the provisions of the KTCP Act does not arise? (ii) When the areas of operation of KIAD Act and KTCP Act are wholly different with different aims and objectives, whether the High Court was right in saying that the principle of interpretation of Special Act prevails over the General Law is applicable? 12. Karnataka Town and Country Planning Act, 1961 (KTCP Act) has been enacted for regulation of planning, coordination and supervision of the orderly development of the areas within the State of Karnataka. KTCP Act is for the regulation of the planned growth of land use and development and for the making and execution of town planning schemes in the State. 13. A combined reading of Section 14 with Section 18 of the KTCP Act leads to the conclusion that the Planning Authority under KTCP Act is entrusted with the function of granting licence to put up construction on the land including the land allotted by the KIAD Board to the allottees under the KIAD Act. This is clear from the non-obstante clause in KTCP Act i.e. Section 76-M which declares that the provisions of Section 76-M of KTCP Act along with rules and regulations and bye-laws made thereunder shall have effect notwithstanding anything inconsistent contained in any other law. 14. For proper appreciation of the contentions urged, we may usefully refer to the relevant provisions of both KTCP Act and KIAD Act. The Preamble of the KTCP Act reads as under:- \u201cAn Act to provide for the regulation of planned growth of land use and development and for the making and execution of town planning schemes in the State of Karnataka. Whereas it is necessary and expedient,\u2014 (i) to create conditions favourable for planning and replanning of the urban and rural areas in the State of Karnataka, with a view to providing full civic and social amenities for the people in the State, (ii) to stop uncontrolled development of land due to land speculation and profiteering in land, (iii) to preserve and improve existing recreational facilities and other amenities contributing towards balanced use of land; and (iv) to direct the future growth of populated areas in the State, with a view to ensuring desirable standards of environmental health and hygiene, and creating facilities for the orderly growth of industry and commerce, thereby promoting general standards of living in the State; And whereas, in order to ensure that town planning schemes are made in a proper manner and their execution is made effective, it is necessary to provide that a local authority shall prepare a development plan for the entire area within its jurisdiction;\u201d 15. \u201cDevelopment\u201d and \u201cLocal Authority\u201d are defined in Section 2 of the KTCP Act as under:- \u201cSection 2. Definitions \u2013 In this Act, unless the context otherwise requires. \u2013 \u2026\u2026 (1-c) \u201cDevelopment\u201d with its grammatical variations, means the carrying out of building, engineering, mining, or other operations in, on, over or under land or the making of any material change in any building or land, or in the use of any building or land and includes sub-division of any land; \u2026\u2026 [(3-a) \u201cLocal authority\u201d means a municipal corporation, municipal council, Town Panchayat or Grama Panchayat and a Local Authority is a \u2018local authority concerned if any land within its local limits falls in the area of a plan prepared or to be prepared under this Act; Admittedly, appellant herein is the planning authority within the meaning of Section 2(7) of the Act. 16. Section 14 of the KTCP Act deals with enforcement of Outline Development Plan (ODP) and Regulations and it prescribes that on or from the date on which a declaration of intention to prepare ODP is published under Section 10(1), every land use, every change in the land use and every development in the area covered by the plan shall conform to the KTCP Act, the ODP and the Regulations as approved by State Government under Section 13(3). Section 14(1) stipulates that every land use, every change in land use and every development in the areas covered by the plan shall conform to the provisions of the Act, the Outline Development Plan and the regulations, as finally approved by the State Government under sub-section (3) of Section 13. Section 14(2)(a) of the Act defines the expression \u2018development\u2019 which means the carrying out of building or other operation in or over or under any land or the making of any material change in the use of any building or other land. 17. Section 15 authorizes the Planning Authority to grant permission for development of building or land. Section 18 confers the power to collect betterment fee and it says where the permission for the change in the use or development of any land or building is granted under Section 15 or Section 16, and such change or development is capable of yielding betterment income to the owner, the Planning Authority may levy a prescribed fees not exceeding one third of the increase in the value of the land or building in the prescribed manner for permitting such use or development. In exercise of its powers under Section 10, the Planning Authority declared its intention of making ODP by a notification dated 29.03.1996 which was made public. The authority resolved to adopt the relevant government orders with regard to charge of betterment fees dated 05.08.1996. 18. Section 18 of the KTCP Act confers the power upon the Planning Authority to collect betterment fee where permission for a change in the use or development of the land or building is granted under Section 15 or Section 16 and such change or development is capable of yielding a better income to the owner, the Planning Authority may levy a prescribed fee not exceeding one-third of the estimated increase in the value of the land or building in the prescribed manner for permitting such change in use or development. Section 18 of the KTCP Act reads as under:- Section 18. Recovery of a fee in certain cases of permission for change in the use of land or building.- [(1) Where permission for change of land use or development of land or building is granted under section 14-A or section 14-B or Section 15 or Section 17 and such change or development is capable of yielding a better income to the owner, the Planning Authority may levy a prescribed fee not exceeding one-third of the estimated increase in the value of the land or building in the prescribed manner for permitting such change of land use or development of land or building.] \u2026\u2026 [(3) The State Government may exempt any Board, Authority or body constituted by or under any law owned or controlled by the State Government or Central Government or an infrastructure Project promoted or implemented by any Company or person and approved by the State Government or Central Government from the payment of fee specified under sub-section (1). 19. The non-obstante clause in Section 76-M of the KTCP Act reads as under:- \u201cSection 76-M. Effect of other Laws.\u2014(1) Save as provided in this Act, the provisions of this Act and the rules, regulations and bye-laws made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law. (2) Notwithstanding anything contained in any such other law,- (a) when permission for development in respect of any land has been obtained under this Act, such development shall not be deemed to be unlawfully undertaken or carried out by reason only of the fact that permission, approval or sanction required under such other law for such development has not been obtained; (b) when permission for such development has not been obtained under this Act, such development shall not be deemed to be lawfully undertaken or carried out by reason only of the fact that permission, approval or sanction required under such other law for such development has been obtained.\u201d 20. The purpose of Karnataka Industrial Areas Development Act, as seen from the Preamble of the Act, is to make special provisions for securing the establishment or industrial areas in the State and generally to promote the establishment and orderly development of the industries therein and for that purpose to establish Industrial Areas Development Board. The Preamble of the KIAD Act reads as under:- \u201cAn Act to make special provision for securing the establishment of industrial areas in the State of Karnataka and generally to promote the establishment and orderly development of industries therein, and for that purpose to establish an Industrial Areas Development Board and for purposes connected with the matters aforesaid. Whereas it is expedient to make special provision for securing the establishment of industrial areas in the State of Karnataka and generally to promote the establishment and the orderly development of industries in such industrial areas, and for that purpose to establish an Industrial Areas Development Board and for purposes connected with the matters aforesaid.\u201d 21. As per Section 27 of the KIAD Act, the provisions of the Act shall apply to such areas from such date as have been notified by the State Government under sub-section (3) of Section 1. Section 47 is the non-obstante clause of KIAD Act which reads as under:- \u201cSection 47 \u2013 Effect of provisions inconsistent with other laws \u2013 The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law.\u201d 22. By careful reading of the provisions of both the Acts, it is seen that the object of KIAD Act is to make special provisions for securing the establishments of industrial areas in the State and to generally promote the establishment and orderly development of the industries. On the other hand, KTCP Act is for regulation of planned growth of land use and development and for the making and execution of town planning schemes in the State. Both the Acts i.e. KIAD Act and KTCP Act operate in different fields. Considering the objects of both the enactments, we find that there is no merit in the plea of the fifth respondent that once a land is acquired for the purpose of industries under the KIAD Act and made over to the Board, the use of the land becomes \u2018use for industrial purpose\u2019 and no further permission for change of use of land by KTCP or any other authority is required. 23. Though heading of Section 18 of the KTCP Act is \u201cRecovery of a fee in certain cases of permission for change in the use of land or building\u201d, the levy of prescribed fee is not only for permission for change of land use but also for development of land or building as contemplated under Section 14A or Section 14B or Section 15 or Section 17 of the Act. As pointed out earlier, \u201cdevelopment\u201d is defined in Section 2(1-c) of KTCP Act which inter alia provides for \u201cin the use of any building or land and includes sub-division of any land\u201d. From a combined reading of Section 18 with Section 2(1-c) of KTCP Act, it is clear that the levy of prescribed fee under Section 18 of the Act is not merely for change of land use but also for development of land or building. The language of expression used in Section 18 that \u201cpermission for change of land used\u2026..\u201d and \u201cdevelopment of land or building\u2026.\u201d is to be interpreted in the light of the object of KTCP Act as enunciated in the Preamble of the Act. 24. Power to Exempt:- Prior to Amendment Act 11 of 1997 (with effect from 19.02.1997), Section 16 of KIAD Act provided for exclusion of operation of other laws in respect of industrial areas. Section 16(C) provided that the State Government may by notification provide that the provisions of any other law relating to local authority which is in force in that area shall cease to apply and thereupon such provision was ceased to apply thereto. In exercise of such powers, the State Government issued the Circular dated 31.12.1990 directing Urban Development Authorities, City Improvement Trust Boards, Planning Authorities not to collect the betterment charges from the statutory bodies like Karnataka Housing Board and KIADB. Section 16 of the KIAD Act was omitted by Act 11 of 1997 (with effect from 19.02.1997). Subsequently by the government order dated 17.07.1997, the above Circular dated 31.12.1990 was revoked and the authorities above named have been directed to collect the betterment charges as per law. 25. The learned senior counsel for the appellant has drawn our attention to the Minutes of the Meeting held on 04.12.1999 where the question of levy of fees by KTCP in the Bangalore Metropolitan Region came up for discussion. The said meeting was attended by various authorities including the Finance Department, Commissioner of KIADB, Director of Town Planning etc. After detailed discussion, the following decisions were taken:- \u201cAfter detailed discussions, the following decisions were taken: 1. The Principal Secretaries to Government UDD & RDPR, in consultation with the Principal Secretary to Government Commerce & Industries Department and Secretary, Law Department would examine all aspects pertaining to constitution of Industrial Townships in identified industrial areas and come up with firm proposals by end of December, 1999. 2. KIADB will obtain approval from the concerned Planning Authority before developing any new industrial area; 3. The matter regarding rationalization of various charges, fees and other levies under the KTCP Act and RDPR Act will be re-examined by the concerned departments, having regard to what is prevailing in neighboring States and firm proposals will be formulated within a period of one month; 4. The matter regarding delegation of powers to KIADB for granting approvals for building plans for industrial units to be established in approved industrial areas will be examined by the Urban Development Department and if necessary suitable amendments would be effected to the concerned Town Planning Act; and 5. Principal Secretary to Government Commerce & Industries Department will organize a meeting of major industries who had not yet paid certain charges and fee and try to sort out the matter in consultation with the Urban Development Department; Concluding the discussions, the Minister for Large & Medium Industries and Infrastructure Development informed that the main objective of constituting industrial townships was to simplify and streamline the procedures and ensure that approvals and also ensure that these industrial areas are maintained properly which at present are in a sorry state of affairs. He suggested that a proper revenue sharing mechanism between township authority and concerned local bodies should be worked out to ensure that the local bodies are also strengthened and take development works outside the industrial area. In view of the inordinate delay in fulfilling the commitments which had been made in the 1993 policy he requested that all concerned departments should take immediate action to formulate a proposal which is acceptable to all the departments.\u201d [Underlining added] When the government of Karnataka, Finance Department and other departments and also the Commissioner for Industrial Development and other departments have participated in the abovesaid meeting and were all parties to the above decisions, it is not open to KIADB to resile from the minutes and put forth claim contrarily. Having been a party to the discussion in the meeting held on 04.12.1999, the State of Karnataka is also not justified in contending that the lands in question are included in the industrial area declared by the State Government and hence, not bound to pay the development fee under Section 18 of the Act. 26. It was stated by the learned senior counsel for the appellant that the State of Karnataka has not filed its counter in the High Court. It is also to be pointed out that after dismissal of the writ petition by the Single Judge, a writ appeal was preferred only by the first respondent. The State of Karnataka has neither filed any appeal nor made its stand clear before the High Court. In the Supreme Court also, the State of Karnataka has not filed its counter affidavit. Only at the time of arguments, the State of Karnataka has filed written submissions stating that the provisions of the KTCP Act are not attracted to the industrial area covered under KIAD Act and that Section 18 of the Act will have no application and hence, no fee could be levied thereunder. In its written submissions, the stand taken by the State of Karnataka reads as under:- \u201c\u2026\u2026It is stated that in the present case, the lands in question are included in the industrial area declared by the State Government and the change in the land use and development thereof are governed by the provisions contained under Karnataka Industrial Areas Development Act, 1966 Sections 14 and 15 of the Karnataka Town and Country Planning Act, 1961 are not at all attracted and consequently Section 18 thereof will have no application to such lands and hence no fee could be levied there under by respondent No.4 and the petitioner\u2026..\u201d Since the State of Karnataka has not made its stand clear before the High Court nor any counter affidavit sworn in by any responsible officer of the State of Karnataka has been filed, we are not inclined to go into the merits of the stand taken by State of Karnataka in its written submissions. More so, when the State is a party to the meeting held on 04.12.1999 and concern expressed in the meeting as to the non-payment of development charges and the decisions taken thereon. The State appears to have been sitting over the fence and watching its two key authorities under KTCP Act and KIAD Act litigating. 27. Section 14 read with Section 18 of the KTCP Act clearly connotes that the Planning Authority is entrusted with the function of granting licence to put up construction on the land including the land acquired and allotted by the Board under KIAD Act. This is also clear from the provisions contained in the non-obstante clause in Section 74-M of the KTCP Act which declares that the provisions of the said Act and the Rules, Regulations and Bye-Laws made thereunder shall have effect notwithstanding anything inconsistent contained in any other law. There is nothing in the provisions of this Act to exclude or exempt the lands which are covered by the KIAD Act. 28. In its lengthy judgment, the High Court inter alia observed that the very acquisition for the industrial areas and the development by KIADB by itself involve the change of land use and the development by the KIADB and while so, seeking permission for change of land use and its development under the KTCP Act will be superfluous. The relevant findings of the High Court in the impugned judgment are as under:- \uf0b7 So far as the land acquired under KIAD Act and utilised for industrial purpose and development thereof will have to be made by the Board in the area declared under the Act as an industrial area. The industrial activities in the industrial area are developed and controlled by the KIADB in accordance with the provisions of KIAD Act and it is a part of functions of KIADB; \uf0b7 The non-obstante clause-Section 47 of KIAD Act excludes the application of the provisions of any other Act; \uf0b7 The industrial activities in the industrial area, however, shall not contravene other laws and it shall be in conformity with Zoning Regulations and the Planning Authority constituted under the KTCP Act. The submission of plan to the appellant- Authority is only to ensure that the establishment of the industrial unit by the allottee in the industrial area is in conformity with the Zonal Regulations. Only for this limited purpose, the allottee of the industrial plot must submit its plan to the Planning Authority constituted under the KTCP Act for the purpose of obtaining NOC; \uf0b7 For granting approval and for issuance of NOC, the Planning Authority under KTCP Act cannot levy betterment fee under Section 18 of the KTCP Act because the allottee of an industrial plot does not seek for a change in the land use or development of the said land. There was already a change of land use and its development as an industrial unit which is the function of the Board constituted under the Special Act i.e. KIAD Act; and \uf0b7 When the entrepreneurs do not seek for change in land use and its development within the meaning of Sections 14 and 15 of the KTCP Act, the question for levying any fee for change of land use under Section 18 of the Act will not arise. 29. The High Court, on the one hand, took the view that Sections 14, 15 and 18 of KTCP Act are not applicable to the industrial area which is governed by KIAD Act. On the other hand, the High Court held that for compliance of the provisions of Sections 14 and 15 of the KTCP Act for all the establishment of the industrial unit, the allottee has to seek approval of the Planning Authority constituted under KTCP Act and KTCP is to scrutinise the plan and other documents so as to ensure that the establishment of the industrial unit by the allottee in the industrial area is in conformity with the Zonal Regulations etc; but KTCP is not to levy betterment fee. The findings of the High Court are self-contradictory to each other. 30. As discussed earlier, the Planning Authority constituted under KTCP Act is entrusted with the functions of granting approval for any development on the land within its jurisdiction including the land acquired and allotted by the Board under KIAD Act. Per contra, the enactment of KIAD Act is to make special provision for securing the establishment of the industrial area in the State and for that purpose to establish Industrial Areas Development Board. The provisions of both the Acts make the intention of the legislature very clear. As rightly submitted by the learned senior counsel for the appellant that if there are two possible interpretations of an enactment, one should avoid the construction which would reduce the legislation to futility and should rather accept the broader interpretation. A statute is designed to be workable and the interpretation thereof by the court should be to secure that object. In so far as the \u201cindustrial area\u201d allotted by KIADB, the interpretation given by the High Court to the provisions of KTCP Act would render the existence of the Planning Authority like the appellant to futility. While on the one hand, the High Court has directed the first respondent to obtain permission from the Planning Authority under KTCP Act and that the appellant- Authority to scrutinise those plans only to ensure that they are in conformity with the Regulations etc. At the same time, the High Court is saying that the appellant-Authority cannot collect the betterment fees. In our considered view, such findings are contradictory to each other and cannot be sustained. 31. The High Court held that KIAD Act being a Special Act, the same will prevail over KTCP Act which is a General Act. KTCP Act is applicable to all the developmental activities in respect of any land coming within the area of Outline Development Plan (ODP) and the lands in question even though situated in industrial area comes within the area of ODP of the Planning Authority. The developmental activities over the said land have to be carried on only with the permission of the Authority and both the enactments have to be harmoniously construed so as to give effect to each of the Acts enacted by the State Government. 32. The question to be considered in this regard is whether KIAD Act is a special enactment and KTCP Act a general Act and whether the maxim \u2018Generalia Specialibus Non Derogant\u2019 is applicable as held by the High Court. Rule of interpretation says that a statute is best interpreted when we know why it was enacted, which can be seen from the preamble of an Act. As discussed earlier, as per the preamble of the KIAD Act, it is an Act to make special provision for securing the establishment of industrial areas in the State of Karnataka and generally to promote the establishment and orderly development of industries therein. KTCP Act on the other hand, as we have pointed out earlier, was enacted to provide for the regulation of planned growth of land use and development and for the making and execution of town planning schemes in the State of Karnataka. Thus, considering the legislative intent of the two enactments, it is seen that there is nothing in the KIAD Act to destroy the authority of the Appellant which has its own assigned role to perform under the provisions of the KTCP Act. Considering the object and purpose for which both the Acts were enacted, there is no inconsistency or overlapping between the two enactments and the power of authorities constituted under the Acts. As the areas of operation of KIAD Act and KTCP Act are wholly different, there is no question of applicability of the maxim Generalia Specialibus Non Derogant. 33. Seeking grant of permission for construction of industrial buildings \u2013 Bulk Cement Terminal near Dodaballapur Railway Station, the first respondent submitted its application to the appellant-Authority on 08.06.1998. On that application for sanctioning the development plan consisting of the plan of storage, packing and administrative office buildings in the plot in question, the appellant-Authority vide order dated 17.09.1988 levied betterment charges, road charges etc. of Rs.1,48,29,173/- under various heads. In response to the same, the first respondent has sent its reply on 16.10.1998 inter alia stating that:- (i) since the first respondent has made payment to KIADB towards allotment of lands considering the first respondent as commercial establishment and levy of development at the rate of Rs.75/- per sq. mtr. may not be necessary; (ii) the construction put up by the first respondent are industrial buildings and not commercial establishments; and (iii) the first respondent is situated in Bengaluru Rural (North) District and it is not situated in Bengaluru Urban District attracting levy of such higher fee. 34. By careful perusal of the first respondent\u2019s response dated 16.10.1998, it is seen that the first respondent has not challenged the jurisdiction of appellant-Authority to levy betterment charges and that the objections that the first respondent has raised were regarding the rate of betterment fee treating the first respondent as commercial establishment and the fact that they are situated in Bengaluru Rural (North) District and not in Bengaluru Urban District. When the first respondent has not raised the objection regarding the jurisdiction/competence of the appellant-Authority to levy betterment fee, the first respondent was not justified in turning around and challenging the powers of the appellant-Planning Authority to levy betterment charges. The High Court, in our view, did not properly consider the response of the first respondent and the High Court erred in saying that the role of KTCP is only to scrutinise the application to ensure that the plan is in conformity with the provisions of the KTCP Act and that it cannot levy the fee. 35. It is also pertinent to note that for obtaining sanction of their plan, the other allottees of industrial plots by KIADB have paid the betterment charges and also the road cess as demanded by the appellant-Authority. In this regard, the learned senior counsel for the appellant has drawn our attention to the communication from ITC Limited including the Pay Order dated 01.08.1997 for payment of betterment charges of Rs.3,01,71,600/-. When other allottees of industrial plots by KIADB have paid betterment charges and road cess for obtaining sanction of the plan, the first respondent cannot challenge the levy and contend that they are not liable to pay the betterment charges. 36. The High Court, in our view, ignored the important provisions of KTCP i.e. Sections 14 and 15 regarding the development act and the development activities including the industrial areas fall within the scope of the appellant-Authority and that the first respondent while obtaining the approval from the appellant-Authority for its plan is bound to pay the betterment charges, road cess and other charges as per the laws. The learned Single Judge has rightly dismissed the writ petition filed by the first respondent and the Division Bench erred in reversing the same and the impugned judgment is liable to be set aside. 37. In the result, the impugned judgment of the High Court is set aside and this appeal is allowed. The first respondent is directed to pay Rs.1,48,29,173/- to appellant-Authority with interest at the rate of 6% from the date of the demand (17.09.1998) within a period of two months from this date, failing which the respondent is liable to pay the interest at the rate of 12% thereafter on the accrued amount. \u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026J. [R. BANUMATHI] \u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026J. 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{"id": "121357872", "text": "1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 3195-3196 OF 2020 (ARISING OUT OF SLP(C)Nos.10972-10973 OF 2020) TRUSTEES OF H.C. DHANDA TRUST ...APPELLANT VERSUS STATE OF MADHYA PRADESH & ORS. ...RESPONDENTS J U D G M E N T ASHOK BHUSHAN,J. Leave granted. 2. The appellant by these appeals challenges the judgment of learned Single Judge of the High Court of Madhya Pradesh, Bench at Indore in Writ Petition No.8888 of 2011 dated 30.03.2017 dismissing the Writ Petition of the appellant as well as the judgment dated Signature Not Verified Digitally signed by 04.09.2017 of the Division Bench dismissing the Writ MEENAKSHI KOHLI Date: 2020.09.17 15:31:32 IST Reason: Appeal filed by the appellant against the judgment of the learned Single Judge. The Division Bench has dismissed the writ appeal vide its judgment dated 04.09.2017 holding it as not maintainable. 3. Brief facts of the case giving rise to these appeals are: Late Shri Harish Chand Dhanda, a Minister in erstwhile Government of Maharaja Holkar of Indore received the free gift of land measuring 108,900 sq.ft. (one lac eight thousand nine hundred) situate at Yeshwant Niwas Road, Indore by Order No.58 of 22.04.1946. Late Shri H.C. Dhanda got constructed in the above piece of land, a building known as \u2018Hotel Lantern\u2019. Another piece of land situate at 5, Ravindra Nath Tagore Marg, Indore was gifted to Late Shri H.C. Dhanda by his father-in-law late Col. V.B. Jadhav on 05.10.1948. Late Shri H.C. Dhanda possessed various other movable and immovable properties in the city of Indore with which we are not concerned in the present appeals. Late Shri H.C. Dhanda executed his last Will dated 26.10.2002. In his Will he mentioned his movable and immovable properties apart from the above two immovable properties and by his Will he created a Trust in which he appointed his son, Yogesh Dhanda as Chairman of Trust, Shri B.J. Dave, Chartered Accountant, Indore and one Shri Chhaganlal Nagar as member. The above two immovable properties apart from other properties were put in Trust under the aforesaid Will. All Trustees under the Will were the executors of the Will. Shri H.C. Dhanda died on 05.07.2003. 4. A meeting of Board of Trustees was held on 06.04.2005. A resolution was passed by Executors/Trustees to transfer and vest area by executing a Deed of Transfer with a site plan from the trustees to beneficiaries by registering the same. On 21.04.2005 a Deed of Assent was executed between M/s H.C. Dhanda Trust, a private trust as one part and Jogesh Dhanda and others as other part. By Deed of Assent the Trustees/Executors gave assent to complete the title of the Legatees and vest absolutely and forever in their favour both Lantern Hotel and Jahaj Mahal property. A notice was issued by the Collector of Stamps, District Indore stating that in Deed of Assent dated 21.04.2005 proper stamp duty has not been paid, 22.03.2007 was fixed for appearance. The notice further stated that why deficit stamp duty of Rs. 1,62,82,150/- on the document dated 21.04.2005, and ten times penalty should not be imposed. The Trust appeared before the Collector of Stamps and filed its objection. The Collector of Stamps passed an order dated 22.09.2008 holding the Deed of Assent dated 21.04.2005 as a gift deed. The Collector held that under Indian Stamp Act, 1899, the stamp duty payable on a gift deed would be 8% of the market value, Municipal duty 1% and Janpad duty 1%. The Collector found deficit duty to the extent of Rs.1,28,09,700/- and also imposed ten times penalty i.e. Rs.12,80,97,000/-. The order called upon the Trust to deposit amount of Rs.14,09,06,700/- within thirty days. Aggrieved against the order of Collector, Reference Application was filed by the appellant before the Board of Revenue, Madhya Pradesh, Gwalior. Board of Revenue vide its order dated 25.10.2011 upheld deficiency of stamp duty of Rs.1,28,09,700/- and ten times penalty of Rs.12,80,97,000/-. The order called upon the Trust to deposit amount of Rs.14,09,06,700/- within thirty days. Board of Revenue vide its order dated 25.10.2011 upheld the order of the Collector dated 22.09.2008 and dismissed the Reference Application. Challenging the order of the Board of Revenue as well as the Collector of Stamps a Writ Petition No.8888 of 2011 was filed by the appellant in the High Court of Madhya Pradesh. Learned Single Judge of the High Court vide its judgment dated 30.03.2017 dismissed the writ petition. Learned Single Judge upheld the order of the Collector by which deficiency in the stamp duty and ten times penalty was imposed. 5. An SLP was filed in this Court challenging the order of the learned Single Judge by the appellant which was withdrawn by the appellant on 4.5.2017 seeking liberty to file writ appeal in the High Court. The writ appeal was filed by the appellant being Writ Appeal No.255 of 2017 which has been dismissed by the Division Bench on 4.9.2017 holding the writ appeal as not maintainable. Aggrieved against the aforesaid two orders these appeals have been filed by the appellant. 6. This Court by its order dated 10.11.2017 issued limited notice to the following effect: \u201cIssue notice, returnable in six weeks, limited to the quantum of penalty that has been imposed by the Collector (Stamps). Subject to the condition that stamp duty is paid within a period of one month, there shall be stay of the order qua the penalty.\u201d 7. In response to the above notice the respondents have appeared. 8. We have heard Shri A.K. Chitale, learned senior counsel, for the appellant and Shri Tushar Mehta, learned Solicitor General, for the State. 9. Shri A.K. Chitale, learned senior counsel appearing for the appellant submits that the Deed of Assent executed on 21.04.2005 is referable to Section 331 and 332 of Indian Succession Act, 1925. Shri Chitale submitted that document in question is not a Gift Deed. Shri Chitale submits that the penalty imposed by the Collector of Stamps was wholly illegal. There was no dishonest conduct on the part of the appellant, Deed of Assent was executed bona fide on which there was no deficiency in the stamp duty. Shri Chitale submits that no reason has been given by the Collector of Stamps as to why maximum penalty of ten times was imposed on the appellant while determining the stamp duty. Shri Chitale submits that the Collector of Stamps has not exercised his jurisdiction in reasonable and fair manner and imposition of ten times penalty on the appellant deserves to be set aside. 10. Shri Tushar Mehta, learned Solicitor General refuting the submission of counsel for the appellant contends that nature of document having been found to be gift the Collector has rightly determined the deficiency in the stamp duty and imposed ten times penalty. Shri Mehta submits that there was clear intention of the appellant to evade the payment of stamp duty which clearly called for imposition of ten times penalty. Shri Mehta referred to the order of Board of Revenue and submits that Board of Revenue has also upheld imposition of ten times penalty by holding that the applicant has executed Deed of Assent suppressing the facts intentionally due to which there has been loss of stamp duty. This can neither be termed as wrong nor illegal. 11. We have considered the submissions of the parties and perused the records. 12. Only question to be determined in these appeals is as to whether the imposition of ten times penalty by the Collector of Stamps under Section 40 of the Indian Stamp Act, 1899 was validly imposed or not. 13. The Collector of Stamps vide its order dated 22.09.2008 determined the nature of document dated 21.04.2005 as Gift Deed. The Collector of Stamps in his order also proceeded to determine the market value of property, Lantern Hotel situate at Yashwant Niwas Road and Jahaj Mahal situate in Ravindra Nath Tagore Marg, on the market value of both afove properties stamp duty payable was determined as Rs.1,28,09,900/-, stamp duty of Rs.200/- only having been paid on the document deficit duty was determined as Rs.1,28,09,700/-. The Collector of Stamps by the same order also imposed ten times penalty of Rs.12,80,97,000/-. 14. Before we proceed to consider the respective submissions, it is useful to extract the order of the Collector of Stamps which contains the discussion regarding imposition of penalty, which is as follows: \u201c\u2026\u2026In the above background, the deed in question is classified in the category of a gift deed. The total market value of the property in question in the position of year 2005-06 under the document is fixed at market value Rs.12,80,99,000/-, on which total stamp duty of Rs.1,28,09,900/- is payable. Only Rs.200/- stamp duty has been paid on the document. Thus, remaining stamp duty Rs.1,28,09,700/- and, since the party has not mentioned the actual nature of the document with an intention to escape the duty, therefore, under Section 40 of the Indian Stamp Act, 1899, ten times penalty Rs.12,80,97,000/- is imposed. Thus, total Rs.14,09,06,700/- shall be deposited in the treasure within 30 days.\u201d 15. Section 40 of Indian Stamp Act, 1899 provides for Collectors power to stamp instruments impounded. Section 40(1) which is relevant for the present case which is as follows: \u201c40. Collectors power to stamp instruments impounded. \u2014 (1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-section (2), not being an instrument chargeable with a duty not exceeding ten naye paise only or a bill of exchange or promissory note, he shall adopt the following procedure: \u2014 (a) if he is of opinion that such instrument is duly stampeded or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be; b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees: Provided that, when such instrument has been impounded only because it has been written in contravention of section 11 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.\u201d 16. According to Section 40(1)(b) if the Collector is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the of the proper duty or the amount required to make up the same, together with a penalty of the five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof. The statutory scheme of Section 40(1)(b) as noticed above indicates that when the Collector is satisfied that instrument is not duly stamped, he shall require the payment of proper duty together with a penalty of the five rupees. The relevant part of Section 40(1)(b) which falls for consideration in these appeals is: \u201cor, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or deficient portion thereof.\u201d 17. The amount of penalty thus can be an amount not exceeding ten times. The expression \u201can amount not exceeding ten times\u201d is preceded by expression \u201cif he thinks fit\u201d. The statutory scheme, thus, vest the discretion to the Collector to impose the penalty amount not exceeding ten times. Whenever statute transfers discretion to an authority the discretion is to be exercised in furtherance of objects of the enactment. The discretion is to be exercised not on whims or fancies rather the discretion is to be exercised on rational basis in a fair manner. The amount of penalty not exceeding ten times is not an amount to be imposed as a matter of force. Neither imposition of penalty of ten times under Section 40(1) (b) is automatic nor can be mechanically imposed. The concept of imposition of penalty of ten times of a sum equal to ten times of the proper duty or deficiency thereof has occurred in other provisions of the Act as well. We may refer to Section 35(a) in this context is as follows: \u201c35. Instruments not duly stamped inadmissible in evidence, etc. \u2014 No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped : Provided that\u2014 (a)any such instrument shall be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of any instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion; (b)\u2026 \u2026 \u2026 \u2026\u201d 18. It is relevant to notice that Section 35 contemplates that when ten times the amount of the proper duty of or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion is required to be deposited. Under Section 39 Collector is empowered to refund penalty. As noticed above under Section 35(a) there is no option except to pay sum equal to ten times of such duty or deficient portion but Section 39 empowers the Collector to refund any portion of the penalty in excess of five rupees which is expressed in following words: \u201cif he thinks fit refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument.\u201d 19. The legislative intent which is clear from reading of Sections 33,35,38 and 39 indicates that with respect to the instrument not duly stamped, ten times penalty is not always retained and power can be exercised under Section 39 to reduce penalty in regard to that there is a statutory discretion in Collector to refund penalty. 20. Section 39(1)(b) of the Indian Stamp Act, 1899 came for consideration before this Court in Gangtappa and another vs. Fakkirappa, 2019(3) SCC 788 (of which one of us Ashok Bhushan, J. was a member). This Court noticed the legislative scheme and held that the legislature has never contemplated that in all cases penalty to the extent of ten times should be ultimately realized. In paragraph 16 following has been laid down by this Court: \u201c16. Deputy Commissioner under Section 38 is empowered to refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument. Section 38 Sub-section (1) again uses the expression \"if he thinks fit\". Thus, in cases where penalty of 10 times has been imposed, Deputy Commissioner has discretion to direct the refund of the penalty in facts of a particular case. The power to refund the penalty Under Section 38 clearly indicates that legislature have never contemplated that in all cases penalty to the extent of 10 times should be ultimately realised. Although the procedural part which provides for impounding and realisation of duty and penalty does not give any discretion Under Section 33 for imposing any lesser penalty than 10 times, however, when provision of Section 38 is read, the discretion given to Deputy Commissioner to refund the penalty is akin to exercise of the jurisdiction Under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times.\u201d 20. The expression \u201cif he thinks fit\u201d also occurs in Section 40 sub-clause (b). The same legislative scheme as occurring in Section 39 is also discernible in Section 40(b), there is no legislative intentment that in all cases penalty to the extent of ten times the amount of proper stamp duty or deficient portion should be realised. The discretion given to Collector by use of expression \u201cif he thinks fit\u201d gives ample latitude to Collector to apply his mind on the relevant factors to determine the extent of penalty to be imposed for a case where instrument is not duly stamped. Unavoidable circumstances including the conduct of the party, his intent are the relevant factors to come to a decision. 21. The purpose of penalty generally is a deterrence and not retribution. When a discretion is given to a public authority, such public authority should exercise such discretion reasonably and not in oppressive manner. The responsibility to exercise the discretion in reasonable manner lies more in cases where discretion vested by the statute is unfettered. Imposition of the extreme penalty i.e. ten times of the duty or deficient portion thereof cannot be based on the mere factum of evasion of duty. The reason such as fraud or deceit in order to deprive the Revenue or undue enrichment are relevant factors to arrive at a decision as to what should be the extent of penalty under Section 40(1)(b). 22. We may refer to judgment of this Court in Peteti Subba Rao vs. Anumala S. Narendra, 2002 (10) SCC 427. This Court had occasion to consider in the above case provisions of Section 40 of the Indian Stamp Act, 1899. Referring to Section 40 this Court made following observation in paragraph 6: \u201c6\u2026\u2026\u2026The Collector has the power to require the person concerned to pay the proper duty together with a penalty amount which the Collector has to fix in consideration of all aspects involved. The restriction imposed on the Collector in imposing the penalty amount is that under no circumstances the penalty amount shall go beyond ten times the duty or the deficient portion thereof. That is the farthest limit which meant only in very extreme situations the penalty need be imposed up to that limit. It is unnecessary for us to say that the Collector is not required by law to impose the maximum rate of penalty as a matter of course whenever an impounded document is sent to him. He has to take into account various aspects including the financial position of the person concerned.\u201d 23. This Court in the above case categorically held that it is only in the very extreme situation that penalty needs to be imposed to the extent of ten times. 24. The Collector by imposing ten times penalty in his order has given the reason for imposition as \u201cthe party has not mentioned the actual nature of the document with the intention to escape the duty\u201d. When the Collector found intention to escape the duty, it was the case of imposition of penalty but whether the reason given by the Collector is sufficient for imposition of extreme penalty of ten times is the question which needs to be further considered. The High Court while considering the question of imposition of penalty of ten times has also given almost same reason in following words: \u201c\u2026\u2026\u2026But in the present case the complete title has been transferred by Trust to Jogesh Dhanda and Ishan Dhanda in the name of Deed of Assent. Therefore, there was intention to evade the heavy stamp duty on such transaction. Therefore, the Collector of Stamp has rightly imposed 10 times penalty which is maximum under the Act. In view of the above, I do not find any merit in this writ petition. The same is hereby dismissed.\u201d 25. No other reasons have been given either by the Collector or by the High Court justifying the imposition of maximum penalty of ten times. It is not the case of Collector that the conduct of the appellant was dishonest or contumacious. The High Court in its judgment has noticed that although the resolution was passed on 06.04.2005 to execute the Deed of Transfer by Trustees in favour of Jogesh Dhanda and Ishan Dhanda, but later on they deliberately executed the deed in the name of Deed of Assent on a stamp paper of Rs.200/-. For the reason given by the Collector as well as by the High Court that there was intention to evade the stamp duty in describing the document as Deed of Assent the imposition of the penalty was called for but in the facts and circumstances and the reasons which have been given by the Collector of Stamps as noticed above we are satisfied that this was not a case of imposition of extreme penalty of ten times of deficiency of stamp duty. Taking into consideration all facts and circumstances of the case, we are of view that ends of justice will be served in reducing the penalty imposed to the extent of the half i.e. five times of deficiency in the stamp duty. 26. In result the appeals are allowed the order of the Collector of Stamps dated 22.09.2008 is modified to the extent that penalty imposed of ten times of Rs.12,80,97,000/- is modified into five times penalty i.e. Rs.6,40,48,500/-. The appeals are partly allowed to the above extent. .....................J. ( ASHOK BHUSHAN ) ......................J. ( R. SUBHASH REDDY ) ......................J. ( M.R. 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{"id": "1714434", "text": "CASE NO.: Special Leave Petition (civil) 6779 of 2000 PETITIONER: VICCO LABORATORIES & ANR. Vs. RESPONDENT: ART COMMERCIA ADVERTISING PVT.LTD. & ORS. DATE OF JUDGMENT: 13/08/2001 BENCH: S.R.Babu, Y.K.Sabharwal JUDGMENT: RAJENDRA BABU, J. : A suit was filed in S.C.Suit No.493 of 1986 in the Bombay City Civil Court, Bombay by Vicco Laboratories, appellant herein, manufacturers of ayurvedic pharmaceutical products against defendant Nos. 1 to 4, respondents herein, for a declaration that the title and format of the suit serial \"Yeh Jo Hai Zindagi\" exclusively belonged to them and respondents Nos. 1 to 4 have no right thereto and for permanent injunction restraining the said respondents from making use of the title or episodes belonging to the petitioners or any episodes hereafter made. A number of averments germane to this case as set out in the plaint are set out hereunder: The petitioners carried on business as manufacturers of ayurvedic pharmaceuticals products, which were sold under the brand name of \"Vicco\" and have acquired substantial reputation in the market. The 1st respondent are an advertising agency and have been the advertising agents in respect of the products manufactured by the petitioners as aforesaid for number of years. The 2nd respondent is a Director and/or partner of the 1st respondent and has mainly dealt with the petitioners on behalf of the 1st respondent. Respondents Nos. 3 & 4 are proprietary concerns of respondent No.2. The 5th respondent is the Union of India and has been joined as the authority concerning Television in India in the name and style of Doordarshan, which is a television media. The petitioners had employed the respondent Nos.1 to 4 as their advertising agents through the petitioners' sister concern \"M/s Modern Advertising Agency\" and \"Uta Advertising Agency\" and were dealing with the respondent No.1 mainly through the petitioners Managing Director, G.K.Pendharkar. In 1984, Doordarshan in order to popularize sponsored serial, undertook the production of a serial by the name \"HUMLOG\". The petitioners are also pioneers in making use of Doordarshan for advertising their products through the agency of the 1st respondent, approached the 1st respondent to act as their agents for the purpose of producing a serial which would be shown as petitioners' sponsored programme. The petitioners agreed to pay the entire costs of the said production to the said advertising agency and requested it to look into the matter, employed various persons on behalf of the petitioners and prepare a suitable serial for them. Pursuant to the said arrangement, the respondent Nos. 1 to 4 as the agents of the petitioners prepared at the costs and expenses of the petitioners, a serial entitled \"Yeh Jo Hai Zindagi\". The petitioners claimed that as a result of the employment of the respondent Nos. 1 to 4 and the finances paid by them the petitioners are the owners of the said serial \"Yeh Jo Hai Zindagi\" and the title thereof. The first and second respondents under the arrangement produced about 60 episodes and the petitioners have spent a crore of rupees for the products and telecast of the said episodes and have also spent large sums of money on advertising to popularize the said programme. \"Yeh Jo Hai Zindagi\" had gained popularity and had become one of the most exclusive and popular serial. The petitioners claimed that the exclusive right to use the title thereof belonged to them and the 2nd episode of \"Yeh Jo Hai Zindagi\" was telecast without the name of the petitioners being mentioned as sponsors nor was their advertisement shown. This was due to the negligence of the respondent Nos.1 to 4. But the respondents recovered the cost of production from the petitioners. Further the said respondents had been recovering the cost of production well in advance of the serial episodes being actually produced. The petitioners claimed that they were the real producers and owners of the said serial \"Yeh Jo Hai Zindagi\" and the petitioners to the knowledge of the respondents have entered into an agreement assigning the video rights in the said serial to one M/s Esquire Distributing and Servicing Pvt. Ltd. on 1.1.1985. The petitioners though not required to do so, made an ex gratia payment to respondent Nos. 1 to 4 of a portion of the royalty received by them from the said M/s Esquire Distributing and Servicing Pvt. Ltd.. 1st and 2nd respondents had by their letter dated 14.12.1984 confirmed that the petitioners have all T.V. and video rights of the sponsored programme in Hindi \"Yeh Jo Hai Zindagi\" and vest with the petitioners. Though original agreement was to have 27 episodes but having regard to the popularity of the programme the petitioners decided to increase the said serial to 52 episodes and by a letter dated 22.4.1985 the petitioners informed respondent Nos. 1 and 2 that in the title of the 27th and 28th episodes it has been stated that it is presented by \"Oberoi Films\". Some time in May 1985, the 1st respondent proposed to the petitioners that some other products should be tied up with the serial \"Yeh Jo Hai Zindagi\". However, the petitioners were not interested in the same as they wanted the serial to project their products only exclusively and did not agree to any other products being tied up with the said serial. The respondents on 27.12.1985 alleged that they were losing Rs.50,000/- to Rs.75,000/- per episode and indicated that they wanted to get a new sponsor. By their letter dated 2.1.1986 the petitioners informed the 1st and 2nd respondents that it was not possible to increase the costs of production for the episodes and that in the circumstances, the production of the serial may stop. It was also pointed out that the name \"Yeh Jo Hai Zindagi\" is associated with the \"Vicco Laboratories\" and that if they wanted to obtain another sponsor they could produce a new serial under a different name. The petitioners apprehended that the respondent Nos. 1 to 3 intended to produce further episodes under the title \"Yeh Jo Hai Zindagi\" making use of the same format as the earlier serial for and on behalf of the third party. The petitioners reserved their right to sue for damages in terms of Order II, Rule 2 CPC. The respondent Nos. 1 to 4 in their written statement contested the suit. Apart from raising the question of valuation of the suit and the pecuniary jurisdiction of the court to try the same they also raised question that the petitioners are not the owners of the copyright in the said serial within the meaning of Section 17 of the Copyright Act, 1957 and the copyright in respect of the said serial belongs and vests with the respondent Nos. 1 to 4. Therefore, it was submitted that the suit lacked cause of action. While traversing the case on merit they contended that it was all along agreed between the petitioners and respondents that the copyright in the said serial would rest exclusively in the respondents and not in the petitioners. Thus the respondents' name was shown in the title of the said serial as the producer thereof right from the beginning of the said serial but the petitioners did not protest against the same. Consistently with the said intention further, the master cassette of the said serial at all relevant times remained exclusively with the respondents and not with the petitioners and the petitioners paid to the respondents 50% of the royalty received from M/s Esquire Distributing and Servicing Pvt. Ltd. under the agreement dated 1.1.1985, 4.3.1985 and 16.9.1985. The advertisements issued by the petitioners themselves in various newspapers to give wide publicity to the said serial would indicate that the serial mentioned these respondents' are the owners of the copyright in respect of the said serial and the petitioners claim in that behalf is devoid of any substance. The respondents also contended that even assuming but without admitting that even if the petitioners are the owners of the copyright in respect of the said serial as on the date of the suit they ceased to be such owners in view of the fact that these rights vested in them before the institution of the suit and they have acquiesced in the exercise of the said right by these respondents by their conduct as referred to earlier. It was also contended that the 2nd respondent is an artist and a film maker and has been in the field of film making for the past 20 years. In the course of his business the 2nd respondent has developed contacts and connections with important and renowned personalities, artists, technicians etc. in the film industry. In the year 1967, the 2nd respondent's wife Mrs. Sunanda S. Oberoi started the proprietary business of advertising agency in the name and style of Art Commercial and the 2nd respondent used to work in various capacities for the said firm. In the year 1983, the said proprietary firm was converted into a private limited company which is the 1st respondent in the present suit and the 2nd respondent constituted respondent Nos. 3 and 4 as his proprietary firm. About 18 years ago before filing of the suit, the respondents came into contact with the petitioners initially as clients in connection with the job of advertisement of their products on All India Radio, theatre and films and later, on television. These ad-films and jingles fetched handsome returns for the petitioners and boosted their sales beyond their own expectations. In course of time, the 2nd respondent and partners of the petitioners especially G.K.Pendharkar came very close to each other and developed very intimate relations. Either at the end of 1983 or early part of 1984, the 5th respondent through the said Doorsarshan decided to introduce the production of films or serials especially for exhibitions on TV instead of exhibiting/telecasting films produced by the professional film producers on payment of exorbitant royalty to them, partly as an economy measure and partly to provide avenues to and exposure new talents. The 5th respondent thereafter decided to entertain/welcome and/or encourage the proposals from the private producers to produce such serials or films at their own cost and responsibility and under the said scheme the advertisers desirous of linking up their advertisements with such films or serials were required to negotiate and settle directly with the producers of such films and/or serials, the royalty or consideration payable to such producers for linking up their advertisements and commercials with their film/serial and under the said scheme further, such advertisements were offered handsome concessions in the rates of advertisements for display of their ads on TV. As against the regular rates/charge of Rs.3,24,000/- for display of advertisements on TV of such advertisers for 120 seconds per telecast, the relevant time, at the rate of Rs.35,000/- only for 120 seconds in addition to the royalty or consideration payable to the producers of such films or serials which invariably was far less than the difference between the usual rates and concession rates of advertisements. The 2nd respondent undertook the preliminary project work on his own without loss of any time. The 2nd respondent made extensive study and research and prepared a format of the proposed serial. The said team of the 2nd respondent responded to his appeal and took great pains and put in hard work in the said project and presented to him an exclusive and ingenious format of the proposed serial. The 2nd respondent then approached the 5th respondent through Doordarshan with his proposal to produce the said serial then proposed to be entitled \"Mussibat Hai\". After a number of meetings between the 2nd respondent and the concerned officers and the authorities of the respondents at Delhi in connection with the said proposal approved a pilot [i.e. the first episode as sample] on 19.9.1984 to produce a TV serial comprising 52 episodes subject of course to the 5th respondent discretion to discontinue the same if the same proved a flop before the expiry of the stipulated period. The entire cost of the spade work and the cost of the title song was borne exclusively by the respondents and nothing was contributed by the petitioners in this regard. The 5th respondent registered the respondent Nos. 1 and 2 as the producers of the said serial. After finalizing the proposal by the TV authorities, respondent No.2 asked the petitioners as to whether they were interested in the linking up their ads with the said serial. Petitioners agreed to link up their ads with 26 episodes of the said serial. The petitioners agreed to pay fixed amount to these respondents per episode for linking up their commercials with the said serial and not on the basis of the actual cost of production of each episode so that if the cost of production exceeded the said fixed amount the respondents had to bear the same. In these circumstances, the respondents contended that by entering into the said agreement of sponsorship, neither the petitioners nor the respondents created nor did they ever intend to create any relationship of employer and employee and/or master and servant or principal and agent between the petitioners on the one hand and the respondents No.1 to 4 on the other. Nor did the parties intend that the respondents should produce the said serial for the petitioners or at the instance of the petitioners and the respondents intended to embark on the production of the said serial on their own. The petitioners by their letter dated 2.1.1987 turned down the respondents' demand and informed the respondents that they had no objection if the respondents went ahead with the production of the said serial and merely requested the respondents that the title of the said serial \"Yeh Jo Hai Zindagi\" may not be used by the respondents. In the meanwhile, the respondents contended that M/s Brook Bond Ltd. who wanted to link up their commercial with 13 episodes and agreed to pay and paid the ruling market price. On these grounds, the respondents contended that the suit of the petitioners is misconceived, malicious and baseless and is liable to be dismissed. The respondents contended that on no occasion the petitioners acted as a producer and even the contract was signed by the petitioners as an Advertiser and by the respondent No. 1 as an approved agent. The respondents strongly contended that the serial \"Hum Log\" was produced by the petitioners in collaboration with M/s Concept Advertisers. The trial court raised as many as 12 issues and they are as follows :- 1. \"Is it proved that this Court has no pecuniary jurisdiction to entertain and try this suit? 2. Do the plaintiffs prove that the T.V.serial entitled \"Yeh Jo Hai Zindagi\" was produced by the defendant Nos. 1 to 4 as agents and (the said serial made by defendant Nos. 1 to 4) in the course of their employment with the plaintiffs as alleged? 3. Do the plaintiffs prove that the entire serial rights including the excluding the exclusive right to use the title thereof, belong to the plaintiffs as alleged? 4. Are defendant Nos. 1 to 4 entitled to deny the ownership of the plaintiffs of the Film \"Yeh Jo Hai Zindagi\" in view of Exhibits a, B and E (colly) to the plaint? 5. Do the defendants prove that the plaintiffs are not the owners of the copyright of the TV serial/film, viz., \"Yeh Jo Hai Zindagi\" , within the meaning of Section 17 of the Copyright Act? 6. Do the defendant Nos. 1 to 4 prove that it was intended between the parties that copyrights in respect of the said film should vest exclusively with the defendants or that the right of ownership was waived by the plaintiffs? 7. Does the suit suffer from non-joinder of necessary parties? 8. Is the suit not maintainable against defendant No. 5 for failure to give notice u/s 80 of CPC? 9. Are the plaintiffs entitled to the declaration sought? 10. Are the plaintiffs entitled to permanent injuction as prayed for? 11. To what relief, if any, are the plaintiffs entitled? 12. What order?\" The trial court found that the petitioners have not been able to prove that the TV serial \"Yeh Jo Hai Zindagi\" was produced by defendants Nos. 1 to 4 as agents in the course of their employment as the agent of the petitioners as contended in the suit. The petitioners were also not able to prove that the entire serial rights including the exclusive right to use the title thereof belonged to the petitioners as alleged. It was also held that the respondents Nos. 1 to 4 are entitled to deny the ownership of the petitioners of the film \"Yeh Jo Hai Zindagi in view of Exhibits A, B and E produced in the case. It was also held that the respondents proved that the petitioners are not the owners of the copy right of the TV serial/film viz., \"Yeh Jo Hai Zindagi\" within the meaning of Section 17 of the Copy Right Act and it was intended between the parties that copy rights in respect of the said film should vest exclusively with the respondents or that the rights of ownership was waived by the petitioners. After examining the oral and documentary evidence on record it is disclosed that prior to letter sent on 11.7.1984 the petitioners were acquainted even with the format of the suit serial, they did not have any connection with the suit serial till that date and relied upon the wording used therein to the effect that \"you and Mr. G.K. Pendharkar are requested to join Mr. Oberoi and his creative team when the format of the proposed half and hour sponsored programme shall be presented to you.\" That was the first occasion when the format was presented to the petitioners. It was also on record that the Shri G.K. Pendharkar of the petitioners and respondent No. 2 had long standing relations with each other and they had already done a lot of advertising works for the petitioners before the production of the suit serial. Exhibit G-1 (which is Exhibit 27-A in the petitioners' compilation) is a letter written by Shri S.P. Agrawal, Controller of Programmes of Doordarshan to respondent No. 1, M/s Art Commercia with reference to the format for the proposed serial of half and hour duration tentatively titled \"Musibat Hai\" serial sent to them on 13.7.1984. Since the letter was addressed to M/s Art Commercia in which the proposal was accepted for production of the serial and the first episode was to be sent for preview and approval which would be given only after seeing the recording of the first episode. That letter had been addressed to respondent No. 1, M/s Art Commercia. The trial court felt that it was addressed not to the petitioners but to the respondents alone. The trial court also relied on Exhibit C-1 which indicated that the respondents were submitting a format for the serial which was to be registered on behalf of the client M/s Vicco Laboratories. The learned Judge of the trial court took the view that this letter nowhere mentioned that the respondents wanted to register their format on behalf of their producers which is consistent with the modern norms of advertising. The trial court ultimately came to the conclusion that the spade work on the production of the suit serial had already started before 11.7.1984 and on that day for the first time film was presented to the petitioners. It was, therefore, found that there was no copy right attached to any idea, but copy right is attached to the work and what is important is that not only the idea of producing the suit serial on TV came to the mind of respondent No. 2 but he had already started working on it in advance and forwarded it to Doordarshan for its approval. The trial court, after examining Exhibits C-1, E-1, F-1 P-1 found that the proposal was for 52 episodes and was accepted by the Doordarshan, while the case put forth on behalf of the appellants is that the original agreement was to have 27 episodes and having regard to the popularity of the programme the petitioners decided to increase the said serial to 52 episodes. The evidence was found to be inconsistent with the theory put forth by the petitioners that they are producers of the suit serial and, if it were to hold otherwise, the agreement or arrangement with the respondents was only for 26 episodes, whereas the sponsorship was for 52 episodes. The trial court examined in detail the letter dated 19.7.1984 (Exhibit F-1) written by Shri G.K. Pendharkar of the petitioners and concluded that averments made in the plaint stated that the original agreement was to have 27 episodes but having regard to the popularity of the serial programme the petitioners decided to increase the said serial to 52 episodes. In one of the contracts (Exhibit H-1) the wording used is as under :- \"Sponsorship of programme of 25 mts duration produced by sponsor entitled \"Yeh Jo Hai Zindagi\" including 2 mts free commercial time\". Relying upon this letter emphasis was laid on the words \"produced by sponsors\" . Whether two capacities \"sponsor\" and \"producer\" can co- exist in one and the same person or not has been examined and the trial court noted that the wording had been borrowed from the Tariff Card and Tariff Card also indicated what are the categories of the advertisers and rates thereof. It is held that words \"produced by sponsors\" would not mean that the sponsors themselves are the producers of the said programmes, as is clear from the Tariff Card. The trial court proceeded thereafter to examine the payments made in regard to production of the serial. Thus it was found that the first 26 episodes the amount per episode paid by the petitioners was Rs. 1,20,000/- and each bill contained the expression \"service charges\" which was stated by the appellants that the respondents acted as agents of the petitioners for production of suit serial. On proper construction of the bills the trial court rejected the contention that these bills and payments as showing that they had borne the costs of production of the suit serial and, therefore, they are the producers. Inasmuch as the respondents could not claim any amount at random, details regarding expenditure were included in the bills and therefore it is the sponsor's price for sponsoring the suit serial. Strong reliance was placed upon certain circumstances, namely, that the format had been approved by the petitioners only on 11.7.1984 and PW-1 admitted that in view of the bill the entry claiming deduction made by the petitioners in their accounts in the financial year ending on 30.3.1984; that the amount was not to be paid for all 26 episodes or even thereafter in lump sum and the bill for 26 episodes enabled petitioners to claim deduction for the entire amount without actual payment in financial year 1983-84; that the entry made for the financial year 1983-84 was beneficial to the petitioners that there was no ceiling on advertising expenditure and it was introduced from 1.4.1984 onwards, the plaintiff did not produce the account books to show if the deduction in respect of the entire amount was claimed or not though they were repeatedly called upon to produce them. The trial court was conscious enough not to enter into the controversy whether during the particular account year ending on 31.3.1984 the advertising expenditure was fully exempted from tax or that there was disallowance of 20 per cent on that point and the decision regarding income tax deductions is not necessary as there is enough other material to show that the said bill was ante-date. The change in the title from 55th episode \"for Vicco Laboratories\" was introduced. Their contention was that there was a protest from the petitioners and as a result thereof this change took place. The 55th episode was telecast sometime at the end of November or beginning of December 1985 and thus there was a time gap of 7/8 months between the protest and the telecast of the 55th episode. Therefore, it cannot be said that there is any communication between the same. The trial court also noticed that in respect of both the advertisements and also in respect of suit serial the petitioners paid to the respondent Nos. 5 and 6 amount which was to be the maximum amount. Thus the profits or loss was of the respondents and there is element of liability to render account was missing and thus there was no question of respondents being the agents of the petitioners within the meaning of Section 182 of the Indian Contract Act. The suit serial was produced by the respondents as agents of the petitioners was false. The facts emerging in the case indicate that the petitioners had joined the production of the suit serial after some concrete beginning had been made like recording of the title song, the conceiving of the title and format of the suit serial, etc. The trial court summed up the position that the two capacities \"sponsor\" and \"producer\" cannot co-exist in one and the same person. If the documents are interpreted that the petitioners are the sponsors as well as the producers it would lead to absurd results. Thus the trial court proceeded to uphold the contentions raised on behalf of the respondents to dismiss the suit. On appeal, the High Court re-examined the matter and on examination of the pleadings, the contentions, put forth before the court, the evidence on record and the findings recorded by the trial court, concluded that the findings recorded by the trial court are proper. In doing so, the High Court noticed that the admitted position in the pleadings and the oral evidence is that the petitioners agreed to sponsor only 26 episodes whereas the respondents had agreed to produce 52 episodes and had made firm commitment to Doordarshan to that effect and this circumstance militates against the respondents having undertaken the production at the behest or at the request of the petitioners. The High Court observed that the petitioners had no knowledge of the Doordarshan scheme regarding the sponsored programme and linking of 2 minutes advertisement and agreed with the findings of the trial court that it is improbable for the respondents to have agreed to reduce its income in the form of commission and undertake the responsible job of production of the serial. It was stated that certain bills had been given to the petitioners to suit their convenience in tax matters and there was no such bill submitted to the petitioners by the respondents when the petitioner had agreed to extend the sponsorship from episodes Nos. 27 to 52 and noticed the nature of the system of accounting maintained by them and held that the petitioners had got deductions in respect of the entire amount of the bill in the year which ended on March 31, 1984. The High Court also noticed the circumstance of respondent No.2's name appearing as 'producer' in the titles of the suit serial and the petitioners did not do anything by way of protest or other objection or take steps to withhold payment of the respondents which in the normal course would have been done and, therefore, the explanation now sought to be offered by the petitioners in the form of a written protest was devoid of any substance. The explanation given by the petitioners that they were busy in the shootings did not carry much weight with the High Court. The High Court also examined the scope of Section 17 of the Copyright Act and the ingredients thereof not having been established the High Court held that no claim could be based on the same and thus agreed with the findings recorded by the trial court and dismissed the appeal. In this special leave petition under Article 136 of the Constitution, the contentions raised before the High Court are reiterated particularly as to the effect of Section 17 of the Copyright Act and whether the correspondence on record would not indicate that they were entitled to ownership and copyright in respect of the TV programme 'Yeh Jo Hai Zindagi'. The learned counsel for the petitioners strongly relied upon the following documents: 1. The cost estimate. 2. The bills of cost of production. 3. Letters dated 14.12.1984 and 15.11.1985. 4. Contracts with Doordarshan. 5. Contractd with Esquire Distributing & Servicing Pvt. Ltd. We have carefully considered the contentions urged on behalf of the petitioners. We are not satisfied that the petitioners have made out a case for consideration by this Court. The matter rests purely upon the appreciation of evidence on record and does not give rise to any question of such importance as to be decided by this Court under Article 136 of the Constitution. It is clear from the findings recorded by the trial court and the appellate court: 1. that the respondents have not undertaken the production of the said serial at the instance of the petitioners. G.K.Pendharkar, the Managing Director of petitioner No.1 was asked to come to view the format of the programme and the petitioners were not even acquainted with the format of the serial while the respondents had taken concrete steps in this regard prior to the letter dated 11.7.1984. 2. That the petitioners had agreed to sponsor only 26 episodes whereas the respondents had agreed to produce 52 episodes and had given a firm commitment to that effect to Doordarshan as is clear from the letter dated 12.7.1984 sent by the respondents to Doordarshan. The trial court thus rightly noted that there was no agency between the parties. 3. That the titles of each episode indicated that respondent No.2 is the producer of the said serial and the petitioners are only the sponsors. As late as on 22.4.1985, the petitioners communicated their displeasure on this display in the episodes as to the titles. However, the titles continued to show Mr. S.S.Oberoi as the producer of the serial and the petitioners did not withhold payments. 4. That the courts below have refuted the claim of the petitioners that the bill dated 19.3.1984 establishes the fact that the production work had been started by the respondents at the behest of the petitioners. It has been proved that the said bill was ante-dated and raised by the respondents in July, 1984 ostensibly for the purpose of benefiting the petitioners for their obtaining tax concessions. 5. That the Doordarshan, which have been impleaded as a party, in their written statement stated that they recognize the respondents as producers of the said serial and recognize the petitioners as sponsors only. 6. That the evidence of Mr. S.S.Gill, who gave evidence on behalf of the Information & Broadcasting Ministry that he was not acquainted with Mr. Pendharkar and that Doordarshan had no direct connection with the petitioners but only with the respondents as producers or the Director stood un-impeached. In his further evidence, Mr. Gill stated that some time in the month of May/June, 1984 he had met Kundan Shah and requested to make a comedy serial for Doordarshan which clearly indicated that it is only the respondents who were dealing with Doordarshan. 7. That the video rights were assigned to Esquire Distributing & Servicing Pvt. Ltd. by the respondents pursuant to letters dated 14.12.1984 and 15.11.1985 and had received royalty for the video rights and the original U-matic cassettes were returned to them by Esquire Distributing & Servicing Pvt. Ltd. as their property. 8. That there was no transfer of rights in favour of the petitioners by the respondents in the aforesaid letters and no consideration whatsoever was paid to the respondents for issuing the said letters which have no legal consequences and it was after the petitioners received the letter dated 19.10.1985 from Esquire Distributing & Servicing Pvt. Ltd. that the respondents were asked by the petitioners to issue another letter in this regard. Thus the pleadings and the evidence on record clearly indicated that the respondents were not the agents of the petitioners for the purpose of producing the said serial. The aggregate amount of Rs.76.50 lakhs which was paid to the respondents for 60 episodes is not the amount for cost of production but the fixed price for sponsoring the said serial in order to link up their advertisement with the serial and avail substantial benefit of concessional rate under the scheme envisaged by Doordarshan. The respondents were not liable to render accounts to the petitioners who paid them a fixed sum for sponsoring the programme. If the expenses were less, the petitioners did not ask for a refund and the profit or loss was entirely of the respondents. It is clear that the bills that have been raised were only to accommodate the petitioners from the circumstances narrated above. However, the learned counsel for the petitioners made elaborate reference to the Income Tax Act, 1961 and the provisions whether such availment of benefit could be taken or not pursuant to the amendment effected to the provisions relating to computation of business income at different stages may not be very germane to the present case. It is probable that the respondents had obliged the petitioners by issuing these bills because the bills cannot be read in isolation but with reference to surrounding circumstances. Therefore, the view taken by the courts below in this regard appears to be correct. So far as the contentions raised on the basis of Section 17 of the Copyright Act is concerned, it is clear that the petitioners were not able to establish that the respondent Nos. 1 to 4 produced the said serial (1) as the agents of the petitioners; (2) in the course of their employment with the petitioners; (3) for valuable consideration paid by the petitioners to them; and (iv) at the instance of the petitioners. When these factors had not been established and the suit is itself not dependent on the interpretation of Section 17 of the Copyright Act, pleadings and issues raised did not attract the same. On appreciation of evidence, the courts below have come to the conclusion that the respondents did not make the said serial for valuable consideration at the instance of the petitioners and in view of the findings of fact, the claim of copyright or ownership in respect of the serial under Section 17(b) and (c) would not arise at all. Thus we find absolutely no merit in this petition. We decline to interfere with the order made by the High Court affirming the decree of the trial court. The petition, therefore, stands dismissed. 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{"id": "48115323", "text": "IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Original Side Present :- Hon'ble Justice Amrita Sinha W.P No. 441 of 2018 G.A. No. 2928 of 2018 Abhishek Mukherjee Vs. The Board of Trustees, Kolkata Port Trust & Ors. For the writ petitioner :- Mr. Soumya Mazumder, Adv. Ms. Ashmita Chakraborty, Adv. Ms. Sunita Kar, Adv. For the respondent :- Mr. Probal Kr. Mukherjee, Sr. Adv. Ms. Sujata Mukherjee, Adv. Hearing concluded on :- 04-09-2019 Judgment on :- 01-10-2019 Amrita Sinha, J. The petitioner is an employee of the Kolkata Port Trust. He joined as a Senior Medical Officer on probation for a period of two years vide appointment letter dated 21st June, 2016. The petitioner is guided by the Kolkata Port Trust Employees' (Classification, Control and Appeal) Regulations, 1987 and the Kolkata Port Trust Employees' (Conduct) Regulations, 1987. The duties and functions of the employer that is the Kolkata Port Trust are enumerated in the Major Port Trust Act, 1963 and the Rules and Regulations framed thereunder. By an order dated 13th February, 2018 the petitioner was placed under suspension with immediate effect as a disciplinary proceeding was contemplated against him. The suspension order was valid until further orders. The petitioner was entitled to draw subsistence allowance during the period of suspension, upon application, indicating that he was not employed in any business or vocation for profit/remuneration during the said period. By a confidential letter dated 2nd March, 2018 the Deputy Chairman, Disciplinary and the Appointing Authority of the petitioner sought for explanation from the petitioner as to why his services should not be dispensed with. The petitioner submitted his explanation by a letter dated 8th March, 2018 denying the allegations made in the letter under reference. The disciplinary authority by an order dated 9th May, 2018 intimated the petitioner that the Suspension Review Committee recommended continuation of his suspension for a further period of 90 days with effect from 14th May, 2018. The period of suspension of the petitioner has thereafter been extended from time to time and the said position is continuing till date. The petitioner is aggrieved by issuance of the memo dated 21/25th June, 2018 issued by the Deputy Chairman and Disciplinary Authority intimating the petitioner that an inquiry will be held against him under Regulation 8 of the Kolkata Port Trust Employees' (Classification, Control and Appeal) Regulations. The statement of Article of charge framed against the petitioner, the statement of imputation of misconduct in support of the charge, list of documents, and the list of witnesses were forwarded to the petitioner along with the aforesaid memo. The petitioner was directed to submit a written statement whether he admitted or denied any or all the Article of charges. On receipt of the aforesaid memo of charge the petitioner duly submitted his written statement denying the allegations levelled against him. The Deputy Chairman and the Disciplinary Authority by an order dated 2nd August, 2018 intimated the petitioner that an inquiry officer has been appointed for conducting an inquiry in respect of the charges framed against him. The petitioner has been charged with gross misconduct on the allegation that he indulged in an unethical activity in the ICU of Centenary Hospital on 3rd February, 2018 by issuing order to inject/injecting KCL/insulin to a patient leading to her death immediately, after she was prematurely declared dead by another doctor who was on duty in ICU. The act of injecting the above injection was intentionally done to bring the premature end to the life of the patient. The same amounted to unethical practice by a medical practitioner amounting to gross misconduct and criminal conspiracy. The statement of imputation of misconduct in support of the charges framed against the petitioner mentions that the aforesaid behaviour of the petitioner amounts to gross negligence of duty, criminal conspiracy and lack of devotion to his work and poor conduct, which is in violation of Regulations 3(1) and 3(9) of the Kolkata Port Trust Employees' (Conduct) Regulations, 1987 which is unbecoming of an officer of Kolkata Port Trust. According to the petitioner, the initiation of the disciplinary proceeding against a medical practitioner by his employer on the ground of professional misconduct is not permissible in law and the same is liable to be set aside. It has been submitted that the disciplinary authority is not competent/authorised to inquire into the allegation of professional misconduct. Being a medical practitioner the petitioner is guided by the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002. It has been contended that the charges levelled against the petitioner in the show cause notice as well as the charge sheet are in variance to the statement of imputation of misconduct. In the charge sheet the petitioner has been alleged to have committed unethical activity, unethical practice and criminal conspiracy which is unbecoming of a medical professional whereas in the statement of imputation of misconduct the petitioner has been alleged to commit gross misconduct of duty, lack of devotion and poor conduct and violation of the Regulations 3(1) and 3(9) of the Kolkata Port Trust Employees' (Conduct) Regulations, 1987. According to the petitioner the allegations are of such a nature that it requires in depth inquiry/investigation by competent persons having qualification in the field of medicine. The same cannot be subject to the Kolkata Port Trust Employees' (Conduct) Regulations, 1987. The allegation of criminal conspiracy is liable to be dealt with under the Indian Penal Code, 1860 and the same cannot be adjudicated under the service regulations. The petitioner relies upon the judgment delivered by the Hon'ble Supreme Court in the matter of Surath Chandra Chakravarty vs The State of West Bengal & Ors. reported in AIR 1971 SC 752 on the issue that the grounds on which the disciplinary authority proposes to take action have to be reduced to the form of definite charge or charges which have to be communicated to the person charged together with the statement of allegations on which each charge is based. In the instant case the statement of imputation has brought in and included fresh charges which were not initially mentioned /included in the statement of charge. The petitioner relies upon an unreported judgment dated 12th September, 2018 passed by a learned single Judge of this court in WP 24993 (W) of 2017 in the matter of Anjan Bhattacharya vs Registrar General, High Court, Kolkata & Ors. on the issue that the disciplinary proceeding initiated by the employer to inquire into the allegations was not amenable to inquiry in the disciplinary proceeding. It has been submitted that as there is a specified Act according to which the professional conduct of the doctors are regulated, accordingly, any steps taken in furtherance of the disciplinary proceeding is bad in law and liable to be set aside. The petitioner refers to the judgment delivered by the Hon'ble Supreme Court in the matter of Union of India vs H. C. Goyel reported in AIR 1964 SC 364 on the proposition that the inquiring authority merely acts as a delegatee of the disciplinary authority while the ultimate decision to arrive at a finding of guilt is always vested in the disciplinary authority. It has been submitted that it is not necessary that the disciplinary authority will accept the findings of the inquiry officer. The disciplinary authority has every right to disagree with the findings of the inquiry officer and may come up with a different finding. In the instant case, as the disciplinary authority does not have the expertise to deal with the charges levelled against the petitioner, it will invariably rely upon the report of the inquiry officer, who is a medical practitioner, and the petitioner will lose one forum and opportunity to persuade and convince the disciplinary authority to disagree with the findings of the inquiry officer, in the event, the same goes against him. Resultantly, the inquiry officer's report will remain binding on the disciplinary authority and he may not be in a position to differ from the same. In view of the above, the valuable right of the petitioner to make representation against the inquiry report will be an empty formality. Submission has been advanced that the allegation of negligence of duty has to be understood as a case of negligence on the part of a medical practitioner in performance of his duties. The same will constitute medical negligence. The petitioner relies upon the judgment delivered by the Hon'ble Supreme Court in the matter of Jacob Mathew vs State of Punjab & Anr. reported in (2005) 6 SCC 1 wherein the court held that the essential components of negligence are \"duty\", \"breach\" and \"resulting damage\". A simple lack of care, an error of judgment or an accident is not proof of negligence on the part of a medical professional. To prosecute a medical professional for negligence under criminal law it must be shown that the accused did something or failed to do something, in the given facts and circumstances, no medical professional in his ordinary senses and prudence would have done or failed to do. It has been submitted that the standard of practice and technique of medical practitioner is enumerated in the Indian Medical Council (Professional Conduct, Conduct and Ethics) Regulations, 2002 which has been framed under the Indian Medical Council Act, 1956. The Indian Medical Council Act, 1956 and the delegated legislation that is the Indian Medical Council (Professional Conduct, Conduct and Ethics) Regulations, 2002 are central legislations and operate in the special field relating to the act and conduct of the medical practitioner. Reliance has been placed upon Section 20A of the Indian Medical Council Act, 1956. The said regulation was framed to specially deal with professional conduct of medical practitioners and it operates in a special field. The Kolkata Port Trust Employees' (Classification, Control and Appeal) Regulations, 1987 and the Kolkata Port Trust Employees' (Conduct) Regulations, 1987 is the general law applicable to all employees. The general law is always subject to the special law. The petitioner relies upon Section 38(1)(3) of the West Bengal Clinical Establishment (Registration, Regulation and Transparency) Act, 2017 which mentions that any complaint of medical negligence against the medical professionals will be dealt with by the respective State Medical Councils. It has been submitted that disciplinary action in respect of professional misconduct can only be undertaken by the competent authority having expertise and none else. It has been argued that the petitioner even though is an employee of the Kolkata Port Trust shall always be guided by the provisions of the Indian Medical Council Act, 1956 and the subordinate legislations. The service regulations are meant for each and every employee of the Kolkata Port Trust and the same deals with the general service conditions of an employee. As the allegations made against the petitioner relates to his professional misconduct the same has to be dealt with by the special law and not the general one. To fortify his argument on the above issue the petitioner has relied upon the judgment delivered by the Hon'ble Supreme Court in the matter of Life Insurance Corporation of India vs D. J. Bahadur & Ors. reported in AIR 1980 SC 2181, KSL & Industries Ltd. Vs Arihant Thread Ltd. & Ors. reported in (2015) 1 SCC 166 and Atmaram Porperties Pvt. Ltd. Vs Oriental Insurance Co. Ltd. reported in (2018) 2 SCC 27. The petitioner is also aggrieved by the act of the respondent KoPT in paying him 50% of his last pay drawn with allowance, as subsistence allowance to him. The petitioner submits that as the regulation under which he has been suspended does not provide for any rate of subsistence allowance accordingly he is entitled to claim full salary during his period of suspension. The petitioner submits that an employee is entitled to receive full emoluments during his period of suspension, in the absence of a provision specifying the percentage or amount that is to be paid on account of subsistence allowance. The petitioner relies upon a judgment delivered by the Hon'ble Supreme Court in the matter of Balvantray Ratilal Patil vs State of Maharashtra reported in AIR 1968 SC 800 wherein the court held that the amount that is to be paid to the public servant during suspension will depend upon the provisions of the statute in that connection. If there is no such provision the public servant will be entitled to his full emolument during the period of suspension. The petitioner relies upon the judgment delivered by this court in the matter of The Secretary of the Managing Committee of Rabindra Smriti (S) B. & Ors. vs M. Bhattacharya & Ors. reported in 2009 (1) CLJ (Cal) 410 wherein the court held that in the absence of a restrictive provision it would be unjust to deny full salary to the employee during the period of suspension. The petitioner cites the judgment delivered by the Hon'ble Supreme Court of India in Delhi Cloth and General Mills Co. Ltd. vs The Workmen & Ors. reported in AIR 1967 SC 469 on the issue that the payment of subsistence allowance during suspension is a matter incidental to the disciplinary proceeding initiated against the petitioner. Institution of a fresh writ petition only for a direction for payment of subsistence allowance will amount to multiplicity of proceedings. The petitioner has prayed for a direction upon the Kolkata Port Trust to pay full salary from the date of suspension after adjusting the amount that has already been paid on account of subsistence allowance. The respondent Kolkata Port Trust submits that the petitioner admitted in his writ petition that he is on probation and subject to the provision of the Kolkata Port Trust Employees' (Classification, Control and Appeal) Regulations, 1987 and the Kolkata Port Trust Employees' (Conduct) Regulations, 1987. It has been submitted that the question of unethical practice by a medical practitioner is a disciplinary issue, which if proved, may lead to suspension of practice, either temporarily or permanently. There are regulatory bodies which regulate the professionals. The same can never stand in the way of an employer from taking disciplinary action against his employee on the ground of misconduct. The petitioner was liable to be proceeded with departmentally as he committed misconduct in his workplace. In the event of his indictment in the disciplinary proceeding the consequences of penalty prescribed in the service regulations may be attracted. The penalty may also include termination of service. It has been submitted that there is a provision for appeal under Regulation 15 of the Kolkata Port Trust Employees' (Classification, Control and Appeal) Regulations, 1987 if an employee is aggrieved by the order of suspension and the order passed for suspension allowance. The petitioner never availed of the alternative efficacious remedy of appeal and straight away approached the Hon'ble High Court for relief. The respondents submit that the proceeding is at a very initial stage and the recording of evidence in the said case has not been initiated till date. It has been submitted that the issuance of charge sheet does not give rise to any cause of action and the writ petition is liable to be dismissed on the ground of being pre- mature. The respondents rely upon the judgment delivered by the Hon'ble Supreme court in the matter of State of Punjab vs Ajit Singh reported in (1997)11 SCC 368 wherein the court held that the High Court was in error in setting aside the charge sheet that was served upon the respondent in the disciplinary proceedings. The court held that till the evidence is produced it cannot be said that the charges contained in the charge sheet are without any basis whatsoever. The respondents submit that in the case at hand the court ought not to enter into the merits of the charge sheet as recording of evidence has not started as yet. There is no scope of judicial review at this stage. The respondents rely upon the judgment delivered by the Hon'ble Supreme Court in the matter of Ram Laxman vs Presiding Officer reported in (2010)10 SCC 201 wherein the court held that if the management has held a disciplinary inquiry against an employee it has got the right to place that employee under suspension, if on the basis of the findings in the departmental inquiry the management is prima facie of the opinion that the employee, on account of charges having been proved, was liable to be dismissed from service. Once the employee is placed under suspension, the management cannot take any work from the suspended employee nor can the employee claim full salary from the management. But the management has to pay the subsistence allowance to the employee so that he may sustain himself. The respondents rely upon the judgment delivered by the Hon'ble Supreme Court in the matter of P. B. Desai vs State of Maharashtra reported in (2013) 15 SCC 481 wherein the court held that whenever the principle of 'duty to take care' is founded on a contractual relationship, it acquires the legal character. The ethical 'duty to treat' on the part of the doctors is clearly covered under the Code of Medical Ethics, 1972 and whenever there is breach of the Code the aggrieved patient or the party aggrieved can approach the relevant disciplinary committee constituted by the State Medical Council concerned. It has been very submitted by the learned senior advocate appearing on behalf of the respondents that the petitioner will be subjected to the disciplinary proceeding in respect of those charges which do not touch his professional conduct. Since the petitioner was an employee of Kolkata Port Trust, the employer by virtue of the service regulations is free and entitled to take appropriate action against the petitioner in accordance with such regulations. The respondents pray for dismissal of the writ petition so that they can proceed with the disciplinary proceeding in accordance with the service regulations. I have heard the submissions made on behalf of both the parties. Admittedly, the petitioner is an employee of the Kolkata Port Trust and is guided by the service regulations. According to the petitioner the charges which have been levelled against him cannot be decided by the disciplinary authority as the same touches his professional conduct. The Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 was promulgated for regulating the professional conduct, etiquette and ethics for registered medical practitioners. There is enough provision in the said regulation for punishing and taking disciplinary action against a medical professional who has acted in derogation of the code. The same is a special regulation to address the medical professionals. The primary allegation against the petitioner is unethical activity, unethical practice, and criminal conspiracy. All the three charges points towards the professional conduct of a medical practitioner. The service regulations framed by the employer is applicable to all the employees of the organisation. There may be various issues with regard to/relating to the service conditions of an employee. In such a situation the general law which is applicable for all the employees can be invoked. The moment the charge relates to professional conduct or misconduct the same cannot be addressed by invoking the general law and the same is required to be redressed by application of the special law. It is noteworthy that the patient party did not lodge any FIR or complaint against the petititioner either before the police or the medical regulatory authority. The charges of gross negligence of duty, lack of devotion to work and poor conduct are not reflected in the Article of Charge. In the statement of imputation of misconduct the same has been incorporated. The petitioner has been charged to act contrary to the provisions mentioned in Regulations 3(1) and 3(9) of the Kolkata Port Trust Employees (Conduct) Regulations, 1987. The aforesaid Regulations are applicable to all the employees of the Kolkata Port Trust. Regulation 3(1) mentions that every employee shall, at all times, maintain absolute integrity and devotion to duty and Regulation 3(9) mentions that no employee shall neglect his duties or cause others to neglect their duties including slowing down of work deliberately which may cause loss to the employer or act in a manner which will be prejudicial to the interest of the employer. No employee shall commit any act which is subversive of discipline or good behaviour. The statement of imputation clearly indicates that the behaviour of the petitioner on the fateful day was such that the same amounted to gross negligence of duty, criminal conspiracy and lack of devotion to work and poor conduct. Negligence of duty, lack of devotion and poor conduct relates to the professional conduct of the petitioner and not in respect of the general conduct of an employee. The behaviour complained of, is the act of the petitioner in issuing order to inject/injecting KCL/insulin to a patient leading to her death immediately. The expression 'such behaviour of Dr. Mukherjee amounts to' implies that the professional behaviour of the petitioner is in question and not his general behaviour. Accordingly the petitioner is liable to be tried under the special law and not the general law/regulation covering all the employees of Kolkata Port Trust. An employer always has the right and authority to take steps against an erring employee. But when an employee serving in a specialised field, with special knowledge, is charged with an act which appears to be a transgression to the standard practice then he is liable to be dealt with by the regulatory body which is specially constituted to deal with such action or inaction. When the legislature has enacted specific laws to deal with specified acts of misconduct there is no reason to try the wrongdoer under a different law, not suitable to cater to the appropriate requirement. The charge sheet in the instant case revolves around the professional behaviour of the employee. Embarking upon an inquiry into the said charges, by the employer, who is not authorised in law to adjudicate the same, will amount to initiating and continuing a proceeding without jurisdiction. A proceeding initiated by an authority without jurisdiction, is bad in law and liable to be set aside. The court in the matter of Anjan Bhattacharya (supra) held that as there is a suitable legislation to deal with the issues then no other mechanism including a disciplinary proceeding may be allowed to sub-plant or circumvent it. Hence the argument of the petitioner that the disciplinary authority is not competent to decide the charges levelled against him in the charge sheet is partially correct. The issue of quantum of subsistence allowance to be paid to a suspended employee has been set at rest by the Hon'ble Supreme Court in the matter of Balbantray Ratilal Patil (supra) wherein a three-Judge Bench laid down that what amount should be paid to the public servant during the period of suspension will depend upon the provisions of the statute or statutory rule in that connection. If there is no such provision the public servant will be entitled to his full emoluments during the period of suspension. The decision in the matter of Mahavir Bhattacharya (supra) reiterates the same principal that in the absence of any restrictive provision it would be unjust to deny full salary to an employee during his period of suspension. Admittedly, the service regulations of Kolkata Port Trust do not mention the amount of allowance that is to be paid to an employee when under suspension. In the absence of any specific provision restricting such payment the employee is entitled to receive his full salary during the period of suspension. Fundamental Rules are the general rules guiding central government employees. As the employer has its own set of rules and regulations concerning service of its employees the Fundamental Rules shall not be applicable in the instant case. In view of the discussions made herein above the disciplinary proceeding initiated against the petitioner is liable to be set aside. The same is hereby quashed. As a consequence thereof the petitioner shall be entitled to receive the full salary, less the amount paid as subsistence allowance, during the period of suspension. The respondent authority shall clear the dues of the petitioner within a period of three months from date. The employer will be free to proceed against the petitioner under the service rules concerning his general behaviour, if situation so demands. In view of disposal of the writ petition the connected application is also disposed of. W.P No. 441 of 2018 and G.A. No. 2928 of 2018 are disposed of accordingly. Urgent certified photocopy of this judgment, if applied for, be supplied to the parties on compliance of usual legal formalities. 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{"id": "135785387", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 443 OF 2020 NAGABHUSHAN \u2026APPELLANT VERSUS THE STATE OF KARNATAKA \u2026RESPONDENT JUDGMENT M.R. SHAH, J. 1. Feeling aggrieved and dissatisfied with the impugned judgment and order of conviction dated 11.10.2019 passed by the High Court of Karnataka at Bengaluru in Criminal Appeal No. 525/2013, by which the High Court has allowed the said appeal preferred by the respondent \u2013 State of Karnataka and has reversed the judgment and order of acquittal passed by the learned trial Court insofar as the appellant \u2013 original Signature Not Verified Digitally signed by Chetan Kumar Date: 2021.03.08 17:19:10 IST Reason: accused no.1 is concerned for the offences punishable under Sections 498A and 302 read with 34 of the IPC and consequently convicted the appellant herein \u2013 original accused no.1 for the aforesaid offences, original accused no.1 has preferred the present appeal. However, the High Court has confirmed the judgment and order of acquittal insofar as original accused nos. 2 and 3 are concerned. 2. As per the case of the prosecution, original accused no.1 married the deceased, the daughter of PW3 & PW4 nine years ago, prior to the date of the incident. That the deceased was subjected to the mental cruelty and there was demand of dowry from the parents of the deceased Rekha. In that regard, mediation was also held and thereafter PW3 & PW4 gave Rs. 10,000/- and Rs. 20,000/- on two occasions. On 24.06.2010 at about 9 p.m. in the matrimonial home, appellant herein \u2013 original accused no.1 took up quarrel with his wife Rekha (deceased) and at that time, he took kerosene and poured the same on her and lit the fire. The deceased was taken to the hospital. That based on the information, the investigating officer went to the hospital and recorded her statement on 27.06.2010 (Exhibit P5). It is alleged that even earlier also on 25.06.2010, the statement of the deceased was recorded by the police (Exhibit D2). On conclusion of the investigation, the investigating officer filed the chargesheet against all the accused for the offences punishable under Sections 498A and 302 read with 34 of the IPC. The case was committed to the Court of Sessions. The accused pleaded not guilty and therefore all of them came to be tried by the learned Sessions Court for the aforesaid offences. 2.1 To prove the case against the accused, the prosecution examined in all 14 witnesses and brought on record the documentary evidences including Exhibit P5 \u2013 dying declaration and the medical evidence. That after closure of the evidence on the side of the prosecution, further statements of the accused under Section 313 Cr. P.C. were recorded. Appellant herein \u2013 original accused no.1 examined himself as DW1 and also examined a witness as DW2. The accused relied upon the earlier statement of the deceased (Exhibit D2). That on appreciation of the evidence and not believing the dying declaration \u2013 Exhibit P5 and having found contradictions in two dying declarations Exhibit P5 and Exhibit D2, the learned trial Court acquitted all the accused for the offences for which they were tried. 3. Feeling aggrieved and dissatisfied with the impugned judgment and order of acquittal passed by the learned trial Court, the State of Karnataka preferred appeal before the High Court. By the impugned judgment and order, the High Court has reversed the order of judgment and order of acquittal insofar as the appellant herein \u2013 original accused no.1 is concerned and has convicted the appellant herein \u2013 original accused no.1 for the offences punishable under Sections 498A and 302 read with 34 of the IPC. The judgment and order of acquittal for original accused nos. 2 & 3 has been confirmed by the High Court. 3.1 Feeling aggrieved and dissatisfied with the impugned judgment and order of the High Court reversing the judgment and order of acquittal and convicting the appellant herein \u2013 original accused no.1 for the offences punishable under Sections 498A & 302 read with 34 of the IPC, original accused no.1 has preferred the present appeal. 4. Learned counsel appearing on behalf of the appellant has vehemently submitted that in the facts and circumstances of the case, the High Court has committed a grave error in reversing the well- reasoned judgment and order of acquittal passed by the learned trial Court. 4.1 It is submitted that while reversing the order of acquittal passed by the learned trial Court, the High Court has exceeded in its jurisdiction vested in it under Section 378 of the Cr. P.C. 4.2 It is submitted that as there were material contradictions in two dying declarations and Exhibit D2 was the dying declaration first in time which came to be believed by the learned trial Court, the learned trial Court committed no error in acquitting the accused. 4.3 It is submitted that the learned trial Court on appreciation of evidence, more particularly two dying declarations, disbelieved the subsequent dying declaration (Exhibit P5) and thereby acquitted the accused, the same was not required to be interfered with by the High Court in exercise of the appellate jurisdiction against the judgment and order of acquittal. 4.3 It is further submitted that while believing the dying declaration vide Exhibit P5, the High Court has not appreciated that the same was recorded by PW10 in the presence of PW13, PW8 and parents of the deceased. 4.4 It is submitted that the High Court ought to have appreciated that the earlier dying declaration vide Exhibit D2, which was recorded on 25.06.2010, was recorded immediately on the next day of the incident wherein deceased Rekha has specifically stated that it was an accidental fire due to which she sustained burn injuries. It is submitted that even in the history which was recorded in the hospital, when the deceased Rekha was admitted, it was stated that the deceased had suffered accidental burn injuries. 4.5 It is submitted that the High Court has not properly appreciated the fact that the dying declaration (Exhibit P5) was recorded later on and that too after the parents of the deceased reached to the hospital. 4.6 It is submitted that possibility of tutoring the deceased Rekha so as to make statement against the accused persons cannot be ruled out. It is submitted that therefore at least the appellant is entitled to the benefit of doubt. 4.6 It is submitted that the High Court has not at all appreciated and/or considered the defence version that on the date of incident there was no power supply in the house and therefore the deceased went to the kitchen to prepare the food and found that the gas was empty and thereafter she told the appellant that she would use the kerosene stove to prepare the food, and that while she was preparing the food with the help of candle light and when the same was almost exhausted, she tried to lit another candle but the same had fallen on the ground where the kerosene was already spread while pouring the kerosene to the stove and as a result of which the fire was caught on her clothes. 4.7 It is submitted that even thereafter when the deceased screamed, the appellant \u2013 original accused no.1 rushed to the spot and tried to extinguish the fire and while extinguishing the fire, he also sustained burn injuries in his right hand. It is submitted that the aforesaid circumstances which were considered by the learned trial Court while acquitting the accused have not been considered and/or appreciated by the High Court while reversing the order of acquittal passed by the learned trial Court and convicting the accused \u2013 appellant herein. 4.8 It is submitted that as such when it was an appeal against the judgment and order of acquittal, the High Court was not justified in reappreciating the oral as well as documentary evidence. It is submitted that only in a case where the findings recorded by the learned trial Court are found to be perverse, the interference by the appellate court against the order of acquittal is warranted. It is submitted that in the present case, as such, the view taken by the learned trial Court was a plausible view, which was on appreciation of the evidences on record and therefore the High Court has committed a grave error in reversing the judgment and order of acquittal passed by the learned trial Court and convicting the accused -appellant herein. 5. We have heard the learned counsel appearing on behalf of the appellant at length. 5.1 Being the statutory appeal against the judgment and order of the High Court reversing the acquittal and thereby convicting the appellant herein \u2013 original accused no.1, we have reappreciated the entire evidence on record. 5.2 Before considering the appeal on merits, the law on the appeal against acquittal and the scope and ambit of Section 378 Cr.P.C. and the interference by the High Court in an appeal against acquittal is required to be considered. 5.2.1 In the case of Babu v. State of Kerala, (2010) 9 SCC 189, this Court had reiterated the principles to be followed in an appeal against acquittal under Section 378 Cr.P.C. In paragraphs 12 to 19, it is observed and held as under: 12. This Court time and again has laid down the guidelines for the High Court to interfere with the judgment and order of acquittal passed by the trial court. The appellate court should not ordinarily set aside a judgment of acquittal in a case where two views are possible, though the view of the appellate court may be the more probable one. While dealing with a judgment of acquittal, the appellate court has to consider the entire evidence on record, so as to arrive at a finding as to whether the views of the trial court were perverse or otherwise unsustainable. The appellate court is entitled to consider whether in arriving at a finding of fact, the trial court had failed to take into consideration admissible evidence and/or had taken into consideration the evidence brought on record contrary to law. Similarly, wrong placing of burden of proof may also be a subject-matter of scrutiny by the appellate court. (Vide Balak Ram v. State of U.P (1975) 3 SCC 219, Shambhoo Missir v. State of Bihar (1990) 4 SCC 17, Shailendra Pratap v. State of U.P (2003) 1 SCC 761, Narendra Singh v. State of M.P (2004) 10 SCC 699, Budh Singh v. State of U.P (2006) 9 SCC 731, State of U.P. v. Ram Veer Singh (2007) 13 SCC 102, S. Rama Krishna v. S. Rami Reddy (2008) 5 SCC 535, Arulvelu v. State (2009) 10 SCC 206, Perla Somasekhara Reddy v. State of A.P (2009) 16 SCC 98 and Ram Singh v. State of H.P (2010) 2 SCC 445) 13. In Sheo Swarup v. King Emperor AIR 1934 PC 227, the Privy Council observed as under: (IA p. 404) \u201c\u2026 the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt; and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses.\u201d 14. The aforesaid principle of law has consistently been followed by this Court. (See Tulsiram Kanu v. State AIR 1954 SC 1, Balbir Singh v. State of Punjab AIR 1957 SC 216, M.G. Agarwal v. State of Maharashtra AIR 1963 SC 200, Khedu Mohton v. State of Bihar (1970) 2 SCC 450, Sambasivan v. State of Kerala (1998) 5 SCC 412, Bhagwan Singh v. State of M.P(2002) 4 SCC 85 and State of Goa v. Sanjay Thakran (2007) 3 SCC 755) 15. In Chandrappa v. State of Karnataka (2007) 4 SCC 415, this Court reiterated the legal position as under: (SCC p. 432, para 42) \u201c(1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded. (2) The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate court on the evidence before it may reach its own conclusion, both on questions of fact and of law. (3) Various expressions, such as, \u2018substantial and compelling reasons\u2019, \u2018good and sufficient grounds\u2019, \u2018very strong circumstances\u2019, \u2018distorted conclusions\u2019, \u2018glaring mistakes\u2019, etc. are not intended to curtail extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of \u2018flourishes of language\u2019 to emphasise the reluctance of an appellate court to interfere with acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion. (4) An appellate court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.\u201d 16. In Ghurey Lal v. State of U.P (2008) 10 SCC 450, this Court reiterated the said view, observing that the appellate court in dealing with the cases in which the trial courts have acquitted the accused, should bear in mind that the trial court\u2019s acquittal bolsters the presumption that he is innocent. The appellate court must give due weight and consideration to the decision of the trial court as the trial court had the distinct advantage of watching the demeanour of the witnesses, and was in a better position to evaluate the credibility of the witnesses. 17. In State of Rajasthan v. Naresh (2009) 9 SCC 368, the Court again examined the earlier judgments of this Court and laid down that: (SCC p. 374, para 20) \u201c20. \u2026 an order of acquittal should not be lightly interfered with even if the court believes that there is some evidence pointing out the finger towards the accused.\u201d 18. In State of U.P. v. Banne (2009) 4 SCC 271, this Court gave certain illustrative circumstances in which the Court would be justified in interfering with a judgment of acquittal by the High Court. The circumstances include: (SCC p. 286, para 28) \u201c(i) The High Court\u2019s decision is based on totally erroneous view of law by ignoring the settled legal position; (ii) The High Court\u2019s conclusions are contrary to evidence and documents on record; (iii) The entire approach of the High Court in dealing with the evidence was patently illegal leading to grave miscarriage of justice; (iv) The High Court\u2019s judgment is manifestly unjust and unreasonable based on erroneous law and facts on the record of the case; (v) This Court must always give proper weight and consideration to the findings of the High Court; (vi) This Court would be extremely reluctant in interfering with a case when both the Sessions Court and the High Court have recorded an order of acquittal.\u201d A similar view has been reiterated by this Court in Dhanapal v. State (2009) 10 SCC 401. 19. Thus, the law on the issue can be summarised to the effect that in exceptional cases where there are compelling circumstances, and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court\u2019s acquittal bolsters the presumption of his innocence. Interference in a routine manner where the other view is possible should be avoided, unless there are good reasons for interference.\u201d (emphasis supplied) 5.2.2 When the findings of fact recorded by a court can be held to be perverse has been dealt with and considered in paragraph 20 of the aforesaid decision, which reads as under: \u201c20. The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is \u201cagainst the weight of evidence\u201d, or if the finding so outrageously defies logic as to suffer from the vice of irrationality. (Vide Rajinder Kumar Kindra v. Delhi Admn (1984) 4 SCC 635, Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons 1992 Supp (2) SCC 312, Triveni Rubber & Plastics v. CCE 1994 Supp. (3) SCC 665, Gaya Din v. Hanuman Prasad (2001) 1 SCC 501, Aruvelu v. State (2009) 10 SCC 206 and Gamini Bala Koteswara Rao v. State of A.P (2009) 10 SCC 636).\u201d (emphasis supplied) 5.2.3 It is further observed, after following the decision of this Court in the case of Kuldeep Singh v. Commissioner of Police (1999) 2 SCC 10, that if a decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the findings would not be interfered with. 5.3 In the case of Vijay Mohan Singh v. State of Karnataka, (2019) 5 SCC 436, this Court again had an occasion to consider the scope of Section 378 Cr.P.C. and the interference by the High Court in an appeal against acquittal. This Court considered catena of decisions of this Court right from 1952 onwards. In paragraph 31, it is observed and held as under: \u201c31. An identical question came to be considered before this Court in Umedbhai Jadavbhai (1978) 1 SCC 228. In the case before this Court, the High Court interfered with the order of acquittal passed by the learned trial court on re-appreciation of the entire evidence on record. However, the High Court, while reversing the acquittal, did not consider the reasons given by the learned trial court while acquitting the accused. Confirming the judgment of the High Court, this Court observed and held in para 10 as under: (SCC p. 233) \u201c10. Once the appeal was rightly entertained against the order of acquittal, the High Court was entitled to reappreciate the entire evidence independently and come to its own conclusion. Ordinarily, the High Court would give due importance to the opinion of the Sessions Judge if the same were arrived at after proper appreciation of the evidence. This rule will not be applicable in the present case where the Sessions Judge has made an absolutely wrong assumption of a very material and clinching aspect in the peculiar circumstances of the case.\u201d 31.1. In Sambasivan v. State of Kerala (1998) 5 SCC 412, the High Court reversed the order of acquittal passed by the learned trial court and held the accused guilty on re-appreciation of the entire evidence on record, however, the High Court did not record its conclusion on the question whether the approach of the trial court in dealing with the evidence was patently illegal or the conclusions arrived at by it were wholly untenable. Confirming the order passed by the High Court convicting the accused on reversal of the acquittal passed by the learned trial court, after being satisfied that the order of acquittal passed by the learned trial court was perverse and suffered from infirmities, this Court declined to interfere with the order of conviction passed by the High Court. While confirming the order of conviction passed by the High Court, this Court observed in para 8 as under: (SCC p. 416) \u201c8. We have perused the judgment under appeal to ascertain whether the High Court has conformed to the aforementioned principles. We find that the High Court has not strictly proceeded in the manner laid down by this Court in Ramesh Babulal Doshi v. State of Gujarat (1996) 9 SCC 225 viz. first recording its conclusion on the question whether the approach of the trial court in dealing with the evidence was patently illegal or the conclusions arrived at by it were wholly untenable, which alone will justify interference in an order of acquittal though the High Court has rendered a well-considered judgment duly meeting all the contentions raised before it. But then will this non-compliance per se justify setting aside the judgment under appeal? We think, not. In our view, in such a case, the approach of the court which is considering the validity of the judgment of an appellate court which has reversed the order of acquittal passed by the trial court, should be to satisfy itself if the approach of the trial court in dealing with the evidence was patently illegal or conclusions arrived at by it are demonstrably unsustainable and whether the judgment of the appellate court is free from those infirmities; if so to hold that the trial court judgment warranted interference. In such a case, there is obviously no reason why the appellate court\u2019s judgment should be disturbed. But if on the other hand the court comes to the conclusion that the judgment of the trial court does not suffer from any infirmity, it cannot but be held that the interference by the appellate court in the order of acquittal was not justified; then in such a case the judgment of the appellate court has to be set aside as of the two reasonable views, the one in support of the acquittal alone has to stand. Having regard to the above discussion, we shall proceed to examine the judgment of the trial court in this case.\u201d 31.2. In K. Ramakrishnan Unnithan v. State of Kerala (1999) 3 SCC 309, after observing that though there is some substance in the grievance of the learned counsel appearing on behalf of the accused that the High Court has not adverted to all the reasons given by the trial Judge for according an order of acquittal, this Court refused to set aside the order of conviction passed by the High Court after having found that the approach of the Sessions Judge in recording the order of acquittal was not proper and the conclusion arrived at by the learned Sessions Judge on several aspects was unsustainable. This Court further observed that as the Sessions Judge was not justified in discarding the relevant/material evidence while acquitting the accused, the High Court, therefore, was fully entitled to reappreciate the evidence and record its own conclusion. This Court scrutinised the evidence of the eyewitnesses and opined that reasons adduced by the trial court for discarding the testimony of the eyewitnesses were not at all sound. This Court also observed that as the evaluation of the evidence made by the trial court was manifestly erroneous and therefore it was the duty of the High Court to interfere with an order of acquittal passed by the learned Sessions Judge. 31.3. In Atley v. State of U.P. AIR 1955 SC 807, in para 5, this Court observed and held as under: (AIR pp. 809-10) \u201c5. It has been argued by the learned counsel for the appellant that the judgment of the trial court being one of acquittal, the High Court should not have set it aside on mere appreciation of the evidence led on behalf of the prosecution unless it came to the conclusion that the judgment of the trial Judge was perverse. In our opinion, it is not correct to say that unless the appellate court in an appeal under Section 417 CrPC came to the conclusion that the judgment of acquittal under appeal was perverse it could not set aside that order. It has been laid down by this Court that it is open to the High Court on an appeal against an order of acquittal to review the entire evidence and to come to its own conclusion, of course, keeping in view the well- established rule that the presumption of innocence of the accused is not weakened but strengthened by the judgment of acquittal passed by the trial court which had the advantage of observing the demeanour of witnesses whose evidence have been recorded in its presence. It is also well settled that the court of appeal has as wide powers of appreciation of evidence in an appeal against an order of acquittal as in the case of an appeal against an order of conviction, subject to the riders that the presumption of innocence with which the accused person starts in the trial court continues even up to the appellate stage and that the appellate court should attach due weight to the opinion of the trial court which recorded the order of acquittal. If the appellate court reviews the evidence, keeping those principles in mind, and comes to a contrary conclusion, the judgment cannot be said to have been vitiated. (See in this connection the very cases cited at the Bar, namely, Surajpal Singh v. State AIR 1952 SC 52; Wilayat Khan v. State of U.P AIR 1953 SC 122) In our opinion, there is no substance in the contention raised on behalf of the appellant that the High Court was not justified in reviewing the entire evidence and coming to its own conclusions. 31.4. In K. Gopal Reddy v. State of A.P. (1979) 1 SCC 355, this Court has observed that where the trial court allows itself to be beset with fanciful doubts, rejects creditworthy evidence for slender reasons and takes a view of the evidence which is but barely possible, it is the obvious duty of the High Court to interfere in the interest of justice, lest the administration of justice be brought to ridicule.\u201d (emphasis supplied) 6. Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand and the findings recorded by the High Court, the High Court has specifically observed and held that the finding recorded by the learned trial Court discarding and/or not believing the dying declaration (Exhibit P5) is perverse and contrary to the evidence on record. The High Court has given cogent reasons while believing dying declaration (Exhibit P5) and has also considered in detail what is stated in the later dying declaration (Exhibit P5), vis-\u00e0-vis, the medical evidence and the injuries sustained by the deceased. Therefore, as such, the High Court has not committed any error in reappreciating the entire evidence on record and thereafter interfering with the judgment and order of acquittal passed by the learned trial Court, having found the finding recorded by the learned trial Court perverse. 7. Now so far as the merits of the appeal are concerned, it cannot be disputed that in the present case there are two dying declarations, (i) Exhibit P5 and (ii) Exhibit D2. The High Court in the impugned judgment and order has given cogent reasons to rely upon and believe the second dying declaration \u2013 Exhibit P5. The High Court has also taken note of the fact that the second dying declaration is reliable and the version in the second dying declaration is supported by the circumstances, namely, the injuries sustained by the deceased; no stove was found at the place of occurrence. The High Court has also taken note of the fact that in the second dying declaration, the deceased has explained her first statement that it was a case of accident and she categorically stated in the second dying declaration that at the time when she gave first statement that it was a case of accident, she was given threats by the appellant herein \u2013 original accused no.1 that he will kill her children also. She also stated in the second dying declaration that after her parents came, she got the courage to tell the truth. Therefore, as such, the High Court rightly believed the second dying declaration \u2013 Exhibit P5. 8. At this stage, the decisions of this Court in the cases of Nallam Veera Stayanandam v. Public Prosecutor (2004) 10 SCC 769; Kashmira Devi v. State of Uttarakhand (2020) 11 SCC 343; and Ashabai v. State of Maharashtra (2013) 2 SCC 224 are required to be referred to. In the aforesaid decisions, this Court had an occasion to consider the cases where there are multiple dying declarations. In the aforesaid decisions, it is held that each dying declaration has to be considered independently on its own merit as to its evidentiary value and one cannot be rejected because of the contents of the other. It is also held that the Court has to consider each of them in its correct perspective and satisfy itself which one of them reflects the true state of affairs. When there are multiple dying declarations, each dying declaration has to be separately assessed and evaluated on its own merits. 9. Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, and on evaluation of both dying declarations independently, dying declaration recorded as Exhibit P5 reflects the true state of affairs and the contents are supported by the medical evidence and the injuries sustained by the deceased. The plea put forth by the defence that it was a case of an accident and while pouring the kerosene from kerosene can to the bottle, the same had fallen on the clothes placed on the ground and when the deceased tried to remove the clothes from that place, the candle fell on the ground, as a result, her clothes caught fire and she sustained burn injuries is disbelieved by the High Court considering the circumstances noted by the High Court that the deceased sustained injuries on the face, chest and back and to the upper limbs. The main injuries are found on the upper limbs of the body. Therefore, as rightly observed by the High Court, the aforesaid injuries can be possible when the kerosene is poured on the deceased. According to the defence and as per the evidence of DW1-A1, while putting the kerosene into the stove, accidentally the kerosene had fallen on the ground and also on her clothes, and thereafter when the candle fell on the ground, the same had come in contact with her clothes and kerosene. If that is the case, there would have been injuries to her feet also. However, no burn injuries are found on her feet. No stove was found at the place of occurrence. Therefore, the defence came out with a false case of accidental fire, which, as such, is not supported by any other reliable evidence. On the contrary, this evidence speaks otherwise. Therefore, when A1 came with a false defence and the dying declaration \u2013 Exhibit P5 is corroborated by other surrounding circumstances and evidence and after independent evaluation of Exhibit P5 and Exhibit D2, when the High Court has found that Exhibit P5 is reliable and inspiring confidence and thereafter when the High Court has convicted the accused, it cannot be said that the High Court has committed any error. 10. Now so far as the submission on behalf of the accused that even thereafter he tried to extinguish the fire and he also sustained injuries and therefore it cannot be said that the appellant has committed an offence punishable under Section 302 IPC is concerned, at the outset, it is required to be noted that in the present case the prosecution is successful in proving that the accused \u2013 appellant herein poured kerosene on the deceased. As per dying declaration Exhibit P5, it has been proved that the deceased was set ablaze by pouring kerosene on her. The act of the accused falls in clause fourthly of Section 300 IPC. It emerges from the evidence on record that the accused poured kerosene on the deceased and not only poured kerosene but also set her ablaze by the matchstick. Merely because thereafter the A1 might have tried to extinguish the fire, that will not bring the case out of clause fourthly of Section 300 IPC. A somewhat similar submission was made before this Court in the case of Santosh v. State of Maharashtra (2015) 7 SCC 641. In the case before this Court, it was contended on behalf of the accused who poured kerosene on the deceased and set her ablaze by matchstick that thereafter they tried to save the deceased by pouring water on her and therefore it was contended on behalf of the accused that by that conduct it cannot be said that the intention of the accused was to cause death of the deceased. The aforesaid has been negated by this Court by observing in paragraphs 9 to 18 as under: \u201c9. Insofar as the first contention that the appellant is not responsible for the death of deceased Saraswatibai, the defence made an attempt to contend that the fire was accidental and that the appellant tried to extinguish the fire in order to save her and in that process, he also suffered burn injuries. The prosecution has adduced cogent evidence to prove that the appellant has caused the death of deceased Saraswatibai. The accused suspected the deceased of infidelity and picking up a fight over it, he kicked her and inflicted fist-blows and further set her on fire by pouring kerosene over her person. PW 6, doctor certified that the deceased was in a fit mental condition to make the statement and PW 7, the Executive Magistrate recorded the dying declaration Ext. 1. In the said dying declaration, the deceased had categorically stated that on the date of incident, the appellant poured kerosene over her person and set her on fire. That accused poured kerosene on the deceased and set her on fire is corroborated by the oral testimony of PW 3, Sindhu Sunil Ingole (sister-in- law) of the deceased. PW 1 Raju Janrao Gavai, neighbour of the deceased who accompanied the deceased to the hospital to whom the deceased is said to have made a statement about the overt act of the accused, had only stated that the deceased told him that the accused beat her and also kicked her. PW 1 had not supported the statement of the deceased in the dying declaration that the accused poured kerosene on her and set her on fire. However, the prosecution has established the guilt of the accused by Ext. 1 dying declaration and the oral evidence of the mother (PW 2) and the sister-in-law (PW 3) and the same cannot be doubted. 10. The learned counsel for the appellant contended that there was no premeditation and the appellant had poured kerosene from the lamp nearby and thereafter the appellant attempted to extinguish the fire by pouring water on her and himself getting burn injuries in the process. It was submitted that the conduct of the appellant in trying to extinguish the fire immediately after the incident would clearly show that there was no intention on the part of the appellant to commit the murder. In support of his contention, he placed reliance on the judgment of this Court in Kalu Ram v. State of Rajasthan [(2000) 10 SCC 324 : 2000 SCC (Cri) 86] . 11. The question falling for consideration is whether the act of the accused pouring water would mitigate the offence of murder. Where the intention to kill is present, the act amounts to murder, where such an intention is absent, the act amounts to culpable homicide not amounting to murder. To determine whether the offender had the intention or not, each case must be decided on its facts and circumstances. From the facts and circumstances of the instant case, it is evident that : (i) there was a homicide, namely, the death of Saraswatibai; (ii) the deceased was set ablaze by the appellant and this act was not accidental or unintentional; and (iii) the post-mortem certificate revealed that the deceased died due to shock and septicaemia caused by 60% burn injuries. When the accused poured kerosene on the deceased from the kerosene lamp and also threw the lighted matchstick on the deceased to set her on fire, he must have intended to cause the death of the deceased. As seen from the evidence of PW 5, panch witness, in the house of the appellant, kerosene lamp was prepared in an empty liquor bottle. Whether the kerosene was poured from the kerosene lamp or from the can is of no consequence. When there is clear evidence as to the act of the accused to set the deceased on fire, absence of premeditation will not reduce the offence of murder to culpable homicide not amounting to murder. Likewise, pouring of water will not mitigate the gravity of the offence. 12. After attending to nature's call, the deceased returned to the house a little late. The accused questioned her as to why she was coming late and he also suspected her fidelity. There was no provocation for the accused to pour kerosene and set her on fire. The act of pouring kerosene, though on the spur of the moment, the same was followed by lighting a matchstick and throwing it on the deceased and thereby setting her ablaze. Both the acts are intimately connected with each other and resulted in causing the death of the deceased and the act of the accused is punishable for murder. 13. Even assuming that the accused had no intention to cause the death of the deceased, the act of the accused falls under clause Fourthly of Section 300 IPC that is the act of causing injury so imminently dangerous where it will in all probability cause death. Any person of average intelligence would have the knowledge that pouring of kerosene and setting her on fire by throwing a lighted matchstick is so imminently dangerous that in all probability such an act would cause injuries causing death. 14. Insofar as the conduct of the accused in attempting to extinguish fire, placing reliance upon the judgment of this Court in Kalu Ram case [(2000) 10 SCC 324 : 2000 SCC (Cri) 86] , it was contended that such conduct of the accused would bring down the offence from murder to culpable homicide not amounting to murder. In Kalu Ram case [(2000) 10 SCC 324 : 2000 SCC (Cri) 86] , the accused was having two wives. The accused in a highly inebriated condition asked his wife to part with her ornaments so that he could purchase more liquor, which led to an altercation when the wife refused to do as demanded. Infuriated by the fact that his wife had failed to concede to his demands, the accused poured kerosene on her and gave her a matchbox to set herself on fire. On her failure to light the matchstick, the accused set her ablaze. But when he realised that the fire was flaring up, he threw water on her person in a desperate bid to save her. In such facts and circumstances, this Court held that the accused would not have intended to inflict the injuries which she sustained on account of the act of the accused and the conviction was altered from Section 302 IPC to Section 304 Part II IPC. 15. The decision in Kalu Ram case [(2000) 10 SCC 324 : 2000 SCC (Cri) 86] cannot be applied in the instant case. The element of inebriation ought to be taken into consideration as it considerably alters the power of thinking. In the instant case, the accused was in his complete senses, knowing fully well the consequences of his act. The subsequent act of pouring water by the accused on the deceased also appears to be an attempt to cloak his guilt since he did it only when the deceased screamed for help. Therefore, it cannot be considered as a mitigating factor. An act undertaken by a person in full awareness, knowing its consequences cannot be treated on a par with an act committed by a person in a highly inebriated condition where his faculty of reason becomes blurred. 16. Within three months of her marriage, the deceased died of burn injuries. In bride burning cases, whenever the guilt of the accused is brought home beyond reasonable doubt, it is the duty of the court to deal with it sternly and award the maximum penalty prescribed by the law in order that it may operate as a deterrence to other persons from committing such offence. 17. This Court on various occasions has stressed the need for vigilance in cases where a woman dies of burn injuries within a short span of her marriage and that stern view needs to be adopted in all such cases. In Satya Narayan Tiwari v. State of U.P. [(2010) 13 SCC 689 : (2011) 2 SCC (Cri) 393] , this Court in paras 3 and 9 has held as under : (SCC pp. 692 & 693) \u201c3. Indian society has become a sick society. This is evident from the large number of cases coming up in this Court (and also in almost all courts in the country) in which young women are being killed by their husbands or by their in-laws by pouring kerosene on them and setting them on fire or by hanging/strangulating them. What is the level of civilisation of a society in which a large number of women are treated in this horrendous and barbaric manner? What has our society become\u2014this is illustrated by this case. *** 9. Crimes against women are not ordinary crimes committed in a fit of anger or for property. They are social crimes. They disrupt the entire social fabric. Hence, they call for harsh punishment. Unfortunately, what is happening in our society is that out of lust for money people are often demanding dowry and after extracting as much money as they can they kill the wife and marry again and then again they commit the murder of their wife for the same purpose. This is because of total commercialisation of our society, and lust for money which induces people to commit murder of the wife. The time has come when we have to stamp out this evil from our society, with an iron hand.\u201d 18. Upon analysis of the evidence adduced by the prosecution, the courts below recorded concurrent findings that the accused caused the death of deceased Saraswatibai and convicted the appellant. It is well settled that concurrent findings of fact cannot be interfered with unless the findings are perverse and unsupportable from the evidence on record. This view has been reiterated in Dhananjay Shanker Shetty v. State of Maharashtra [(2002) 6 SCC 596 : 2002 SCC (Cri) 1444] . In the totality of the facts and circumstances, in our view, the concurrent findings of facts recorded by the courts below are based on evidence and we see no infirmity in the impugned judgment warranting interference\u201d. Therefore, after pouring kerosene on the deceased and thereafter setting her ablaze, thereafter merely because the accused might have tried to extinguish the fire will not take the case out of the clutches of clause fourthly of Section 300 of the IPC. The act of the accused pouring kerosene on the deceased and thereafter setting her ablaze by matchstick is imminently dangerous which, in all probability, will cause death. Therefore, the High Court has rightly convicted the accused for the offence under Section 302 IPC. 11. In view of the above and for the reasons stated above, the present appeal fails. We see no reason to interfere with the impugned judgment and order of conviction passed by the High Court. The appeal deserves to be dismissed and is accordingly dismissed. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..J. [Dr. Dhananjaya Y. Chandrachud] New Delhi; \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.J. March 8, 2021. [M.R. 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{"id": "155222376", "text": "NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S).4124 OF 2009 AJMER VIDYUT VITRAN NIGAM LIMITED \u2026..APPELLANT(S) VERSUS HINDUSTAN ZINC LTD. AND ANOTHER \u2026..RESPONDENT(S) JUDGMENT Rastogi, J. 1. The instant appeal under Section 125 of the Electricity Act, 2003 (hereinafter referred to as the \u201cAct 2003\u201d) has been preferred at the instance of the distribution company, namely, Ajmer Vidyut Vitran Nigam Limited (for short \u201cAVVNL\u201d), a Government Company incorporated under the Companies Act, 1956 with an object, inter alia, for distribution and supply of electricity, assailing the impugned judgment dated 03rd February, 2009 passed by the Appellate Signature Not Verified Digitally signed by Tribunal for Electricity. JAGDISH KUMAR Date: 2022.02.17 16:35:49 IST Reason: 2. The brief facts culled out from the record and relevant for the purpose are that the Hindustan Zinc Limited (for short \u201cHZL\u201d) has captive generating plant set up at Chanderia in the District of Chittorgarh, State of Rajasthan where it generates electricity primarily for its own consumption and uses the electricity generated at its units/works situated at:- i) Debari in the district of Udaipur; ii) Agucha in the district of Bhilwara; and iii) Dariba in the district of Rajsamand. All the three districts are in the State of Rajasthan and for wheeling of electricity generated in the captive generating plant, HZL uses the distribution system of AVVNL from the point of injection at Chanderia to the points of drawal at its different units/works as indicated above. 3. In other words, the use of the distribution system for wheeling electrical energy from the generating point to the drawal is called \u201copen access facility\u201d and the user of such facility is called \u201copen access consumer\u201d. For the aforesaid purposes, regulations were framed by the Rajasthan Electricity Regulatory Commission (hereinafter referred to as the \u201cCommission\u201d) in exercise of its power conferred under Section 42 read with Section 181 of the Act, 2003 by notification dated 26th May, 2004 called the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2004 (for short \u201cRegulations, 2004\u201d) which came to be further amended by 3rd amendment vide notification dated 27th December, 2006 under Section 42 read with Section 181 of the Act, 2003 called the Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) (3rd Amendment) Regulations, 2006(hereinafter being referred to as the \u201cRegulations 2006\u201d). 4. Under the scheme of Regulations 2004, open access customer has been defined under Regulation 2(c) which includes such persons using or intending to use the transmission system or the distribution system or both the licences in the State for transmission or wheeling of electricity in the State and open access agreement is to be executed between the parties in terms of Regulation 12 and the pricing mechanism of unscheduled interchange pricing is to be determined in terms of Regulation 20 as specified by the Commission for the State from time to time. 5. Regulations 2(c), 12 and 20 of Regulations, 2004 which came to be notified on 26th May, 2004 are reproduced thereunder:- \u201c2. Definitions \u2026. c) \"Open Access Customer\" means a person using or intending to use the transmission system or the distribution system or both of the licensees in the state for transmission or wheeling of electricity in the State; \u2026\u2026... 12. Open Access Agreement (1) An open access customer shall enter into commercial agreements with the transmission and distribution licensees, generators, traders and others, as applicable for use of their transmission and distribution systems; (2) The agreement shall provide, amongst other things for the eventuality of premature termination of agreement and its consequences on the contracting parties; (3) After agreements have been entered into and copies furnished to State Load Dispatch Centre, the State Load Dispatch Centre shall inform the open access customer the date from which open access will be available which will not be later than 3 days from the date of furnishing of agreements.\u201d 20. Unscheduled interchange pricing The payment for mismatch between the schedule and the actual drawal shall be governed by the pricing mechanism as specified by the Commission for the State from time to time.\u201d 6. In terms of the provisions of Regulations 2004, the agreement for short term open access of distribution system and supply of regular and standby HT supply came to be executed between the parties i.e. the appellant and the respondent herein on 22nd September, 2006 and draft format of the open access agreement became effective from 01st May, 2006 and they are concerned with Part III of standby supply and the manner in which the billing has to take place followed with payments. The relevant clauses of the open access agreement for the purpose are reproduced thereunder:- \u201c22. Tariff applicable for stand by supply shall be as applicable for temporary supply as per tariff for electricity supply determined by RERC as applicable to HT large industrial/ mixed load/ bulk supply service. Tariff shall be applied on daily basis as & when such standby supply is availed & shall be subject to minimum annual drawal for 36 days in a financial year. 25. This agreement shall, subject as hereinafter provided, remain in force at least for a period of one year in the first instance commencing from the date of supply and shall remain in force till its termination. Provided that either party shall be at liberty to terminate this agreement or get his contract demand altered by giving one month's notice in writing in that behalf subject to the condition shall reduction in contract demand will be permissible only on completion of initial period of one year including the notice period. The consumer can also get his connection permanently disconnected or get his contract demand reduced on the same day of notice if he is ready to by pay the minimum billing amount equivalent to one month. 29. Billing (1) Ajmer Discom (distribution licensee) shall raise the bills at the end of the month for the use of distribution system for wheeling of Open Access Power, as also for regular and standby supply. The bills shall be for: a. Wheeling charges for the contracted open access power on distribution system as determined by the Commission from time to time. b. Cross-subsidy surcharge as determined by the Commission, from time to time under OA Regulations. c. Additional surcharge as determined by the Commission from time to time under OA Regulation in case the consumer avails open access and receives electricity supply from a licensee other than (i.e. distribution licensee of the area of supply). d. Regular supply as per tariff for supply of electricity, specified by the distribution licensee for temporary supply for large industrial / non domestic/ mixed load service (schedule HT-5). e. Standby supply as per tariff for supply of electricity, specified by the distribution licensee for temporary supply for large industrial/non domestic/ mixed load service, during the period of outage of generating unit effecting open access supply for the days of such drawals. f. Inadvertent drawal of electricity in excess of regular & standby supply as per subclause (e) at temporary supply tariff. g. Reactive energy charges for open access supply at the rates specified by the Commission. (2) The Billing shall be made as per finalized energy accounts issued by SLDC, based on various para-meters at 15 minutes interval, starting from 0.00 hours of the day, stored in ABT complaint meters and as specified by the Commission. Provided, that pending finalization of energy accounts by SLDC, bills shall be issued by the distribution licensee based on provisional energy account. Provided that a soft copy of the provisional and final energy account shall be supplied to open access customer along with the bills. 30. Payments: The open access customer shall arrange the payments for the bills raised by the distribution licensee within the due date indicated on such bills. In the event of monthly bill[s] not paid in full within the period specified on the bills, the Open access customer shall pay the Late Payment Surcharge to the distribution licensee. Late payment surcharge shall be as specified for applicable tariff at clause 28(d) from time to time. This agreement shall be governed by the provisions of the general conditions of supply of the distribution licensee except for the specific provisions made in this agreement. Provided that such specific provisions will apply to the respective part of the agreement. This agreement is liable to be modified subject to revision/final agreement approved by RERC.\u201d 7. Consequently, the Commission in terms of open access regulations specified a standard format of agreement for short term open access for distribution system and for HT supply which came to be served on 03rd January, 2007. It may be relevant to note that under clause 29(1)(f), the standard format of agreement was supplied by the Commission by its letter dated 03rd January, 2007, which is referred to as under:- \u201c29(1)(f). inadvertent drawal of electricity in excess of regular & standby supply as per subclause (e) at temporary supply tariff.\u201d 8. Although, it was forwarded to the respondent for its signatures on 07th June, 2007, Clause 29(1)(f) of the format was different from the standard agreement prescribed in the open access regulations and the change effected was thus (inadvertent drawl of electricity in excess of regular & standby supply as per sub-clause (e) at temporary supply tariff). 9. Pursuant to the release of standard format agreement, the appellant (AVVNL) sought certain clarifications pertaining to alleged contradiction in Clauses 29(1)(f) and 32(4) of the standard format agreement from the Commission. In furtherance thereof, the appellant issued a revised demand for access drawal of electricity on the basis of tariff for regular supply on 30th June, 2007. 10. The reference to the changes in the standard agreement for HT supply and short term open access in distribution came to be examined by the Commission in the Petition No.134/07 and after deliberation, the Commission made substantial changes and altered Clauses 29(1)(e) and 29(1)(f) and 32(4) of the standard format agreement and observed that the inadvertent drawal will be billed at the same rate as regular supply irrespective of whether such inadvertent drawal was done during a period of outage of generating unit affecting open access supply or during the period of shortage of supply. 11. To be more specific, Clause 29(1)(f) earlier provided that all inadvertent supply would be charged as per temporary supply tariff but under order dated 15th September, 2007, the Commission altered the position substantially and held that instead of the tariff for temporary supply, a tariff for regular supply will be payable for inadvertent drawal. The extract of the order passed by the Commission dated 15th September, 2007 with which the present controversy is concerned is referred to under Clauses 29(1)(e) and 29(1)(f) which are reproduced hereunder:- \u201cClause 29(1)(e) : 13. Under clause 29(1)(e) it has been proposed that in the situation of reduced supply or outage of generating unit effecting supply to Open Access Consumer the tariff for standby supply shall be as per tariff for temporary supply, whereas in the Agreement the situation considered is the outage of generating unit only. Jodhpur Discom has agreed for his proposal, Sh. P.N.Bhandari, also agreed to the proposed change to be incorporated in the Agreement. Clause 29(1)(f) : 16. Under clause 29 of the Agreement it is stipulated that the distribution licensee shall raise the bills for different purposes wherein at para (f) it is for inadvertent excess drawal of electricity. Under clause 29(1)(f), it is now proposed to specify the applicable rate also which is actually missing for billing inadvertent excess supply for the sake of clarify in implementation. Sh. Bhandari stated that since inadvertent supply or drawal, according to Commission's own definition is inevitable mismatch, which cannot be stopped by licensee or the CPP, therefore, levy of excess demand charges in such cases would be outright harsh. Shri Bhandari further submitted that in clause 29 (l)(f) the provision to charge temporary supply tariff on per day basis when drawal has exceeded is quite logical and does not require any change as it being accidental and non intentional. 17. The inadvertent supply in this case is the excess demand over and above the regular supply demand plus standby supply demand which is in excess of regular and standby supply. The existing provision in the Agreement considered inadvertent drawal, which is in excess of regular and standby supply. The standby supply has been further qualified as the supply which is as per sub clause (e) to be billed at temporary supply tariff. This qualification is inadvertent and can be deleted. However, this does not mean that the applicable tariff for inadvertent or excess drawal is temporary supply tariff. The accounting and billing of permissible and excess demand is covered in clause 32 of the Agreement for both the scenarios i.e. with ABT & without ABT. The proposed changes clarify that this inadvertent supply is a part of excess demand of regular supply contract demand. Jodhpur Discom has not agreed to the proposed change stating that drawal of electricity in excess of regular and standby supply should be billed at temporary supply tariff. Jaipur Discom also did not agree to the proposal without stating any reason. Commission\u2019s decision : 20. In view of the above, it is decided that the sub-clause 29(1)(f) of the Agreement be clarified further as under: \"(f) drawal of electricity in excess of sum of the contract demand under regular supply and standby supply shall be billed alongwith 29(1)(d) above.\" 12. No clarification was made by the Commission as to whether the substantial changes which have been made under the open access agreement will apply retrospectively from the date of agreement when executed or prospectively from the date the Commission under its Order dated 15th September, 2007 has given effect to. Although a clarification was made by the Secretary of the Commission to be prospective which indeed holds no authority but when the bills were raised by the appellant for the period from June, 2006 to February, 2008 (for the anterior period) by demand notice dated 12th March, 2008, aggrieved with the same, the respondents filed appeal before the Appellate Tribunal questioning the order of the Commission dated 15th September, 2007 with the grievance that the substantial modification has been made in terms of the standard format agreement and is not merely an interpretation/clarification of the standard format agreement and in the given facts and circumstances, it will apply only prospectively and the demand raised for the anterior period to the substantial changes that the Commission has given effect to by its order dated 15th September, 2007 will not in any manner be construed different on the clarification under terms of open access agreement. 13. The Appellate Tribunal after taking note of the submissions made under its order impugned held that the proposed changes which are effected by the Commission and particularly, in Clause 29(1)(f) are substantial changes in the standard format agreement and further observed that it has altered the position substantially and changed the tariff from temporary supply to regular supply in cases of inadvertent drawal and such substantial changes/amendments which have been made, in no manner, can be read as mere clarification but a substantial alteration in the standard format agreement, therefore, the same can be given effect to only from the date, i.e. 15th September, 2007, the Commission has introduced those amendments under the agreement. The operative part of the Order of the Tribunal is quoted hereunder:- \u201cThe impugned order of the Commission says that \"any interpretation/clarifications etc. to the order dated 15.09.07 have to be derived from within it\". The Commission thus means that retrospectivity or prospectivity of the order has to be determined from the order itself. Apparently, the Commission is avoiding to make a categorical pronouncement about the prospectivity or retrospectivity of the order dated 15.09.07. Nonetheless, the Commission in paragraph 12 of the impugned order, as extracted above in paragraph 12, says that the order dated 15.09.07 is but an interpretation of various clauses of the standard format. Thus the Commission, without making a categorical pronouncement says that the order dated 15.09.07 shall apply with effect from the date standard format was issued. Thus there is a genuine grievance on the part of the appellant which has required the appellant to present the appeal. We find force in the contention of the appellant. The order dated 15.09.07 has to be read as an order amending the standard format issued on 01.03.07 and therefore can be given effect to only from 15.09.07. The respondent No.2 in its petition No. 166 of 2007 had prayed that the order dated 15.09.07 be declared as operative retrospectively from the effective date of agreement i.e. 01.05.06. This prayer could not at all have been allowed because even the format as issued on 01.03.07 could not be given retrospectivity from 01.05.06. The parties had agreed in the original agreement to abide by any change in the terms and conditions of open access notified by the Commission. This does not mean every time there is a change, notified by the Commission, the change will relate back to the effective date of the agreement. Every change can have only prospective effect. Therefore, the change brought about by the order dated 01.03.07 would be effective only from 01.03.07. Similarly, the change brought about by order dated 15.09.07 could be effective from 15.09.07. The petition No. 166 of 2007 presented by respondent No.2 before the Commission only deserved to be dismissed.\u201d 14. The judgement of the Appellate Tribunal dated 03rd February, 2009 became the subject matter of challenge in appeal before us under Section 125 of the Act 2003. 15. Learned counsel for the appellant submits that changes which have been given effect to by the Commission under its order dated 15th September, 2007 are strictly in terms of the scheme of Regulations 2004 which clearly postulate that the parties will abide by any change in the terms and conditions, if any, being notified by the Commission and once the Commission has recorded its satisfaction and introduced those changes in the open access agreement dated 22nd September, 2006, it goes without saying that such clarification stands incorporated and made a part of the agreement from the date of its execution. It is true that to give retrospective effect to any statutory instrument, power is vested with the legislature but in the instant facts and circumstances, where the parties have entered into a commercial agreement(open access agreement) with open eyes that they will abide by any change in the terms and conditions of the open access agreement notified by the Commission, all alterations effected by the Commission indeed will have to be read as a part of the agreement as being incorporated from its very inception. Thus, in the facts and circumstances, the finding of prospective applicability of the changes in Clause 29(1)(f) which has been given effect to by the Tribunal under its order dated 03rd February, 2009 is not sustainable and needs to be interfered with by this Court. 16. Learned counsel for the respondents, on the other hand, while supporting the finding recorded by the Tribunal submits that the Commission under its order dated 15th September, 2007 has made substantial changes in the open access agreement executed between the parties and Clause 29(1)(f), in particular, which was clear in terms that during the period of outage of the generating unit effecting the open access supply because of which all inadvertent supply would be charged as per temporary supply tariff which has been substantially altered by the Commission and instead of the tariff for temporary supply, the tariff for regular supply became payable for inadvertent drawal and this cannot be considered to be a mere clarification under the terms of agreement executed between the parties and if that being so, all such substantial modifications/amendments which are made under the terms of agreement, in no manner, can be read prejudicial to the interest of the parties and if such substantial change which has been given effect to is given retrospective effect, that indeed will seriously prejudice the rights of the respondents, more so, when the conditions of the open access agreement with which the present dispute is concerned in reference to Clauses 29(1)(e) and 29(1)(f) of the agreement are neither in contradistinction nor in contravention to the provisions of the Regulations 2004 or of 3rd Amendment 2006. In the given circumstances, the finding recorded by the Tribunal that such changes being substantial in character may not be read prejudicial to the interest of the parties inter se to be read prospectively and that has been accepted by the respondents and accordingly, the payments are made after 15th September, 2007 in terms of the modified clause 29(1)(f) which the Commission has given effect to and the finding which is duly supported by law needs no interference of this Court. 17. We have heard the learned counsel for the parties and with their assistance perused the material available on record. 18. The question in the instant appeal before us is as to whether the Order dated 15th September, 2007 of the Commission is a mere interpretation/clarification of standard format agreement or the order changes the position substantially the terms of the format having prospective effect for raising future bills. 19. It is not disputed that the Commission issued the draft agreement to give effect to the Regulations, 2004 and further 3rd amendment was made to the regulations on 27th December, 2006 with provisions for unscheduled interchange pricing. The Commission further made amendment in the format on 03rd January, 2007 and included Clause 32 in the agreement. 20. The initial standard format agreement executed between the parties on 22nd September, 2006 effective from 01st May, 2006 undisputedly, refer to inadvertent drawal of electricity in sub-clause 29(1)(f) as quoted above and that such drawal in excess of regular and standby supply was to be charged as per sub-clause (e). Sub- clause (e) simply provided that standby supply would be charged as per temporary rates during the period of outage of generating unit affecting open access supply for the days of such drawal. Clause 22 makes no exception for standby supply during the period of outage of generating unit affecting open access supply. In other words, the \u201cperiod of outage of generating unit affecting open access supply\u201d in sub-clause (e) is not of any consequence but all that it can mean is that during the time of outage, the standby supply will be charged at the same rate at which temporary supply is charged and if sub-clause (e) and sub-clause (f) are read in conjunction, it clearly manifests that all inadvertent supply will be charged as per temporary supply tariff. Sub-clauses 29(1)(e) and 29(1)(f) which have been substantially altered by the Commission under its Order dated 15th September, 2007 holds that instead of the tariff of temporary supply, the tariff of regular supply will be payable for inadvertent drawal. 21. It may further be noticed that the new sub-clause makes no reference to outage of the generating units or of unscheduled interchange. At the same time, Clause 32(4) under the heading \u201cunscheduled interchange pricing\u201d also mentions excess drawal at the drawal end beyond the permissible limit in case of reduced supply or outage of suppliers generating station. The situation contemplated in Clauses 29(f) and 32(4) deals in different context and if they are overlapping, it will always be open for clarification but the Order of the Commission dated 15th September, 2007, in our view, cannot be considered to be as such a clarification since it has virtually amended the original Clause 29(1)(f) thereby changing the tariff for inadvertent drawal from temporary supply rate to the regular supply rate which indeed is a substantial alteration in the conditions of the agreement. 22. It is also not the case of the appellant that the conditions of open access agreement with which we are presently concerned and particularly, Clauses 29(1)(e) and 29(1)(f) of the agreement are either in contradistinction or in contravention to the Regulations, 2004 and tariff to be charged for inadvertent drawal from temporary supply rate was equally permissible under the scheme of Regulations, 2004 and agreement was accordingly executed between the parties in compliance thereof. 23. In our considered view, the substantial change/modification which has been given effect to by the Commission under its order dated 15th September, 2007 under Clause 29(1)(f) effecting the tariff for inadvertent drawal from temporary supply rate to regular supply rate is indeed a substantial change in the condition of the agreement and prejudicial to the interest of the parties (respondents herein) and cannot be read to apply retrospectively from the date of agreement executed between the parties. 24. Although, we cannot lay down a straight-jacket principle as to what is to be considered a clarification or what may tantamount to a substantial change or modification but if we take note of the guiding principles from Section 152 of the Code of Civil Procedure, 1908 in a way where there is an unintentional omission or mistake or an arithmetic or typographical error, if any, while drafting the agreement that may have been permissible to give an effect at a later stage from its inception but, at the same time, where there is a substantial amendment/alteration in the conditions of agreement, if taken place with its inception, may certainly cause prejudice to the rights of the parties inter se financially or otherwise. As we are dealing with the commercial agreement, if any modification, that too substantial is being permitted to be altered under the agreement executed between the parties at a later stage with retrospective effect even by the statutory authority in the garb of correction or mistake or any typographical error, if any, that may, if prejudicial to the interest of the parties inter se in law be neither permissible nor advisable to give effect anterior to the date of modification/altercation in terms and conditions of the agreement. 25. This Court, by an interim order dated 27th August, 2010, directed the appellant to file an undertaking in the format of an affidavit that in case the appeal fails, the money which has been deposited by the respondents will be refunded subject to adjustment, if any, with interest that may be fixed by the Court at the appropriate time. Taking note of the order dated 27th August, 2010 passed by this Court, directing the appellant to refund the amount deposited by the respondents with interest, we consider it appropriate to clarify that since the parties are in long business relations, let the money which has been deposited by the respondents as noticed by this Court in the order dated 27th August, 2010, be adjusted against the future bills to be raised by the appellant in the terms as agreeable to the parties. 26. Consequently, the appeal stands dismissed with the observations. 27. Pending application(s), if any, stand disposed of. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.J. (AJAY RASTOGI) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.J. (ABHAY S. 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{"id": "33220115", "text": "[REPORTABLE] IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 7451 of 2021 The Rajasthan Marudhara Gramin Bank \u2026Appellant (s) (RMGB) & Anr. Versus Ramesh Chandra Meena & Anr. \u2026Respondent (s) JUDGMENT M. R. Shah, J. 1.0. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 07.07.2021 passed by the High Court of Judicature for Rajasthan at Jodhpur in D.B. Special Appeal Writ No.311 of 2021, by which, Signature Not Verified Digitally signed by R Natarajan the Division Bench of the High Court has dismissed Date: 2022.01.04 16:52:34 IST Reason: the said Appeal and has confirmed the judgment and order dated 28.01.2021 passed by the learned Single Judge, by which, the learned Single Judge allowed the writ petition preferred by the respondent herein (hereinafter referred to as the \u201coriginal writ petitioner\u201d) and directed the appellant Bank to allow the original writ petitioner to be represented by a retired employee of the Bank in the departmental inquiry, the Appellant Bank has preferred the present appeal. 2.0. The facts leading to the present appeal in nutshell are as under: 2.1. That the respondent herein \u2013 original writ petitioner was working as Cashier \u2013 cum\u00ad Clerk (office Assistant). While working as a Branch Manager is alleged to had committed certain irregularities amounting to misconduct. A show cause notice was issued by the Bank dated 24.4.2019 whereby it was stated that while working at Rawastar Branch, he had committed irregularities while granting loans to farmers / villagers under the loan scheme and he did not take adequate precautions and without written mandates of borrowers, he transferred the loan amount in favour of another person and had thus committed misconduct. One another similar show cause notice was issued on dated 24.6.2019. Departmental Inquiry was initiated against him. A chargesheet dated 1.11.2019 was served upon the original writ petitioner by the Bank in terms of Rajasthan Marudhara Gramin Bank (Officers and Employees) Service Regulation, 2010 (hereinafter referred to as the \u201cRegulation, 2010\u201d). A written reply was submitted by the original writ petitioner to the chargesheet issued. He denied the charges leveled against him. Not satisfied with the reply, the Bank initiated departmental inquiry. One Shri K.C. Gupta was appointed as an Enquirer Officer. An opportunity was afforded to the original writ petitioner to take assistance of a defence representative (hereinafter referred to as \u201cDR\u201d) in accordance with Regulation, 2010 as also in accordance with guidelines issued by the Bank. However, the original writ petitioner informed the Enquiry Officer that he may be allowed to defend himself in the inquiry through a legal practitioner. Keeping in view the restrictions under Regulation 44 of the Regulation, 2010 on engagement of legal practitioner during the inquiry, vide communication dated 17.3.2020, his request permitting him to defend himself through a legal practitioner came to be declined by the Enquiry Officer. A request was made to the Disciplinary Authority by the original writ petitioner permitting him to engage a legal practitioner as his DR. Having considered that no complicated legal question has been involved in the matter and the Presenting Officer appointed by the Disciplinary Authority is neither Law Officer nor a legal practitioner and keeping in mind the Regulation 44 of Regulation, 2010 on engagement of legal practitioner during the inquiry, the request to permit him to represent through legal practitioner came to be declined by the Disciplinary Authority, which was communicated to him vide communication dated 27.5.2020. Again a request was made by the original writ petitioner to permit him to engage a legal practitioner as his DR in the inquiry proceedings, which again came to be rejected. During the inquiry proceedings on 11.08.2020, the original writ petitioner submitted a consent letter of one Shri Mahesh Kumar Atal to be engaged as his DR. The said request was turned down. Again a request was made to permit him to engage any legal practitioner or any retired officer from the Bank as his DR, which again came to be turned down by the Disciplinary Authority. Aggrieved by the order passed by the Disciplinary Authority dated 19.08.2020, the original writ petitioner approached the High Court by way of SB Civil Writ Petition No.8363 of 2020 inter alia, praying that he may be permitted to engage any legal practitioner or retired officer of the Bank as his DR. The said writ petition was opposed by the Bank. Regulation 44 of Regulation, 2010 and the Circular dated 31.01.2014 as also the guidelines issued by the Bank in respect of disciplinary proceeding that no outsider, not associated with the Bank can be permitted to act as a DR were pressed into service. That by judgment and order dated 28.1.2021, the learned Single Judge allowed the said writ petition and directed the Bank to permit the original writ petitioner to be represented through retired officer of the Bank in the disciplinary proceedings. Feeling aggrieved and dissatisfied with the judgment and order passed by the learned Single Judge, the Bank preferred appeal before the Division Bench of the High Court. By impugned judgment and order, the Division Bench of the High Court has dismissed the said appeal mainly on the ground that since circular dated 31.1.2014 and the Regulation 8.2 did not prohibit the utilization of the services of ex\u00ad employee of the Bank, therefore, judgment and order passed by the learned Single Judge is not to be interfered with. 2.2. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court directing the Bank to permit the original petitioner to be represented through retired officer of the Bank in the disciplinary proceedings, the Bank has preferred present appeal. 3.0. Shri Rishabh Sancheti, learned counsel appearing for the appellant has vehemently submitted that in the facts and circumstances of the case, the High Court has committed a grave error in directing the appellant Bank to permit the respondent original writ petitioner to be represented through retired officer of the Bank in the disciplinary proceedings. 3.1. It is submitted that the High Court has not at all adverted to Regulation 8.2 of the Handbook of Vigilance Administration & Disciplinary Action (hereinafter referred to as the \u201cHandbook Procedure\u201d) which has been duly approved by the Board of the Bank and applicable to all kind of matters. 3.2. It is vehemently submitted that Regulation 8.2 of the Handbook Procedure specifically provides that the defence representative should be serving official / employee from the Bank. It is submitted that the provisions of Handbook Procedure are binding on all the employees and applicable to all kind of matters. It is submitted that even there was no challenge to Regulation 8 of the Handbook Procedure by the original writ petitioner. 3.3. It is further submitted that High Court has not properly appreciated the fact that provisions of Regulation, 2010 are to be read with Handbook provisions in a harmonious manner. 3.4. It is further submitted that High Court has erred in construing Regulation 44 as permitting outsiders into a disciplinary inquiry. It is submitted that in fact Regulation 44 restricts legal practitioner to be DR without prior permission. It is submitted that Regulation 44 can in no manner can be construed to mean that it permits all outsiders except lawyers. It is submitted that this is so, since the basic principle is that an employee has no right to representation in the departmental proceedings by another person or a lawyer unless the Service Rules specifically provides for the same. It is submitted that right to representation is available only to the extent specifically provided for in the Rules. Reliance is placed on the decisions of this Court in the case of P. Raghava Kurup & Anr. v. V. Ananthakumari & Anr. reported in (2007) 9 SCC 179; N. Kalindi & Ors. v. Tata Locomotive & Engg. Co. Ltd reported in (1960) 3 SCR 407; National Seeds Corporation Limited vs. K.V. Rama Reddy reported in (2006) 11 SCC 645 and Bharat Petroleum Corporation Limited v. Maharashtra General Kamgar Union & Ors. reported in (1999) 1 SCC 626. 3.5. It is submitted that right to representation in the inquiry can be restricted, controlled or regulated by the Statute, Service Rules, Regulations or Standing Orders and the extent of representation in any enquiry has to be in accordance with the Statute, Service Rules, Regulations or Standing Orders etc. In support of above submission, reliance is placed on the decision of this Court in the case of Cipla Limited & Ors v. Ripu Daman Bahnot & Anr. reported in (1999) 4 SCC 188; in the case of Crescent Dyes & Chemicals Limited v. Ram Naresh Tripathi reported in (1993) 2 SCC 115 and in the case of Indian Overseas Bank vs. Indian Overseas Bank Officer\u2019s Association and Another reported in (2001) 9 SCC 540. 3.6. It is further submitted that as held by this Court in the case of Bharat Petroleum Corporation Limited (supra) there should be minimum intervention of any outsider / legal practitioner in departmental proceedings and the choice, if granted by the Statute, Service Rules, Regulations or Standing Orders, cannot be allowed to travel beyond the Statutes / Service Rules/ Regulations/ Standing Orders. 3.7. It is submitted that in the present case the service conditions of the employee of the bank are governed by Regulation, 2010, which do not contain any provision enabling the Candidate under the enquiry to have any defence representative outside the employees of the Bank. It is submitted that the object and purpose of Regulation 44 was to keep a check on frivolous and unnecessary request made for legal practitioner if the facts and situation do not demand so. It is submitted that Handbook Procedure issued by the Vigilance Department of the Bank which was duly approved by the Board also do not allow the employee to choose any outsider or a legal practitioner as his defence representative and the same is expressly provided under Clause 8 of Chapter VIII of the Handbook Procedure. 3.8. It is submitted that the impugned judgment and order has created an anomalous situation where: I. Ex\u00ademployees who themselves may have been subject of a disciplinary enquiry/ chargesheeted / dismissed from service are also enabled to act as Defence Representatives. II. Ex\u00ademployees who were part of Vigilance or Audit Sections who come across a lot of information of confidential nature are enabled to act as Defence Representatives, which would result in grave injustice. III. The solemn nature of proceedings is taken away and would result in issues of orderliness as well as decorum when a disgruntled ex\u00ademployee is enabled to act as a Defence Representative. CVC Circular no.19.9.2021 dated 6.10.2021 prescribes the time limit for completion of departmental enquiry within 6 months and the same has adopted in the Vigilance Handbook page no.55 para 7.2. If an outsider gets permitted completion of departmental inquiry within prescribed time limit shall be a problem. IV. It is a matter of record that presently in almost all the pending Disciplinary enquiries, most of the Employees\u00ad under\u00ad enquiry are now asking for retired officials to act as Drs. 3.9. It is submitted that aforesaid aspect has not at all been considered by the High Court while permitting the respondent employee to allow ex\u00ademployee as his DR. Making the above submissions, it is prayed to allow the present appeal. 4.0. Learned counsel appearing for the respondent has submitted that Regulation 44 of the Regulation 2020 do not bar engagement of retired employee of the Bank to act as a DR. It is submitted that the only bar under the Rules and the Regulation is with regard to appointment of legal practitioner as a DR without permission of the Bank. It is submitted that therefore, the High Court has rightly directed the Bank to permit the respondent employee to avail service of the retired employee of the Bank as defence representative. 4.1. It is submitted that Handbook of Vigilance Administration and Disciplinary Action dated 15.3.2019 are not binding rules or guidelines and are merely directory in nature. 4.2. It is submitted that on conjoint reading of Clause 7.2 and Clause 8.2 of Handbook Procedure would mean that only officer who is junior to the presenting officer and Enquiry Officer can be appointed as DR. It is submitted that this would result in gross miscarriage of justice and in violation of principles of natural justice. 4.3. It is submitted that judgments cited by the learned counsel for the appellant shall not be applicable to the facts of the present case as every bank has its own Rules and Regulations. It is submitted that in the present case there is no specific bar in the service regulation in engaging retired employee of the Bank as defence representative. It is submitted that therefore, in absence of any specific bar and considering the Regulation 44, the High Court has not committed any error. 4.4. It is submitted that similar question came up for determination before the High Court of Allahabad in the case of Rakesh Singh vs. Chairman and Disciplinary Authority and Another in Writ Appeal No. 64711 of 2013 wherein the High Court has held that in absence of any specific bar in the Regulation, the denial of the right to engage a retired employee of the Bank as defence representative is not justified. It is submitted that said judgment of the Allahabad High Court has been affirmed by this Court and the SLP against the said judgment and order has been dismissed. Making the above submissions and relying upon the above decisions, it is prayed to dismiss the present appeal. 5.0. Heard the learned counsel for the respective parties at length. By the impugned judgment and order, the High Court has permitted the respondent employee who is facing disciplinary proceedings to represent through ex\u00ademployee of the Bank. While permitting the respondent employee, the High Court while construing Regulation 44 of Regulation, 2010 has observed that the Regulation 44 only restricts representation by a legal practitioner, and even that too is permissible of course with the leave to the competent authority, and there is no complete or absolute bar even on engaging a lawyer, the employee cannot be restrained from availing services of retired employee of a Bank. However, it was the specific case on behalf of the Bank that in view of circular dated 31.01.2014 and clause 8.2 of the Handbook Procedure, the DR should be a serving official / employee from the Bank. Therefore, the short question which is posed for consideration of this Court is whether the respondent employee, as a matter of right is entitled to avail the services of an Ex\u00ad employee of the Bank as his DR in the departmental proceedings ? 6.0. While considering the aforesaid issue, few decisions of this Court on the right of the employee to make representation in the Departmental Proceedings are required to be referred to. 6.1. In the case of Kalindi and Ors (supra), it is observed and held that ordinarily in inquiries before domestic tribunals the person accused of any misconduct conducts his own case and therefore, it is not possible to accept the argument that natural justice ex\u00adfacie demands that in the case the enquiries into a chargesheet of misconduct against a workman he should be represented by a member of his Union; though of\u00adcourse an employer in his discretion can and may allow his employee to avail himself of such assistance. The dictum of this decision has been subsequently elucidated. 6.2. In the case of the Dunlop Rubber Co. (India) Ltd v. Workmen reported in (1965) 2 SCR 139, after considering its earlier decision in the case of Kalindri and ors (supra), it is observed and held that there is no per se right to representation in the departmental proceedings through a representative through own union unless the company by its Standing Order recognized such a right. It is observed that refusal to allow representation by any Union unless the Standing Orders confer that right does not vitiate the proceedings. It is further observed that in holding domestic enquiries, reasonable opportunity should be given to the delinquent employees to meet the charge framed against them and it is desirable that at such an enquiry the employee should be given liberty to represent their case by persons of their choice, if there is no standing order against such a course being adopted and if there is nothing otherwise objectionable in the said request. It is further observed that denial of such an opportunity cannot be said to be in violation of principles of natural justice. 6.3. In the case of Cipla Ltd. and Ors (supra), it is observed and held as under: \u201c13. In N. Kalindi v. Tata Locomotive & Engg. Co Ltd, it was held that a workman against whom a departmental enquiry is held by the Management has no right to be represented at such enquiry by an outsider, not even by a representative of his Union though the Management may in its discretion allow the employee to avail of such assistance. So also in Dunlop Rubber Company vs. Workmen, 1965 (2) SCR 139 = AIR 1965 SC 1392 = 1965 (1) LLJ 426, it was laid down that an employee has no right to be represented in the disciplinary proceedings by another person unless the Service Rules specifically provided for the same. A Three\u00adJudge Bench of this Court inCrescent Dyes and Chemicals Ltd. vs. Ram Naresh Tripathi, (1993) 2 SCC 115 = 1992 Suppl. (3) SCR 559, laid down that the right to be represented in the departmental proceedings initiated against a delinquent employee can be regulated or restricted by the Management or by the Service Rules. It was held that the right to be represented by an advocate in the departmental proceedings can be restricted and regulated by statutes or by the Service Rules including the Standing Orders, applicable to the employee concerned. The whole case law was reviewed by this Court in Bharat Petroleum Corporation Ltd. vs. Maharashtra Genl. Kamgar Union & Ors., (1999) 1 SCC 626, and it was held that a delinquent employee has no right to be represented by an advocate in the departmental proceedings and that if a right to be represented by a co\u00adworkman is given to him, the departmental proceedings would not be bad only for the reason that the assistance of an advocate was not provided to him.\u201d 6.4. In the case of Crescent Dyes and Chemicals Ltd. (supra), it is observed and held that in the departmental proceedings right to be represented through counsel or agent can be restricted, controlled or regulated by statute, rules, regulations or Standing Orders. A delinquent has no right to be represented through counsel or agent unless the law specifically confers such a right. The requirement of the rule of natural justice insofar as the delinquent's right of hearing is concerned, cannot and does not extend to a right to be represented through counsel or agent. In the case before this Court, the delinquent's right to representation was regulated by the Standing Orders which permitted a clerk or a workman working with him in the same department to represent him and said right stood expanded permitting representation through an officer, staff\u00admember or a member of the Union, on being authorised by the State Government. Holding that the same is permissible and cannot be said to be in violation of principles of natural justice, it is observed that the object and purpose of such provisions are to ensure that the domestic enquiry is completed with despatch and is not prolonged endlessly; secondly, when the person defending the delinquent is from the department or establishment in which the delinquent is working he would be well conversant with the working of that department and the relevant rules and would, therefore, be able to render satisfactory service to the delinquent. In the present case also clause 8 permits representation through serving officials / employee from the Bank. 6.5. A similar view has been expressed by this Court in the case of Bharat Petroleum Corporation Limited (supra) as well as in the case of National Sees Corporation Limited (supra). 6.6. In the case of Indian Overseas Bank (supra), it is observed and held that law does not concede an absolute right of representation to an employee in domestic enquiries as part of his right to be heard and that there is no right to representation by somebody else unless the rules or regulation and standing orders, specifically recognize such a right and provide for such representation. 7.0. Applying law laid down by this Court in the aforesaid decisions to the facts of the case on hand, the respondent employee / respondent delinquent has no absolute right to avail the services by ex\u00ademployee of the Bank as his DR in the departmental proceedings. It is true that Regulation 44 puts specific restriction on engagement of a legal practitioner and it provides that for the purpose of an enquiry under Regulation, 2010, the Officer or Employee shall not engage a legal practitioner without prior permission of the competent authority. Therefore, even availing the services of legal practitioner is permissible with the leave of the competent authority. However, Regulation does not specifically provides that an employee can avail the services of any outsider and / or ex\u00ad employee of the Bank as DR. Therefore, Regulation, 2010 neither restricts nor permits availing the services of any outsider and / or ex\u00ademployee of the Bank as DR and to that extent Regulation is silent. If the reasoning of the High Court is considered, the High Court is of the opinion that as there is no complete or absolute bar even on engaging a lawyer, it is difficult to accept that a retired employee of the Bank cannot be engaged to represent a delinquent officer in the departmental inquiry. However, the High Court has not appreciated the effect of the Handbook. As per Clause 8 of the Handbook Procedure which has been approved by the Board of Directors and it is applicable to all the employees of the Bank and Clause 8 is with respect to the defence representative, it specifically provides that DR should be serving official / employee from the Bank. The said Handbook Procedure which has been approved by the Board of Directors of the Bank is binding to all the employees of the Bank. The High Court has considered Regulation 44 of the Regulation, 2010, however has not considered clause 8 of the Handbook Procedure on the ground that the same cannot be said to be supplementary. However, we are of the opinion that Handbook Procedure can be said to be supplementary. The same cannot be said to be in conflict with the Regulation 44 of Regulation, 2010. As observed herein above, neither Regulation 44 permits nor restricts engagement of an ex\u00ademployee of the Bank to be DR. Therefore, Clause 8.2 cannot be said to be in conflict with the provisions of Regulation, 2010. Provisions of Regulation, 2010 and the provisions of Handbook Procedure are required to be read harmoniously, the result can be achieved without any violation of any of the provisions of Regulation, 2010 and the Handbook Procedure. The objects of Regulation 44 of Regulation, 2010 and Clause 8 of the Handbook Procedure seem to be to avoid any outsider including legal representative and / or even ex\u00ademployee of the Bank. At the cost of repetition, it is observed that there is no absolute right in favour of the delinquent officer\u2019s to be represented in the departmental proceedings through the agent of his choice and the same can be restricted by the employer. 8.0. As per the Bank there is a justification also to permit the delinquent officer to be represented in the departmental proceedings through serving official / employee from the Bank only. The Bank has justified its action of not permitting ex\u00ademployee of the Bank as DR and according to the Bank, the ex\u00ademployee who themselves may have been subject of a disciplinary enquiry/ chargesheet / dismissed from service; the ex\u00ademployee might be a part of vigilance or audit sections who come across a lot of information of confidential nature and therefore, if they are allowed to be DR in the departmental proceedings, which would result in grave injustice; the solemn nature of proceedings is taken away and would result in issues of orderliness as well as decorum when a disgruntled ex\u00ademployee is enabled to act as defence representative; they may adopt delay tactics in departmental enquiry and may not permit completion of department enquiry within six months as mandated by the CVC Circular and as per Vigilance Handbook adopted by the Bank. For all the aforesaid reasons not permitting the delinquent officer to be represented through ex\u00ademployee of the Bank in the departmental enquiry cannot be said to be in any way in breach of principles of natural justice and / or it violates any of the rights of the delinquent officer. As per settled proposition of law and as observed herein above, in decisions referred to herein above, the only requirement is that delinquent officer must be given fair opportunity to represent his case and that there is no absolute right in his favour to be represented through the agent of his choice. However, at the same time, if the charge is severe and complex nature, then request to be represented through a counsel can be considered keeping in mind Regulation 44 of Regulation, 2010 and if in a particular case, the same is denied, that can be ground to challenge the ultimate outcome of the departmental enquiry. However, as a matter of right in each and every case, irrespective of whether charges is severe and complex nature or not, the employee as a matter of right cannot pray that he may be permitted to represent through the agent of his choice. 9.0. Now so far as reliance placed upon the decision of the Allahabad High Court in the case of Rakesh Singh (supra) by the learned counsel for the respondent is concerned, it is required to be noted that at the time when the High Court decided the matter no such Clause 8 of the Handbook Procedure was in force. Handbook Procedure has been adopted by the Board of Directors in its meeting held on 15.3.2019. Therefore, the said decision shall not be applicable to the facts of the case on hand. 10. In view of the above and for the reasons stated above, the High Court has committed an error in permitting respondent delinquent officer to be represented in the departmental enquiry through ex\u00ademployee of the Bank. The view taken by the learned Single Judge confirmed by the Division Bench is unsustainable. Accordingly, present appeal is allowed and the impugned judgment and order passed by the learned Single Judge confirmed by the Division Bench permitting the respondent delinquent officer to be represented in the departmental proceedings through ex\u00ademployee of the Bank is hereby quashed and set aside. Present appeal is accordingly allowed. In the facts and circumstances of the case, there shall be no order as to costs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. (M. R. SHAH) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. (SANJIV KHANNA) New Delhi, January, 04 2022", "spans": [{"start": 20, "end": 42, "label": "COURT"}, {"start": 72, "end": 101, "label": "CASENO"}, {"start": 106, "end": 137, "label": "APP"}, {"start": 174, "end": 194, "label": "RESP"}, {"start": 227, "end": 237, "label": "JUDGE"}, {"start": 326, "end": 329, "label": "DATE"}, {"start": 350, "end": 388, "label": "COURT"}, {"start": 403, "end": 442, "label": "CASENO"}, {"start": 513, "end": 545, "label": "COURT"}, {"start": 1019, "end": 1033, "label": "APP"}, {"start": 1413, "end": 1422, "label": "DATE"}, {"start": 1818, "end": 1827, "label": "DATE"}, {"start": 1897, "end": 1906, "label": "DATE"}, {"start": 1976, "end": 2057, "label": "STAT"}, {"start": 2918, "end": 2927, "label": "DATE"}, {"start": 3671, "end": 3680, "label": "DATE"}, {"start": 3889, "end": 3899, "label": "DATE"}, {"start": 4298, "end": 4308, "label": "DATE"}, {"start": 4354, "end": 4364, "label": "COURT"}, {"start": 4375, "end": 4413, "label": "CASENO"}, {"start": 4639, "end": 4649, "label": "DATE"}, {"start": 4869, "end": 4878, "label": "DATE"}, {"start": 5220, "end": 5252, "label": "COURT"}, {"start": 5290, "end": 5322, "label": "COURT"}, {"start": 5400, "end": 5409, "label": "DATE"}, {"start": 5697, "end": 5707, "label": "COURT"}, {"start": 5897, "end": 5913, "label": "A.COUNSEL"}, {"start": 6037, "end": 6047, "label": "COURT"}, {"start": 6275, "end": 6285, "label": "COURT"}, {"start": 7014, "end": 7024, "label": "COURT"}, {"start": 7197, "end": 7207, "label": "COURT"}, {"start": 7944, "end": 8023, "label": "PREC"}, {"start": 8025, "end": 8035, "label": "PREC"}, {"start": 8197, "end": 8305, "label": "PREC"}, {"start": 8714, "end": 8761, "label": "PREC"}, {"start": 8912, "end": 9020, "label": "PREC"}, {"start": 9093, "end": 9129, "label": "PREC"}, {"start": 10888, "end": 10913, "label": "CASENO"}, {"start": 10920, "end": 10929, "label": "DATE"}, {"start": 11462, "end": 11472, "label": "COURT"}, {"start": 11991, "end": 12001, "label": "COURT"}, {"start": 12239, "end": 12248, "label": "DATE"}, {"start": 13104, "end": 13114, "label": "COURT"}, {"start": 13224, "end": 13247, "label": "COURT"}, {"start": 13263, "end": 13327, "label": "PREC"}, {"start": 13331, "end": 13360, "label": "CASENO"}, {"start": 13373, "end": 13383, "label": "COURT"}, {"start": 13599, "end": 13619, "label": "COURT"}, {"start": 13940, "end": 13950, "label": "COURT"}, {"start": 14120, "end": 14130, "label": "COURT"}, {"start": 14602, "end": 14612, "label": "DATE"}, {"start": 14960, "end": 14963, "label": "DATE"}, {"start": 15168, "end": 15175, "label": "PREC"}, {"start": 15885, "end": 15893, "label": "PREC"}, {"start": 16917, "end": 16961, "label": "PREC"}, {"start": 17260, "end": 17349, "label": "PREC"}, {"start": 17563, "end": 17663, "label": "PREC"}, {"start": 18132, "end": 18225, "label": "PREC"}, {"start": 18566, "end": 18598, "label": "PREC"}, {"start": 19464, "end": 19480, "label": "AUTH"}, {"start": 20222, "end": 20258, "label": "PREC"}, {"start": 20293, "end": 20326, "label": "PREC"}, {"start": 20729, "end": 20732, "label": "DATE"}, {"start": 21744, "end": 21754, "label": "COURT"}, {"start": 21774, "end": 21784, "label": "COURT"}, {"start": 22031, "end": 22041, "label": "COURT"}, {"start": 22521, "end": 22531, "label": "COURT"}, {"start": 26025, "end": 26045, "label": "COURT"}, {"start": 26061, "end": 26073, "label": "PREC"}, {"start": 26191, "end": 26201, "label": "COURT"}, {"start": 26363, "end": 26372, "label": "DATE"}, {"start": 26524, "end": 26534, "label": "COURT"}, {"start": 27213, "end": 27223, "label": "JUDGE"}, {"start": 27242, "end": 27255, "label": "JUDGE"}, {"start": 27268, "end": 27284, "label": "DATE"}]}
{"id": "129202572", "text": "CA 5970/2021 1 Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No 5970 of 2021 (Arising out of SLP (C) No 699 of 2019) Mr Rajeev Nohwar Appellant Versus Chief Controlling Revenue Authority Respondent(s) Maharashtra State, Pune and Others JUDGMENT Dr Dhananjaya Y Chandrachud, J 1 Leave granted. 2 A citizen\u201fs claim for the refund of stamp duty has found a winding path to this court. The appellant booked a residential apartment. There arose a dispute with the builder. It led to a consumer complaint. The litigation consumed time. The appellant was permitted to opt for a refund of the price. The claim for refund of stamp duty has been rejected by the revenue arm of the state on the ground that more than six months have elapsed. The Bombay High Court, agreeing with Signature Not Verified Digitally signed by Chetan Kumar the decision found the claim to be stale. A simple claim for refund leads us to Date: 2021.10.05 17:04:04 IST Reason: CA 5970/2021 the complexities of a revenue sourcing law. 3 This appeal arises from a judgment dated 22 November 2018 of a Single Judge of the High Court of Judicature at Bombay. The Deputy Inspector General of Registration and Deputy Controller of Stamps, Pune rejected an application for refund of stamp duty filed by the appellant. The order of the authority was challenged in the exercise of the jurisdiction of the High Court under Article 226 of the Constitution. The petition has been dismissed. 4 On 24 April 2014, the appellant booked a residential flat, being Unit No 2001 admeasuring 1660 sq ft in Tower No 24 of a construction project called Lodha Belmondo in Pune for a consideration of Rs 1,68,88,095. The appellant initially paid an amount of Rs 33,91,795 by July 2014 representing 19.9% of the agreed sale consideration, following which a confirmatory email was issued. This was followed by a letter of allotment dated 15 July 2014. On 14 August 2014, the appellant paid an amount of Rs 1,58,28,221 out of the agreed consideration. In order to facilitate the execution of a conveyance, the appellant purchased an e-SBTR stamp paper through a government challan bearing MTR GRN No MH0023603832014155 for a total amount of Rs 8,44,500 from the IDBI bank, Aundh, Pune for the execution of the agreement to sell. 5 Disputes arose between the appellant and the developer which led to the appellant instituting a consumer complaint before the National Consumer Disputes Redressal Commission1. During the pendency of the complaint, an 1 \u201cNCDRC\u201d CA 5970/2021 interim order dated 25 September 2014 restrained the developer from creating third party interests in the flat. Eventually by an order dated 6 May 2016, the complaint was allowed. The appellant was given the option to either execute the agreement with the developer, in which event the developer would pay compensation in the amount of Rs 10 lakhs, or in the alternative, if the appellant was not willing to execute an agreement, the developer was directed to refund the entire consideration together with interest at the rate of 12% per annum from the date of receipt of each installment until the date of refund along with compensation of Rs.10,00,000. The appellant exercised the option of seeking a refund of consideration together with interest. 6 The developer issued a cheque on 11 July 2016 for the refund of the consideration in terms of the order of the NCDRC. The appellant thereupon applied on 16 July 2016 for refund of the stamp duty of Rs 8,44,500 to the Collector of Stamps. By a communication dated 5 August 2016, the Collector of Stamps forwarded the file to the Deputy Inspector General of Registration with a recommendation that the refund should be denied on the ground that the appellant had not applied for refund within six months. By an order dated 27 September 2016, the Deputy Inspector General of Registration rejected the application for refund of stamp duty on the ground that the application for refund was not made within six months as mandated by Section 48(3) of the Maharashtra Stamp Act 1958. The appellant filed an appeal before the Chief Controlling Revenue Authority under Section 53(1A) of the Maharashtra Stamp Act 1958. The appeal was dismissed on 2 April 2018 on the same ground. The CA 5970/2021 appellant moved the High Court of Judicature at Bombay in a writ petition under Article 226 of the Constitution challenging the orders dated 27 September 2016 and 2 April 2018 and for seeking an order directing the refund of the stamp duty paid. 7 The High Court by its judgment dated 22 November 2018 dismissed the petition, affirming the view of the revenue authorities that the application for refund was barred by limitation, not having been preferred within a period of six months from the date of the purchase of the e-stamp. The High Court rejected the argument that the six month limitation period under Section 48(3) would not be applicable since the appellant\u201fs case falls under Section 52A of the Act. It was observed that Sections 47, 48, 52 and 52A of the Act will have to be interpreted harmoniously, and an application under Section 52A will also have to be made within six months from the date of purchase of the stamps. The matter has accordingly travelled to this Court. Notice was issued on 18 January 2019. 8 Mr Varun Singh, counsel appearing on behalf of the appellant submits that in order to appreciate the circumstances in which the application for refund was filed, it is necessary to bear in mind the following events: (ii) Following the dispute with the developer, the appellant moved the NCDRC which initially granted an interim stay on the creation of third party rights on 25 September 2014 and CA 5970/2021 eventually allowed the complaint on 6 May 2016; and (iii) The application for refund was moved on 16 July 2016. 9 In this backdrop, counsel for the appellant submitted that for the following five reasons, the application for refund was instituted within a reasonable period and cannot be held to be barred either on laches or limitation: (i) The dispute in relation to the agreement with the developer was pending adjudication before the NCDRC; (ii) The appellant had paid the stamp duty and purchased the e- stamp paper bona fide in order to facilitate the completion of the transaction pertaining to the residential flat; (iii) In order to demonstrate the readiness and willingness of the appellant before the NCDRC, it was necessary for the appellant to continue to retain the e-stamp paper pending the disposal of the proceedings; (iv) The e-stamp paper, as a matter of fact, would have been used if the adjudication by the NCDRC had resulted in a resolution of the dispute by removing some of the offending provisions insisted by the developer; and (v) Following the order of the NCDRC, the appellant exercised the CA 5970/2021 option to seek a refund in terms of a judicial order of the competent forum. 10 In this backdrop, counsel has relied on the provisions of Sections 47, 48 and 52A of the Maharashtra Stamp Act 1958. It has been submitted that the provisions of Section 48(3) which prescribe a period of six months from the date of purchase of stamp for filing an application for refund, would have no application where the case is not covered by the provisions of Section 47. In such a situation, it was urged that Section 52A would enure to the benefit of the appellant. In this context, counsel for the appellant relied on a judgment of a two-Judge Bench of this Court in Committee-GFIL vs Libra Buildtech Private Limited and Others.2 11 Opposing the submissions of the appellant, Mr Rahul Chitnis, Chief Standing Counsel for the State of Maharashtra has urged that: (i) The application filed by the appellant was specifically under the provisions of Section 47 of the Maharashtra Stamp Act 1958; (ii) Once the appellant has conceded that the application was filed with reference to Section 47, the period of limitation prescribed in Section 48 would squarely stand attracted; (iii) As a matter of fact, the application for refund of stamp duty would be relatable to the provisions of Section 47(a) of the Act; and 2 (2015) 16 SCC 31 CA 5970/2021 (iv) In these circumstances, the appellate authority was justified in coming to the conclusion that the application for refund was barred by limitation. The rival submissions fall for our analysis. 12 Chapter 5 of the Maharashtra Stamp Act 1958 is titled \u201callowances for stamps in certain cases\u201d. Section 47 which deals with \u201callowance for spoiled stamps\u201d provides as follows: \u201c47. Allowance for spoiled stamps.- Subject to such rules as may be made by the State Government as to the evidence to be required, or the inquiry to be made, the Collector may on application, made within the period prescribed in section 48, and if he is satisfied as to the facts, make allowance for impressed stamps spoiled in the cases hereinafter mentioned, namely: (a) the stamp on any paper inadvertently and undesignedly spoiled, obliterated or by error in writing or any other means rendered unfit for the purpose intended before any instrument written thereon is executed by any person; (b) the stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto; (c) the stamp used for an instrument executed by any party thereto which- (1) has been afterwards found by the party to be absolutely void in law from the beginning; (1A) has been afterwards found by the Court, to be absolutely void from the beginning under section 31 of the Specific Relief Act, 1963; (2) has been afterwards found unfit by reason of any error or CA 5970/2021 mistake therein, for the purpose originally intended; (3) by reason of the death of any person by whom it is necessary that it should be executed, without having executed the same, or of the refusal of any such person to execute the same, cannot be completed so as to effect the intended transaction in the form proposed; (4) for want of the execution thereof by some material party, and his inability or refusal to sign the same, is in fact incomplete and insufficient for the purpose for which it was intended; (5) by reason of the refusal of any person to act under the same, or to advance any money intended to be thereby secured, or by the refusal or non-acceptance of any office thereby granted, totally fails of the intended purpose; (6) becomes useless in consequence of the transaction intended to be thereby effected by some other instrument between the same parties and bearing a stamp of not less value; (7) is deficient in value and the transaction intended to be thereby effected had been effected by some other instrument between the same parties and bearing a stamp of not less value; (8) is inadvertently and undesignedly spoiled, and in lieu whereof another instrument made between the same parties and for the same purpose is executed and duly stamped: Provided that, in the case of an executed instrument, except that falling under sub-clause (lA), no legal proceeding has been commenced in which the instrument could or would have been given or offered in evidence and that the instrument is given up to be cancelled, or has been already given up to the Court to be cancelled. Explanation.- The certificate of the Collector under section 32 that the full duty with which an instrument is chargeable has been paid is an impressed stamp within the meaning of this section.\u201d (emphasis supplied) CA 5970/2021 13 Section 47 is subject to the rules which are made by the State government in regard to the evidence to be required or enquiry to be made. The provision stipulates that the Collector may make allowance, on an application seeking an allowance, for impressed stamps spoiled in the cases which are set out in clauses (a) to (c). The opening words of Section 47 also indicate that the application under Section 47 has to be made within the period which is prescribed by Section 48. The prefatory words of Section 47 advert to \u201cimpressed stamps spoiled in the cases\u201d which are contained in clauses (a) to (c). Clause (a) deals with a situation where the stamp on any paper is inadvertently or undesignedly spoiled, obliterated or rendered unfit for the purpose intended either by an error in writing or by any other means before the instrument written on it is executed by any person. The object of clause (a) is to ensure that an allowance is made for impressed stamps which are spoiled inadvertently or unintentionally or where the stamp paper is rendered unfit for the purpose for which it was intended. That is why the expressions which have been used in clause (a) are spoiled, obliterated, or rendered unfit for the purpose. 14 Section 47 covers three classes of cases within it: (i) spoiled; (ii) obliterated; and (iii) unfit for the purpose by an error in writing or \u201eany other means\u201f. It is contended by the State that the case of the appellant would fall within the purview of the third category since it was rendered unfit for the purpose, i.e., the purpose of purchase of the property. This submission thus places reliance on the expression \u2018purpose\u2019 used in the provision. The submission does not accord with a plain reading of the provision. The expression \u201cany other means\u201d must be read CA 5970/2021 in the context of the words which immediately precede it, namely, \u201cerror in writing\u201d. The expression \u201cby any other means\u201d would indicate that the legislature intended to refer to defacement of a stamp paper in any manner analogous to an error in writing the instrument on the stamp paper. \u201cAny other means\u201d refers to any other modality by which the stamp paper is rendered unfit for the purpose for which it was purchased. Moreover, the prefatory words in Section 47 state that the collector must be satisfied that the stamp is \u201espoiled\u201f. Clauses (a) to (c) lay down the cases that are covered within the ambit of the expression \u201espoiled stamps\u201f. The emphasis of Section 47 is not on the purpose but on unfit stamps. Therefore, a case where the stamp has not been utilized at all because it is not needed subsequent to the purchase will not fall within the purview of Section 47. Only those cases where the stamp is unfit for the purpose by an error in writing or any other means would be covered by the provision. It is not the case of the appellant that the stamp paper has been spoiled or obliterated or rendered unfit for the purpose for which it was required. In the present case, it is common ground that the stamp paper is not spoiled but the purpose for which the stamp was purchased has become redundant in view of the judgment of the NCDRC. Therefore, there would be no occasion to apply the provisions of clause (a) of Section 47. 15 Clause (c) of Section 47 begins with the expression \u201cstamp used for an instrument executed by any party thereto\u201d and is followed by eight sub clauses. In other words, clause (c) of Section 47 applies only where a stamp paper has been used for an instrument which has been executed by one of the parties to CA 5970/2021 the instrument. That is why, for instance sub clause (2) refers to the instrument being subsequently found unfit either by reason of an error or mistake for the purpose for which it was originally intended. Sub clause (4) adverts to a situation where the instrument has not been executed by a material party and by his inability or refusal to sign it renders the instrument incomplete and insufficient for the purpose for which it was intended. Clause (c) of Section 47 has no application to the facts of the present case since it is common ground that the stamp was not used for an instrument already executed by any party thereto. 16 Now it is in this backdrop that it becomes necessary to advert to Section 48 of the Act. Section 48 provides as follows: \u201c48. Application for relief under section 47 when to be made. - The application for relief under section 47 shall be made within the following period, that is to say.- (1) in the cases mentioned in clause (c) (5), within six months of the date of the instruments: Provided that where an Agreement to sell immovable property, on which stamp duty is paid under Article 25 of the Schedule I, is presented for registration under the provisions of the Registration Act, 1908 and if the seller refuses to deliver possession of the immovable property which is the subject matter of such agreement the application may be made within two years of the date of the instrument [or where such agreement is cancelled by a registered cancellation deed on the grounds of, dispute regarding the premises concerned, inadequate finance, financial dispute in terms of agreed consideration, or afterwards found to be illegal construction or suppression of any other material fact, the application may be made within two years from the date of such registered cancellation deed; (2) in the case when for unavoidable circumstances any instrument for which another instrument has been substituted cannot be given up to be cancelled, the application may be CA 5970/2021 made within six months after the date of execution of the substituted instrument. (3) in any other case, within six months from the date of purchase of stamp.\u201d 17 Section 48 begins with the statement that the application for relief under Section 47 shall be made within the periods which are indicated in clauses (1), (2) and (3). In other words, the periods of limitation which are prescribed in clauses (1), (2) and (3) are in respect of those cases which are governed by Section 47. Clause (1) stipulates that for cases governed by clause (c)(5), the period within which the application has to be filed will be six months of the date of the instrument. Clause (2) specifies that in case where for unavoidable circumstances, any instrument for which another instrument has been substituted cannot be given up to be cancelled, in such an event, the application may be made within six months after the date of execution of the substituting instrument. Clause (3) which is a residuary provision provides for a limitation of six months from the date of the purchase of stamp. 18 The revenue authorities rejected the application filed by the appellant on the ground that the application was not filed within six months from the date of the purchase of the stamp paper, treating the case to fall within the residuary provision in Section 48 of the Act. This view has been accepted by the Single Judge of the Bombay High Court. What this view misses is that Section 48 in its entirety applies only to those cases where the application for relief is governed CA 5970/2021 by Section 47. If the application for refund is not with reference to the provisions of Section 47, the period of limitation in Section 48 clearly has no application. Since the application of the appellant does not fall within the purview of any of the clauses in Section 47, the 6 month limitation period prescribed in Section 48 would not be applicable to the application for allowance filed by the appellant. 19 Having observed that the application of the appellant for allowance is not covered by the Section 47, it is imperative to determine if it falls within the purview of any other provisions of the Act. Section 49 provides that allowance can be made without any limit of time for stamp papers that are used as printed forms of instruments by any banker or company, if the forms are not required by the banks or the companies. Thus, the application of the appellant is not covered by section 49. Section 50 states that allowance for misused stamps can be made. The provision brings within the purview of the term \u201emisused stamps\u201f, the stamps of greater value than required or stamps of description other than that prescribed by any rules or stamps that are useless since the instrument is written in contravention of the provisions or where a stamp has been used when the instrument is not charged with stamp duty. Section 50 only covers those cases where inadvertent mistakes are made in the stamp paper. Therefore, the case of the appellant is not covered by Section 50 since there is no mistake in the e-stamp, be it with regard to the value or description. Section 51 lays down the procedure for seeking allowance for cases that fall under Section 47, 49 and 50 and is thus of no application to the appellant\u201fs claim. 20 Now it is important to refer to Section 52 of the Act which provides as follows: CA 5970/2021 \u201c52. Allowance for stamps not required for use: When any person is possessed of a stamp or stamps which have not been, spoiled or rendered unfit or useless for the purpose intended, but for which he has no immediate use, the Collector shall repay to such person the value of such stamp or stamps in money, deducting [thereform such amount as may be prescribed by rules made in this behalf by the State Government] upon such person delivering up the same to be cancelled, and proving to the Collector's satisfaction,\u2014 (a) that such stamp or stamps were purchased by such person with a bona fide intention to use them ; and (b) that he has paid the full price thereof ; and (c) that they were so purchased within the period of 1[six months] next preceding the date on which they were so delivered : Provided that, where the person is a licensed vendor of stamp, the Collector may, if he thinks fit, make the repayment of the sum actually paid by the vendor without any such deduction as aforesaid.\u201d (emphasis supplied) Section 52 deals with provision of allowance in case of stamps that are not required for use. There are two kinds of stamps that are not required for use. The first is where the stamp is spoiled, as covered by Section 47 of the Act. The second is where the stamp is not spoiled but the stamp is not needed since the purchaser has no use of it. Section 52 specifically excludes the first of category since it is already covered by Section 47. The provision only applies to the class in the second category. Thus, Section 52 covers stamps that are not spoiled but which are of no use to the applicant by the occurrence of any subsequent event that renders the purpose of purchase of stamp void or nugatory. For the application of Section 52A, the applicant must have purchased the stamp on the payment of full price, with a bona fide intention to use it. However, within six months from the purchase of the stamp, the purpose of the purchase has not CA 5970/2021 been fulfilled. Such a situation can arise in multiple circumstances. For example, a person may have obtained a stamp paper for purchasing a building. However, before the agreement of sale could be executed, the building turns to shambles after an earthquake hits the area. In such a case, the stamp paper has no use. This may also cover a case where the seller has taken back his consent to sell the property after the purchase of the stamp paper. In such cases, the stamp purchased will not have any use since the purpose for which it was purchased could not materialize. 21 It could be argued that the use of the words, \u201cfor which he has no immediate use\u201d in Section 52 would only covers cases where the purpose for the purchase of the stamp is still valid but the execution of the purpose if delayed and not \u201eimmediate\u201f. Such an interpretation, however, is erroneous in view of the holistic reading of the provision. The use of the phrase \u201eimmediate\u201f must be read in the context of the limitation period prescribed by the provision. Since a six month limitation period has been imposed in Section 52 for the cases that fall within its purview, the use of the phrase \u201eno immediate use\u201f should be interpreted to mean either the permanent abandonment of the purpose or a delay (of more than six months from the purchase of the stamp) in the execution of the purpose. 22 However, Section 52 would only apply to those cases where the applicant had knowledge that the stamp purchased was not be required for use within six months from the date of purchase. The provision cannot be arbitrarily applied to cases where the purchaser of the stamp had no knowledge that the stamp CA 5970/2021 would not be required for use within six months from the purchase of the stamp. In the instant case, the appellant had no knowledge of the fact that the stamp was not needed within six months from the purchase of it. He was in a bona fide contest over his rights with the builder. Therefore, the case of the appellant would not fall under Section 52 of the Act as well. 23 It has been contended by the counsel for the appellant that the case of the appellant falls within the purview of Section 52A of the Act. Now, it becomes necessary to advert to the provisions of Section 52A which provides as follows: \u201c52A. Allowance for duty.- (1) Notwithstanding anything contained in sections 47, 50, 51 and 52, when payment of duty is made by stamps or in cash as provided for under sub-section (3) of section 10 or section 10A or section 108, and when the amount of duty paid exceeds rupees one lakh, the concerned Collector shall not make allowance for the stamps, or the cash amount paid under the Challans, which are spoilt or misused or not required for use, but shall, after making necessary enquiries, forward the application with his remarks thereon to,- (a) the Additional Controller of stamps for the cases handled by the Collectors working in the Mumbai City District and Mumbai Suburban District; and (b) the concerned Deputy Inspector General of Registration and Deputy Controller of Stamps of the division for the cases handled by the Collectors other than those mentioned in clause (a). (2) The Additional Controller of Stamps or, the concerned Deputy Inspector General of Registration and Deputy Controller of Stamps of the division, as the case, may, be, on receiving such application consider the same and decide whether such allowance shall be given or not, and accordingly shall, grant the same, if the amount of allowance does not exceed rupees ten lakh, and if, it exceeds rupees ten lakh, shall submit such application, with his remarks thereon to the Chief Controlling Revenue Authority for decision. CA 5970/2021 (3) The Chief Controlling Revenue Authority on receiving such application shall decide on merit whether such allowance shall be given or not, and pass such order thereon as he thinks just and proper, which shall be final and shall not be questioned in any court or before any authority.\u201d 24 Section 52A is prefaced with a non obstante clause which operates notwithstanding anything contained in Sections 47, 50, 51 and 52. Section 52A stipulates that when the amount of stamp duty paid exceeds Rs 5 lakhs, the concerned Collector shall not make an allowance for the stamps or the cash amount paid under the challans but shall after making necessary enquiries forward the application with his remarks to the Additional Collector of Stamps (for cases handled by the Collectors working in the Mumbai City District and Mumbai Sub-Urban Districts) and the concerned Deputy Inspector General of Registration and Deputy Controlling of Stamps for cases in other regions. 25 In view of Section 52A(2) of the Act, the Additional Collector of Stamps or the DIG as the case may be, on assessing the application has to decide whether allowance should be given or not and shall grant it if the amount of allowance does not exceed Rs 20 lakhs. If the amount exceeds Rs 20 lakhs, the application has to be submitted to the Chief Controlling Revenue Authority. The Chief Controlling Revenue Authority on receiving the application is required to decide on merits whether or not the allowance should be given. The provisions of Section 52A were substituted with effect from 1 May 2006 by Maharashtra Act 12 of 2006. By an Amendment, the amount of Rs 5 lakhs which has been specified in sub-Section (1) was enhanced from Rs 1 lakh by Maharashtra Act 20 CA 5970/2021 of 2015 with effect from 24 April 2015. Likewise in sub-Section (2), the amount of Rs 20 lakhs stands enhanced from the earlier amount of Rs 10 lakhs by the same amending provision. 26 The provisions of Section 52A as noticed above have overriding force and effect, inter alia, on the provisions of Sections 47, 50, 51 and 52. It is pertinent to note that the non obstante clause does not apply to Sections 48 and 49 of the Act. While Section 48 is a limitation clause applicable to cases that are covered by Section 47, Section 49 applies to a Corporation where no limitation period has been prescribed. Section 52A can be applied to the appellant\u201fs case only if the provision is interpreted to override the limitation period laid down in the preceding provisions and if it is regarded as a residual substantive provision that would cover all cases that are not covered by any of the provisions. We will now consider the validity of such an interpretation. 27 If Section 52A was enacted with the intent to override the limitation prescribed by Sections 50, 51 and 52 then Section 48 ought to have also been included specifically since Section 48 is the limitation provision applicable to Section 47. Section 48 is not incorporated in the non-obstante provision of section 52 A. This is hence intrinsic material to indicate that the purpose of the non-obstante clause in Section 52A was to override the jurisdiction of the adjudicating authority (i.e the Collector) under Sections 47, 50, 51 and 52 to decide the claims for allowances. Section 52A specifically divests the power of the Collector to decide the claims of allowance falling within those provisions and vests the power to other authorities if the payment of stamp duty exceeds Rupees five CA 5970/2021 lakhs. In those cases, though the application is to be made to the Collector, he will have no adjudicatory capacity. The Collector must forward the application to the concerned authority as mentioned in Section 52A along with remarks and such authority would have the power to decide the claim. The interpretation that Section 52A only overrides the authority of the Collector in adjudicating the case is evident since the provision does not override Section 49 where the adjudicating officer is the Chief Controlling Revenue Authority. In such a case, Section 52A cannot be considered as a residual clause by applying it to classes of cases that do not fall within the purview of any other provisions. A contrary interpretation would create an artificial class based on economic capacity, as cases where the stamp duty paid exceeds Rupees five lakhs will alone be adjudicated without application of any limitation period as a residual case, while cases falling within the same class but where stamp duty paid is less than Rupees five lakhs cannot take recourse to the provision. It is an established principle of interpretation that an interpretation that furthers the constitutionality of a provision will have to be undertaken. An interpretation which leads to an invidious discrimination must be eschewed. Thus, the intendment of Section 52A was neither to cover the applications that are not brought under any of the preceding substantive clauses nor to override the limitation clauses. 28 Evidently, and for the reasons that we have indicated above, the application filed by the appellant did not fall within the ambit of Sections 47, 52 and 52A. It is true that the application for refund was titled with reference to the provisions of Section 47. But, it is well settled that a reference of a wrong statutory provision, CA 5970/2021 cannot oust the citizen of an entitlement to refund which otherwise follows in terms of a statutory provision. 29 In the present case, the stamp paper was purchased bona fide in view of the agreement to sell which was to be executed by the appellant with the developer. There was a dispute with the developer which led to the institution of the proceedings before the NCDRC. There was nothing untoward in the conduct of the appellant and certainly no unreasonable delay on the part of the appellant in awaiting the outcome of the proceedings. The NCDRC allowed the complaint giving the option to the appellant of either going ahead with the agreement along with an award of compensation or, in the alternative, to seek a refund with interest. The appellant having exercised the latter option applied within two months from the order of the NCDRC for the grant of refund. The conduct of the appellant, therefore, cannot be held to be unreasonable nor was there any intentional or wanton delay on the part of the appellant in applying for a refund of stamp duty. Such an application must be filed within a reasonable period. 30 In Committee-GFIL (supra), a two-judge Bench of this Court was dealing with the issue of limitation prescribed in the Indian Stamp Act 1899. In this case, an auction sale of immovable properties was held by a committee constituted by this Court. Successful bidders deposited with the committee, the entire sale consideration along with the stamp duty. However, the transaction failed due to reasons beyond the control of the parties. The Court cancelled the transaction CA 5970/2021 and directed the committee to refund the sale consideration with interest and permitted the purchasers to approach the State Government for refund of the stamp duty. The applications of the auction-purchasers seeking refund of stamp duty was rejected on the ground that the applications were time-barred. An application against the rejection of the refund applications was filed before this Court. This Court allowed the application on three grounds: (i) the transaction which was Court-monitored, could not be fulfilled for reasons beyond the control of the auction-purchasers. No act of the Court should prejudice a person; (ii) in view of the principle of restitution embodied in Section 65 of the Contract Act, any advantage received by a person under a void contract or a contract that becomes void is bound to be restored; and (iii) in light of equity and justice, the six months limitation period prescribed in Section 50 of the Indian Stamp Act 1899 must be read to mean six months from the date of the order of this Court. 31 We are conscious of the fact that as a general rule of law, the right to refund is a statutory creation. A refund can be sought in terms envisaged by statute. As discussed above, the case of the appellant is not specifically barred by any substantive provision. It is an established principle that this Court while exercising its power under Article 142 of Constitution must not ignore and override statutory provisions but must rather take note of the express statutory provisions and exercise its discretion with caution.3 Therefore, if a statute prescribes a limitation period, this Court must be slow to interfere with the delay under Article 142. 3AR Anthulay v. RS Nayak, (1988) 2 SCC 602; Union Carbide Corporation v. Union of India, (1991) 4 SCC 584; Supreme Court Bar Association v. Union of India, (1998) 4 SCC 409. CA 5970/2021 However, in the case of an eventuality such as the instant case where the facts of the case are not covered by the statute, this Court under Article 142 will have the power to do complete justice by condoning the delay. We are of the view that since the delay in filling the application for refund in the instant case was due to the prolonged proceedings before the NCDRC, the application cannot be rejected on the ground of delay. A litigant has no control over judicial delays. A rejection of the application for refund would violate equity, justice and fairness where the applicant is made to suffer the brunt of judicial delay. Therefore, this is a fit case for the exercise of the power under Article 142 of the Constitution. 32 For the above reasons, we allow the appeal and set aside the impugned judgment and order of the learned Single Judge of the Bombay High Court dated 22 November 2018. As a consequence, we direct that the appellant would be entitled to a refund of the stamp duty which was paid at the time of the purchase of the e-stamp paper, conditional on the appellant returning the e-stamp paper to the Collector of Stamps, Mumbai. The refund shall be processed within a period of one month of the delivery of the e-stamp paper to the Collector. The appellant would be entitled to interest at the rate of 6% per annum from 16 July 2016 until the date of refund. In the circumstances of the case, there shall be no order as to costs. CA 5970/2021 33 Pending applications, if any, stand disposed of. .........\u2026.....\u2026.......\u2026\u2026\u2026\u2026\u2026\u2026........J. [Dr Dhananjaya Y Chandrachud] \u2026.....\u2026.....\u2026.......\u2026\u2026\u2026\u2026\u2026\u2026........J. 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{"id": "184940", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 389 OF 2008 [Arising out of Special Leave Petition (Civil) No. 15612 of 2008] ACADEMY OF GENERAL EDU., MANIPAL & ANR. ... APPELLANTS Versus B. MALINI MALLYA ... RESPONDENT JUDGMENT S.B. SINHA, J. 1. Leave granted. 2. `Yakshagana' is a form of ballet dance. It has its own heritage. Indisputably, Dr. Kota Shivarama Karanth (for short, \"Dr. Karanth\"), a Jnanapeeth awardee, who was a Novelist, Play Writer, Essayist, Encyclopediationist, Cultural Anthropologist, Artist, Writer of Science, Environmentalist. He developed a new form of `Yakshagana'. He was a Director of the appellant - institute. On or about 18.6.1994, he executed a Will in favour of the respondent. Dr. Karanth expired on 9.12.1997. Yakshagana Ballet dance as developed by Dr. Karanth was performed in New Delhi on or about 18.9.2001. Respondent filed a suit for declaration, injunction and damages alleging violation of the copyright in respect of the said dance vested in her in terms of the said Will stating that Dr. Karanth developed a new distinctive dance, drama troop or theatrical system which was named by him as `Yaksha Ranga' which in his own words mean \"creative extension of traditional Yakshagana\" and, thus, the appellants infringed the copyright thereof by performing the same at New Delhi without obtaining her prior permission. It was stated that Dr. Karanth had composed seven verses or prasangas for staging Yaksharanga Ballet apart from bringing in changes in the traditional form thereof on its relevant aspects, namely, Raga, Tala, Scenic arrangement, Costumes etc. These prasangas are: (i) Bhishma Vijaya; (ii) Nala Damayanthi; (iii) Kanakangi or Kanakangi Kalyana; (iv) Abhimanyu or Abhimanyu Vada; (v) Chitrangadha or Babruvahana Kalaga; (vi) Panchavati; and (vii) Ganga Charitha. 3. Plaintiff - respondent admittedly claimed copyright in respect of `literary and artistic works' in her favour in terms of clauses 11 and 12 of the said Will dated 18.6.1994, which read as under: \"11. Since I left the house `suhasa' I have been living in a specially built house \"Manasa\" of Smt. Malini Mallya, who has built it with borrowed money at her cost. She had joined my service as Copyist and later, she secured an employment in Life Insurance Corporation of India. Ever since 1974 till now in my old age she has been serving me with exemplary devotion and sincerity. And in this occasion I must also acknowledge with gratitude that she diligently cared and nursed my wife Leela Karanth during her prolonged illness till her last day. And she has cared and looked after me also during my illness which at times had been quite serious, enfeebling me for long period. In recognition of her devotion and sincere affection towards me in 1986 I have dedicated one of my novels namely, \"Antida Aparanji\" to her. I have also placed on record her invaluable services to me in my Memoirs, \"Hunchu Mansina Hathu Mukhagalu\" 1991 Edition. In my opinion, very long enduring and a signal service she has done to me and to my literary works is, in writing a bibliography of all my books- a highly meritorious and scholarly work involving so much of pains taking research, that it has been acclaimed and rated as the first of its kind in Kannada and highly appreciated by Critics and Scholars. Apart from this, she has collected and edited all my stray writings from 1924 onwards upto date in eight Sumptuous volumes which are being published by Mangalore University. This work also has brought her deserving fame and appreciation of Scholars. Such painstaking service in this direction has brought to light several of my hitherto untraced, forgotten and unknown writings and thereby giving them extended or renewed lease of life. For all these services, I hereby declare that after my death copyrights in respect of all my literary works shall vest with Smt. Malini Mallya and she alone shall be entitled to receive royalties of all my books and she shall be entitled to print, publish and republish and market the same. Whatever she may earn thereby shall be her exclusive income and property. No one else shall have any right or claims for the same. 12. From time to time I have distributed among my children all gold and silver jewels and ornaments and other valuables, which were gifted to me by my friends and admirers. And I have distributed all copper and bronze vessels and utensils among my children while leaving my former home \"Suhasa\" keeping only bare essential and necessary things and articles. Whatever movable properties, books, fittings, furniture, utensils etc. belonging to me into this house `Manasa' and my Car and cash money in hand after my death shall go to Smt. Malini Malya only. No one else shall have any claim or right over the same. Any outstanding due to me and Bank Deposits and whatever assets or properties not mentioned above, that is, residuary after my death shall belong to Smt. Malini Mallya alone.\" 4. Plaintiff- Respondent, inter alia, prayed for passing a judgment and decree against the defendants - appellants granting the following reliefs: \"1. A declaration that the plaintiff is the exclusive copyright holder in respect of Yaksharanga ballets, namely, Bhishma Vijaya, Kanakangi, Nala Damayanthi, Panchavati, Gaya Charitha, Chitrangadha, Abhimanyu Vadha, and for consequential permanent injunction restraining the Defendants, their agents, employees etc. from staging or performing any of the above said 7 ballets or Prasangas or any parts thereof. 1,000-00 2. Directing the Defendants to pay to the plaintiff damages of Rs.15,000/- towards infringement of her copyright on account of stating or performing Abhimanyu Vadha on 18-9-2001 at New Delhi. 15,000-00 3. Directing the Defendants to pay to the plaintiff interest on Rs.15,000/- at 15% p.a. from 18-9-2001 till now which is 95-00 4. Directing the Defendants to pay future interest on Rs.15,000/- at 15% p.a. till payment of the entire amount. 5. ................................... 6. .....................................\" 5. Appellants in their written statement, however, denied and disputed any copyright of the said dance in Dr. Karanth alleging that whatever work he had done was in the capacity of a Director of the Kendra with the assistance, finance and staff provided by the Organization of Mahatma Gandhi Memorial College Trust in respect whereof a Committee was formed under him by the Board of Trustees. It was furthermore contended that Dr. Karanth was appointed as the President of the Executive Committee of Yakshagana Kendra for a period of three years by the appellant and while holding the said post only he expired. 6. By reason of a judgment and decree dated 14.11.2003, the District Judge, Udupi decreed the said suit declaring the plaintiff - respondent as a person having the exclusive copyright in respect of seven Prasangas and that she had acquired the same by reason of a Will as a residuary legatee and the defendants - appellants or their employees or agents were restrained from performing the said seven ballets or Prasangas or any parts thereof in any manner as evolved distinctively by Dr. Karanth. 7. Appellants aggrieved thereby and dissatisfied therewith preferred an appeal before the Karnataka High Court which was marked as R.F.A. No. 271 of 2004. By reason of the impugned judgment and order dated 5.12.2007, the said appeal has been dismissed. 8. Appellants are, thus, before us. 9. Dr. Rajiv Dhavan, learned Senior Counsel appearing on behalf of appellants in his usual fairness conceded: i. The copyright in the literary work has been assigned by reason of the said Will in favour of the respondent in terms of clause 12 of the Will. ii. Dr. Karanth has made substantial changes in the original traditional form of the Yakshagana dance. Additions made in the form of the said dance including the Prasangas fell within the purview of `originality' in respect whereof copyright could be claimed. It was, however, urged: i. Keeping in view of the findings of the learned trial judge, it ought to have been held that no cause of action arose against the appellants in this case as the Institution had performed the said dance at New Delhi in the memory of Dr. Karanth without charging any fees. ii. The form of copyright as regards dramatic work as has been held by the High Court stating the same to be a part of the literary work is not correct as they connote two different things. iii. The form of injunction granted in favour of the plaintiff - respondent is not in terms of the provisions of the Copyright Act, 1957 as the appellant as an institution or otherwise is entitled to use the same in terms of clauses (a), (i) and (l) of sub-Section (1) of Section 52 thereof. 10. Mr. G.V. Chandrashekhar, learned counsel appearing on behalf of the respondent, on the other hand, would support the impugned judgment. 11. The Copyright Act, 1957 (for short, \"the Act\") was enacted to amend and consolidate the law relating to copyright. Section 2 is the interpretation section. Section 2(c) defines `artistic work' to mean (i) a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality; (ii) a work of architecture; and (iii) any other work of artistic craftsmanship. The word `author' is defined in Section 2(d) to mean, (i) in relation to a literary or dramatic work, the author of the work; (ii) in relation to a musical work, the composer; (iii) in relation to an artistic work other than a photograph, the artist; (iv) in relation to a photograph, the person taking the photograph; (v) in relation to a cinematograph film or sound recording, the producer; and (vi) in relation to any literary, dramatic, musical or artistic work which is computer-generated, the person who causes the work to be created. The term \"communication to the public\" as defined in Section 2(ff) reads as under: \"(ff) \"communication to the public\" means making any work available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion other than by issuing copies of such work regardless of whether any member of the pubic actually sees, hears or otherwise enjoys the work so made available. Explanation.- For the purposes of this clause, communication through satellite or cable or any other means of simultaneous communication to more than one household or place of residence including residential rooms of any hotel or hostel shall be deemed to be communication to the public\" Section 2 (ffa) defines the word \"composer\", in relation to a musical work, to mean the person who composes the music regardless of whether he records it in any form of graphical notation. Section 2(h) defines \"dramatic work\" to include any piece of recitation, choreographic work or entertainment in dumb show, the scenic arrangement or acting, form of which is fixed in writing or otherwise but does not include a cinematograph film. Section 2(o) defines \"literary work\" to include computer programmes, tables and compilations including computer databases. Section 2(qq) defines \"performer\" to include an actor, singer, musician, dancer, acrobat, juggler, conjurer, snake charmer, a person delivering a lecture or any other person who makes a performance. Section 2(y) defines \"work\" to mean any of the following works, namely:- (i) a literary, dramatic, musical or artistic work; (ii) a cinematograph film; (iii) a sound recording. Section 13 which occurs in Chapter III of the Act provides that subject to the provisions thereof and the other provisions of the said Act, copyright shall subsists throughout India in the following classes of works, that is to say,- (a) original literary, dramatic, musical and artistic works; (b) cinematograph films; and (c) sound recording. Section 17 of the Act deals with \"First owner of copyright\", in terms whereof, subject to the provisions of the Act, the author of a work shall be the owner of the copyright therein. Proviso (d) appended thereto states that in the case of a Government work, Government shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein. Sections 22, 23 and 52(1)(a), (i) and (l) of the Act, which are relevant for our purpose read as under: \"22. Term of copyright in published literary, dramatic, musical and artistic works.- Except as otherwise hereinafter provided, copyright shall subsist in any literary, dramatic, musical or artistic work (other than a photograph) published within the life time of the author until fifty years from the beginning of the calendar year following the year in which the author dies. Explanation- In this section, the reference to the author shall in the case of a work of joint authorship, be construed as a reference to the author who dies last. 23 - Term of copyright in anonymous and pseudonymous works.- (1) In the case of a literary, dramatic, musical or artistic work (other than a photograph), which is published anonymously or pseudonymously, copyright shall subsist until sixty years from the beginning of the calendar year next following the year in which the work is first published: Provided that where the identity of the author is disclosed before the expiry of the said period, copyright shall subsist until sixty years from the beginning of the calendar year following the year in which the author dies. (2) In sub-section (1), references to the author shall, in the case of an anonymous work of joint authorship, be construed,-- (a) where the identity of the authors is disclosed, as references to that author; (b) where the identity of more authors than one is disclosed, as references to the author who dies last from amongst such authors. (3) In sub-section (1), references to the author shall, in the case of a pseudonymous work of joint authorship, be construed,-- (a) where the names of one or more (but not all) of the authors arc pseudonymous and his or their identity is not disclosed, as references to the author whose name is not a pseudonym, or, if the names of two or more of the authors are not pseudonyms, as references to such of those authors who dies last; (b) where the names of one or more (but not all) of the authors arc pseudonyms and the identity of one or more of them is disclosed, as references to the author who dies last from amongst the authors whose names arc not pseudonyms and the authors whose names are pseudonyms and are disclosed; and (c) where the names of all the authors arc pseudonyms and the identity of one of them is disclosed, as references to the author whose identity is disclosed or if the identity of two or more of such authors is disclosed, as references to such of those authors who dies last. Explanation.--For the purposes of this section, the identity of an author shall be deemed to have been disclosed, if either the identity of the author is disclosed publicly by both the author and the publisher or is otherwise established to the satisfaction of the Copyright Board by that author. 52. Certain acts not to be infringement of copyright.- (1) The following acts shall not constitute an infringement of copyright, namely:- (a) a fair dealing with a literary, dramatic, musical or artistic work not being a computer programme for the purpose of-- (i) Private use including research; (ii) criticism or review, whether of that work or of any other work; xxx xxx xxx (i) the performance, in the course of the activities of an educational institution, of a literary, dramatic or musical work by the staff and student of the institution, or of a cinematograph film or a sound recording, if the audience is limited to such staff and students, the parents and guardians of the students and persons directly connected with the activities of the institution or the communication to such an audience of a cinematograph film or sound recording. xxx xxx xxx (l) the performance of a literary, dramatic or musical work by an amateur club or society, if the performance is given to a non-paying audience, or for the benefit of a religious institution.\" 12. Before adverting to the submissions made by the learned counsel for the parties, we may notice the issues framed in the suit, which are: \"i. Does plaintiff prove that late Dr. Shivaramaji Karanth had acquired copyright in respect of seven Yakshagana Prasangas and also in respect of Yakshagana dramatic or theatrical form i.e., Bhishma Vijaya, Nala Damayanthi, Kanakaangti or Kanakangi Kalyana, Abhimanyu or Abhimanyu Vadha, Chitrangadha or Babruvahana Kalaga, Panchavati Chritha followed in the plaint? ii. Has the plaintiff became entitled to the said right under the Registered Will dated 18.06.1994? iii. Does the plaintiff prove that her right under the said Will was infringed by the defendants?\" 13. Indisputably, in view of the submissions made at the bar, respondent had acquired copyright in respect of seven Yakshagana Prasangas as also in respect of Yakshagana dramatic or theatrical form as a residuary legatee in terms of clause 12 of the Will dated 18.6.1994. However, we may notice that whereas the trial court has proceeded on the basis that clause 12 of the Will shall apply in the instant case, the High Court opined that clause 11 thereof is attracted, stating: \".....No doubt, by reading para-12 of the `Will' in isolation, one can certainly arrive at the conclusion that the bequest made in favour of the plaintiff is in the nature of residuary bequest. But, that is not all, in the `Will'-Ex. P-1. I have already referred to para No. 11 of the `Will' while dealing with the topic dramatic works vis- `-vis literary work and therefore if the `Will' is read in its entirety and if we take into account, the benefits that flow from the bequest made by Dr. Karanth in favour of the plaintiff, it is not as if the plaintiff received the bequest only in respect of the things which form the residuary as mentioned in para-12 of the `Will' but the plaintiff also was given the copyrights in respect of literary works and all books as well as the right to print, republished and mark the literary works as well as the books.\" Referring to the new Encyclopaedia Britannica and Halsbury's Laws of England, that a literary work with dramatic elements in it would also be literary work, the High Court observed: \"Dramatic works also could contain in its, passages of great literary taste, as in the case of great plays of William Shakespear. Therefore, the main classification as literary work and dramatic work cannot be construed to mean that dramatic work has nothing to do with literary work. The only difference I see in them is that the dramatic work (Plays) forms the text upon which the performance of the plays rests whereas a `literary work' enables one to read the printed words. Neither of the two can be produced without the imaginative skill of the author.\" It was furthermore held: \"I am of the considered opinion that all the above changes brought about by Dr. Karanth in respect of Yakshagana Ballet leads to the inference that the imaginative faculties of Dr. Karanth permeated the entire Yakshagana Prasangas and thus a new look was given to the Yakshagana Ballets. I, therefore, hold that the bequest of copyright in literary works and books in favour of the plaintiff by Dr. Karanth, will have to be treated as the bequest covering the dramatic works also since I have also drawn the conclusion that the dramatic works is also a form of literature. Therefore, necessity of mentioning copyright separately in respect of dramatic works does not arise. The plaintiff, therefore, is entitled to copyright even in respect of the dramatic works namely the seven prasangas, by virtue of bequest made in her favour in respect of copyrights and books.\" 14. Broadly speaking, a dramatic work may also come within the purview of literary work being a part of dramatic literature. The new Encyclopaedia Britannica (Vol-IV) 15th Edition, provides the following information about \"Dramatic Literature. \"Dramatic Literature: the texts of plays that can be read, as distinct from being seen and heard in performance.\" We must, however, notice that the provisions the Act make a distinction between the `literary work' and `dramatic work'. Keeping in view the statutory provisions, there cannot be any doubt whatsoever that copyright in respect of performance of `dance' would not come within the purview of the literary work but would come within the purview of the definition of `dramatic work'. We, however, do not mean to suggest that any act of literary work will be outside the purview of the Will dated 18.6.1994. Our exercise in this behalf was only for the purpose of clarifying the provisions of the Act with reference to the findings arrived at by the High Court. 15. For the aforementioned reasons, we agree with Dr. Dhavan that paragraph 12 of the Will, namely, residuary clause shall apply in the instant case apart from the areas which are otherwise covered by paragraph 11 of the Will. The residuary clause will apply because it is well settled that no part of the stay lies in limbo. It was also not a case where respondent in any manner whatsoever waived her right. 16. The learned trial judge on issue No. 4 opined that plaintiff had not been able to prove actual loss or damage particularly having regard to the fact that Dr. Karanth had associated himself with the appellants for a long time. The learned trial judge recognized the equitable interest vested in the plaintiff - respondent. A declaratory decree, therefore, was passed. 17. We may notice at this stage that the form of injunction granted both by the learned trial judge as also by the High Court in favour of the plaintiff-respondent. The operative part of the judgment of the trial court reads as under: \"Defendants or their employees or agents are restrained from performing the above said 7 ballets or Prasangas or in parts thereof in any manner as evolved distinctively by Dr. Karanth by way of permanent injunction.\" The High Court, however, directed: \"(iii) As far as the restraint order passed by the Trial Court by granting permanent injunction to the plaintiff is concerned, the same is modified by ordering that if the appellants desire to stage any of the seven Yakshagana prasangas in the manner and form as conceived in all respects viz., costumes, choreography and direction by Dr. Karanth, the appellants can do so only in accordance with the provisions of the Copyrights Act, 1957 in view of copyright in seven prasangas vesting with the plaintiff.\" 18. Decree for injunction is an equitable relief. The courts while passing a decree for permanent injunction would avoid multiplicity of proceedings. The court while passing such a decree, is obligated to consider the statutory provisions governing the same. For the said purpose, it must be noticed as to what is a copyright and in respect of the matters the same cannot be claimed or otherwise the same is lodged by conditions and subject to statutory limitation. 19. In R.G. Anand vs. M/s Delux Films & ors. [(1978) 4 SCC 118], this Court held: \"46. Thus, on a careful consideration and elucidation of the various authorities and the case law on the subject discussed above, the following propositions emerge: 1. There can be no copyright in an idea, subject-matter, themes, plots or historical or legendary facts and violation of the copyright in such cases is confined to the form, manner and arrangement and expression of the idea by the author of the copyrighted work. 2. Where the same idea is being developed in a different manner, it is manifest that the source being common, similarities are bound to occur. In such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work. If the defendant's work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright. In other words, in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an act of piracy. 3. One of the surest and the safest test to determine whether or not there has been a violation of copyright is to see if the reader, spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original. 4. Where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work, no question of violation of copyright arises. 5. Where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two works are clearly incidental no infringement of the copyright comes into existence. 6. As a violation of copyright amounts to an act of piracy it must be proved by clear and cogent evidence after applying the various tests laid down by the case-law discussed above. 7. Where however the question is of the violation of the copyright of stage play by a film producer or a director the task of the plaintiff becomes more difficult to prove piracy. It is manifest that unlike a stage play a film has a much broader prospective, wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the idea. Even so, if the viewer after seeing the film gets a totality of impression that the film is by and large a copy of the original play, violation of the copyright may be said to be proved.\" Yet again in Eastern Book Company & ors. vs. D.B. Modak & Anr. [(2008) 1 SCC 1], this Court held: \"57. The Copyright Act is not concerned with the original idea but with the expression of thought. Copyright has nothing to do with originality or literary merit. Copyrighted material is that what is created by the author by his own skill, labour and investment of capital, maybe it is a derivative work which gives a flavour of creativity. The copyright work which comes into being should be original in the sense that by virtue of selection, coordination or arrangement of pre-existing data contained in the work, a work somewhat different in character is produced by the author. On the face of the provisions of the Copyright Act, 1957, we think that the principle laid down by the Canadian Court would be applicable in copyright of the judgments of the Apex Court. We make it clear that the decision of ours would be confined to the judgments of the courts which are in the public domain as by virtue of Section 52 of the Act there is no copyright in the original text of the judgments. To claim copyright in a compilation, the author must produce the material with exercise of his skill and judgment which may not be creativity in the sense that it is novel or non- obvious, but at the same time it is not a product of merely labour and capital. The derivative work produced by the author must have some distinguishable features and flavour to raw text of the judgments delivered by the court. The trivial variation or inputs put in the judgment would not satisfy the test of copyright of an author.\" 20. The High Court, in our opinion, should have clarified that the appellants can also take the statutory benefit of the provisions contained in clauses (a), (i) and (l) of sub-section (1) of Section 52 of the Act. Section 52 of the Act provides for certain acts which would not constitute an infringement of copyright. When a fair dealing is made, inter alia, of a literary or dramatic work for the purpose of private use including research and criticism or review, whether of that work or of any other work, the right in terms of the provisions of the said Act cannot be claimed. Thus, if some performance or dance is carried out within the purview of the said clause, the order of injunction shall not be applicable. Similarly, appellant being an educational institution, if the dance is performed within the meaning of provisions of clause (i) of sub-section (1) of Section 52 of the Act strictly, the order of injunction shall not apply thereto also. Yet again, if such performance is conducted before a non-paying audience by the appellant, which is an institution if it comes within the purview of amateur club or society, the same would not constitute any violation of the said order of injunction. 21. With the aforementioned modification in the order of injunction, this appeal is dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs. ......................................J. [S.B. Sinha] .....................................J. [Lokeshwar Singh Panta] .....................................J. [B. 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{"id": "97694707", "text": "1 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.447 OF 2021 (Arising out of SLP (CRL.) No. 1549 of 2021) SANDEEP KHAITAN, RESOLUTION PROFESSIONAL FOR NATIONAL PLYWOOD INDUSTRIES LTD. \u2026 APPELLANT(S) VERSUS JSVM PLYWOOD INDUSTRIES LTD. & Anr. \u2026 RESPONDENT(S) J U D G M E N T K.M. JOSEPH, J. Leave granted. 1. The appeal is directed against order dated 04.02.2021 passed by the Hon\u2019ble High Court of Guwahati. In the impugned order, the High Court has allowed an interlocutory application filed by Signature Not Verified Digitally signed by Indu Marwah Date: 2021.04.22 the Respondent No. 1 to allow it to operate its 15:30:43 IST Reason: bank account maintained with the ICICI Bank Bhubaneswar and to unfreeze the bank account of its creditors over which the lien has been created and the accounts frozen pursuant to the lodging of an FIR by the appellant before us. It was made subject to conditions. 2. An application under Section 7 of the Insolvency and Bankruptcy Code, 2016, hereinafter referred to as the IBC was admitted on 26.08.2019 against one National Plywood Industries Limited (NPIL). The Appellant was appointed as the Interim Resolution Professional. A moratorium also came to be passed by the very same order within the meaning of Section 14 of the IBC. The Appellant came to be appointed as the Resolution Professional by an order dated 08.11.2019. In the meantime, the Respondent No.1 claiming to be an operational creditor lay the claim for the amounts due to it from the Corporate Debtor before the Appellant vide communication dated 22.11.2019. It would appear that the former Managing Director of the Corporate Debtor challenged the order of the NCLT, Guwahati, admitting the application under Section 7. The NCLAT by order dated 24.11.2019 dismissed the appeal interalia holding that the application under Section 7 was not barred by limitation. Civil Appeal No. 9142 of 2019 filed by the former Managing Director of the Corporate Debtor came to be however allowed by this Court by an order dated 20.01.2020. The NCLT was directed to consider the matter in accordance with law. It would appear that on 28.01.2020 interlocutory application 7 of 2020 filed by the former Managing Director of the Corporate Debtor seeking an injunction restraining the Respondents therein from interfering in the operation of the Corporate Debtor and to disperse the cost of the CIRP was disposed of interalia as follows: - i. \u201cToday the Respondents submitted across the Bar that except ratifying the expenses of the IRP, no major decisions have been taken by the COC in the yesterday\u2019s COC meeting. Both the respondents informed that they are conscious about the order passes by the Hon\u2019ble Supreme Court and the legal consequences thereof. ii. In view of the above submissions of the respondents, this Tribunal expects that the respondents would maintain status-quo in respect of the IRP proceedings. As the main company petition was remanded back to the Hon\u2019ble NCLAT for fresh disposal in accordance with law, this Tribunal is of the considered opinion that the petitioner has to approach the Hon\u2019ble NCLAT for any further directions in the above matter and accordingly above application stands disposed of with the above observations. Even otherwise, the order of admission of the company petition has not attained finality and, therefore, no interim orders as prayed for needs to be passed today. iii. In the result, IA No. 07 of 2020 is disposed of with the above observations.\u201d Thereafter there is order dated 20.03.2020 passed which we will advert to. 3. It is the case of the Appellant that the former Managing Director of the Corporate Debtor in conspiracy with the Respondent No.1 engaged in an illegal transaction to the tune of Rs. 32.50 lakhs without authority from the Appellant and in violation of Section 14 of the IBC. It is his complaint that initially, the Managing Director made a transaction of Rs. 500. Thereafter, he proceeded by virtue of 4 consecutive transactions to transfer a sum of Rs. 32.50 lakhs to the Respondent No. 1. It is also complaint of the Appellant that the former Managing Director proceeded to transfer another sum of Rs. 3.29 lakhs from another account and the amount was transferred to his close associate. 4. On 23.04.2020, the Appellant filed a cyber complaint. This was followed on the same date by filing an application under Section 19 read with Section 23 (2) of the IBC alleging non corporation by the previous management of the Corporate Debtor. On 27.04.2020, the Appellant got lodged an FIR. On 04.05.2020 the ICICI Bank created a lien upon the bank account of the Respondent No. 1 based on the allegedly illegal transaction. The next development to be noticed is the order dated 20.05.2020 passed by the NCLT, Guwahati. The order is passed in I.A. No. 37 of 2020. The relief sought therein was for direction to the Directors of the Corporate Debtor to hand over the management of the company. The order reflects the controversy relating to the payment of Rs. 32.50 lakhs violating the moratorium. Tribunal finds that the directors of the Corporate Debtor were not giving maximum assistance. On the basis of its findings the tribunal issued directions to the suspended Board of the Corporate Debtor to cooperate with the Appellant. The Auditors were to complete the audit expeditiously interalia. More importantly the Directors were directed to refund the amount withdrawn less the amount if any paid to the alleged supplier as the cost of raw materials. The interlocutory application was posted before the regular bench for hearing after lifting the lockdown. 5. A perusal of the order reveals that the Directors of the company sought to defend the withdrawal of Rs.32.50 lakhs as one intended to pay for the raw materials. It is further noticed that the Tribunal noticed that there was no proof for the same. More importantly it was found that even if done to discharge debt due to supplies during the CIRP, without permission and knowledge of the Resolution Professional, it was in violation of Section 14 of the Code. 6. The Appellant moved an application for review of the order dated 20.05.2020. The Tribunal in its order dated 05.06.2020 noticed the limitations flowing from Rules 154 and 155 of the NCLT, Rules, 2016 in the matter of review. It is observed that for the reasons highlighted in the 20.05.2020 the former Directors of the Corporate Debtor are found prima facie liable to refund the amount unauthorisedly withdrawn from the account of the Corporate Debtor. It is also noticed that the Directors of the suspended board were not made respondents. The application for review came to be dismissed. 7. The genesis of the impugned order is the FIR lodged against the Appellant and arose from the payment effected into the account of Respondent No.1 in a sum of Rs. 32.50 lakhs. The said FIR came to be challenged in a petition under Section 482 of the Cr.P.C. by the Respondent No.1 by filing Criminal Petition No. 454 of 2020. In the same the Appellant also filed I.A. No. 453 of 2020. 8. On 19.01.2021 the NCLT, Guwahati passed an order in I.A No. 37 of 2020. By the said order the Appellant was directed to discharge his duties as per the provisions of the IBC. Thereafter, it also passed the following directions: - i. \u201cThe Learned Counsel for the Respondents has confirmed that the Suspended Management has been co-operating and providing assistance to RP to complete the CIRP in time. The Corporate Debtor is directed to submit its reply Affidavit to the allegations made relating to the transactions of Rs. 35.795 lakhs serving a copy upon the RP. ii. Any amount of the Corporate Debtor lying in any Bank is to be transferred to the account being operated by the RP. Banks having account of the Corporate Debtor are directed to lift the lien, if any, on any amount of the Corporate Debtor and allow the operation of the account by the RP only. iii. The RP is directed to utilize the funds of the Corporate Debtor under CIRP judiciously keeping the Unit in its full operation.\u201d 9. Thereafter, in the petition filed by the Respondent No.1 under Section 482, the High Court admitted the petition. The case was directed to be listed for regular hearing in usual course. (According to the Appellant the High Court had directed investigation to be continued. This is not seen reflected in the order which is produced). In the I.A No. 453 of 2020 filed in the Section 482 resulting in the impugned order, the prayers sought has already been noted. It is to allow the Respondent No.1 and its creditors to operate their bank account over which lien has been created and those accounts which have been frozen based on the FIR dated 27.04.2020. THE IMPUGNED ORDER 10. After noticing the contentions of the parties, the Learned Single Judge in the impugned order proceeds to hold as follows:- i. \u201cFrom the material on record, it is apparent that there was business relation between the petitioner company and the NPIL, which is evident from the various documents annexed to the petition. Only question raised in this FIR is that the money was transferred by the suspended CMD without any authority, inasmuch as, the entire state of affairs of NPIL was vested with the Respondent No. 2, who has been appointed as resolution professional. Only incriminating allegation against the petitioner is that the suspended CMD has personal interest in the petitioner company being an associate company, which is however, a disputed fact required to be investigated by police. ii. Be that as it may, having considered the entire gamut of the matter and the nature of accusation brought against the present petitioner, I am of the view that freezing of all the bank account as indicated above would certainly cause unnecessary hardship, which may not be necessary for the investigation of the present FIR in view of the nature of the accusation made therein as well as in view of the offer made by the petitioner to furnish a bond. Therefore, in my consider view, the petitioner is entitled to the interim relief as sought for. Accordingly, it is provided that the lien created upon the bank account no. 149905001306 maintained with the ICICI Bank Limited, Chandrasekarpur Branch, Bhubaneswar be lifted, the petitioner and its creditors shall be allowed to operate the bank account over which lien has been created and the accounts have been frozen pursuant to the instruction of the Respondent No. 2 in connection with Margherita P.S. Case No. 0112/2020, until further order of the Court. iii. It is however, made clear that the interim relief granted to the petitioner as above with regard to unfreezing the bank account and lifting of lien shall be subject to the condition that the petitioner shall withdraw the WP (C) No. 118/2020 filed before the Itanagar Permanent Bench of this Court and furnishing an indemnity bond undertaking to refund the amount of Rs. 32.50 Lakhs if required, subject to final outcome of the criminal case.\u201d 11. We heard the Learned Counsel for the Appellant Shri Anand Varma and the Learned Counsel for the Respondent No. 1, Shri Harish Pandey. The State is represented by Shri Shuvodeep Roy. SUBMISSIONS 12. The Learned Counsel for the Appellant contended that the impugned order proceeds on an erroneous basis namely that the allegations about the co-accused (former Managing Director of the Corporate Debtor) having an interest in the Respondent No.1 Company was a disputed fact which had to be investigated. It is the case of the Appellant that there is a report of the auditing firm. Also, the said finding of the High Court is contrary to the documents of the Respondent No. 1 itself. It is also urged that the High Court itself has permitted the investigation to go on in the petition under section 482. Secondly, he pointed out that the impugned order was contrary to Section 14 of the IBC. He drew support from the judgment of this Court in P Mohanraj vs. M/S. Shah Brothers Ispat Pvt. Ltd. in Civil Appeal No. 10355 of 2018. According to him, the whole purpose of the moratorium would be defeated if members of the previous management of the Corporate Debtor are left free to transfer the funds of the Corporate Debtor. The Respondent No. 1 was a related party of the Corporate Debtor. He reiterates that with the appointment of Appellant as the Resolution Professional under Section 25 (2)a of the IBC he is to take custody and control of all the assets of the Corporate Debtor. Finally, he also emphasized the nature of the jurisdiction under Section 482 of the Cr.P.C. The High Court has overlooked the limits of its power in passing the impugned order, he complains. He points out that the order admitting the application under section (7) has not been stricken by the remand by this Court of the appeal against the order admitting the application. 13. Per contra Shri Harish Pandey, Learned Counsel, contended that the order may not be interfered by this Court. The Respondent No.1 was a related party and it was always known to be such related party. He referred to the fact that the Respondent No.1 was supplier of raw material to the Corporate Debtor. He pointed out goods worth more than Rs.2 crores have been supplied by it to the Corporate Debtor. Payments were being made. In fact, a sum of more than Rs.39 lakhs is further due from the Corporate Debtor to the Respondent No. 1. It is emphasized as a MSME it would cause grave prejudice to it if the impugned order is set aside. 14. It is the case of the Respondent No. 1 further that the business relationship between the Respondent No. 1 and Corporate Debtor has existed for more than 15 years. The Corporate Debtor has been declared a sick industry on 18.04.2006. It was nursed back by the Respondent No. 1. Our attention is drawn to the minutes of the first meeting of the Committee of Creditors dated 23.09.2019. The minutes reveal that committee of creditors observes that a substantial part of the raw materials is purchased from Respondent No.1 and that the relatives of the Corporate Debtor directors or shareholders hold more than 51 percent shareholding of the first respondent. It is further noted that the processes to assess the veracity and reasonableness of the transaction in such situation were let known and the purchases/sales must be benchmarked against arm\u2019s length transactions and open market transactions. (We may also notice that the meeting resolved that all the banks were to act on the instructions of the appellant interalia.) It is the case of the Respondent No. 1 that right from the beginning, it was known that the Respondent No. 1 was a related party. It is the further case of the Respondent No. 1 that its claim for over 6 crores of rupees was vetted, verified and admitted by the Appellant. After the commencement of CIRP Respondent No. 1 had made regular substantial supplies to the Corporate Debtor for which the payment were being made (they relate to the period from 26.08.2019 to 31.03.2020). This is shown as amounting to Rs. 2,70,84,982. The Respondent No. 1 lays store by the order of the NCLT, Guwahati dated 28.01.2020 which we have already referred to. E-mails addressed to the Appellant to clarify did not evoke any response. In March 2020, orders were placed by the Corporate Debtor for approximately Rs. 30 lakhs. The lockdown intervened. On 18.04.2020 it is not disputed that the Corporate Debtor made a payment of Rs 32.50 lakhs through online net banking transfer against material supplied during the period that the corporate debtor was under CIRP. The Learned Counsel for the Respondent No.1 would point out that the order of the NCLT dated 20.05.2020 passed by the NCLT directed the directors of the Corporate Debtor to refund the amount withdrawn less any amount supplied to the alleged supplier. It is therefore, pointed out creating a lien on the accounts of the Respondent no. 1 was not justified. The Learned Counsel also drew our attention to the order dated 24.03.2021 passed by the NCLT Guwahati Bench. This is in an effort at showing the manner in which the appellant has been functioning. The Tribunal in the said order refers to the Impugned Order and the Interim order passed by this Court in this matter. The Tribunal noted that the production has been suspended and layoff notice is also issued in regard to the Corporate Debtor. The objectives of the IBC are being defeated on the basis of the claims and the FIR interalia. The Appellant was directed to file the copy of the FIR in this case among other documents. The Learned counsel for the Respondent no. 1 would submit that the having regard to the orders passed by the tribunal the Impugned Order passed by the High Court may not be interfered with. Having regard to the dismissal of the review petition filed against the 20.05.2020 there is no merit in the present appeal. 15. The Learned Counsel for the Appellant would point out that the Appellant is prevented from disbursing the salary of the workers. Nearly four months\u2019 salary would be disbursed with the amount which was paid by the former management without any authority as noticed. It is the case of Appellant that the transactions between the Respondent No.1 and the Corporate Debtor was not authorised by the Appellant during the period from 21.02.2020 to 27.04.2020. FINDINGS 16. The contours of the jurisdiction under 482 of the Cr.P.C. are far too well settled to require articulation or reiteration. Undoubtedly, in this case by 26.08.2019 an application filed under section 7 of the IBC was admitted, the appellant appointed as the interim resolution professional and what is more a moratorium declared. With the declaration of the moratorium the prohibitions as enacted in section 14 came into force. It is clear that the assets of the company would include the amounts lying to the credit in the bank accounts. There cannot be any dispute that well after the order under section 14 was passed, a sum of Rs. 32.50 lakhs has been remitted into the account of Respondent No.1 company. No doubt it is the definite case of the Respondent No.1 that it has had business relations with the Corporate Debtor since more than 15 years and that the amount remitted in its account represented the price of the materials supplied to the Corporate Debtor. Apart from this amount a sum of rupees more than Rs.39 lakhs is still due. It is to be noticed that though an appeal was filed against the order admitting the petition under Section 7 the same was dismissed by the NCLAT. The appellate order was undoubtedly set aside by this court and the appeal remanded to the NCLT for its consideration. We would think that setting aside the appellate order of the NCLAT by this court and remanding the appeal would not have the effect of setting aside the order admitting the application. Initially, as was noticed by us an order was passed on 28.02.2020. The ambiguity created by the said order was removed by the subsequent order of the Tribunal dated 20.03.2020. In other words, by the order dated 20.03.2020 the NCLT, Guwahati ordered that the appellant was at liberty to act as per law and the words used in the earlier order dated 28.02.2020 relied upon by the Respondent No.1 were found to be a mere casual observation which did not culminate into any direction. We need not say anything further particularly in view of the fact that there is an FIR and which is pending consideration in the High Court also. It is significant only for us to notice that the Appellant is essentially aggrieved by the transactions representing a sum of Rs. 32.50 lakhs all of which took place after order dated 20.03.2020. 17. It may be true that in the interim order passed by the NCLT Guwahati, the Tribunal had directed the Directors to refund the amount of the Corporate Debtor less any amount paid for supplies. It is also true that the review petition filed by the Appellant is dismissed, essentially based on the limitations on the power of review. 18. The provisions of the IBC contemplate resolution of the insolvency if possible, in the first instance and should it not be possible, the winding up of the Corporate Debtor. The role of the insolvency professional is neatly carved out. From the date of admission of application and the appointment of Interim Resolution Professional, the management of the affairs of the Corporate Debtor is to vest in the Interim Resolution Professional. With such appointment, the powers of the Board of Directors or the partners of the Corporate Debtor as the case may be are to stand suspended. Section 17 further declares that the powers of the Board of Directors or partners are to be exercised by the Interim Resolution Professional. The financial institutions are to act on the instructions of the Interim Resolution Professional. Section 14 is emphatic, subject to the provisions of sub section (2) and (3). The impact of the moratorium includes prohibition of transferring, encumbering, alienating or disposing of by the Corporate Debtor of any of its assets. 19. Sub section 2 reads as follows:- \u201cThe supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.\u201d 20. Essential goods and services referred to in Section 14(2) has been defined by Regulations. Regulation 32 of the INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016, reads as follows:- \"Essential Supplies. The essential goods and services referred to in section 14(2) shall mean- i. Electricity; ii. water; iii. telecommunication services; and iv. information technology services, to the extent these are not a direct input to the output produced or supplied by the corporate debtor. Illustration- Water supplied to a corporate debtor will be essential supplies for drinking and sanitation purposes, and not for generation of hydro-electricity.\u201d 21. Also, undoubtedly Section (2A) of Section 14 of the THE INSOLVENCY AND BANKRUPTCY CODE, 2016 provides as follows: \u201cWhere the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified.\u201d 22. This provision was inserted with effect from 28.12.2019. No doubt under this provision goods or services not covered by Section 14(2) are also covered. The call however is to be taken by the IRP/RP. Raw material supply could fall within the provision. The IRP/RP must take a decision guided purely by the object of the IBC and the provisions and the factual matrix. 23. With the appointment of Committee of Creditors, a Resolution Professional is to be appointed. The Resolution Professional is thereafter to conduct the resolution process and manage the operations. Section 23 (2) makes it clear that his power is the same as the powers of the Interim Resolution Professional. Undoubtedly, the Resolution Professional is bound to seek prior approval of the Committee of Creditors in maters covered by Section 28. 24. We have to also in this context bear in mind that the High Court appears to have, in passing the impugned order, which is an interim order for that matter, overlooked the salutary limits on its power under Section 482. The power under Section 482 may not be available to the Court to countenance the breach of a statuary provision. The words \u2018to secure the ends of justice\u2019 in Section 482 cannot mean to overlook the undermining of a statutory dictate, which in this case is the provisions of Section 14, and Section 17 of the IBC. 25. It would appear to us that having regard to the orders passed by the NCLT admitting the application, under Section 7, and also the ordering of moratorium under Section 14 of the IBC and the orders which have been passed by the tribunal otherwise, the impugned order of the High Court resulting in the Respondent No. 1 being allowed to operate the account without making good the amount of Rs 32.50 lakhs to be placed in the account of the Corporate Debtor cannot be sustained. The Learned Counsel for the Appellant has also no objection in the Respondent No. 1 being allowed to operate its account subject to it remitting an amount of Rs. 32.50 lakhs into the account of the Corporate Debtor. In such circumstances, Appeal is allowed. The Impugned order is modified as follows: i. The Respondent No.1 is allowed to operate its account subject to it to first remitting into the account of the Corporate Debtor, the amount of Rs 32.50 lakhs which stood paid to it by the management of the Corporate Debtor. The assets of the Corporate Debtor shall be managed strictly in terms of the provisions of the IBC. The Appellant as RP will bear in mind the provision of Section 14 (2A) and the object of IBC. We however make it clear that our order shall not be taken as our pronouncement on the issues arising from the FIR including the petition pending under Section 482 of the Cr.P.C. ii. We also make it clear that the judgment will not stand in the way of the Respondent No.1 pursuing its claim with regard to its entitlement to a sum of Rs.32.50 lakhs and any other sum from the Corporate Debtor or any other person in the appropriate forum and in accordance with law. There will be no order as to costs. ......................J. (UDAY UMESH LALIT) ......................J. (K.M. 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{"id": "48386631", "text": "HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Judgment Reserved on 20.11.2020 Judgment Delivered on 08.12.2020 Court No. - 5 Case :- WRIT TAX No. - 646 of 2020 Petitioner :- M/S Indian Oil Corporation Limited Respondent :- Union Of India And 2 Others Counsel for Petitioner :- Shubham Agrawal,Sanyukta Singh Counsel for Respondent :- A.S.G.I.,Gaurav Mahajan Hon'ble Surya Prakash Kesarwani,J. Hon'ble Dr. Yogendra Kumar Srivastava,J. (Per Hon'ble Surya Prakash Kesarwani J.) 1. Heard Sri Shubham Agrawal, learned counsel for the petitioner and Sri Gaurav Mahajan, learned counsel for the respondent nos. 2 & 3. Learned counsel for the petitioner submits as under: 2. This writ petition has been filed for the following relief:- \"(a) Certiorari quashing and setting aside the SVLDRS-3 dated 26.2.2020 (Annexure No.12) passed by the Designated Committee; (b) Mandamus directing the Designated Committee to accept the SVLDRS-1 Declaration (Annexure No.8) filed by the petitioner. (c) Mandamus directing the respondent No.1 to delete SKO from Fourth Schedule of Central Excise Tariff Act, 1944, retrospectively, wef 1.7.17; Or in the alternative (d) Declaring continued existence/non-deletion of SKO from the Fourth Schedule of Central Excise Tariff Act, 1944, after 1.7.17, to be violative of section 174 of Central Goods and Service Tax 2017 and also violative of Entry No.84 of List - I (Union List) of the Seventh Schedule to Constitution of India, which has been amended by the Constitution (One Hundred and First) Amendment Act, 2016.\" 3. This writ petition was heard at length on 20.11.2020 and the submissions made by learned counsels for the parties were noted. Submission on behalf of the petitioner 4. Learned counsel for the petitioner has submitted as under :- (i) A show cause notice dated 17.10.2007 under the Central Excise Act, 1944 was issued to the petitioner for excise duty of Rs.2,96,99,001/- not paid for the period from 01.11.2002 to 31.03.2005. Penalty was also sought to be imposed under Section 11-A of the Central Excise Act 1944 read with Rule 25 of the Central Excise Rules, 2002. (ii) A scheme known as \"Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019\" was enacted by Finance (No.2) Act, 2019. Section 124 of the Finance Act, 2019 provides that tax dues relatable to a show cause notice pending as on 30.06.2019 for more than Rs. 50 lacs shall be available to a declarant to give him relief of 50% of the tax dues. Section 125(1)(h) of the Act 2019 provides that persons seeking to make declaration with respect to excisable goods set forth in the 4th Schedule to the Central Excise Act, 1944 shall not be eligible to make a declaration under this scheme. Disputed commodity i.e. SKO is mentioned in the 4th Schedule of the Central Excise Act as amended by Taxation Laws (Amendment) Act, 2017 (No.18 of 2017) whereby the 2nd Schedule to the Central Excise Tariff Act was renumbered with certain modifications as 4th Schedule, but inclusion of SKO in the 4th Schedule to the Central Excise Act is not permissible inasmuch as after amendment of entry 84 of List 1 of the 7th Schedule to the Constitution of India, the parliament has power to impose Central Excise duty only in respect of 5 items, namely, petroleum crude, high speed diesel oil, motor spirit, natural gas aviation turbine fuel and tobacco and tobacco products which does not include SKO. Therefore, the SKO could not have been included in the 4th Schedule. (iii) The application of the petitioner for taking benefit of the aforesaid scheme has been arbitrarily rejected by impugned communication dated 26.02.2020 on the ground that as per Section 125 (1)(h) of the Finance (No.2) Act, 2019 the product i.e. SKO is set forth in the 4th Schedule of Central Excise Tariff Act, 1944 and, therefore, the application to avail benefits of SVLDRS scheme can not be accepted. (iv) Since SKO is not an excisable goods. Therefore, the petitioner could not have been denied the benefit of SVLDRS scheme by the impugned order/communication dated 26.02.2020. (v) In view of the amended entry 84 of list 1 of the 7th Schedule of the Constitution (one hundred and 1st Amendment) Act, 2016, the 4th Schedule to the Central Excise Tariff Act mentioning therein SKO by the Taxation Laws (Amendment) Act, 2017 (No.18 of 2017) is violative of Section 174 of the Central GST Act which has repealed the Central Excise Act except with respect to the matters provided in the amended entry 84 of list 1 of the 7th Schedule. (vi) Since GST is being charged as mentioned in the 4th Schedule (List of goods at 5% rate) at Serial No.164 on \"Kerosene PDS\", therefore, the existence of SKO (Super Kerosene Oil) in the 4th Schedule to the Central Excise Act showing rate of duty as nil, can not be continued under the Central Excise Tariff Act. Submission on behalf of the respondents 5. Sri Gaurav Mahajan, learned counsel for the respondent nos. 2 & 3 supports the action of the respondents and the impugned order. He further submits that proper procedure was followed before rejecting the application of the petitioner. 6. Sri Gaurav Mahajan, further submits that SKO continues to be an excisable goods falling under the 4th Schedule of the Central Excise Act. Facts 7. Briefly stated facts of the present case are that the petitioner is engaged in the manufacturing and clearance of various petroleum products falling under Chapter 27 of the Central Excise Tariff Act, 1985 (hereinafter referred to as \"the Tariff Act\"). During the period 01.11.2002 to 31.03.2005 petitioner paid Central Excise duty on the basis of Central Excise invoice in which value was shown much lower than actual price recovered by the petitioner from the buyers as per the commercial invoices in respect of Superior Kerosene Oil (SKO). Consequently, a show cause notice dated 17.10.2007 under Section 11 of the Central Excise Act, 1944 (hereinafter referred to as \"the Act 1944\") was issued to the petitioner by the Commissioner of Central Excise, Lucknow, requiring them to show cause as to why Central Excise duty amounting to Rs.2,96,99,001/- short paid for the period from 01.11.2002 to 31.03.2005 may not be recovered under Section 11-A and penalty under Section 11-AC of the Act, 1944 read with Rule 25 of the Central Excise Rules, 2002, be not imposed. The petitioner submitted reply dated 17.12.2007 in which the petitioner admitted lower amount shown in the Central Excise invoices and higher amount shown in the commercial invoices but took the stand that subsidy received from the Government will not form part of the value for the purposes of payment of Central Excise Duty. According to the petitioner final order has not yet been passed pursuant to the aforesaid show cause notice. In the mean time, the Finance (No.2) Act, 2019 enacted \"Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019\" (hereinafter referred to as \"Sabka Vishwas Scheme\") which was applied to demands under several enactments including Central Excise Act, 1944. Section 124 of the Finance (No.2) Act, 2019, provides for relief available under the Scheme. Section 125 provides that all persons shall be eligible to make a declaration under the Scheme except classes of persons provided in Clauses (a) to (h). Relevant Clause (h) of Section 125 (1) of the Finance (No.2) Act, 2019 i.e. Sabka Vishwas Scheme is reproduced below:- \"Section 125 Declaration under Scheme (1) All persons shall be eligible to make a declaration under this Scheme except the following, namely :- (a) .... (b) .... (c) .... (d) .... (e) .... (f) .... (g) .... (h) Persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 (1 of 1944).\" 8. Rule 3 of the \"Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019\" (hereinafter referred to as \"Sabka Vishwas Rules\") provides for declaration under Section 125 electronically. Rule 4 provides for auto acknowledgment. Rule 6 provides for verification of declaration by the designated committee and issue of estimates etc. in Form No. SVLDRS - 3. 9. The designated committee issued the impugned communication dated 26.02.2020 to the petitioner with the remarks as under :- \"As per Section 125 (h) of the Finance (No.2) Act, 2019, the product i.e. SKO is set forth in the Fourth Schedule of Central Excise Tariff Act, 1944, therefore, the application to avail benefits of SVLDRS Scheme can not be accepted\" . 10. Aggrieved with the aforesaid communication, the petitioner has filed the present writ petition. Discussion and Findings 11. By the constitution (One Hundred and First Amendment) Act 2016, dated 08.09.2016, Article 246-A was inserted providing for Special Provision with respect to goods and service Tax. By Section 17 of same Amendment Act, the 7th Schedule to the Constitution was amended by substituting in list -1 - Union List, the entry 84 as under :- Entry 84 of List - 1 - Union List 12. Duties of excise on the following goods manufactured or produced in India, namely :- \"(a) Petroleum Crude; (b) High Speed Diesel; (c) Motor Spirit (commonly known as petrol); (d) natural gas (e) aviation turbine fuel; and (f) tobacco and tobacco products.\" 13. In K.C. Sachdeva Vs. State 1976 Cri.L.J. 1208(para 4) learned Single Judge has observed that the \"Petroleum\" includes \"Kerosene. In its own case i.e. in Indian Oil Corporation Limited Vs. Commissioner of Central Excise Vadodara (2010) 12 SCC 750 Hon\"ble Supreme Court while referring to the Chapter heading 27 of the erstwhile Central Excise Tariff Act 1985 and Notification No.5/98-CE dated 2.6.1998 and Notification No.5/99-CE dated 28.2.1999 noticed the Notification in which it is mentioned that \"Kerosene\" is any hydro carbon oil (excluding Colza Oil and white spirit) which has a smoke point of 18 mm or more. 14. It appears that on account of the one hundred and First constitution Amendment Act, 2016, the Goods and Service Tax laws were enacted and Central Excise Act, 1944 was also amended by Act 18 of 2017. By Section 174 of the Central Goods and Service Tax Act, 2017 assented by the President on 12.04.2017 and enforced w.e.f. 01.07.2017 certain enactments including the Central Excise Act, 1944 (except as respects goods included in entry 84 of the Union List of the 7th Schedule to the Constitution) and the Central Excise Tariff Act, 1985, have been repealed with a saving clause in sub - Section (2). 15. By Act 18 of 2017 (w.e.f. 01.07.2017) several amendments were made in the Central Excise Act, 1944. The relevant amended provisions for the purposes of the present case are Section 2(d), Section 2(f) (ii) and the Fourth Schedule to the Act. The Fourth Schedule has been substituted with reference to the provisions of Section 2(d) and Section 2(f)(ii) of the Act, 1944. Section 2(d) and 2(f)(ii) are reproduced below:- \"Section 2(d) \"Excisable goods\" means \"goods\" specified in the Fourth Schedule as being subject to a duty of excise and includes salt. Explanation.- For the purposes of this clause, \"goods\" includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable\" Section 2(f)(ii) \"Manufacture\" includes any process - (i) ...... (ii) .....which is specified in relation to any goods in the section or Chapter notes of the Fourth Schedule as amounting to manufacture; or (iii)...... and the word \"manufacturer\" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account.\" 16. Section 3 of the Act, 1944 as amended by Act 18 of 2017 is the charging Section. It provides for leavy and collection of duty of excise to be called Central Value Added Tax (CENVAT) on all excisable goods which are produced or manufactured in India, at the rates set forth in the Fourth Schedule. Sub-Section 3 of Section 3 empowers the Central Government to provide by Notification rates of duty and tariff values with respect to the articles enumerated in the Fourth Schedule. Thus, all the items which are enumerated in the Fourth Schedule are excisable goods in terms of the provisions of Section 2(d), read with Section 2(f) and are liable to duty at the notified rates under the charging Section 3 of the Act. 17. \"Manufacture\" is the taxable event under the Central Excise Act, 1944 while under Section 9 of the CGST Act/UPGST Act, the event of taxation is the supply of goods or services except the supply of alcoholic liquor for human consumption. Sub-Section 2 of Section 9 of the CGST Act/UPGST Act empowers to levy tax on supply of petroleum crude, high speed diesel oil, motor spirit, natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. Thus, GST may be levied even on such goods which are excisable goods under the Central Excise Act, 1944. Therefore, Superior Kerosene Oil (SKO) shall continue to be an excisable goods under the Central Excise Act, 1944 even if GST on supply of Kerosene Oil (PDS) is levied under the GST laws. 18. Perusal of the Fourth Schedule to the Central Excise Act, 1944 and the provisions of Section 2(d) read with Section 2(f)(ii) leaves no manner of doubt that Superior Kerosene Oil is an excisable goods under the Central Excise Act, 1944, even if no rate of duty has been notified by the Central Government under the Act, 1944. Section 125(1)(h) of the Finance (No.2) Act, 2019 (Sabka Vishwas Scheme) specifically excludes applicability of the \"Sabka Vishwas Scheme\" with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act 1944. Since the 'SKO\" is an excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944, therefore, the petitioner was not eligible to make a declaration under the Scheme in view of Section 125 of the Finance (No.2) Act 2019. 19. Perusal of the Fourth Schedule shows that against the goods Superior Kerosene Oil \"......\" is appearing under the column rate of duty. Clause 4 of the additional notes to the Fourth Schedule provides that \"......\" against any goods denotes that Central Excise Duty under this Schedule is not leviable on such goods. It means that S.K.O. is an excisable goods as defined in Section 2(d) read with Section 2(f) and Section 3 (Charging Section) of the Central Excise Act, 1944 but presently no duty is leviable in the absence of rate of duty in the Fourth Schedule to the Act, 1944. 20. Thus, if the \"additional notes\" to the Fourth Schedule is read together with Section 2(d), Section 2(f)(ii), Section 3 of the Act, 1944 and Section 125 (1) (h) of the Finance (No.2) Act, 2019, it is clear that Section 125(1)(h) merely makes a person not eligible for declaration with respect to the excisable goods which are set forth in the Fourth Schedule to the Act, 1944. 21. Undisputedly, Superior Kerosene Oil is mentioned in the Fourth Schedule although no rate of duty has been provided. If rate of duty has not been provided it shall merely mean that no duty is leviable in the absence of rate of duty. It does not mean that such goods are not excisable. All the goods mentioned in Fourth Schedule to the Act, 1944 shall continue to be excisable goods unless the goods is removed from the Schedule by an amendment. Section 174 of the CGST Act has not repealed the Central Excise Act, 1944 as respect to the goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution. The Central Excise Act, 1944 as amended by Act 18 of 2017 has been enacted with respect to the goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution which includes S.K.O. 22. The petitioner has sought the relief No. (c) and (d) to delete SKO from the Fourth Schedule of Central Excise Tariff Act, 1944. There is no such Act. The relief sought is without substance. Apart from this, inclusion of SKO in the Fourth Schedule of the Act, 1944 is not violative of Section 174 of the CGST Act, 2017, for detailed reasons given in the foregoing paragraphs. 23. \"Sabka Vishwas Scheme\" is a complete code in itself. An earlier scheme known as \"Kar Vivad Samadhan\" scheme was considered by Hon'ble Supreme Court in the case of Union of India Vs. Nitdip Textile Processors Pvt. Ltd. 2011 (273) ELT 321 (SC) : (2012)1 SCC 226 and it was held that such a scheme is a complete code in itself. 24. Provisions in Chapter V of the Finance (No.2) Act, 2019, whereby \"Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019\" has been enacted; is an offer by the Government to settle tax arrears locked in litigation at a substantial discount. Section 124 Finance (No.2) Act 2019 provides the slabs of tax arrears and the discount slabs in percentage for payment by an applicant/declarant to settle the dispute. Section 125 provides that all persons shall be eligible to make a declaration under the Scheme except those mentioned in Clauses (a) to (h). Section 126 empowers the designated Committee to verity the correctness of the declaration made by the declarant under Section 125 in the manner as may be prescribed. Section 127 of the Act empowers the designated Committee to issue statement indicating the amount payable by the declarant and in the event the amount estimated by the designated Committee exceeds the amount declared by the declarant then the designated Committee shall afford an opportunity of hearing to the declarant and thereafter issue a statement in electronic form indicating the amount payable by the declarant. Thereafter, the declarant shall pay the amount through internet banking and on payment, the designated committee shall issue a discharge certificate in electronic form within 30 days of the payment and production of proof. Sub-Section 6 and Sub-Section 7 of Section 127 provides for withdrawal or deemed withdrawal of Appeal, Revision, Reference or Writs relating to the matter in question. Section 129 provides for certain immunities to the declarant. Section 130 prohibits payment through input tax credit account, refunds and to take input tax credit of the amount deposited under the Scheme. Section 131 provides for removal of doubts. Section 134 provides for removal of difficulties. Section 132 empowers the Central Government to make Rules by notification to carry out the provisions of the Scheme. Section 133 empowers the Central Board of Indirect Taxes to issue orders, instructions etc. Section 135 provides for protection to the Officers. 25. Thus, perusal of the provisions of the Scheme briefly noted above, shows that the Scheme is a complete Code in itself. In substance, it is a scheme for recovery of duty/indirect tax to unlock the frozen assets and recover the tax arrears at a discounted amount. Thus, \"Sabka Vishwas Scheme\", although a beneficial scheme for a declarant, is statutory in nature which has been enacted with the object and purpose to minimise the litigation and to realise the arrears of tax by way of settlement at discounted amount in an expeditious manner. In other words the scheme is a step towards the settlement of outstanding disputed tax liability. 26. The discussion made in the foregoing paragraphs leaves no manner of doubt that the petitioner/declarant could avail benefit of the \"Sabka Vishwas Scheme\" only in accordance with the provisions of the Scheme. Section 125(1)(h) of the Act 2019/\"Sabka Vishwas Scheme\" has specifically excluded persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944. Undisputedly, S.K.O. is an excisable goods set forth in the Fourth Schedule to the Act, 1944. The petitioner was not eligible to make a declaration under the \"Sabka Vishwas Scheme\" with respect to \"S.K.O.\". Therefore, non acceptance of the declaration of the petitioner by the respondents does not suffer from any manifest error of law. 27. For all the reasons aforestated, we do not find any merit in this writ petition. Consequently, the Writ Petition fails and is hereby dismissed. 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{"id": "91090158", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 590 OF 2015 JAYANTILAL VERMA \u2026Appellant Versus STATE OF M.P. (Now Chhattisgarh) \u2026Respondent JUDGMENT SANJAY KISHAN KAUL, J. 1. On the fateful day of 24.8.1999, one Sahodara Bai was found dead on a cot in her matrimonial home located in village Uslapur, District Rajanandgaon, M.P. (now Chhattisgarh). A marg intimation was lodged with the police at the behest of her brother, one Kishore Kumar, who Signature Not Verified Digitally signed by alleged that he had returned to village Uslapur to see his sister, where he Anita Malhotra Date: 2020.11.19 18:45:14 IST Reason: was informed by her in-laws that she had died. He related a prior incident from a few days ago alleging that on 19.8.1999, the deceased had returned to her maternal home to village Baiharsari stating that she had been harassed at the hands of her in-laws for the last 6-7 months. The cause for harassment was stated to be that the appellant herein (her husband) had a brother who lived separately and the in-laws would beat and harass her if she attempted to speak to the wife of the brother of the appellant herein. The endeavour of reconciliation took place when Kishore Kumar along with another brother, Lochan, had brought the deceased back to her matrimonial home. Even at that stage, on being asked whether they wanted her to live with them, the in-laws responded that they will see for a few days and then decide. The deceased thereafter stayed back at her matrimonial home. 2. A postmortem was conducted on the body and FIR No.72/99 came to be registered at P.S. Bodla, District Kawargha on 29.8.1999 arraying the appellant herein, his father, one Lalchand and mother, one Ahiman Bai as accused for offences punishable under Sections 302 read with Section 34 of the Indian Penal Code, 1860 (hereinafter referred to as the \u2018IPC\u2019). The FIR is stated to have been registered at the behest of one K.P.S. Paikara, the SHO of P.S. Bodla, who relayed the abovementioned information from the marg intimation and also elaborated on the relationship of the deceased and the appellant herein along with the findings of the postmortem report. The marriage between the appellant herein and the deceased had taken place about 8 years prior to the incident and there was a son born, who was only a few months old. The appellant herein, along with the deceased was staying with his parents. The post mortem report stated that the cause of death was asphyxia due to strangulation, and the nature of death was possibly homicidal. On completion of investigation, Chargesheet No. 64/99 was filed and charges were framed by the Sessions Court in Sessions Trial No.165/1999, arraying the appellant herein and his parents as accused. The version given by the accused in their statements under Section 313 Code of Criminal Procedure, 1973 (hereinafter referred to as the \u2018Cr.P.C.\u2019) was that on the morning of the incident all the three accused had gone to the fields, while only the deceased remained at home. Lalchand stated that after taking a bath in the pond, when he returned, he discovered the deceased lying dead in her cot. Thereafter he called the appellant herein and his wife, Ahiman Bai, who were still in the fields. No evidence was led in this regard. 3. The prosecution led evidence of 9 witnesses to establish their case. Five of these witnesses turned hostile \u2013 PW-2 (Lochan), brother of the deceased, PW-3 (Mukund), PW-4 (Jagdev), PW-5 (Pitambar Verma) and PW-6 (Ghasiya). The case of the prosecution was, thus, based on the testimonies of the remaining witnesses, i.e., PW-1, Kishore Kumar, the brother of the deceased and PW-7, Rajendra Chauhan, who prepared the site plan, PW-8, K.P.S. Paikara, Investigating Officer and PW-9, Dr. M.S. Bachkar, who conducted the postmortem. Thus, effectively the case was based on the testimony of PW-1, apart from the testimony of the doctor who conducted the postmortem. 4. The Sessions Court held all the three accused persons guilty of offences punishable under Section 302 of the IPC, in terms of the judgment dated 21.7.2000. 5. The finding of the Sessions Court was based on the cause of death being asphyxia due to strangulation. The testimony of the doctor, PW-9, was relied upon to come to the conclusion that the death was homicidal as it was a result of strangulation. The possibility of any other manner of death was explored by the court, i.e., thieves killing the deceased in order to snatch a chain from her neck. This was ruled out as the incident took place in the house, which in turn was surrounded by other houses on three sides and no commotion was heard. Further, no crime of theft had been reported in the recent past. Next, the possibility of death caused by a snakebite was explored. This was owing to the testimony of PW-1, who had stated, that upon finding his sister dead and enquiring as to what had happened, Lalchand, father of appellant herein had stated that she had died of a snakebite. Court noted that the postmortem did not indicate any symptom of a snake bite as there was no mark or any poisoning detected in the body. The suicide theory was also ruled out as there were scratch marks found on her neck. The conclusion was, thus, based on circumstantial evidence to convict the accused. All the three accused preferred an appeal before the High Court, being Criminal Appeal No.1930/2000. In the course of the pendency of the appeal, Lalchand, the father-in-law of the deceased passed away. The High Court concluded that there was no legally admissible evidence to convict the mother-in-law of the deceased, and hence she was acquitted. However, the conviction of the appellant herein was upheld by the High Court. 6. The appellant herein filed the present appeal in which leave was granted on 30.3.2015. 7. It would be appropriate to note that there was some improvement in the statement of PW-1 to the extent that he had never mentioned Lalchand\u2019s explanation of the death of the deceased by snake bite in the earlier statement. While this was noted by the Trial Court, all other aspects were found to be consistent with his earlier statements. The testimony of PW-1 as a whole was found to be natural. It was also noted that there was an absence of any prior animosity between PW-1 and the family of the appellant herein. PW-1, incidentally, was the stepbrother of the deceased, while PW-2, who turned hostile was her real brother. The cause of witnesses turning hostile, as per the Trial Court, was that PW-2 was influenced on account of subsisting family relationship, as the daughter of Lalchand (sister of the appellant herein) was married to the brother of PW-2. 8. The circumstantial evidence was examined closely as that could be the only basis of conviction, and it was found that there was a complete chain to prove the guilt of the accused. The visit of the deceased to her maternal home, her statement regarding the ill-treatment by her in-laws to her brother, PW-1, her being taken to the matrimonial home by PW-1 along with another brother, Lochan, the discussion between PW-1 and Lalchand and finally the cause of death being homicidal were all circumstances examined to establish guilt of the accused. The Trial Court held that after the murder, Lalchand sent his wife and the appellant herein to the fields, while he himself went to the pond to bathe and when he returned to his house, he raised a hue and cry, pretending to be shocked by the sudden death of the deceased. There was a possibility of death being caused by strangulation by an article made of a chain-like material but the same had likely been destroyed. The Trial Court did castigate the manner of prosecution. 9. The High Court in the given situation, apart from relying on the testimony of PW-1, turned its attention to the postmortem report. In this context, it was noted that there was blood oozing from both nostrils and mouth of the deceased, there was swelling over the right cheek, marks of ecchymosis at epiglottis region and back of the neck, bruise present at left axillary of cheek and there was depression mark of a mala on the left side of the neck. It went on to state that since the incident had taken place inside the privacy of the house, the onus was on the persons residing in the house, to give an explanation. In such situations, it was noted that it is difficult for the prosecution to lead any direct evidence to establish the guilt of the accused. In this regard, the High Court referred to Section 106 of the Indian Evidence Act, 1872 (hereinafter referred to as the \u2018Evidence Act\u2019), which reads as under: \u201c106. Burden of proving fact especially within knowledge.\u2014 When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him.\u201d It, thus, opined that in such cases, while the initial burden to establish the case would be upon the prosecution, it would be of a relatively light character. There would be a corresponding a burden on the inmates of the house to give cogent explanation as to how the crime was committed. They could not get away by keeping quiet and offering no explanation. 10. In the aforesaid contours of the factual situation we have examined the submissions of the learned counsels for the parties. 11. The submission of the learned counsel for the appellant herein was that the circumstantial evidence was not of such a nature that it could be said to be conclusive, and the chain of evidence was not complete to pronounce the appellant herein guilty. The previous allegations of cruelty had not been proved as there was no prior complaint of harassment lodged by the deceased or her relatives and that the testimony of PW-1 is further discredited, as he is the stepbrother and not the real brother of the deceased. It was further argued that the statements of the witnesses were not recorded prior to 29.8.1999 i.e., for five days from the date of incident, and even the site plan prepared by PW-7 was not proved. There was stated to be no intention or motive attributable to the appellant herein to kill the deceased and the prosecution could not absolve itself of the burden to prove the case beyond reasonable doubt. 12. The testimony of PW-9, Dr. Bachkar was assailed as there was no formation of a firm opinion regarding the nature of death as it was mentioned that it \u201cmay\u201d have been homicidal. There was stated to be a mark on the left side of the neck and but no such mark existed around the neck. He had stated that the mark could have been caused by pressing the necklace on the neck, but asphyxia was not possible due to the same. No recovery of necklace had taken place from the appellant herein and the weapon of crime was never recovered. Lastly, it was contended that on the same evidence, the mother of the appellant herein had been acquitted. 13. The appellant herein is stated to have served 16 years and 9 months of his sentence but some dispute was raised about the actual time he had spent in jail by learned counsel for the respondent State, though it was conceded that cases for release were considered after 14 years of serving the actual sentence. 14. Learned counsel for the respondent State relied upon the absence of any explanation by the accused regarding the cause of death, even though the death had occurred in the privacy of the matrimonial home. The appellant herein and his family are stated to be the only residents, where the body of the deceased was found and that itself cast a burden on them within the meaning of Section 106 of the Evidence Act. 15. In order to support the aforesaid proposition, reliance was placed on the following judgments: a. Amarsingh Munnasingh Suryawanshi v. State of Maharashtra1: In this case, the death had occurred in the matrimonial home but the conviction was supported by a dying declaration. b. Raj Kumar Prasad Tamarkar v. State of Bihar & Anr.2: Here, the weapon of offence, a gun, was recovered from the room of the accused and the dead body was found on the terrace attached to the private room of the accused. c. Trimukh Maroti Kirkan v. State of Maharashtra 3: In this case, the body of the deceased was found in the matrimonial home and the cause of death was strangulation, though the defence pleaded it to be a case of a snakebite. 16. The aforesaid, would thus, show that the third case best fits the factual scenario in the present case. 17. Learned counsel for the State emphasised that the other witnesses turning hostile cannot be a ground itself to acquit the accused and the testimony of PW-1 was consistent and sufficient to convict the appellant herein. In this behalf, a reference was made to Section 134 of the Evidence Act, which reads as under: (2007) 15 SCC 455 (2007) 10 SCC 433 (2006) 10 SCC 681 \u201c134. Number of witnesses. \u2013 No particular number of witnesses shall in any case be required for the proof of any fact.\u201d 18. It was, thus, contended that mere presence or absence of a large number of witnesses cannot be the basis of conviction. It is the quality of evidence and not the number of witnesses, which is relevant. In this behalf, a reference was made to the following cases: a. Yanob Sheikh Alias Gagu v. State of West Bengal4, where it was observed as under: \u201c20. We must notice at this stage that it is not always the quantity but the quality of the prosecution evidence that weighs with the Court in determining the guilt of the accused or otherwise. The prosecution is under the responsibility of bringing its case beyond reasonable doubt and cannot escape that responsibility. In order to prove its case beyond reasonable doubt, the evidence produced by the prosecution has to be qualitative and may not be quantitative in nature. In the case of Namdeo v. State of Maharashtra [(2007) 14 SCC 150], the Court held as under: \u201c28. From the aforesaid discussion, it is clear that Indian legal system does not insist on plurality of witnesses. Neither the legislature (Section 134 of the Evidence Act, 1872) nor the judiciary mandates that there must be particular number of witnesses to record an order of conviction against the accused. Our legal system has always laid emphasis on value, weight and quality of evidence rather than on quantity, multiplicity or plurality of witnesses. It is, therefore, open to a competent court to fully and completely rely on a solitary witness and record conviction. Conversely, it may acquit the accused in (2013) 6 SCC 428 spite of testimony of several witnesses if it is not satisfied about the quality of evidence. The bald contention that no conviction can be recorded in case of a solitary eyewitness, therefore, has no force and must be negatived.\u201d b. Gulam Sarbar v. State of Bihar (Now Jharkhand) 5 wherein the Court relied on the same aforementioned principle. 19. On consideration of the evidence led by the prosecution and considering the concurrent findings by the two courts qua the appellant herein we are unable to find any reason to interfere with the judgment of the courts below. 20. It is no doubt true that a large number of witnesses turned hostile and the Trial Court was also not happy with the manner of prosecution conducted this case. But that is not an unusual event in the long drawn out trials in our country and in the absence of any witness protection regime of substance, one has to examine whatever is the evidence which is capable of being considered, and then come to a finding whether it would suffice to convict the accused. 21. The rationale adopted for coming to the conclusion behind the reason for the real brother of the deceased turning hostile while step brother stood his ground is also obvious and correctly appreciated, i.e., to (2014) 3 SCC 401 preserve the close family ties which continued to exist by marriage in the instant case, in view of the siblings of the deceased and appellant herein being married. In the Indian context, there exists a continued relationship between two families wherein the daughter-in-law comes from another house. 22. We are conscious that the case of the prosecution rests only on the testimony of PW-1 and the medical evidence. The statement of PW-1 was consistent and cogent except to the extent that in the earlier statement he had not mentioned the factum of the death being attributed to snakebite. However, that itself would not nullify the remaining part of his testimony. In fact, the said witness did not back out from the statement, but could not state the reason why the police did not record it in the FIR though it was mentioned. 23. The doctor opined the cause of death to be asphyxia due to strangulation. Thereafter, he has stated that nature may be homicidal. This was so stated because asphyxia being the cause of death, the doctor himself could not have conclusively said whether it was homicidal or suicidal. It was also voluntarily opined, that there had to be a minimum of five minutes of forceful pulling to cause the death. 24. In our view, the most important aspect is where the death was caused and the body found. It was in the precincts of the house of the appellant herein where there were only family members staying. The High Court also found that the location of the house and the surrounding buildings was such that there was no possibility of somebody from outside coming and strangulating the deceased and that too without any commotion being caused or any valuable/jewellery missing. 25. We are confronted with a factual situation where the appellant herein, as a husband is alleged to have caused the death of his wife by strangulation. The fact that the family members were in the home some time before is also quite obvious. No explanation has been given as to how the wife could have received the injuries. This is a strong circumstance indicating that he is responsible for commission of the crime.6 The appellant herein was under an obligation to give a plausible explanation regarding the cause of the death in the statement recorded under Section 313 of the Cr.P.C. and mere denial could not be the answer in such a situation. 26. We, thus, find no reason to interfere with the impugned judgment. Trimukh Maroti Kirkan v. State of Maharashtra (supra). The appeal is accordingly dismissed leaving the parties to bear their own costs. 27. We, however, direct the respondent State to examine whether the appellant herein has completed 14 years of actual sentence or not and if it is so, his case should be examined within a maximum period of two months for release in accordance with norms. If not, the exercise be undertaken within the same time on completion of 14 years of actual sentence. ...\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. [Sanjay Kishan Kaul] ...\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. [Hrishikesh Roy] New Delhi. November 19, 2020.", "spans": [{"start": 242, "end": 251, "label": "DATE"}, {"start": 473, "end": 486, "label": "WIT"}, {"start": 632, "end": 642, "label": "DATE"}, {"start": 776, "end": 785, "label": "DATE"}, {"start": 1229, "end": 1242, "label": "WIT"}, {"start": 1271, "end": 1277, "label": "WIT"}, {"start": 1663, "end": 1672, "label": "DATE"}, {"start": 1895, "end": 1898, "label": "STAT"}, {"start": 1965, "end": 1979, "label": "WIT"}, {"start": 2616, "end": 2637, "label": "CASENO"}, {"start": 2679, "end": 2693, "label": "COURT"}, {"start": 2697, "end": 2723, "label": "CASENO"}, {"start": 2854, "end": 2886, "label": "STAT"}, {"start": 2920, "end": 2927, "label": "STAT"}, {"start": 3433, "end": 3439, "label": "WIT"}, {"start": 3473, "end": 3479, "label": "WIT"}, {"start": 3488, "end": 3494, "label": "WIT"}, {"start": 3503, "end": 3517, "label": "WIT"}, {"start": 3529, "end": 3536, "label": "WIT"}, {"start": 3643, "end": 3656, "label": "WIT"}, {"start": 3696, "end": 3712, "label": "WIT"}, {"start": 3748, "end": 3762, "label": "WIT"}, {"start": 3800, "end": 3812, "label": "WIT"}, {"start": 3983, "end": 3997, "label": "COURT"}, {"start": 4088, "end": 4091, "label": "STAT"}, {"start": 4124, "end": 4133, "label": "DATE"}, {"start": 4157, "end": 4171, "label": "COURT"}, {"start": 5383, "end": 5393, "label": "COURT"}, {"start": 5401, "end": 5429, "label": "CASENO"}, {"start": 5537, "end": 5547, "label": "COURT"}, {"start": 5745, "end": 5755, "label": "COURT"}, {"start": 5836, "end": 5845, "label": "DATE"}, {"start": 6101, "end": 6112, "label": "COURT"}, {"start": 6528, "end": 6539, "label": "COURT"}, {"start": 7099, "end": 7105, "label": "WIT"}, {"start": 7266, "end": 7277, "label": "COURT"}, {"start": 7685, "end": 7696, "label": "COURT"}, {"start": 7745, "end": 7755, "label": "COURT"}, {"start": 8520, "end": 8530, "label": "COURT"}, {"start": 8562, "end": 8587, "label": "STAT"}, {"start": 8621, "end": 8633, "label": "STAT"}, {"start": 9921, "end": 9930, "label": "DATE"}, {"start": 10271, "end": 10278, "label": "WIT"}, {"start": 11594, "end": 11606, "label": "STAT"}, {"start": 11710, "end": 11766, "label": "PREC"}, {"start": 11890, "end": 11940, "label": "PREC"}, {"start": 12113, "end": 12158, "label": "PREC"}, {"start": 12726, "end": 12738, "label": "STAT"}, {"start": 13207, "end": 13254, "label": "PREC"}, {"start": 13780, "end": 13830, "label": "PREC"}, {"start": 14017, "end": 14035, "label": "STAT"}, {"start": 14726, "end": 14772, "label": "PREC"}, {"start": 15146, "end": 15157, "label": "COURT"}, {"start": 17201, "end": 17211, "label": "COURT"}, {"start": 18051, "end": 18058, "label": "STAT"}, {"start": 18190, "end": 18235, "label": "PREC"}, {"start": 18701, "end": 18719, "label": "JUDGE"}, {"start": 18739, "end": 18753, "label": "JUDGE"}, {"start": 18766, "end": 18783, "label": "DATE"}]}
{"id": "189745935", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 3964-71 OF 2007 M/S BANGALORE CLUB \u2026Appellant VERSUS THE COMMISSIONER OF WEALTH TAX & ANR. ...Respondents JUDGMENT R.F. Nariman, J. 1. In the year of grace 1868, a group of British officers banded together to start the Bangalore Club. In the year of grace 1899, one Lt. W.L.S. Churchill was put up on the Club\u2019s list of defaulters, which numbered 17, for an amount of Rs.13/- being for an unpaid bill of the Club. The \u201cBill\u201d never became an \u201cAct\u201d. Till date, this amount remains unpaid. Lt. W.L.S. Churchill went on to become Sir Winston Leonard Spencer Churchill, Prime Minister of Great Britain. And the Bangalore Club continues its Signature Not Verified Digitally signed by Nidhi Ahuja Date: 2020.09.08 17:47:19 IST Reason: mundane existence, the only excitement being when the tax collector knocks at the door to extract his pound of flesh. 2. Fast forward now from British India to free India and we come to assessment years 1981-82 and 1984-85 upto 1990-91. The question for determination in these appeals is whether Bangalore Club is liable to pay wealth tax under the Wealth Tax Act. The order of assessment dated 3rd March, 2000, passed by the Wealth Tax Officer, Bangalore, referred to the fact that Bangalore Club is not registered as a society, a trust or a company. The assessing officer, without further ado, \u201cafter a careful perusal\u201d of the rules of the Club, came to the conclusion that the rights of the members are not restricted only to user or possession, but definitely as persons to whom the assets of the Club belong. After referring to Section 167A, inserted into the Income Tax Act, 1961, and after referring to Rule 35 of the Club Rules, the assessing officer concluded that the number of members and the date of dissolution are all uncertain and variable and therefore indeterminate, as a result of which the Club was liable to be taxed under the Wealth Tax Act. By a cryptic order dated 25th October, 2000, the CIT (Appeals) dismissed the appeal against the aforesaid order. On the other hand, by a detailed order passed by the Income Tax Appellate Tribunal, Bangalore dated 7th May, 2002, the Appellate Tribunal first referred to the Objects of the Bangalore Club, which it described as a \u201csocial\u201d Club, as follows: \u201c1. To provide for its Members, social, cultural, sporting, recreational and other facilities; 2. To promote camaraderie and fellowship among its members. 3. To run the Club for the benefit of its Members from out of the subscriptions and contributions of its member. 4. To receive donations and gifts without conditions for the betterment of the Club. The General Committee may use its discretion to accept sponsorships for sporting Areas 5. To undertake measures for social service consequent on natural calamities or disasters, national or local. 6. To enter into affiliation and reciprocal arrangements with other Clubs of similar standing both in India and abroad. 7. To do all other acts and things as are conducive or incidental to the attainment of the above objects. Provided always and notwithstanding anything hereinafter contained, the aforesaid objects of the Club, shall not be altered, amended, or modified, except, in a General Meeting, for which the unalterable quorum shall not be less than 300 members. Any resolution purporting to alter, amend, or modify the objects of the Club shall not be deemed to have been passed, except by a two thirds majority of the Members present and voting thereon.\u201d 3. The Tribunal then set out Rule 35 of the Club Rules, which stated as follows: \u201cRULE 35 APPOINTMENT OF LIQUIDATORS: If it be resolved to wind up, the Meeting shall appoint a liquidator or liquidators and fix his or their remuneration. The liquidation shall be conducted as nearly as practicable in accordance with the laws governing voluntary liquidation under the Companies Act or any statutory modifications thereto and any surplus assets remaining after all debts and liabilities of the Club have been discharged shall be divided equally amongst the Members of the Club as defined in Rules 6.1(i), 6.1(ii), 6.1 (iii), 6.2(i), 6.2(ii), 6.2(iii), 6.2(vii), 6.2(viii) and 6.2(ix). 4. After setting out Section 21AA of the Wealth Tax Act, the Tribunal then referred to this Court\u2019s judgment in CIT v. Indira Balkrishna (1960) 39 ITR 546 and held: \u201c9. From the facts of the case, it is clear that members who have joined here have not joined to earn any income or to share any profits. They have joined to enjoy certain facilities as per the objects of the club. The members themselves are contributing to the receipts of the club. The members themselves are contributing to the receipts of the club (sic) and what is the difference between the Income and Expenditure can be said to be only surplus and not income of the assessee-club. It is an accepted principle that principle of mutuality is applicable to the assessee club and hence not liable to income-tax also. At the most, this. may be called the \"Body of Individuals\" but not an AOP formed with an intention to earn income.\u201d 5. It then referred to a CBDT Circular dated 11th January, 1992, explaining the pari materia provision of Sections 167A in the Income Tax Act, and therefore inferred, from a reading of the aforesaid Circular, that Section 21AA would not be attracted to the case of the Bangalore Club. It was then held, on a reading of Rule 35, that since members are entitled to equal shares in the assets of the Club on winding-up after paying all debts and liabilities, the shares so fixed are determinate also making it clear that Section 21AA would have no application to the facts of the present case. As a result, the Appellate Tribunal allowed the appeal and set aside the orders of the Assessing Officer and the CIT (Appeals). 6. Against this order, by a cryptic order of the High Court, the decision in CWT v. Club 197 ITR Karnataka 609 was stated to cover the facts of the present case, as a result of which the question raised was decided in favour of the revenue by the impugned order dated 23rd January, 2007. A Review Petition filed against the aforesaid order was dismissed on 19th April, 2007. 7. Shri Nikhil Nayyar, learned counsel appearing on behalf of the appellant, referred to the object for the enactment of Section 21AA of the Wealth Tax Act and then took us through the provisions of Section 21AA. According to him, it is settled law by several judgments of this Court that \u201cassociation of persons\u201d in the context of a taxing statute would only refer to persons who band together with a common object in mind \u2013 the common object being to create income and make a profit. As it is clear that the present Club is a social club where the members do not band together for any commercial or business purpose of making income or profits, the section does not get attracted at all. Further, in any case, as a without prejudice argument, it is clear that the individual shares of the members of the said association in income or assets of the association must be indeterminate or unknown to attract the provision of Sec. 21AA. He took us to the Appellate Tribunal judgment and to Rule 35, in particular, to argue that since on winding-up all members get an equal share in the surplus that remains after all debts and liabilities are dealt with, their shares cannot be said to be indeterminate or unknown. For this purpose, he cited a number of judgments of the High Courts. He then adverted to an explanation that was added to the definition of \u201cperson\u201d contained in Section 2(31) of the Income Tax Act, which made it clear that on and from 1st April, 2002, an association of persons need not be persons who band together for the object of deriving income or profits. This explanation does not apply to the Wealth Tax Act, and, in any case, given the fact that the assessment years in question are way before 1st April, 2002, the law laid down by this Court in several judgments on association of persons would directly apply. 8. To counter these arguments, Shri Vikramjit Banerjee, learned Additional Solicitor General, referred to Rule 35 of the Club Rules and relied heavily upon Section 21AA(2). According to Shri Banerjee, sub-section (2) deals with a situation where the association of persons is dissolved, and given Rule 35, the Section, therefore, would directly apply to the Bangalore Club. He then referred to this Court\u2019s judgment in Bangalore Club v. CIT (2013) 5 SCC 509, in which, for income tax purposes, the Bangalore Club was assessed as an association of persons. This being the case, it cannot be that for income tax purposes, the Bangalore Club is treated as an association of persons but for wealth tax purposes, it cannot be so treated. He then referred to this Court\u2019s judgment in CWT v. Ellis Bridge Gymkhana (1998) 1 SCC 384 in order to support the impugned judgment of the High Court which, according to him, correctly followed Chikmagalur Club\u2019s case (supra) which, in turn, only relied upon this Court\u2019s judgment in Ellis Bridge Gymkhana (supra). He also stated that the finding of the Assessing Officer that the shares of a fluctuating body of members would be indeterminate is correct and therefore, even on this ground it is clear that the High Court judgment can be supported. 9. Having heard learned counsel for both sides, it is important to first advert to Section 3, which is the charging section in the Wealth Tax Act. Section 3(1) states as follows: \u201c3. Charge of wealth-tax \u2014 (1) Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the first day of April, 1957 but before the first day of April, 1993, a tax (hereinafter referred to as wealth-tax) in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in Schedule I.\u201d 10. It will be noticed that only three types of persons can be assessed to wealth tax under Section 3 i.e. individuals, Hindu undivided families and companies. It is clear that if Section 3(1) alone were to be looked at, the Bangalore Club neither being an individual, nor a HUF, nor a company cannot possibly be brought into the wealth tax net under this provision. 11. By the Finance Bill of 1981, Section 21AA was introduced into the Wealth Tax Act. The explanatory notes on the introduction of Section 21AA were as follows: \u201c21.1 Under the Wealth Tax Act, 1957, individuals and Hindu Undivided Families are taxable entities but an association of persons is not charged to wealth tax on its net wealth. Where an individual or a Hindu Undivided Family is a member of an association of persons, the value of the interest of such member in the association of persons is determined in accordance with the provisions of the rules and is includible in the net wealth of the member. 21.2 Instances had come to the notice of the Government where certain assessees had resorted to the creation of a large number of associations of persons without specifically defining the shares of the members therein with a view to avoiding proper tax liability. Under the existing provisions, only the value of the interest of the member in the association which is ascertainable is includible in his net wealth. Accordingly, to the extent the value of the interest of the member in the association cannot be ascertained or is unknown, no wealth tax is payable by such member in respect thereof. 21.3 In order to counter such attempts at tax avoidance through the medium of multiple associations of persons without defining the shares of the members, the Finance Act has inserted a new Section 21-AA in the Wealth Tax Act to provide for assessment in the case of associations of persons which do not define the shares of the members in the assets thereof. Sub-section (1) provides that where assets chargeable to wealth tax are held by an association of persons (other than a company or a cooperative society) and the individual shares of the members of the said association in income or the assets of the association on the date of its formation or at any time thereafter, are indeterminate or unknown, wealth tax will be levied upon and recovered from such association in the like manner and to the same extent as it is leviable upon and recoverable from an individual who is a citizen of India and is resident in India at the rates specified in Part I of Schedule I or at the rate of 3 per cent, whichever course is more beneficial to the Revenue.\u201d 12. With this object in mind, Section 21AA was enacted w.e.f. 1st April, 1981 as follows: \u201c21AA. Assessment when assets are held by certain associations of persons \u2014 (1) Where assets chargeable to tax under this Act are held by an association of persons, other than a company or cooperative society or society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India, and the individual shares of the members of the said association in the income or assets or both of the said association on the date of its formation or at any time thereafter are indeterminate or unknown, the wealth-tax shall be levied upon and recovered from such association in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India for the purposes of this Act. (2) Where any business or profession carried on by an association of persons referred to in subsection (1) has been discontinued or where such association of persons is dissolved, the Assessing Officer shall make an assessment of the net wealth of the association of persons as if no such discontinuance or dissolution had taken place and all the provisions of this Act, including the provisions relating to the levy of penalty or any other sum chargeable under any provisions of this Act, so far as may be, shall apply to such assessment. (3) Without prejudice to the generality of the provisions of sub-section (2), if the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) in the course of any proceedings under this Act in respect of any such association of persons as is referred to in sub- section (1) is satisfied that the association of persons was guilty of any of the acts specified in section 18 or section 9 18A, he may impose or direct the imposition of a penalty in accordance with the provisions of the said sections. (4) Every person who was at the time of such discontinuance or dissolution a member of the association of persons, and the legal representative of any such person who is deceased, shall be jointly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum. (5) Where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceedings may be continued against the persons referred to in sub-section (4) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly.\u201d 13. It can be seen that for the first time from 1st April, 1981, an association of persons other than a company or cooperative society has been brought into the tax net so far as wealth tax is concerned with the rider that the individual shares of the members of such association in the income or assets or both on the date of its formation or at any time thereafter must be indeterminate or unknown. It is only then that the section gets attracted. 14. The first question that arises is as to what is the meaning of the expression \u201cassociation of persons\u201d which occurs in Section 21AA. In an early judgment of this Court where the expression \u201cassociation of persons\u201d occurred in the Income Tax Act, 1922 \u2013 a cognate tax statute, this Court in CIT v. Indira Balkrishna (supra) posed question no.3 as follows: \u201c(3) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the assessment made on the three widows of Balkrishna Purushottam Purani in the status of an association of persons is legal and valid in law?\u201d 15. After referring to the amendments made in the Income Tax Act speaking of \u201cassociation of persons\u201d and \u201cassociation of individuals\u201d, this Court went on to hold: \u201c8\u2026In the absence of any definition as to what constitutes an association of persons, we must construe the words in their plain ordinary meaning and we must also bear in mind that the words occur in a section which imposes a tax on the total income of each one of the units of assessment mentioned therein including an association of persons. The meaning to be assigned to the words must take colour from the context in which they occur\u2026 9. It is enough for our purpose to refer to three decisions: In re, B.N. Elias [(1935) 3 ITR 408]; CIT v. Laxmidas Devidas [(1937) 5 ITR 584]; and In re. Dwaraknath Harishchandra Pitale [(1937) 5 ITR 716]. In B.N. Elias Derbyshire, C.J. rightly pointed out that the word \u201cassociate\u201d means, according to the Oxford dictionary, \u201cto join in common purpose, or to join in an action\u201d. Therefore, an association of persons must be one in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one the object of which is to produce income profits or gains. This was the view expressed by Beaumont, C.J. in CIT v. Laxmidas Devidas at p. 589 and also in Re. Dwaraknath Harishchandra Pitale. In re. B.N. Elias [(1935) III ITR 408] Costello, J. put the test in more forceful language. He said: \u201cIt may well be that the intention of the legislature was to hit combinations of individuals who were engaged together in some joint enterprise but did not in law constitute partnership\u2026. When we find \u2026. that there is a combination of persons formed for the promotion of a joint enterprise \u2026. then I think no difficulty arise in the way of saying that these persons did constitute an association\u2026.\u201d 10. We think that the aforesaid decisions correctly lay down the crucial test for determining what is an association of persons within the meaning of Section 3 of the Income Tax Act, and they have been accepted and followed in a number of later decisions of different High Courts to all of which it is unnecessary to call attention. It is, however, necessary to add some words of caution here. There is no formula of universal application as to what facts, how many of them and of what nature, are necessary to come to a conclusion that there is an association of persons within the meaning of Section 3; it must depend on the particular facts and circumstances of each case as to whether the conclusion can be drawn or not.\u201d 16. Likewise, in G. Murugesan & Brothers v. CIT 88 ITR 432 (1973), this Court referred with approval to Indira Balakrishna (supra) and then held: \u201c11. For forming an \u201cAssociation of Persons\u201d, the members of the association must join together for the purpose of producing an income. An \u201cAssociation of Persons\u201d can be formed only when two or more individuals voluntarily combine together for a certain purpose. Hence volition on the part of the member of the association is an essential ingredient. It is true that even a minor can join an \u201cAssociation of Persons\u201d if his lawful guardian gives his consent. In the case of receiving dividends from shares, where there is no question of any management, it is difficult to draw an inference that two more shareholders functioned as an \u201cAssociation of Persons\u201d from. The mere fact that they jointly own one or more shares, and jointly receive the dividends declared those circumstances do not by themselves go to show that they acted as an \u201cAssociation of Persons\u201d. \u201c 17. These judgments have since been referred to with approval in Meera and Co. v. CIT (1997) 4 SCC 677 (see paras 19 and 20) and Ramanlal Bhailal Patel v. State of Gujarat (2008) 5 SCC 449 (see paragraph 28). It may be mentioned in passing at this stage that under the Income Tax Act an explanation has been added to the definition of \u201cperson\u201d contained in Section 2(31), sub-clause (v) of which includes \u201can association of persons or a body of individuals, whether incorporated or not\u201d. The explanation inserted by amendment, which is w.e.f. 1st April, 2002, is as follows: \u201cExplanation.\u2014For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains;\u201d 18. Obviously, therefore, after 1st April, 2002, the ratio of the aforesaid judgments has been undone by this explanation insofar as income tax is concerned. 19. It is well-settled that when Parliament used the expression \u201cassociation of persons\u201d in Section 21AA of the Wealth Tax Act, it must be presumed to know that this expression had been the subject matter of comment in a cognate allied legislation, namely, the Income Tax Act, as referring to persons banding together for a common purpose, being a business purpose in the context of a taxation statute in order to earn income or profits. This presumption is felicitously referred to in the following judgments. 20. In P. Vajravelu Mudaliar v. Special Deputy Collector for Land Acquisition (1965) 1 SCR 614, this Court had to decide whether the 4th Amendment to the Constitution of India, which amended Article 31(2) of the Constitution, made any change in whether compensation being a just equivalent in money to be paid for acquisition continued to be a just equivalent or something less. This Court held that since the expression \u201ccompensation\u201d, as interpreted in State of W.B. v. Bela Banerjee 1954 SCR 558, continued even after the 4th Amendment, a just equivalent in terms of money for land acquisition would continue having to be paid. The Court held: \u201c\u2026 Even after the amendment, provision for compensation or laying down of the principles for determining the compensation is a condition for the making of a law of acquisition or requisition. A legislature, if it intends to make a law for compulsory acquisition or requisition, must provide for compensation or specify the principles for ascertaining the compensation. The fact that Parliament used the same expressions, namely, \u201ccompensation\u201d and \u201cprinciples\u201d as were found in Article 31 before the amendment is a clear indication that it accepted the meaning given by this Court to those expressions in Mrs Bela Banerjee case [(1954) SCR 558] . It follows that a legislature in making a law of acquisition or requisition shall provide for a just equivalent of what the owner has been deprived of or specify the principles for the purpose of ascertaining the \u201cjust equivalent\u201d of what the owner has been deprived of. If Parliament intended to enable a legislature to make such a law without providing for compensation so defined, it would have used other expressions like \u201cprice\u201d, \u201cconsideration\u201d etc. In Craies on Statute Law, 6th Edn., at p. 167, the relevant principle of construction is stated thus: \u201cThere is a well-known principle of construction, \u2018that where the legislature used in an Act a legal term which has received judicial interpretation, it must be assumed that the term is used in the sense in which it has been judicially interpreted unless a contrary intention appears.\u201d The said two expressions in Article 31(2) before the Constitution (Fourth Amendment) Act, have received an authoritative interpretation by the highest court in the land and it must be presumed that Parliament did not intend to depart from the meaning given by this Court to the said expressions.\u201d (at page. 626) 21. In Sakal Deep Sahai Srivastava v. Union of India (1974) 1 SCC 338, in the context of the Limitation Act, this Court held: \u201c8. The only question of some difficulty raised before us is whether Article 102 or Article 120 of the Limitation Act of 1908 would apply to the case. After having heard the attractive arguments of Mr Yogeshwar Prasad, we have no doubt that a good deal can be said in favour of the contention that a claim for arrears of salary is distinguishable from a claim for wages. But, our difficulty is that the question appears to us to be no longer open for consideration afresh by us, or, at any rate, it is not advisable to review the authorities of this Court, after such a lapse of time when, despite the view taken by this Court that Article 102 of the Limitation Act of 1908 was applicable to such cases, the Limitation Act of 1963 had been passed repeating the law, contained in Articles 102 and 120 of the Limitation Act of 1908, in identical terms without any modification. The Legislature must be presumed to be cognizant of the view of this Court that a claim of the nature before us, for arrears of salary, falls within the purview of Article 102 of the Limitation Act of 1908. If Parliament, which is deemed to be aware of the declarations of law by this Court, did not alter the law, it must be deemed to have accepted the interpretation of this Court even though the correctness of it may be open to doubt. If doubts had arisen, it was for the Legislature to clear these doubts. When the Legislature has not done so, despite the repeal of the Limitation Act of 1908, and the enactment of the Limitation Act of 1963 after the decisions of this Court, embodying a possibly questionable view, we think it is expedient and proper to overrule the submission made on behalf of the appellant that the correctness of the view adopted by this Court in its decisions on the question so far should be re-examined by a larger Bench.\u201d 22. Likewise, in Diwan Bros. v. Central Bank of India (1976) 3 SCC 800, this Court referred to the well-known dictum of Lord Buckmaster in Barras v. Aberdeen Steam Trawling and Fishing Company 1933 AC 402 and held as under: \u201c22. Apart from the above considerations, it is a well- settled principle of interpretation of statutes that where the Legislature uses an expression bearing a well-known legal connotation it must be presumed to have used the said expression in the sense in which it has been so understood. Craies on Statute Law observes as follows: \u201cThere is a well-known principle of construction, that where the legislature uses in an Act a legal term which has received judicial interpretation, it must be assumed that the term is used in the sense in which it has been judicially interpreted, unless a contrary intention appears.\u201d 23. In Barras v. Aberdeen Steam Trawling and Fishing Company [1933 AC 402, 411] Lord Buckmaster pointed out as follows: \u201cIt has long been a well-established principle to be applied in the consideration of Acts of Parliament that where a word of doubtful meaning has received a clear judicial interpretation, the subsequent statute which incorporates the same word or the same phrase in a similar context must be construed so that the word or phrase is interpreted according to the meaning that has previously been ascribed to it.\u201d Craies further points out that the rule as to words judicially interpreted applies also to words with well-known legal meanings, even though they have not been the subject of judicial interpretation. Thus applying these principles in the instant case it would appear that when the Court Fees Act uses the word \u201cdecree\u201d which had a well-known legal significance or meaning, then the Legislature must be presumed to have used this term in the sense in which it has been understood, namely, as defined in the Code of Civil Procedure even if there has been no express judicial interpretation on this point.\u201d 23. A recent judgment of this Court namely, Shree Bhagwati Steel Rolling Mills v. CCE (2016) 3 SCC 643, refers to the same presumption as follows: \u201c21. It is settled law that Parliament is presumed to know the law when it enacts a particular piece of legislation. The Prevention of Corruption Act was passed in the year 1988, that is long after 1969 when the Constitution Bench decision in Rayala Corpn. [Rayala Corpn. (P) Ltd. v. Director of Enforcement, (1969) 2 SCC 412] had been delivered. It is, therefore, presumed that Parliament enacted Section 31 knowing that the decision in Rayala Corpn. [Rayala Corpn. (P) Ltd. v. Director of Enforcement, (1969) 2 SCC 412] had stated that an omission would not amount to a repeal and it is for this reason that Section 31 was enacted. This again does not take us further as this statement of the law in Rayala Corpn. [Rayala Corpn. (P) Ltd. v. Director of Enforcement, (1969) 2 SCC 412] is no longer the law declared by the Supreme Court after the decision in Fibre Board case [Fibre Boards (P) Ltd. v. CIT, (2015) 10 SCC 333]. This reason therefore again cannot avail the appellant.\u201d 24. This being the case, it is clear that in order to be an association of persons attracting Section 21AA of the Wealth Tax Act, it is necessary that persons band together with some business or commercial object in view in order to make income or profits. The presumption gets strengthened by the language of Sec. 21AA (2), which speaks of a business or profession carried on by an association of persons which then gets discontinued or dissolved. The thrust of the provision therefore, is to rope in associations of persons whose common object is a business or professional object, namely, to earn income or profits. Bangalore Club being a social club whose objects have been referred to by the Appellate Tribunal in this case make it clear that persons who are banded together do not band together for any business purpose or commercial purpose in order to make income or profits. In fact, the nature of these kind of clubs has been set out in Cricket Club of India Ltd v. Bombay Labour Union (1969) 1 SCR 600 as follows: \u201cWhat we have to see is the nature of the activity in fact and in substance. Though the Club is incorporated as a Company, it is not like an ordinary Company constituted for the purpose of carrying on business. There are no shareholders. No dividends are ever declared and no distribution of profits takes place. Admission to the Club is by payment of admission fee and not by purchase of shares. Even this admission is subject to balloting. The membership is not transferable like the right of shareholders. There is the provision for expulsion of a Member under certain circumstances which feature never exists in the case of a shareholder holding shares in a Limited Company. The membership is fluid. A person retains rights as long as he continues as a Member and gets nothing at all when he ceases to be a Member, even though he may have paid a large amount as admission fee. He even loses his rights on expulsion. In these circumstances, it is clear that the Club cannot be treated as a separate legal entity of the nature of a Limited Company carrying on business. The Club, in fact, continues to be a Members' Club without any shareholders and, consequently, all services provided in the Club for Members have to be treated as activities of a self-serving institution.\u201d (at page. 614) This judgment has been referred to with approval recently in State of West Bengal v. Calcutta Club Limited (2019) 13 SCALE 474 at paragraph 28. 25. At this stage, it is important to refer to CWT v. Ellis Bridge Gymkhana, (supra). In this case, the Ellis Bridge Gymkhana, like the Bangalore Club, is an unincorporated club. The assessment years involved in this case are from 1970-71 to 1977-78 i.e. prior to Section 21AA coming into force. Despite the fact that Section 21AA did not apply, this Court referred to Section 21AA as follows: \u201c15. All these provisions go to show that the Wealth Tax Act has been drafted on the same lines as the Indian Income Tax Act, 1922. There is great similarity of wording between the various provisions of the Wealth Tax Act and corresponding provisions of the Indian Income Tax Act, 1922. But in the case of the charging Section 3 of the Wealth Tax Act, the phraseology of the charging Section 3 of the Indian Income Tax Act, 1922 has not been adopted. Unlike Section 3 of the Income Tax Act, Section 19 3 of the Wealth Tax Act does not mention a firm or an association of persons or a body of individuals as taxable units of assessment. 16. The position has been placed beyond doubt by insertion of Section 21-AA in the Wealth Tax Act itself. This amendment was effected by the Finance Act, 1981 with effect from 1-4-1981. It provides for assessment of association of persons in certain special cases and not otherwise.\u201d The Court then went on to hold: \u201c17. It will be seen that assessment as an association of persons can be made only when the individual shares of members of the association in the income or assets or both of the association on the date of its formation or any time thereafter are indeterminate or unknown. It is only in such an eventuality that an assessment can be made on an association of persons, otherwise not. Sub-section (2) of Section 21-AA deals with cases of such associations as mentioned in sub-section (1). That means only association of persons in which individual shares of the members were unknown or indeterminate can be subjected to wealth tax. Sub-section (3) also deals with association of persons referred to in sub-section (1). Sub- sections (4) and (5) deal with some consequences which will follow the members of an association of persons spoken of in sub-section (1) in the case of discontinuance or dissolution. xxx xxx xxx 19. In our view, Section 21-AA far from helping the case of the Revenue directly goes against its contention. An association of persons cannot be taxed at all under Section 3 of the Act. That is why an amendment was necessary to be made by the Finance Act, 1981 whereby Section 21-AA was inserted to bring to tax net wealth of an association of persons where individual shares of the members of the association were unknown or indeterminate.\u201d After referring to the explanatory notes introducing Section 21AA in paragraph 32, the Court then went on to hold: \u201c33. It will appear from this notification that the Central Board of Direct Taxes clearly recognised that the charge of wealth tax was on individuals and Hindu Undivided Families and not on any other body of individuals or association of persons. Section 21-AA has been introduced to prevent evasion of tax. In a normal case, in assessment of an individual, his wealth from every source will be added up and computed in accordance with provisions of the Wealth Tax Act to arrive at the net wealth which has to be taxed. So, if an individual has any interest in a firm or any other non-corporate body, then his interest in those bodies or associations will be added up in his wealth. It is only where such addition is not possible because the shares of the individual in a body holding property is unknown or indeterminate, resort will be taken to Section 21-AA and association of individuals will be taxed as association of persons.\u201d 26. A perusal of this judgment would show that Section 21AA has been introduced in order to prevent tax evasion. The reason why it was enacted was not to rope in association of persons per se as \u201cone more taxable person\u201d to whom the Act would apply. The object was to rope in certain assessees who have resorted to the creation of a large number of association of persons without specifically defining the shares of the members of such associations of persons so as to evade tax. In construing Section 21AA, it is important to have regard to this object. 27. In K P Varghese v. ITO, 1982 (1) SCR 629, what arose for interpretation before the Supreme Court was in the context of capital gains \u2013 as to whether, to attract the applicability of Sec. 52(2) of the Income Tax Act, understatement of consideration is a prerequisite. On a purely literal reading of Sec. 52(2), it would be clear that no such condition has been mentioned. However, this Court, after referring to the object of the section held: \u201cThus it is not enough to attract the applicability of sub- section (2) that the fair market value of the capital asset transferred by the assessee as on the date of the transfer exceeds the full value of the consideration declared in respect of the transfer by not less than 15 per cent of the value so declared, but it is furthermore necessary that the full value of the consideration in respect of the transfer is understated or in other words, shown at a lesser figure than that actually received by the assessee. Sub-section (2) has no application in case of an honest and bona fide transaction where the consideration in respect of the transfer has been correctly declared or disclosed by the assessee, even if the condition of 15 per cent difference between the fair market value of the capital asset as on the date of the transfer and the full value of the consideration declared by the assessee is satisfied.\u201d (at page. 652, 653) 28. The Bangalore Club is an association of persons and not the creation, by a person who is otherwise assessable, of one among a large number of associations of persons without defining the shares of the members so as to escape tax liability. For all these reasons, it is clear that Section 21AA of the Wealth Tax Act does not get attracted to the facts of the present case. 29. However, the impugned judgment of the High Court relies solely upon CWT v. Chikmagalur Club (supra). This case dealt with a club that was registered under the provisions of the Karnataka Societies Registration Act, 1960. After referring copiously to the Appellate Authority\u2019s orders on facts in this case, the Court went on to hold: \u201c10. \u2026 Several High Courts and the Tribunals have taken different view on the question whether a club registered under the provisions of Karnataka Societies Registration Act is exigible to tax under the provisions of the Wealth Tax Act, but in our view, for the present, the issue is now settled by the pronouncement of the Supreme Court in the case of the Commissioner of Wealth Tax v. Ellis Bridge Gymkhana [ 229 ITR 1.] \u2014 wherein it is held that \u2018club is not assessable to wealth tax in assessment years 1970- 1971 to 1977-1978 as an Association of Persons\u2019 and while saying so, the Court has observed that\u2019 the position has been placed beyond doubt by the insertion of Section 21AA in the Wealth Tax Act itself.\u201d For this purpose, paragraph 17 already extracted in the Ellis Bridge Gymkhana case (supra) was referred to by the said judgment. After referring to paragraph 17, the Court then concluded: \u201c13. \u2026 Now that the scope of Section 21AA of the Act has been explained by the Apex Court in Ellies Bridge Gymkhana Club's case-229 ITR 1, we need not dilate much on the scope and interpretation of the said Section. It would be suffice to notice that assessment as an association of persons can be made only, when the individual shares of the members of the association in the income or assets or both of the association on the date of its formation or any time thereafter are indeterminate or unknown can be subjected to wealth tax. In the present case, the assessee is a club registered under the provisions of the Karnataka Societies Registration Act and had declared \u2018nil\u2019 wealth and had claimed that it is not susceptible to the provision of wealth Tax Act, since it is only an association of persons providing recreation facilities to its members. This claim, in our view, is rightly rejected by both the assessing authority as well as by the first appellate authority on the ground that the assessee is an association of persons and the members are the owners of the assets and the individual shares of the members in the owners of the assets and the individual shares of the members in the income or assets or both of the association on the date of formation or any time thereafter or indeterminate or unknown and accordingly, has subjected the assessee to wealth tax.\u201d 30. What will be noticed is that the High Court in Chikmagalur Club (supra) only referred to paragraph 17 and omitted to refer to paras 19, 32 and 33 of the Ellis Bridge Gymkhana judgment (supra) which have been referred to by us hereinabove. If all these paragraphs would have been referred to, what would have been clear is that a social club like the Chikmagalur Club could not possibly be said to be an association of persons regard being had to the object sought to be achieved by enacting Section 21AA, which is a Section enacted in order to prevent tax evasion. As has been pointed out by us hereinabove, the Section was not introduced to add one more category to the category of taxable persons \u2013 that could have been done by amending the charging section i.e. Section 3(1) of the Wealth Tax Act. Further, the High Court judgment is completely oblivious of the line of judgments starting with Indira Balakrishna\u2019s case (supra) by which \u201cassociation of persons\u201d must mean persons who are banded together with a common object \u2013 and, in the context of a taxation statute, common object being a business object being to earn income or profits. This judgment does not refer to Indira Balakrishna (supra) and the judgments following it at all. For all these reasons, the judgment in CWT v. Chikmagalur Club (supra) not being correctly decided, is overruled. Equally, the High Court judgment which rests solely upon the decision in Chikmagalur Club\u2019s case (supra) has no legs to stand. 31. We now come to some of the points raised by the learned Additional Solicitor General, Shri Banerjee. The submission that Section 21AA (2) which deals with dissolution of an association of persons and the fact that on dissolution under Rule 35 of the Bangalore Club, members get an equal share would show first, that the Bangalore Club is an association of persons; and second, that the member\u2019s share in its income and assets are indeterminate or unknown, is an argument which has to be stated to be rejected. First and foremost, sub-section (2) begins with the words \u201cany business or profession carried on\u201d by an association of persons. No business or profession is carried on by a social members club. Further, the association of persons mentioned in sub-section (1) must be persons who have banded together for a business objective \u2013 to earn profits \u2013 and if this itself is not the case, then sub-section (2) cannot possibly apply. Insofar as Rule 35 is concerned, again what is clear is that on liquidation, any surplus assets remaining after all debts and liabilities of the club has been discharged, shall be divided equally amongst all categories of members of the club. This would show that \u201cat any time thereafter\u201d within the meaning of Section 21AA (1), the members\u2019 shares are determinate in that on liquidation each member of whatsoever category gets an equal share. 32. The judgments cited by Shri Nikhil Nayyar in so far as this aspect is concerned, have no direct relevance. The judgment in CWT v. Rama Varma Club 226 ITR 898 and CWT v. George Club 191 ITR 368 are both judgments in which no part of the assets is to be distributed even on liquidation to any of the members of these clubs. Thus, it was held in these cases that the members do not have any share in the income or assets of the club at all. The same cannot be said in the facts of this case inasmuch as under Rule 35 the members of the Bangalore Club are entitled to receive surplus assets in the circumstances stated in Rule 35 - equally on liquidation. However, the result remains the same \u2013 viz., that even if it be held that the Bangalore Club is an association of persons, the members\u2019 shares being determinate do not attract Section 21AA. 33. Shri Banerjee then relied upon the judgment in Bangalore Club v. CIT (2013) 5 SCC 509 only in order to point out that the Bangalore Club was taxed as an AOP under the Income Tax Act and cannot and should not therefore, escape liability under the Wealth Tax Act (an allied and cognate Act). First and foremost, the definition of \u201cperson\u201d in Section 2(31) of the Income Tax Act would take in both an association of persons and a body of individuals. For the purposes of income tax, the Bangalore Club could perhaps be treated to be a \u2018body of individuals\u2019 which is a wider expression than \u2018association of persons\u2019 in which such body of individuals may have no common object at all but would include a combination of individuals who had nothing more than a unity of interest. This distinction has been made by the Andhra Pradesh High Court in Deccan Wine and General Stores v. CIT 106 ITR 111 at pages 116, 117. Quite apart from this, to be taxed as an association of persons under the Income Tax Act is to be taxed as an association of persons per se. We have already seen that Section 21AA does not enlarge the field of tax payers but only plugs evasion as the association of persons must be formed with members who have indeterminate shares in its income or assets. For all these reasons, we cannot accede to Shri Banerjee\u2019s argument that being taxed as an association of persons under the Income Tax Act, the Bangalore Club must be regarded to be an \u2018association of persons\u2019 for the purpose of a tax evasion provision in the Wealth Tax Act as opposed to a charging provision in the Income Tax Act. One last argument of Shri Banerjee needs to be addressed. According to the learned ASG, the fact that the membership of the club is a fluctuating body of individuals would necessarily lead to the conclusion that the shares of the members in the assets or the income of the club would be indeterminate. In CWT v. Trustees of H.E.H. Nizam's Family 108 ITR 555 (1977), this court had to construe Sec. 21 of the Wealth Tax Act. Sec. 21 (1) & (4) which are relevant for our purpose are set out hereinbelow: \u201c21. (1) In the case of assets chargeable to tax under this Act, which are held by a court of wards or an administrator-general or an official trustee or any receiver or manager or any other person, by whatever name called, appointed under any order of a court to manage property on behalf of another, or any trustee appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise (including a trustee under a valid deed of wakf), the wealth-tax shall be levied upon and recoverable from the court of wards, administrator-general, official trustee, receiver, manager or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf or for whose benefit the assets are held, and the provisions of this Act shall apply accordingly. xxx xxx xxx (4) Notwithstanding anything contained in this section, where the shares of the persons on whose behalf or for whose benefit any such assets are held are indeterminate or unknown, the wealth-tax shall be levied upon and recovered from the court of wards, administrator-general, official trustee, receiver, manager, or other person aforesaid as if the person on whose behalf or for whose benefit the assets are held were an individual for the purposes of this Act.\u201d 34. The argument made in this case was that, as the members of the Nizam\u2019s family trust who are beneficiaries thereof would be a fluctuating body of persons, the beneficiaries must be said to be indeterminate as a result of which Sec. 21(4) of the Act would apply and not Sec. 21(1). This was repelled by this Court stating: \u201cThis immediately takes us to the question as to which of the two sub-sections, (1) or (4) of Section 21 applies for the purpose of assessing the assessees to wealth tax in respect of the beneficial interest in the remainder qua each set of unit or units allocated to the relatives specified in the Second Schedule. Now it is clear from the language of Section 3 that the charge of wealth tax is in respect of the net wealth on the relevant valuation date, and, therefore, the question in regard to the applicability of sub- section (1) or (4) of Section 21 has to be determined with reference to the relevant valuation date. The Wealth Tax Officer has to determine who are the beneficiaries in respect of the remainder on the relevant date and whether their shares are indeterminate or unknown. It is not at all relevant whether the beneficiaries may change in subsequent years before the date of distribution, depending upon contingencies which may come to pass in future. So long as it is possible to say on the relevant valuation date that the beneficiaries are known and their shares are determinate, the possibility that the beneficiaries may change by reason of subsequent events such as birth or death would not take the case out of the ambit of sub-section (1) of Section 21. It is no answer to the applicability of sub-section (1) of Section 21 to say that the beneficiaries are indeterminate and unknown because it cannot be predicated who would be the beneficiaries in respect of the remainder on the death of the owner of the life interest. The position has to be seen on the relevant valuation date as if the preceding life interest had come to an end on that date and if, on that hypothesis, it is possible to determine who precisely would be the beneficiaries and on what determinate shares, sub- section (1) of Section 21 must apply and it would be a matter of no consequence that the number of beneficiaries may vary in the future either by reason of some beneficiaries ceasing to exist or some new beneficiaries coming into being. Not only does this appear to us to be the correct approach in the application of sub-section (1) of Section 21, but we find that this has also been the general consensus of judicial opinion in this country in various High Courts during the last about thirty years. The first decision in which this view was taken was rendered as far back as 1945 by the Patna High Court in Khan Bahadur M. Habibur Rahman v.CIT [(1945) 13 ITR 189 (Pat)] and since then, this view has been followed by the Calcutta High Court in Suhashini Karuri v. WTO [(1962) 46 ITR 953 (Cal)] the Bombay High Court in Trustees of Putlibai R.F. Mulla Trust v. CWT [(1967) 66 ITR 653, 657- 8 (Bom)] and CWT v. Trustees of Mrs Hansabai Tribhu wandas Trust [(1967) 69 ITR 527 (Bom)] and the Gujarat High Court in Padmavati Jaykrishna Trust v.CIT [(1966) 61 ITR 66, 73-4 (Guj)]. The Calcutta High Court pointed out in Suhashini Karuri case: \u201cThe share of a beneficiary can be said to be indeterminate if at the relevant time the share cannot be determined but merely because the number of beneficiaries vary from time to time, one cannot say that it is indeterminate.\u201d The same proposition was formulated in slightly different language by the Bombay High Court in Trustees of Putalibai R.F. Mulla Trust case [(1967) 66 ITR 653, 657-8 (Bom)]: \u201cThe question whether the shares of the beneficiaries are determinate or known has to be judged as on the relevant date in each respective year of taxation. Therefore, whatever may be the position \u2014 as to any future date, so far as the relevant date in each year is concerned, it is upon the terms of the trust deed always possible to determine who are the sharers and what their shares respectively are.\u201d The Gujarat High Court also observed in Padmavati Jaykrishna Trust case [(1966) 61 ITR 66, 73-4 (Guj)] : \u201c. . . in order to ascertain whether the shares of beneficiaries and their numbers were determinate or not, the Wealth Tax Officer has to ascertain the facts as they prevailed on the relevant date and therefore any variation in the number of beneficiaries in future would not matter and would not make sub-section (4) of Section 21 applicable.\u201d These observations represent correct statement of the law and we have no doubt that in order to determine the applicability of sub-section (1) of Section 21, what has to be seen is whether on the relevant valuation date, it is possible to say with certainty and definiteness as to who would be the beneficiaries and whether their shares would be determinate and specific, if the event on the happening of which the distribution is to take place occurred on that date. If it is, sub-section (1) of Section 21 would apply: if not, the case will be governed by sub-section (4) of Section 21.\u201d 35. It is thus clear that what has to be seen in the facts of the present case is the list of members on the date of liquidation as per Rule 35 cited hereinabove. Given that as on that particular date, there would be a fixed list of members belonging to the various classes mentioned in the rules, it is clear that, applying the ratio of Trustees of H.E.H. Nizam's Family (supra), such list of members not being a fluctuating body, but a fixed body as on the date of liquidation would again make the members \u2018determinate\u2019 as a result of which, Sec. 21AA would have no application. 36. For all these reasons, the impugned judgment and the review judgment are set aside. The appeals are allowed with no order as to costs. \u2026\u2026\u2026\u2026\u2026..\u2026\u2026\u2026\u2026\u2026\u2026J. (R. F. Nariman) \u2026\u2026\u2026..\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. (Navin Sinha) \u2026\u2026\u2026..\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. (Indira Banerjee) New Delhi. 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{"id": "1373037", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6418 OF 2008 (Arising out of SLP (C) NO. 17397 of 2007) M/s. M.M.T.C. Limited ...Appellant Versus Commissioner of Commercial Tax & Ors. ...Respondents JUDGMENT Dr. ARIJIT PASAYAT, J. 1. Leave granted. 2. Challenge in this appeal is to the judgment of a Division Bench of the Madhya Pradesh High Court dismissing the writ appeal filed by the appellant on the ground that it was not maintainable. The appeal was filed under Section 2(1) of the M.P. Uchacha Nyayalay (Khand Nyaypeth Ko Appeal) Adhiniyam, 2005 (hereinafter referred to as the `Act'). It was held that the order was passed in exercise of power of superintendence under Article 227 of the Constitution of India, 1950 (in short the `Constitution') against which the Letters Patent Appeal is not maintainable. The order of learned Single Judge was passed on 9.11.2005. Against the said order, special leave petition was filed which was disposed of by this Court by order dated 16.2.2006. We shall refer to the text of the order later. The High Court construed as if this Court has only waived the limitation for filing of Letters Patent Appeal and there was no direction to consider the case on merits. 3. Learned counsel for the appellant submitted that the order of this Court is very clear and the conclusions of the High Court that merely limitation was waived is contrary to the clear terms of the earlier order of this Court. Additionally it is submitted that the prayer in the Writ Petition was to quash the order passed by the Assistant Commissioner, Commercial Tax. That being so, the mere fact that the writ petition was styled under Article 227 of the Constitution is of no consequence. It is the nature of the relief sought for and the controversy involved which determines the Article which is applicable. 4. Learned counsel for the respondent-State on the other hand supported the impugned judgment of the High Court. 5. The earlier order passed by this Court dated 22.8.2006 reads as follows: \"Heard. Since the impugned order is passed by a learned Single Judge. The normal remedy is to file a Letters Patent Appeal. Since we had entertained the Special Leave Petition against the learned Single Judge's order it would be appropriate to grant three weeks' time to the petitioner to prefer the LPA which if otherwise free from defect shall be entertained for being considered on merits. The interim order passed by this Court shall continue for the aforesaid purpose. The Special Leave Petition is disposed of accordingly.\" (Underlined for emphasis) 6. A bare reading of the order shows that the direction was to consider the LPA on merits and time was granted to prefer the LPA within three weeks. The High Court was directed to dispose of the LPA on merits if it was otherwise free from defect. The High Court was, therefore, not justified in holding that this Court's earlier order only waived the limitation for filing a Letters Patent Appeal. On that score alone the High Court's order is unsustainable. 7. In addition, the High Court seems to have gone by the nomenclature gone by the nomenclature i.e. the discription given in the writ petition to be one under Article 227 of the Constitution. The High Court did not consider the nature of the controversy and the prayer involved in the Writ petition. As noted above the prayer was to quash the order of assessment passed by the Assistant Commissioner, Commercial Tax levying purchase as well as Entry Tax. 8. Section 2 of the Act reads as follows: \"2(1) An appeal shall lie from a judgment or order passed by the one Judge of the High Court in exercise of original jurisdiction under Article 226 of the Constitution of India, to a Division bench comprising of two judges of the same High Court. Provided that no such appeal shall lie against an interlocutory order or against an order passed in exercise of supervisory jurisdiction under Article 227 of the Constitution of India.\" 9. This Court in Hari Vishnu Kamath v. Syed Ahmad Ishaque and Ors. (AIR 1955 SC 233) held that the High Court while issuing writ of certiorari under Article 226 of the Constitution can only annul a decision of a Tribunal whereas under Article 227 of the Constitution it can issue further directions as well. As noted above the prayer in the Writ Petition was to set aside the decision of the assessing officer. 10. In Umaji Keshao Meshram v. Radhikabai [AIR 1986 SC 1272] it was noted as follows: \"Under Article 226 an order, direction or writ is to issue to a person, authority or the State. In a proceeding under that article the person, authority or State against whom the direction, order or writ is sought is a necessary party. Under Article 227, however, what comes up before the High Court is the order or judgment of a subordinate court or tribunal for the purpose of ascertaining whether in giving such judgment or order that subordinate court or tribunal has acted within its authority and according to law. Prior to the commencement of the Constitution, the Chartered High Courts as also the Judicial Committee had held that the power to issue prerogative writs possessed by the Chartered High Courts was an exercise of original jurisdiction (see Mahomedalli Allabux v. Ismailji Abdulali (AIR 1926 Bom 332), Raghunath Keshav Khadilkar v. Poona Municipality,(AIR 1945 Bom 7) Ryots of Garabandho v. Zemindar of Parlakimedi (AIR 1943 PC 164) and Moulvi Hamid Hasan Nomani v. Banwarilal Roy [(1946- 47) 74 Ind App 120,130-131]. In the last mentioned case which dealt with the nature of a writ of quo warranto, the Judicial Committee held: \"In Their Lordships' opinion any original civil jurisdiction possessed by the High Court and not in express terms conferred by the Letters Patent or later enactments falls within the description of ordinary original civil jurisdiction.\" By Article 226 the power of issuing prerogative writs possessed by the Chartered High Courts prior to the commencement of the Constitution has been made wider and more extensive and conferred upon every High Court. The nature of the exercise of the power under Article 226, however, remains the same as in the case of the power of issuing prerogative writs possessed by the Chartered High Courts. A series of decisions of this Court has firmly established that a proceeding under Article 226 is an original proceeding and when it concerns civil rights, it is an original civil proceeding (see, for instance, State of U.P. v. Vijay Anand Maharaj [(1963) 1 SCR 1,16], CIT v. Ishwarlal Bhagwandas [AIR 1965 SC 1818], Ramesh v. Seth Gendalal Motilal Patni (1966 (3) SCR 198), Arbind Kumar Singh v. Nand Kishore Prasad[1968 (3) SCR 322] and Ahmedabad Mfg. & Calico Ptg. Co. Ltd. v. Ram Tahel Ramnand (AIR 1972 SC 1598).\" 11. In para 106, it was noted as follows: \"106. The non obstante clause in Rule 18, namely, \"Notwithstanding anything contained in Rules 1, 4 and 17 of this chapter\", makes it abundantly clear why that rule uses the words \"finally disposed of\". As seen above, under Rules 1 and 17, applications under Articles 226 and 227 are required to be heard and disposed of by a Division Bench. Rule 4, however, gives power to a Single Judge to issue rule nisi on an application under Article 226 but precludes him from passing any final order on such application. It is because a Single Judge has no power under Rules 1, 4 and 17 to hear and dispose of a petition under Article 226 or 227 that the non obstante clause has been introduced in Rule 18. The use of the words \"be heard and finally disposed of by a Single Judge\" in Rule 18 merely clarifies the position that in such cases the power of the Single Judge is not confined merely to issuing a rule nisi. These words were not intended to bar a right of appeal. To say that the words \"finally disposed of\" mean finally disposed of so far as the High Court is concerned is illogical because Rules 1, 4 and 7 use the words \"be heard and disposed of by a Divisional Bench\" and were the reasoning of the Full Bench correct, it would mean that so far as the High Court is concerned, when a Single Judge hears a matter and disposes it of, it is finally disposed of and when a Division Bench disposes it of, it is not finally disposed of. The right of appeal against the judgment of a Single Judge is given by the Letters Patent which have been continued in force by Article 225 of the Constitution. If under the Rules of the High Court, a matter is heard and disposed of by a Single Judge, an appeal lies against his judgment unless it is barred either under the Letters Patent or some other enactment. The word \"finally\" used in Rule 18 of Chapter XVII of the Appellate Side Rules does not and cannot possibly have the effect of barring a right of appeal conferred by the Letters Patent. As we have seen above, an intra-court appeal against the judgment of a Single Judge in a petition under Article 226 is not barred while clause 15 itself bars an intra-court appeal against the judgment of a Single Judge in a petition under Article 227.\" 12. In Sushilabai Laxminarayan Mudliyar v. Nihalchand Waghajibhai Shaha [1993 Supp. (1) SCC 11] this court with reference to an unreported judgment in Ratnagiri District Central Co-operative Bank Ltd. v. Dinkar Kashinath Watve, C.A. No. 520 of 1989 decided on 27.1.1989 held as follows: \"Even when in the cause title of an application both Article 226 and Article 227 of the Constitution have been mentioned, the learned single Judge is at liberty to decide, according to facts of each particular case, whether the said application ought to be dealt with only under Article 226 of the Constitution. For determining the question of maintainability of an appeal against such a judgment of the Single Judge the Division bench has to find out whether in substance the judgment has been passed by the learned Single Judge in exercise of the jurisdiction under Article 226 of the Constitution. In the event in passing his judgment on an application which had mentioned in its cause title both Articles 226 and 227, the Single Judge has in fact invoked only his supervisory powers under Article 227, the appeal under clause 15 would not lie. The clause 15 of the Letters Patent expressly bars appeals against orders of Single Judges passed under revisional or supervisory powers. Even when the learned Single Judge's order has been passed under both the articles, for deciding the maintainability against such an order what would be relevant is the principal or main relief granted by the judgment passed by learned Single Judge and not the ancillary directions given by him. The expression `ancillary' means, in the context, incidental or consequential to the main part of the order. Thus, the determining factor is the real nature of principal order passed by the Single Judge which is appealed against and neither the mentioning in the cause title of the application of both the articles nor the granting of ancillary orders thereupon made by learned Single Judge would be relevant. Thus, in each case, the Division Bench may consider the substance of the judgment under appeal to ascertain whether the Single Judge has mainly or principally exercised in the matter his jurisdiction under Article 226 or under Article 227. In the event in his judgment the learned Single Judge himself had mentioned the particular article of the Constitution under which he was passing his judgment, in an appeal under clause 15 against such a judgment it may not be necessary for the appellate bench to elaborately examine the question of its maintainability. When without mentioning the particular article the learned Single Judge decided on merits the application, in order to decide the question of maintainability of an appeal, against such a judgment, the Division Bench might examine the relief granted by the learned Single Judge, for maintainability of an appeal, the determination would be the main and not the ancillary relief. When a combined application under Articles 226 and 227 of the Constitution is summarily dismissed without reasons, the appeal Court may consider whether the facts alleged, warranted filing of the application under Article 226 or under Article 227 of the Constitution.\" 13. Thereafter this Court explained the ratio laid down in the case of Umaji's case (supra) and expressed thus: \"...In Umaji case it was clearly held that where the facts justify a party in filing an application either under Article 226 or 227 of the Constitution of India and the party chooses to file his application under both these articles in fairness of justice to party and in order not to deprive him of valuable right of appeal the Court ought to treat the application as being made under Article 226, and if in deciding the matter, in the final order the Court gives ancillary directions which may pertain to Article 227, this ought not to be held to deprive a party of the right of appeal under clause 15 of the Letters Patent where the substantial part of the order sought to be appealed against is under Article 226. Rule 18 of the Bombay High Court Appellate Side Rules read with clause 15 of the Letters Patent provides for appeal to the Division Bench of the High Court from a judgment of the learned Single Judge passed on a writ petition under Article 226 of the Constitution. In the present case the Division Bench was clearly wrong in holding that the appeal was not maintainable against the order of the learned Single Judge.\" 14. In Mangalbhai & Ors. v. Radhyshyam (Dr.) [AIR 1993 SC 806] it was inter alia observed as follows: \"The learned Single Judge in his impugned judgment dated December 11, 1987 nowhere mentioned that he was exercising the powers under Article 227 of the Constitution. The learned Single Judge examined the matter on merit and set aside the orders of the Rent Controller as well as the Resident Deputy Collector on the ground that the aforesaid judgments were perverse. The findings of the Rent Controller and Resident Deputy Collector were set aside on the question of habitual defaulter as well as on the ground of bona fide need. Thus in the totality of the facts and circumstances of the case, the pleadings of the parties in the writ petition and the judgment of the learned Single Judge leaves no manner of doubt that it was an order passed under Article 226 of the Constitution and in that view of the matter the Letters Patent Appeal was maintainable before the High Court. After taking the aforesaid view one course open was to set aside the order of the Division Bench and to remand the matter for being disposed of on merits by the Division Bench of the High Court. However, taking in view the fact that this litigation is going on for nearly a decade and also the fact that even the learned Single Judge in his impugned order dated December 11, 1987 had remanded the case to the Rent Controller, we considered it proper in the interest of justice to hear the appeal on merits against the judgment of the learned Single Judge. We have heard learned counsel for the parties at length on the merits of the case.\" 15. In Lokmat Newspapers (P) Ltd. v. Shankarprasad [1999 (6) SCC 275] it was observed as follows: \"It is, therefore, obvious that the writ petition invoking jurisdiction of the High Court both under Articles 226 and 227 of the Constitution had tried to make out a case for the High Court's interference seeking issuance of an appropriate writ of certiorari under Article 226 of the Constitution of India. Basic averments for invoking such a jurisdiction were already pleaded in the writ petition for the High Court's consideration. It is true, as submitted by learned counsel for the appellant, that the order of the learned Single Judge nowhere stated that the Court was considering the writ petition under Article 226 of the Constitution of India. It is equally true that the learned Single Judge dismissed the writ petition by observing that the courts below had appreciated the contentions and rejected the complaint. But the said observation of the learned Single Judge did not necessarily mean that the learned Judge was not inclined to interfere under Article 227 of the Constitution of India only. The said observation equally supports the conclusion that the learned Judge was not inclined to interfere under Articles 226 and 227. As seen earlier, he was considering the aforesaid writ petition moved under Article 226 as well as Article 227 of the Constitution of India. Under these circumstances, it is not possible to agree with the contention of learned counsel for the appellant that the learned Single Judge had refused to interfere only under Article 227 of the Constitution of India when he dismissed the writ petition of the respondent. In this connection, it is profitable to have a look at the decision of this Court in the case of Umaji Keshao Meshram v. Radhikabai [1986 Supp.SCC 401]. In that case O. Chinnappa Reddy and D.P. Madon, JJ., considered the very same question in the light of clause 15 of the Letters Patent of the Bombay High Court. Madon, J., speaking for the Court in para 107 of the Report at p. 473, made the following pertinent observations: (SCC p. 473, para 107) \"107. Petitions are at times filed both under Articles 226 and 227 of the Constitution. The case of Hari Vishnu Kamath v. Syed Ahmad Ishaque (AIR 1955 SC 233) before this Court was of such a type. Rule 18 provides that where such petitions are filed against orders of the tribunals or authorities specified in Rule 18 of Chapter XVII of the Appellate Side Rules or against decrees or orders of courts specified in that rule, they shall be heard and finally disposed of by a Single Judge. The question is whether an appeal would lie from the decision of the Single Judge in such a case. In our opinion, where the facts justify a party in filing an application either under Article 226 or 227 of the Constitution, and the party chooses to file his application under both these articles, in fairness and justice to such party and in order not to deprive him of the valuable right of appeal the court ought to treat the application as being made under Article 226, and if in deciding the matter, in the final order the court gives ancillary directions which may pertain to Article 227, this ought not to be held to deprive a party of the right of appeal under clause 15 of the Letters Patent where the substantial part of the order sought to be appealed against is under Article 226. Such was the view taken by the Allahabad High Court in Aidal Singh v. Karan Singh (AIR 1957 All 414) and by the Punjab High Court in Raj Kishan Jain v. Tulsi Dass (AIR 1959 Punj 291) and Barham Dutt v. Peoples' Coop. Transport Society Ltd. (AIR 1961 Punj 24) and we are in agreement with it.\" The aforesaid decision squarely gets attracted on the facts of the present case. It was open to the respondent to invoke the jurisdiction of the High Court both under Articles 226 and 227 of the Constitution of India. Once such a jurisdiction was invoked and when his writ petition was dismissed on merits, it cannot be said that the learned Single Judge had exercised his jurisdiction only under Article 226 (sic 227) of the Constitution of India. This conclusion directly flows from the relevant averments made in the writ petition and the nature of jurisdiction invoked by the respondent as noted by the learned Single Judge in his judgment, as seen earlier. Consequently, it could not be said that clause 15 of the Letters Patent was not attracted for preferring appeal against the judgment of the learned Single Judge. It is also necessary to note that the appellant being the respondent in letters patent appeal joined issues on merits and did not take up the contention that the letters patent appeal was not maintainable. For all these reasons, therefore, the primary objection to the maintainability of the letters patent appeal as canvassed by learned counsel for the appellant, has to be repelled. Point 1 is, therefore, answered in the affirmative against the appellant and in favour of the respondent. It takes us to the consideration of points arising for our decision on merits.\" 16. In Surya Dev Rai v. Ram Chander Rai & Ors. [AIR 2003 SC 3044] after referring to decisions in Custodian of Evacuee Property, Bangalore v. Khan Saheb Abdul Shukoor, etc. [1961 (3) SCR 855] and Nagendra Nath Bora & Anr. v. Commissioner of Hills Division [AIR 1958 SC 398], T.C. Basappa v. T. Nagappa [AIR 1954 SC 440] and Rupa Ashok Hurra v. Ashok Hurra [AIR 2002 SC 1771], this Court held at paragraphs 17, 19 & 25 as follows: \"17. From the aforesaid enunciation of law it is quite vivid and luminescent that the pleadings in the writ petition, nature of the order passed by the learned Single Judge, character and the contour of the order, directions issued, nomenclature given the jurisdictional prospective in the constitutional context are to be perceived. It cannot be said in a hypertechnical manner that an order passed in a writ petition, if there is assail to the order emerging from the inferior tribunal or subordinate Court has to be treated all the time for all purposes to be under Article 227 of the Constitution of India. Phraseology used in exercise of original jurisdiction under Article 226 of the Constitution in Section 2 of the Act cannot be given a restricted and constricted meaning because an order passed in a writ petition can tantamount to an order under Article 226 or 227 of the Constitution of India and it would depend upon the real nature of the order passed by the learned Single Judge. To elaborate; whether the learned Single Judge has exercised his jurisdiction under Article 226 or under Article 227 or both would depend upon various aspects and many a facet as has been emphasized in the afore quoted decisions of the apex Court. The pleadings, as has been indicated hereinabove, also assume immense significance. As has been held in the case of Surya Devi Rai (supra) a writ of certiorari can be issued under Article 226 of the Constitution against an order of a Tribunal or an order passed by the sub ordinate court. In quintessentiality, it cannot be put in a state jacket formula that any order of the learned judge that deals with an order arising from an inferior tribunal or the sub ordinate court is an order under Article 227 of the Constitution of India and not an order under Article 226 of the Constitution. It would not be an over emphasis to state that an order in a writ petition can fit into the subtle contour of Articles 226 and 227 of the Constitution in a composite manner and they can coincide, co-exit, overlap imbricate. In this context it is apt to note that there may be cases where the learned single judge may feel disposed or inclined to issue a writ to do full and complete justice because it is to be borne in mind that Article 226 of the Constitutions is fundamentally a repository and reservoir of justice based on equity and good conscience. It will depend upon factual matrix of the case. 19. Thus, there is no manner of doubt that the orders and proceedings of a judicial court subordinate to the High Court are amenable to writ jurisdiction of the High Court under Article 226 of the Constitution. 25. Upon a review of decided cases and a survey of the occasions, wherein the High Courts have exercised jurisdiction to command a writ of certiorari or to exercise supervisory jurisdiction under Article 227 in the given facts and circumstances in a variety of cases, it seems that the distinction between the two jurisdictions stands almost obliterated in practice. Probably, this is the reason why it has become customary with the lawyers labelling their petitions as one common under Articles 226 and 227 of the Constitution, though such practice has been deprecated in some judicial pronouncement. Without entering into niceties and technicality of the subject, we venture to state the broad general difference between the two jurisdictions. Firstly, the writ of certiorari is an exercise of its original jurisdiction by the High Court; exercise of supervisory jurisdiction is not an original jurisdiction and in this sense it is akin to appellate, revisional or corrective jurisdiction. Secondly, in a writ of certiorari, the record of the proceedings having been certified and sent up by the inferior court or tribunal to the High Court, the High Court if inclined to exercise its jurisdiction, may simply annul or quash the proceedings and then do no more. In exercise of supervisory jurisdiction, the High Court may not only quash or set aside the impugned proceedings, judgment or order but it may also make such directions as the facts and circumstances of the case may warrant, maybe, by way of guiding the inferior court or tribunal as to the manner in which it would now proceed further or afresh as commended to or guided by the High Court. In appropriate cases the High Court, while exercising supervisory jurisdiction, may substitute such a decision of its own in place of the impugned decision, as the inferior court or tribunal should have made. Lastly, the jurisdiction under Article 226 of the Constitution is capable of being exercised on a prayer made by or on behalf of the party aggrieved; the supervisory jurisdiction is capable of being exercised suo motu as well.\" 17. In view of what has been stated above, the High Court was not justified in holding that the Letters Patent Appeal was not maintainable. In addition, a bare reading of this Court's earlier order shows that the impugned order is clearly erroneous. The impugned order is set aside. The writ appeal shall be heard by the Division Bench on merits. 18. The appeal is allowed. ..................................J. (Dr. ARIJIT PASAYAT) .................................J. (P. SATHASIVAM) .................................J. 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{"id": "111507500", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 707 OF 2020 (ARISING OUT OF SLP (CRIMINAL) NO. 3585 OF 2020) HITESH VERMA .....APPELLANT(S) VERSUS THE STATE OF UTTARAKHAND & ANR. .....RESPONDENT(S) JUDGMENT HEMANT GUPTA, J. 1. The challenge in the present appeal is to an order passed by the High Court of Uttarakhand at Nainital on 20.7.2020 whereby the petition filed by the appellant under Section 482 of the Code of Criminal Procedure, 19731 for quashing the charge-sheet as well as the summoning order dated 25.6.2020 was dismissed. 2. The FIR No. 173 in question was lodged by the respondent No. 2 on 11.12.2019 at 23:24 hours in respect of an incident alleged to have Signature Not Verified occurred on 10.12.2019 at 10:00 hours against the appellants and Digitally signed by Vishal Anand Date: 2020.11.05 others. The FIR was lodged for the offences under Sections 452, 16:30:41 IST Reason: 1 For short, the \u2018Code\u2019 504, 506 and Section 3(1)(x) and 3(1)(e) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 2. The said FIR, when translated, reads as under: \u201cRespected SHO with respect of registering of FIR, the complainant is presently resident of Gram New Bajeti Patti Chandak Tehsil & District Pithoragarh. I am constructing my house on my Khet No. 6195, 6196 & 6199 but Banshilal, Pyarelal S/o Late Har Lal, Hitesh Verma S/o Sh. Pyarelal, Pawan Verma S/o Banshilal, Uma Verma w/o Pyarelal and their Nepali Domestic help Raju from past 6 months are not allowing the applicant to work on her fields. All the above persons used to abuse the applicant her husband and other family members and use to give death threats and use Caste coloured abuses. On 10.12.2019 at around 10 am, all these persons entered illegally in to four walls of her building and started hurling abuses on myself and my labourers and gave death threats and used castes\u2019 remarks/abuses and took away the construction material such as Cement, Iron, Rod, Bricks. The Applicant is a Scheduled Caste and all of the above person uses castes\u2019 remarks/abuses (used bad language) and said that you are persons of bad caste and that we will not let you live in this mohalla/vicinity. Respect Sir, the applicant and her family has threat to her life from such persons. Thus, it is requested that an FIR may be lodged against such persons and necessary action may be taken against them\u2026..\u201d 3. Pursuant to the FIR filed by Respondent No. 2, Police filed a report disclosing offences under Sections 504, 506 IPC and Section 3(1)(x) of the Act, cognizance for the same was taken by the Trial Court on 25.6.2020. It is the said order which was challenged along with the charge-sheet before the High Court, which was unsuccessful. 4. On the other hand, on the basis of the statement of Mr. Pawan Verma, an FIR No. 174 at about 23:47 hours was lodged on 2 For short, \u201cthe Act\u201d. 11.12.2019 in respect of an occurrence which had taken place allegedly at 9:45 hours on 11.12.2019. A charge-sheet in the said matter has been submitted against respondent No. 2 and others. Thereafter, the learned Chief Judicial Magistrate, Pithoragarh had taken cognizance for the offences under Sections 323 and 354 IPC against respondent No. 2 and others on 2.7.2020. 5. The Appellant invoked the jurisdiction of the High Court by way of a petition under Section 482 of the Code to challenge the charge- sheet and the order taking cognizance. The Appellant relied upon Gerige Pentaiah v. State of Andhra Pradesh & Ors. 3 wherein the allegation was of abusing the complainant in the name of their caste and this Court quashed the complaint. The attention of the High Court was drawn to another judgment reported as Ashabai Machindra Adhagale v. State of Maharashtra & Ors. 4 wherein this Court refused to quash the FIR on the ground that the caste of the accused was not mentioned in the first information report. The High Court found that both the abovementioned cases dealt with the same issue with regard to applicability of the provisions of the Act. It was observed by the High Court that the appellant had categorically admitted that the informant belonged to Scheduled Caste and that she and her labourers were abused. Therefore, the provisions of the Act were found to be applicable and accordingly, after investigation, charge-sheet has been submitted. The High Court dismissed the petition with the aforesaid findings. 3 (2008) 12 SCC 531 4 (2009) 3 SCC 789 6. The learned counsel for the appellant argued that the disputes relating to the property are pending before the Civil Court and that, the present FIR has been filed on patently false grounds by respondent No. 2 only to harass the appellant and to abuse of process of law. It is argued that the allegations levelled in the FIR and the subsequent report submitted by the Police after investigations does not disclose any offence under the Act. Furthermore, it is argued that the report neither discloses the caste of the informant nor the allegations are that they were made in public view. Also, the offending words are not purported to be made for the reason that the informant is a person belonging to Scheduled Caste. 7. The learned counsel for the State on the contrary, submitted that during investigations, certain persons have supported the version of the informant. It is argued on behalf of respondent No. 2 that in fact the appellant and his family are encroacher on the informant\u2019s land. Therefore, the appellant was rightly not granted any indulgence by the High Court. 8. Against the backdrop of these facts, it is pertinent to refer to the Statement of Objects and Reasons of enactment of the Act. It is provided as under: economic conditions of the Scheduled Castes and the Scheduled Tribes, they remain vulnerable. They are denied number of civil rights. They are subjected to various offences, indignities, humiliations and harassment. They have, in several brutal incidents, been deprived of their life and property. Serious crimes are committed against them for various historical, social and economic reasons. 2. Because of the awareness created amongst the Scheduled Castes and the Scheduled Tribes through spread of education, etc., they are trying to assert their rights and this is not being taken very kindly by the others. When they assert their rights and resist practices of untouchability against them or demand statutory minimum wages or refuse to do any bonded and forced labour, the vested interests try to cow them down and terrorise them. When the Scheduled Castes and the Scheduled Tribes try to preserve their self- respect or honour of their women, they become irritants for the dominant and the mighty. Occupation and cultivation of even the Government allotted land by the Scheduled Castes and the Scheduled Tribes is resented and more often these people become victims of attacks by the vested interests. Of late, there has bene an increase in the disturbing trend of commission of certain atrocities like making the Scheduled Caste persons eat inedible substances like human excreta and attacks on and mass killings of helpless Scheduled Castes and the Scheduled Tribes and rape of women belonging to the Scheduled Castes and the Scheduled Tribes. Under the circumstances, the existing laws like the Protection of Civil Rights Act, 1955 and the normal provisions of the Indian Penal Code have been found to be inadequate to check these crimes. A special Legislation to check and deter crimes against them committed by non-Scheduled Castes and non-Scheduled Tribes has, therefore, become necessary.\u201d 9. The long title of the Act is to prevent the commission of offences of atrocities against the members of the Scheduled Castes and the Scheduled Tribes, to provide for Special Courts and Exclusive Special Courts for the trial of such offences and for the relief and rehabilitation of the victims of such offences and for matters connected therewith or incidental thereto. 10. The Act was enacted to improve the social economic conditions of the vulnerable sections of the society as they have been subjected to various offences such as indignities, humiliations and harassment. They have been deprived of life and property as well. The object of the Act is thus to punish the violators who inflict indignities, humiliations and harassment and commit the offence as defined under Section 3 of the Act. The Act is thus intended to punish the acts of the upper caste against the vulnerable section of the society for the reason that they belong to a particular community. 11. It may be stated that the charge-sheet filed is for an offence under Section 3(1)(x) of the Act. The said section stands substituted by Act No. 1 of 2016 w.e.f. 26.1.2016. The substituted corresponding provision is Section 3(1)(r) which reads as under: \u201c3(1)(r) intentionally insults or intimidates with intent to humiliate a member of a Scheduled Caste or a Scheduled Tribe in any place within public view;\u201d 12. The basic ingredients of the offence under Section 3(1)(r) of the Act can be classified as \u201c1) intentionally insults or intimidates with intent to humiliate a member of a Scheduled Caste or a Scheduled Tribe and 2) in any place within public view\u201d. 13. The offence under Section 3(1)(r) of the Act would indicate the ingredient of intentional insult and intimidation with an intent to humiliate a member of a Scheduled Caste or a Scheduled Tribe. All insults or intimidations to a person will not be an offence under the Act unless such insult or intimidation is on account of victim belonging to Scheduled Caste or Scheduled Tribe. The object of the Act is to improve the socio-economic conditions of the Scheduled Castes and the Scheduled Tribes as they are denied number of civil rights. Thus, an offence under the Act would be made out when a member of the vulnerable section of the Society is subjected to indignities, humiliations and harassment. The assertion of title over the land by either of the parties is not due to either the indignities, humiliations or harassment. Every citizen has a right to avail their remedies in accordance with law. Therefore, if the appellant or his family members have invoked jurisdiction of the civil court, or that respondent No.2 has invoked the jurisdiction of the civil court, then the parties are availing their remedies in accordance with the procedure established by law. Such action is not for the reason that respondent No.2 is member of Scheduled Caste. 14. Another key ingredient of the provision is insult or intimidation in \u201cany place within public view\u201d. What is to be regarded as \u201cplace in public view\u201d had come up for consideration before this Court in the judgment reported as Swaran Singh & Ors. v. State through Standing Counsel & Ors.5. The Court had drawn distinction between the expression \u201cpublic place\u201d and \u201cin any place within public view\u201d. It was held that if an offence is committed outside the building e.g. in a lawn outside a house, and the lawn can be seen 5 (2008) 8 SCC 435 by someone from the road or lane outside the boundary wall, then the lawn would certainly be a place within the public view. On the contrary, if the remark is made inside a building, but some members of the public are there (not merely relatives or friends) then it would not be an offence since it is not in the public view. The Court held as under: \u201c28. It has been alleged in the FIR that Vinod Nagar, the first informant, was insulted by Appellants 2 and 3 (by calling him a \u201cchamar\u201d) when he stood near the car which was parked at the gate of the premises. In our opinion, this was certainly a place within public view, since the gate of a house is certainly a place within public view. It could have been a different matter had the alleged offence been committed inside a building, and also was not in the public view. However, if the offence is committed outside the building e.g. in a lawn outside a house, and the lawn can be seen by someone from the road or lane outside the boundary wall, the lawn would certainly be a place within the public view. Also, even if the remark is made inside a building, but some members of the public are there (not merely relatives or friends) then also it would be an offence since it is in the public view. We must, therefore, not confuse the expression \u201cplace within public view\u201d with the expression \u201cpublic place\u201d. A place can be a private place but yet within the public view. On the other hand, a public place would ordinarily mean a place which is owned or leased by the Government or the municipality (or other local body) or gaon sabha or an instrumentality of the State, and not by private persons or private bodies.\u201d 15. As per the FIR, the allegations of abusing the informant were within the four walls of her building. It is not the case of the informant that there was any member of the public (not merely relatives or friends) at the time of the incident in the house. Therefore, the basic ingredient that the words were uttered \u201cin any place within public view\u201d is not made out. In the list of witnesses appended to the charge-sheet, certain witnesses are named but it could not be said that those were the persons present within the four walls of the building. The offence is alleged to have taken place within the four walls of the building. Therefore, in view of the judgment of this Court in Swaran Singh, it cannot be said to be a place within public view as none was said to be present within the four walls of the building as per the FIR and/or charge-sheet. 16. There is a dispute about the possession of the land which is the subject matter of civil dispute between the parties as per respondent No.2 herself. Due to dispute, appellant and others were not permitting respondent No.2 to cultivate the land for the last six months. Since the matter is regarding possession of property pending before the Civil Court, any dispute arising on account of possession of the said property would not disclose an offence under the Act unless the victim is abused, intimated or harassed only for the reason that she belongs to Scheduled Caste or Scheduled Tribe. 17. In another judgment reported as Khuman Singh v. State of Madhya Pradesh6, this Court held that in a case for applicability of Section 3(2)(v) of the Act, the fact that the deceased belonged to Scheduled Caste would not be enough to inflict enhanced punishment. This Court held that there was nothing to suggest that the offence was committed by the appellant only because the deceased belonged to Scheduled Caste. The Court held as under: 6 2019 SCC OnLine SC 1104 \u201c15. As held by the Supreme Court, the offence must be such so as to attract the offence under Section 3(2)(v) of the Act. The offence must have been committed against the person on the ground that such person is a member of Scheduled Caste and Scheduled Tribe. In the present case, the fact that the deceased was belonging to \u201cKhangar\u201d-Scheduled Caste is not disputed. There is no evidence to show that the offence was committed only on the ground that the victim was a member of the Scheduled Caste and therefore, the conviction of the appellant-accused under Section 3(2)(v) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act is not sustainable.\u201d 18. Therefore, offence under the Act is not established merely on the fact that the informant is a member of Scheduled Caste unless there is an intention to humiliate a member of Scheduled Caste or Scheduled Tribe for the reason that the victim belongs to such caste. In the present case, the parties are litigating over possession of the land. The allegation of hurling of abuses is against a person who claims title over the property. If such person happens to be a Scheduled Caste, the offence under Section 3(1)(r) of the Act is not made out. 19. This Court in a judgment reported as Dr. Subhash Kashinath Mahajan v. State of Maharashtra & Anr. 7 issued certain directions in respect of investigations required to be conducted under the Act. In a review filed by the Union against the said judgment, this Court in a judgment reported as Union of India v. State of Maharashtra & Ors.8 reviewed the directions issued by this Court and held that if there is a false and unsubstantiated FIR, 7 (2018) 6 SCC 454 8 (2020) 4 SCC 761 the proceedings under Section 482 of the Code can be invoked. The Court held as under: \u201c52. There is no presumption that the members of the Scheduled Castes and Scheduled Tribes may misuse the provisions of law as a class and it is not resorted to by the members of the upper castes or the members of the elite class. For lodging a false report, it cannot be said that the caste of a person is the cause. It is due to the human failing and not due to the caste factor. Caste is not attributable to such an act. On the other hand, members of the Scheduled Castes and Scheduled Tribes due to backwardness hardly muster the courage to lodge even a first information report, much less, a false one. In case it is found to be false/unsubstantiated, it may be due to the faulty investigation or for other various reasons including human failings irrespective of caste factor. There may be certain cases which may be false that can be a ground for interference by the Court, but the law cannot be changed due to such misuse. In such a situation, it can be taken care of in proceeding under Section 482 CrPC.\u201d 20. Later, while examining the constitutionality of the provisions of the Amending Act (Central Act No. 27 of 2018), this Court in a judgment reported as Prathvi Raj Chauhan v. Union of India & Ors.9 held that proceedings can be quashed under Section 482 of the Code. It was held as under: \u201c12. The Court can, in exceptional cases, exercise power under Section 482 CrPC for quashing the cases to prevent misuse of provisions on settled parameters, as already observed while deciding the review petitions. The legal position is clear, and no argument to the contrary has been raised.\u201d 21. In Gerige Pentaiah, one of the arguments raised was non- disclosure of the caste of the accused but the facts were almost 9 (2020) 4 SCC 727 similar as there was civil dispute between parties pending and the allegation was that the accused has called abuses in the name of the caste of the victim. The High Court herein has misread the judgment of this Court in Ashabai Machindra Adhagale as it was not a case about the caste of the victim but the fact that the accused was belonging to upper caste was not mentioned in the FIR. The High Court of Bombay had quashed the proceedings for the reason that the caste of the accused was not mentioned in the FIR, therefore, the offence under Section 3(1)(xi) of the Act is not made out. In an appeal against the decision of the Bombay High Court, this Court held that this will be the matter of investigation as to whether the accused either belongs to or does not belong to Scheduled Caste or Scheduled Tribe. Therefore, the High Court erred in law to dismiss the quashing petition relying upon later larger Bench judgment. 22. The appellant had sought quashing of the charge-sheet on the ground that the allegation does not make out an offence under the Act against the appellant merely because respondent No. 2 was a Scheduled Caste since the property dispute was not on account of the fact that respondent No. 2 was a Scheduled Caste. The property disputes between a vulnerable section of the society and a person of upper caste will not disclose any offence under the Act unless, the allegations are on account of the victim being a Scheduled Caste. Still further, the finding that the appellant was aware of the caste of the informant is wholly inconsequential as the knowledge does not bar, any person to protect his rights by way of a procedure established by law. 23. This Court in a judgment reported as Ishwar Pratap Singh & Ors. v. State of Uttar Pradesh & Anr.10 held that there is no prohibition under the law for quashing the charge-sheet in part. In a petition filed under Section 482 of the Code, the High Court is required to examine as to whether its intervention is required for prevention of abuse of process of law or otherwise to secure the ends of justice. The Court held as under: \u201c9. Having regard to the settled legal position on external interference in investigation and the specific facts of this case, we are of the view that the High Court ought to have exercised its jurisdiction under Section 482 CrPC to secure the ends of justice. There is no prohibition under law for quashing a charge-sheet in part. A person may be accused of several offences under different penal statutes, as in the instant case. He could be aggrieved of prosecution only on a particular charge or charges, on any ground available to him in law. Under Section 482, all that the High Court is required to examine is whether its intervention is required for implementing orders under the Criminal Procedure Code or for prevention of abuse of process, or otherwise to secure the ends of justice. A charge-sheet filed at the dictate of somebody other than the police would amount to abuse of the process of law and hence the High Court ought to have exercised its inherent powers under Section 482 to the extent of the abuse. There is no requirement that the charge-sheet has to be quashed as a whole and not in part. Accordingly, this appeal is allowed. The supplementary report filed by the police, at the direction of the Commission, is quashed.\u201d 24. In view of the above facts, we find that the charges against the appellant under Section 3(1)(r) of the Act are not made out. Consequently, the charge-sheet to that extent is quashed. The 10 (2018) 13 SCC 612 appeal is disposed of in the above terms. 25. The FIR in respect of other offences will be tried by the competent Court in accordance with law along with the criminal case 11, though separately initiated, for the reason that it relates to interparty dispute and is in respect of same subject matter of property, despite of the fact that two different dates of the incident have been provided by the parties. .............................................J. (L. NAGESWARA RAO) .............................................J. (HEMANT GUPTA) .............................................J. 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{"id": "149138346", "text": "Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No 923 of 2017 (Arising out of SLP (C) No 28615 of 2016) Vodafone Idea Cellular Ltd. \u2026Appellant Versus Ajay Kumar Agarwal \u2026Respondent WITH Civil Appeal No 1389 of 2022 & Civil Appeal No 4274 of 2016 Signature Not Verified Digitally signed by Chetan Kumar Date: 2022.02.25 16:45:40 IST Reason: JUDGMENT Dr Dhananjaya Y Chandrachud, J 1. This civil appeal 1 arises from a judgment and order dated 26 May 2016 of the National Consumer Disputes Redressal Commission 2 which was rendered in the exercise of its revisional jurisdiction. The issue is whether Section 7B of the Indian Telegraph Act 1885 ousts the jurisdiction of the consumer forum in deciding a dispute between a telecom company and a consumer. 2. On 25 May 2014, the respondent instituted a consumer complaint before the District Consumer Disputes Redressal Forum 3, Ahmedabad alleging a deficiency of service on the part of the appellant. The complaint states that the respondent had a post-paid mobile connection and was paying an amount of Rs 249 as the monthly basic rent. The appellant was providing mobile telecom services to the complainant on the basis of which it was asserted that there exists a relationship of consumer and service provider. The complainant subscribed to an \u2018auto pay\u2019 system through a credit card issued by his bankers in terms of which, the appellant would receive the payment before the due date to facilitate the timely payment of bills. According to the complainant, the average monthly bill was in the vicinity of Rs 555. Copies of the previous bills for five months, until 8 November 2013 were annexed. For the period between 8 November 2013 and 7 December 2013, the respondent was billed in the amount of Rs 24,609.51. Civil Appeal No 923 of 2017 \u201cNCDRC\u201d \u201cDistrict Forum\u201d According to the respondent, this is an over-charge. The credit limit for the post- paid mobile connection was Rs 2,300 until the bill dated 8 November 2013, after which the credit limit was increased to Rs 2,800 for the bill which was generated on 8 December 2013. The respondent has denied undertaking excessive use of the connection, including towards internet facilities. It was alleged that as a prevalent practice, the mobile service provider must intimate the customer when the bill reaches 80 percent of the credit limit. The complaint contains a recital of the steps which were taken by the respondent by contacting the representatives of the appellant following which he registered a complaint on 22 December 2013. The respondent instituted the consumer complaint on 25 May 2014 seeking compensation in the amount of Rs 22,000 together with interest, besides consequential reliefs. 3. The appellant raised an objection to the maintainability of the complaint based on a judgment of a two-Judge Bench of this Court in General Manager, Telecom v. M Krishnan and Another 4. The District Forum dismissed the application and directed that a written statement must be submitted by the appellant on all issues including on the issue of jurisdiction. It was observed that the appellant, a private service provider is not a \u2018telegraph authority\u2019 for the purposes of Section 7B of the Indian Telegraphic Act 1885 5; however, the issue of jurisdiction could not be determined without the filing of a written statement. In this context, it was observed: \u201c17. [\u2026] In these circumstances also instead of taking decision on preliminary issue i.e jurisdiction, it is (2009) 8 SCC 481 \u201cAct of 1885\u201d reasonable and legal that whole complaint is heard on merits and decision regarding jurisdiction is also taken in it.\u201d The order of the District Forum was questioned before the State Consumer Disputes Redressal Commission 6, Gujarat. The SCDRC held by an order dated 30 November 2015 that the issue of jurisdiction could be raised as a preliminary issue. On merits, the SCDRC relied on the letter of the Department of Telecommunication dated 24 January 2014 where it was stated that the judgment in M Krishnan (supra) on Section 7B of the Act of 1885 would not be applicable to a private service provider since it is not a \u2018Telegraph Authority\u201d. For this purpose, reliance was also placed on Bharthi Hexacom Ltd. v. Komal Prakash 7. The State Forum observed that: \u201c [\u2026] under the above mentioned circumstances for a dispute under Sect. 7(B) between Private Service Provider and Consumer the authority cannot take decision because, for Private Service provider any arrangement is not made in the above act regarding Telegraphic Authority are not given to the Service Provider, hence, the Learned Consumer Forum has the jurisdiction to hear, decide and dispose of the dispute between the Private service Provider and consumer.\u201d The matter was thereafter carried in revision to the NCDRC. The NCDRC by its judgment dated 26 May 2016 affirmed the view of the SCDRC. 4. Mr Aditya Narain, learned counsel appearing on behalf of the appellant submits that Section 7B of the Act of 1885 provides a statutory remedy of arbitration. Counsel submitted that in view of the statutory remedy, which is a remedy under a special statute, the jurisdiction of the consumer forum is ousted. In this context, besides relying on the provisions of Section 7B, counsel adverted \u201cSCDRC\u201d or \u201cState Forum\u201d Misc Application No. 204/2014 in Revision Petition Application No. 12 to the definitions of the expression \u2018telecom officer\u2019 in Section 3(2) and of \u2018telegraph authority\u2019 in Section 3(6). 5. The principal issue which arises for determination is whether the existence of a remedy under Section 7B of the Act of 1885 ousts the jurisdiction of the consumer forum under the Consumer Protection Act 1986 8. 6. Section 11 of the Act of 1986 specified the jurisdiction of the District Forum. Section 11(1) provided as follows: \u201c11. Jurisdiction of the District Forum.\u2014(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs.\u201d 7. In terms of Section 11(1), the District Forum was conferred with the jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed did not exceed a stipulated amount. The amount was progressively revised from Rs 1 lakh to Rs 5 lakhs and eventually to Rs 20 lakhs. The expression \u2018service\u2019 is defined in Section 2(o) in the following terms: \u201c2 (o) \u201cservice\u201d means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.\u201d 8. The expression \u2018deficiency\u2019 is defined in Section 2(g): \u201c2(g) \u201cdeficiency\u201d means any fault, imperfection, \u201cAct of 1986\u201d shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.\u201d 9. The definition of the expression \u2018service\u2019 is couched in wide terms. The width of statutory language emerges from the manner in which the definition is cast. Parliament has used the expression \u201cservice of any description which is made available to potential users\u201d. The definition employs the \u2018means and includes formula\u2019. The means part of the definition incorporates service of \u201cany\u201d description. The inclusive part incorporates services by way of illustration, such as facilities in connection with banking, finance, insurance, transport, processing, supply of electrical and other energy, board or lodging and housing construction. The inclusive part is prefaced by the clarification that the services which are specified are not exhaustive. This is apparent from the expression \u201cbut not limited to\u201d. The last part of the definition excludes (i) the rendering of any service free of charge; and (ii) services under a contract of personal service. Parliament has confined the exclusion only to two specified categories. The initial part of the definition however makes it abundantly clear that the expression \u2018service\u2019 is defined to mean service of any description. In other words, a service of every description would fall within the ambit of the statutory provision. 10. The Act of 1986 was a milestone in legislative efforts designed to protect the welfare and interest of consumers. The long title to the Act specifies that it is an Act \u201cto provide for better protection of the interest of consumers\u201d. Paragraph 2 of the Statement of Objects and Reasons accompanying the introduction of the Bill in Parliament specifies the objects in the following terms: \u201c2. It seeks, inter alia, to promote and protect the rights of consumers such as\u2014 (a) the right to be protected against marketing of goods which are hazardous to life and property; (b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices; (c) the right to be assured, wherever possible, access to variety of goods at competitive prices; (d) the right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums; (e) the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and (f) right to consumer education.\u201d 11. Section 4 of the Act of 1885 vests the Central government with the exclusive privilege of establishing, maintaining and working telegraphs. The expression \u2018telegraph\u2019 finds its definition in Section 3(1AA). Under the proviso to Section 4(1) the Central Government is empowered to grant a license to any person to establish, maintain or work a telegraph within any part of India. Section 7B contains a provision for the arbitration of disputes and is in the following terms: \u201c7B. Arbitration of disputes.\u2014(1) Except as otherwise expressly provided in this Act, if any dispute concerning any telegraph line, appliance or apparatus arises between the telegraph authority and the person for whose benefit the line, appliance or apparatus is, or has been, provided, the dispute shall be determined by arbitration and shall, for the purposes of such determination, be referred to an arbitrator appointed by the Central Government either specially for the determination of that dispute or generally for the determination of disputes under this section. (2) The award of the arbitrator appointed under sub- section (1) shall be conclusive between the parties to the dispute and shall not be questioned in any court.\u201d 12. Under Section 7B, any dispute concerning a telegraph line, appliance or apparatus, between the telegraph authority and the person for whose benefit the line, appliance or apparatus is or has been provided has to be determined by arbitration. Such a dispute has to be referred to an arbitrator appointed by the Central Government either especially for the determination of that dispute or generally for the determination of the disputes under the Section. The expression \u2018telegraph authority\u2019 is defined in Section 3(6) 9. 13. The submissions of the appellant proceed on the basis that as a private telecom service provider, any dispute of a subscriber with it is encompassed by the remedy of arbitration in terms of Section 7B of the Act of 1885. Even if that be so, the issue in the present case is whether this would oust the jurisdiction of the consumer forum. The definition of the expression \u2018service\u2019, as already noticed, is embodied in wide terms. The District Forum is entrusted with the jurisdiction to entertain all complaints where the value of goods or services and the compensation claimed do not exceed the stipulated threshold. Under Section 14, where the District Forum is satisfied that the allegations in the complaint about the services are proved, it is empowered to pass remedial orders in terms of the provisions of sub-section (1). While the Act of 1885 can be construed to be a special enactment for regulating telegraphs, the Act of 1986 is a special (and later) enactment intended to protect the interest and welfare of consumers. Section 3(6) of the Act of 1885 defines \u2018telegraph authority\u2019 thus: \u201ctelegraph authority\u201d means the Director General of 1 [Posts and Telegraphs], and includes any officer empowered by him to perform all or any of the functions of the telegraph authority under this Act\u201d; Though the present case relates to the period before the enactment of the Consumer Protection Act 2019 10, an important aspect of the matter is that the definition of the expression \u2018service\u2019 in Section 2(42) of the later Act specifically incorporates telecom services 11. 14. The submission which was urged on behalf of the appellant was that the specific incorporation of telegraph services in the Act of 2019 is an indicator that it was only as a result of the new legislation that telecom services were brought within the jurisdiction of the consumer fora. This submission cannot be accepted for the simple reason that the specification of services in Section 2(s) of the earlier Act of 1986 was illustrative. This is apparent from the use of the expression \u2018includes but not limited to\u2019. The specification of services in Section 2(s) of the erstwhile Act was therefore not intended to be an exhaustive enumeration of the services which are comprehended within the definition. On the contrary, by adopting language which provides that the expression \u2018service\u2019 would mean service of any description which is made available to potential users, Parliament indicated in unambiguous terms that all services would fall within the ambit of the definition. The only exception was in the case of (i) services rendered free of charge; and (ii) services under a contract of personal service. 15. In Emaar MGF Land Ltd. v. Aftab Singh 12, this Court has held that an arbitration agreement governed by the Arbitration and Conciliation Act 1996 will \u201cAct of 2019\u201d Section 2(42) of the Consumer Protection Act, 2019 is as follows: - \"service\" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service\u201d; (2019) 12 SCC 751 not oust the jurisdiction of the consumer forum to entertain a complaint of deficiency of goods or services. The Court relied on Section 3 13 of the Act of 1986, which provides that the provisions of the Act are in addition to and not in derogation of the provisions of any other enactment. The following observations of this Court are relevant: \u201c19. Section 3 of the Consumer Protection Act provided that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. Noticing the object and purpose of the Act as well as Section 3, this Court in Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha [Thirumurugan Coop. Agricultural Credit Society v. M. Lalitha, (2004) 1 SCC 305] , laid down the following in paras 11 and 12 : (SCC p. 312) \u201c11. From the Statement of Objects and Reasons and the scheme of the 1986 Act, it is apparent that the main objective of the Act is to provide for better protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, various quasi-judicial forums are set up at the district, State and national level with wide range of powers vested in them. These quasi- judicial forums, observing the principles of natural justice, are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to the consumers and to impose penalties for non-compliance with their orders. 12. As per Section 3 of the Act, as already stated above, the provisions of the Act shall be in addition to and not in derogation of any other provisions of any other law for the time being in force. Having due regard to the scheme of the Act and purpose sought to be achieved to protect the interest of the consumers better, the provisions are to be interpreted broadly, positively and purposefully in the context of the present case to give meaning to additional/extended jurisdiction, particularly when Section 3 seeks to provide remedy under the Act in addition to other Section 3 \u2013 Act not in derogation of any other law- \u201cThe provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.\u201d remedies provided under other Acts unless there is a clear bar.\u201d 16. The only distinction in the present case is that where Section 7B of the Act of 1885 applies, a statutory remedy of arbitration is provided. The fact that the remedy of an arbitration under the Act 1885 is of a statutory nature, would not oust the jurisdiction of the consumer forum. The Act of 1986 and its successor, the Act of 2019 are subsequent enactments which have been enacted by Parliament to protect the interest of consumers. Hence, an ouster of jurisdiction cannot be lightly assumed unless express words are used or such a consequence follows by necessary implication. 17. The judgment of a two-Judge Bench of this Court in M Krishnan (supra) arose from a decision of the Kerala High Court. The dispute, in that case, arose from the disconnection of a telephone connection for the non-payment of the bill. The District Forum allowed the complaint. The writ petition was dismissed. The proceedings resulted in a reference to a Full Bench of the Kerala High Court, which dismissed the writ appeal against the judgment of the Single Judge. Before this Court, the jurisdiction of the consumer forum was in issue. In that context, a two-Judge Bench of this Court held thus: \u201c5.In our opinion when there is a special remedy provided in Section 7-B of the Telegraph Act regarding disputes in respect of telephone bills, then the remedy under the Consumer Protection Act is by implication barred.\u201d The Court also relied on Rule 413 of the Telegraph Rules in terms of which all services relating to telephones are subject to the Telegraph Rules. The Court held that the special law would override the general law and concluded that the High Court was not correct in upholding the jurisdiction of the consumer forum. 18. We are unable to subscribe to the view which has been adopted in the above decision in M Krishnan (supra). The decision is incorrect on two grounds. First, it failed to recognize that the Act of 1986 is not a general law but a special law that has been enacted by Parliament specifically to protect the interest of consumers. Second, even if it is assumed that the Act of 1986 is a general law, it is a settled position of law that if there is any inconsistency between two legislations, the later law, even if general in nature, would override an earlier special law. In Ajoy Kumar Banerjee v. Union of India14, a three-judge Bench of this Court observed: \u201c38\u2026As mentioned hereinbefore if the Scheme was held to be valid, then the question what is the general law and what is the special law and which law in case of conflict would prevail would have arisen and that would have necessitated the application of the principle Generalia specialibus non derogant. The general rule to be followed in case of conflict between two statutes is that the later abrogates the earlier one. In other words, a prior special law would yield to a later general law, if either of the two following conditions is satisfied: \u201c(i) The two are inconsistent with each other. (ii) There is some express reference in the later to the earlier enactment.\u201d If either of these two conditions is fulfilled, the later law, even though general, would prevail. 39. From the text and the decisions, four tests are deducible and these are: (i) The legislature has the undoubted right to alter a law already promulgated through subsequent legislation, (ii) A special law may be altered, abrogated or repealed by a later general law by an express provisions, (iii) A later general law will override a prior special law if the two are so repugnant to each other that they cannot co-exist even though no express provision in that behalf is found in the general law, and (iv) It is only in the absence of a provision to the contrary and of a clear inconsistency that a special law will remain wholly unaffected by a later general law. See in this connection, Maxwell on the Interpretation of Statutes, Twelfth Edn., pp. 196-198.\u201d (1984) 3 SCC 127 19. In any event, the decision in M Krishnan (supra) also fails to note that the Act of 1986 is a special law providing protection to consumers. Crucially, M Krishnan (supra) fails to notice that Section 3 of the Act of 1986 clearly provides that the remedies available under the Act are in addition to the remedies available in other statutes and the availability of additional remedies would not bar a consumer from filing a complaint under the Act of 1986. Section 100 of the Act of 2019 corresponds to Section 3 of the Act of 1986. In Emaar MGF Land Ltd. (supra), this Court held that the complaint under the Act of 1986 is a special remedy provided to a consumer in addition to the remedies that can be availed of by them, including arbitration. In Imperia Structures Ltd. v Anil Patni 15, this Court held that the remedies available under the Act of 1986 are in addition to the remedies available under other statutes, including special statutes like the Real Estate (Regulation and Development) Act 2016 16. This Court reiterated the settled position of law in the following terms: \u201c23. It has consistently been held by this Court that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.\u201d 20. The above position was reiterated in IREO Grace Realtech (P) Ltd. v. Abhishek Khanna 17 by a three-judge Bench of this Court, of which one of us (Justice DY Chandrachud) was a part. Justice Indu Malhotra, speaking for the Bench invoked the doctrine of election, which provides that when two remedies are available for the same relief, the party at whose disposal such remedies are (2020) 10 SCC 783 \u201cRERA\u201d 2021 SCC OnLine SC 277 available, can make the choice to elect either of the remedies as long as the ambit and scope of the two remedies is not essentially different. These observations were made in the context of an allottee of an apartment having the choice of initiating proceedings under the Act of 1986 or the RERA. In the present case, the existence of an arbitral remedy will not, therefore, oust the jurisdiction of the consumer forum. It would be open to a consumer to opt for the remedy of arbitration, but there is no compulsion in law to do so and it would be open to a consumer to seek recourse to the remedies which are provided under the Act of 1986, now replaced by the Act of 2019. The insertion of the expression \u2018telecom services\u2019 in the definition which is contained in Section 2(42) of the Act of 2019 cannot, for the reasons which we have indicated be construed to mean that telecom services were excluded from the jurisdiction of the consumer forum under the Act of 1986. On the contrary, the definition of the expression \u2018service\u2019 in Section 2(o) of the Act of 1986 was wide enough to comprehend services of every description including telecom services. 21. For the above reasons, we affirm the judgment of the NCDRC which came to the conclusion that the District Forum has the jurisdiction to entertain and try the complaint. 22. The appeal shall accordingly stand dismissed. 23. Pending applications, if any, stand disposed of. Civil Appeal No 1389 of 2022 [Arising out of SLP(C) No 9071/2016] & Civil Appeal No 4274 of 2016 1. Leave granted. 2. In view of the judgment delivered today in Idea Cellular Ltd vs Ajay Kumar Agarwal [Civil Appeal No 923 of 2017], the appeals shall stand allowed and the impugned judgments and orders of the NCDRC dated 30 April 2014 in Revision Petition No 531 of 2013 and 11 April 2013 in Revision Petition No 95 of 2013 shall stand set aside. Consumer Complaint No 238 of 2010 and Complaint No 1457 of 2007 shall stand restored to the Consumer Disputes Redressal Forum, Kasargod and Consumer Disputes Redressal Forum, Delhi respectively. 3. Pending applications, if any, stand disposed of. \u2026.....\u2026...\u2026.......\u2026\u2026\u2026\u2026\u2026\u2026........J. [Dr Dhananjaya Y Chandrachud] ..\u2026....\u2026........\u2026\u2026\u2026\u2026\u2026\u2026.\u2026........J. [Surya Kant] ..\u2026....\u2026........\u2026\u2026\u2026\u2026\u2026\u2026.\u2026........J. 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{"id": "101482639", "text": "HIGH COURT OF JUDICATURE AT ALLAHABAD RESERVED A.F.R. Court No. - 1 Case :- APPLICATION U/S 482 No. - 737 of 2020 Applicant :- Chitra @ Bebi Opposite Party :- State of U.P. and Another Counsel for Applicant :- Atul Kumar,Deepak Dubey,M J Akhtar Counsel for Opposite Party :- G.A.,Amit Daga Hon'ble J.J. Munir,J. 1. It is idiomatically said that 'Dead men tell no tales'. But, sometimes, before a man crosses over to the netherworld, he may speak his mind or tell the circumstances that led to his death - homicidal or suicidal. In cases of suicide, an authentic and dependable suicide note is the most sterling evidence about what drove the man to take his own life. 2. This application under Section 482 of the Code of Criminal Procedure, 19731 seeks to challenge the impugned charge-sheet bearing number 219A of 2019 dated November the 15th, 2019 submitted in Case Crime No. 223 of 2019, under Sections 306, 506 of the Indian Penal Code, 18602, Police Station - Meerapur, District - Muzaffarnagar and the entire proceedings in Case No. 1984/9 of 2019, pending before the learned Additional Chief Judicial Magistrate, Court No. 3, Muzaffarnagar, as against the applicant. This application calls in question the aforesaid charge-sheet, primarily on the ground that no prima facie case against the applicant is disclosed on the basis of material carried in the impugned charge sheet, about her involvement in abetting the suicide committed by her brother-in-law (her sister's deceased husband), the Late Mohan Kumar. 3. This prosecution commenced on a First Information Report3 lodged by the deceased's brother, Rahul Kumar Sharma, on 28.07.2019, about the suicidal death of his brother on 25th of July, 2019. The FIR nominates the deceased's in laws, numbering seven, including his wife Smt. Menka alias Monty, his mother-in-law Smt. Kusum Lata, his three sisters-in-law, to wit, Indu Sharma, Chhaya Sharma and Romika Sharma, besides his brother-in-law Rajat Sharma. Another person nominated is one Rajendra Chaudhary, said to be an uncle of sorts to the deceased's in-laws. The applicant is not named in the FIR. The substance of the information, addressed to the police, says that the named in-laws of the deceased were frequently troubling him and he was in distress. Rajendra Chaudhary had repeatedly threatened the deceased to death and demanded money of him. The deceased had shared the last mentioned fact with the informant, but his in-laws would not give up on their wayward conduct and Rajendra Chaudhary and the other in-laws would repeatedly demand money of the deceased. It is reported that distressed over this issue, on 25.07.2019, at 12 O' Clock, the deceased jumped off the bridge built over the Ganga barrage, and into the river, committing suicide. It is also said that he had left home, riding the informant's motorcycle, which was later later on found. A suicide note in the deceased's handwriting was found at the informant's Dharm Kanta, wherein the deceased had blamed harassment by his wife and in-laws as the cause driving him to commit suicide. It is said in the closing lines of the FIR that the deceased did commit suicide because of the harassment that his wife and in-laws inflicted on him. 4. Heard Mr. V.M. Zaidi, leanred Senior Advocate, assisted by Mr. Imran Khan, learned Counsel for the applicant, Mr. Amit Daga, learned Counsel appearing on behalf of opposite party no. 2, and Mr. Deepak Mishra, learned Additional Government Advocate appearing on behalf of the State. 5. Mr. V.M. Zaidi, learned Senior Advocate, has primarily submitted that no prima facie case is made out against the applicant, as the allegations and the material collected during investigation do not show that there was any act done by the applicant vis-\u00e0-vis the deceased, that may be said to constitute either ''instigation' or a ''conspiracy' with the other co-accused, or ''aid' within the meaning of Section 107 IPC that led the deceased to commit suicide. He submits that in the absence of any material about an act or omission constituting instigation, conspiracy or aid on the applicant's part, that led the deceased to commit suicide, no case worth trial against the applicant is prima facie made out. He submits that on this ground, the impugned charge-sheet, as against the applicant, deserves to be quashed, which, if not done, would be an abuse of process of Court and lead to ends of justice being defeated. It is on the aforesaid case that Mr. Zaidi has advanced his submissions before this Court. 6. The learned Senior Advocate has proceeded to point out that the applicant, much unlike the other in-laws, has not been nominated in the FIR. Her name has been introduced on the basis of a second thought by the informant and the other family members of the deceased, who, according to the learned Senior Advocate, in any case, have launched a malicious and vindictive prosecution against the deceased's wife and in-laws for an oblique motive. That oblique motive, according to the learned Senior Advocate, is that the informant wants to deprive the deceased's wife of her inheritance in her husband's property, both movable and immovable. He has pointed out that the entire prosecution is mala fide and designed to achieve the last mentioned purpose. He has been at pains to point out that the informant has launched another mala fide prosecution against deceased's in-laws, reporting them for an offence involving a murderous assault on the informant and his family, besides loot of ornaments that belonged to the deceased's wife. By a reference to the other prosecution arising from an FIR registered as Case Crime No. 224 of 2019, under Sections 395, 323, 307, 364, 506, 145 IPC, Police Station - Meerapur, District - Muzaffarnagar, learned Senior Advocate urges that it shows the underlying mala fides that animate the impugned prosecution and its oblique purpose. Mr. V.M. Zaidi, further elaborating on his submissions, says that the applicant was not named in the FIR, and also in the earlier statement of the first informant recorded on 28.07.2019, under Section 161 of the Code or the statements of the other witnesses also recorded under Section 161. It is pointed out that the applicant's name was introduced for the first time in the statement of one Sushil Kumar, about a month after the incident, as a result of the continuing efforts, to bring oblique pressure upon the wife's family in order to coerce the wife into giving up her share in the deceased's property. The learned Senior Advocate has also pointed out to the various steps taken by the informant to get his name mutated over the deceased's share in the family's agricultural land and transfer of funds done from the deceased's bank account to his own. 7. Learned Senior Counsel has drawn the Court's attention to a copy of the mutation application dated 30.08.2019 moved by the informant before the Consolidation Officer-II, Sadar, Muzaffarnagar and registered as Case no.520. This document is annexed to the supplementary affidavit dated 10.09.2020, as Annexure no. SA-4. Learned Senior Counsel has also drawn the Court's attention to a photostat copy of the deceased's bank account statement, bearing Account ID no. 1609010100512190, where transfer of funds to the informant's Account have been shown. A copy of the said statement is annexed as part of Annexure no. SA-5 to the supplementary affidavit, last mentioned. 8. Mr. V.M. Zaidi, learned Senior Counsel, in support of his submissions noticed in the opening part of this judgment about the absence of necessary ingredients to make out a prima facie case of abetment to commit suicide, has placed reliance upon the decision of the Supreme Court in Arnab Manoranjan Goswami vs. State of Maharashtra and others4 and further on a decision of the Supreme Court in Gurcharan Singh vs. State of Punjab5. Reliance has also been placed on a decision of this Court in Sudhakar Pathak vs. State of U.P.6. All these authorities have been pressed in aid of the essential submission that the three necessary ingredients to attract an offence of abetment to suicide, that is to say, instigation, aid or conspiracy are at all not discernible from the material collected during investigation. 9. It must be remarked here that in aid of the Application, the applicant has filed three supplementary affidavits, to wit, the one dated 09.10.2020, another dated 16.01.2020 and still another dated 17.02.2020. A counter affidavit has been filed on behalf of the complainant/ opposite party, to which the applicant has filed a rejoinder. The State have not come up with any return, but at the hearing, supported the impugned proceedings through Mr. Deepak Mishra, learned A.G.A. The learned A.G.A. says that the facts here show it to be a triable case, which ought not to be quashed. 10. Mr. Amit Daga, learned Counsel appearing for the second opposite party/ informant submits that though the applicant is not named in the FIR, but during the course of investigation, the Investigating Officer found material showing her involvement in the crime. In this regard, he has, particularly, referred to the text messages sent by the deceased through his mobile phone to the mobile phone of his relatives, while alive. These messages have also been treated as a part of the suicide note and made part of the police papers. These messages specifically carry the name of the applicant as one of the persons responsible for driving the deceased to commit suicide. Learned Counsel for the second opposite party, therefore, says that it cannot be said that there is no material against the applicant connecting her to the crime. It is emphasized that the material collected during investigation shows that the applicant along with the other co-accused - all in-laws of the deceased created such inexorable pressure, where the deceased had no option except to put an end to his life. It is pointed out with reference to the averments in paragraph no. 9 of the counter affidavit and the suicide note annexed as Annexure no. CA-1 to the said affidavit that what the applicant has annexed for the deceased's suicide note, is not the complete document. It is pointed out that the suicide note is a part of the case diary, annexed to the second parcha dated 29.07.2019. 11. Learned Counsel for the second opposite party submits that though the suicide note, a copy whereof is annexed as Annexure no. CA-1, does not specifically carry the applicant's name, but read as a whole, squarely blames all of the deceased's in-laws about that extreme position, where he was impelled to end his life. He submits that it is quite another matter that the deceased has, particularly, emphasized the malevolent role of his brother-in-law, Rajat and sister-in-law, Indu, but that, according to Mr. Daga, learned Counsel for the second opposite party, does not show that the applicant was no part of the conspiracy or instigation, that drove him to commit suicide. It is also submitted by the learned Counsel for the second opposite party, relying on averments made in paragraph no.10 of the counter affidavit that prior to scripting the suicide note, the deceased sent WhatsApp messages, carrying his photograph as well as a video from his mobile no. 9997589058 to the mobile number of the informant's elder brother, Sushil Kumar Sharma, where he specifically blamed the applicant alongwith the other co-accused as persons, who had tortured and harassed him to an extent that he had no option except to commit suicide. Copies of those WhatsApp messages are included in the case diary. 12. It is pointed out by the learned Counsel for the second opposite party that since the WhatsApp messages were sent on the WhatsApp messenger of his elder brother, Sushil Kumar Sharma, he was unaware about these messages when he lodged the FIR, or made his earlier statement to the police. It was during the course of investigation that Sushil discovered these WhatsApp messages on his phone and disclosed them to the police, who made them part of the case diary. It is these messages, which have shown the complicity of the applicant and certainly constitute material, on the basis whereof cognizance ought to be taken. It is urged with much emphasis on behalf of the second opposite party that the continued misbehaviour, torture, ill-treatment and harassment by the deceased's wife and in-laws, including the applicant, drove him to commit suicide and those acts do constitute intentional aid within the meaning of Section 107 IPC, besides conspiracy involving all the accused, so as to attract the provisions of Section 306 IPC. 13. This Court has keenly considered the submissions advanced on both sides and perused the record. It would be of seminal importance to extract the suicide note. The suicide note is part of CD no.2 dated 29.07.2019 and reads (in Hindi vernacular): \"\u092e\u0948 \u092e\u094b\u0939\u093f\u0924 \u0936\u0930\u094d\u092e\u093e \u0906\u091c \u0926\u0941\u0916\u0940 \u0939\u094b\u0915\u0930 \u0906\u0924\u094d\u092e\u0939\u0924\u094d\u092f\u093e \u0915\u0930\u0928\u0947 \u091c\u093e \u0930\u0939\u093e \u0939\u0942\u0901, \u092e\u0947\u0930\u0940 \u092e\u094c\u0924 \u0915\u0940 \u0938\u093e\u0930\u0940 \u091c\u093f\u092e\u094d\u092e\u0947\u0926\u093e\u0930\u0940 \u092e\u0947\u0930\u0940 \u0938\u0938\u0941\u0930\u093e\u0932 \u0935\u093e\u0932\u094b \u0915\u0940 \u0939\u0948, \u092e\u0947\u0930\u0940 \u0938\u092c\u0938\u0947 \u092c\u0921\u093c\u0940 \u0938\u093e\u0932\u0940 \u0907\u0928\u094d\u0926\u0941 \u0936\u0930\u094d\u092e\u093e, \u091b\u093e\u092f\u093e, \u0930\u091c\u0924 \u0936\u0930\u094d\u092e\u093e, \u0930\u094b\u092e\u093f\u0924\u093e \u0914\u0930 \u0938\u092c\u0938\u0947 \u0916\u093e\u0938 \u0930\u093e\u091c\u0947\u0928\u094d\u0926\u094d\u0930 \u091a\u094c\u0927\u0930\u0940 \u0909\u0930\u094d\u092b \u091a\u093e\u091a\u093e \u0914\u0930 \u092e\u0947\u0930\u0940 \u0938\u093e\u0938 \u0915\u0941\u0938\u0941\u092e\u0932\u0924\u093e \u0915\u0940 \u0939\u0948\u0964 \u092f\u0947 \u0938\u092c \u092e\u0941\u091d \u092a\u0930 \u0928\u093e\u091c\u093e\u092f\u091c \u0926\u092c\u093e\u0935 \u092c\u0928\u093e\u0924\u0947 \u0939\u0948\u0964 \u092e\u0941\u091d\u0947 \u0926\u093f\u0928 \u0930\u093e\u0924 \u0927\u092e\u0915\u0940 \u0926\u0947\u0924\u0947 \u0930\u0939\u0924\u0947 \u0939\u0948\u0964 \u092e\u0941\u091d\u0947 \u092c\u0939\u0941\u0924 \u092a\u0930\u0947\u0936\u093e\u0928 \u0915\u0930 \u0930\u0916\u093e \u0939\u0948\u0964 \u092e\u0947\u0930\u0940 \u092a\u0924\u094d\u0928\u0940 \u0915\u093e \u092e\u0941\u091c0\u0928\u0917\u0930 \u092e\u0947\u0902 \u0928\u093e\u091c\u093e\u092f\u091c \u0930\u093f\u0936\u094d\u0924\u093e \u0939\u0948\u0964 \u0935\u094b \u092e\u0941\u091d \u092a\u0930 \u0938\u0938\u0941\u0930\u093e\u0932 \u0915\u0947 \u092a\u093e\u0938 \u0918\u0930 \u0932\u0947\u0915\u0930 \u0930\u0939\u0928\u0947 \u0915\u093e \u0926\u092c\u093e\u0935 \u092c\u0928\u093e\u0924\u0940 \u0939\u0948\u0964 \u092e\u0941\u091d\u0947 \u0917\u093e\u0932\u0940 \u0926\u0947\u0924\u0940 \u0939\u0948\u0964 \u0916\u093e\u0928\u093e \u0924\u0915 \u091b\u0940\u0928 \u0932\u0947\u0924\u0940 \u0939\u0948\u0964 \u092e\u0947\u0930\u0940 \u0906\u092a \u0938\u092c\u0938\u0947 \u092c\u093f\u0928\u0924\u0940 \u0939\u0948 \u0915\u093f \u092e\u0947\u0930\u0947 \u0938\u093e\u0932\u0947 \u0930\u091c\u0924 \u0915\u094b \u092b\u0949\u0938\u0940 \u0914\u0930 \u0907\u0928\u094d\u0926\u0941 \u0915\u094b \u0938\u091c\u093e\u092f\u0947 \u092e\u094c\u0924 \u091c\u0930\u0942\u0930 \u0926\u0947\u0928\u093e \u0914\u0930 \u092e\u0947\u0930\u093e \u0915\u094b\u0908 \u092a\u0941\u0924\u094d\u0930 \u0928\u0939\u0940\u0902 \u0939\u0948\u0964 \u092e\u0947\u0930\u0940 \u0938\u093e\u0930\u0940 \u0938\u092e\u094d\u092a\u0924\u094d\u0924\u093f \u092e\u0947\u0930\u0947 \u092a\u094d\u0930\u093f\u092f \u092d\u093e\u0908 \u0930\u093e\u0939\u0941\u0932 \u0915\u0941\u092e\u093e\u0930 \u0915\u094b \u0926\u0947 \u0926\u0940 \u091c\u093e\u092f\u0947 \u0914\u0930 \u0917\u0948 \u0906\u091c \u0926\u0941\u0916\u0940 \u0939\u094b\u0915\u0930 \u091c\u093f\u0938\u0915\u093e \u0915\u093e\u0930\u0923 \u092e\u0947\u0930\u0940 \u0938\u0938\u0941\u0930\u093e\u0932 \u0915\u0947 \u0938\u092e\u0938\u094d\u0924 \u0935\u094d\u092f\u0915\u094d\u0924\u093f\u0917\u0923 \u0939\u0948 \u092e\u0948\u0902 \u0906\u0924\u094d\u092e \u0939\u0924\u094d\u092f\u093e \u0915\u0930\u0928\u0947 \u091c\u093e \u0930\u0939\u093e \u0939\u0942\u0901\u0964\" 14. Quite apart from it, are the contents of some WhatsApp messages, still photograph and videos, sent by the deceased to his elder brother, Sushil on 25.07.2019 at 11:26 a.m. in Hindi, but written in Roman script, which read thus: \"Meri mout ki sari jimmedari meri sasural wali ki meri sali Indu, Chhaya Rajat, Chitra, romita, Rajendra Choudhary (ChaCha). Ye sab mujh par najayaj dabav banate rahten hai or Jaan se Marni ki damki deten rahten hai\" 15. This message shows that the deceased was last seen on Thursday at 11:56 a.m. 16. There is yet another WhatsApp message, which carries the same suicide note, that was recovered from the informant's Dharm Kanta and made part of the case diary. There is one oddity, or at least a feature about the prosecution case, which shows that opportunity came knocking to save the deceased, but the one who could did not act. There is a statement attributed to one Faeemuddin, son of late Badaruddin recorded under Section 161 of the Code, where he says that the deceased scripted the suicide note in his presence and said that he was going to commit suicide, driven to it by his wife, Menaka and the in-laws. It is rather baffling that if the witness saw the deceased writing a suicide note, why he did not prevent him from moving away to accomplish his fatal intentions; but that is all about it. This statement under Section 161 may be true or not, but it does not, of its own, render the prosecution case incredible. 17. The material collected during investigation by the police shows that there are statements of the informant Sushil Sharma, the deceased's sister-in-law Smt. Nirupama Sharma wife of Sushil Sharma, Smt. Priyanka Sharma, another sister-in-law of the deceased, Sonu Dhimaan, an unrelated witness, who happened to pass by the deceased's residence on 25.07.2019, and another unrelated witness Akash Rastogi, who also passed by the deceased's house on 25.07.2019; and all of them saw the deceased's wife misbehave with him. The statements of the informant and the two sisters-in-law of the deceased show, amongst other things, that the deceased's wife would often stay at her parents' place, rather than her matrimonial home. She would repeatedly ask for money, apparently to meet her expenses and enforce her demand by show of anger and misbehaviour towards her husband. The deceased's wife wanted him to sell his property at Town Meerapur, District Muzaffarnagar and move over to her place at Patel Nagar, Muzaffarnagar. She was persuaded by the deceased's family not to indulge in that kind of behaviour, but she was aided in her pernicious conduct by her sisters, Chhaya, Romita, Indu, Chitra (applicant), her mother Kusum Lata and uncle Rajendra. All of them would coerce the deceased to part with money, and upon refusal, would threaten him with death. 18. There is a particular instance that appears in the statements of Smt. Nirupama Sharma, Smt. Priyanka Sharma and the two passersby, Sonu Dhimaan and Akash Rastogi, which indicate that the deceased Mohit Sharma and his wife were seen outside their house and the deceased's wife was misbehaving with him. The two sisters-in-law have said that the deceased's wife, Menaka beat him up publicly, a fact which many saw. The two public witnesses, who claimed to have witnessed the occurrence on 25.07.2019, have said that they saw the deceased, Mohit Sharma's wife misbehaving with him while they were passing by. She is alleged to have asked the deceased go somewhere and die. These witnesses also said that the deceased's wife said that when she demands money of him, he does not pay nor does he go over to Muzaffarnagar. It is said that thereafter Menaka beat him up. To the same effect is the statement of Akash Rastogi. All these statements have been recorded under Section 161 of the Code. The moot question is that, do all these statements taken together as material collected during investigation and the suicide note, besides the WhatsApp messages disclose a triable case of abetment to suicide against the applicant? 19. Gurcharan Singh vs. State of Punjab7 relied upon much by the learned Senior Counsel appearing for the applicant was a case that came up before the Supreme Court in appeal from an order of conviction for an offence punishable under Section 306 IPC. The deceased was the wife of one Dr. Jaspal Singh, whereas the appellant Gurcharan Singh was Dr. Jaspal Singh's brother. The victims were three in number, that is to say, Surjit Kaur, wife of Dr. Jaspal Singh and their two daughters, Geet Pahul and Preet Pahul. Apparently, four persons were charge sheeted after investigation, to wit, Satnam Kaur, who died pending committal proceedings, Gurcharan Singh, Ajit Kaur and Sukhvinder Singh alias Goldy. All of them were in-laws of the deceased, Surjit Kaur. At the conclusion of trial, Ajit Kaur was acquitted, whereas Gurcharan Singh and Sukhvinder Singh were convicted of the charge punishable under Section 306 IPC. The Trial Court awarded each of the accused a term of six years rigorous imprisonment. On appeal to the High Court, the conviction was upheld, but the sentences were reduced to five years' rigorous imprisonment. On appeal to their Lordships of the Supreme Court by Special Leave preferred by Gurcharan Singh, the conviction was overturned and the appellant acquitted. The facts giving rise to the prosecution can no better be described than in their Lordships' words, where these are recorded thus: \"3. The fascicule of facts, indispensable to comprehend the backdrop of the prosecution, has its origin in the inexplicable abandonment of the deceased Surjit Kaur and her two daughters, namely; Geet Pahul and Preet Pahul by Dr Jaspal Singh, their husband and father respectively, about two years prior to the tragic end of his three family members as above. The prosecution version is that Dr Jaspal Singh, who was initially in the government service, had relinquished the same and started a coal factory at Muktsar. He suffered loss in the business and consequently failed to repay the loan availed by him in this regard from the bank. As he and his brother Gurcharan Singh (appellant herein) and others succeeded to the property left by their predecessors, he started medical practice in private. 4. Be that as it may, before leaving his family, he addressed a communication to the bank concerned expressing his inability to repay the loan in spite of his best efforts as he was not possessed of any property in his name. Dr Jaspal Singh was thereafter not to be traced. Following this turn of events, according to the prosecution, his wife Surjit Kaur and his daughters shifted from Jalalabad where they used to stay to Abohar and started residing in a rented house of one Hansraj (PW 3). According to them, they had no source of income and further, they were also deprived of their share in the property and other entitlements, otherwise supposed to devolve on Dr Jaspal Singh. They were also not provided with any maintenance by the family members of her husband -- Jaspal Singh and instead were ill-treated, harassed and intimidated. 5. While the matter rested at that, on 3-10-2000 at about 10.30 p.m., Hansraj, the landlord of the deceased Surjit Kaur, being suspicious about prolonged and unusual lack of response by his tenants, though the television in their room was on, informed the brother of the deceased Surjit Kaur. Thereafter they broke open the door of the room and found all three lying dead. The police was informed and FIR was lodged. 6. In course of the inquisition, the investigating officer collected a suicide note in the handwriting of Surjit Kaur and also subscribed to by her daughter Preet Bahul. The suicide note implicated the appellant, his wife Ajit Kaur and the convicted co-accused Sukhvinder Singh alias Goldy as being responsible for their wretched condition, driving them in the ultimate to take the extreme step. A notebook containing some letters, written by deceased Geet Pahul was also recovered. On the completion of the investigation, which included, amongst others the collection of the post-mortem report which confirmed death due to consumption of aluminium phosphide, a pesticide, charge-sheet was submitted against the three persons named hereinabove along with Satnam Kaur under Sections 306/34 IPC.\" 20. It must be remarked here for the purpose of emphasis, though already apparent, that the decision in Gurcharan Singh came on appeal before their Lordships, where there was the advantage of all evidence recorded during trial being available and analyzed by the Courts below threadbare. The case did not arise on a petition to quash proceedings at the threshold. It was after a consideration of the evidence on record that it was held in Gurcharan Singh : \"21. It is thus manifest that the offence punishable is one of abetment of the commission of suicide by any person, predicating existence of a live link or nexus between the two, abetment being the propelling causative factor. The basic ingredients of this provision are suicidal death and the abetment thereof. To constitute abetment, the intention and involvement of the accused to aid or instigate the commission of suicide is imperative. Any severance or absence of any of these constituents would militate against this indictment. Remoteness of the culpable acts or omissions rooted in the intention of the accused to actualise the suicide would fall short as well of the offence of abetment essential to attract the punitive mandate of Section 306 IPC. Contiguity, continuity, culpability and complicity of the indictable acts or omission are the concomitant indices of abetment. Section 306 IPC, thus criminalises the sustained incitement for suicide. 22. Section 107 IPC defines \"abetment\" and is extracted hereunder: \"107. Abetment of a thing.--A person abets the doing of a thing, who-- First.--Instigates any person to do that thing; or Secondly.--Engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that conspiracy, and in order to the doing of that thing; or Thirdly.--Intentionally aids, by any act or illegal omission, the doing of that thing. Explanation 1.--A person, who by wilful misrepresentation, or by wilful concealment of a material fact which he is bound to disclose, voluntarily causes or procures, or attempts to cause or procure, a thing to be done, is said to instigate the doing of that doing. Explanation 2.--Whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act.\" Not only the acts and omissions defining the offence of abetment singularly or in combination are enumerated therein, the explanations adequately encompass all conceivable facets of the culpable conduct of the offender relatable thereto. 27. The pith and purport of Section 306 IPC has since been enunciated by this Court in Randhir Singh v. State of Punjab [Randhir Singh v. State of Punjab, (2004) 13 SCC 129 : 2005 SCC (Cri) 56] , and the relevant excerpts therefrom are set out hereunder: (SCC p. 134, paras 12-13) \"12. Abetment involves a mental process of instigating a person or intentionally aiding that person in doing of a thing. In cases of conspiracy also it would involve that mental process of entering into conspiracy for the doing of that thing. More active role which can be described as instigating or aiding the doing of a thing is required before a person can be said to be abetting the commission of offence under Section 306 IPC. 13. In State of W.B. v. Orilal Jaiswal [State of W.B. v. Orilal Jaiswal, (1994) 1 SCC 73 : 1994 SCC (Cri) 107] , this Court has observed that the courts should be extremely careful in assessing the facts and circumstances of each case and the evidence adduced in the trial for the purpose of finding whether the cruelty meted out to the victim had in fact induced her to end the life by committing suicide. If it transpires to the court that a victim committing suicide was hypersensitive to ordinary petulance, discord and differences in domestic life quite common to the society to which the victim belonged and such petulance, discord and differences were not expected to induce a similarly circumstanced individual in a given society to commit suicide, the conscience of the court should not be satisfied for basing a finding that the accused charged of abetting the offence of suicide should be found guilty.\" (emphasis supplied) 28. Significantly, this Court underlined by referring to its earlier pronouncement in Orilal Jaiswal [State of W.B. v. Orilal Jaiswal, (1994) 1 SCC 73 : 1994 SCC (Cri) 107] that courts have to be extremely careful in assessing the facts and circumstances of each case to ascertain as to whether cruelty had been meted out to the victim and that the same had induced the person to end his/her life by committing suicide, with the caveat that if the victim committing suicide appears to be hypersensitive to ordinary petulance, discord and differences in domestic life, quite common to the society to which he or she belonged and such factors were not expected to induce a similarly circumstanced individual to resort to such step, the accused charged with abetment could not be held guilty. The above view was reiterated in Amalendu Pal v. State of W.B. [Amalendu Pal v. State of W.B., (2010) 1 SCC 707 : (2010) 1 SCC (Cri) 896]. 29. That the intention of the legislature is that in order to convict a person under Section 306 IPC, there has to be a clear mens rea to commit an offence and that there ought to be an active or direct act leading the deceased to commit suicide, being left with no option, had been propounded by this Court in S.S. Chheena v. Vijay Kumar Mahajan [S.S. Chheena v. Vijay Kumar Mahajan, (2010) 12 SCC 190 : (2011) 2 SCC (Cri) 465]. 30. In Pinakin Mahipatray Rawal v. State of Gujarat [Pinakin Mahipatray Rawal v. State of Gujarat, (2013) 10 SCC 48 : (2013) 4 SCC (Civ) 616 : (2013) 3 SCC (Cri) 801] , this Court, with reference to Section 113-A of the Evidence Act, 1872, while observing that the criminal law amendment bringing forth this provision was necessitated to meet the social challenge of saving the married woman from being ill-treated or forced to commit suicide by the husband or his relatives demanding dowry, it was underlined that the burden of proving the preconditions permitting the presumption as ingrained therein, squarely and singularly lay on the prosecution. That the prosecution as well has to establish beyond reasonable doubt that the deceased had committed suicide on being abetted by the person charged under Section 306 IPC, was emphasised. 31. The assessment of the evidence on record as above, in our considered opinion, does not demonstrate with unqualified clarity and conviction, any role of the appellant or the other implicated in-laws of the deceased Surjit Kaur, as contemplated by the above provisions so as to return an unassailable finding of their culpability under Section 306 IPC. The materials on record, to reiterate, do not suggest even remotely any act of cruelty, oppression, harassment or inducement so as to persistently provoke or compel the deceased to resort to self-extinction being left with no other alternative. No such continuous and proximate conduct of the appellant or his family members with the required provocative culpability or lethal instigative content is discernible to even infer that the deceased Surjit Kaur and her daughters had been pushed to such a distressed state, physical or mental that they elected to liquidate themselves as if to seek a practical alleviation from their unbearable earthly miseries.\" (Emphasis by Court) 21. In Sudhakar Pathak and others vs. State of U.P. and others8 which is again a case that arose on appeal by a convicted husband before this Court - convicted for an offence punishable under Section 306 IPC for abetting suicide by his wife, this Court after a complete review of evidence on record and the law applicable held: \"15. Though, Gurucharan (supra) was a case based on dowry harassment, the last four lines mentioned in bold letters are still relevant and they require specific incident, and not general allegations, having provocative capability to drive the deceased to such distressed state, mental and physical that she could elect to end her life. Routine behaviour, remark or quarrel by husband in matrimonial life in a drunken state cannot be taken to be sufficient to the extent to constitute abetment unless something extra-ordinary, more than normal wear and tear of married life, is shown on or just before the date of incident. In this instant case where admittedly the deceased was suffering from mental illness or disease, the burden of proving close link, in proximity of time between abetment and suicide, heavily lies on prosecution and the prosecution has utterly failed in discharging this burden. 16. This is no principle of law that wherever wife commits suicide, the husband will bear the responsibility and will be held liable. No doubt that in such cases, if the prosecution has discharged its initial burden of proof of guilt and has proved the relationship between abetment by husband and suicide by wife, the accused may be required in view of section 106 of the Evidence Act to explain the circumstances in which the wife committed suicide. But when mental illness of the wife is admitted much before in time from the date of death and the husband is habitual drunkard since marriage and in the habit of causing harassment in drunken state and both have passed more than 15 years of marriage as such giving birth to four children, general allegation of harassment cannot be sufficient to hold him guilty for the offence of abetment of suicide, particularly when the presence of husband in the house around the incident is not established.\" 22. This Court must still again remark that cases where the charge is about abetment to commit suicide, there are very subtle features of evidence that may show the necessary mens rea and the relevant persistent conduct of the accused in driving the deceased to commit suicide. There could be cases where on the material collected during investigation, there is hardly anything to show that the accused or one of them ex facie committed an act proximate in point of time that could drive the deceased to take his life. Again, there could be cases where the role of one of the accused is overt and proximate in point of time, by the standard of a man similarly circumstanced and a sensible man at that, that could lead him to commit suicide. The proximate and immediate conduct of one of the accused rendering the deceased option-less to commit suicide, may not be an impromptu action, provoked by the action of the accused on occasion. It could be the precipitating event behind which stand a long trail of instigation or aid, driven by persistent conduct of one or more of the accused acting together. This is in particular true of a matrimonial relationship, which comes as it does, with abiding social obligations and much legal consequences. A spouse at the receiving end of matrimonial cruelty - mental and physical or both, cannot be compared to a person placed in a different situation of harassment, like an employee perceiving or being actually harassed by his employer, or a student by his teacher. It is for this reason that special laws have been made for women where they commit suicide, within seven years of marriage in the matrimonial home. 23. No doubt, social realities have not yet arisen in the perception of law makers and others as well in similar terms for the other partner in marriage, but the reality remains that in the nature of relationship in matrimony, social and legal obligation arise, which when inter-laid with persistent cruel conduct by the wife, may lead a man to find himself optionless. Of course, it depends on the circumstances of a man, his financial and social status and his general outlook towards life. But, what cannot be ignored is the fact that in the matrimonial relationship both spouses, in sometime, become aware of the others general outlook and the threshold of toleration beyond which the other may not be driven, and if persistently harassed, may adopt fatal options. 24. There is yet another angle to the matter, which holds stronger in case of a matrimonial alliance. The person actually involved in doing an act proximate in point of time to the deceased taking his life, may have others participating with him/her leading to the 'build-up', where the fatal event occurs. These could be those persons who have conspired with the instigator or the one who actively aids the deceased through a proximate act. The role of such persons in the shadows who have conspired would in no measure be less culpable and certainly relevant under Section 107 IPC. No doubt, the evidence about their role would have to be more carefully sifted at the trial, than the person who has acted as the agent provocateur, proximate in point of time. 25. In the present case, this Court finds that whatever evidence has been collected is not one simply about a hair trigger fatal response from an over sensitive man. The parties were together for some four years and had a son. The suicide note, which comprises two parts, the one physically scripted and the other sent by WhatsApp messages, shows definitive allegations against wife and the in-laws. The scripted suicide note shows that the wife, who was staying back at her parents' place at Muzaffarnagar, was carrying on there and forcing the deceased to stay in a house close to her place. The note also says that the wife abuses him and snatches away food from him (\u092e\u0941\u091d\u0947 \u0917\u093e\u0932\u0940 \u0926\u0947\u0924\u0940 \u0939\u0948, \u0916\u093e\u0928\u093e \u0924\u0915 \u091b\u0940\u0928 \u0932\u0947\u0924\u0940 \u0939\u0948). He has blamed his wife and named the other in-laws, who along with her threatened and harassed him. The scripted suicide note goes to the extent of showing that the son is not begotten of him. 26. It must be remarked that though a child born during the subsistence of a valid marriage is presumed to be legitimate and begotten of the husband, subject to fulfillment of the conditions specified under Section 112 of the Evidence Act, 1872 disowning a child born during marriage is frowned upon by the law, but the words carried in the suicide note are those of a man who was on the brink of ending his own life. These are entitled justly to be differently received and assessed. No doubt, in the scripted suicide note, there is conspicuous absence of the applicant's name though all other in-laws have been specifically nominated as part of concerted design and effort to harass the deceased driving him over the brink, but the WhatsApp message, a copy of which is annexed at page 17 to the counter affidavit and is part of the case diary, clearly nominates the applicant also with imputations that have been extracted hereinbefore. 27. The statements of the informant and the two sisters-in-law of the deceased show that the family made efforts to persuade the deceased's wife away from the course of harassment and oppression, but to no avail. The deceased's wife, and if the material collected during investigation, were to withstand scrutiny at the trial, shows that the in-laws of the deceased, including the applicant, sometimes directly and at others through the deceased's wife put the deceased to extreme oppression and threat. The deceased was exposed to insult and humiliation. The material gathered during investigation shows that the immediate and proximate cause for the deceased to take the extreme step was a public humiliation by his wife, co-accused Menaka, who outside the matrimonial home and in full public view, misbehaved with him and on his protest beat him up. Public humiliation of a spouse, particularly, an act of assault by the husband or the wife, may, in the circumstances of long and persistent misbehaviour and harassment, drive a person to take the extreme step of taking his/ her life. 28. In the entirety of the circumstances, in the considered opinion of this Court, suicide committed by the deceased cannot be regarded as an oversensitive or freak reaction of a person, who circumstanced like the deceased, would not ordinarily be expected to exhibit. Much reliance was placed during the hearing by Mr. Zaidi, learned Senior Advocate for the applicant on a recent decision of the Supreme Court in Arnab Manoranjan Goswami (supra) on the question what would constitute an offence of abetment to suicide, punishable under Section 306 IPC. It reads, thus: \"49. Before we evaluate the contents of the FIR, a reference to Section 306 IPC is necessary. Section 306 stipulates that if a person commits suicide \"whoever abets the commission of such suicide\" shall be punished with imprisonment extending up to 10 years [ \"306. Abetment of suicide.--If any person commits suicide, whoever abets the commission of such suicide, shall be punished with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.\"] . Section 107 is comprised within Chapter V IPC, which is titled \"Of Abetment\". Section 107 provides: (Quoted portion omitted) 50. The first segment of Section 107 defines abetment as the instigation of a person to do a particular thing. The second segment defines it with reference to engaging in a conspiracy with one or more other persons for the doing of a thing, and an act or illegal omission in pursuance of the conspiracy. Under the third segment, abetment is founded on intentionally aiding the doing of a thing either by an act or omission. These provisions have been construed specifically in the context of Section 306 to which a reference is necessary in order to furnish the legal foundation for assessing the contents of the FIR. These provisions have been construed in the earlier judgments of this Court in State of W.B. v. Orilal Jaiswal [State of W.B. v. Orilal Jaiswal, (1994) 1 SCC 73 : 1994 SCC (Cri) 107] , Randhir Singh v. State of Punjab [Randhir Singh v. State of Punjab, (2004) 13 SCC 129 : 2005 SCC (Cri) 56] , Kishori Lal v. State of M.P. [Kishori Lal v. State of M.P., (2007) 10 SCC 797 : (2007) 3 SCC (Cri) 701] (\"Kishori Lal\") and Kishangiri Mangalgiri Goswami v. State of Gujarat [Kishangiri Mangalgiri Goswami v. State of Gujarat, (2009) 4 SCC 52 : (2009) 2 SCC (Cri) 62] . In Amalendu Pal v. State of W.B. [Amalendu Pal v. State of W.B., (2010) 1 SCC 707 : (2010) 1 SCC (Cri) 896] , Mukundakam Sharma, J., speaking for a two-Judge Bench of this Court and having adverted to the earlier decisions, observed : (SCC p. 712, para 12) \"12. ... It is also to be borne in mind that in cases of alleged abetment of suicide there must be proof of direct or indirect acts of incitement to the commission of suicide. Merely on the allegation of harassment without there being any positive action proximate to the time of occurrence on the part of the accused which led or compelled the person to commit suicide, conviction in terms of Section 306 IPC is not sustainable.\" 51. The Court noted that before a person may be said to have abetted the commission of suicide, they \"must have played an active role by an act of instigation or by doing certain act to facilitate the commission of suicide\". Instigation, as this Court held in Kishori Lal [Kishori Lal v. State of M.P., (2007) 10 SCC 797 : (2007) 3 SCC (Cri) 701] , \"literally means to provoke, incite, urge on or bring about by persuasion to do anything\". In S.S. Chheena v. Vijay Kumar Mahajan [S.S. Chheena v. Vijay Kumar Mahajan, (2010) 12 SCC 190 : (2011) 2 SCC (Cri) 465] , a two-Judge Bench of this Court, speaking through Dalveer Bhandari, J., observed : (SCC p. 197, para 25) \"25. Abetment involves a mental process of instigating a person or intentionally aiding a person in doing of a thing. Without a positive act on the part of the accused to instigate or aid in committing suicide, conviction cannot be sustained. The intention of the legislature and the ratio of the cases decided by this Court is clear that in order to convict a person under Section 306 IPC there has to be a clear mens rea to commit the offence. It also requires an active act or direct act which led the deceased to commit suicide seeing no option and that act must have been intended to push the deceased into such a position that he committed suicide.\" 52.Madan Mohan Singh v. State of Gujarat [Madan Mohan Singh v. State of Gujarat, (2010) 8 SCC 628 : (2010) 3 SCC (Cri) 1048 : (2010) 2 SCC (L&S) 682] was specifically a case which arose in the context of a petition under Section 482 CrPC where the High Court had dismissed [Madan Mohan Singh v. State of Gujarat, 2008 SCC OnLine Guj 568] the petition for quashing an FIR registered for offences under Sections 306 and 294(b) IPC. In that case, the FIR was registered on a complaint of the spouse of the deceased who was working as a driver with the accused. The driver had been rebuked by the employer and was later found to be dead on having committed suicide. A suicide note was relied upon in the FIR, the contents of which indicated that the driver had not been given a fixed vehicle unlike other drivers besides which he had other complaints including the deduction of 15 days' wages from his salary. The suicide note named the appellant-accused. In the decision of a two-Judge Bench of this Court, delivered by V.S. Sirpurkar, J., the test laid down in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] was applied and the Court held : (Madan Mohan Singh case [Madan Mohan Singh v. State of Gujarat, (2010) 8 SCC 628 : (2010) 3 SCC (Cri) 1048 : (2010) 2 SCC (L&S) 682] , SCC p. 631, paras 10-11) \"10. We are convinced that there is absolutely nothing in this suicide note or the FIR which would even distantly be viewed as an offence much less under Section 306 IPC. We could not find anything in the FIR or in the so-called suicide note which could be suggested as abetment to commit suicide. In such matters there must be an allegation that the accused had instigated the deceased to commit suicide or secondly, had engaged with some other person in a conspiracy and lastly, that the accused had in any way aided any act or illegal omission to bring about the suicide. 11. In spite of our best efforts and microscopic examination of the suicide note and the FIR, all that we find is that the suicide note is a rhetoric document in the nature of a departmental complaint. It also suggests some mental imbalance on the part of the deceased which he himself describes as depression. In the so-called suicide note, it cannot be said that the accused ever intended that the driver under him should commit suicide or should end his life and did anything in that behalf. Even if it is accepted that the accused changed the duty of the driver or that the accused asked him not to take the keys of the car and to keep the keys of the car in the office itself, it does not mean that the accused intended or knew that the driver should commit suicide because of this.\" 53. Dealing with the provisions of Section 306 IPC and the meaning of abetment within the meaning of Section 107, the Court observed : (Madan Mohan Singh case [Madan Mohan Singh v. State of Gujarat, (2010) 8 SCC 628 : (2010) 3 SCC (Cri) 1048 : (2010) 2 SCC (L&S) 682] , SCC pp. 631-32, para 12) \"12. In order to bring out an offence under Section 306 IPC specific abetment as contemplated by Section 107 IPC on the part of the accused with an intention to bring about the suicide of the person concerned as a result of that abetment is required. The intention of the accused to aid or to instigate or to abet the deceased to commit suicide is a must for this particular offence under Section 306 IPC. We are of the clear opinion that there is no question of there being any material for offence under Section 306 IPC either in the FIR or in the so-called suicide note.\" The Court noted that the suicide note expressed a state of anguish of the deceased and \"cannot be depicted as expressing anything intentional on the part of the accused that the deceased might commit suicide\". Reversing the judgment [Madan Mohan Singh v. State of Gujarat, 2008 SCC OnLine Guj 568] of the High Court, the petition under Section 482 was allowed and the FIR was quashed. 54. In a concurring judgment delivered by one of us (Dhananjaya Y. Chandrachud, J.) in the decision of the Constitution Bench in Common Cause [Common Cause v. Union of India, (2018) 5 SCC 1] , the provisions of Section 107 were explained with the following observations : (SCC p. 244, para 458) \"458. For abetting an offence, the person abetting must have intentionally aided the commission of the crime. Abetment requires an instigation to commit or intentionally aiding the commission of a crime. It presupposes a course of conduct or action which (in the context of the present discussion) facilitates another to end life. Hence abetment of suicide is an offence expressly punishable under Sections 305 and 306 IPC.\" 55. More recently in M. Arjunan v. State [M. Arjunan v. State, (2019) 3 SCC 315 : (2019) 2 SCC (Cri) 219] , a two-Judge Bench of this Court, speaking through R. Banumathi, J., elucidated the essential ingredients of the offence under Section 306 IPC in the following observations : (SCC p. 317, para 7) \"7. The essential ingredients of the offence under Section 306 IPC are : (i) the abetment; (ii) the intention of the accused to aid or instigate or abet the deceased to commit suicide. The act of the accused, however, insulting the deceased by using abusive language will not, by itself, constitute the abetment of suicide. There should be evidence capable of suggesting that the accused intended by such act to instigate the deceased to commit suicide. Unless the ingredients of instigation/abetment to commit suicide are satisfied the accused cannot be convicted under Section 306 IPC.\" 56. Similarly, in another recent judgment of this Court in Ude Singh v. State of Haryana [Ude Singh v. State of Haryana, (2019) 17 SCC 301 : (2020) 3 SCC (Cri) 306] , a two-Judge Bench of this Court, speaking through Dinesh Maheshwari, J., expounded on the ingredients of Section 306 IPC, and the factors to be considered in determining whether a case falls within the ken of the aforesaid provision, in the following terms : (SCC pp. 321-22, para 16) \"16. In cases of alleged abetment of suicide, there must be a proof of direct or indirect act(s) of incitement to the commission of suicide. It could hardly be disputed that the question of cause of a suicide, particularly in the context of an offence of abetment of suicide, remains a vexed one, involving multifaceted and complex attributes of human behaviour and responses/reactions. In the case of accusation for abetment of suicide, the court would be looking for cogent and convincing proof of the act(s) of incitement to the commission of suicide. In the case of suicide, mere allegation of harassment of the deceased by another person would not suffice unless there be such action on the part of the accused which compels the person to commit suicide; and such an offending action ought to be proximate to the time of occurrence. Whether a person has abetted in the commission of suicide by another or not, could only be gathered from the facts and circumstances of each case. 16.1. For the purpose of finding out if a person has abetted commission of suicide by another, the consideration would be if the accused is guilty of the act of instigation of the act of suicide. As explained and reiterated by this Court in the decisions abovereferred, instigation means to goad, urge forward, provoke, incite or encourage to do an act. If the persons who committed suicide had been hypersensitive and the action of accused is otherwise not ordinarily expected to induce a similarly circumstanced person to commit suicide, it may not be safe to hold the accused guilty of abetment of suicide. But, on the other hand, if the accused by his acts and by his continuous course of conduct creates a situation which leads the deceased perceiving no other option except to commit suicide, the case may fall within the four-corners of Section 306 IPC. If the accused plays an active role in tarnishing the self-esteem and self-respect of the victim, which eventually draws the victim to commit suicide, the accused may be held guilty of abetment of suicide. The question of mens rea on the part of the accused in such cases would be examined with reference to the actual acts and deeds of the accused and if the acts and deeds are only of such nature where the accused intended nothing more than harassment or snap show of anger, a particular case may fall short of the offence of abetment of suicide. However, if the accused kept on irritating or annoying the deceased by words or deeds until the deceased reacted or was provoked, a particular case may be that of abetment of suicide. Such being the matter of delicate analysis of human behaviour, each case is required to be examined on its own facts, while taking note of all the surrounding factors having bearing on the actions and psyche of the accused and the deceased.\" 57. Similarly, in Rajesh v. State of Haryana [Rajesh v. State of Haryana, (2020) 15 SCC 359] , a two-Judge Bench of this Court, speaking through L. Nageswara Rao, J., held as follows : (SCC para 9) \"9. Conviction under Section 306 IPC is not sustainable on the allegation of harassment without there being any positive action proximate to the time of occurrence on the part of the accused, which led or compelled the person to commit suicide. In order to bring a case within the purview of Section 306 IPC, there must be a case of suicide and in the commission of the said offence, the person who is said to have abetted the commission of suicide must have played an active role by an act of instigation or by doing certain act to facilitate the commission of suicide. Therefore, the act of abetment by the person charged with the said offence must be proved and established by the prosecution before he could be convicted under Section 306 IPC.\" 58. In a recent decision of this Court in Gurcharan Singh v. State of Punjab [Gurcharan Singh v. State of Punjab, (2020) 10 SCC 200 : (2021) 1 SCC (Cri) 417] , a three-Judge Bench of this Court, speaking through Hrishikesh Roy, J., held thus : (SCC pp. 206-07, para 15) \"15. As in all crimes, mens rea has to be established. To prove the offence of abetment, as specified under Section 107 IPC, the state of mind to commit a particular crime must be visible, to determine the culpability. In order to prove mens rea, there has to be something on record to establish or show that the appellant herein had a guilty mind and in furtherance of that state of mind, abetted the suicide of the deceased.\" 59. In Vaijnath Kondiba Khandke v. State of Maharashtra [Vaijnath Kondiba Khandke v. State of Maharashtra, (2018) 7 SCC 781 : (2018) 3 SCC (Cri) 362] , a two-Judge Bench of this Court, speaking through U.U. Lalit, J., dealt with an appeal against the rejection of an application under Section 482 CrPC, for quashing an FIR registered under Sections 306 and 506 read with Section 34 IPC. A person serving in the office of the Deputy Director of Education, Aurangabad had committed suicide on 8-8-2017. His wife made a complaint to the police that her husband was suffering from mental torture as his superiors were getting heavy work done from her husband. This resulted in him having to work from 10 a.m. to 10 p.m. and even at odd hours and on holidays. The specific allegation against the appellant was that he had stopped the deceased's salary for one month and was threatening the deceased that his increment would be stopped. This Court noted that there was no suicide note, and the only material on record was in the form of assertions made by the deceased's wife in her report to the police. The Court went on to hold that the facts on record were inadequate and insufficient to bring home the charge of abetment of suicide under Section 306 IPC. The mere factum of work being assigned by the appellant to the deceased, or the stoppage of salary for a month, was not enough to prove criminal intent or guilty mind. Consequently, proceedings against the appellant were quashed. 60. On the other hand, we must also notice the decision in Praveen Pradhan [Praveen Pradhan v. State of Uttaranchal, (2012) 9 SCC 734 : (2013) 1 SCC (Cri) 146] where a two-Judge Bench of this Court, speaking through B.S. Chauhan, J., dismissed an appeal against the rejection [Praveen Pradhan v. State of Uttaranchal, 2012 SCC OnLine Utt 51] of an application under Section 482 CrPC by the High Court for quashing a criminal proceeding, implicating an offence under Section 306 IPC. The suicide note which was left behind by the deceased showed, as this Court observed, that \"the appellant perpetually humiliated, exploited and demoralised the deceased, who was compelled to indulge in wrongful practices at the workplace, which hurt his self-respect tremendously.\" The Court noted that the appellant always scolded the deceased and tried to always force the deceased to resign. Resultantly, the Court observed : (SCC p. 741, para 19) \"19. Thus, the case is required to be considered in the light of the aforesaid settled legal propositions. In the instant case, alleged harassment had not been a casual feature, rather remained a matter of persistent harassment. It is not a case of a driver; or a man having an illicit relationship with a married woman, knowing that she also had another paramour; and therefore, cannot be compared to the situation of the deceased in the instant case, who was a qualified graduate engineer and still suffered persistent harassment and humiliation and additionally, also had to endure continuous illegal demands made by the appellant, upon nonfulfilment of which, he would be mercilessly harassed by the appellant for a prolonged period of time. He had also been forced to work continuously for long durations in the factory, vis-\u00e0-vis other employees which often even entered to 16-17 hours at a stretch. Such harassment, coupled with the utterance of words to the effect, that, \"had there been any other person in his place, he would have certainly committed suicide\" is what makes the present case distinct from the aforementioned cases. Considering the facts and circumstances of the present case, we do not think it is a case which requires any interference by this Court as regards the impugned judgment and order [Praveen Pradhan v. State of Uttaranchal, 2012 SCC OnLine Utt 51] of the High Court. The appeal is, therefore, dismissed accordingly.\" The contents of the FIR, therefore, indicated that the deceased had been subjected to harassment persistently and continuously and this was coupled by words used by the accused which led to the commission of suicide. 61. In Narayan Malhari Thorat v. Vinayak Deorao Bhagat [Narayan Malhari Thorat v. Vinayak Deorao Bhagat, (2019) 13 SCC 598 : (2019) 4 SCC (Cri) 636] , this Court, speaking through U.U. Lalit, J., reversed the judgment [Vinayak Deorao Bhagat v. State of Maharashtra, 2016 SCC OnLine Bom 15933] of a Division Bench of the High Court which had quashed criminal proceedings in exercise of the jurisdiction under Section 482. This was a case where the FIR was registered pursuant to the information received from the appellant. The FIR stated that the son and daughter-in-law of the appellant were teachers in Zila Parishad School. The respondent used to call the daughter-in-law of the appellant on the phone and used to harass her. Moreover, despite the efforts of the son of the appellant, the respondent did not desist from doing so. This Court noted : (SCC p. 603, para 12) \"12. We now consider the facts of the present case. There are definite allegations that the first respondent would keep on calling the wife of the victim on her mobile and keep harassing her which allegations are supported by the statements of the mother and the wife of the victim recorded during investigation. The record shows that 3-4 days prior to the suicide there was an altercation between the victim and the first respondent. In the light of these facts, coupled with the fact that the suicide note made definite allegation against first respondent, the High Court was not justified in entering into question whether the first respondent had the requisite intention to aid or instigate or abet the commission of suicide. At this juncture when the investigation was yet to be completed and charge-sheet, if any, was yet to be filed, the High Court ought not to have gone into the aspect whether there was requisite mental element or intention on part of the respondent.\" The above observations of the Court clearly indicated that there was a specific allegation in the FIR bearing on the imputation that the respondent had actively facilitated the commission of suicide by continuously harassing the spouse of the victim and in failing to rectify his conduct despite the efforts of the victim.\" 29. The authorities of the Supreme Court referred to in Goswami (supra), it is true, lay down that mere harassment of an individual by another or oppressive behaviour cannot be held to be in itself constitutive of the offence of abetment to commit suicide, but persistent acts of harassment by the accused or a continuous course of conduct, that creates a situation, \"which leads the deceased perceiving no other option except to commit suicide\" to borrow the words of their Lordships in Ude Singh vs. State of Haryana9 has been regarded sufficient to qualify for the requirement envisaged under Section 306 IPC. Likewise, in Ude Singh it has been recognized that where the accused played an active role in tarnishing the self-esteem and self-respect of the victim, that eventually draws him to commit suicide, may be regarded as abetment. Here, as said in some detail in the earlier part of this judgment, the wife allegedly brought matters to the precipitating event by humiliating the husband in public outside their matrimonial home, where she is said to have assaulted him; and again, if this were an isolated action, it might have been discounted for a hypersensitive reaction of a person, where a person similarly circumstanced would not have acted to take his own life. But, as the materials collected during investigation suggest, the fateful event came at the end of a 'build-up', where the wife and in-laws had subjected the deceased to persistent harassment and humiliation. And if the departed soul were to be believed for his word in the scripted suicide note, he was subjected to the humiliation of the wife carrying on with another man and bearing the other's child. In this entire long course of the claimed harassment that the deceased suffered, the in-laws, including the applicant, are alleged to have been active participants. They are said to have connived with the wife and acted alongside her in harassing the deceased. 30. One may legitimately think as to what would possibly be the shade of the mens rea that the victim's wife or his in-laws would harbour to covet death for him. In the opinion of this Court, if a person, particularly one in a relationship of great trust like man and wife, were to betray that trust persistently and indulge in harassment of the other in a manner that the victim-spouse, could reasonably be expected in the circumstances to be driven to take the extreme step, the precise kind of mens rea that would be involved, may not be very relevant. The necessary mens rea of whatever shade and fuelled by whatever motivation, would be inferable from the persistent conduct of the accused. 31. This Court, however, may clarify that whatever is said in this judgment is purely tentative and limited to the purpose of judging the worth of the prayer to quash proceedings. It is and ought not be regarded by the Trial Court as any kind of a comment or evaluation about evidence, which is yet to surface during trial. The truth of the prosecution case has to be established beyond doubt at the trial in accordance with law. However, this Court is of opinion that this is not a case, where the prosecution ought to be scuttled at the threshold in the exercise of powers under Section 482 of the Code. 32. In the result, this Application fails and is dismissed. Order Date :- July the 16th, 2021 Anoop / I. 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{"id": "1680750", "text": "PETITIONER: REV. FR. K. C. ALEXANDER Vs. RESPONDENT: STATE OF KERALA DATE OF JUDGMENT16/08/1973 BENCH: REDDY, P. JAGANMOHAN BENCH: REDDY, P. JAGANMOHAN DWIVEDI, S.N. CITATION: 1973 AIR 2498 1974 SCR (1) 399 1973 SCC (2) 737 ACT: Travancore Land Conservancy Act (4 of 1916), s. 9-'Other product raised on land' if includes trees. Trespasser-Right to compensation for trees Planted on another's land. HEADNOTE: There was a dispute regarding the ownership of certain land between a Jenmi family and the State Government, and the Jenmi family filed a suit for declaration of its title. While the dispute was pending, the appellant applied to the Conservator of Forests for registration of the lands in his name under the Travancore Land Conservancy Act, 1916, but the application was rejected. After the suit filed by the Jenmi family was dismissed, the appellant who was in possession of the land, was dispossessed. The appellant, thereafter. filed a suit for the value of improvements affected by him on the land by planting trees and constructing a building. The trial Court decreed the suit for the value of the building but rejected the rest of claim. The High Court dismissed his appeal. In appeal to this Court, it was contended that : (1) there was no order of forfeiture of improvements as required under s. 9 of the Act; (2) the appellant was entitled to compensation under general, law; and (3) the appellant was not served with a notice to quit as required by s. 9 of the Act to enable him to cut and remove the trees. Dismissing the appeal, HELD: (1) Section 9 provides for two notices to be given : (a) one notice to be given to the person in unauthorised occupation of government land to vacate within a reasonable time, and (b) another for forfeiture of any crop or other product raised on the land or to remove any building or other structure within a reasonable time. The words 'raised on the land' qualify both the 'crop' and 'other product', and so, the words 'other product' have to be read in the context of the word 'crop'. So read, trees would not be in- cluded within the meaning of 'other product raised on the land in s. 9 of the Act, and therefore. there is no obligation on the respondent to give notice of forfeiture. [405D-H; 406E] Clark and Another v. Gaskarth, 8 Taunt 431, applied. (2) (a) The trial court and High-Court found on the evidence that the appellant's possession commenced only after his application for registration was rejected, and that. the improvements, if any, were effected by him only thereafter, with full knowledge that the title to the lands was in dispute. Therefore, he could not be said to be a bona fide trespasser. It could not also be contended that nevertheless he was a bona fide trespasser entitled to com- pensation on the basis that he entered upon the land with a bona fide intention of improving the land. Such a contention would give validity to a dangerous principle which will condone all acts of deliberate and wrongful trespass, be-cause, any person desperate enough to trespass on other man's land without any claim of title can always plead that he had a bona fide intention of improving the land whether or not the owner of the land wanted the improvement. The maxim of English law quicquid plantatur solo, solo cedit (whatever is affixed to the soil belongs to the soil) is not applicable to India. but that is not to say that wrongful trespasser can plant trees on someone else's land and claim a right to those trees after he is evicted. [406E-H; 407A] Vallabdas Narainji v. Development Officer, Bandra, A.I.R. 1929 P.C. 163, applied. 400 (b) in any case, the position of a trespasser cannot be better than that of a lawful tenant, who, having lost his possession cannot claim compensation or damages for anything erected on the land or any improvements made therein. [407H] (3) There are no clear allegations in the plaint that the appellant was evicted without notice. No issue had been framed regarding the notice of eviction not being given and no application for framing such an issue was filed in the trial court, or the High Court or this Court. Therefore, the appellant, who was not a mere trespasser but one who had deliberately entered upon the land knowing fully well that he had no right, claim or title to the land, or any manner of right to enter the land, and who had been rightly evicted as a trespasser, should not be permitted to raise such a contention in this Court. [408H-409B] JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 744 of 1967. Appeal by special leave from the judgment and decree dated the 2nd March 1965, of the Kerala High Court at Ernakulam, in A. S. No. 216 of 1961. J. Krishnamoorthy Iyer, Annamma Allexander, S. K. Mehta, K. R. Nagaraja, Qamaruddin and Vinod Dhawan, for the appellant. A. R. Somnath Iyer and M. R. K. Pillai, for the respondent. The Judgment of the Court was delivered by JAGANMOHAN REDDY, J.-This appeal is by special leave against the judgment and decree of the High Court of Kerala which dismissed an appeal against the judgment and decree of the Subordinate Court of Havelikkara. The appellant had filed a suit on October 24, 1942, for the recovery of Rs. 2 lakhs and interest thereon from the date of suit and for costs originally against the State of Travancore now the State of Kerala-the respondent-and three others who however were not made parties in the appeal before the High Court. It has alleged in the plaint that the plaintiff (appellant) was wrongfully dispossessed from 160 acres of land along with the improvements which had been effected by him and as the State had appropriated those improvements without any right or title thereto he claimed the value of those improvements. It was the appellant's case that he had been in occupation of the said 160 acres of Cherikkal land (unregistered dry lands in hilly tracts) about which and the adjoining lands there was a dispute as to whether the same belonged to a jenmi family known as Koodalvalli Illom--hereinafter called 'the Illom--or to the Government of the erstwhile Travancore State. The appellant's father and the appellant had occupied these lands, made improvement thereon by planting coconut trees, arecanut palms, peppervines, rubber-trees, jack trees, other trees, and by constructing bungalow, huts, wells etc. in the bona fide belief that the lands belonged to the Illom. It was stated that according to the practice prevailing in the erstwhile State of Travancore the cultivators could enter into unoccupied waste lands belonging to the janmies with the object of cultivating and improving them, and as they held the lands under them by paying rent, the consent of the Jemies to such occupation was implied. This practice it seems, was also current in respect of lands belonging to the, Government be-fore the Travancore Land Conservancy Act 4 of 1091 (24-7-1916) (hereinafter called 'the Act'). It is the case of the appellant that even, after the Act was passed, unauthorised occupants of land belonging to the Government who had made improvements therein had, under the rules made both under the Act and the Land Assignment Act a pre- ferential claim over others for getting kuthakapattom or assignment of the property in their possession. It may be mentioned that in respect of the 160 acres of land of' the Illom which were occupied by the appellant's father and the appellant, there was a dispute between the Illom and the Travancore State from about 1848. While this dispute was pending it appears the appellant applied to the Conservator of Forests for registration of the lands in his name, but the application was rejected on June 14, 1919 stating that the land applied for cannot be registered (Ext. A). While the application for registration was pending, the dispute between the Illom and the State of Travancore had reached a stage when the Illom had to institute a suit O. S. No. No. 126 of 1096 (January 1918) in the District Court at Quilon for a declaration of its title to those properties. In that suit the appellant, after his application for registration was rejected, sought to get himself impleaded, but that application also was rejected. Thereafter the suit filed by the Illom was dismissed on 28-6-1109 (February 10, 1934). An appeal against it was dismissed on September 27, 1943. It may here be mentioned that while the suit of the Illom i.e. O.S. No. 126 of 1096 M.E. was pending in the District Court, Quilon, the Government of Travancore had initiated proceedings in ejectment against the appellant by L. C. Case No. 112 of 1100; (1925 A.D.). As the suit of the illom had been finally disposed of and the title of' the Illom to the lands was not established, the appellant apprehending that he might be ejected in the above L.C. Case filed a suit No. O.S. 156 of 1103 M.E. (1927-28 A.D.) in the District Court at Quilon against the respondent to establish his right and title to the said 160 acres and in the adjoining Cherikkal lands in his possession. In that suit an injunction was prayed for in respect of 100 acres of the property involved in the suit, but the prayer was rejected. Against that order a Civil Miscellaneous Appeal No. 206 of 1110 M.E. (1934-35 A.D.) was filed in the High Court of Travancore. The High Court issued a commission for inspecting the properties and the Commissioner in his report part 13 of Ext. CC set out the improvements made by the appellant on the lands which comprised of a bungalow in which the appellant was residing, a number of small houses. a rubbers state, and a large number of other valuable trees like jack trees, mango trees, coconut trees etc. It appears that as there was no injunction restraining his dispossession in L.C. Case No. 112 of 11,00 M.E. an order was passed for dispossessing the appellant on July 24. 1939, Ext. VI. The appellant, pursuant to this order, was dispossessed from the lands and possession of these lands was given to the second defendant Nair Service Society Ltd. in August 1939. Thereafter the suit out of which this appeal arises was filed against the Government on October 24, 1942. The respondent-State contended that the appellant encroached on the suit lands, that proceedings were taken against him in L.C. Case No. 112 of 11 00 M. E. and he was evicted in due course, that the trespass by the appellant was of recent origin, that the allegation that the entry was made in the belief that the land belonged to the Illom was false, that the Revenue and Forest Departments did not harass the appellant but they took steps for dispossessing him only in accordance with the law, that the Commissioner's report was not correct in that all the improvements noted by the Commissioner were not made by the appellant but by other independent squatters, that after due notice an order of forfeiture had been passed in L.C. Case No. 112 of 1100 M.E. and the appellant was therefore not entitled to claim any value for improvements as it was his duty to remove any building before he was evicted. The respondent also averred that it had not taken possession of any crops or movables as stated in the ,plaint and that the movables found in the building were attached for the realisation of arrears of fine etc. There were other allegations also but it is unnecessary for purposes of this appeal to refer to them. Several issues were framed, but it is not necessary to refer to :them except to say that the suit was decreed only for Rs. 3000/being the value of the appellant's bungalow taken possession of by the respondent. The rest of the claim was dismissed. it was observed by the Trial Court that though there is no specific evidence to show when exactly the possession of the appellant had commenced, the evidence however indicated that it must have started close to the year I 100 M. E. and that in any case the claim of the appellant that possession was from 1030 M.E. was not true inasmuch as from the year 1067 M.E. when the Act was passed possession without permission was penal and it could not be imagined that the appellant was left in peace for all these long years. The Trial Court also held that all through these long years there had been a dispute as to the title between the Illom and the State and after the suit of the Illom was dismissed and the Illom's title was not sustained, the allegation that the improvements were effected cannot be stated to be bona fide. It pointed out that the plaintiff (appellant) had applied to get himself impleaded on 0.S. No. 126 of _ 109,6 M. E. but his application was rejected, and after that suit was dismissed the appellant again applied for registry, but that was also rejected. All this, according to the Trial Court, would show that the appellant was aware that he was remaining on Government lands without title. It was further held that the greater part of the improvements were effected by the appellant after the proceedings in the L.C. Case No. 112 of 1100 M.E. were stayed, as such it cannot be said that these improvements could have been effected in good faith. With respect to the allegation that an order of forfeiture was not served on the appellant under s. 9 of the .Act, the Court observed that though the State had in its written statement contended that such an order had been passed, no order was produced in evidence and consequently it was conceded by the Government Pleader that no such order was passed. In the circumstances the question that had to be considered was whether without an order of forfeiture being passed, the respondent could forfeit the improve- ments. On this issue it was held that no notice, of forfeiture of trees. need be given under s. 9 of the Act and, therefore no compensation or damages were payable in respect thereof. The High Court accepted the finding of the Trial Court on issue. It observed that the evidence in the case indicated that the possession of the father of the appellant must have commenced close to the year 1100 M.E. and consequently the claim of the appellant that lie was in possession from 1030 M.E. cannot be true. It then said : \"If the possession commenced only about the year 1100, it certainly cannot be under any bona fide claim of title for even on. 12-6-1094, the petitioner knew that the land was Government land and had then applied for assignment of the land.\" Accordingly the High Court found that at no time the occupation of the land by the appellant was under a bona fide claim of title. The contention of the appellant that the trees which are the subject-matter of the appeal should have been forfeited by an order passed under s. 9 of the Act and in the absence of such. an order his right to the value of those trees had to be adjudged and paid. to him was also negatived, as the Court held that the words \"any crop or other product raised on the land\" occuring in s. 9 of the Act would not include trees. In its view these words take in what is familiarly known in law as 'emblements' which according to Black's. Law Dictionary mean \"Such products of the soil as are annually planted, served and saved by manual labour, as cereals, vegetables, Grass maturing for harvest or harvested, etc., but not grass on lands used for pasturage.\" In this view it held that compensation for trees which are to be dealt with under the general law cannot be decreed in favour of a mere trespasser who had no rights therein. It was also of the view that the claim for compensation for trees which has to be dealt with under the general law under which a mere trespasser would have no rights to the payment of compensation nor could be. appellant be allowed to remove them after his dispossession. Another reason for disallowing the compensation for trees given by the High Court was that the position of a trespasser-whether he be a mere trespasser or a trespasser under a bona fide claim of title--cannot be better than that of a tenant, and that if this is correct, then the appeal has to be dismissed on the short ground that there is no principle of law or equity which requires the payment of compensation in respect of trees, the ownership of which was all along, or at any rate from the dale of the trespasser's dispossession, vested in the State. The learned advocate for the appellant has reiterated the submissions made before the Trial Court and the High Court and contends that there is no order forfeiting the improvements as required under s. 9 of the Act, and if s. 9 does not apply and there is no right of forfeiture as contemplated under s. 9, then the appellant is entitled to compensation under the general law. Apart from this contention, towards the end of his argument, the learned advocate for the appellant sought to make out a fresh case, namely, that as the appellant was not served with a notice to quit as required under s. 9 of the Act but was forcibly evicted without giving him an opportunity of cutting and taking away the trees etc. from the lands from which he was evicted, he would be entitled to claim compensation for the improvements made by him. It may be stated that the finding that the possession of the appellant ,commenced after his application for registration was rejected in 1919, and the improvements, if any must have been effected only thereafter with full knowledge that the title to the lands was in dispute between the Illom and the Government, is unassailable. We have earlier adverted to Ext. A and also to the fact that after the application for registration was ,rejected the appellant tried to get himself impleaded in the suit filed by the Illom against the State which application was also rejected and so the claim that his possession was bona fide or that he was a bona fide .trespasser has no validity. This finding is fortified by s. 5 of the Act which provides that from and after the commencement of the Act it shall not be lawful for any person to occupy land which is the property of the Government whether Poramboke or not without the permission from the Government or such officer of the Government as may be ,empowered in that behalf. In view of this specific provision the contravention of which is punishable under s. 6 thereof, his conduct in applying for registration and for getting himself impleaded in the suit of the Illom against the Government, would show that he knew that the land was Government land or land in which the Government had a claim. In these circumstances he cannot be said to be a bona fide trespasser particularly after he had applied to the Government for obtaining .a registration in his name on the basis that it was Government land. It is however urged before us that the High Court was in error in thinking that the appellant did not occupy the lands as a trespasser with a bona fide claim of title because it was his case that he trespassed upon the land with a bona fide intention to improve the land, and as such he can still be considered as a bona fide trespasser entitled to improvements under the general law. Before dealing with this aspect,, we will first consider the question whether trees are included within the meaning of s. 9, so as to entitle the appellant to a notice of forfeiture thereunder. Section 9 of the Act is in the following terms : \"Any person unauthorisedly occupying any land for which he is liable to pay a fine under section 6 and an assessment or prohibitory assessment under section 7, may be summarily evicted by the Division Peishkar, and any crop or other product raised on the land shall be liable to forfeiture and any building or other structure erected or anything deposited thereon shall also, if not removed by him after such written notice as the Division Peishkar may deem reasonable, be liable to forfeiture. 'Forfeiture under this section shall be disposed of as the Division Peishkar may direct. An eviction under this section shall be made in the following manner, namely: By serving a notice on a person reported to be in occupation or his agent, requir ing him, within such time as the Division Peishkar may deem reasonable after receipt of the said notice to vacate the land, and if such notice is not obeyed, by removing or deputing a subordinate to remove any person who may refuse to vacate the same, and, if the officer removing any such person shall be resisted or obstructed by any person, the Division Peishkar shall hold a summary enquiry into the, facts of the case and, if satisfied that the resistance or obstruction still continues, may issue a warrant for the arrest of the said person, and on his appearance may send him with a warrant in the form of the Schedule for imprisonment in the Civil Jail of the District for such period not exceeding 30 days as may be necessary to prevent the continuance of such obstruction or resistance Provided that no person so committed or imprisoned under this section shall be liable to be prosecuted under sections 176, 179 and 181 of the Travancore Penal Code in respect of the same facts.\" This section provides for two notices to be given one notice is to be given to the person who is in unauthorised occupation of Government land to vacate the land within a reasonable time and the other notice is to forfeit any crop or other product raised on the land or to remove any building or other structure erected or anything deposited therein within a reasonable time as may be stated in the notice. It was conceded before the Trial Court and no attempt was made to establish anything to the contrary before the High Court that no notice of forfeiture as required under s. 9 was given to the appellant. In these circumstances, the question that would arise for determination is whether the trees come within the description of \"other product raised on the land\". It is stated before us that at the time when the appellant was evicted the Transfer of Property Act was not in force. But this is not relevant as what has to be considered is whether trees can be said to be \"other product raised on the land\". The words \"raised on the land\" qualify both the 'crop' and 'other product', so the words \"other product\" have to be read in the context of the word 'crop' which precedes it. It was pointed out by the learned advocate that the High Court was in error in equating other product raised on the land with emblements because the definition of crop in Black's Law Dictionary does include emblements, as such the words 'other product' cannot also be treated as emblements and must therefore be given a different meaning which according to him would include trees. No doubt one of the meanings given in the Black's Law Dictionary does say that in a more restricted sense the word is synonymous with 'fructus industrials'. But the meaning to be ascribed to that word is that it connotes in its larger signification, products of the soil that are grown and raised yearly and are gathered during a single season. In this sense the term includes \"fructus industrials\" and having regard to the etymology of the word it has been held to mean only products after they have been severed from the soil. The same dictionary gives the meaning of the word ,,product\" as follows : \"Product. With reference to property, proceeds.: yield; income; receipts; return . ............ The \"products\" of a farm may include, the increase of cattle on the premises................\" Even under this definition \"product\" cannot mean anything which is attached to the land like trees. It may, however, include the fruit of the trees. This view of ours is supported by the case of Clark and Another v. Gaskarth(1). That was a case of a trespass for breaking and entering the closes of the plaintiffs and tearing up, digging up, cutting down, and carrying away the plaintiff's trees, plants, roots and seeds, growing on the closes. Notice of this trespass was given to the defendant. At the time of the distress the sum of pound 281.6 s. was due from the plaintiffs to the defendant for rent in respect of the nursery ground. The question before the Court was whether the plaintiffs were entitled to recover against the defendant damages caused to them by cutting down and carrying away the plaintiffs' trees. It was Contended-that the defendant's action was justified under the statute II G. 2, C. 19, s. 8, which after enumerating certain crops, empowered the landlord to seize as a distress any \"other product whatsoever which shall be growing on any part of the estate demised\" and, therefore, the trees and shrubs in question came within that description. The Court rejected the contention that the trees and shrubs could be distrained and held that the word product' in the eighth section of the statute did not extend to trees and shrubs growing in a nurseryman's ground, but that it was confined to products of a similar nature. with those specified in that section, to all of which the process of becoming ripe, and of being cut, gathered, made, and laid up when ripe, was incidental. In our view, therefore, trees are not included within the meaning of 'other products raised on the, land' in s. 9 of the Act and there is, therefore, no obligation on the Government to give notice of forfeiture under that section. It is then contended that even if trees are not included in s. 9 and no notice of forfeiture is necessary, under the general law even a trespasser on the land, whether bona fide or not, is entitled to compensation or damages for the improvements made by him on the land We have already agreed with the Trial Court and the High Court that the appellant was not a bona fide trespasser. But the learned advocate for the appellant submits that it was not his case nor is it under the general law necessary for a person who trespassed on the land to trespass with a claim of bona fide title. According to his submission a person is nevertheless a bona fide trespasser if he enters upon the land with a bona fide intention of improving the land. No authority has been cited for this novel proposition, and if accepted, it would give validity to a dangerous principle which will condone all acts of deliberate and wrongful trespass because any person desparate enough to trespass on other mans' land without any claim of title can always plead that he had a bona fide intention of improving the land whether the owner of that land wants that improvement or not. This vicarious and altruistic exhibition of good intention may even cause damage to the land of an owner who may not want improvements of such a kind as tree plantation. It is true that the maxim of the English law \"quicquid plantatur solo, solo cedit\" i.e. whatever is affixed to the soil belongs to the soil, is. not applicable in (1) 8 Taunt 431, India but that is not to say that a wrongful trespasser can plant trees on some one else's land and claim a right to those trees after he is evicted. The case of Vallabdas Narainji v. Development Officer, Bandra(1), which was cited by the learned counsel for the appellant does not assist him, for the Privy Council did not think it necessary to give a decision on what it termed to be a far-reaching contention. That was a case in which the Government had taken possession of the lands and had erected certain building on the land before a decision under s. 6 of the Land Acquisition Act was made as to the appellant's property arid it was contended that the appellant should be allowed the value of the land in the state in which it then was i.e. with buildings on it. It appears that the Government had resolved to acquire the land in question and other lands and by arrangement with certain of the sutidars it took possession of such land, including a portion which was in the occupation of the appellant. Upon such land, including a portion in the possession of the appellant they proceeded to erect buildings without the necessary notification under s. 6 of the Land Acquisition Act which was not served until November 4, 1920. On these findings it was observed that the Government were in a position, by law at any rate, to regularize their possession by such a notification a fact which becomes material when it has to be considered what the nature of the trespass is. Both the Assistant Judge and the High Court negatived the claim of the appellant. Before the Privy Council it was contended on behalf of the appellant that in the various cases relied upon, there was at least some genuine claim or belief in the party erecting the buildings that he had a title to do so, even though he was eventually held to be a trespasser; and it was urged that no such claim or belief existed in that case, in which it was said the Government without any pretence of a right, tortuously invaded the appellant's property and proceeded to deal with it as their own. it is in this context that the respondent's contention that even if the appellants were considered to be mere trespassers they would still be entitled to the value of the improvements and contest the claim of the appellant was described, as already stated, as a far-reaching contention. The Board, however, agreed with what was apparently the view of both Courts in India that under the circumstances of this case, as already set forth, by the law of India, which they appear to have correctly interpreted, the Government officials were in possession \"not as mere trespassers\" but under such a colour of title that the buildings erected by them on the land ought not to be included in the valuation as having become the property of the landowner. This case does not support the contention that a mere trespasser who has deliberately and wrongfully contrary to the provisions of s. 5 of the Act, entered 'upon another's land which makes such an act even punishable under s. 6 thereof, is entitled to compensation for the trees planted by him on the land. In any case, as the High Court rightly observed, the position of a trespasser cannot be better than that of a lawful tenant who having lost his possession cannot claim compensation or damages for anything erected on the land or any improvements made therein. The appellant's claim after he was evicted cannot, on the same parity of reasoning, be held to be valid. Once the appellant's counsel was confronted I with this (1) A.I.R. 1929 P.C. 163. proposition, he tried to raise an entirely new point, namely, that no notice of eviction was given to the appellant, and if such a notice had been given to him under s. 9, he would have cut the trees and taken them away, within the time allowed for him to vacate the lands. In support of this contention he has referred us to the leadings contained in paragraph-3 of the plaint in which it is stated : \"The improvements effected by the plaintiff have a value of Rs. 2 lakhs as per the accounts shown below. In his helplessness the plaintiff had even applied to Government to give him the land in which he had effected improvements, on kuthakapattom. But out of the said land 160 acres were taken out of my possession and given to the 2nd defendant even without giving me the opportunity to remove the movable improvements, such as cultivation, cattle, machines, utensils, houses, stocked crops, ripe crops etc., belonging to me.\" These averments in the above paragraph do not clearly allege that he was evicted without notice, nor has any allegation been made that he was forcibly evicted from the lands with the help of the police etc. as it has now been contended before us. On the other hand what the plaintiff (appellant) stated shows that no opportunity was given to him to remove the movable improvements, such as cultivation, cattle, machines, utensils, houses, stocked crops, ripe crops etc. which belonged to him. There is nothing stated by him that he had no opportunity to cut trees and take them away. Even in paragraph-4 of the plaint where he complains that no notice of forfeiture was given to him, he mentions only the items referred to in paragraph-3. It is in this connection, he says, that no legal procedure had been followed by Government for taking them into possession, which only implies that it is in respect of the items mentioned in paragraph-3. It is again stated in, paragraph-4 that \"It was irregular on the part of Government to take possession of the above items\". The respondent did not understand the averments in the plaint as alleging that no notice to quit was given to him is evident from the written statement of the respondent in paragraph, where it is stated thus : \"This defendant submits that after due notice an order of forfeiture has been passed in Poramboke Case 112 of 11 00 and the plaintiff is therefore not entitled to claim any value of improvements or value of any building.\" The issues that had been famed by the Trial Court also do not refer to this aspect. No doubt in the evidence of the plaintiff P.W. 1 states that he was evicted from the lands without giving him an opportunity to remove the improvements, and in cross-examination he was asked whether he was not given any notice prior to the dispossession and he said that certainly no notice was, received. P.W. 4 the Manager was asked in cross-examination whether he had been given any prior- information or notice about eviction and this witness also said that there was no prior information or notice. While these passages might show that no notice of eviction was given, even at that stage there was no application for an issue being framed, nor has such an application been made in the appeal before the High Court, nor even before this Court. en it has been held that the appellant was not a mere trespasser and had deliberately entered upon the lands knowing fully well that he had no right, claim or title to the lands or had in any manner a right to enter the land and has been rightly evicted as a trespasser, he cannot now be permitted to raise this contention before us. In the view we have taken, the appeal has no substance and is accordingly dismissed with no order as to costs, but the court fee will be recovered from the appellant. V.P.S. 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{"id": "10104667", "text": "1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7157 OF 2008 M/s. L. R. Brothers Indo Flora Ltd. \u2026 Appellant Versus Commissioner of Central Excise \u2026Respondent JUDGMENT A. M. Khanwilkar, J. 1. This appeal takes exception to the Final Order No. C/203/08 dated 17.7.2008 passed by the Customs, Excise & Service Tax Appellate Tribunal1 in Customs Appeal No. 9 of 2008, whereby the customs duty levied upon the appellant on the sale of cut flowers within the Domestic Tariff Area 2 had been confirmed by the Tribunal. 2. The factual matrix leading to the present appeal is that the appellant \u00ad M/s. L.R. Brothers Indo Flora Ltd. is a 100% Export Signature Not Verified Digitally signed by DEEPAK SINGH Date: 2020.09.01 17:01:04 IST Reason: 1 For short, \u201cCESTAT\u201d 2 For short, \u201cDTA\u201d Oriented Unit3 and engaged in production of cut flowers and flower buds of all kinds, suitable for bouquets and for ornamental purposes. The 100% EOU is required to export all articles produced by it. As a consequence whereof, it is exempted from payment of customs duty on the imported inputs used during production of the exported articles, vide Notification No. 126/94\u00ad Cus dated 3.6.19944. Under the said notification, exemption on levy of customs duty had been extended even to the inputs used in production of articles sold in domestic market, in accordance with the Export\u00adImport (EXIM) Policy and subject to other conditions specified by the Development Commissioner. To wit, upon payment of excise duty in case of excisable goods; and in case of non\u00adexcisable goods, upon payment of customs duty on the inputs used for production, manufacturing or packaging of such articles at a rate equivalent to the rate of customs duty that would have been leviable on such articles, if such articles were imported. The said notification was amended by Notification No. 56/01\u00adCus dated 18.5.20015, by which the customs duty in case of non\u00adexcisable goods became leviable on inputs used for 3 For short, \u201cEOU\u201d 4 For short, \u201cthe exemption notification\u201d 5 For short, \u201cthe amendment notification\u201d production, manufacturing or packaging, as if there was no exemption notification in place. The effect of this amendment was that the customs duty on inputs which was charged at the rate equivalent to the duty leviable on final articles under the exemption notification, was now chargeable at the rate specified for the inputs. 3. The EXIM Policy 1997\u00ad2002 provided that a 100% EOU in floriculture sector was permitted to sell 50% of its produce in DTA, subject to achieving positive net foreign exchange earning of 20% and upon approval of the Development Commissioner. The appellant, without obtaining the approval of the Development Commissioner and without maintaining the requisite net foreign exchange earning, made DTA sales to the extent of Rs.38,40,537/\u00ad during 1998\u00ad99 to 2000\u00ad01 (upto December 2000), in contravention of the provisions of EXIM Policy. Notably, the appellant subsequently sought ex\u00adpost facto approval from the Development Commissioner vide letter dated 6.2.2001. 4. Meanwhile, the Additional Commissioner, Central Excise, Meerut\u00adI issued a show cause notice dated 16.3.2001 to the appellant to show cause as to why customs duty, interest and penalty should not be imposed for the DTA sales made by the appellant in contravention of the EXIM Policy, that too after having availed the exemptions under the exemption notification on the import of green house equipment, raw materials like Live Rose Plants and consumables like planting materials and fertilizers. After according opportunity of being heard, the Additional Commissioner adjudged the show cause notice and held that the DTA sales were made without permission of the Development Commissioner and in contravention of the EXIM Policy and therefore, customs duty is leviable upon the appellant for the said sales. It was further held that the appellant had wilfully suppressed facts and thus Section 28 of the Customs Act, 19626 was invoked in the present case. The relevant extract of the Order\u00adin\u00adOriginal dated 18.10.2001 passed by the Additional Commissioner, Central Excise, Meerut \u2013 I on the aforesaid findings is reproduced hereunder: \u201c3.1 I find that the party had imported the capital goods and also imported raw materials like \u201cLive Rose Plants\u201d and consumable like \u201cFertilizer and Planting Materials\u201d during 1996\u00ad97 to 2000\u00ad2001 and further that they made clearances towards Domestic Tariff Area sales without obtaining permission from the Competent Authority in the matter. On scrutiny of the records, it was observed that before making any 6 For short, \u201cthe 1962 Act\u201d DTA sales it was required that 20% positive Net Foreign Exchange Earning (NFEP) should have been achieved i.e. annual value of export should have been 20% more than Rs.2,42,37,400/= (+) annual value of imports of raw materials and consumables during the respective year and the said noticee had exported the flowers worth Rs.91,92,000/= only which are well below prorata annual value of Import of capital goods. 3.2 I also find that as per condition of the approval letter No. 119(1994)EOB/34/94 dated 04.5.94, issued by Govt. of India, Ministry of Industries, Department of Industrial Development, Secretarial for Industrial approval, MUCC Section, New Delhi, the bonding period of M/s. L.R. Brothers Indo Flora Ltd., was fixed for 10 years during which they were required to achieve 62% value addition over and above the imports and other factors contributing towards the foreign exchange gone out of the country. As per the specific condition of the approval letter, the party was required to export all of its production out of India subject to permissible limit of Domestic Tariff Area Sales (herein after referred to as DTA Sales) and that, too, after specific permission from Development Commissioner of the EPZ concerned, on payment of applicable Customs & Central Excise duties. The Export Import Policy 1997\u00ad 2002 specifies the condition of DTA sales by an EOU. In this regard, I reproduce below the contents of the relevant paras of Export Import Policy 1997\u00ad2002\u2026.. 3.3 Therefore, in view of the above legal provisions of the Export Import Policy 1997\u00ad2002, it is amply clear that for earning DTA sales entitlement the EOU should fulfil the export obligations as prescribed in the letter of approval and also should have a positive NFEP which is 20% in case of floriculture units. 3.4 ..... As per Note 3 to paragraph 9.5 of the Export Import Policy, as discussed above, prorata annual value of imported capital goods (i.e. 1/5th of the total import of Capital Goods worth Rs.12,11,87,000/\u00ad comes to Rs.2,42,37,400/\u00ad. Therefore, before making any DTA sales it was required that 20% positive NFEP should have been achieved i.e. the annual value of export should have been 20% more than Rs.2,42,37,400/\u00ad + annual value of imports of raw materials and consumable during the respective year, whereas in all the four years since operation, the unit had exported the flowers worth Rs.91.92 lakhs only which are well below the prorata annual value of import of capital goods. Therefore, in view of the specific provisions of the Export Import Policy 1997\u00ad2002, the unit was not entitled to sell any goods in DTA. 3.5 Moreover, the guidelines for sale of goods in the DTA by EOU are prescribed in Appendix 42 of Handbook of Procedure, Export Import Policy 1997\u00ad2002. Para (f) of the said Appendix 42 reads as: \u201cAn application for DTA sale shall be accompanied by a statement indicating the ex\u00adfactory value of the goods produced (excluding rejects) and ex\u00adfactory value of goods actually exported. The statement shall be certified by an independent cost/chartered/cost and works accountant and endorsed by the Customs/Central Excise Officer having jurisdiction over the unit. The Development commissioner of the EPZ concerned will determine the extent of DTA sale admissible in value terms and issue goods removal authorization in terms of value and quantity for sale in DTA.\u201d However in the present case as per records, the party failed to furnish the same application as well as permission, if any to this department and did not follow the procedure as laid down in the Hand Book of Procedure, Export Import Policy 1997\u00ad2002. 3.6 Apart from the above, the floriculture EOU may Import Capital Goods and Raw Materials, without payment of Customs duties in terms of Custom Notification No. 126/94 dated 3.6.94 and accordingly M/s. L.R. Brother Indo, Flora Ltd., have imported green house equipment, raw materials like Liver Rose Plants and Consumable like planting materials and Fertilizers under the said notification. Para 3 of the said Notification reads as under :\u00ad .... 3.7 Therefore, from the above provision, it is clear that the units working under the said Notification may sell their produced goods in DTA on payment of excise duty as leviable under Section 3 of Central Excise Act, 1944 if the goods are excisable and on payment of full Customs duties leviable on such goods as if imported as such if the goods are non excisable. Cut Flowers or Flower Buds are not covered under Central Excise Tariff Act, 1985 as Chapter 6 which covers such types of Flowers in Customs Tariff left blank in Central Excise Tariff Act and, therefore, such types of Flowers will be treated as non excisable in view of Section 2 (d) of the Central Excise Act, 1944. Therefore, full Customs duties will be leviable on such Flowers, if sold in DTA treating such flowers as imported into India, in terms of Notification No. 126/94\u00adCus dated 03.6.94. Further, M/s. L.R. Brothers Indo Flora Ltd., had made DTA sales during the year 1998\u00ad99 to 2000\u00ad01 (upto December 2000) in contravention to the aforesaid provisions. Further, they failed to show any permission from Development Commissioner for sale of their goods in DTA. It appears that the Development Commissioner has granted no such permission to them, as they have not earned the DTA sale entitlement due to very low exports in comparison to high quantum of imports. ...... 3.8 I have also come to conclusion that M/s. L.R. Brothers Indo Flora Ltd., Behat Road, Saharanpur have contravened the provisions of Import & Export Policy 1997\u00ad2002 and have not fulfilled the conditions of Notification No. 126/94 dated 3.6.94. Hence the party is liable to pay the full customs duty on cut flowers sold in DTA, treating the flowers imported as such into India. Further, the said M/s. L.R. Brothers Indo Flora Ltd., have been indulged in wilful suppression of facts, as aforesaid, and sold the said goods viz., cut flowers falling under Ch. S.H. No. 0603.10 of the Customs Tariff, in D.T.A. in contravention of the provisions of Import Export Policy 1997\u00ad2002, without payment of Customs duty, hence extended period of five years as provided under proviso to section 28 of the Customs Act 1962 is invokable in the instant case. Therefore, all obligations were cast on such a large undertaking to discharge the correct duty liability i.e. Customs duty amounting to Rs.9,98,177.00. Therefore, demand of Customs duty stands recoverable from them. They are also liable to pay interest @ 24% from the 1 st day of the month succeeding the month in which the duty ought to have been paid under Section 28AB of the Customs Act, 1962. ....\u201d (emphasis supplied) 5. The Additional Commissioner, by way of aforesaid order, confirmed the demand of customs duty of Rs.9,98,177/\u00ad under Section 28, interest at the rate of 24% under Section 28AB and penalty of Rs.9,98,177/\u00ad under Section 114A of the 1962 Act. The appellant unsuccessfully carried the matter in appeal before the Commissioner (Appeals), Customs & Central Excise, Meerut\u00ad I, wherein the Order\u00adin\u00adOriginal came to be confirmed by the Order\u00adin\u00adAppeal dated 29.7.2005 by holding thus: \u201c5. ....... In the light of the above facts, I find myself in agreement with the findings of the adjudicating authority that the appellants have not earned the DTA sale entitlement due to very low exports in comparison to high quantum of imports. Thus, the alleged contravention of provisions of Import & Export Policy 1997\u00ad2002 and non\u00adfulfilling of the conditions of the Notification 126/94\u00adCus ibid is fully established against them. Therefore, the demand of Customs duty along with interest in this case as per the impugned order is justified. As regards the imposition of penalty on the appellants, I find that the charges of contravention of provisions of Export & Import Policy 1997\u00ad2002 & Notification No. 126/94 Cus dt. 03.06.94 stand proved against the appellants. They were aware that they were not entitled to make DTA sales of the subjected goods, even then they made DTA sales of the same to evade payment of duty. Hon\u2019ble Supreme Court in the case of Gujarat Travancore Agency vs. Commissioner of Income Tax 1989 (42) ELT 350 (SC), has held that the penalty under Section 271(1)(a) of the Income Tax Act is a civil obligation and unless there is something in language of the statute indicating the need to establish element of mensrea, it is generally sufficient to prove that a default in complying with the statute has occurred. In view of the ratio of the aforesaid judgment of Apex Court, the penalty has been rightly imposed upon the appellant. In view of the above, I find no infirmity in the order passed by the adjudicating authority and therefore disallow the appeal.\u201d 6. The matter was further carried in appeal before CESTAT whereat the impugned order was passed confirming the order of the authorities below whilst also holding that amendment notification is prospective and cannot be applied to the present case. The relevant extract of the impugned order is reproduced below: \u201c5. We have carefully considered the submissions made from both the sides. Irrespective of whether the DTA clearances of cut\u00adflowers were, in contravention of the EXIM Policy or otherwise, the cut\u00adflowers being non\u00ad excisable goods, their DTA clearance would attract, in terms of the provisions of para 3(a) of the exemption Notification No. 123/94\u00adCUS., only the Custom Duty involved on the inputs used in the production of the cut\u00ad flowers. The point of dispute is as to whether the Custom Duty payable on the inputs used in the production of the cut\u00adflowers which had been cleared to DTA, is to be taken as an amount equal to Custom Duty chargeable on the import of cut\u00adflowers, as such, or it should be the actual Custom Duty on the inputs used in the production of cut\u00adflowers cleared to DTA. 5.1 xxx xxx xxx 5.2 From reading of para 3(a) of the Notification No. 126/94\u00adcus as it existed during the period of dispute i.e. during the period prior to 18.5.01 \u2013 and as it existed during period w.e.f. 18\u00ad5\u00ad01, it is clear that during the period of dispute, the notification contained a machinery provisions for determining, the Custom Duty chargeable on the inputs used in the production of non\u00adexcisable goods cleared to DTA and as per this machinery provision, the duty was to be in an amount equal to the Custom Duty chargeable on the finished goods, as if imported, as such. However, after the amendment of this Notification w.e.f. 18.5.01, the duty on the inputs used in the production of non\u00adexcisable goods cleared to the DTA was to be calculated on actual basis. The amendment to the Notification No. 126/94\u00adCUS. w.e.f. 18.5.01 by the Notification No. 56/01 can have only prospective effect and it cannot be given retrospective effect. In view of this, during the period of dispute, customs duty on the inputs used in the production of cut\u00adflowers cleared to DTA has to be calculated as per the provisions of the Notification, as it existed during that period. 6. The Tribunal's judgment in the case of Vikram Ispat (supra) is not applicable to the fact of this case, as in the present case what is being charged in respect of DTA clearances of the cut\u00adflowers is not the customs duty on the cut\u00adflowers, but the custom duty on the inputs used in the production of those cut\u00adflowers, which as per the provisions of Notification, as it existed at that time, was equal to the Customs Duty chargeable on the import of cut\u00adflowers, as such. In the Tribunal's judgment in case of Zygo Flowers Ltd. (supra) and Cosco Blossoms Pvt. Ltd. (supra), the implications of the wording of para 3(a) of the exemption notification during the period of dispute \u00ad \u201cor where such articles [including rejects, waste and scrap material] are not excisable, on payment of Custom Duty on the said goods used for the purpose of production, manufacture or packaging of such articles in an amount equal to the Custom Duty leviable on such articles, as if imported, as such\u201d had not been considered. If the Appellant's view accepted, the words \u201cin an amount equal to the Custom Duty leviable on such articles, as if imported, as such\u201d would become redundant. It is well settled principle of interpretation of statute that a statute has to be construed without adding any words to it or subtracting any words from it and an interpretation which makes a part of the statute redundant has to be avoided. 7. In view of the above discussion, we hold that the custom duty has been correctly charged in respect of DTA clearances of the cut\u00adflowers and as such we find no infirmity in the impugned order. The appeal is accordingly dismissed.\u201d Thus, the levy of customs duty stood confirmed. 7. Being aggrieved, the appellant has approached this Court. The thrust of the argument of the appellant is that according to Paragraph 3 of the exemption notification, sales made in DTA would attract excise duty and since the cut flowers sold by the appellant are non\u00adexcisable goods, no excise duty can be levied upon it. Further, according to the notification, in case of non\u00ad excisable goods, the customs duty is leviable on the imported inputs. In the present case, since the cut flowers are home grown, customs duty cannot be levied upon them and therefore, the demand of customs duty cannot be sustained. Reliance is placed on the decisions of CESTAT in Cosco Blossoms Pvt. Ltd vs. Commissioner of Customs, Delhi7 and larger bench of Central Excise and Gold (Control) Appellate Tribunal 8 in Vikram Ispat vs. Commissioner of Central Excise, Mumbai\u00adIII9. It is then urged that the exemption notification predicates levy of customs duty on non\u00adexcisable goods sold in DTA sales to the extent of the value of inputs and not to the extent of the value of final product. It is further urged that the amendment notification is merely clarificatory and hence it would apply retrospectively. To buttress this submission, the appellant had placed reliance on Circular No. 31/2001\u00adCus dated 24.5.2001 issued by Central Board of Excise and Customs, New Delhi 10, which noted that the charge of customs duty on the inputs equal to the duty leviable 7 2004 (164) ELT 423 (Tri.-Del.) 8 For short, \u201cthe CEGAT\u201d 9 2000 (120) ELT 800 (Tribunal-LB) 10 For short, the \u201cCBEC Circular\u201d on the import of final product is putting floriculture EOUs at a disadvantageous position. The circular further envisages that the central excise notifications provided for recovery of duty on inputs procured duty free, whereas the exemption notification provided for recovery on inputs equal to duty on the final product. That the amendment notification was issued to address this anomaly and to harmonise the central excise and customs notifications. The appellant placed reliance on the Constitution Bench decision of this Court in Commissioner of Income Tax (Central) \u2013 I, New Delhi vs. Vatika Township Private Limited11, wherein it had been observed that whenever the legislator intends to confer benefit upon a person, it must be presumed to have retrospective effect. The appellant relied upon yet another decision of this Court in Zile Singh vs. State of Haryana & Ors.12 to contend that the substitution of a clause which clarifies about the intent of the legislature takes effect from the date of enactment of original provision. The appellant would further urge that Section 12 of the 1962 Act being the charging section, could only be applied if the goods are imported into India 11 (2015) 1 SCC 1 12 (2004) 8 SCC 1 and since the cut flowers are not imported, the show cause notice issued under the provisions of the 1962 Act is bad in law. In this regard, the appellant had placed reliance on Commissioner of Central Excise and Customs vs. Suresh Synthetics13. The appellant further relied on the exposition of this Court in Uniworth Textiles Limited vs. Commissioner of Central Excise, Raipur14 to submit that Section 28 of the 1962 Act, extending limitation, can be invoked only in the case of deliberate default and urged that it cannot be invoked in the present case since there was no default. 8. Per contra, the respondent would urge that in the fact situation of the present case, the department has correctly levied the customs duty, as the DTA sales made were in contravention of the EXIM policy and the appellant had no permission from the Development Commissioner to clear the goods in DTA. The respondent further urged that the amendment seeks to bring about a substantive change, whilst pointing out that the CBEC Circular in its opening paragraph speaks about \u201ccarrying out\u201d the amendment. Further, the amendment must be applied 13 2007 (216) ELT 662 (SC) 14 (2013) 9 SCC 753 prospectively. Reliance is placed upon the decision of this Court in Union of India & Anr. vs. IndusInd Bank Limited & Anr. 15, wherein it has been held that if the provision is remedial in nature, it cannot be construed as clarificatory or declaratory and has to be applied prospectively. 9. We have heard Mr. Rupesh Kumar, learned counsel for the appellant and Mr. Ashok K. Srivastava, learned senior counsel for the respondent. 10. The issues that arise for consideration in this appeal are: (i) Whether customs duty can be charged on the non\u00adexcisable goods produced in India and sold in DTA by an EOU?; and (ii) Whether the amendment in terms of Notification No. 56/01\u00adCus dated 18.05.2001, purporting to amend the criteria for determination of duty on inputs, is prospective or retrospective in its application? 11. At the outset, it is apposite to refer to the stated notification. The relevant extract thereof reads as under: \u201cNOTIFICATION NO. 126/94\u00adCUS DATED 3.6.1994 Exemption to import of specified goods for use in manufacture of export goods by 100% E.O.Us. \u00ad In exercise of the powers conferred by sub\u00adsection (1) of section 25 of the Customs Act, 1962 (52 of 1962), the 15 (2016) 9 SCC 720 Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in Annexure\u00adI to this notification (hereinafter referred to as the goods), when imported into India, for the production or manufacture of articles specified in Annexure\u00adII for export out of India or for being used in connection with the production, manufacture or packaging of the said articles specified in Annexure\u00adII for export out of India (hereinafter referred to as the specified purpose) by hundred per cent Export Oriented Undertakings approved by the Board of Approval for hundred per cent Export Oriented Undertakings, appointed by the notification of Government of India in the former Ministry of Industry and Civil Supplies, (Department of Industrial Development) No. S.0.163(E)/RLIU/10(2)76, dated the 3rd March, 1976 or the Development Commissioner concerned as the case may be, from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty, if any, leviable thereon under section 3 of the second mentioned Act, subject to the following conditions, namely :\u00ad (1) the importer has been granted the necessary licence for the import of the said goods; (2) the importer, at the time of import of the said goods, produces to the Assistant Commissioner of Customs a certificate from the Development Commissioner to the effect that the importer has executed a bond in such form and for such sum as may be prescribed binding himself\u00ad (a) to bring the said goods into his unit and to use them for the specified purpose; and (b) to dispose of the said goods or the articles produced, manufactured or packaged in the unit or the waste, scrap or remanents arising out of such production, manufacture or packaging in the manner as may, if any, be prescribed in the Export\u00adImport Policy and in this notification;\u2026.. xxx xxx xxx 3. Notwithstanding anything contained in this notification, the exemption contained herein shall also apply to the said goods which on importation into India are used for the purposes of production, manufacture or packaging of articles and such articles (including rejects, waste and scrap material arising in the course of production, manufacture or packaging of such articles) even if not exported out of India are allowed to be sold in India under and in accordance with the Export\u00adImport Policy and in such quantity and subject to such other limitations and conditions as may be specified in this behalf by the Development Commissioner, on payment of duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or where such articles (including rejects, waste and scrap material) are not excisable, on payment of customs duty on the said goods used for the purpose of production, manufacture or packaging of such articles, in an amount equal to the customs duty leviable on such articles as if imported as such.) Explanation.\u00ad For the purposes of this notification, \"Export\u00adImport Policy\" means Export and Import Policy, 1st April, 1997 \u00ad 31st March, 2002, published by the Government of India in the Ministry of Commerce Notification No. 1/1997\u00ad2002, dated 31 st March, 1997, as amended from time to time. \u2026..\u201d (emphasis supplied) 12. A bare perusal of the above notification would evince that apart from providing for duty free imports of inputs for an 100% EOU in order to export all the goods produced or manufactured by it, in addition, it also gives liberty to the 100% EOUs to clear their goods in DTA to the extent permissible by and in accordance with the EXIM policy. The EXIM policy, at paragraph 9.9 provided that for earning an entitlement to make sales in DTA, the unit has to maintain positive net foreign exchange earning. The calculation of net foreign exchange earning, as defined at paragraph 9.29, is provided for at paragraph 9.5 of the Policy, which had to be done as prescribed in Appendix I of the Policy. In case of cut flowers, it has been fixed at 20% since it would come within the category of \u201cProducts not covered above\u201d. 13. On a combined reading of the notification with the conditions laid down in the EXIM policy, it is clear that the fulfilment of the aforesaid conditions is a condition precedent to become eligible to make DTA sales. Resultantly, if goods are cleared in DTA sales in breach of the aforesaid conditions, customs duty would be leviable, as if such goods were imported goods. 14. Reverting to the first question, the appellant lays emphasis that the DTA sales made by an 100% EOU can only be amenable to excise duty and show cause notice under the provisions of the 1962 Act could not have been issued. This ground finds support in the decision of larger bench of the CEGAT in Vikram Ispat (supra), which the appellant relies upon. In paragraph 16 of the said decision, it has been held as under: \u201c16. Notification No. 2/95\u00adC.E., dated 4\u00ad1\u00ad95 provides that the goods manufactured and cleared by a 100% E.O.U. to DTA will be exempted from so much of duty of excise as is in excess of the amount calculated at the rate of 50% of each of duty of customs leviable read with any other notification for the time being in force on the like goods produced or manufactured outside India, if imported into India provided that the amount of duty payable shall not be less than the duty of excise leviable on like goods produced or manufactured by the units in Domestic Tariff Area read with any relevant notification. It is, thus apparent that notification No. 2/95 provides a minimum limit of the rate of duty which has to be paid by the 100% E.O.U. while clearing the goods to DTA and this limit is provided by the duty of excise leviable on like good manufactured outside 100% E.O.U. However, if the aggregate of duty customs leviable on goods cleared by 100% E.O.U. is more than the duty of excise leviable on like goods, a 100% E.O.U. has to pay more duty. The Revenue wants to restrict the availment of Modvat credit to the components of additional duty of customs paid under Section 3 of the Customs Tariff Act by bringing the fiction that 100% E.O.U. is a place which is not in India and the sale therefrom within India is akin to import into India. We do not find any substance in this view of the Revenue. The clearance of the goods by 100% E.O.U. are not import in the terms in which it has been defined under Section 2 (23) of the Customs Act, according to which import, with its grammatical and cogent expression means bringing into India from a place outside India. This is also apparent from the fact that when the goods are cleared from 100% E.O.U. to any place in India, central excise duty under Section 3(1) of the Central Excise Act is levied and not the customs duty under the Customs Act. If it is to be regarded as import, then the duty has to be charged under Section 12 of the Customs Act, read with Section 3 of the Customs Tariff Act. The Revenue, it seems is confusing the measure of the tax with the nature of the tax. The nature of the duty levied on the goods from 100% E.O.U. is excise duty and nothing else, whereas for determining the quantum of duty the measure adopted is duty leviable under Customs Act as held by the Supreme Court in many cases referred to above. The method adopted by the law makers in recovering the tax cannot alter its character. Once it is held that the duty paid by the 100% E.O.U. in respect of goods cleared to any place in India is excise duty, the question of dissecting the said duty into different components of basic customs duty, auxiliary duty, additional duty of Customs or any other customs duty does not arise. The proforma of AR\u00ad1A on which the reliance was placed by the learned D.R., cannot change the legal position that the duty levied on 100% E.O.U. is a duty of excise and not customs duty.\u201d (emphasis supplied) However, this exposition has no application to the fact situation of the present case, in as much as there had been no contravention of conditions of EXIM Policy and the issue was only about the nature of tax, in case of goods otherwise amenable to excise duty. 15. Concededly, the DTA sales pertaining to excisable goods made in conformity with the conditions of the EXIM policy are exigible to excise duty, but once there is contravention of the condition(s) of the EXIM policy, irrespective of the goods produced being excisable or non\u00adexcisable, the benefit under the exemption notification is unavailable. In such a situation, the very goods would become liable to imposition of customs duty as if being imported goods. 16. We may now examine as to what would be the position in case of sale of non\u00adexcisable goods as per conditions specified under the EXIM policy. Assuming there was no contravention of the EXIM policy, in case of the goods cleared being non excisable, the Paragraph 3 of the exemption notification would come into play and the duty would be leviable on the inputs used in such goods. It is relevant to bear in mind Section 12 of the 1962 Act here, being the charging section, as is set out hereunder: \u201cSection 12 \u2013 Dutiable Goods (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub\u00adsection (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government.\u201d It is clear from the above provision that the goods which are imported shall be charged as specified under the Customs Tariff Act, 1975 or \u201cany other law\u201d, unless exempted under the 1962 Act or by \u201cany other law\u201d. 17. In the present case, the notification provides for exemption on import of inputs and at the same time prescribes for adherence of certain conditions for availing the exemption. The notification further prescribes the rate at which the customs duty on the inputs used in the production of non\u00adexcisable goods sold in DTA is to be charged. Thus, the notification, having been issued in exercise of delegated legislation under Section 25 of the 1962 Act, has to be understood as \u201cany other law\u201d. Resultantly, the appellant, having availed exemption under the notification, cannot evade customs duty on the imported inputs at the rate prescribed by the notification. 18. The show cause notice points out that the appellant imported raw materials like \u201cLive Rose Plants\u201d and consumables like fertilizers and planting materials, however, the appellant advisedly chose to confine its argument to \u201ccut flowers\u201d, which, as contended, were grown on Indian soil and thus not amenable to customs duty. However, the demand made in the show cause notice \u201ctreating\u201d cut flowers as deemed to have been imported was only for the purpose of quantification of the customs duty on the imported inputs and not imposition of the customs duty on the domestically grown cut flowers as such. 19. The decision of CESTAT in the case of Cosco Blossoms (supra) is of no avail to the appellant. In that case, the tribunal had relied upon the decision in Vikram Ispat (supra) and held that the cut flowers cleared in DTA sales cannot be charged with customs duty, without considering that the goods were non excisable. Notably, the Tribunal had granted liberty to the authorities to charge customs duty upon the imported inputs, if used in production of the goods cleared in DTA, which supports the case of the respondent. Paragraph 5 of the aforesaid order reads as under: \u201c5. It is well settled [2000 (120) E.L.T. 800] that goods produced in an EOU cannot be treated as imported goods and subjected to customs duty. The duty payable in respect of such goods is the duty of excise under Section 3 of the Central Excise Act, 1944. Therefore, the duty demand made in the impugned order under Section 28 of the Customs Act is not sustainable. Accordingly, we set aside the impugned order and allow the present appeal. However, we make it clear that revenue authorities will be at liberty to demand duty on the imported inputs, if any, used in the production of the cut\u00adflowers in question. The appeal is disposed of as above.\u201d (emphasis supplied) 20. A priori, the demand in the present case, pertaining to the non\u00adexcisable goods has rightly been made under the 1962 Act upon the imported inputs used in the production of goods sold in DTA in violation of condition(s) in the EXIM Policy. 21. The decision of CESTAT in Suresh Synthetics (supra) is not applicable to the present case. The goods in that case were Polyster Textured Yarn, which are excisable goods. The investigations were made as per provisions of the Central Excise Act, 194416, however, show cause notice was issued under 16 For short, \u201cthe 1944 Act\u201d provisions of the 1962 Act. Thus, it was held that the demand is not maintainable as it was made under a defective show cause notice. 22. In case of excisable goods, even the present notification takes resort to Section 3 of the 1944 Act, as can be seen from the Paragraph 3 of the notification extracted above. Whereas, the provisions of the 1962 Act are invoked only when the goods are non\u00adexcisable. In the present case, since the cut flowers are non\u00ad excisable goods, the demand for payment of customs duty had rightly been made vide show cause notice under the provisions of the 1962 Act. 23. Moving to the second question, the show cause notice was issued to the appellant prior to the issuance of the amendment notification. In this backdrop, let us now examine the contention of the appellant that the amendment notification being retrospective in its application. The relevant portion of the said notification is reproduced hereunder: \u201cNOTIFICATION NO. 56 /2001\u00adCUS DATED 18.5.2001 In exercise of the powers conferred by sub\u00adsection (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed shall be amended or further amended, as the case may be, in the manner specified in the corresponding entry in column (3) of the said Table. TABLE Sr.No Notification No. Amendment and Date (1) (2) (3) xxx Xxx xxx 8. 126/94\u00adCus In the said notification,\u00ad dated the 3rd June, 1994 (a) in the first paragraph, in condition (6), after clause (d), the following shall be inserted, namely:\u00ad \" (e) permit destruction of rejects and waste without payment of duty within the unit, or outside the said unit, where it is not possible or permissible to destroy the same within the said unit, in the presence of Customs or Central Excise officer.\"; (b) in paragraph 2, in the proviso, for the words and figures \"duty of 15% ad valorem\", the words and figure \"duty of 5% ad valorem\" shall be substituted; (c) in paragraph 3, in clause (a), for the words \"on payment of customs duty on the said goods used for the purpose of production, manufacture or packaging of such articles in an amount equal to the customs duty leviable on such articles as if imported as such.\", the following shall be substituted, namely:\u00ad \"customs duty equal in amount to that leviable on inputs obtained under this notification and used for the purpose of production, manufacture or packaging of such articles, which would have been paid, but for the exemption under this notification, shall be payable at the time of clearance of such articles. \u2026..\" (emphasis supplied) 24. As can be seen, the aforesaid notification posits of carrying out amendments and substituting the charging clause of the inputs used in case of non\u00adexcisable goods. The language employed in the notification does not offer any guidance on whether the amendments as made were to apply prospectively or retrospectively. It is a settled proposition of law that all laws are deemed to apply prospectively unless either expressly specified to apply retrospectively or intended to have been done so by the legislature. The latter would be a case of necessary implication and it cannot be inferred lightly. 25. In this regard, the appellant has heavily relied upon the CBEC Circular to contend that the Government intended to apply the notification retrospectively as it was brought in to address an anomaly, which existed vis a vis central excise notifications. The relevant portion of the CBEC Circular is extracted hereunder: \u201cCircular No. 31/2001\u00adCus, dated 24\u00ad5\u00ad2001 xxx xxx xxx (xi) Duty on DTA Clearance of Non\u00adExcisable Goods; 25. At present, the EOUs and units operating under EPZ/STP/EHTP Schemes are allowed to sell finished products (including rejects, waste & scrap) in the Domestic Tariff Area (DTA) on payment of applicable excise duty as per proviso to Section 3 of the Central Excise Act, 1944. However, the same is applicable if the goods being cleared into DTA are excisable goods. Under the present dispensation, the notifications providing duty free import of goods under the above said Schemes stipulate that where the finished products (including rejects, wastes & scrap) sought to be cleared in DTA are not excisable, such products are allowed to be cleared on payment of customs duty on the inputs used for the purpose of production, manufacture, processing or packaging such products in an amount equal to the customs duty leviable on such products as if imported as such. 26. It has been brought to notice of the Board that in some Commissionerates, the floriculture units under the EOU Scheme are being asked to pay duty equivalent to the customs duty leviable on finished goods as if imported as such, for clearance of cut\u00adflowers, which is not an excisable commodity. It has also been stated that the DTA units are not required to pay any duty for sale of cut\u00adflowers, as the same are not excisable. This is stated to have placed the floriculture units in EOUs at a serious disadvantageous position vis\u00ada\u00advis DTA units. 27. The matter has been examined. In the central excise notifications governing duty free procurement by EOUs and units under EPZ/STP/ETHP Schemes, there is a provision to recover duty on the inputs & consumables procured duty free under exemption notification, which have gone into production of non\u00ad excisable goods cleared into DTA. In the notifications governing duty free import by EOUs and the EPZ/STP/EHTP units, the anomaly, however, exists inasmuch as the notifications talk about payment of customs duty on the inputs used in the manufacture of articles in an amount equal to the customs duty leviable on such articles as if imported as such. In order to remove this anomaly, all the notifications governing duty free import of goods by STP/EHTP/EPZ units and EOUs including those in Aquaculture and Agriculture sector have been amended so as to bring the provisions of these notifications in harmony with the provisions of corresponding Central Excise notifications. Notification No. 56/2001\u00adCus, dated 18\u00ad5\u00ad2001 may be seen for details.\" (emphasis supplied) 26. Upon a bare reading of the circular, it can be noted that it discusses the mechanism in force before the amendment, the reason for bringing in the change and the changes brought in. The circular does not mention that the earlier methodology in force was deficient or devoid of clarity in any manner. It rather says that the same was being disadvantageous to the EOU units as compared to the DTA units due to the difference in charging rates in the respective circulars. Upon considering that, the amendment has been brought in to establish parity with the excise notifications and to vindicate the disadvantage that earlier regime was causing to EOU units. Merely because an anomaly has been addressed, it cannot be passed off as an error having been rectified. Unless shown otherwise, it has to be seen as a conscious change in the dispensation, particularly concerning the fiscal subject matters. The word \u201canomaly\u201d has been defined in Webster's New Twentieth Century Dictionary to mean \u201cabnormality; irregularity; deviation from the regular arrangement, general rule or the usual method\u201d. 27. In the context of the subject circular, since it takes note of the previous arrangement and distinguishes it from the excise notifications, the meaning has to be taken as deviation from the regular arrangement, which by no stretch of imagination can be treated as a mere mistake. To call the amendment notification clarificatory or curative in nature, it would require that there had been an error/mistake/omission in the previous notification which is merely sought to be explained. 28. To understand if the Government brought in the amendment notification to clarify that the articles were to be charged at the rate of duty provided for inputs and not for the final articles, it would be necessary to analyse the position prior to the amendment and to see if duty on inputs chargeable at the rate of final articles was an error that crept in. In this regard, we may refer to Section 3 of the 1944 Act as it stood during the relevant period, which is set out hereunder: \u201cSection 3. Duties specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied\u00ad (1) There shall be levied and collected in such manner as may be prescribed,\u00ad (a) a duty of excise on all excisable goods which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in Clause (a) above, on excisable goods specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule. Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured,\u00ad\u00ad (i) in a free trade zone and brought to any other place in India; or (ii) by a hundred per cent export\u00adoriented undertaking and allowed to be sold in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable Under Section 12 of the Customs Act, 1962 (52 of 1962), on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975).\u201d (emphasis supplied) The proviso to the charging section of the 1944 Act provides that an EOU making DTA sales shall be charged duty as if the goods were imported into India and in value equal to the customs duty chargeable thereto. No doubt, the said provision applies only in cases of excisable goods, but the exemption notification providing for similar duty by terms thereunder for non\u00adexcisable goods, can be understood to have been made to equate the duty in case of excisable as well as non\u00adexcisable goods. Therefore, it must follow that the said provision was not an error that crept in but was intentionally introduced by the Government to determine the charging rate, as discussed above. That being the position prior to amendment, the amendment brought in cannot be said to be clarificatory in nature. 29. The decision of this Court in Zile Singh (supra) is of no avail to the appellant. In as much as it was a case of poor choice of words by the draftsmen, which led to absurdity in interpretation and a subsequent substitution of such words to make the intention clear. In the present case, as discussed above, there was no error present in the prevailing dispensation and it was a policy decision to give relief to the EOU units from the date of its amendment. 30. In Vatika Township (supra), Constitution Bench of this Court has analysed the principle concerning retrospectivity. The appellant heavily relies upon the observation made at paragraph 30 of the decision, which reads thus: \u201c30. ... If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. \u2026\u201d. The appellant clearly misinterprets the context of the above observation by reading the same in isolation. To have a better understanding of the said principle, it is relevant to read the preceding and subsequent paragraphs. We may here refer to Paragraph 32 of the said decision, which is extracted below: \u201c32. Let us sharpen the discussion a little more. We may note that under certain circumstances, a particular amendment can be treated as clarificatory or declaratory in nature. Such statutory provisions are labelled as \u201cdeclaratory statutes\u201d. The circumstances under which provisions can be termed as \u201cdeclaratory statutes\u201d are explained by Justice G.P. Singh in the following manner: \u201cDeclaratory statutes The presumption against retrospective operation is not applicable to declaratory statutes. As stated in CRAIES and approved by the Supreme Court: \u2018For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error, whether in the statement of the common law or in the interpretation of statutes. Usually, if not invariably, such an Act contains a Preamble, and also the word \u201cdeclared\u201d as well as the word \u201cenacted\u201d.\u2019 But the use of the words \u2018it is declared\u2019 is not conclusive that the Act is declaratory for these words may, at times, be used to introduced new rules of law and the Act in the latter case will only be amending the law and will not necessarily be retrospective. In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is \u2018to explain\u2019 an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. The language \u2018shall be deemed always to have meant\u2019 is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre\u00adamended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law which the Constitution came into force, the amending Act also will be part of the existing law.\u201d The above summing up is factually based on the judgments of this Court as well as English decisions.\u201d Upon reading the observations at Paragraph 30 and juxtaposed with paragraph 32, it is crystal clear that an essential requirement for application of a legislation retrospectively is to show that the previous legislation had any omission or ambiguity or it was intended to explain an earlier act. In absence of the above ingredients, a legislation cannot be regarded as having retrospective effect. 31. In IndusInd Bank (supra), this Court, while examining whether the amendment made to Section 28 of the Indian Contract Act, 1872 was prospective or retrospective, has noted that the said provision is remedial in nature and not clarificatory, since prior to the amendment, the rights and liabilities accrued were sought to be taken away. Paragraph 24 of the said decision is reproduced below: \u201c24. On a conspectus of the aforesaid decisions, it becomes clear that Section 28, being substantive law, operates prospectively, as retrospectivity is not clearly made out by its language. Being remedial in nature, and not clarificatory or declaratory of the law, by making certain agreements covered by Section 28(b) void for the first time, it is clear that rights and liabilities that have already accrued as a result of agreements entered into between parties are sought to be taken away. This being the case, we are of the view that both the Single Judge and the Division Bench were in error in holding that the amended Section 28 would apply.\u201d We are in agreement with the respondent that this decision squarely applies to the present case as prior to the amendment, the DTA sales made by the appellant have already attracted liability at the prescribed charging rate, which in facts of the present case cannot be undone in reference to the subject amendment. 32. It is relevant here to advert to a decision of Constitution Bench of this Court in Commissioner of Central Excise, New Delhi vs. Hari Chand Shri Gopal & Ors.17, wherein it has been held that an exemption clause ought to be strictly construed according to the language employed therein and in case of any ambiguity, benefit must go to the State. It will be useful to reproduce paragraphs 29 and 30 of the aforesaid decision hereunder: \u201c29. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non\u00ad compliance of which would not affect the essence or substance of the notification granting exemption. 30. In Novopan India Ltd. this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. CCE and 17 (2011) 1 SCC 236 Customs held that (Novopan India Ltd. case, SCC p. 614, para 16) \u201c16. \u2026 such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification i.e. by the plain terms of the exemption.\u201d \u201d Applying the aforequoted dictum to the present case, the appellant was obliged to comply with the conditions prescribed by the EXIM Policy, to avail the exemption under the stated notification; and failure to do so, must denude them of the exemption so granted. Further, since the charging rate prescribed under the exemption notification is under question, any ambiguity in regard to the date of application of the amendment thereto would necessarily have to be construed in favour of the State, unless shown otherwise by judicially acceptable parameters. 33. The next contention of the appellant is that Section 28 of the 1962 Act cannot be invoked to extend the limitation as there was no wilful mis\u00adstatement or suppression of facts on behalf of the appellant. The decision of this Court in Uniworth Textiles (supra), has been relied upon by the appellant. The same explains the situations in which Section 28 of the 1962 Act can be invoked. It had been held in the said decision that the extension of limitation for a period of five years can be done only in cases of deliberate default and not inadvertent non\u00adpayment. It was further held that the burden for proving mala fide conduct is on the revenue; and specific averments in that regard must find place in the show cause notice. 34. In the fact situation of the present case, the appellant was issued a show cause notice mentioning that it had suppressed the DTA sales of cut flowers to evade payment of duty. Had the appellant in good faith believed that no duty was payable upon the DTA sales of cut flowers, it would have sought prior approval of the Development Commissioner, which it failed to do. Even in the letter seeking ex\u00adpost facto approval, the appellant claimed that they had not used any imported input such as fertilizer, plant growth regulations, etc. in growing flowers sold in DTA, despite having imported green house equipment, raw materials like Live Rose Plants and consumables like planting materials and fertilizers. Therefore, it prima facie appeared that suppression by the appellant was \u201cwilful\u201d. The burden of proving to the contrary rested upon the appellant, which the appellant failed to discharge by failing to establish that the imported inputs were not used in the production of the cut flowers sold in DTA. In view thereof, the authorities below have rightly invoked Section 28 of the 1962 Act and allied provisions. 35. In light of the foregoing discussion and observations, we are of the view that CESTAT has rightly upheld the levy of customs duty. 36. This appeal, therefore, deserves to be dismissed. It is so ordered. There shall be no order as to costs. Pending applications, if any, shall stand disposed of. ................................., J. (A.M. Khanwilkar) \u2026.............................., J. 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{"id": "1716348", "text": "CASE NO.: Appeal (crl.) 660 of 2005 PETITIONER: M.C.D. RESPONDENT: State of Delhi and Anr. DATE OF JUDGMENT: 29/04/2005 BENCH: Ashok Bhan & Dr. AR. Lakshmanan JUDGMENT: JUDGMENT ORDER Leave granted. Municipal Corporation of Delhi, aggrieved against the judgment and final order dated 26.03.2004 passed by the High Court Delhi in Criminal Revision Petition No. 185 of 2004 by which order the High Court gave the benefit of probation under Section 4 of the Probation of Offenders Act, 1958 (herein after referred to as \"POB Act\") to the second respondent - Gurcharan Singh but maintained the conviction, preferred the above appeal. The brief facts leading to the filing of the above appeal are as under : One Mr. M.K. Verma (PW-4), Junior Engineer, Civil Line Zone, visited 189 Prem Gali, Punja Sharif, Mori Gate where he found unauthorized construction going at the first floor of the said plot. F.I.R. was prepared on the report of Mr. M.K. Verma who forwarded the F.I.R. before Zonal Engineer, who ordered to issue notice under Section 343/344 of the Delhi Municipal Corporation Act, 1957 (for short the \"DMC Act\"). Subsequently, the second respondent along with Kuldeep Singh were prosecuted for commission of offences under Sections 332 and 461 of the DMC Act before the designated Municipal Court. The trial Court, after the conclusion of the trial, convicted the second respondent under Sections 332 and 461 of the DMC Act and sentenced him to six months simple imprisonment and imposed a fine of Rs. 5000 (Annexure P-1). Aggrieved by that order, the second respondent-accused filed an appeal before the Sessions Court, Delhi. The said Court by an order and judgment dated 23.3.2004 dismissed the appeal by holding that there was no infirmity in the order passed by the trial Court (Annexure P-2). Against the judgment and order dated 23.3.2004, the accused filed Criminal Revision Petition No. 185 of 2004 before the High Court Delhi. At the time of arguments, the advocate for the accused submitted before the High Court that the accused did not wish to challenge the conviction on merits and stated it a fit case of accused to be admitted to the benefit of POB Act on the ground that the accused faced trial for 12 years in the lower courts and remained in jail for three days. The High Court vide its order dated 26.3.2004 held that the accused suffered the agony of trial lasting for 12 years. Besides that he has already undergone some period in custody. The High Court also observed that there is no allegation that the petitioner-accused is a previous convict and it further held that the accused deserved the benefit of probation under Section 4 of the POB Act and while maintaining the conviction of the respondent-accused, the sentence of imprisonment and fine as awarded to him was set aside. The appellant, aggrieved by the judgment of the High Court, preferred the above appeal by way of special leave petition before this Court. We have perused the entire pleadings, orders and judgments passed by the lower Courts and also of the High Court, the other annexures, in particular, annexures P-1 and P-2, and records annexed to this appeal and also heard the arguments of Mr. Ashwani Kumar, learned senior counsel appearing for the appellant, Mr. Vikas Sharma, learned counsel appearing for respondent No. 1 and Mr. Jaspal Singh, learned senior counsel, appearing for the second respondent. Learned senior counsel appearing for the appellant submitted that the High Court, before extending the benefit of POB Act to the accused did not call for a report from the authorities to check upon the conduct of the accused- respondent as per Section 4(2) of the POB Act and that the appellant-MCD was also not given time to file their counter affidavit on the question of sentence. He further submitted that the High Court while passing the impugned order and judgment did not take into consideration that the accused-respondent had been convicted in another criminal case No. 202 of 1997 by the Court of Metropolitan Magistrate, Patiala House, New Delhi. In the said case, the accused-respondent was convicted under Section 332/461 of the DMC Act and sentenced to six months simple imprisonment with a fine of Rs. 5000. Learned senior counsel appearing for the appellant further submitted that there was no good reason for letting the respondent off by granting to him the said benefit of POB Act, particularly keeping in view the large scale irregularity and unauthorized constructions carried by the builders in Delhi despite strict direction of the Municipal authorities and courts passing various orders from time to time against the unauthorized constructions. It was further submitted that the High Court should not have waived off the payment of fine amount by the accused respondent and that the High Court ought to have taken into consideration that the respondent has been in jail for only three days and had not put in substantial period in custody. It was further submitted by learned senior counsel appearing for the appellant that the Court shall not direct release of offender unless it is satisfied that the offender or his surety, if any, has a fixed place of abode or regular occupation in the place over which the Court exercises jurisdiction or in which the offender is likely to live during the period for which he enters into the bond. It was also contended that before making any order under Section 4(1) of the POB Act, the Court shall take into consideration the report, if any, of the probation officer concerned in relation to the case which the High Court has miserably failed to do so. Therefore, learned senior counsel appearing for the appellant, prayed that order dated 26.3.2004 in Crl.Rev. Pet. No. 185 of 2004 be set aside and appropriate orders be passed in this appeal. Learned senior counsel appearing for the contesting respondent submitted that the order of the High Court does not require any reconsideration by this Court and that the High Court while extending the benefit of POB Act had clearly recorded in the order that the counsel for the State of Delhi is not averse to the grant of benefit of probation to the answering respondent and, therefore, the requirement under Section 4(2) of the POB Act has been waived off by the State and that the High Court took into consideration the fact that the answering respondent has faced the agony of trial for over 12 years and has also undergone some period in custody and while maintaining the conviction of the answering respondent, the benefit of probation was extended to him. It was, therefore, submitted that the High Court passed the said order in the presence of the counsel of all the parties. Learned senior counsel appearing for the second respondent submitted that in S.T.No. 202 of 1997 , a judgment was given by the Metropolitan Magistrate on 10.9.2002 and the respondent filed an appeal No. 374 of 2002 before the Court of Sessions, Patiala House, New Delhi challenging the said order of conviction and in that appeal, the Court of Additional Sessions Judge, Patiala House, suspended the sentence during the pendency of the appeal upon furnishing a personal bond for a sum of Rs. 25,000 with one surety of the like amount to the satisfaction of the trial Court. It was, therefore, submitted that the sentence/imprisonment awarded by the Metropolitan Magistrate has been suspended under Section 389 of the Criminal Procedure Code by the Court of Additional Sessions Judge, Delhi in view of the pendency of the appeal against the order of conviction is a continuation of proceedings and therefore, there is no conviction against the answering respondent so long as the same is not decided by the Court of Sessions. It was also submitted that the requirement of calling of a report from the Probationer Officer under Section 4(2) of the POB Act has been waived off by the counsel for the State of Delhi and that the counsel for the MCD also did not raise any objection before the High Court. It was further contended that the respondent has not contested the revision in the High Court on merits and confined his submission to the benefit of Section 4 of the POB Act being extended to him. Therefore, there is no occasion for the High Court to go into the issue of extent of constructions being raised by the answering respondent. He further contended that the trial Court has committed serious error in exercising jurisdiction while not granting the benefit of probation to the answering respondent and the order of the trial Court was, therefore, rightly and justifiable modified by the High Court. Concluding his arguments, he submitted that the respondent has been released after compliance of the order passed by the High Court by furnishing the bone of good conduct and security to the satisfaction of the Additional Court of Metropolitan Magistrate, Delhi and there is no report of any misconduct or breach of the bond of good conduct by the answering respondent since the date of the order of the High Court, therefore, the order of the High Court is not liable to be interfered with. In the above background, two questions of law arise for consideration by this Court : \"1. Whether the High Court was correct in extending the benefit of the Probation of Offenders Act, 1958 to the accused respondent without calling for a report from the Authorities relating to the conduct of the respondent as per Section 4 of the Act. 2. Whether the High Court was correct in passing the impugned judgment in view of the fact that the respondent has been convicted in another criminal case No. 202 of 1997 by the trial Court, New Delhi.\" Before proceeding further, it would be beneficial to reproduce Section 4 of the Probation of Offenders Act, 1958 which is extracted below for ready reference :- Power of court to release certain offenders on probation of good conduct:- 1. When any person is found guilty of having committed an offence not punishable with death or imprisonment for life and the court by which the person is found guilty is of opinion that, having record to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient to release him on probation of good conduct, then, notwithstanding anything contained in any other law for the time being in force, the court may, instead of sentencing him at once to any punishment direct that he be released on his entering into a bond, with or without sureties, to appear and receive sentence when called upon during such period, not exceeding three years, as the court may direct, and in the meantime to keep the peace and be of good behaviour : Provided that the court shall no direct such release of an offender unless it is satisfied that the offender or his surety, if any, has a fixed place of abode or regular occupation in the place over which the court exercises jurisdiction or in which the offender is likely to live during the period for which he enters into the bond. 2. Before making any order under sub-section (1), the court shall take into consideration the report, if any, of the Probation Officer concerned in relation to the case.\" It is the specific case of the appellant herein that the High Court has not afforded to the appellant an opportunity to file counter affidavit. The appellant would have filed the orders passed by the criminal Courts convicting the respondent herein had an opportunity been given to the appellant. The High Court while passing the impugned order and judgment did not take into consideration that the accused-respondent has been convicted in another Criminal Case No. 202 of 1997 by the Court of Metropolitan Magistrate, Patiala House, New Delhi. In the said case, the accused has been convicted under Sections 332/461 of the DMC Act and sentenced to six months simple imprisonment with fine of Rs. 5000. In our view, there was no good reason for letting the respondent off by granting to him the said benefit of POB Act particularly, keeping in view the large scale irregularity and unauthorized constructions carried by the builders in Delhi despite strict direction of the Municipal authorities and despite of the Courts passing various orders from time to time against the unauthorized construction. The High Court also failed to take into consideration that the respondent has been in jail for three days and had not put in substantial period in custody. The High Court vide its order impugned in this appeal has observed that there is no allegation that the respondent is a previous convict. In fact, as could be seen from the annexures filed along with this appeal, the respondent has been convicted for offence under Sections 332 and 461 of the DMC Act. The Trial Court heard the respondent on sentence also and passed the following order: \"Convict in person with counsel Heard on sentence. It is contended that he is first offender. He is not a previous convict nor habitual offender. He has faced trail since 1991. He is aged about 57 years. He is not doing any business due to his bad health. Considering the above facts and circumstances, and gravity of the nature of the offence i.e. extent of construction raised by the accused for commercial as 11 shops at ground floor and 11 shops at first floor, I am not inclined to release the accused/convict on probation. Hence request declined. In the interest of justice, sentence of six months SI, with fine of Rs. 5000 I.D. one month SI is imposed upon the convict for offence u/s 332/461 DMC Act. Fine deposited. Convict remained for sentence.\" The Additional Sessions Judge, New Delhi also in Civil Appeal No. 7 of 2002 (Annexure P-2) dismissed the appeal as there is no infirmity in the order of the trial Court and uphold the conviction order passed by the trial Court on the point of sentence. The appellate Court held that no interference is required in the order passed by the trial court regarding point of sentence. Since the appellant-MCD was not given any opportunity by the High Court to file conduct report of the respondent, the order impugned in this appeal is liable to be set aside. This apart, the respondent did not also disclose the fact in the criminal revision filed before the High Court that he has also been convicted in another Criminal Case No. 202 of 1997 by the Court of Metropolitan Magistrate, Patiala House, New Delhi. Thus, the contesting respondent has come to the High Court with unclean hands and withholds a vital document in order to gain advantage on the other side. In our opinion, he would be guilty of playing fraud on the Court as well as on the opposite party. A person whose case is based on falsehood can be summarily thrown out at any stage of the litigation. We have no hesitation to say that a person whose case is based on falsehood has no right to approach the Court and he can be summarily thrown out at any stage of the litigation. In the instant case, non-production of the order and even non-mentioning of the conviction and sentence in the criminal Case No. 202 of 1997 tantamounts to playing fraud on the Court. A litigant who approaches the Court is bound to produce all documents which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well on the opposite party. The second respondent, in our opinion, was not justified in suppressing the material fact that he was convicted by the Magistrate on an earlier occasion. Since the second respondent deliberately suppressed the crucial and important fact, we disapprove strongly and particularly, the conduct of the second respondent and by reason of such conduct, the second respondent disentitled himself from getting any relief or assistance from this Court. We, however, part with this case with heavy heart expressing our strong disapproval of the conduct and behaviour but direct that the second respondent to pay a sum of Rs. 10,000 by way of cost to the appellant herein. We have already reproduced Section 4 of the POB Act. It applied to all kinds of offenders whether under or above 21 years of age. This section is intended to attempt possible reformation of an offender instead of inflicting on him the normal punishment of his crime. The only limitation imposed by Section 6 is that in the first instance an offender under twenty one years of age, will not be sentenced to imprisonment. While extending benefit of this case, the discretion of the Court has to be exercised having regard to the circumstances in which the crime was committed, the age, character and antecedents of the offender. Such exercise of discretion needs a sense of responsibility. The offender can only be released on probation of good conduct under this section when the Court forms an opinion, having considered the circumstances of the case, the nature of the offence and the character of the offender, that in a particular case, the offender should be released on probation of good conduct. The section itself is clear that before applying the section, the Magistrate should carefully take into consideration the attendant circumstances. The second respondent is a previous convict as per the records placed before us. Such a previous convict cannot be released in view of Section 4 of the POB Act. The Court is bound to call for a report as per Section 4 of POB Act but the High Court has failed to do so although the Court is not bound by the report of the Probationer Officer but it must call for such a report before the case comes to its conclusion. The word \"shall\" in sub-section (2) of Section 4 is mandatory and the consideration of the report of the Probationer Officer is a condition precedent to the release of the accused as reported in the case of State v. Naguesh G. Shet Govenkar and Anr., AIR (1970) Goa 49 and a release without such a report would, therefore, be illegal. In the case of Ram Singh and Ors. v. State of Haryana, [1971] 3 SCC 914, a Bench of two Judges of this Court in paragraph 16 of the judgment observed as under : \"Counsel for the appellants invoked the application of Probation of Offenders Act. Sections 4 and 6 of the Act indicate the procedure requiring the Court to call for a report from the Probation Officer and consideration of the report and any other information available relating to the character and physical and mental condition of the offender. These facts are of primary importance before the Court can pass an order under the Probation of Offenders Act. This plea cannot be entertained in this Court.\" In the case of R. Mahalingam v. G. Padmavathi and Anr., (1979) Crl. LJ NOC 20 Mad., the Court observed as under : \"If any report is filed by the probation officer, the Court is bound to consider it. Obtaining such a report of the probation officer is mandatory since the sub-s.(1) of S. 4 says that the Court shall consider the report of the probation officer. Words \"if any\" do not mean that the Court need not call for a report from the probation officer. The words \"if any\" would only cover a case where notwithstanding such requisition, the probation officer for one reason or other has not submitted a report. Before deciding to act under S. 4 (1), it is mandatory on the part of the Court to call for a report from the probation officer and if such a report is received, it is mandatory on the part of the Court to consider the report. But if for one reason or the other such a report is not forthcoming, the Court has to decide the matter on other materials available to it. In the instant case, the Magistrate passed order releasing the accused on probation without taking into consideration their character. Held, the requirement of S. 4(1) was not fulfilled and therefore the case remanded.\" Since the High Court has disposed of the criminal revision without giving an opportunity of filing counter affidavit to the counsel for the MCD and that the respondent did not disclose the fact in the criminal revision filed before the High Court that he has also been convicted in another criminal case No. 202 of 1997, the judgment impugned in this appeal cannot be allowed to stand. We, therefore, have no hesitation in setting aside the order impugned and remit the matter to the High Court for fresh disposal strictly in accordance with law. The appeal is, accordingly, allowed with costs of Rs. 10,000 to be paid by the second respondent to the appellant, as indicated in paragraph supra.", "spans": [{"start": 10, "end": 35, "label": "CASENO"}, {"start": 48, "end": 54, "label": "APP"}, {"start": 67, "end": 81, "label": "RESP"}, {"start": 109, "end": 119, "label": "DATE"}, {"start": 127, "end": 137, "label": "JUDGE"}, {"start": 144, "end": 158, "label": "JUDGE"}, {"start": 284, "end": 294, "label": "DATE"}, {"start": 309, "end": 325, "label": "COURT"}, {"start": 329, "end": 371, "label": "CASENO"}, {"start": 391, "end": 401, "label": "COURT"}, {"start": 455, "end": 487, "label": "STAT"}, {"start": 518, "end": 525, "label": "STAT"}, {"start": 555, "end": 570, "label": "RESP"}, {"start": 711, "end": 721, "label": "WIT"}, {"start": 936, "end": 946, "label": "WIT"}, {"start": 1052, "end": 1089, "label": "STAT"}, {"start": 1106, "end": 1113, "label": "STAT"}, {"start": 1255, "end": 1262, "label": "STAT"}, {"start": 1285, "end": 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{"id": "49260341", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.1584 of 2021 (@SLP (CRL.) NO. 11816 OF 2019) JASDEEP SINGH @ JASSU \u2026APPELLANT(S) VERSUS STATE OF PUNJAB \u2026RESPONDENT(S) WITH CRIMINAL APPEAL NO.1585 OF 2021 (@SLP(CRL.) NO.11486/2019) CRIMINAL APPEAL NO.1586 OF 2021 (@SLP(CRL.) NO.3301/2020) JUDGMENT M.M. SUNDRESH, J. 1. Heard learned counsel appearing for the parties. 2. Crl. A. No.1584 of 2021 and Crl. A. No.1585 of 2021 are filed by convicted Appellants/Accused 3 and 4 respectively against conviction under Section Signature Not Verified 304 Part I of the Indian Penal Code (IPC) with life sentence, while Crl. A. Digitally signed by RASHI GUPTA Date: 2022.01.07 No.1586 of 2021 is filed by the de facto complainant seeking modification of 17:25:06 IST Reason: the conviction to the sentence punishable under Section 302 IPC. Thus, we shall deal with all the appeals by our common order, particularly, when they emanate and emerge from a common impugned order. BRIEF FACTS 3. Four accused persons were charged, convicted, and sentenced in the following manner: Name of convict Offence under Sentence Section Ramsimran Singh U/s 304 Part I IPC To undergo Makkar imprisonment for life and to pay fine of Rs.10,000/- and in default of payment of fine to undergo further RI for one year. U/s 25 Arms Act To undergo rigorous imprisonment for two years and to pay fine of Rs.2000/- and in default of payment of fine to undergo further RI for three months. U/s 27 Arms Act To undergo rigorous imprisonment for five years and to pay fine of Rs.5000/- and in default of payment of fine to undergo further RI for six months. Amardeep Singh U/s 304 Part I, read To undergo Sachdeva with Section 34 IPC imprisonment for life and to pay fine of Rs.10,000/- and in default of payment of \f fine to undergo further RI for one year. U/s 25 Arms Act To undergo rigorous imprisonment for two years and to pay fine of Rs.2000/- and in default of payment of fine to undergo further RI for three months. Jasdeep Singh U/s 304 Part I, read To undergo with Section 34 IPC imprisonment for life and to pay fine of Rs.10,000/- and in default of payment of fine to undergo further RI for one year. Amarpreet Singh U/s 304 Part I, read To undergo Narula with Section 34 IPC imprisonment for life and to pay fine of Rs.10,000/- and in default of payment of fine to undergo further RI for one year. 4. The occurrence took place at about 12:45 a.m. on 21.04.2011 in the area of Baba Rasoi Dhaba, Jalandhar. The motive for the occurrence was that the deceased felt that a raid conducted in the hotel belonging to him and his father (PW6), the Appellant in Crl. A. No.1586 of 2021, was done at the instance of the accused. All the accused are friends of each other. 5. PW6 went in search of the deceased on finding that he had not returned home, though he was in a habit of coming late. On a particular street, he saw the accused grappling with the deceased. It was seen by him in the street light. The occurrence was also witnessed by PW10 who incidentally was a friend of the deceased. PW13 spoke about the common intention on the part of the accused on the previous night to do away with the deceased. 6. In pursuance to the statement made by A3 and A4, saying \u201cwhat are you seeing now\u201d, A1 took out a gun from his pocket and shot the deceased. A2 took his gun and brandished it against the deceased, prior to the aforesaid statement made by A3 and A4, followed by the shooting by A1. A3 and A4 made the statement pointing to A1, though A2 was already having the gun out. It is only thereafter that A1 took out his gun and shot the deceased. 7. The deceased was taken to the hospital situated about 3 kms from the place of occurrence, notwithstanding the other hospitals nearby. PW23 helped PW6 and PW10 to carry the deceased into the car of PW6. Thereafter PW6 gave the complaint under Exhibit PL. In the complaint, he did not make any statement that A3 and A4 exhorted A1 to shoot, except the statement as referred earlier. However, in his additional statement given under Section 161 CrPC, he improved his version by stating that A3 and A4 instigated A1 to fire. We may note, A6 is a legally qualified person. 8. PW24 took up the investigation and completed the formalities. Recoveries have been made, including of the weapons. 9. Before the trial court, the prosecution examined 27 witnesses and marked documents in support of its case. On behalf of the defense, 16 witnesses have been examined along with the documents. 10.Before the trial court, PW10 and PW23 turned hostile. Upon hearing the counsel appearing for the parties a conviction has been rendered against all the accused for the offences punishable under Section 304 Part I IPC along with life sentence. The trial court reasoned that it is not as if the accused were waiting for the deceased. The deceased went nearer to the accused, as could be seen from the evidence of PW10 under Exhibit PF/1 and PQ. There was only one single shot. Though the deceased fell down the accused did not shoot him thereafter. There was indeed a quarrel preceding the occurrence. The evidence of PW13 was disbelieved with respect to prior concert. It was noted that he was a resident of a place 50 kms away from Jalandhar. The evidence adduced by his cousin (DW1) showed that he was not present at his house at Jalandhar and there was no reason for going to Jalandhar on 20.04.2011. The prosecution did not prove that that day was his birthday and there were other places available nearer to his residence. There was absolutely no material to hold that he knew the accused at any prior point of time. It would be improbable that the accused would make a plan to commit a murder in public, by addressing themselves by names while flaunting their weapons. Further, he did not make any complaint. The statement that he visited days thereafter to seek tires for his jeep was not believed as such tires could be obtained otherwise in a nearer place. 11.Accordingly, holding that there was no premeditation, and the occurrence took place in pursuance to a sudden fight, in a heat of passion, the case was brought under Exception 4 to Section 300 IPC. 12.Appeals were filed by all the parties. The High Court concurred with the views of the trial court. However, it did not specifically deal with the scope of Section 34 IPC as against A3 and A4 which was accordingly done by the trial court. We may also note that the trial court did an in-depth, exhaustive assessment, by considering almost all the material placed before it, including the statements made by the witnesses. 13.A3 and A4 are before us by filing their respective appeals seeking to overturn the judgment rendered by the High Court confirming the one by the trial court. Thus, A1 and A2 have not filed their appeals. We have been informed at the Bar, by the learned Senior Counsel appearing for the de facto complainant/Appellant in Crl. A. No.1586 of 2021 that A1 has since been let out on pre-mature release by the State. We do not wish to state anything on the role of A1 and A2 except to the extent of testing the decision of the High Court and the trial court as to whether the case would fall under Section 304 Part I or Section 302 IPC. Arguments on behalf of the Appellants 14.Since appeals have been filed both by the convicted Appellants and the de facto complainant, we would like to note the arguments of A3 and A4 first and thus the other appeal filed by de facto complainant would be taken along with the arguments of the State. 15.It is submitted by the learned counsel that the evidence of PW13 having been disbelieved, the courts have committed an error in applying Section 34 IPC. There is an improvement with respect to the statement made by PW6. A mere statement per se would not be sufficient to attract Section 34 IPC. It is strange that both of them made the same statement. The presence of PW6 is very doubtful. He had deposed that the deceased used to come late and there was no complaint whatsoever. If A2 brandished the gun before the deceased was shot by A1, it is only logical that A3 and A4 would have asked A2 to shoot first. Even the other eyewitness in PW10 has turned hostile and so also another material witness in PW23. Under those circumstances it is a fit case where the conviction rendered against A3 and A4 are to be set aside. Submission of the Respondents 16.The learned Senior Counsel appearing for the de facto complainant submitted that the accused are influential persons. The case would come under offense punishable under Section 302 IPC. The trial court has committed an error as confirmed by the High Court in bringing it under Section 299 IPC and therefore wrongly applied Section 304 Part I IPC. It is not necessary that an accused will have to do a physical act in order to attract Section 34 IPC. Thus, a mere presence of the accused would suffice. Hence, the appeal filed by the de facto complainant be allowed while dismissing the appeal filed by the Accused-Appellants. 17.The counsel appearing for the State submitted that cogent reasoning was given by the High Court. The trial court considered the entire material available on record. Recoveries made have been proved. Under those circumstances there is no need to interfere with the conviction and sentence. Section 34 IPC 18.We shall first go back into the history to understand Section 34 IPC as it stood at the inception and as it exists now. Old Section 34 of IPC New Section 34 of IPC \u201cWhen a criminal act is done by \u201cWhen a Criminal act is done by several persons, each of such several persons, in furtherance of the \f persons is liable for that act in common intention of all, each of such the same manner as if the act persons is liable for that act in the was done by him alone\u201d same manner as if it were by him alone\u201d 19.On a comparison, one could decipher that the phrase \u201cin furtherance of the common intention\u201d was added into the statute book subsequently. It was first coined by Chief Justice Barnes Peacock presiding over a Bench of the Calcutta High Court, while delivering its decision in Queen v. Gorachand Gope, (1866 SCC OnLine Cal 16) which would have probably inspired and hastened the amendment to Section 34 IPC, made in 1870. The following passage may lend credence to the aforesaid possible view: \u201cIt does not follow that, because they were present with the intention of taking him away, that they assisted by their presence in the beating of him to such an extent as to cause death. If the object and design of those who seized Amordi was merely to take him to the thannah on a charge of theft, and it was no part of the common design to beat him, they would not all be liable for the consequence of the beating merely because they were present. It is laid down that, when several persons are in company together engaged in one common purpose, lawful or unlawful, and one of them, without the knowledge or consent of the others, commits an offence, the others will not be involved in the guilt, unless the act done was in some manner in furtherance of the common intention. It is also said, although a man is present when a felony is committed, if he take no part in it, and do not act in concert with those who commit it, he will not be a principal merely because he did not endeavour to prevent it or to apprehend the felon. But if several persons go out together for the purpose of apprehending a man and taking him to the thannah on a charge of theft, and some of the party in the presence of the others beat and ill-treat the man in a cruel and violent manner, and the others stand by and look on without endeavouring to dissuade them from their cruel and violent conduct, it appears to me that those who have to deal with the facts might very properly infer that they were all assenting parties and acting in concert, and that the beating was in furtherance of a common design. I do not know what the evidence was, all that I wish to point out is, that all who are present do not necessarily assist by their presence every act that is done in their presence, nor are consequently liable to be punished as principals.\u201d 20. Before we deal further with Section 34 IPC, a peep at Section 33 IPC may give a better understanding. Section 33 IPC brings into its fold a series of acts as that of a single one. Therefore, in order to attract Section 34 to 39 IPC, a series of acts done by several persons would be related to a single act which constitutes a criminal offense. A similar meaning is also given to the word \u2018omission\u2019, meaning thereby, a series of omissions would also mean a single omission. This provision would thus make it clear that an act would mean and include other acts along with it. 21.Section 34 IPC creates a deeming fiction by infusing and importing a criminal act constituting an offence committed by one, into others, in pursuance to a common intention. Onus is on the prosecution to prove the common intention to the satisfaction of the court. The quality of evidence will have to be substantial, concrete, definite and clear. When a part of evidence produced by the prosecution to bring the accused within the fold of Section 34 IPC is disbelieved, the remaining part will have to be examined with adequate care and caution, as we are dealing with a case of vicarious liability fastened on the accused by treating him at par with the one who actually committed the offence. 22.What is required is the proof of common intention. Thus, there may be an offence without common intention, in which case Section 34 IPC does not get attracted. 23.It is a team effort akin to a game of football involving several positions manned by many, such as defender, mid-fielder, striker, and a keeper. A striker may hit the target, while a keeper may stop an attack. The consequence of the match, either a win or a loss, is borne by all the players, though they may have their distinct roles. A goal scored or saved may be the final act, but the result is what matters. As against the specific individuals who had impacted more, the result is shared between the players. The same logic is the foundation of Section 34 IPC which creates shared liability on those who shared the common intention to commit the crime. 24.The intendment of Section 34 IPC is to remove the difficulties in distinguishing the acts of individual members of a party, acting in furtherance of a common intention. There has to be a simultaneous conscious mind of the persons participating in the criminal action of bringing about a particular result. A common intention qua its existence is a question of fact and also requires an act \u201cin furtherance of the said intention\u201d. One need not search for a concrete evidence, as it is for the court to come to a conclusion on a cumulative assessment. It is only a rule of evidence and thus does not create any substantive offense. 25.Normally, in an offense committed physically, the presence of an accused charged under Section 34 IPC is required, especially in a case where the act attributed to the accused is one of instigation/exhortation. However, there are exceptions, in particular, when an offense consists of diverse acts done at different times and places. Therefore, it has to be seen on a case to case basis. 26.The word \u201cfurtherance\u201d indicates the existence of aid or assistance in producing an effect in future. Thus, it has to be construed as an advancement or promotion. 27.There may be cases where all acts, in general, would not come under the purview of Section 34 IPC, but only those done in furtherance of the common intention having adequate connectivity. When we speak of intention it has to be one of criminality with adequacy of knowledge of any existing fact necessary for the proposed offense. Such an intention is meant to assist, encourage, promote and facilitate the commission of a crime with the requisite knowledge as aforesaid. 28.The existence of common intention is obviously the duty of the prosecution to prove. However, a court has to analyse and assess the evidence before implicating a person under Section 34 IPC. A mere common intention per se may not attract Section 34 IPC, sans an action in furtherance. There may also be cases where a person despite being an active participant in forming a common intention to commit a crime, may actually withdraw from it later. Of course, this is also one of the facts for the consideration of the court. Further, the fact that all accused charged with an offence read with Section 34 IPC are present at the commission of the crime, without dissuading themselves or others might well be a relevant circumstance, provided a prior common intention is duly proved. Once again, this is an aspect which is required to be looked into by the court on the evidence placed before it. It may not be required on the part of the defence to specifically raise such a plea in a case where adequate evidence is available before the court. 29.The essence and scope of Section 34 IPC can be borne out of excerpts from the following judgements: Suresh v State of U.P. ((2001) 3 SCC 673): \u201c24. Looking at the first postulate pointed out above, the accused who is to be fastened with liability on the strength of Section 34 IPC should have done some act which has nexus with the offence. Such an act need not be very substantial, it is enough that the act is only for guarding the scene for facilitating the crime. The act need not necessarily be overt, even if it is only a covert act it is enough, provided such a covert act is proved to have been done by the co-accused in furtherance of the common intention. Even an omission can, in certain circumstances, amount to an act. This is the purport of Section 32 IPC. So, the act mentioned in Section 34 IPC need not be an overt act, even an illegal omission to do a certain act in a certain situation can amount to an act, e.g. a co-accused, standing near the victim face to face saw an armed assailant nearing the victim from behind with a weapon to inflict a blow. The co-accused, who could have alerted the victim to move away to escape from the onslaught deliberately refrained from doing so with the idea that the blow should fall on the victim. Such omission can also be termed as an act in a given situation. Hence an act, whether overt or covert, is indispensable to be done by a co-accused to be fastened with the liability under the section. But if no such act is done by a person, even if he has common intention with the others for the accomplishment of the crime, Section 34 IPC cannot be invoked for convicting that person. In other words, the accused who only keeps the common intention in his mind, but does not do any act at the scene, cannot be convicted with the aid of Section 34 IPC. xxx xxx xxx 40. Participation in the crime in furtherance of the common intention cannot conceive of some independent criminal act by all accused persons, besides the ultimate criminal act because for that individual act law takes care of making such accused responsible under the other provisions of the Code. The word \u201cact\u201d used in Section 34 denotes a series of acts as a single act. What is required under law is that the accused persons sharing the common intention must be physically present at the scene of occurrence and be shown not to have dissuaded themselves from the intended criminal act for which they shared the common intention. Culpability under Section 34 cannot be excluded by mere distance from the scene of occurrence. The presumption of constructive intention, however, has to be arrived at only when the court can, with judicial servitude, hold that the accused must have preconceived the result that ensued in furtherance of the common intention. A Division Bench of the Patna High Court in Satrughan Patar v. Emperor, AIR 1919 Pat 111 held that it is only when a court with some certainty holds that a particular accused must have preconceived or premeditated the result which ensued or acted in concert with others in order to bring about that result, that Section 34 may be applied.\u201d Lallan Rai v. State of Bihar, [(2003) 1 SCC 268]: \u201c22. The above discussion in fine thus culminates to the effect that the requirement of statute is sharing the common intention upon being present at the place of occurrence. Mere distancing himself from the scene cannot absolve the accused \u2014 though the same however depends upon the fact situation of the matter under consideration and no rule steadfast can be laid down therefor.\u201d Chhota Ahirwar v. State of M.P., [(2020) 4 SCC 126]: \u201c24. Section 34 is only attracted when a specific criminal act is done by several persons in furtherance of the common intention of all, in which case all the offenders are liable for that criminal act in the same manner as the principal offender as if the act were done by all the offenders. This section does not whittle down the liability of the principal offender committing the principal act but additionally makes all other offenders liable. The essence of liability under Section 34 is simultaneous consensus of the minds of persons participating in the criminal act to bring about a particular result, which consensus can even be developed at the spot as held in Lallan Rai v. State of Bihar, (2003) 1 SCC 268. There must be a common intention to commit the particular offence. To constitute common intention, it is absolutely necessary that the intention of each one of the accused should be known to the rest of the accused.\u201d Barendra Kumar Ghosh v. King Emperor (AIR 1925 PC 1): \"...... the words of S. 34 are not to be eviscerated by reading them in this exceedingly limited sense. By S. 33 a criminal act in S. 34 includes a series of acts and, further, \u201cact\u201d includes omissions to act, for example, an omission to interfere in order to prevent a murder being done before one's very eyes. By S. 37, when any offence is committed by means of several acts whoever intentionally co-operates in the commission of that offence by doing any one of those acts, either singly or jointly with any other person, commits that offence. Even if the appellant did nothing as he stood outside the door, it is to be remembered that in crimes as in other things \u201cthey also serve who only stand and wait\u201d. By S. 38, when several persons are engaged or concerned in the commission of a criminal act, they may be guilty of different offences by means of that act. Read together, these sections are reasonably plain. S. 34 deals with the doing of separate acts, similar or diverse, by several persons; if all are done in furtherance of a common intention, each person is liable for the result of them all, as if he had done them himself, for \u201cthat act\u201d and \u201cthe act\u201d in the latter part of the section must include the whole action covered by 'a criminal act' in the first part, because they refer to it. S. 37 provides that, when several acts are done so as to result together in the commission of an offence, the doing of any one of them, with an intention to co-operate in the offence (which may not be the same as an intention common to all), makes the actor liable to be punished for the commission of the offence. S. 38 provides for different punishments for different offences as an alternative to one punishment for one offence, whether the persons engaged or concerned in the commission of a criminal act are set in motion by the one intention or by the other.\" Mehbub Shah v. Emperor (AIR 1945 PC 148): \"....Section 34 lays down a principle of joint liability in the doing of a criminal act. The section does not say \"the common intentions of all\" nor does it say \"an intention common to all.\u201d Under the section, the essence of that liability is to be found in the existence of a common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. To invoke the aid of S. 34 successfully, it must be shown that the criminal act complained against was done by one of the accused persons in the furtherance of the common intention of all; if this is shown, then liability for the crime may be imposed on any one of the persons in the same manner as if the act were done by him alone. This being the principle, it is clear to their Lordships that common intention within the meaning of the section implies a pre-arranged plan, and to convict the accused of an offence applying the section it should be proved that the criminal act was done in concert pursuant to the pre- arranged plan\u2026\" Rambilas Singh & Ors. v. State of Bihar [(1989) 3 SCC 605]: \"7\u2026It is true that in order to convict persons vicariously under section 34 or section 149 IPC, it is not necessary to prove that each and every one of them had indulged in overt acts. Even so, there must be material to show that the overt act or acts of one or more of the accused was or were done in furtherance of the common intention of all the accused or in prosecution of the common object of the members of the unlawful assembly\u2026\" Krishnan & Another v. State of Kerala [(1996) 10 SCC 508]: \"15. Question is whether it is obligatory on the part of the prosecution to establish commission of overt act to press into service section 34 of the Penal Code. It is no doubt true that court likes to know about overt act to decide whether the concerned person had shared the common intention in question. Question is whether overt act has always to be established? I am of the view that establishment of an overt act is not a requirement of law to allow section 34 to operate inasmuch this section gets attracted when \"a criminal act is done by several persons in furtherance of common intention of all\". What has to be, therefore, established by the prosecution is that all the concerned persons had shared the common intention. Court's mind regarding the sharing of common intention gets satisfied when overt act is established qua each of the accused. But then, there may be a case where the proved facts would themselves speak of sharing of common intention: res ipsa loquitur.\" Surendra Chauhan v. State of M.P. [(2000) 4 SCC 110]: \"11. Under Section 34 a person must be physically present at the actual commission of the crime for the purpose of facilitating or promoting the offence, the commission of which is the aim of the joint criminal venture\u2026.\u201d Gopi Nath @ Jhallar v. State of U.P. [(2001) 6 SCC 620]: \u201c8. \u2026As for the challenge made to the conviction under Section 302 read with Section 23 IPC, it is necessary to advert to the salient principles to be kept into consideration and often reiterated by this Court, in the matter of invoking the aid of Section 34 IPC, before dealing with the factual aspect of the claim made on behalf of the appellant. Section 34 IPC has been held to lay down the rule of joint responsibility for criminal acts performed by plurality or persons who joined together in doing the criminal act, provided that such commission is in furtherance of the common intention of all of them. Even the doing of separate, similar or diverse acts by several persons, so long as they are done in furtherance of a common intention, render each of such persons liable for the result of them all, as if he had done them himself, for the whole of the criminal action \u2013 be it that it was not overt or was only covert act or merely an omission constituting an illegal omission. The section, therefore, has been held to be attracted even where the acts committed by the different confederates are different when it is established in one way or the other that all of them participated and engaged themselves in furtherance of the common intention which might be of a pre-concerted or pre-arranged plan or one manifested or developed at the spur of the moment in the course of the commission of the offence. The common intention or the intention of the individual concerned in furtherance of the common intention could be proved either from direct evidence or by inference from the acts or attending circumstances of the case and conduct of the parties. The ultimate decision, at any rate, would invariably depend upon the inferences deducible from the circumstances of each case.\u201d Ramesh Singh @ Photti v. State of A.P. [(2004) 11 SCC 305]: \"12. \u2026As a general principle in a case of criminal liability it is the primary responsibility of the person who actually commits the offence and only that person who has committed the crime can be held guilty. By introducing Section 34 in the Penal Code the legislature laid down the principle of joint liability in doing a criminal act. The essence of that liability is to be found in the existence of a common intention connecting the accused leading to the doing of a criminal act in furtherance of such intention. Thus, if the act is the result of a common intention, then every person who did the criminal act with that common intention would be responsible for the offence committed irrespective of the share which he had in its perpetration.......... \" Nand Kishore V. State Of Madhya Pradesh [(2011) 12 SCC 120)]: \u201c20. A bare reading of this section shows that the section could be dissected as follows: (a) Criminal act is done by several persons; (b) Such act is done in furtherance of the common intention of all; and (c) Each of such persons is liable for that act in the same manner as if it were done by him alone. In other words, these three ingredients would guide the court in determining whether an accused is liable to be convicted with the aid of Section 34. While first two are the acts which are attributable and have to be proved as actions of the accused, the third is the consequence. Once the criminal act and common intention are proved, then by fiction of law, criminal liability of having done that act by each person individually would arise. The criminal act, according to Section 34 IPC must be done by several persons. The emphasis in this part of the section is on the word \u201cdone\u201d. It only flows from this that before a person can be convicted by following the provisions of Section 34, that person must have done something along with other persons. Some individual participation in the commission of the criminal act would be the requirement. Every individual member of the entire group charged with the aid of Section 34 must, therefore, be a participant in the joint act which is the result of their combined activity. 21. Under Section 34, every individual offender is associated with the criminal act which constitutes the offence both physically as well as mentally i.e. he is a participant not only in what has been described as a common act but also what is termed as the common intention and, therefore, in both these respects his individual role is put into serious jeopardy although this individual role might be a part of a common scheme in which others have also joined him and played a role that is similar or different. But referring to the common intention, it needs to be clarified that the courts must keep in mind the fine distinction between \u201ccommon intention\u201d on the one hand and \u201cmens rea\u201d as understood in criminal jurisprudence on the other. Common intention is not alike or identical to mens rea. The latter may be coincidental with or collateral to the former but they are distinct and different. 22. Section 34 also deals with constructive criminal liability. It provides that where a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it was done by him alone. If the common intention leads to the commission of the criminal offence charged, each one of the persons sharing the common intention is constructively liable for the criminal act done by one of them. (Refer to Brathi v. State of Punjab 1991 (1) SCC 519). 23. Another aspect which the court has to keep in mind while dealing with such cases is that the common intention or state of mind and the physical act, both may be arrived at the spot and essentially may not be the result of any predetermined plan to commit such an offence. This will always depend on the facts and circumstances of the case\u2026\u201d Shyamal Ghosh V. State of West Bengal [(2012) 7 SCC 646)]: \u201c87. Upon analysis of the above judgments and in particular the judgment of this Court in the case of Dharnidhar v. State of Uttar Pradesh, [(2010) 7 SCC 759], it is clear that Section 34 IPC applies where two or more accused are present and two factors must be established i.e. common intention and participation of the accused in the crime. Section 34 IPC, moreover, involves vicarious liability and therefore, if the intention is proved but no overt act was committed, the section can still be invoked. This provision carves out an exception from general law that a person is responsible for his own act, as it provides that a person can also be held vicariously responsible for the act of others, if he had the common intention to commit the act. The phrase \u201ccommon intention\u201d means a pre-oriented plan and acting in pursuance to the plan, thus, common intention must exist prior to the commission of the act in a point of time. The common intention to give effect to a particular act may even develop on the spur of moment between a number of persons with reference to the facts of a given case.\" 30. The aforesaid principle has also been dealt with in extenso by the Apex Court in Virendra Singh V. State of Madhya Pradesh ((2010) 8 SCC 407) through the following paragraphs: \"15. Ordinarily, a person is responsible for his own act. A person can also be vicariously responsible for the acts of others if he had the common intention to commit the offence. The words \"common intention\" implies a prearranged plan and acting in concert pursuant to the plan. It must be proved that the criminal act was done in concert pursuant to the prearranged plan. Common intention comes into force prior to the commission of the act in point of time, which need not be a long gap. Under this section a pre-concert in the sense of a distinct previous plan is not necessary to be proved. The common intention to bring about a particular result may well develop on the spot as between a number of persons, with reference to the facts of the case and circumstances of the situation. Though common intention may develop on the spot, it must, however, be anterior in point of time to the commission of the crime showing a prearranged plan and prior concert. The common intention may develop in course of the fight but there must be clear and unimpeachable evidence to justify that inference. This has been clearly laid down by this Court in the case of Amrik Singh & Ors. v. State of Punjab, 1972 (4) SCC (N) 42:1972 CriLJ 465. 16. The essence of the liability is to be found in the existence of a common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. Undoubtedly, it is difficult to prove even the intention of an individual and, therefore, it is all the more difficult to show the common intention of a group of persons. Therefore, in order to find whether a person is guilty of common intention, it is absolutely necessary to carefully and critically examine the entire evidence on record. The common intention can be spelt out only from the evidence on record. 17. Section 34 is not a substantive offence. It is imperative that before a man can be held liable for acts done by another under the provisions of this section, it must be established that there was common intention in the sense of a prearranged plan between the two and the person sought to be so held liable had participated in some manner in the act constituting the offence. Unless common intention and participation are both present, this section cannot apply. xxx xxx xxx 36. Referring to the facts of this case, the short question which arises for adjudication in this appeal is whether the appellant Virendra Singh can be convicted under section 302 with the aid of section 34 IPC. Under the Penal Code, the persons who are connected with the preparation of a crime are divided into two categories: (1) those who actually commit the crime i.e. principals in the first degree; and (2) those who aid in the actual commission i.e. principals in the second degree. The law does not make any distinction with regard to the punishment of such persons, all being liable to be punished alike. 37. Under the Penal Code, a person is responsible for his own act. A person can also be vicariously responsible for the acts of others if he had a common intention to commit the acts or if the offence is committed by any member of the unlawful assembly in prosecution of the common object of that assembly, then also he can be vicariously responsible. Under the Penal Code, two sections, namely, Sections 34 and 149, deal with them circumstances when a person is vicariously responsible for the acts of others. 38. The vicarious or constructive liability under Section 34 IPC can arise only when two conditions stand fulfilled i.e. the mental element or the intention to commit the criminal act conjointly with another or others; and the other is the actual participation in one form or the other in the commission of the crime. 39. The common intention postulates the existence of a prearranged plan implying a prior meeting of the minds. It is the intention to commit the crime and the accused can be convicted only if such an intention has been shared by all the accused. Such a common intention should be anterior in point of time to the commission of the crime, but may also develop on the spot when such a crime is committed. In most of the cases it is difficult to procure direct evidence of such intention. In most of the cases, it can be inferred from the acts or conduct of the accused and other relevant circumstances. Therefore, in inferring the common intention under section 34 IPC, the evidence and documents on record acquire a great significance and they have to be very carefully scrutinized by the court. This is particularly important in cases where evidence regarding development of the common intention to commit the offence graver than the one originally designed, during execution of the original plan, should be clear and cogent. 40. The dominant feature of Section 34 is the element of intention and participation in action. This participation need not in all cases be by physical presence. Common intention implies acting in concert. 41. The essence of Section 34 IPC is a simultaneous consensus of the minds of the persons participating in criminal action to bring about a particular result. Russell in his celebrated book Russell on Crime, 12th Edn., Vol. 1 indicates some kind of aid or assistance producing an effect in future and adds that any act may be regarded as done in furtherance of the ultimate felony if it is a step intentionally taken for the purpose of effecting that felony. It was observed by Russell that any act of preparation for the commission of felony is done in furtherance of the act. 42. Section 34 IPC does not create any distinct offence, but it lays down the principle of constructive liability. Section 34 IPC stipulates that the act must have been done in furtherance of the common intention. In order to incur joint liability for an offence there must be a prearranged and premeditated concert between the accused persons for doing the act actually done, though there might not be long interval between the act and the premeditation and though the plan may be formed suddenly. In order that Section 34 IPC may apply, it is not necessary that the prosecution must prove that the act was done by a particular or a specified person. In fact, the section is intended to cover a case where a number of persons act together and on the facts of the case it is not possible for the prosecution to prove as to which of the persons who acted together actually committed the crime. Little or no distinction exists between a charge for an offence under a particular section and a charge under that section read with section 34.\" On merit 31.Having understood Section 34 IPC, we shall now deal with the case on hand. 32.The evidence of PW13 did not find favour with the courts. The trial court which had the advantage of noting the deposition of the witnesses, chose to disbelieve the evidence adduced, by giving cogent reasons. This evidence was rightly eschewed by the trial court and also by the High Court. There are too many improbabilities in the testimony of PW13. A person who was living 50 kms away remembered the accused and their names and overheard their plot to commit the murder. His evidence was belied by the evidence of DW1 who was none other than his own cousin with whom he was said to be residing at the relevant point of time. 33.The other material witnesses are PW6 and PW10. PW10 had given prior statements. Though he turned hostile despite being a friend of the deceased, the trial court did take into consideration his earlier statement, while coming to the conclusion that there was no premeditation and thus the case would fall under culpable homicide not murder. Though the evidence of PW6 was not rejected, both the courts did find a clear exaggeration on his part. On many occasions PW6 made a concerted effort to improve the case of prosecution. The testimony given by him on the dying declaration, a case inserted by him in his supplementary statement, made subsequently, was also rightly rejected by the courts. This was also supported by the medical evidence. The other part of the evidence with respect to the fight was also dealt with by the courts as evidence available would suggest that it is the deceased who went nearer, and the accused were not stationing themselves waiting for his arrival. Therefore, the aforesaid findings of both the courts in coming to the conclusion that it is not a case which would attract punishment under Section 301 Part I IPC does not suffer from any perversity. In view of the above Crl. A. No.1586 of 2021 stands dismissed. At this stage we also hasten to add that the overt act of A2 being different and in the absence of any appeal filed by him, we do not wish to make any remark for the purpose of acquitting him. 34. The only other issue for consideration is the application of Section 34 IPC to the case of the Appellants. The occurrence was admittedly during the nighttime. It happened on the street. If A3 and A4 had made such a statement in the same voice, they should have addressed A2 instead of A1. A2 was already having a gun and A1 was stated to have taken his gun out only on the statement made by A3 and A4. The reasoning of the trial court in disbelieving the evidence of PW6 as he improved on his case subsequently, ought to be applied for the statement made that A3 and A4 had asked A1 to fire. Admittedly, this was an improvement to the earlier statement made as could be seen from the evidence of PW6 on more than one occasion. Thus, in our considered view both the courts ought to have disbelieved the evidence of PW6 insofar as Section 34 IPC is concerned. There is no evidence at all on record to hold that A3 and A4 were aware of the fact that A1 was having a gun with him. The prosecution wanted to implicate A3 and A4 mainly on the evidence of PW13. Once the said evidence was not accepted, more care ought to have been taken before convicting A3 and A4 under Section 34 IPC. We have no difficulty in holding that a common intention can be formed at the time of the occurrence. However, the evidence available is not sufficient enough to hold that Section 34 IPC is attracted as against A3 and A4, especially when the testimony of PW13 did not find favour with the courts. We further note that except the statement said to have been made by A3 and A4, there was no other material to implicate them. 35. Now, we shall come to the statements. The statement made by A3 and A4 is as follows: \u201cwhat are you seeing now\u201d. The question is as to whether the said statement would constitute an offense punishable under Section 304 Part I IPC. We have already noted the fact that had A2 fired at the deceased in pursuance to the statement made by A3 and A4 the situation would have been different. It is possible that the said statement has been made only to attack otherwise the deceased. Suffice it is to hold that the prosecution has not proved its case beyond reasonable doubt as against A3 and A4 by reflecting the offence committed by A1, taking umbrage under Section 34 IPC. 36. The High Court did not even consider the import of Section 34 IPC as against A3 and A4. We find that the approach of the trial court cannot be sustained to that extent in the light of our discussion. Thus, we are inclined to set aside the judgment of the High Court confirming that of the trial court as against the Accused-Appellants namely A3 and A4 alone are concerned. 37. In the result Crl. A. No.1584 of 2021 and Crl. A. No.1585 of 2021 are allowed. The Crl. A. No.1586 of 2021 stands dismissed. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. (SANJAY KISHAN KAUL) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J. (M.M. 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{"id": "1890994", "text": "CASE NO.: Appeal (civil) 8605 of 2002 PETITIONER: BANNARI AMMAN SUGARS LTD. RESPONDENT: COMMERCIAL TAX OFFICER AND ORS. DATE OF JUDGMENT: 22/11/2004 BENCH: ARIJIT PASAYAT & C.K. THAKKER JUDGMENT: JUDGMENT 2004 Supp(6) SCR 264 The Judgment of the Court was delivered by ARIJIT PASAYAT, J. : These two appeals involve identical questions and, therefore, are disposed of by this common judgment after noticing the factual position, so far as they are relevant. The appellants question correctness of the judgment rendered by a Division Bench of the Madras High Court which held that the withdrawal of benefits extended to the appellants as subsidy was in order. The appellants questioned legality or the G.O.Ms No. 989 dated 1.9.1988 directing discontinuance of purchase tax exemption in case of mills which exceeded the ceiling of Rs. 300 lakhs during the period of five years, and Government letter dated 28.12.1988 which made the aforesaid G.O. Ms. No. 989 of 1.9.1988 operative retrospectively from 1.4.1988. Initially the writ petitions were filed before the High Court, but after constitution of the Tamil Nadu Taxation Special Tribunal (hereinafter referred to as the 'Tribunal') the writ petitions were transferred to the Tribunal which held that on application of the principles of promissory estoppel and legitimate expectation, the withdrawal of benefit was not sustainable in law. The State questioned correctness of the judgment before the High Court which, as noted above, held the G.O.Ms, and the Govt. letter to be valid, reversing the conclusions arrived at by the Tribunal. The judgment forms subject matter of challenge in these appeals. In support of the appeals the primary stands raised by the appellants are : 1. The doctrines of promissory estoppel and legitimate expectation were applicable to the facts of the case. There was no material to show existence of any overriding public interest to rule out application of the aforesaid doctrine there was no scope for retrospective withdrawal. In any event, before withdrawal of the benefits, no opportunity of hearing was granted. The High Court erroneously came to hold that the State Government had not filed any counter. The materials which were produced before the High Court and on the basis of which it is decided that the decision of the Government is in order were not even pleaded in the pleadings and during arguments. The appellants were taken by surprise by production of materials which were not even disclosed to the appellants. The contents of the files which were produced before the High Court and on which reliance was placed to hold against the appellants are not known to the appellants. In other words, there was clear violation of the principles of natural justice. The Government's letter dated 28.12.1988 refers to some decision, but in the absence of any authentication as required under Article 166 of the Constitution of India, 1950 (in short the 'Constitution') the same is ineffective. In any event, the retrospective withdrawal of the benefit on the basis of an executive decision is impermissible. In response, learned counsel for the respondent-State submitted that the appellants have failed to adduce any evidence or material to show that were in any way induced by any governmental action to set up industries. In fact, the Government of Tamil Nadu vide G.O.Ms. No. 1294 dated 24.10.1975 granted exemption from purchase tax on sugarcane in favour of sugar mills established in \"co-operative and public sectors\" in the form of annual subsidy equivalent to purchase tax on sugarcane. There was no scope for any mis-understanding that it applied to any private sector participation in the sphere of sugar manufacturing. The commercial productions were started in case of appellants in C.A. No. 8606/2002 i.e. Ponni Sugars (Erode) Ltd. v. Govt. of Tamil Nadu & Ors., on 27.1.1984 and in C.A. 8605/ 2002 i.e. Bannari Amman Sugars Ltd v. Commercial Tax Officer & Ors. on 22.1.1986. The appellants only made representation to Government subsequently claiming exemption at par with the cooperative and public sector mills. As there was no inducement or assurance, the question of any promissory estoppel did not arise. So far as legitimate expectation aspect is concerned, it is too well known that the benefit extended can be withdrawn and with this knowledge if the units are set up, the principle of legitimate expectation does not apply. The High Court recorded the following findings on the factual aspects. (1) The respondents have established their units prior to the Government orders granting the subsidy and they have no vested right to claim exemption. (2) No inducement was made in the Government orders to establish the units. (3) The respondents have not acted on the basis of the Government Orders for establishing the units. (4) The grant of subsidy is a concession and the Government has got good reasons for modifying the scheme in public interest. (5) No prejudice is caused to the respondents since the scheme was interested to make the units viable and the modified scheme provides for safeguards to that extent. (6) The Order granting subsidy can be withdrawn in public interest. The Government has exercised their right to modify the scheme in the interest of public revenue. The stand taken by the present appellants before the Tribunal and the High Court was rejected. With reference to the files produced, certain factual conclusions were arrived at, the correctness of those form the core challenge in these appeals. Estoppel is a rule of equity which has gained new dismensions in recent years. A new class of estoppel has come to be recognized by the courts in this country as well as in England. The doctrine of 'promissory estoppel' has assumed importance in recent years though it was dimly noticed in some of the earlier cases. The leading case on the subject is Central London Property Trust Ltd. v. High Trees House Ltd., [1947] 1 KB 130. The rule laid down in High Trees case (supra), again came up for consideration before the King's Bench in Combe v. Bombe, [1951] 2 KB 215. Therein the court ruled that the principle stated in High Trees's case (supra), is that, where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word. But that principle does not create any cause of action, which did not exist before; so that, where a promise is made which is not supported by any consideration, the promise cannot bring an action on the basis of that promise. The principle enunciated in the High Trees case (supra), was also recognized by the House of Lords in Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd., [1955] 2 All ER 657. That principle was adopted by this Court in Union of India v. Indo-Afghan Agencies Ltd., AIR (1968) SC 718 and Turner Morrison and Co. Ltd. v. Hungerford Investiment Trust Ltd., [1972] 1 SCC 857. Doctrine of \"Promissory Estoppel\" has been envolved by the courts, on the principles of equity, to avoid injustice. \"Promissory Estoppel\" is defined in Black's Law Distionary as \"an estoppel which arises when there is a promise which promissor should reasonable expect to induce action or forbearance of a definite and substantial character on the part of promisee, and which does include such action or forbearance, and such promise is binding if injustice can be avoided only by enforcement of promise\". So far as this Court is concerned, it invoked the doctrine in Indo Afghan Agencies's case (supra) in which is was, inter alia, laid down that even though the case would not fall within the terms of Section 115 of the Indian Evidence Act, 1872 (in short the 'Evidence Act') which enacts the rule of estoppel, it would still be open to a party who had acted on a representation made by the Government to claim that the Government should be bound to carry out the promise made by it even though the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution. [See Century Spinning Co. v. Ulhasnagar Municipal Council, AIR (1971) SC 1021, Radhakrishna v. State of Bihar, AIR (1977) SC 1496, Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., [1979] 2 SCC 409, Union of India v. Godfrey Philips Indian Ltd., [1985] 4 SCC 369 and Dr. Ashok Kumar Maheshwari v. State of U.P. & Another, (1998) 2 Supreme 100]. In the backdrop, let us travel a little distance into the past to understand the evolution of the doctrine of \"promissory estoppel\". Dixon, J. an Australian Jurists, in Grundt v. Great Boulder Gold Mines Prorietary Ltd., [1939] 59 CLR 641 (Aust) laid down as under : \"It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumptions were deserted that led to it\". The principle, set out above, was reiterated by Lord Denning in High Trees's case (supra) This principle has been evolved by equity to avoid injustice. It is nether in the realm of contract nor in the realm of estoppel. Its object is to interpose equity shorn of its form to mitigate the rigour of strict law, as noted in Anglo Afghan Aencies 's case (supra) and Sharma Transport Represented by D.P. Sharma v. Government of A.P. and Others, [2002] 2 SCC 188. No vested right as to tax holding is acquired by a person who is granted concession. If any concession has been given it can be withdrawn at any time and no time limit should be insisted upon before it was withdrawn. The rule of promissory estoppel can be invoked only if on the basis of representation made by the Government, the industry was established to avail benefit if of exemption. In Kasinka Trading and Anr. v. Union of India and Anr., [1995] 1 SCC 274 it was held that the doctrine of promissory estoppel represents a principle evolved by equity to avoid injustice. A person may have a 'legitimate expectation' of being treated in a certain way by an administrative athority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. The doctrine of legitimate expectation has an important place in the developing law of judicial review. It is, however, not necessary to explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial review. It is generally agreed that 'legitimate expectation' gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right to a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words, where a person's legitimate expectation in not fulfilled by taking a particular decision then decision maker should justify the denial of such expectation by showing some overriding public interest. (See Union of India and Others. v. Hindustan Development Corporation and Others, AIR (1994) SC 998). While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validity for discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does if really satisfy the test of reasonableness. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in different manner which does not disclose any discernible principle which is reasonable itself small be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary. This Court's observations in G.B. Mahajan v. Jalgaon Municipal Council, AIR (1991) SC 1153 are kept out of lush field of administrative policy except where policy is inconsistent with the express or implied provision of a statute which creates the power to which the policy relates or where a decision made in purported exercise of power is such that a repository of the power acting reasonably and in good faith could not have made it. But there has to be a word of caution. Something overwhelming must appear before the Court will intervene. That is and ought to be a difficult onus for an applicant to discharge. The Courts are not very good at formulating or evaluating policy. Sometimes when the Courts have intervened on policy grounds the Court's view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism. As Professor Wade points out (in Administrative Law by H.W.R. Wade, 6th Edition) there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable. The reasonableness in administrative law must, therefore, distinguish between proper course and improper abuse of power. Nor is the test Court's own standard of reasonableness as it might conceive it in a given situation. The point to note is that the thing is not unreasonable in the legal sense merely because the Court thinks it to be unwise. In Hindustan Development Corporation's case (supra), it was observed that decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest where the doctrine of legitimate expectation can be applied. If it is a question of policy, even by ways of change of old policy, the Courts cannot intervene with the decision. In a given case whether there are such facts and circumstances giving rise to legitimate expectation, would primarily be a question of fact. As was observed in Punjab Communications Ltd. v. Union of India of Others, AIR (1999) SC 1801, the change in policy can defeat a substantive legitimate expectation if it can be justified on \"Wednesbury reasonableness.\" The decision-maker has the choice in the balancing of the pros and cons relevant to the change in policy. It is, therefore, clear that the choice of police is for the decision-maker and not the Court. The legitimate substantive expectation merely permits the Court to find out if the change of policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. A claim based on merely legitimate expectation without anything more cannot ipso facto give a right. Its uniqueness lies in the fact that it covers the entire span of time; present, past and future. How significant is the statement that today is tomorrows' yesterday. The present is as we experience it, the past is a present memory and future is a present expectation. For legal purposes, expectation is not same as anticipation. Legitimacy of an expectation can be inferred only if it is founded on the sanction of law. As observed in Attorney General for New Southwale v. Quinn, [1990] 64 Australian LJR 327 to strike the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the Courts adrift on a featureless sea of pragmatism. Moreover, the negotiation of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law. If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power of violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider, but the Court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the Courts for the review of administrative action must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is 'not the key which unlocks the treasure of natural justice and it ought not to unlock the gates which shuts the Court out of review on the merits,' particularly, when the elements of speculation and uncertainty are inherent in that very concept. As cautioned in Attorney General for New Southwale's case the Courts should restrain themselves and respect such claims duly to the legal limitations. It is a well meant caution. Otherwise, a resourceful litigant having vested interest in contract, licences, etc. can successfully indulge in getting welfare activities mandated by directing principles thwarted to further his own interest. The caution, particularly in the changing scenario becomes all the more important. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interest of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved the nature of the right alleged to have taken infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time enter into judicial verdict, the reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. (See Parbhani Transport Co-operative Society Ltd. v. Regional Transport Authority, Aurangabad and Others, AIR (1960) SC 901; Shree Meenakshi Mills Ltd. v. Union of India, AIR (1974) SC 365; Hari Chand Sarda v. Mizo District Council and Another, AIR (1967) SC 829; Krishnan Kakkanth v. Government of Kerala and Others, AIR (1997) SC 128 and Union of India and Another v. International Trading Co. and Another, [2003] 5 SCC 437. Article 166 of the Constitution deals with the conduct of Government business. The said provision reads as follows : \"166. Conduct of business of the Government of a State. - (1) All executive action of the Government of a State shall be expressed to be taken in the name of the Governor. (2) Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor. (3) The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocating among Ministers of the said business in so far as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion.\" Clause (1) requires that all executive action of the State Government shall have to be taken in the name of the Governor. Further is no particular formula of words required for compliance with Article 166(1). What the Court has to see is whether the substance of its requirement has been complied with. A Constitution Bench in R. Chitralekha Etc. v. State of Mysore and Ors., AIR (1964) SC 1823 held that the provisions of the Article were only directory and not mandatory in character and if they were not complied with it could still be established as a question of fact that the impugned order was issued in fact by the State Government or the Governor. Clause (1) does not prescribe how an executive action of the Government is to be performed; it only prescribes the mode under which such act is to be expressed. While clause (1) is in relation to the mode of expression, clause (2) lays down the ways in which the order is to be authenticated. Whether there is any Government order in terms of Article 166; has to be adjudicated from the factual background of each case. In order to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking and doctrine the bald expressions without any supporting material to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. The Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the Court. In Shrijee Sales Corporation and Anr. v. Union of India, [1997] 3 SCC 398 it was observed that once public interest is accepted as the superior equity which can override individual equity the principle would be applicable even in cases where a period has been indicated for operation of the promise. If there is a supervening public equity, the Government would be allowed to change its stand and has the power to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Moreover, the Government is competent to rescind from the promise even if there is no manifest public interest involved, provided no one is put in any adverse situation which cannot be rectified. Similar view was expressed in M/s. Pawan Alloys and Casting Pvt. Ltd. Meerut Etc. Etc. v. U.P. State Electricity Board and Others, AIR (1997) SC 3910 and in Sales Tax Officers and Anr. v. Shree Durga Oil Mills and Anr., [1999] 1 SCC 573, it was further held that the Government could change its industrial policy if the situation so warranted and merely because the resolution was announced for a particular period, it did not mean that the government could not amend and change the policy under any circumstances. If the party claiming application of the doctrine acted on the basis of a notification it should have known that such notification was liable to be amended or rescinded at any point of time, if the government felt that it was necessary to do so in public interest. In view of the factual position recorded by the High Court that at the point of time the appellants' units were set up and the commercial production started there was no assurance or promise. The doctrine of promissory estoppel had no application to the facts of the case at that stage. We find no substance in the plea that before a policy decision is taken to amend or alter the promise indicated in any particular notification, the beneficiary was to be granted an opportunity of hearing. Such a plea is clearly unsustainable. While taking policy decision, the government is not required to hear the persons who have been granted the benefit which is sought to be withdrawn. The question of legitimate expectation arises according to the appellants after the benefits were granted by the concerned G.O.Ms. At this juncture we would like to take note to certain factual positions highlighted by the appellants which are practically undisputed by the respondents. Contrary to what the High Court has stated, it appears from record that counter affidavits were filed. The reasons which have weighed with the High Court to uphold the action of the State were not pleaded before the High Court specifically, and the High Court cull out those from the files which were produced before it. Though the appellants were not entitled to any opportunity of hearing before alteration of the benefits flowing from the notifications or withdrawal of any benefit, yet when the State has not taken any specific stand justifying the withdrawal and the High Court referred to the files to put its seal of proof, notwithstanding non- requirement for granting any opportunity before the withdrawal, principles of natural justice certainly were applicable, since the High Court with reference to the files recorded findings on the basis thereof. As noted above no specific grounds or reasons were indicated to justify the withdrawal in the affidavits filed before the Tribunal or the High Court, as the case may be. As the correctness of factual basis justifying withdrawal is in issue, fair play certainly warranted grant of opportunity to the appellants to present its side of the picture. Further, a definite plea was taken that there was no scope for retrospective withdrawal of benefit by an executive order. The High Court has not dealt with the issue. The same also needs to be examined. Above being the position, decision of the High Court by placing reliance on the files to hold that the withdrawal was justified, is not tenable in law and in the fitness of things, the High Court should hear the matter afresh and taken decision on those two issues. It is made clear that we have not expressed any opinion on those issues on the facts of the present case. It is to be noted that no privilege was claimed from production of the file as the files were produced before the High Court and in fact the High Court referred to the materials on the files to affirm State's action. We direct that the State Government, if it so chooses, shall file its further counter-affidavits before the High Court within six weeks from today indicating the reasons which warranted the withdrawal of the benefits extended. The plea of the appellants regarding legitimate expectation shall be considered by the High Court in the light of materials to be placed by the respondents by affidavits as directed above. We make it clear that we have not expressed any opinion on the factual aspects except indicating the principles underlying legitimate expectation. Another point which was specifically raised before the High Court but has not been dealt by it is the legality of the action in directing retrospective withdrawal of the benefit by a letter of the Government. Whether the same is permissible in law has to be decided by the High Court. To the aforesaid limited extent, the matter is remitted to the High Court for fresh consideration. 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{"id": "199441852", "text": "W.P.No.11774 of 2014 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 27.11.2020 CORAM THE HONOURABLE MR. JUSTICE M.DHANDAPANI W.P.No.11774 of 2014 M.Suresh ... Petitioner vs. 1. The Union of India, rep. by its Secretary to Government, Ministry of Home Affairs, New Delhi. 2. The Director General, Central Industrial Security Force, CGO Complex, Lodhi Road, New Delhi \u2013 110 003. 3. The Inspector General, Central Industrial Security Force, Hyderabad. 4. The Deputy Inspector General, Central Industrial Security Force, Recruitment Training Centre, Arakkonam, Suraksha Campus Post, Vellore District. 5. The Senior Commandant, Central Industrial Security Force, Recruitment Training Centre, Arakkonam, Suraksha Campus Post, Vellore District. ... Respondents Page No.1 of 17 \f W.P.No.11774 of 2014 Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of Certiorarified Mandamus, calling for the records relating to the order passed by the 3rd Respondent dated 10.02.2014 in his order No.11014/T.S./Disc.Rev-Suresh/359/2014/769, confirming the order of the 4th Respondent dated 28.10.2013 in his order No.V-15014/CISF/RTC (A) Disc/Maj/S/2013/4634 confirming the order of the 5th Respondent dated 13.09.2013 in his final order No.V-15014/CISF/RTC (A) Disc/Maj/S/2013/4025 and quash the same and to direct the Respondents to pay all benefits. For Petitioner : Mr.R.Thiyagarajan For Respondents 1 to 3 : Mr.J.Madhana Gopal Rao, Sr. Central Govt. Standing Counsel For Respondents 4 & 5 : Mrs.R.Mageswari ORDER Petitioner has come up with this Writ Petition seeking to quash the order dated 10.02.2014 passed by the 3rd Respondent, confirming the order dated 28.10.2013 passed by the 4th Respondent, confirming the order dated 13.09.2013 passed by the 5th Respondent and for a direction to the Respondents to pay him all benefits. 2. According to the Petitioner, he joined as a Constable in Central Industrial Security Force (CISF) on 03.09.2006. He was transferred from MBR (KBR) CISF Unit, Jharkahand to NDRF Battalion, Arakkonam under the 5 th Respondent in the year 2012. He was issued Memorandum under Rule 36 of W.P.No.11774 of 2014 the CISF Rules by the 5th Respondent on 28.12.2012 with the following Article of Charge: \u201cCISF No.066008247 Constable/GD Suresh (u/s) of CISF, RTC, Arakkonam was detailed to perform the duties of Dry Canteen Salesman from 03.11.2012 to 02.12.2012. On 06.11.2012, 13.11.2012 and 21.11.2012, he sold 01 pair of Anklet Khaki to Chest No.307 ASI/Exe (UT) Niraj Kumar, Chest No.317 ASI/Exe (UT) R.K. Rana and Chest No.314 ASI/Exe (UT) P.K.Upadhya respectively. Further on 26.11.2012, held sold 01 pair of Boot Ankle (Black) to Chest No.255 HC/Clk. (UT) Nitin Singh and Chest No.254 HC/Clk. (UT) Ravi Kumar by collecting more amount that its fixed rate. Further, he has not issued any cash receipt for the items sold to the trainees. Thus the act committed by CISF No.066008247 Constable/GD Suresh amounts to gross indiscipline and misconduct which is unbecoming of a member of a disciplined Force. Hence, the charge. 3. Denying the article of Charge framed against him, the Petitioner submitted a detailed written Statement of defence on 15.10.2013. Enquiry Officer was appointed, who, after enquiry, submitted his Report based on the materials available on record. After calling for explanation from the petitioner, on the basis of findings of the Enquiry Officer, the 5th Respondent imposed the punishment of compulsory retirement on the petitioner, vide order dated 13.09.2013. Aggrieved by the same, the Petitioner filed an Appeal before the W.P.No.11774 of 2014 4th Respondent on 20.09.2013 and the same was rejected on 28.10.2013. Challenging the order of rejection, the Petitioner filed a Revision before the 3rd Respondent on 10.02.2014, which was also rejected, the petitioner has come up with the present Writ Petition. 4. Learned counsel for the Petitioner submitted that, when the Petitioner took over charge of the Canteen, rate of each items was displayed in the rate Board outside the Canteen and the same was also displayed inside the Canteen, which could be verified from the Statements of P.Ws.2 and 3. In such circumstances, it was not possible to collect excess rate for the items being sold. It is his contention that, when the trainees have deposed that, they have discussed the issue of excess rate with their room mates, none of their room mates were called for the enquiry. He pointed out that, the billing machine of the canteen was out of order and that, only hand written Bills were prepared and handed over to the trainees. However, during the enquiry, the trainees were not able to produce any hand written bill issued by the petitioner. There being no substantive material to implicate the petitioner, the finding recorded by the enquiry officer is unsustainable and the punishment consequent upon the said finding is also impermissible and, therefore, prays for allowing the present writ petition. W.P.No.11774 of 2014 5. On the above contentions, this Court heard the learned counsel appearing for the respondents, who submitted that the materials available on record were analysed independently by the concerned authorities to come to the finding based on which punishment has been awarded. It is the further submission of the learned counsel for the respondents that the standard of proof required in a departmental proceedings is not like the proof that is required in a criminal trial. The appreciation of evidence is on the basis of preponderance of probabilities and not subject to strict enforcement of the provisions of the Evidence Act. Further, the learned counsel also laid emphasis on the ratio laid down by the Hon'ble Supreme Court with regard to the scope of judicial review in departmental proceedings and, therefore, prayed that this Court may not interfere with the order impugned herein. 6. In a recent decision in Director General of Police, RPF & Ors. - Vs \u2013 Rajendra Kumar Dubey (C.A. No.3820/2020 dated 25.11.20), the Hon'ble Supreme Court, adverting to the various decisions of the Apex Court relating to the interference by the High Court in exercise of its writ jurisdiction with respect to disciplinary proceedings, including the decision in Chaturvedi's case (supra), held as under :- \u201c12.1 ...... It is well settled that the High Court must not act W.P.No.11774 of 2014 as an appellate authority, and re-appreciate the evidence led before the enquiry officer. We will advert to some of the decisions of this Court with respect to interference by the High Courts with findings in a departmental enquiry against a public servant. In State of Andhra Pradesh v S.Sree Rama Rao, a three judge bench of this Court held that the High Court under Article 226 of the Constitution is not a court of appeal over the decision of the authorities holding a departmental enquiry against a public servant. It is not the function of the High Court under its writ jurisdiction to review the evidence, and arrive at an independent finding on the evidence. The High Court may, however interfere where the departmental authority which has held the proceedings against the delinquent officer are inconsistent with the principles of natural justice, where the findings are based on no evidence, which may reasonably support the conclusion that the delinquent officer is guilty of the charge, or in violation of the statutory rules prescribing the mode of enquiry, or the authorities were actuated by some extraneous considerations and failed to reach a fair decision, or allowed themselves to be influenced by irrelevant considerations, or where the conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person could ever have arrived at that conclusion. If however the enquiry is properly held, the departmental authority is the sole judge of facts, and if there is some legal evidence on which the findings can be based, the adequacy or reliability of that evidence is not a matter which can be permitted to be canvassed before the High Court in a writ petition. W.P.No.11774 of 2014 These principles were further reiterated in the State of Andhra Pradesh v Chitra Venkata Rao. The jurisdiction to issue a writ of certiorari under Article 226 is a supervisory jurisdiction. The court exercises the power not as an appellate court. The findings of fact reached by an inferior court or tribunal on the appreciation of evidence, are not re-opened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ court, but not an error of fact, however grave it may be. A writ can be issued if it is shown that in recording the finding of fact, the tribunal has erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence. A finding of fact recorded by the tribunal cannot be challenged on the ground that the material evidence adduced before the tribunal is insufficient or inadequate to sustain a finding. The adequacy or sufficiency of evidence led on a point, and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the tribunal. In subsequent decisions of this Court, including Union of India v. G. Ganayutham, Director General RPF v. Ch. Sai Babu, Chennai Metropolitan Water Supply and Sewerage Board v T.T. Murali, Union of India v. Manab Kumar Guha, these principles have been consistently followed. In a recent judgment delivered by this Court in the State of Rajasthan & Ors. v. Heem Singh this Court has summed up the law in following words : \u201c33. In exercising judicial review in disciplinary matters, there are two ends of the spectrum. The first embodies a rule of restraint. The second defines when W.P.No.11774 of 2014 interference is permissible. The rule of restraint constricts the ambit of judicial review. This is for a valid reason. The determination of whether a misconduct has been committed lies primarily within the domain of the disciplinary authority. The judge does not assume the mantle of the disciplinary authority. Nor does the judge wear the hat of an employer. Deference to a finding of fact by the disciplinary authority is a recognition of the idea that it is the employer who is responsible for the efficient conduct of their service. Disciplinary enquiries have to abide by the rules of natural justice. But they are not governed by strict rules of evidence which apply to judicial proceedings. The standard of proof is hence not the strict standard which governs a criminal trial, of proof beyond reasonable doubt, but a civil standard governed by a preponderance of probabilities. Within the rule of preponderance, there are varying approaches based on context and subject. The first end of the spectrum is founded on deference and autonomy \u2013 deference to the position of the disciplinary authority as a fact finding authority and autonomy of the employer in maintaining discipline and efficiency of the service. At the other end of the spectrum is the principle that the court has the jurisdiction to interfere when the findings in the enquiry are based on no evidence or when they suffer from perversity. A failure to consider vital evidence is an incident of what the law regards as a perverse determination of fact. Proportionality is an entrenched feature of our jurisprudence. Service jurisprudence has W.P.No.11774 of 2014 recognized it for long years in allowing for the authority of the court to interfere when the finding or the penalty are disproportionate to the weight of the evidence or misconduct. Judicial craft lies in maintaining a steady sail between the banks of these two shores which have been termed as the two ends of the spectrum. Judges do not rest with a mere recitation of the hands-off mantra when they exercise judicial review. To determine whether the finding in a disciplinary enquiry is based on some evidence an initial or threshold level of scrutiny is undertaken. That is to satisfy the conscience of the court that there is some evidence to support the charge of misconduct and to guard against perversity. But this does not allow the court to re-appreciate evidentiary findings in a disciplinary enquiry or to substitute a view which appears to the judge to be more appropriate. To do so would offend the first principle which has been outlined above. The ultimate guide is the exercise of robust common sense without which the judges\u2019 craft is in vain.\u201d In Union of India v. P. Gunasekaran, this Court held that the High Court in exercise of its power under Articles 226 and 227 of the Constitution of India shall not venture into re- appreciation of the evidence. The High Court would determine whether : (a) the enquiry is held by the competent authority; (b) the enquiry is held according to the procedure prescribed in that behalf; (c) there is violation of the principles of natural justice in conducting the proceedings; (d) the authorities have disabled themselves from reaching a fair conclusion by some W.P.No.11774 of 2014 considerations which are extraneous to the evidence and merits of the case; (e) the authorities have allowed themselves to be influenced by irrelevant or extraneous considerations; (f) the conclusion, on the very face of it, is so wholly arbitrary and capricious that no reasonable person could ever have arrived at such conclusion; (g) the disciplinary authority had erroneously failed to admit the admissible and material evidence; (h) the disciplinary authority had erroneously admitted inadmissible evidence which influenced the finding; (i) the finding of fact is based on no evidence. In paragraph 13 of the judgment, the Court held that : \u201c13.Under Articles 226 / 227 of the Constitution of India, the High Court shall not : (i) re-appreciate the evidence; (ii) interfere with the conclusions in the enquiry, in the case the same has been conducted in accordance with law; (iii) go into the adequacy of the evidence; (iv) go into the reliability of the evidence; (v) interfere, if there be some legal evidence on which findings can be based; (vi) correct the error of fact however grave it may appear to be; (vii) go into the proportionality of punishment unless it shocks its conscience.\u201d (Emphasis Supplied) W.P.No.11774 of 2014 7. From the ratio laid down above, it is explicitly clear that the Courts, in exercise of its power of judicial review, cannot extend the examination to the correctness of the act of the disciplinary authority, but only limit itself to the manner in which the decision has been arrived at by the authorities and whether the same is in accordance with law. This Court is to test only the correctness of the decision arrived at by the authorities on the basis of the evidence before it and not proceed with the case as if it is an appeal against the impugned order. 8. A perusal of the report of the enquiry officer reveals that a finding has been recorded that the petitioner had collected excess rate from three trainees viz. P.Ws.4, 5 and 6, who, in their Statements, have clearly deposed that, the petitioner had charged excess rates towards purchase of Khaki anklets on 06.11.2012, 13.11.2012 and 21.11.2012, respectively. The sales list for 06.11.2012 and 13.11.2012 produced by P.W.2 are indicative of the said fact. Though it is the contention of the petitioner that the billing machine was not in operation and manual billing was given and in the absence of any bill, produced by the above witnesses to prove the case against the petitioner, the case against the petitioner cannot stand the test of legal scrutiny does not merit acceptance for the simple reason that it is not required of the persons, who W.P.No.11774 of 2014 purchased the items to keep the manual bill preserved, as they would not be aware of any disciplinary proceedings that would be initiated by the respondents against the petitioner. But it is common knowledge that insofar as manual billing is concerned, always a duplicate copy is maintained by the biller for the goods sold, so as to have a cross check on the sales on the close of hours of business. Had the petitioner given manual bills, definitely there ought to be duplicate copy of the bills given, which the petitioner could have summoned to substantiate his case. Merely pleading that billing machine was not working and manual bills was given and the said bills have not been produced by the department to substantiate the charge against the petitioner is nothing but a feeble attempt on the part of the petitioner to clutch to the last bit of straw to vindicate himself from the charges. 9. On a holistic consideration of the materials available on record, this Court is of the considered opinion that the findings recorded in the enquiry are just and reasonable and this Court, under the guise of judicial review, cannot conduct a roving expedition as if the matter is in appeal before this Court. The petitioner having not produced any material to substantiate his case, the finding recorded by the enquiry officer, as accepted by the authorities below to fasten the guilt on the petitioner does not require any interference. W.P.No.11774 of 2014 10. Insofar as the punishment awarded to the petitioner is concerned for the delinquency, it has been the consistent view of the Courts that, it is always within the domain of the Appointing Authority to decide on the punishment to be imposed on the delinquent, which should be proportionate to the act of the delinquent. Only when the punishment is disproportionate and shocking the conscience, the Courts interfere with the same, in exercise of powers under Article 226 of the Constitution of India. In Prem Nath Bali \u2013 Vs - High Court of Delhi reported in (2015 (16) SCC 415), the Hon'ble Supreme Court has held as under : \u201c20. It is a settled principle of law that once the charges levelled against the delinquent employee are proved then it is for the appointing authority to decide as to what punishment should be imposed on the delinquent employee as per the Rules. The appointing authority, keeping in view the nature and gravity of the charges, findings of the inquiry officer, entire service record of the delinquent employee and all relevant factors relating to the delinquent, exercised its discretion and then imposed the punishment as provided in the Rules. 21. Once such discretion is exercised by the appointing authority in inflicting the punishment (whether minor or major) then the courts are slow to interfere in the quantum of punishment and only in rare and appropriate case substitutes the punishment. Such power is exercised W.P.No.11774 of 2014 when the court finds that the delinquent employee is able to prove that the punishment inflicted on him is wholly unreasonable, arbitrary and disproportionate to the gravity of the proved charges thereby shocking the conscience of the court or when it is found to be in contravention of the Rules. The Court may, in such cases, remit the case to the appointing authority for imposing any other punishment as against what was originally awarded to the delinquent employee by the appointing authority as per the Rules or may substitute the punishment by itself instead of remitting to the appointing authority.\u201d (Emphasis Supplied) 11. In the case on hand, a careful perusal of the entire records right relating to the enquiry as also the order passed by the disciplinary authority, as confirmed by the appellate and revisional authorities, it clearly transpires that the disciplinary authority has applied his mind to the enquiry report and all the other materials while imposing the punishment of compulsory retirement and on appeal and revision, the appellate and the revisional authorities have appreciated the materials independently and concurred with the view of the disciplinary authority. On an overall consideration of the materials, this Court is in consensus with the order passed by the disciplinary authority as confirmed by the appellate authority and affirmed by the reviewing authority and the punishment imposed on the petitioner is just and reasonable considering the nature of delinquency and no sympathy can flow from this Court for such an W.P.No.11774 of 2014 act. Therefore, the punishment imposed on the petitioner is in no way shocking the conscience of this Court or disproportionate to the delinquency and, therefore, this Court is not inclined to interfere with the same. 12. In fine, the Writ Petition stands dismissed, as devoid of merits. No costs. 27.11.2020 Index : Yes/No Speaking Order : Yes/No (vsi2/aeb) W.P.No.11774 of 2014 To: 1. The Secretary to Government, Union of India, Ministry of Home Affairs, New Delhi. 2. The Director General, Central Industrial Security Force, CGO Complex, Lodhi Road, New Delhi \u2013 110 003. 3. The Inspector General, Central Industrial Security Force, Hyderabad. 4. The Deputy Inspector General, Central Industrial Security Force, Recruitment Training Centre, Arakkonam, Suraksha Campus Post, Vellore District. 5. The Senior Commandant, Central Industrial Security Force, Recruitment Training Centre, Arakkonam, Suraksha Campus Post, Vellore District. 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{"id": "110007179", "text": "1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1007 OF 2021 UNIVERSITY OF DELHI \u2026APPELLANT(S) VERSUS DELHI UNIVERSITY CONTRACT EMPLOYEES UNION & ORS. \u2026RESPONDENT(S) WITH CIVIL APPEAL NO. 1008 OF 2021 (Delhi University Contract Employees Union and anr. vs. University of Delhi and ors.) JUDGMENT Uday Umesh Lalit, J. 1. These appeals arise out of the final judgment and order dated 22.11.2016 passed by the High Court of Delhi at New Delhi in LPA No. 989/2013. The appeal preferred by University of Delhi (\u201cthe University\u201d for short) i.e. Civil Appeal No. 1007 of 2021 arising out of SLP(C) No. 17486 of 2017 is taken as the lead matter. Signature Not Verified Digitally signed by Indu Marwah Date: 2021.03.25 2. While allowing the Letters Patent Appeal preferred by the Delhi 19:53:43 IST Reason: University Contract Employees\u2019 Union (\u201cthe Union\u201d for short) & Others, following conclusions were arrived at and directions were issued by the Division Bench of the High Court:- \u201cConclusion I. The decision of the University of Delhi to grant one time age exemption to all contract labour who may have served for over a year on such basis for participating in the selection in effect is in the nature of the Scheme postulated by the Supreme Court in para 53 of Umadevi. It cannot be denied that such opportunity to participate in the selection process has to be meaningful. II. In view of the age relaxation given by the University of Delhi, an opportunity to undergo the selection process was made available to all contract employees who had worked for one year or more on contract. As a result of such opportunity, the contract workers were rendered entitled to be tested on a realistic and fair scale and benchmark. There is substance in the grievance of the contractual employees that to test them on the same standards as new applicants is to deprive them of a fair and meaningful opportunity to participate in the selection process. III. The Delhi University admits that the contract employees who applied under the last recruitment drive i.e. 6th November, 2013 possessed the requisite qualifications as per the recruitment rules of 2008. Regular vacant posts were available when they were appointed. Therefore, so far as all those who applied are concerned, their qualifications stand verified. Furthermore, their original appointments could also, at the worst, be termed irregular and not illegal. IV. There is substance in the grievance of the appellants that pursuant to the notification dated 6th November, 2013, they have not been subjected to a test that is fair and appropriate for them. The respondent-University ought to have designed an appropriate mechanism for testing the appellants having regard to the date when they would have acquired their qualifications. Beside the appointment drive conducted by the respondent-University, they have regular post available for making appointments pursuant to a test appropriately designed for the appellants and other persons based like them. V. The appellants and others like them have served the organisation for long years, and, it is evident that even if their having acquired academic qualifications much before the new applicants, the deficiency, if any, is made good by the valuable experience acquired by them by virtue of the years of service. The learned Single Judge has fallen into error in treating the writ petition as one seeking a relief of regularisation. VI. The respondents were unable to fill up the vacancies pursuant to the process initiated by the notification dated 6 th November, 2013 which are still available. VII. In view of the passage of time, it would be unfair to the appellants as well as the respondents to remand the matter for consideration of the above. This court is adequately empowered to mould the relief to ensure complete justice to the parties. Result 102. In view thereof, this appeal is disposed of with a direction to the University of Delhi to design and hold an appropriate test for selection in terms of the notification dated 6th November, 2013 having regard to the fact that the persons working on contract basis covered under the notification dated 6th November, 2013 had obtained their essential qualifications much before the fresh applicants; that they have rendered satisfactory service and bring with them the benefit of the knowledge acquired by experience gained while working on contract basis with the Delhi University. 103. It is also clarified that the same persons who shall be so tested would be those who would be eligible pursuant to the advertisement dated 6th November, 2013. The impugned order of the Single Judge dated 16 th December, 2013 is modified to this extent and the appeal is disposed of with the above directions.\u201d 3. The relevant facts for the present purpose, in brief, are as under:- A) By communication dated 31.08.1999 the University Grants Commission (\u201cUGC\u201d, for short) imposed a ban on filling up of non-teaching posts in all institutes/universities and the affiliated colleges. The relevant part of the directions issued by the UGC were:- \u201c(2)Ban on filling up of vacant posts. Every University/College shall undertake a review of all the posts, which are lying vacant in the Universities and in the affiliated Colleges and subordinate offices, etc., in consultation with the University Grants Commission. Financial Advisers will ensure that the review is completed in a time bound manner and full details of vacant posts in their respective Universities etc. are available. TILL THE REVIEW IS COMPLETED, NO VACANT POSTS SHALL BE FILLED UP EXCEPT WITH THE APPROVAL OF THE UNIVERSITY GRANTS COMMISSION.\u201d These directions were reiterated by UGC in subsequent letters. B) On 12.01.2011 the UGC sanctioned and allowed the University to fill up 255 posts of Junior Assistants while suggesting changes in Recruitment Rules of the University. Accordingly, Recruitment Rules (Non-Teaching Employees) 2008 were amended by the University and an advertisement was published on 06.11.2013 in the leading newspapers inviting applications for 255 posts of Junior Assistants in the University. C) However, during the period from 2003 to 2013 various appointments were made by the University on contract basis as a result of which about 300 Junior Assistants are presently in the employment of the University on contract basis, most of whom are members of the Union. D) Soon after the advertisement dated 06.11.2013, Writ Petition (C) No.7929 of 2013 was filed by the Union seeking following reliefs:- \u201c(i) To direct the Respondents to formulate a scheme for regularising the services of members of the petitioner Union and other petitioners working on contract/ad hoc/daily wage basis after relaxing age requirement so as to confer on them permanent status; (ii) To direct Respondent no. 1 to pay salary to all the members of the petitioner Union and other petitioners at the rate of the minimum salary of the grade to which they have been appointed as is done by Respondent No. 1 in respect of Assistant Professors of the University/Colleges; (iii) To direct Respondent No. 1 to pay to all the members of the petitioner Union and other petitioners who have worked for six months or 240 days in each year of their employment with Respondent No. 1 on ad hoc/contract/daily wage basis non-productivity linked bonus retrospectively from the date(s) of their employment; (iv) To direct Respondent No. 1 to fill up all vacancies in future as and when they arise within six months of occurrence to avoid any ad hoc/contractual arrangement in future; (v) To direct Respondent No. 1 to grant maternity leave and other benefits to women employees; To allow this writ petition with costs; and (vi) To pass any other appropriate order and/or direction which this Hon\u2019ble court deems fit and proper in the interest of justice.\u201d E) A Single Judge of the High Court by his order dated 16.12.2013 rejected said writ petition. Relying on the decision of this Court in Secretary, State of Karnataka & Ors. vs. Umadevi & Ors.1, it was observed:- \u201c2. All the issues which have been urged in the present petition stand settled against the petitioners by the Constitution Bench judgment of the Supreme Court in the case of Secretary, State of Karnataka & Ors. vs. Umadevi & Ors., (2006) 4 SCC 1. The Supreme Court in the case of Umadevi (supra) has laid down the following ratio:- \u201c(I) The questions to be asked before regularization are:- (a)(i) Was there a sanctioned post (court cannot order creation of posts because finances of the state may go haywire), (ii) is there a vacancy, (iii) are the persons qualified persons and (iv) are the appointments through regular recruitment process of calling all possible persons and which process involves inter-se competition among the candidates. (b) A court can condone an irregularity in the appointment procedure only if the irregularity does not go to the root of the matter. (II) For sanctioned posts having vacancies, such posts have to be filled by regular recruitment process of prescribed procedure otherwise, the constitutional mandate flowing from Articles 14, 16, 309, 315, 320 etc. is violated. (III) In case of existence of necessary circumstances the government has a right to appoint contract employees or casual labour or employees for a project, but, such persons form a class in themselves and they cannot claim equality (except possibly for equal pay for equal work) with regular employees who form a separate class. Such 1 (2006) 4 SCC 1 temporary employees cannot claim legitimate expectation of absorption/regularization as they knew when they were appointed that they were temporary inasmuch as the government did not give and nor could have given an assurance of regularization without the regular recruitment process being followed. Such irregularly appointed persons cannot claim to be regularized alleging violation of Article 21. Also the equity in favour of the millions who await public employment through the regular recruitment process outweighs the equity in favour of the limited number of irregularly appointed persons who claim regularization. (IV) Once there are vacancies in sanctioned posts such vacancies cannot be filled in except without regular recruitment process, and thus neither the court nor the executive can frame a scheme to absorb or regularize persons appointed to such posts without following the regular recruitment process. (V) At the instance of persons irregularly appointed the process of regular recruitment shall not be stopped. Courts should not pass interim orders to continue employment of such irregularly appointed persons because the same will result in stoppage of recruitment through regular appointment procedure. (VI) If there are sanctioned posts with vacancies, and qualified persons were appointed without a regular recruitment process, then, such persons who when the judgment of Uma Devi1 is passed have worked for over 10 years without court orders, such persons be regularized under schemes to be framed by the concerned organization. (VII) The aforesaid law which applies to the Union and the States will also apply to all instrumentalities of the State governed by Article 12 of the Constitution.\u201d 3. Para-4 of the judgment in the case of Umadevi1 specifically directs that Courts should desist from issuing orders preventing regular selection or recruitment at the instance of persons who are only adhoc/contractual/casual employees and who have not secured regular appointments as per procedure established. The Supreme Court has further observed that passing of orders preventing regular recruitment tends to defeat the very constitutional scheme of public employment and that powers under Article 226 of the Constitution of India therefore cannot be exercised for perpetuating illegalities, irregularities or improprieties or for scuttling the whole scheme of public employment. 4. In the present case, it cannot be and could not be disputed that employment to be given pursuant to the posts which have been advertised by the advertisement dated 6.11.2013 is with respect to regular posts or permanent posts. Accordingly, in view of the ratio of the judgment in the case of Umadevi1 , and more particularly para-4 thereof, this Court cannot interdict the regular selection process. I may note that the learned senior counsel for respondent no. 1 states that regular employment in the posts now advertised could not be given earlier because of a ban on regular recruitments imposed by UGC. Since that ban has been lifted, regular posts are now being advertised for being filled in. I may note that I take the statement on record made on behalf of respondent no. 1 that the University is going to give age relaxation to all candidates in its employment which would be the length of service which has been rendered by that employee in the employment of respondent no. 1-University while working on casual/adhoc/temporary status basis. This statement is made pursuant to the letter dated 5.12.2013 which is placed on record. 5. Learned counsel for the petitioner seeks to argue that respondent-University is appointing persons on contractual basis pursuant to the earlier advertisement dated 30.5.2013 and which should not be done in view of the ratio of the judgment of the Supreme Court in the case of Umadevi1. This argument is misconceived for various reasons. Firstly, Umadevi's case (supra) does not state that State is not bound to make permanent appointment. In fact, Umadevi1 allows State and instrumentalities of State as per exigency of situation also to make contractual/casual/temporary appointments. In any case, this argument is also rejected for the reason that learned senior counsel on instruction states that posts advertised in terms of the advertisement dated 30.5.2013 in fact merge with the advertisement now issued on 6.11.2013 by requiring appointments to such posts only to be made as regular appointments and in permanent employment.\u201d F) In the recruitment process pursuant to the advertisement dated 06.11.2013, the Junior Assistants employed on contractual basis, also participated. All contractual appointees were granted age relaxation. However, only 120 regular appointments could be made by the University out of which 10 were contractual appointees and members of the Union. G) The Union, being aggrieved by the dismissal of its Writ Petition, filed LPA No.989/2013 before the Division Bench of the High Court. During the pendency of said Appeal, factual details pertaining to the members of the Union were placed on record, which show that the earliest contract employees were appointed in the year 2003 while the last appointees were of the year 2013. The details can be tabulated as under:- Sl. No. Year of appointment No. of contract appointees H) By its judgment and order dated 22.11.2016, the Division Bench of the High Court allowed the appeal to the extent indicated above and the University was directed to design and hold an appropriate test for selection in terms of Notification dated 06.11.2013. I) Being aggrieved, the University filed the instant appeal. The Union also preferred an independent appeal i.e. Civil Appeal No.1008 of 2021 arising out of SLP(C)No.4906 of 2021. By its interim order dated 04.07.2017, the direction to hold special tests was stayed by this Court but it was directed that the contract employees would continue to work in the positions held by them on provisional basis until the next round of selections. The contract employees were however granted liberty to participate in any selection process held in future. 4. When these appeals came up before this Court on 22.10.2019, it was noted that even after the selection undertaken in the year 2013 there remained regular vacancies. The University was therefore directed to file an appropriate affidavit indicating the status. In the affidavit dated 13.11.2019 the University indicated that 124 regular posts of Junior Assistants were then lying vacant. 5. In the affidavit dated 09.03.2021 filed on behalf of the University, it is submitted that a decision has been taken that in order to facilitate the contractual employees to participate in the recruitment process, age relaxation as well as certain advantage for the service rendered as contract employees will be given by the University. Paragraphs 6 and 7 of said affidavit read are as under:- \u201c6. In view of the order of this Court, to enable the contractual employees to participate in the recruitment process, a comprehensive age relaxation with respect to the upper age limit has been given to the contract employees working at the University in the present recruitment process. 7. In addition to the above, a maximum of upto 10 extra marks, depending on the number of years of service of the contract employee, would be given to them while finalizing the merit.\u201d 6. Heard Mr. Santosh Kumar, learned Advocate for the University and Mr. Colin Gonsalves, learned Senior Advocate for the Union. It was submitted by Mr. Santosh Kumar, learned Advocate that the directions issued by the Division Bench of the High Court were not consistent with the law declared by this Court in Umadevi1 and the subsequent decisions of this Court including that in Official Liquidator vs. Dayanand and Ors. 2. With regard to the ensuing selection to be undertaken where the benefits in terms of paragraphs 6 and 7 of the affidavit dated 09.03.2021 would be extended, it was submitted that the total marks in the test would be 300 and grant of 10 marks 2 (2008) 10 SCC 1 would mean 3.33% advantage. On the other hand, Mr. Gonsalves, learned Senior Advocate submitted that even after the decision of this Court in Umadevi1, this Court extended the benefit of regularization in certain cases. He relied upon the decisions of this Court in State of Karnataka and others vs. M.L. Kesari and others 3; State of Gujarat and others vs. PWD Employees Union and others4; Nihal Singh and others vs. State of Punjab and others5; Sheo Narain Nagar and others vs. State of Uttar Pradesh and others6; and Narendra Kumar Tiwari and others vs. State of Jharkhand and others7. 7. The decision of the Constitution Bench of this Court in Umadevi1 was pronounced on 10.04.2006 by which time, the earliest contract employees had put in only 3-4 years of service and most of the contract employees were engaged after the decision in Umadevi1. In paragraphs 47, 49 and 53 of the decision in Umadevi1, this Court stated:- \u201c47. When a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognised by the relevant rules or procedure, he is aware 3 (2010) 9 SCC 247 [Paras 7 & 8] 4 (2013) 12 SCC 417 [Para 27] 5 (2013) 14 SCC 65 6 (2017) 14 SCALE 247 [Para 8] = (2018) 13 SCC 432 7 (2018) 8 SCC 238 of the consequences of the appointment being temporary, casual or contractual in nature. Such a person cannot invoke the theory of legitimate expectation for being confirmed in the post when an appointment to the post could be made only by following a proper procedure for selection and in cases concerned, in consultation with the Public Service Commission. Therefore, the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual employees. It cannot also be held that the State has held out any promise while engaging these persons either to continue them where they are or to make them permanent. The State cannot constitutionally make such a promise. It is also obvious that the theory cannot be invoked to seek a positive relief of being made permanent in the post. \u2026 \u2026 \u2026 49. It is contended that the State action in not regularising the employees was not fair within the framework of the rule of law. The rule of law compels the State to make appointments as envisaged by the Constitution and in the manner we have indicated earlier. In most of these cases, no doubt, the employees had worked for some length of time but this has also been brought about by the pendency of proceedings in tribunals and courts initiated at the instance of the employees. Moreover, accepting an argument of this nature would mean that the State would be permitted to perpetuate an illegality in the matter of public employment and that would be a negation of the constitutional scheme adopted by us, the people of India. It is therefore not possible to accept the argument that there must be a direction to make permanent all the persons employed on daily wages. When the court is approached for relief by way of a writ, the court has necessarily to ask itself whether the person before it had any legal right to be enforced. Considered in the light of the very clear constitutional scheme, it cannot be said that the employees have been able to establish a legal right to be made permanent even though they have never been appointed in terms of the relevant rules or in adherence of Articles 14 and 16 of the Constitution. \u2026 \u2026 \u2026 53. One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointments) as explained in S.V. Narayanappa8, R.N. Nanjundappa9 and B.N. Nagarajan10 and referred to in para 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of the courts or of tribunals. The question of regularisation of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases abovereferred to and in the light of this judgment. In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularise as a one-time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of the courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed. The process must be set in motion within six months from this date. We also clarify that regularisation, if any already made, but not sub judice, need not be reopened based on this judgment, but there should be no further bypassing of the constitutional requirement and regularising or making permanent, those not duly appointed as per the constitutional scheme.\u201d (Emphasis added) 8. The decision in Umadevi1 and other relevant decisions on the point were considered by a Bench of three Judges of this Court in Official Liquidator vs. Dayanand and others2. In that case, the decisions of the Calcutta High Court and the Delhi High Court were under challenge. The Single Judge of the Calcutta High Court had directed absorption of Group \u2018C\u2019 staff, which direction 8 AIR 1967 SC 1071 9 (1972) 1 SCC 409 10 (1979) 4 SCC 507 was affirmed by the Division Bench. Similarly, a Single Judge of the Delhi High Court had directed absorption of the writ petitioners in their appropriate scales with benefits such as fitment and promotions which directions were affirmed in appeal by the Division Bench. This Court accepted the challenge and set aside the directions issued by the Calcutta High Court and the Delhi High Court. During the course of its Judgment, this Court made following observations:- \u201c52. \u2026 In this context, we may also mention that though the Official Liquidators appear to have issued advertisements for appointing the company-paid staff and made some sort of selection, more qualified and meritorious persons must have shunned from applying because they knew that the employment will be for a fixed term on fixed salary and their engagement will come to an end with the conclusion of liquidation proceedings. As a result of this, only mediocres must have responded to the advertisements and joined as company-paid staff. In this scenario, a direction for absorption of all the company-paid staff has to be treated as violative of the doctrine of equality enshrined in Articles 14 and 16 of the Constitution. [emphasis added] \u2026 \u2026 \u2026 75. By virtue of Article 141 of the Constitution, the judgment of the Constitution Bench in Umadevi1 is binding on all the courts including this Court till the same is overruled by a larger Bench. The ratio of the Constitution Bench judgment has been followed by different two-Judge Benches for declining to entertain the claim of regularisation of service made by ad hoc/temporary/daily- wage/casual employees or for reversing the orders of the High Court granting relief to such employees \u2014 Indian Drugs and Pharmaceuticals Ltd. v. Workmen11, Gangadhar 11 (2007) 1 SCC 408 Pillai v. Siemens Ltd.12, Kendriya Vidyalaya Sangathan v. L.V. Subramanyeswara13, Hindustan Aeronautics Ltd. v. Dan Bahadur Singh14. However, in U.P. SEB v. Pooran Chandra Pandey15 on which reliance has been placed by Shri Gupta, a two-Judge Bench has attempted to dilute the Constitution Bench judgment by suggesting that the said decision cannot be applied to a case where regularisation has been sought for in pursuance of Article 14 of the Constitution and that the same is in conflict with the judgment of the seven-Judge Bench in Maneka Gandhi v. Union of India16.\u201d The Judgment of a Bench of two Judges of this Court in Pooran Chandra Pandey16 was then found to be inconsistent with the law laid down by this Court in Umadevi1. 9. All the decisions relied upon by Mr. Colin Gonsalves, learned Senior Advocate were by Benches of two Judges of this Court and in each of those cases, the concerned employees had put in more than 10 years of service and could claim benefit in terms of paragraph 53 of the decision in Umadevi1. In the last of those decisions i.e. in Narendra Kumar Tiwari7, the submission was that the employees had not put in more than 10 years of service with the newly created State of Jharkhand and, therefore, there was no entitlement in terms of the decision in Umadevi1. Relying on the concept of one-time measure elaborated in M.L. Kesari3, it was observed:- 12 (2007) 1 SCC 533 13 (2007) 5 SCC 326 14 (2007) 6 SCC 207 15 (2007) 11 SCC 92 16 (1978) 1 SCC 248 \u201c3. The appellants had contended before the High Court that the State of Jharkhand was created only on 15-11-2000 and therefore no one could have completed 10 years of ser- vice with the State of Jharkhand on the cut-off date of 10- 4-2006. Therefore, no one could get the benefit of the Reg- ularisation Rules which made the entire legislative exercise totally meaningless. The appellants had pointed out in the High Court that the State had issued Resolutions on 18-7- 2009 and 19-7-2009 permitting the regularisation of some employees of the State, who had obviously not put in 10 years of service with the State. Consequently, it was sub- mitted that the appellants were discriminated against for no fault of theirs and in an irrational manner. \u2026 \u2026 \u2026 6. The concept of a one\u00adtime measure was further ex\u00ad plained in Kesari3 in paras 9, 10 and 11 of the Report which read as follows: (SCC pp. 250\u00ad51, paras 9\u00ad11) \u20189. The term \u201cone-time measure\u201d has to be under- stood in its proper perspective. This would nor- mally mean that after the decision in Umadevi1 , each department or each instrumentality should undertake a one-time exercise and prepare a list of all casual, daily-wage or ad hoc employees who have been working for more than ten years without the intervention of courts and tribunals and subject them to a process verification as to whether they are working against vacant posts and possess the requisite qualification for the post and if so, regularise their services. 10. At the end of six months from the date of de- cision in Umadevi1, cases of several daily- wage/ad hoc/casual employees were still pending before courts. Consequently, several departments and instrumentalities did not commence the one- time regularisation process. On the other hand, some government departments or instrumentali- ties undertook the one-time exercise excluding several employees from consideration either on the ground that their cases were pending in courts or due to sheer oversight. In such circumstances, the employees who were entitled to be considered in terms of para 53 of the decision in Umadevi1, will not lose their right to be considered for regu- larisation, merely because the one-time exercise was completed without considering their cases, or because the six-month period mentioned in para 53 of Umadevi1 has expired. The one-time exer- cise should consider all daily-wage/ad hoc/casual employees who had put in 10 years of continuous service as on 10-4-2006 without availing the pro- tection of any interim orders of courts or tri- bunals. If any employer had held the one-time ex- ercise in terms of para 53 of Umadevi1, but did not consider the cases of some employees who were entitled to the benefit of para 53 of Umadevi1, the employer concerned should con- sider their cases also, as a continuation of the one-time exercise. The one-time exercise will be concluded only when all the employees who are entitled to be considered in terms of para 53 of Umadevi1, are so considered. 11. The object behind the said direction in para 53 of Umadevi1 is twofold. First is to ensure that those who have put in more than ten years of con- tinuous service without the protection of any in- terim orders of courts or tribunals, before the date of decision in Umadevi1 was rendered, are con- sidered for regularisation in view of their long service. Second is to ensure that the departments/instrumentalities do not perpetuate the practice of employing persons on daily- wage/ad hoc/casual basis for long periods and then periodically regularise them on the ground that they have served for more than ten years, thereby defeating the constitutional or statutory provisions relating to recruitment and appoint- ment. The true effect of the direction is that all persons who have worked for more than ten years as on 10-4-2006 [the date of decision in Umadevi1 without the protection of any in- terim order of any court or tribunal, in vacant posts, possessing the requisite qualification, are entitled to be considered for regularisation. The fact that the employer has not undertaken such exercise of regularisation within six months of the decision in Umadevi1 or that such exercise was undertaken only in regard to a limited few, will not disentitle such employees, the right to be con- sidered for regularisation in terms of the above directions in Umadevi1 as a one-time measure.\u2019 7. The purpose and intent of the decision in Umadevi 1 was therefore twofold, namely, to prevent irregular or ille- gal appointments in the future and secondly, to confer a benefit on those who had been irregularly appointed in the past. The fact that the State of Jharkhand continued with the irregular appointments for almost a decade after the decision in Umadevi1 is a clear indication that it believes that it was all right to continue with irregular appoint- ments, and whenever required, terminate the services of the irregularly appointed employees on the ground that they were irregularly appointed. This is nothing but a form of exploitation of the employees by not giving them the benefits of regularisation and by placing the sword of Damocles over their head. This is precisely what Umadevi1 and Kesari3, sought to avoid. 10. The decision in Narendra Kumar Tiwari7 has to be understood in the backdrop of the facts of that case. 11. The contract employees in the present case cannot, therefore, claim the relief of regularization in terms of paragraph 53 of the decision in Umadevi1. The rejection of their petition by the single Judge of the High Court was quite correct and there was no occasion for the Division Bench to interfere in the matter. 12. It is true that, as on the day when the judgment in Umadevi1 was delivered by this Court, the contract employees had put in just about 3 to 4 years of service. But, as of now, most of them have completed more than 10 years of service on contract basis. Though the benefit of regularization cannot be granted, a window of opportunity must be given to them to compete with the available talent through public advertisement. A separate and exclusive test meant only for the contract employees will not be an answer as that would confine the zone of consideration to contract employees themselves. The modality suggested by the University, on the other hand, will give them adequate chance and benefit to appear in the ensuing selection. 13. We, therefore, direct that all the concerned contract employees engaged by the University be afforded benefits as detailed in paragraphs 6 and 7 of the affidavit dated 09.03.2021 with following modifications: (a) The benefit of age relaxation as contemplated in paragraph 6 of the affidavit without any qualification must be extended to all the contract employees. (b) In modification of paragraph 7 of the affidavit, those employees who were engaged in the year 2011 be given the benefit of 10 marks in the ensuing selection process while for every additional year that a contract employee had put in, benefit of one more mark subject to the ceiling of 8 additional marks be given. In other words, if a contract employee was engaged for the first time in the year 2010, he shall be entitled to the benefit of 11 marks, while one engaged since 2003 shall be given 18 marks, as against the appointee of 2011 who will have the advantage of only 10 marks. The contract appointees of 2012 and 2013 will have the advantage of 9 and 8 marks respectively. (c) The Public Notice inviting applications from the candidates shall specifically state that the advantage in terms of the order passed by this Court would be conferred upon the contract employees so that other candidates are put to adequate notice. (d) All the contract employees shall be entitled to offer their candidature for the ensuing selection in next four weeks and in order to give them sufficient time to prepare, the test shall be undertaken only after three months of the receipt of applications from the candidates. 14. We hasten to add that these directions are premised on two basic submissions advanced by Mr. Santosh Kumar, learned advocate for the University that; (i) the total marks for the test will be 300 marks and thus the maximum advantage which a contract employee will have is of 18 marks which in turn is relatable to advantage of 6% as against other participants in the selection process; (ii) all the contract employees are otherwise entitled and eligible to participate in the selection process. 15. In our view, paragraphs 6 & 7 of the affidavit with the modifications as directed hereinabove will subserve the purpose. Such directions will not only afford chance to the contract employees to participate in the selection process regardless of their age but will also entitle them to some advantage over the other participants. Similarly, those contract employees who have put in more number of years as against the other contract employees, will also have a comparative advantage. 16. Lastly, it must be observed that according to Mr. Santosh Kumar, there are at present 300 Junior Assistants working on contract basis in the University while the number of posts advertised are only 236. Even if it be assumed that all these 236 posts are secured by the contract employees, that would still leave 64 of the contract employees as unsuccessful. It may therefore possibly be said that as against the required posts of 236, the University had engaged contract employees in excess of the required number or that there may be further advertisement to fill up the remaining posts. We need not go into this issue and we rest content by saying that in any selections in future, one more chance and advantage in terms of this order shall be given to such unsuccessful contract employees. 17. With the aforesaid observations, these appeals stand disposed of. No costs. \u2026...\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..J. [UDAY UMESH LALIT] ..\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..J. [K. M. 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{"id": "95803467", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 975 OF 2021 SANJIV PRAKASH \u2026APPELLANT VERSUS SEEMA KUKREJA AND ORS. \u2026RESPONDENTS WITH CIVIL APPEAL NO. 976 OF 2021 JUDGMENT R.F. Nariman, J Civil Appeal No. 975 of 2021 1. This appeal arises out of the dismissal of a petition under Section 11 of the Arbitration and Conciliation Act, 1996 [\u201c1996 Act\u201d] filed before the High Court of Delhi. The Appellant, Sanjiv Prakash, is a member of a family which also consists of his sister, Seema Kukreja (Respondent No.1 herein), Signature Not Verified Natarajan Date: 2021.04.06 his mother, Daya Prakash (Respondent No.2 herein), and his father, Prem Digitally signed by R 17:16:59 IST Reason: Prakash (Respondent No.3 herein). The Appellant and Respondents are hereinafter collectively referred to as the \u201cPrakash Family\u201d. 2. The facts, briefly stated, are as follows: 2.1. A private company was incorporated on 09.12.1971 under the name and style of Asian Films Laboratories Private Limited [\u201cthe company\u201d] by Prem Prakash, the entire amount of the paid-up capital being paid for by him from his personal funds. He then distributed shares to his family members without receiving any consideration for the same. On 06.03.1997, the name of the company was altered to its present name \u2013 ANI Media Private Limited. 2.2. Owing to the extensive efforts of Sanjiv Prakash at a global level, Reuters Television Mauritius Limited (now Thomson Reuters Corporation), a company incorporated in Mauritius [\u201cReuters\u201d], approached him for a long- term equity investment and collaboration with the company on the condition that he would play an active role in the management of the company. 2.3. Pursuant to this understanding, a Memorandum of Understanding [\u201cMoU\u201d] was entered into sometime in 1996 between the four members of the Prakash Family. The MoU recorded that Sanjiv Prakash, supported by the guidance and vision of Prem Prakash, had been responsible for the tremendous growth of the company. The paid-up share capital of the company was held as follows: Rupees Percentage held Prem Prakash 2,80,000 27.99% Daya Prakash 2,40,000 24.01% Sanjiv Prakash 3,00,000 30.00% Seema Kukreja 1,80,000 18.00% --------------- -------------- 10,00,000 100.00% The Prakash Family was to divest 49% of this shareholding in favour of Reuters or its affiliates, subject to necessary permission of the authorities, as follows: \u201cAnd whereas ANI for the past many years has been doing considerable business with Reuters Television (Reuters). The relationship between them has been close and cordial. In order to strengthen the relationship and make optimum use of the tremendous growth potential in the TV media sector, including to cater to the ever expanding news video demands of Reuters in its satellite transmissions to subscribers worldwide, it has been found expedient by the existing members of the company to divest 49% of their shareholding in favour of Reuters or its affiliates subject to necessary permission of authorities. This would cement the relationship built over the years between Reuters and the company.\u201d The MoU went on to record: \u201c1. The Prakash family will divest its 49% shareholding as under: Prem Prakash 1372 Daya Prakash 1176 Sanjiv Prakash 1470 ________ 2. That Prakash family recognises the leadership provided by S.P. and the role he has played in steering the company to new heights with the name ANI which is respected internationally. 3. D.P. has been the Managing Director of the company from the beginning and Prakash family recognises her role in bringing the company to a very sound financial base as a result of very ably handling the accounts and finances of the company. She would continue to be Managing Director after Reuters\u2019 participation in equity. 4. The Prakash family would continue to own 51% shareholding in the company after Reuters becomes a 49% shareholder. As they would continue to have the controlling interest it is the intention and desire of the Prakash family members that their actions and voting must be in a manner so as to act in consensus and as one block. 5. S.P. would after divesting his about 15% share, continue to hold 15% equity in the company. Reuters has made it clear that they would like the management control of the company to vest with S.P. 6. In view of the fact that S.P. has been able to get Reuters to participate in Asian Films Laboratories Pvt. Ltd. The other shareholders of the Prakash family namely P.P., D.P. and S.K. agree to vote on all resolutions both in the directors and shareholders meeting in the manner instructed by S.P. To this effect, they are agreeable to cooperate and vote for amendment in the Articles to reflect the following: (a) Any resolution in Board to have either affirmative vote of S.P. or his consent in writing to approve the same. (b) Disproportionate voting rights irrespective of the number of the shares held by them as under: Prem Prakash 1 vote Daya Prakash 1 vote Seema Kukreja 1 vote Sanjiv Prakash 5097 votes Reuters Television Mauritius Limited 4900 votes. 7. This MoU shall be binding on all the heirs, successors and assigns of P.P., D.P., S.P. and S.K. and they would act in the manner stated in this MoU. 8. That in the event P.P. or D.P. desire to sell and or bequeath his/her equity shares, the same shall be offered/bequeathed only to S.P. or his heirs and successors. Similarly, in the event of S.K. or her heirs/successors desire to sell their shares, the same shall be sold only to S.P. or his successors. The consideration paid shall be the net worth of shares on the last balance sheet date determined by the auditors of the company. xxx xxx xxx 11. This MoU embodies the entire understanding of the parties as to its subject matter and shall not be amended except in writing executed all the parties to the MoU. 12. All disputes, questions or differences etc., arising in connection with this MoU shall be referred to a single arbitrator in accordance with and subject to the provisions of the Arbitration Act, 1940, or any other enactment or statutory modification thereof for the time being in force.\u201d 2.4. A Shareholders\u2019 Agreement dated 12.04.1996 [\u201cSHA\u201d] was then executed between the Prakash Family and Reuters. So far as is relevant, the SHA referred to the Appellant and the Respondents collectively as the \u201cPrakash Family Shareholders\u201d, and individually as a \u201cPrakash Family Shareholder\u201d. It then set out the reason for entering into the SHA as follows: \u201cWHEREAS (A) Pursuant to a share purchase agreement dated today between the Prakash Family Shareholders and Reuters (the Share Purchase Agreement), Reuters has agreed to purchase 4,900 Shares (as defined below) representing 49% of the issued share capital of Asian Films Laboratories (Pvt.) Ltd. (the Company). Following completion of the Share Purchase Agreement, each of the Prakash Family Shareholders will hold the numbers of Shares set opposite his or her name in schedule 3 hereto, with the aggregate number of Shares so held by the Prakash Family Shareholders representing 51% of the issued share capital of the Company. (B) The Shareholders (as defined below) are entering into the Agreement to set out the terms governing their relationship as shareholders in the Company.\u201d In the definition section, \u201cArtificial Deadlock\u201d and \u201cManagement Deadlock\u201d were defined as follows: \u201cArtificial Deadlock means a Management Deadlock caused by virtue of the Prakash Family Shareholders or Reuters (or any appointee on the Board) voting against an issue or proposal in circumstances where the approval of the same is required to enable the Company to carry on the Business properly and effectively in accordance with the then current approved Business Plan and Budget;\u201d xxx xxx xxx \u201cManagement Deadlock means a material management dispute (not being an Artificial Deadlock) between any or all of the Prakash Family Directors on the one hand and the Reuters directors on the other hand relating to the affairs of the Company which is not resolved within sixty (60) days of such dispute being referred for settlement to the Reuters Managing Director (as defined in clause 16.1) and the Chairman;\u201d The expression \u201cPrakash Family Directors\u201d was defined as follows: \u201cPrakash Family Directors means the directors of the Company from time to time appointed by the Prakash Family Shareholders in accordance with the Articles;\u201d The expression \u201cPrakash Family Members or Interests\u201d was defined as follows: \u201cPrakash Family Members or Interests means each of the Prakash Family Shareholders and each of their respective fathers, mothers, sons, daughters, brothers and sisters (the Prakash Family Relatives) and any company in which any such relation or any Prakash Family Shareholder has a controlling interest;\u201d \u201cReuters Directors\u201d was defined as follows: \u201cReuters Directors means the directors of the Company from time to time appointed by Reuters in accordance with the Articles;\u201d \u201cReuters Group\u201d was defined as follows: \u201cReuters Group means Reuters, its Holding Company and such Holding Company\u2019s Subsidiaries for the time being;\u201d Transfer of shares and pre-emption was dealt with in clause 4 read with clauses 11, 12, and 14 and schedule 1 of the SHA. Clause 7.2 is important and states as follows: \u201c7.2 Unless otherwise agreed by the Shareholders, the number of Directors shall be seven (7) of whom, for so long as the Percentage Interest of the Prakash Family Shareholders is in aggregate equal to or greater than fifty point zero one per cent. (50.01%), four (4) shall be Prakash Family Directors and three (3) shall be Reuters Directors in accordance with the Articles. If the Percentage Interest of the Prakash Family Shareholders falls below such level, the number of Prakash Family Directors and Reuters Directors shall be determined in accordance with the Articles.\u201d The quorum for holding meetings was then set out in clause 7.12, and matters requiring special majority were set out in clause 8.1. Default events were set out in clause 11. Clause 11.2 is important and states as follows: \u201c11.2 If a Default Event exists in relation to any of the Shareholders (the Defaulting Shareholder), then the other Shareholder(s) comprising, in the case of a Default Event existing in relation to a Prakash Family Shareholder, Reuters and, in the case of a Default Event existing in relation to Reuters, the Prakash Family Shareholders (each of Reuters in the first case and the Prakash Family Shareholders in the second case being the Non-Defaulting Shareholder(s)) shall have the right, subject to the prior right of the Defaulting Shareholder to transfer its Shares as contemplated in paragraph 8 of Schedule 1 (all as provided in clause 11.3), to purchase or procure the purchase by a nominee or by a third party of all (but not some only) of the Shares held by the Defaulting Shareholder, provided that, in the case of a Default Event comprising a material breach of the kind contemplated by clause 11.1(c)(ii), the relevant breach has not been either cured to the reasonable satisfaction of the Non-Defaulting Shareholder(s) or waived by it or, as the case may be, others.\u201d Clause 12.1, under the heading \u201cChanges in Circumstances: Illegality\u201d then provided as follows: \u201c12.1 Where the introduction, imposition or variation of any law or any change in the interpretation or application of any law makes it unlawful or impractical without breaching such law for Reuters to continue to hold upto at least forty nine per cent. (49%) of the issued ordinary share capital of the Company or to carry out all or any of its obligations under this Agreement, upon Reuters notifying the other Shareholders: (a) Reuters shall be entitled to require the other Shareholders to purchase its holding of Shares at a price determined in accordance with clause 11.4, which shall apply mutatis mutandis, and any such purchase shall be made by the other Shareholders in the proportions agreed between them or otherwise in the proportion each such other Shareholders holding of Shares bears to the aggregate number of Shares held by all of such Shareholders; (b) Any amounts loaned or made available to the Company shall forthwith be repaid to Reuters; and (c) Reuters shall upon the service of such notice cease to be bound by the provisions hereof save for the preceding provisions of this clause 12.\u201d The termination clause was set out as follows: \u201c14.1 This Agreement shall continue in full force and effect for so long as both (i) any of the Prakash Family Shareholders and (ii) any member of the Reuters Group hold any Shares. If, as a result of any sale or disposal made in accordance with this Agreement, either (i) none of the Prakash Family shareholders or (ii) no member of the Reuters Group holds any Shares, then this Agreement shall terminate and cease to be of any effect, save that this shall not: (a) relieve any Shareholder from any liability or obligation in respect of any matters, undertakings or conditions which shall not have been done, observed or performed by any such Shareholder prior to such termination; (b) save for clause 14.2, affect the terms of any agreement entered into between any Prakash Family Shareholders and Reuters or any successor of either of them holding Shares, to replace this Agreement; or (c) affect the terms of clause 15 (confidentiality) of this Agreement.\u201d The arbitration clause was set out in clause 16 which reads as follows: \u201cLEGAL DISPUTES 16.1 In the event of any dispute between the Shareholders arising in connection with this Agreement (a legal dispute), they shall use all reasonable endeavours to resolve the matter on an amicable basis. If any Shareholder serves formal written notice on any other Shareholder that a legal dispute has arisen and the relevant Shareholders are unable to resolve the dispute within a period of thirty (30) days from the service of such notice, then the dispute shall be referred to the managing director of the senior management company identified by Reuters as having responsibility for India (the Reuters Managing Director) and the Chairman of the Company. No recourse to arbitration under this Agreement shall take place unless and until such procedure has been followed. ARBITRATION 16.2 If the Reuters Managing Director and the Chairman of the Company shall have been unable to resolve any legal dispute referred to them under clause 16.1 within thirty (30) days, that dispute shall, at the request of any Shareholder, be referred to and finally settled by arbitration under and in accordance with the Rules of the London Court of International Arbitration by one or more arbitrators appointed in accordance with those Rules. The place of arbitration shall be London and the terms of this clause 16.2 shall be governed by and construed in accordance with English law. The language of the arbitration proceedings shall be English.\u201d Clause 28, upon which a large part of the argument of both sides hinges, is set out as follows: \u201cENTIRE AGREEMENT 28.1 This Agreement, the Ancillary Agreements, and the Share Purchase Agreement constitute the entire agreement and understanding of the parties with respect to the subject matter thereof and none of the parties has entered into this agreement in reliance upon any representation, warranty or undertaking by or on behalf of the other parties which is not expressly set out herein or therein. 28.2 Without prejudice to the generality of clause 28.1, the parties hereby agree that this Agreement supersedes any or all prior agreements, understanding, arrangements, promises, representations, warranties and/or contracts of any form or nature whatsoever, whether oral or in writing and whether explicit or implicit, which may have been entered into prior to the date hereof between the parties, other than the Ancillary Agreements and the Share Purchase Agreement.\u201d Clause 31 deals with governing law and jurisdiction and states as follows: \u201c31. This Agreement (save for clause 16.2, which shall be governed by and construed in accordance with the laws of England) is governed by and shall be construed in accordance with the laws of India.\u201d 2.5. On the same day, a Share Purchase Agreement dated 12.04.1996 [\u201cSPA\u201d] was entered into between the Prakash Family and Reuters. The SPA also contained an arbitration clause similar to that contained in clause 16 of the SHA, and also contained an \u201centire agreement clause\u201d in clause 11, which is similar to clause 28 of the SHA. On the same date, various ancillary agreements were also entered into between the parties, referred to in the SHA. These ancillary agreements are as follows: (i) Agreement for the Assignment of Copyright dated 12.04.1996 between Prem Prakash, Asian Films Laboratories Pvt. Ltd., and Reuters Television Mauritius Ltd. (ii) Trade Clarification Agreement dated 12.04.1996 between Asian Films Laboratories Pvt. Ltd., Reuters Television Mauritius Ltd., and the partners of Ved & Co. (i.e., Prem Prakash, Daya Prakash, Sanjiv Prakash, and Seema Kukreja) (iii) PIB Accreditation Agreement dated 12.04.1996 between Asian Films Laboratories Pvt. Ltd., Reuters Television Mauritius Ltd., and the partners of Ved & Co. (i.e., Prem Prakash, Daya Prakash, Sanjiv Prakash, and Seema Kukreja) (iv) Facilities and Marketing Agreement dated 12.04.1996 between Asian Films Laboratories Pvt. Ltd. and Reuters Television (England) Ltd. (v) Service Agreement dated 12.04.1996 between Asian Films Laboratories Pvt. Ltd. and Sanjiv Prakash (vi) Deed of Tax Indemnity dated 12.04.1996 between Prem Prakash, Daya Prakash, Sanjiv Prakash, Seema Kukreja, Asian Films Laboratories Pvt. Ltd., and Reuters Television Mauritius Ltd. 2.6. The Articles of Association of the company were amended on 14.05.1996 to reflect certain decisions that were taken in the MoU. Thus, clause 11(f) was amended so as to read as follows: \u201c11. Transfer of Shares xxx xxx xxx (f) If the Continuing Shareholder(s) comprise Prakash Family Shareholders and purchases are to be made by them under Article 11(e), SP Shall have the right (but not the obligation) to purchase all (but not some only) of the Seller\u2019s Shares. If SP shall fail to purchase all of the Seller\u2019s Shares within the time period set out in Article 11(e) the Shares subject to such Purchases shall be acquired by each Prakash Family Shareholder in the proportion such Shareholder\u2019s holding of Shares bears to the aggregate number of Shares held by all of the Prakash Family Shareholders who have become bound to make such purchases.\u201d Likewise, clause 11(i)(i) was inserted, in which it was stated: \u201c11. Transfer of Shares xxx xxx xxx (i) xxx xxx xxx (i) SP shall have the right (but not the obligation) upon serving notice in writing to each remaining Prakash Family Shareholder to purchase all (but not some only) of such Shares in preference to any other Prakash Family shareholder;\u201d Clause 16(b) of the Articles of Association also incorporated clause 6(b) of the MoU as follows: \u201c16. xxx xxx xxx (b) If a poll is demanded in accordance with the provisions of section 179 of the Companies Act 1956: (i) SP shall so long as he holds Shares be able to vote such number of Shares as is equal to the number of Shares held by all the Prakash Family Shareholders less the numbers of Prakash Family Shareholders other than SP (the other Prakash Family Shareholders). The remaining votes attributable to Shares hold by Prakash Family Shareholders shall be divided equally between the other Prakash Family shareholders; and (ii) The provisions of Article 16(b)(i) shall cease to be valid and effective upon the occurrence of any of the events in relation to SP.\u201d We are informed that this position continued up to the year 2012 after which, by mutual agreement, the Articles of Association were again amended so that the amendments incorporated in 1996 no longer continued. 2.7. Divestment of 49% of the share capital took place as was set out in the MoU as well as the SPA and the SHA, consequent upon which Daya Prakash resigned as the Managing Director and Sanjiv Prakash took over as the Managing Director of the company in 1996 itself. 2.8. Disputes between the parties arose when Prem Prakash decided to transfer his shareholding to be held jointly between Sanjiv Prakash and himself, and Daya Prakash did likewise to transfer her shareholding to be held jointly between Seema Kukreja and herself. A notice invoking the arbitration clause contained in the MoU was then served by Sanjiv Prakash on 23.11.2019 upon the three Respondents, alleging that his pre-emptive right to purchase Daya Prakash\u2019s shares, as was set out in clause 8 of the MoU, had been breached, as a result of which disputes had arisen between the parties and Justice Deepak Verma (retired Judge of this Court), was nominated to be the sole arbitrator. The reply filed by Seema Kukreja and Daya Prakash, dated 20.12.2019, pointed out that the MoU ceased to exist on and from the date of the SHA, i.e. 12.04.1996, which superseded the aforesaid MoU and novated the same in view of clause 28.2 thereof. Therefore, they denied that there was any arbitration clause between the parties as the MoU itself had been superseded and did not exist after 12.04.1996. In view of this, Sanjiv Prakash moved the Delhi High Court under Section 11 of the 1996 Act by a petition dated 06.01.2020. In the said petition, an interim order was passed on 09.01.2020 as follows: \u201cAll the parties agree to defer Agenda Nos. 4 and 8 circulated in the notice dated 31st December, 2019 in the Board Meeting scheduled to be held on 15th January, 2020 for a date beyond the next date of hearing fixed in this matter.\u201d 2.9. By the impugned judgment dated 22.10.2020, the Delhi High Court set out what according to it was the issue that had to be decided in paragraph 79 follows: \u201c79. In this petition, I am of the view, the initial issue which arises for consideration is, whether at the stage of considering the request of the petitioner for the appointment of an Arbitrator, it is only the existence of an Arbitration Agreement that needs to be seen, leaving it to the Arbitrator to decide the issue of validity of the Agreement, including the plea of novation of MoU.\u201d After referring to both the MoU and the SHA, the learned Single Judge of the Delhi High Court held: \u201c88. In so far as Clause 1.1 is concerned, the same defines \u2018artificial deadlock\u2019 as a management deadlock caused by virtue of the Prakash Family Shareholders or Reuters voting against an issue or proposal in circumstances where the approval of the same is required for the functioning of the Company as per approved plans. No doubt, Mr. Kathpalia, Mr. Nayar and Mr. Sethi may be right in contending that there exist a contemplation of groups viz. Prakash Family Members and Reuters under the SHA, but the same is in a particular fact situation of deadlock then the Prakash Family Members and Reuters act as \u2018blocks\u2019, which does not mean that SHA does not recognise Prakash Family Shareholders in their individual capacity. More so, as per the opening paragraph, the term \u2018parties\u2019 envisages Prakash Family Shareholders both individually as well as collectively.\u201d xxx xxx xxx \u201c90. A conjoint reading of the Clause 28.2 with the opening paragraph of SHA therefore necessarily means that any kind of agreement as detailed in Clause 28.2, \u2018between the parties\u2019 shall stand superseded as per Clause 28.2. So, it follows the shareholders of Prakash Family having being individually recognised under the SHA as parties, the MoU, an agreement, as relied upon by the petitioner which governs the inter-se rights and obligations of the Prakash Family stands superseded. It is not the case of the Ld. Counsel for the petitioner that the SHA does not deal with inter-se rights of the members / shareholders of the Prakash Family. The plea of Mr. Nayar that MoU was entered by Prakash Family to define their family arrangement before the Reuters came in by purchasing the shares and hence cannot be overridden by the SHA is not appealing. Nothing precluded the members of the Prakash Family to include a stipulation in the SHA, that the SHA, shall not supersede the MoU, as has been specially stated in Clause 28.2 with regard to ancillary agreements and share purchase agreement. The plea of Mr. Nayar, that the present dispute between the parties being in respect of shares in an Indian company to be resolved by London Court of International Arbitration as per English law, contracting out of Indian Law is opposed to public policy is also not appealing as such an issue doesn\u2019t arise in these proceedings which have been filed by invoking the MoU. Nor such a plea would revive the MoU, which stands novated by the SHA.\u201d After then setting out Section 62 of the Indian Contract Act, 1872 [\u201cContract Act\u201d] and this Court\u2019s judgments in Union of India v. Kishorilal Gupta & Bros., (1960) 1 SCR 493 [\u201cKishorilal Gupta\u201d], Damodar Valley Corporation v. K.K. Kar, (1974) 1 SCC 141 [\u201cDamodar Valley Corporation\u201d], and Young Achievers v. IMS Learning Resources (P) Ltd., (2013) 10 SCC 535 [\u201cYoung Achievers\u201d], the learned Single Judge then concluded: \u201c98. It is clear from a reading of the above judgments that the law relating to the effect of novation of contract containing an arbitration agreement/clause is well-settled. An arbitration agreement being a creation of an agreement may be destroyed by agreement. That is to say, if the contract is superseded by another, the arbitration clause, being a component/part of the earlier contract, falls with it or if the original contract in entirety is put to an end, the arbitration clause, which is a part of it, also perishes along with it. Hence, the arbitration clause of the MoU, being Clause 12, having perished with the MoU, owing to novation, the invocation of arbitration under the MoU is belied/not justified. 99. In view of my conclusion above, the plea of doctrine of \u2018kompetenz-kompetenz\u2019 and the reliance placed on Section 11(6A) of the Act are untenable. I have also considered the judgments relied upon by the counsels for the petitioners viz. Duro Felguera S.A. [Duro Felguera, S.A. v. Gangavaram Port 17 Ltd., (2017) 9 SCC 729], Mayavati Trading Pvt. Ltd. [Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714], Zostel Hospitality [Zostel Hospitality Pvt. Ltd. v. Oravel Stays Pvt. Ltd., Arb. Pet. 28/2018], Oriental Insurance Company Ltd. [Oriental Insurance Company Ltd. v. Narbheram Power and Steel Pvt. Ltd., (2018) 6 SCC 534], Vodafone [Vodafone International Holdings BV v. Union of India, (2012) 6 SCC 613], Uttarakhand Purv Sainik [Uttarakhand Purv Sainik Kalyan Nigam Limited v. Northern Coal Field Ltd., (2020) 2 SCC 455], Russell [Russell v. Northern Bank Development Corpn. Ltd., (1992) B.C.C. 578] and Anderson [Catherine Anderson v. Ashwani Bhatia, (2019) 11 SCC 299], and the same are not applicable to the case in hand.\u201d 3. Shri K.V. Viswanathan, learned Senior Advocate appearing on behalf of the Appellant, relied strongly upon the MoU between the Prakash Family and stressed the fact that it was a family settlement or arrangement which raised a special equity between the parties and could not be treated as a mere contractual arrangement, having to be enforced in accordance with several judgments of this Court. For this purpose, he relied strongly upon the observations contained in paragraph 9 of Kale v. Deputy Director of Consolidation, (1976) 3 SCC 119 [\u201cKale\u201d], as followed in Reliance Natural Resources Ltd. v. Reliance Industries Ltd., (2010) 7 SCC 1 (at paragraphs 49 and 50). In particular, he relied upon the fact that it was the Appellant who was responsible for the tremendous growth of the company, and it is by his efforts that Reuters infused a huge amount of capital by purchasing 49% of the share capital of the company. It is for this reason that the MoU made it clear vide clause 8 that in case any of the three Respondents wished to sell or bequeath their equity shares in the company, their shares may be offered/sold/bequeathed only to the Appellant or to his heirs and successors. The arbitration clause contained in the MoU would therefore be applicable, the 1996 Act being the Act under which the arbitration would have to be effected. He then read out various clauses of the SHA and relied strongly upon clause 12.1(a), in which it was agreed that if Reuters would have to divest any part of its shares in the company, it shall be entitled to require the other shareholders to purchase its holding of shares in such proportions as was \u201cagreed between them or otherwise\u201d, thereby making it clear that the MoU between the Prakash Family was expressly referred to and preserved by the aforesaid clause. He also stressed upon the absurdity of disputes arising between members of a family residing and working only in India to have to be referred to arbitration in accordance with the rules of the London Court of International Arbitration, which would be the result if the SHA were to supersede the MoU. He was also at pains to point out that clause 28 of the SHA has to be read as a whole, and clause 28.1 made it clear that the entire agreement and understanding between the parties which was contained in the SHA, the SPA, and the ancillary agreements was only \u201cwith respect to the subject matter thereof\u201d, the subject matter of these Agreements being the relationship between the Prakash Family and Reuters, which was completely different from the subject matter of the MoU, which was only between the members of the Prakash Family, Reuters not being a party thereto. For this purpose, he relied strongly upon the judgments contained in Barclays Bank Plc v. Unicredit Bank Ag and Anor, [2014] EWCA Civ 302 (at paragraphs 27 and 28), The Federal Republic of Nigeria v. JP Morgan Chase Bank, NA, [2019] EWHC 347 (Comm) (at paragraph 37), and Kinsella and Anor v. Emasan AG and Anor, [2019] EWHC 3196 (Ch) (at paragraphs 64 to 71). A reading of these judgments would, according to the learned Senior Advocate, show that \u201centire agreement\u201d clauses are to be construed strictly, the idea being to obviate having to refer to negotiations that had taken place between the parties pertaining to the subject matter of the agreement before the agreement was formally entered into. He then assailed the learned Single Judge\u2019s judgment dated 22.10.2020, arguing that the impugned judgment, instead of following Duro Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729 [\u201cDuro Felguera\u201d] and Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714 [\u201cMayavati Trading\u201d], was in the teeth of the principles laid down in the aforesaid two judgments. He also argued that whether or not novation had taken place is, at the very least, an arguable point of considerable complexity which would depend upon a finding based upon various clauses of the MoU and the SHA, when construed in accordance with the surrounding circumstances. He also argued that what was missed by the learned Single Judge was the fact that a family settlement had been acted upon, resulting in an amendment of the Articles of Association of the company soon after the MoU was entered into. He also relied upon three recent judgments of this Court, which made it clear that unless an ex facie case had been made out that no arbitration agreement existed between the parties, a Section 11 court would be duty-bound to refer the parties to arbitration and leave complex questions of fact and law relating to novation of a contract under Section 62 of the Contract Act to be decided by an arbitral tribunal. 4. Shri Mukul Rohatgi, learned Senior Advocate appearing on behalf of Respondent No.3, supported the arguments of Shri Viswanathan. He referred us to the MoU, the SPA, and the SHA, and strongly relied upon the observations in Kale (supra) which were followed in Ravinder Kaur Grewal v. Manjit Kaur, (2020) 9 SCC 706 (at paragraphs 25 to 28). He argued that not only were the parties to the MoU different from those to the SHA, but that the MoU itself contemplated that the Prakash Family would enter into a separate agreement with Reuters so as to effectuate the purchase of 49% shareholding in the company by Reuters, showing thereby that the MoU and the Agreements entered into with Reuters were separate contracts. 5. Shri Avishkar Singhvi and Shri Manik Dogra, learned counsel appearing on behalf of Respondents No. 1 and 2, relied heavily on the fact that the MoU was superseded immediately, inasmuch as it no longer existed after some of its material clauses were put into the Articles of Association of the company on 14.05.1996. They also argued that the MoU was never given effect to as Daya Prakash, who was the Managing Director of the company, did not continue as such but handed over the management to Sanjiv Prakash, who then became the Managing Director of the company soon after the SHA was entered into. They then pointed out that, in any case, after 2012, even this did not remain as the Articles of Association were then amended with the consent of Sanjiv Prakash to no longer incorporate what had earlier been contained in the Articles post the amendment of 1996. They also pointed out that on the same day, i.e. on 05.10.2019, just as Prem Prakash sought to divest his shareholding in the company to be jointly held by Sanjiv Prakash and himself, Daya Prakash did likewise, and sought to divest her shareholding in the company to be jointly held by Seema Kukreja and herself. The first reaction of Sanjiv Prakash then was not to rely upon a novated MoU, but to take up the plea that the document being unstamped, ought not to be taken in evidence. It is only as an afterthought that clause 8 of the MoU was then relied upon. Both the learned counsel strongly relied upon clause 11.2 of the SHA which made it clear beyond doubt that the MoU stood superseded. They then relied upon the judgments in Kishorilal Gupta (supra) (at paragraph 9), Damodar Valley Corporation (supra) (at paragraphs 7 and 8), Young Achievers (supra) (at paragraphs 5 and 8), Sasan Power Ltd. v. North American Coal Corpn. (India) (P) Ltd., (2016) 10 SCC 813 (at paragraph 23), and Larsen & Toubro Ltd. v. Mohan Lal Harbans Lal Bhayana, (2015) 2 SCC 461 (at paragraph 15) in favour of the proposition that the MoU stood novated as a result of the SHA. They also relied upon V.B. Rangaraj v. V.B. Gopalakrishnan, (1992) 1 SCC 160 (at paragraphs 1, 2, 7 and 8) and Pushpa Katoch v. Manu Maharani Hotels Ltd., 2005 SCC OnLine Del 702 : (2005) 83 DRJ 246 (at paragraphs 5, 7 and 8), for the proposition that the MoU would be unenforceable in law as any restriction on transfer of shares of a private company, without incorporating the aforesaid in its Articles, would be invalid as a result of which the Articles of Association alone would have to be looked at. This being the case, the arbitration clause contained in an agreement which is void obviously cannot be looked at. They then referred to certain recent judgments of this Court for the proposition that the present case being an open and shut one, the learned Singe Judge of the Delhi High Court was right in dismissing the Section 11 petition filed by the Appellant. 6. By virtue of the Arbitration and Conciliation (Amendment) Act, 2015 [\u201c2015 Amendment Act\u201d], by which Section 11(6A) was introduced, the earlier position as to the scope of the powers of a court under Section 11, while appointing an arbitrator, are now narrowed to viewing whether an arbitration agreement exists between parties. In a gradual evolution of the law on the subject, the judgments in Duro Felguera (supra) and Mayavati Trading (supra) were explained in some detail in a three-Judge Bench decision in Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1 [\u201cVidya Drolia\u201d]. So far as the facts of the present case are concerned, it is important to extract paragraphs 127 to 130 of Vidya Drolia (supra), which deal with the judgments in Kishorilal Gupta (supra) and Damodar Valley Corporation (supra), both of which have been heavily relied upon by the learned Single Judge in the impugned judgment, as follows: \u201c127. An interesting and relevant exposition, when assertions claiming repudiation, rescission or \u201caccord and satisfaction\u201d are made by a party opposing reference, is to be found in Damodar Valley Corpn. v. K.K. Kar [Damodar Valley Corpn. v. K.K. Kar, (1974) 1 SCC 141], which had referred to an earlier judgment of this Court in Union of India v. Kishorilal Gupta & Bros. [Union of India v. Kishorilal Gupta & Bros., AIR 1959 SC 1362] to observe: (Damodar Valley Corpn. case [Damodar Valley Corpn. v. K.K. Kar, (1974) 1 SCC 141] , SCC pp. 147-48, para 11) \u201c11. After a review of the relevant case law, Subba Rao, J., as he then was, speaking for the majority enunciated the following principles: (Kishorilal Gupta & Bros. case [Union of India v. Kishorilal Gupta & Bros., AIR 1959 SC 1362], AIR p. 1370, para 10) \u2018(1) An arbitration clause is a collateral term of a contract as distinguished from its substantive terms; but nonetheless it is an integral part of it; (2) however comprehensive the terms of an arbitration clause may be, the existence of the contract is a necessary condition for its operation; it perishes with the contract; (3) the contract may be non est in the sense that it never came legally into existence or it was void ab initio; (4) though the contract was validly executed, the parties may put an end to it as if it had never existed and substitute a new contract for it solely governing their rights and liabilities thereunder; (5) in the former case, if the original contract has no legal existence, the arbitration clause also cannot operate, for along with the original contract, it is also void; in the latter case, as the original contract is extinguished by the substituted one, the arbitration clause of the original contract perishes with it; and (6) between the two falls many categories \u201cof disputes in connection with a contract, such as the question of repudiation, frustration, breach, etc. In those cases it is the performance of the contract that has come to an end, but the contract is still in existence for certain purposes in respect of disputes arising under it or in connection with it. As the contract subsists for certain purposes, the arbitration clause operates in respect of these purposes.\u2019 In those cases, as we have stated earlier, it is the performance of the contract that has come to an end but the contract is still in existence for certain purposes in respect of disputes arising under it or in connection with it. We think as the contract subsists for certain purposes, the arbitration clause operates in respect of these purposes.\u201d 128. Reference in Damodar Valley Corpn. case [Damodar Valley Corpn. v. K.K. Kar, (1974) 1 SCC 141] was also made to the minority judgment of Sarkar, J. in Kishorilal Gupta & Bros. [Union of India v. Kishorilal Gupta & Bros., AIR 1959 SC 1362] to observe that he had only disagreed with the majority on the effect of settlement on the arbitration clause, as he had held that arbitration clause did survive to settle the dispute as to whether there was or was not an \u201caccord and satisfaction\u201d. It was further observed that this principle laid down by Sarkar, J. that \u201caccord and satisfaction\u201d does not put an end to the arbitration clause, was not disagreed to by the majority. On the other hand, proposition (6) seems to be laying the weight on to the views of Sarkar, J. These decisions were under the Arbitration Act, 1940. The Arbitration Act specifically incorporates principles of separation and competence-competence and empowers the Arbitral Tribunal to rule on its own jurisdiction. 129. Principles of competence-competence have positive and negative connotations. As a positive implication, the Arbitral Tribunals are declared competent and authorised by law to rule as to their jurisdiction and decide non-arbitrability questions. In case of expressed negative effect, the statute would govern and should be followed. Implied negative effect curtails and constrains interference by the court at the referral stage by necessary implication in order to allow the Arbitral Tribunal to rule as to their jurisdiction and decide non-arbitrability questions. As per the negative effect, courts at the referral stage are not to decide on merits, except when permitted by the legislation either expressly or by necessary implication, such questions of non-arbitrability. Such prioritisation of the Arbitral Tribunal over the courts can be partial and limited when the legislation provides for some or restricted scrutiny at the \u201cfirst look\u201d referral stage. We would, therefore, examine the principles of competence-competence with reference to the legislation, that is, the Arbitration Act. 130. Section 16(1) of the Arbitration Act accepts and empowers the Arbitral Tribunal to rule on its own jurisdiction including a ruling on the objections, with respect to all aspects of non- arbitrability including validity of the arbitration agreement. A party opposing arbitration, as per sub-section (2), should raise the objection to jurisdiction of the tribunal before the Arbitral Tribunal, not later than the submission of statement of defence. However, participation in the appointment procedure or appointing an arbitrator would not preclude and prejudice any party from raising an objection to the jurisdiction. Obviously, the intent is to curtail delay and expedite appointment of the Arbitral Tribunal. The clause also indirectly accepts that appointment of an arbitrator is different from the issue and question of jurisdiction and non-arbitrability. As per sub-section (3), any objection that the Arbitral Tribunal is exceeding the scope of its authority should be raised as soon as the matter arises. However, the Arbitral Tribunal, as per sub-section (4), is empowered to admit a plea regarding lack of jurisdiction beyond the periods specified in sub-sections (2) and (3) if it considers that the delay is justified. As per the mandate of sub-section (5) when objections to the jurisdiction under sub-sections (2) and (3) are rejected, the Arbitral Tribunal can continue with the proceedings and pass the arbitration award. A party aggrieved is at liberty to file an application for setting aside such arbitral award under Section 34 of the Arbitration Act. Sub-section (3) to Section 8 in specific terms permits an Arbitral Tribunal to continue with the arbitration proceeding and make an award, even when an application under sub-section (1) to Section 8 is pending consideration of the court/forum. Therefore, pendency of the judicial proceedings even before the court is not by itself a bar for the Arbitral Tribunal to proceed and make an award. Whether the court should stay arbitral proceedings or appropriate deference by the Arbitral Tribunal are distinctly different aspects and not for us to elaborate in the present reference.\u201d Again, insofar as the facts of the present case are concerned, paragraph 148 of the aforesaid judgment is apposite and states as follows: \u201c148. Section 43(1) of the Arbitration Act states that the Limitation Act, 1963 shall apply to arbitrations as it applies to court proceedings. Sub-section (2) states that for the purposes of the Arbitration Act and Limitation Act, arbitration shall be deemed to have commenced on the date referred to in Section 21. Limitation law is procedural and normally disputes, being factual, would be for the arbitrator to decide guided by the facts found and the law applicable. The court at the referral stage can interfere only when it is manifest that the claims are ex facie time-barred and dead, or there is no subsisting dispute. All other cases should be referred to the Arbitral Tribunal for decision on merits. Similar would be the position in case of disputed \u201cno- claim certificate\u201d or defence on the plea of novation and \u201caccord and satisfaction\u201d. As observed in Premium Nafta Products Ltd. [Fili Shipping Co. Ltd. v. Premium Nafta Products Ltd., 2007 UKHL 40 : 2007 Bus LR 1719 (HL)], it is not to be expected that commercial men while entering transactions inter se would knowingly create a system which would require that the court should first decide whether the contract should be rectified or avoided or rescinded, as the case may be, and then if the contract is held to be valid, it would require the arbitrator to resolve the issues that have arisen.\u201d (emphasis supplied) 7. A recent judgment, Pravin Electricals Pvt. Ltd. v. Galaxy Infra and Engineering Pvt. Ltd., 2021 SCC OnLine SC 190, referred in detail to Vidya Drolia (supra) in paragraphs 15 to 18 as follows: \u201c15. Dealing with \u201cprima facie\u201d examination under Section 8, as amended, the Court then held [Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1]: \u201c134. Prima facie examination is not full review but a primary first review to weed out manifestly and ex facie non-existent and invalid arbitration agreements and non-arbitrable disputes. The prima facie review at the reference stage is to cut the deadwood and trim off the side branches in straightforward cases where dismissal is barefaced and pellucid and when on the facts and law the litigation must stop at the first stage. Only when the court is certain that no valid arbitration agreement exists or the disputes/subject-matter are not arbitrable, the application under Section 8 would be rejected. At this stage, the court should not get lost in thickets and decide debatable questions of facts. Referral proceedings are preliminary and summary and not a mini trial. This necessarily reflects on the nature of the jurisdiction exercised by the court and in this context, the observations of B.N. Srikrishna, J. of \u201cplainly arguable\u201d case in Shin-Etsu Chemical Co. Ltd. [Shin- Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., (2005) 7 SCC 234] are of importance and relevance. Similar views are expressed by this Court in Vimal Kishor Shah [Vimal Kishor Shah v. Jayesh Dinesh Shah, (2016) 8 SCC 788 : (2016) 4 SCC (Civ) 303] wherein the test applied at the pre-arbitration stage was whether there is a \u201cgood arguable case\u201d for the existence of an arbitration agreement. 16. The parameters of review under Sections 8 and 11 were then laid down thus: \u201c138. In the Indian context, we would respectfully adopt the three categories in Boghara Polyfab (P) Ltd. [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117] The first category of issues, namely, whether the party has approached the appropriate High Court, whether there is an arbitration agreement and whether the party who has applied for reference is party to such agreement would be subject to more thorough examination in comparison to the second and third categories/issues which are presumptively, save in exceptional cases, for the arbitrator to decide. In the first category, we would add and include the question or issue relating to whether the cause of action relates to action in personam or rem; whether the subject-matter of the dispute affects third-party rights, have erga omnes effect, requires centralised adjudication; whether the subject-matter relates to inalienable sovereign and public interest functions of the State; and whether the subject-matter of dispute is expressly or by necessary implication non-arbitrable as per mandatory statute(s). Such questions arise rarely and, when they arise, are on most occasions questions of law. On the other hand, issues relating to contract formation, existence, validity and non-arbitrability would be connected and intertwined with the issues underlying the merits of the respective disputes/claims. They would be factual and disputed and for the Arbitral Tribunal to decide. 139. We would not like to be too prescriptive, albeit observe that the court may for legitimate reasons, to prevent wastage of public and private resources, can exercise judicial discretion to conduct an intense yet summary prima facie review while remaining conscious that it is to assist the arbitration procedure and not usurp jurisdiction of the Arbitral Tribunal. Undertaking a detailed full review or a long-drawn review at the referral stage would obstruct and cause delay undermining the integrity and efficacy of arbitration as a dispute resolution mechanism. Conversely, if the court becomes too reluctant to intervene, it may undermine effectiveness of both the arbitration and the court. There are certain cases where the prima facie examination may require a deeper consideration. The court's challenge is to find the right amount of and the context when it would examine the prima facie case or exercise restraint. The legal order needs a right balance between avoiding arbitration obstructing tactics at referral stage and protecting parties from being forced to arbitrate when the matter is clearly non- arbitrable. [Ozlem Susler, \u201cThe English Approach to Competence-Competence\u201d Pepperdine Dispute Resolution Law Journal, 2013, Vol. 13.] 140. Accordingly, when it appears that prima facie review would be inconclusive, or on consideration inadequate as it requires detailed examination, the matter should be left for final determination by the Arbitral Tribunal selected by the parties by consent. The underlying rationale being not to delay or defer and to discourage parties from using referral proceeding as a ruse to delay and obstruct. In such cases a full review by the courts at this stage would encroach on the jurisdiction of the Arbitral Tribunal and violate the legislative scheme allocating jurisdiction between the courts and the Arbitral Tribunal. Centralisation of litigation with the Arbitral Tribunal as the primary and first adjudicator is beneficent as it helps in quicker and efficient resolution of disputes.\u201d 17. The Court then examined the meaning of the expression \u201cexistence\u201d which occurs in Section 11(6A) and summed up its discussion as follows: \u201c146. We now proceed to examine the question, whether the word \u201cexistence\u201d in Section 11 merely refers to contract formation (whether there is an arbitration agreement) and excludes the question of enforcement (validity) and therefore the latter falls outside the jurisdiction of the court at the referral stage. On jurisprudentially and textualism it is possible to differentiate between existence of an arbitration agreement and validity of an arbitration agreement. Such interpretation can draw support from the plain meaning of the word \u201cexistence\u201d. However, it is equally possible, jurisprudentially and on contextualism, to hold that an agreement has no existence if it is not enforceable and not binding. Existence of an arbitration agreement presupposes a valid agreement which would be enforced by the court by relegating the parties to arbitration. Legalistic and plain meaning interpretation would be contrary to the contextual background including the definition clause and would result in unpalatable consequences. A reasonable and just interpretation of \u201cexistence\u201d requires understanding the context, the purpose and the relevant legal norms applicable for a binding and enforceable arbitration agreement. An agreement evidenced in writing has no meaning unless the parties can be compelled to adhere and abide by the terms. A party cannot sue and claim rights based on an unenforceable document. Thus, there are good reasons to hold that an arbitration agreement exists only when it is valid and legal. A void and unenforceable understanding is no agreement to do anything. Existence of an arbitration agreement means an arbitration agreement that meets and satisfies the statutory requirements of both the Arbitration Act and the Contract Act and when it is enforceable in law. 147. We would proceed to elaborate and give further reasons: 147.1. In Garware Wall Ropes Ltd. [Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd., (2019) 9 SCC 209 : (2019) 4 SCC (Civ) 324], this Court had examined the question of stamp duty in an underlying contract with an arbitration clause and in the context had drawn a distinction between the first and second part of Section 7(2) of the Arbitration Act, albeit the observations made and quoted above with reference to \u201cexistence\u201d and \u201cvalidity\u201d of the arbitration agreement being apposite and extremely important, we would repeat the same by reproducing para 29 thereof: (SCC p. 238) \u201c29. This judgment in Hyundai Engg. Case [United India Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607 : (2019) 2 SCC (Civ) 530] is important in that what was specifically under consideration was an arbitration clause which would get activated only if an insurer admits or accepts liability. Since on facts it was found that the insurer repudiated the claim, though an arbitration clause did \u201cexist\u201d, so to speak, in the policy, it would not exist in law, as was held in that judgment, when one important fact is introduced, namely, that the insurer has not admitted or accepted liability. Likewise, in the facts of the present case, it is clear that the arbitration clause that is contained in the sub- contract would not \u201cexist\u201d as a matter of law until the sub-contract is duly stamped, as has been held by us above. The argument that Section 11(6-A) deals with \u201cexistence\u201d, as opposed to Section 8, Section 16 and Section 45, which deal with \u201cvalidity\u201d of an arbitration agreement is answered by this Court's understanding of the expression \u201cexistence\u201d in Hyundai Engg. case [United India Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607 : (2019) 2 SCC (Civ) 530] , as followed by us.\u201d Existence and validity are intertwined, and arbitration agreement does not exist if it is illegal or does not satisfy mandatory legal requirements. Invalid agreement is no agreement. 147.2. The court at the reference stage exercises judicial powers. \u201cExamination\u201d, as an ordinary expression in common parlance, refers to an act of looking or considering something carefully in order to discover something (as per Cambridge Dictionary). It requires the person to inspect closely, to test the condition of, or to inquire into carefully (as per Merriam- Webster Dictionary). It would be rather odd for the court to hold and say that the arbitration agreement exists, though ex facie and manifestly the arbitration agreement is invalid in law and the dispute in question is non-arbitrable. The court is not powerless and would not act beyond jurisdiction, if it rejects an application for reference, when the arbitration clause is admittedly or without doubt is with a minor, lunatic or the only claim seeks a probate of a will. 147.3. Most scholars and jurists accept and agree that the existence and validity of an arbitration agreement are the same. Even Stavros Brekoulakis accepts that validity, in terms of substantive and formal validity, are questions of contract and hence for the court to examine. 147.4. Most jurisdictions accept and require prima facie review by the court on non-arbitrability aspects at the referral stage. 147.5. Sections 8 and 11 of the Arbitration Act are complementary provisions as was held in Patel Engg. Ltd. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618]. The object and purpose behind the two provisions is identical to compel and force parties to abide by their contractual understanding. This being so, the two provisions should be read as laying down similar standard and not as laying down different and separate parameters. Section 11 does not prescribe any standard of judicial review by the court for determining whether an arbitration agreement is in existence. Section 8 states that the judicial review at the stage of reference is prima facie and not final. Prima facie standard equally applies when the power of judicial review is exercised by the court under Section 11 of the Arbitration Act. Therefore, we can read the mandate of valid arbitration agreement in Section 8 into mandate of Section 11, that is, \u201cexistence of an arbitration agreement\u201d. 147.6. Exercise of power of prima facie judicial review of existence as including validity is justified as a court is the first forum that examines and decides the request for the referral. Absolute \u201chands off\u201d approach would be counterproductive and harm arbitration, as an alternative dispute resolution mechanism. Limited, yet effective intervention is acceptable as it does not obstruct but effectuates arbitration. 147.7. Exercise of the limited prima facie review does not in any way interfere with the principle of competence-competence and separation as to obstruct arbitration proceedings but ensures that vexatious and frivolous matters get over at the initial stage. 147.8. Exercise of prima facie power of judicial review as to the validity of the arbitration agreement would save costs and check harassment of objecting parties when there is clearly no justification and a good reason not to accept plea of non-arbitrability. In Subrata Roy Sahara v. Union of India [Subrata Roy Sahara v. Union of India, (2014) 8 SCC 470 : (2014) 4 SCC (Civ) 424 : (2014) 3 SCC (Cri) 712] , this Court has observed: (SCC p. 642, para 191) \u201c191. The Indian judicial system is grossly afflicted with frivolous litigation. Ways and means need to be evolved to deter litigants from their compulsive obsession towards senseless and ill-considered claims. One needs to keep in mind that in the process of litigation, there is an innocent sufferer on the other side of every irresponsible and senseless claim. He suffers long-drawn anxious periods of nervousness and restlessness, whilst the litigation is pending without any fault on his part. He pays for the litigation from out of his savings (or out of his borrowings) worrying that the other side may trick him into defeat for no fault of his. He spends invaluable time briefing counsel and preparing them for his claim. Time which he should have spent at work, or with his family, is lost, for no fault of his. Should a litigant not be compensated for what he has lost for no fault? The suggestion to the legislature is that a litigant who has succeeded must be compensated by the one who has lost. The suggestion to the legislature is to formulate a mechanism that anyone who initiates and continues a litigation senselessly pays for the same. It is suggested that the legislature should consider the introduction of a \u201cCode of Compulsory Costs\u201d.\u201d 147.9. Even in Duro Felguera [Duro Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764], Kurian Joseph, J., in para 52, had referred to Section 7(5) and thereafter in para 53 referred to a judgment of this Court in M.R. Engineers & Contractors (P) Ltd. v. Som Datt Builders Ltd. [M.R. Engineers & Contractors (P) Ltd. v. Som Datt Builders Ltd., (2009) 7 SCC 696 : (2009) 3 SCC (Civ) 271] to observe that the analysis in the said case supports the final conclusion that the memorandum of understanding in the said case did not incorporate an arbitration clause. Thereafter, reference was specifically made to Patel Engg. Ltd. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] and Boghara Polyfab (P) Ltd. [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117] to observe that the legislative policy is essential to minimise court\u2019s interference at the pre- arbitral stage and this was the intention of sub-section (6) to Section 11 of the Arbitration Act. Para 48 in Duro Felguera [Duro Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764] specifically states that the resolution has to exist in the arbitration agreement, and it is for the court to see if the agreement contains a clause which provides for arbitration of disputes which have arisen between the parties. Para 59 is more restrictive and requires the court to see whether an arbitration agreement exists \u2014 nothing more, nothing less. Read with the other findings, it would be appropriate to read the two paragraphs as laying down the legal ratio that the court is required to see if the underlying contract contains an arbitration clause for arbitration of the disputes which have arisen between the parties \u2014 nothing more, nothing less. Reference to decisions in Patel Engg. Ltd. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] and Boghara Polyfab (P) Ltd. [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117] was to highlight that at the reference stage, post the amendments vide Act 3 of 2016, the court would not go into and finally decide different aspects that were highlighted in the two decisions. 147.10. In addition to Garware Wall Ropes Ltd. case [Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd., (2019) 9 SCC 209 : (2019) 4 SCC (Civ) 324] , this Court in Narbheram Power & Steel (P) Ltd. [Oriental Insurance Co. Ltd. v. Narbheram Power & Steel (P) Ltd., (2018) 6 SCC 534 : (2018) 3 SCC (Civ) 484] and Hyundai Engg. & Construction Co. Ltd. [United India Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607 : (2019) 2 SCC (Civ) 530] , both decisions of three Judges, has rejected the application for reference in the insurance contracts holding that the claim was beyond and not covered by the arbitration agreement. The Court felt that the legal position was beyond doubt as the scope of the arbitration clause was fully covered by the dictum in Vulcan Insurance Co. Ltd. [Vulcan Insurance Co. Ltd. v. Maharaj Singh, (1976) 1 SCC 943] Similarly, in PSA Mumbai Investments Pte. Ltd. [PSA Mumbai Investments Pte. Ltd. v. Jawaharlal Nehru Port Trust, (2018) 10 SCC 525 : (2019) 1 SCC (Civ) 1] , this Court at the referral stage came to the conclusion that the arbitration clause would not be applicable and govern the disputes. Accordingly, the reference to the Arbitral Tribunal was set aside leaving the respondent to pursue its claim before an appropriate forum. 147.11. The interpretation appropriately balances the allocation of the decision-making authority between the court at the referral stage and the arbitrators' primary jurisdiction to decide disputes on merits. The court as the judicial forum of the first instance can exercise prima facie test jurisdiction to screen and knock down ex facie meritless, frivolous and dishonest litigation. Limited jurisdiction of the courts ensures expeditious, alacritous and efficient disposal when required at the referral stage.\u201d 18. The Bench finally concluded: \u201c153. Accordingly, we hold that the expression \u201cexistence of an arbitration agreement\u201d in Section 11 of the Arbitration Act, would include aspect of validity of an arbitration agreement, albeit the court at the referral stage would apply the prima facie test on the basis of principles set out in this judgment. In cases of debatable and disputable facts, and good reasonable arguable case, etc., the court would force the parties to abide by the arbitration agreement as the Arbitral Tribunal has primary jurisdiction and authority to decide the disputes including the question of jurisdiction and non-arbitrability. 154. Discussion under the heading \u201cWho Decides Arbitrability?\u201d can be crystallised as under: 154.1. Ratio of the decision in Patel Engg. Ltd. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] on the scope of judicial review by the court while deciding an application under Sections 8 or 11 of the Arbitration Act, post the amendments by Act 3 of 2016 (with retrospective effect from 23-10-2015) and even post the amendments vide Act 33 of 2019 (with effect from 9-8-2019), is no longer applicable. 154.2. Scope of judicial review and jurisdiction of the court under Sections 8 and 11 of the Arbitration Act is identical but extremely limited and restricted. 154.3. The general rule and principle, in view of the legislative mandate clear from Act 3 of 2016 and Act 33 of 2019, and the principle of severability and competence-competence, is that the Arbitral Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. The court has been conferred power of \u201csecond look\u201d on aspects of non- arbitrability post the award in terms of sub-clauses (i), (ii) or (iv) of Section 34(2)(a) or sub-clause (i) of Section 34(2)(b) of the Arbitration Act. 154.4. Rarely as a demurrer the court may interfere at Section 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non- existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably \u201cnon-arbitrable\u201d and to cut off the deadwood. The court by default would refer the matter when contentions relating to non- arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the Arbitral Tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism. 155. Reference is, accordingly, answered.\u201d The Court then concluded, on the facts of that case, that it would be unsafe to conclude one way or the other that an arbitration agreement exists between the parties on a prima facie review of facts of that case, and that a deeper consideration must be left to an arbitrator, who is to examine the documentary and oral evidence and then arrive at a conclusion. 8. Likewise, in Bharat Sanchar Nigam Ltd. v. Nortel Networks India Pvt. Ltd., 2021 SCC OnLine SC 207, another Division Bench of this Court referred to Vidya Drolia (supra) and concluded: \u201c39. The upshot of the judgment in Vidya Drolia [Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1] is affirmation of the position of law expounded in Duro Felguera [Duro Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729] and Mayavati Trading [Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714], which continue to hold the field. It must be understood clearly that Vidya Drolia [Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1] has not resurrected the pre-amendment position on the scope of power as held in SBP & Co. v. Patel Engineering [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618]. It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time- barred, or that the dispute is non-arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal.\u201d 9. Judged by the aforesaid tests, it is obvious that whether the MoU has been novated by the SHA dated 12.04.1996 requires a detailed consideration of the clauses of the two Agreements, together with the surrounding circumstances in which these Agreements were entered into, and a full consideration of the law on the subject. None of this can be done given the limited jurisdiction of a court under Section 11 of the 1996 Act. As has been held in paragraph 148 of Vidya Drolia (supra), detailed arguments on whether an agreement which contains an arbitration clause has or has not been novated cannot possibly be decided in exercise of a limited prima facie review as to whether an arbitration agreement exists between the parties. Also, this case does not fall within the category of cases which ousts arbitration altogether, such as matters which are in rem proceedings or cases which, without doubt, concern minors, lunatics or other persons incompetent to contract. There is nothing vexatious or frivolous in the plea taken by the Appellant. On the contrary, a Section 11 court would refer the matter when contentions relating to non-arbitrability are plainly arguable, or when facts are contested. The court cannot, at this stage, enter into a mini trial or elaborate review of the facts and law which would usurp the jurisdiction of the arbitral tribunal. 10. The impugned judgment was wholly incorrect in deciding that the plea of doctrine of kompetenz-kompetenz and reliance on Section 11(6A) of the 1996 Act, as expounded in Duro Felguera (supra) and Mayavati Trading (supra) were not applicable to the case in hand. Apart from going into a detailed consideration of the MoU and the SHA, which is exclusively within the jurisdiction of the arbitral tribunal, the learned Single Judge, while considering clause 28 of the SHA to arrive at the finding that any kind of agreement as detailed in clause 28.2 between the parties shall stand superseded, does not even refer to clause 28.1. No consideration has been given to the separate and distinct subject matter of the MoU and the SHA. Also, Kishorilal Gupta (supra) and Damodar Valley Corporation (supra) are judgments which deal with novation in the context of the Arbitration Act, 1940, which had a scheme completely different from the scheme contained in Section 16 read with Section 11(6A) of the 1996 Act. 11. For all these reasons, we set aside the judgment of the High Court and refer the parties to the arbitration of a sole arbitrator, being Justice Aftab Alam (retired Judge of this Court), who will decide the dispute between the parties without reference to any observations made by this Court, which are only prima facie in nature. 12. It is made clear that Agenda Nos. 4 and 8, circulated in the notice dated 31.12.2019, for the Board Meeting scheduled to be held on 15.01.2020, will continue to remain deferred until the learned sole arbitrator passes interim orders varying or setting aside this order, or until a final Award is delivered, depending upon whether a party applies under Section 17 of 1996 Act. Civil Appeal No. 975 of 2021 is allowed in the aforesaid terms. Civil Appeal No. 976 of 2021 13. Consequently, in light of the directions in paragraphs 11 and 12 hereinabove, Civil Appeal No. 976 of 2021 is accordingly disposed of. \u2026\u2026\u2026\u2026\u2026\u2026\u2026.......................J. [ ROHINTON FALI NARIMAN ] \u2026\u2026\u2026\u2026\u2026\u2026\u2026.......................J. [ B.R. GAVAI ] \u2026\u2026\u2026\u2026\u2026\u2026\u2026.......................J. 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{"id": "37724412", "text": "1 apeal67.00 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH, NAGPUR. CRIMINAL APPEAL NO.67 OF 2000 1) Ramkrushna s/o Barkaji Gulhane, _ (Appeal is dismissed Aged about 40 years, as abated vide order 16-7-2015) 2) Laxman s/o Barkaji Gulhane, Aged about 42 years, 3) Ambu Alias Amrut Babansa Gulhane, Aged about 22 years, 4) Devidas s/o Babansa Gulhane, Aged about 32 years, 5) Dayaram s/o Barkaji Gulhane, Aged about 38 years, 6) Babansa s/o Barkaji Gulhane, -(Appeal is dismissed Aged about 60 years, as abated vide order 16-7-2015) All Appellant Nos. 1 to 6 are Agriculturists and all of them are the residents of Pethpura, MorshiMorshi, District - Amravati. .... APPELLANTS VERSUS The State of Maharashtra, through Police Station Officer, Police Station Morshi, District Amravati. .... RESPONDENT ______________________________________________________________ Shri P.D. Sharma, Advocate for the appellant, Mrs. M.H. Deshmukh, Addl.P.P. for the respondent. ______________________________________________________________ 2 apeal67.00 CORAM : ROHIT B. DEO, J. DATE OF RESERVING THE JUDGMENT : 07-08-2017 DATE OF PRONOUNCING THE JUDGMENT : 13-11-2017 JUDGMENT : The appellants are aggrieved by the judgment and order dated 17-2-2000 passed by the learned Additional Sessions Judge, Amravati in Sessions Trial 266/1994, by and under which, while acquitting the appellants of offence punishable under Section 307 read with Section 149 of the Indian Penal Code, the learned Sessions Judge was pleased to convict the appellants for offence punishable under Section 148 of the Indian Penal Code and to sentence the appellants to suffer rigorous imprisonment for one year and to payment of fine of Rs.100/-, and to sentence the appellants to suffer rigorous imprisonment for two years and to payment of fine of Rs.200/- for offence punishable under Section 326 read with Section 149 of the Indian Penal Code for causing grievous hurt by dangerous weapon to Marotrao Dhole, and to sentence the appellants to suffer rigorous imprisonment for one year and to payment of fine of Rs.200/- for offence punishable under Section 452 read with Section 149 of the Indian Penal Code and to further sentence the appellants to suffer rigorous imprisonment for six months and to payment of fine of 3 apeal67.00 Rs.100/- for offence punishable under Section 324 read with Section 149 of the Indian Penal Code for causing hurt to Prakash Dhole, Sau. Chanda Ramesh Dhole, Sau. Sunanda Ganesh Dhole and Vijay Marotrao Dhole. Appellant 1 Ramkrushna Barkaji Gulhane and appellant 6 Babansa Barkaji Gulhane died during pendency of the appeal, therefore, the appeal stands abated as against them. 2. Heard Shri P.D. Sharma, learned Counsel for the appellants (hereinafter referred to as the \"accused\") and Mrs. M.H. Deshmukh, learned Additional Public Prosecutor for the respondent. 3. The appellants alongwith six others namely Motiram Barkaji Gulhane, Sanjay Haribhau Gulhane, Vishwas Babansa Gulhane, Kishore Dayaram Gulhane, Ganesh Motiram Gulhane and Vijay Haribhau Gulhane faced trial for having formed an unlawful assembly with the object of assaulting Marotrao Dhole and his family members and in furtherance of common object, for having committed the offence of rioting, house trespass and attempting to commit the murder of Marotrao Dhole and voluntarily causing hurt to his family members. The charge was under Sections 147, 148, 452, 307 and 324 read with 4 apeal67.00 Section 149 of the Indian Penal Code. 4. The prosecution case as is unfolded during the course of trial is that the accused are residents of Pethpura locality of Morshi, District Amravati. The victim Marotrao Dhole, who expired during the pendency of trial was residing in the same locality with family. Prakash Dhole is the son of deceased Marotrao Dhole. Some months prior to the incident, accused Devidas Gulhane purchased the bullock on credit from one Shamu Gond and Prakash Dhole acted as a mediator or broker. Prakash Dhole had guaranteed the payment of the costs of the bullock. Accused Devidas did not make the payment to Shamu Gond. Prakash Dhole, on 05-7-1994, asked Devidas Gulhane to make the payment of the bullock and the response of Devidas Gulhane was to assault Prakash Dhole in respect of which incident Prakash Dhole lodged a report in the police station Morshi. The next day, on 06-7-1994 Marotrao saw Devidas Gulhane and confronted him about the assault on Prakash in the weekly market and berated him for having done so. Immediately thereafter, the accused swooped on the house of Marotrao Dhole armed with sticks. Marotrao Dhole was at the entrance of his house. 5 apeal67.00 He attempted to restrain the accused. All the accused started assaulting Marotrao with sticks, as a result of which Marotrao Dhole suffered fracture of right leg. The accused, then entered into the house of Marotrao and assaulted Prakash Dhole and Vijay Dhole, sons of Marotrao and other family members Smt. Chanda Dhole, Sunanda Dhole, Gitabai Dhole and Godabai Dhole, by sticks. Prakash Dhole rushed to police station Morshi, Police Sub- Inspector Sugandhi came to the spot with his staff. Police Sub- Inspector Sugandhi noticed Marotrao lying injured infront of his house with bleeding injury. Marotrao was taken to Primary Health Centre, Morshi and was examined by one Dr. Sawale. The victim Marotrao Dhole lodged a report with Police Sub-Inspector Sugandhi, on the basis of which offence punishable under Sections 147,148, 323, 452 and 307 read with Section 149 of the Indian Penal Code was registered. On the same day at 9.45 a.m. or thereabout, the accused excluding Vijay Haribhau Gulhane, were arrested. Police Sub-Inspector Sugandhi visited the spot of the incident, drew the spot panchanama, collected mud mixed with blood, the clothes of Marotrao which were stained with blood were produced by Prakash and were seized. During the course of investigation, sticks were seized pursuant to memorandum recorded under Section 27 of the Indian Evidence Act from accused 6 apeal67.00 Laxman, Sanjay, Ambu, Vishwas, Devidas, Kishore and Dayaram Gulhane. In the interregnum, Dr. Sawale examined Marotrao Dhole and his family members. Marotrao Dhole suffered compound fracture on the left leg with fracture of both bones to wit tibia and fibula. Prakash Dhole suffered abrasions on the backside of the left elbow joint and front side of the right forearm. Abrasions and contusions were noticed on the person of Godabai, Chanda, Sunanda, Vijay and Gitabai Dhole. Accused 12-Vijay Gulhane was arrested on 10-7-1994. Investigation ensued and accused 1 to 12 were charge- sheeted in the Court of Judicial Magistrate First Class, Morshi who committed the case to the Sessions Court. The learned Sessions Judge framed charge for offence punishable under Sections 147, 148, 452, 207 and 324 read with Section 149 of the Indian Penal Code. The accused pleaded not guilty and claimed to be tried. 5. The prosecution examined twelve witnesses to bring home the charge including Prakash Dhole (P.W.5), Chanda Dhole (P.W.6), Ramesh Dhole (P.W.7), Sunanda Dhole (P.W.8) and Vijay Dhole (P.W.10) who are injured witnesses. Dr. Sawale is examined as P.W.12. 7 apeal67.00 6. The defence of the accused, as is discernible from the statement recorded under Section 313 of the Criminal Procedure Code is of total denial and false implication. The defence is that Godabai who is the mother of Prakash Dhole contested the election and was defeated. Marotrao Dhole and his family members believed that the accused voted against Godabai and due to grudge, the accused have been falsely implicated. Be it noted, that Marotrao Sakharam Dhole who expired during the trial due to causes entirely unrelated with the injury which suffered during the incident. 7. Shri P.D. Sharma, learned Counsel for the appellant, who has also placed on record written submissions to buttress the oral submissions, canvassed the following submissions : (a) The participation of accused persons in the commission of alleged offence is not conclusively proved by any cogent evidence. (b) The circumstances suggest the possibility of free fight. (c) Injuries on the person of one of the accused (appellant 4) was not only suppressed but no action was taken on the report lodged by him and he was advised to approach the civil Court. (d) The investigating officer referred appellant 4 for medical examination at 7.45 a.m., his presence, therefore, was not possible by 8 apeal67.00 any stretch of imagination on the spot of occurrence at 8-00 a.m. (e) The seizure of the sticks is not proved. (f) The medical evidence suggests that the injuries were possible by fall on the ground. (g) No independent witness was examined. (h) The person who lodged the first information report could not be examined before the Hon'ble Court which has deprived the appellants of their valuable right under Section 145 of the Evidence Act to cross-examine with respect to its contents. (i) The circumstances in which the first information report was lodged, are blurred. (j) There are two other persons namely P.W.5 Prakash and P.W.7 Ramesh who claimed to have went to the police station and lodged the report and such a report lodged by them is suppressed by the prosecution. (k) Omnibus procedure was adopted to record the statements of all the accused on common questionnaire indicating that the prosecution could not successfully demonstrate before the Trial Court individual acts and involvement of the appellants. (l) It was absolutely improper and unsafe to convict the appellants only on the basis of first information report referring to their 9 apeal67.00 involvement. 8. P.W.1 Sharadkumar Abrol is examined to prove the site map of the place of incident Exhibit 96. P.W.2 Ramesh Bargat is examined to prove the spot panchanama and the seizure of the clothes of Marotrao and the sticks produced by accused Laxman, Sanjay, Ambu, Vishwas, Devidas, Kishore and Dayaram. P.W.2 did not support the prosecution and is cross-examined by the learned Additional Public Prosecutor. He admits, in the cross-examination, the signatures on the spot panchanama and the seizure panchanama. P.W.3 Raju Kaple who is examined to prove the spot panchanama, did not support the prosecution and is cross-examined by the learned Additional Public Prosecutor. Nothing is elicited in the cross-examination of P.W.3 Raju to assist the prosecution. P.W.4 Bhimrao Pradhan who is examined as eye-witness did not support the prosecution and was cross-examined by the learned Additional Public Prosecutor. Except a statement that Marotrao sustained injury on leg, nothing material is brought out in the cross- examination by the learned Additional Public Prosecutor to support the prosecution. 10 apeal67.00 P.W.5 Prakash Dhole has narrated the incident which took place a day prior to the assault. P.W.5 has proved report Exhibit 104 which he lodged at police station Morshi alleging that he was slapped by accused 7 Devidas. Prakash has further deposed that on the day of the incident at 8-00 a.m. accused 7 Devidas was confronted by Marotrao. Accused 7 Devidas left the house of Marotrao and within ten minutes all the accused, armed with sticks, came to the house of Marotrao, Prakash was inside the house and Marotrao was outside, is the deposition. Prakash states that all the accused persons assaulted Marotrao who became unconscious. The accused entered the house, broke open the inside door of the house, all the accused assaulted Prakash and when the other family members came to the rescue of Prakash, the accused assaulted Godabai, sisters Gitabai and Durgabai, brothers and sisters-in-law Chandabai and Sunandabai. In the cross- examination, on behalf of accused Ramkrishna, Motiram, Laxman, Sanjay, Ambu and Vishwas, certain omissions are brought on record, which according to me are not significant since the omissions touch only the peripheral or incidental aspects and not the core of the incident. A suggestion is given to Prakash that in view of the grudge nurtured against the accused, they have been falsely implicated. In the cross-examination on behalf of accused Devidas, Kishore, Dayaram, 11 apeal67.00 Babansa and Ganesh, obviously in the response to suggestions, P.W.5 Prakash states thus : \"It is true that my father said to Devidas that he had not paid the amount to his son i.e. myself and on the contrary he assaulted him i.e. me and as such his act was not proper. It is true that Devidas accused No.7 said to my father that he means my father may take action against him as he likes and thereupon I gave two blows by a dried stem of Tur crop. It is not true to say that I had given blows to accused No.7 by stick. I do not know whether the accused No.7 reported to police about the blows given by me to him. It is true that scuffle had ensued between me and my father on one hand and the accused No.7 on the other hand. On hearing, our cry the members of my family came out of the house. It is not true to say that my brother, mother, sister and sister-in- law tried to separate us. It is not true to say that during this incident, I picked up a stick and gave a blow by it, but it unfortunately struck on the leg of my father. It is not true to say that the members of my family sustained abrasions while rescuing and separating me and my father. It is not true to say that the accused No.7 Devidas tried to rescue himself from our hands and we tried to bring him inside the house. It is not true to say that during scuffle my father fell on the cemented poles known as Gawana and sustained injury. It is not true to say that first the accused No.7 had gone to police station for lodging the report and then I went to police station for lodging the report.\" examination, is that accused Devidas, Kishore, Dayaram, Babansa and Ganesh have suggested that there was a physical altercation between 12 apeal67.00 accused 7 Devidas on one hand and Prakash and Marotrao on the other hand. The suggestion is that Marotrao suffered injury due to blow inflicted by Prakash who was intending to assault Devidas. The suggestion is that the other family members of P.W.5 Prakash suffered abrasions in the process of rescuing and separating P.W.5 Prakash and Marotrao. It is suggested to Prakash that in the scuffle Marotrao fell on cemented pole and sustained injury. P.W.6 Chanda Dhole has deposed that the family members attempted to save Prakash from the assault, however, P.W.6 Chanda and other family members also bore the brunt of the assault. In the cross-examination, a few minor omissions are elicited. The witness is suggested that on the day of the incident the family members of the witness assaulted accused 7 Devidas, which suggestion is denied. The cross-examination also brings on record the inter se relationship between the accused and the family of the witness and the fact that Marotrao knew all the twelve accused. P.W.7 Ramesh Dhole is the son of Marotrao and brother of Prakash. He states that he was standing beyond the main road which passes infront of his resident. The witness has deposed that all the accused came to his house with sticks. They assaulted his father Marotrao who collapsed on the spot having received stick blows. All 13 apeal67.00 the accused entered the house. The witness, who till then was standing near the small bridge which is beyond the main road, rushed to the house. The accused persons assaulted Prakash and when other family members attempted to rescue Prakash, they were also assaulted. Ramesh went to police station Morshi and reported the incident. In the cross-examination, the said witness states that each of the accused assaulted each of the seven members of the family who were inside the house. The witness denies that there was an altercation between Marotrao and Prakash on one hand and accused 7 Devidas on the other, prior to the incident. However, in the cross-examination on behalf of accused Devidas, Kishore, Dayaram, Babansa, Ganesh and Vijay, the witness has admitted an altercation between Marotrao and Prakash on one hand and accused 7 Devidas, on the other. P.W.8 Sunanda Dhole has deposed that on the day of the incident at 8-00 a.m. all the accused entered her house armed with sticks, damaged the doors of the house, dragged her brother-in-law Prakash by holding his hair and assaulted him with sticks. When P.W.8 intervened, she was hit with stick on right hand, is the deposition. The other members of the family also received stick blows. The witness states that when the family members came out of the house, Marotrao was seen lying in the courtyard by the side of the tar road with 14 apeal67.00 bleeding injury. P.W.9 Savitribai Kumbhare has deposed as regards the altercation between Prakash and accused 7 Devidas on the issue of payment of the price of bullock. P.W.10 Vijay Dhole states that on 06-7-1994 at 8-00 a.m. when he was resting on the cot inside the house, he heard commotion. He peeped through the window and saw Marotrao lying on the road. All the accused persons had assaulted Marotrao with sticks, is the deposition. Accused entered the house, damaged the doors and assaulted Prakash and when other members of the family tried to save Prakash, they were also assaulted with stick blows, is the deposition. In the cross-examination on behalf of accused 7 to 12, it is brought on record that on both sides of the road infront of the house, there used to be traffic since morning and that during the incident since Marotrao and other family members raised alarm, about 50 persons had gathered near the place of incident including the neighbours of the witness. Although the witness admits that the accused did not work or canvas for her mother during election campaign, he denies the suggestion that his family was not on good terms with the accused since the election. P.W.11 Mohan Sugandhi is the investigating officer. It is brought out in the cross-examination of the investigating officer that 15 apeal67.00 the station diary dated 06-7-1994 reveals that at about 6-30 a.m. accused 7 Devidas had lodged report in the police station to the effect that he was assaulted by Marotrao Dhole, Prakash Dhole and Ganesh Dhole. It is further elicited that accused 7 Devidas was sent to hospital at 7.45 a.m. and that he was arrested on 06-7-1995 and the arrest panchanama was prepared at 9-45 a.m. The investigating officer admits that the doctor issued certificate as regards the injuries suffered by accused 7 Devidas which is not produced alongwith the charge- sheet. The investigating officer further states in the cross-examination that he registered the offence at 9-30 a.m. and arrested 11 accused at 9-45 a.m. Except the statement of Marotrao and the medical certificate, the investigating officer did not have any papers when he arrested the accused persons. Be it noted, that in the examination-in-chief, the investigating officer refers to the statement of Marotrao as first information report which is proved as Exhibit 114. The investigating officer states that he arrested accused 1 to 11 and then prepared the spot panchanama. He deposes as to the seizure of sticks from accused 7 Devidas and proves memorandum Exhibit 119. The investigating officer proves seizure memorandum recorded in view of statement given by accused 5 Ambu (Exhibit 122). Similarly he states that 16 apeal67.00 accused 8 Kishore made a statement that he kept a stick at his house, accordingly memorandum was recorded and the admissible portion is marked Exhibit 124. The seizure panchanama is proved and marked Exhibit 125. Memorandum of accused 6 Vishwas is proved and marked Exhibit 126 and the seizure panchanama is proved and marked Exhibit 127. Memorandum of accused 9 Dayaram is proved and marked Exhibit 128 and the seizure panchanama is proved and marked Exhibit 129. Memorandum of accused 4 Sanjay is proved and marked Exhibit 130 and the seizure panchanama is marked Exhibit 131. The memorandum of accused 3 Laxman is proved and marked Exhibit 132 and the seizure panchanama is marked Exhibit 133. The investigating officer states that all the sticks were seized on 10-7-1994. P.W.12 Dr. Baban Sawale who is examined to prove the injury certificate Exhibit 136 issued pursuant to the medical examination of injured Marotrao. P.W.12 has deposed that Marotrao suffered compound fracture on left leg, both bones tibia and fibula were found fractured and there was lacerated wound 4\" below left knee joint horizontal of size 2\" x \u00bd \" bone deep. A contusion swelling on backside of left chest was also noticed. P.W.12 has deposed that Marotrao Dhole was referred to General Hospital, Amravati for further treatment. 17 apeal67.00 P.W.12 on examining Prakash Dhole issued medical certificate dated 06-7-1994 Exhibit 137 and he has deposed that Prakash Dhole suffered two abrasions, one on the backside of left elbow and the other on the front side of right forearm. P.W.12 examined Godabai Dhole who suffered two abrasions and two contusions. The medical certificate is Exhibit 138. Chanda Dhole suffered a contusion on dorsal side of ring and little finger of left hand which is Exhibit 139. Sunanda Dhole suffered a contusion on dorsal side of right hand of size 2\" x 1\" and the medical certificate is Exhibit 140. Vijay Dhole suffered one contusion on backside of chest on right side middle to scapula region, on the right side/middle to scapula region of 3\" x 1\" dimension and one abrasion on dorsal side of ring finger of left hand and the medical certificate is Exhibit 141. While Gitabai Dhole suffered contusion on backside of chest on the left side of size 3\" x 2\". In the cross-examination, P.W.12 has admitted that injuries suffered by Chanda, Godabai, Vijay, Sunanda, Gitabai and Prakash are simple in nature and could be caused for fall on hard and rough surface. 9. A minute scrutiny of the evidence on record would reveal that not a single witness attributes any specific role to the twelve 18 apeal67.00 accused implicated in the incident of assault on Marotrao and the other members of the family. The only independent witness who is examined did not support the prosecution. Marotrao expired before the commencement of the trial. The other witnesses who are members of the family have in unison deposed that all the twelve accused were members of unlawful assembly, assaulted Marotrao and then barged in the house and assaulted Prakash and other family members who attempted to rescue Prakash. 10. The learned Sessions Judge was pleased to acquit accused 2 Motiram, accused 4 Sanjay, accused 6 Vishwas, accused 8 Kishore, accused 11 Ganesh and accused 12 Vijay holding that since they were not named in the first information report, there was no material available with the investigating officer to arrest the said accused. The learned Sessions Judge has relied on the seizure of the sticks proved through the investigating officer, but then, the seizure of sticks is also from the accused who are acquitted. The investigation is clearly unfair. It is brought on record in the cross-examination of the investigating officer, that accused 7 Devidas lodged a report at police station Morshi to the effect that he was assaulted by Marotrao, Prakash and Ganesh and that he was sent for medical examination at 7-45 a.m. It is 19 apeal67.00 axiomatic that accused 7 Devidas could not have been involved in the incident which according to the prosecution occurred at 8-00 a.m. or thereabout. The injury certificate as regards Devidas is suppressed. The fact that Devidas was implicated in the incident, is suggestive of either false or over implication and unfair investigation. 11. The finding recorded by the learned Sessions Judge that the prosecution has proved that Marotrao suffered grievous hurt is, in my opinion, unsustainable. Concededly, it is not established by adducing evidence of x-ray or other radiological evidence that Marotrao suffered fracture. Ordinarily, it would be unsafe to assume as a fact that a person has suffered fracture unless the x-ray reports are proved by examining the radiologist. It is not even the case of the prosecution, that the fracture was diagnosed with the assistance of the radiology report. It would be apposite to refer to the following observations in the case of Faizan Ahmed Abdul Wahab Shah vs. The State of Maharashtra reported in 2014 ALL MR (Cri.) 4841. \"20. It is seen that the injuries are not proved to be grievous hurt. There cannot be a presumption that the grievous hurt was caused without formal proof of the fact of fracture. The fact of existence of fracture cannot be diagnosed and certified in absence of proof of x-ray plates, unless the fact of fractured 20 apeal67.00 bones is perceivable barely of perception by naked eyes and sheerly by clinical examination, its being vivid and palpable. Therefore, proof of x-ray plates was necessary particularly, the appellant had made an attempt to retract the admission of medical certificate/discharge summary\" 12. In my opinion, the seizure of sticks to which only the investigating officer has testified, is of little significance. The distinction made by the learned Sessions Judge between the accused acquitted and the accused convicted, is, in my opinion, not warranted in the factual matrix. The only reason given by the learned Sessions Judge is that the accused acquitted are not named in Exhibit 114, but then, in view of the death of Marotrao, although Exhibit 114 may be admissible in evidence, the veracity thereof could not be tested through cross-examination. Accused 7 Devidas whose presence on the spot is suspect is also named in the first information report. The witnesses who have supported the prosecution are related witnesses and the only independent witness was declared hostile. It is true that related witnesses are not necessarily interested witnesses. It is also true, as is contended by the learned Additional Public Prosecutor, that ordinarily the injured witnesses stand on a higher pedestal than other witnesses. But then, the witnesses have assigned identical role to or each of the twelve accused. Six of them are acquitted and State has not challenged 21 apeal67.00 the acquittal. The over implication and indeed false implication is apparent from the fact that accused 7 Devidas who could not have been on the spot is implicated as one of the assailants. The incident is blurred. Some of the witnesses have admitted that there was a physical altercation between accused 7 Devidas on one hand and Marotrao and Prakash on the other prior to the incident. 13. In the totality of the circumstances, although the evidence on record may at the most raise strong suspicion, unimpeachable proof is lacking. 14. I deem it extremely hazardous to let the conviction rest on the evidence on record. I would extend the benefit of doubt to the accused and acquit them of the offences with which they have charged. The judgment and order dated 17-2-2000 delivered by the learned Additional Sessions Judge, Amravati in Sessions Trial 266/1994 is set aside. The accused are acquitted of the offences punishable under Sections 148, 326 read with Section 149, 452 read with Section 149 and 324 read with Section 149 of the Indian Penal Code. The bail bonds of the accused shall stand discharged. 22 apeal67.00 The fine paid by the accused, if any, be refunded to them. The appeal is allowed and disposed of accordingly. 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{"id": "35302553", "text": "$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 18th July, 2019 Decided on: 22nd August, 2019 + ITA 927/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Through: Mr. Ajit Sharma, Senior Standing Counsel and Ms Adeeba Mujahid, Junior Standing Counsel for Revenue. versus ANOOP JAIN ..... Respondent Through: Mr Ajay Vohra, Senior Advocate with Mr U.A. Rana and Mr Himanshu Mehta, Advocates. CORAM: JUSTICE S. MURALIDHAR JUSTICE TALWANT SINGH JUDGMENT % Dr. S. Muralidhar, J.: 1. This is an appeal by the Revenue against the order dated 21 st February, 2005 passed by the Income Tax Appellate Tribunal (\u201eITAT\u201f) in ITA Nos. 2959 & 3221/Del./1996 for the Assessment Year (\u201eAY\u201f) 1992-93. 2. While admitting this appeal on 22nd August, 2007, the following question of law was framed for consideration: \"Whether the Income Tax Appellate Tribunal was correct in law in affirming the decision of the Commissioner of Income Tax (Appeals) deleting the addition of Rs.5,17,45,958/- made by the Assessing Officer under Section 69-A of the Income Tax Act, 1961?\" 3. The background facts are that the Respondent/Assessee is stated to be a member of the Delhi Stock Exchange (\u201eDSE\u201f), carrying on business in the name and style of M/s. Jain and Company. He is also stated to be an empanelled broker of financial institutions and funds like Unit Trust of India (\u201eUTI\u201f), Indian Bank Mutual Fund, Can Bank Mutual Fund, etc. 4. For the AY in question, the Assessee filed a return declaring his income as Rs.3,96,960/-. The return was picked up for scrutiny. The Assessing Officer (\u201eAO\u201f) noticed that the Assessee had disclosed a bank account with Corporation Bank at Bombay in the Balance Sheet for the year ending on 31st March, 1993. This was, however, not disclosed in the Balance Sheet for the earlier year and the year ending on 31st March, 1992. In his statement on 13th February 1995, the Assessee claimed that this bank account had been inadvertently left out. 5. The AO further noticed that the balance in the said bank account as per the books of accounts of the Assessee was nil, whereas the bank statement showed it to be Rs.32,105/-. It was also noticed that as on 4th March, 1992, in the said account, there was a credit balance of Rs.1,03,31,250/-. Against this account, 24 cheques in different names had been issued between 11 th and 17th March, 1992. The explanation offered by the Assessee was that this credit amount represented the sale proceeds of 7,25,000 units of the UTI 1964 Scheme sold to State Bank of Hyderabad (\u201eSBH\u201f). 6. Looking into the complexity of the account, the AO directed a special audit under Section 142 (2A) of the Income Tax Act, 1961 (\u201eAct\u201f). It transpired that a chain of transactions had led to the above credit entry into the bank account of the Assessee. On 6 th February, 1992, 7,25,000 units of the UTI 1964 Scheme were purchased from SBH Funds Management Cell, Bombay at Rs.14.20 each, for a total consideration of Rs.1,02,95,000/-. SBH issued their bankers receipt for the same amount on the same date in lieu of the units sold by them. The payment of this amount was made by the Assessee by a cheque dated 6th February, 1992 drawn on Standard Chartered Bank (\u201eSCB\u201f) in favour of SBH, Bombay. 7. After purchasing the above shares, the Assessee sold the units on the same date to Mr. D. D. Chaturvedi. The Assessee explained to the AO that the Bank Receipt was purchased from SBH on 6th February, 1992 on behalf of Mr. Chaturvedi, who in turn had bought the same on behalf of M/s. Shri Maharaj Investment (\u201eSMI\u201f), which was a proprietory concern of Mrs. Sneh Pathak wife of Mr. Jaideep Pathak, the manager of SCB. The Assessee further explained that this bank receipt had been sold back to SBH on 4th March, 1992 for a consideration of Rs.1,03,02,250/- on the instructions of Mr. Chaturvedi. The Assessee thus claimed that he had entered into the transaction not on his own behalf but on behalf of Mr. Chaturvedi, who in turn was acting on behalf of SMI. The Assessee claimed that he had only made a profit of Rs.7,250/- in this transaction. 8. The AO, not being satisfied with the above explanation, recorded the statement of Mr. Chaturvedi. He also obtained statements of Mr. Jaideep Pathak and his wife Mrs. Sneh Pathak at Bombay. In his statement, Mr. Chaturvedi accepted the transaction of purchase and sale of units through the Assessee. However, Mr. Pathak and Mrs. Sneh Pathak denied having entered into any such transaction with Mr. Chaturvedi or with the Assessee. The AO found that SCB had issued a letter on 6th February, 1992 under the signature of Mr. Pathak by which a cheque for Rs.1,02,95,000/- was forwarded. The AO was of the view that the cheque had been issued on the instructions and at the instance of the Assessee i.e. M/s Jain & Company. It was concluded that this amount had been obtained by the Assessee from SCB by utilizing his own funds. 9. The AO found that there were in all 15 drafts/pay orders (\u201ePO\u201f) issued by Mr. Jaideep Pathak on behalf of SCB totalling to Rs.5,68,75,958/-. Out of these 15 POs, 13 were received by the Assessee, aggregating to Rs.5,17,45,958/-. The first of such POs of Rs.1,02,95,000/- was utilised for the purchase of 7,25,000 units from SBH. Remaining 12 POs were utilised for the purchase of shares of different companies by the Assessee on his own account which were later sold to Mr. Chaturvedi. Since the first PO of Rs.1,02,95,000/- was held to have emanated from the funds of Assessee, the AO held that for the remaining 12 POs, the same belonged to the Assessee on the parity of reasoning given with respect to the first PO of Rs.1,02,95,000/-. The AO noticed that the remaining 12 POs were not deposited in the Assessee's bank account with the Corporation Bank but were paid directly for the purchase of securities to the vendors. 10. The Assessee volunteered that this purchase was also done on behalf of Mr. Chaturvedi and that the difference of the price and the amount of the POs was adjusted in the running account of the Assessee with Mr. Chaturvedi. However, the AO not being convinced with the above explanation, treated the entire amount of Rs.5,17,45,958/- as unexplained income of the Assessee under section 69A of the Act. 11. During the proceedings, the Special Auditor in his report under section 142 (2A) of the Act pointed out that the Assessee had made payments in excess of Rs.10,000/- otherwise than by crossed cheque or a crossed bank draft. This was held to be in violation of Section 40A (3) of the Act. Further, the amount of the 9 cheques to the extent of Rs.3,43,450/- was disallowed under Section 40A (3) of the Act. Rs.1,34,450/- was disallowed for failure to enter the transactions representing the amount into \u201eChopris\u201f. 12. Aggrieved by the above order, the Assessee filed an appeal before the Commissioner of Income Tax (Appeals) [\u201eCIT (A)\u201f]. By the order dated 6th February, 1996, the CIT (A) held that there was no material on record to suggest that the draft of Rs.l,02,95,000/- was utilised for the Assessee\u201fs own benefit. It was also held that there was no material to show that Assessee was acting in collusion with Mr Chaturvedi. 13. The CIT (A) noted that certain assets were found by the Central Bureau of Investigation (\u201eCBI\u201f) in possession of Mr Chaturvedi, who then surrendered them to the CBI. The CIT (A) also held that there was no evidence to show that the money in question was utilised by the Assessee. The CIT (A) accordingly deleted the addition of Rs.5,17,45,958/-. The CIT (A) however, confirmed the addition made by the AO of Rs.1,34,405/- and Rs.3,43,450/-. 14. Both, the Assessee as well as the Revenue, filed appeals before the ITAT. The addition of Rs.5,17,45,958/- under section 69A of the Act by the AO, was held by the ITAT in the impugned order to be bad in law since the Revenue had not been able to bring on record any material or evidence to indicate that the Assessee had carried out any transactions outside the books of accounts. The ITAT held that Section 69A of the Act was not applicable since the conditions precedent to give rise to the legal fiction had not been proved. However, in respect of the Assessee\u201fs plea as regards addition of Rs.l,34,150/- and disallowance of Rs.3,43,450/- under Section 40A (3) of the Act, it was held that the since it was an inadvertent omission, no addition could be made. 15. The ITAT further held that the loss of Rs.24,29,739/- was rightly characterised as loss in speculation. The only question was how much of the loss had been suffered by the Assessee and how much by the Assessee\u201fs clients. Despite ample opportunities the Assessee failed to furnish the particulars. Thus the Assessing Officer (AO) was compelled to resort to an estimate. The AO attributed 50% loss to the Assessee which was reduced by the CIT (A) to 25%. Consequently, the ITAT saw no reason to interfere. 16. Thus, the Revenue\u201fs appeal was dismissed and the appeal filed by the Assessee was partly allowed by the ITAT. The addition of Rs.1,34,450/- on account of failure to enter transactions into Chopris and Rs.3,43,450/- by way of disallowance under Section 40A (3) of the Act were deleted. 17. As already noticed hereinabove the present appeal has been admitted confined to only one question regarding deletion by the ITAT of the addition made by the AO of Rs.5,17,45,958/- to the income of the Assessee under Section 69A of the Act. 18. Mr. Ajit Sharma, learned counsel appearing for the Revenue submitted that the ITAT failed to appreciate that both Mr. Jaideep Pathak and Smt. Sneh Pathak had stated that they had not entered into any transaction with Mr. Chaturvedi or with the Assessee. He submitted that the ITAT also failed to appreciate that when Mr. Chaturvedi for whom the 7,25,000/- units of UTI 1964 scheme were purchased by the Assessee was questioned, he replied that the PO had been received from SMI, a proprietary concern of the wife of Mr. Jaideep Pathak. However, he was unable to produce any documentary evidence to substantiate this. This was also denied by SMI. The fact remained that in terms of the cheque dated 6th February, 1992 issued by the SCB addressed to SBH the proceeds of the PO were to be credited into the account of the Assessee. 19. Relying on the decision in CIT v. K. Chinnathamban (2007) 7 SCC 390, Mr. Sharma submitted that in the above circumstances the onus to prove the source of Rs.1,02,95,000/- was on the Assessee and he failed to discharge it. Reliance was also placed on the decision in Sumati Dayal v. Commissioner of Income Tax, Bangalore (1995) Supp 2 SCC 453 to urge that the burden of proof in the present case had shifted to the Assessee to prove the sources of income. 20. Mr. Ajay Vohra, learned Senior counsel for the Respondent/Assessee, referred to the correspondence between the parties. In particular he referred to the letter dated 21st August, 1995 issued by the SCB to the AO stating that the record of the bank did not show that the aforementioned cheque of Rs.1,02,95,000/- in favour of SBH was issued on instructions of Jain & Co. i.e. Assessee. He pointed out that the letter stated that there were no written instructions from the Assessee to that effect and further that the money was not received back with the bank. 21. Mr. Vohra referred to a letter dated 25th August, 1995 stating that no security had been received against the PO. He also referred to the letter dated 25th August, 1995 addressed by the bank to the AO stating that it had not received any security against the PO nor were the funds returned to the bank. He referred to the reply of Mr. Chaturvedi to Question No. 3 of the AO where he confirmed that the payment of the above sum of Rs.1,02,95,000/- was made by Mr. Chaturvedi to the Assessee for making payment to SBH. He also confirmed that 24 cheques issued from Corporation Bank, Bombay by the Assessee were as per his instructions and on his behalf. He denied that the Assessee was connected with the clients of Mr. Chaturvedi to whom the 24 cheques were issued. Even in the course of cross-examination by the AO, Mr. Chaturvedi confirmed these transactions. 22. Mr. Vohra referred to the statement of Mr. Jaideep Pathak recorded by the AO on 24th March, 1995. In reply to questions 3,4 & 5 Mr. Pathak stated that he had received instructions from Mr. Hiten P. Dalal, who was a stock and share broker from Kanpur, for issuing pay orders totalling Rs.5,68,74,958/-. He referred to the charge-sheet filed by the CBI on 20th June, 1992 where it was alleged that the pay orders of SCB were issued by Mr. Pathak from the funds of Mr. Hiten P. Dalal which were then given to Mr. Chaturvedi as part of criminal conspiracy to derive pecuniary benefit. He pointed out that in the assessment order dated 31st July, 1995 of Mr. Pathak for AY 1992-1993 Rs. 5,68,75,958/- was added to his income and this included a sum of Rs. 5,17,45,958/- added by the AO in the hands of the Assessee. He pointed out that Mr. Pathak had also written a letter on 6th February, 1992 to SBH stating that he had not received any instructions from the Assessee to issue a draft for Rs.1,02,95,000/-. 23. By a letter dated 26th September, 1995 SCB confirmed to the Assessee that he did not have any bank account with them and that SCB had not filed any civil claim against the Assessee. Mr Vohra referred to the letter dated 25th September, 1995 from Mr. Chaturvedi to the Assessee giving a list of the securities and money deposited by Mr. Chaturvedi with the CBI amounting to Rs.4,73,19,836/- consisting of drafts, shares and money. This letter also confirmed that the assets were held by Mr. Chaturvedi in his books in the name of SMI whose proprietor was Mrs. Sneh Pathak, the wife of Mr. Jaideep Pathak. This showed that the money was held by Mr. Chaturvedi on behalf of SMI. Additional evidence was also admitted by the CIT (A) at the time of appeal. 24. The above submissions have been considered. Apropos the question of law framed in this appeal, it is necessary first to refer to Section 69A of the Income Tax Act which reads as under: \"69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.\" 25. The legal requirement as regards Section 69A may be summarised thus: i) In any financial year the Assessee should be found to be the owner of any money, bullion, jewellery etc. ii) Such money, bullion, jewellery etc. should not be recorded in his books of account, if any maintained by him for any source of income. iii) The Assessee should offer no explanation about the nature and source of acquisition of the money. iv) The explanation offered by him is not found to be satisfactory in the opinion of the AO. 26. If the above conditions exist then such money and the value of such bullion, jewellery etc. would be deemed to be the income of the Assessee for such financial year. In Chuharmal v. CIT (1988) 3 SCC 588 it was explained that the word \u201eincome\u201f in Section 69A had a wide meaning. 27.1 In CIT v. K. Chinnathamban (supra) relied upon by learned counsel for the Revenue, the Respondent/Assessee was connected with the firm by name of V.V. Enterprises. On search of its premises by the police officers Rs.1.18 crores of cash was seized. The firm was managed by one K. Palaniasamy who had filed its returns and gave statements in the course of the assessment proceedings. 27.2 Mr. K. Palaniasamy was not in a position to explain the source of deposit of Rs.1.18 crores. The AO therefore treated the said amount as undisclosed income of the persons in whose names the deposit appeared. As far as the Respondent/Assessee was concerned, Rs.5.16 lakhs was determined to be his income on the basis that Rs.16,148/- as his salary and Rs.5 lacs as undisclosed income. It was found by the AO that although M/s V.V. Enterprises was stated to be a registered firm but there were in fact no bank accounts in the name of such firm. Also there were no accounts in the name of any of the partners alleged therein. There were no deposits either in the name of the firm or of any of the partners. 27.3 In view of the statements of Mr. K. Palaniasamy the AO proceeded to frame assessment in his hands on protective basis and in the hands of the deposit holders for unexplained deposits. As far as Assessee is concerned, he could not establish the source of the deposit and there was no evidence to support his claim that the amount had been collected from members of the public. 27.4 It was held by the Supreme Court in CIT v. K. Chinnathamban that where the deposit stands in the name of third person and that person is related to the Assessee then in such a case the proper course would be to call upon the person in whose books the deposit appears or the person in whose names the deposit stands to explain such deposit. 27.5 In that case it was found that there was no evidence regarding the registration of firm or the source of investment. The onus of proving the source of deposit primarily rested on the persons in whose names the deposit appeared in various banks. Accordingly, the action of the department in making the individual assessment in the hands of the Assessee was upheld. Therefore, what turned the decision in the case was the failure of the Assessee to properly explain the source of the deposit. 28.1 Turning now to the decision in Sumati Dayal v. CIT, Bangalore (supra), the Assessee there carried on business as a dealer in art pieces, antiques and curios in Bangalore. During the AY 1971-72 the Assessee received a total amount of Rs.3,11,831/- \"by way of race winnings in Jackpots and Treble events in races at Turf Clubs in Bangalore, Madras and Hyderabad.\" The amount was shown by the Assessee in the capital account in the books. The AO recorded the statement of the Assessee and in the Assessment Order held that the above amount did not represent winnings and races. He treated the receipt as income from undisclosed sources and assessed it as income from other sources. For the AY 1972-73 similar amount of Rs.93,500/- shown by the Assessee as race winnings was treated as income from other sources. 28.2 While the appeals were pending before the Appellate Tribunal the Assessee withdrew those appeals and went before the Settlement Commission. By majority, the Settlement Commission came to the conclusion that the Assessee\u201fs claim about her winnings and races was contrived and not genuine. The Chairman of the Settlement Commission gave a dissenting opinion. 28.3 In upholding the majority of the opinion of the Settlement Commission the Supreme Court explained that once there was prima facie evidence against the Assessee, the burden shifted to the Assessee to rebut the inference that the unexplained money constituted income in the Assessee\u201fs hands. The legal position was explained in para 4 as under: \"4. It is no doubt true that in all cases in which a receipt is sought to be taxed as income, the burden lies on the Department to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving that it is not taxable because it falls within exemption provided by the Act lies upon the assessee. (See: Parimisetti Seetharamamma (supra) at P. 536). But, in view of Section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year the same may be charged to income tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut, the said evidence being unrebutted, can be used against him by holding that it was a receipt of an income nature. While considering the explanation of the assessee the Department cannot, however, act unreasonably. (See: Sreelekha Banerjee (supra) at p. 120)\" 28.4 As far as the merits of the case was concerned, it was observed as under: \"7. There is no dispute that the amounts were received by the appellant from various race clubs on the basis of winning tickets presented by her. What is dispute is that they were really the winnings of the appellant from the races. This raises the question whether the apparent can be considered as real. As laid down by this Court, apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. (See: Commissioner of Income Tax v. Durga Prasad More,(1971) 82 ITR 540, at pp. 545, 547)\" 28.5 Both the above decisions, therefore, turned on the peculiar facts of each case. In both cases, the Assessee was not able to satisfactorily explain the source of income. 29. Turning to the case on hand, the question to be asked is whether the Assessee was able to satisfactorily explain the source of the credit entry of Rs.1,02,95,000/- appearing in his Corporation Bank Account. It must be recalled that while this was the starting point, during the course of assessment the AO found that the Assessee had received not one but 13 pay orders aggregating to Rs.5,17,45,958/- from SCB, Bombay during the FYs in question and mostly between December, 1991 and February, 1992. All these POs were utilised by him for purchasing units and shares from different banks and mutual funds. 30. The explanation offered by the Assessee was that all 13 POs were received from Mr. Chaturvedi, a Bombay Broker and the purchase of units and shares were done by him on behalf of Mr. Chaturvedi and then the same were sold back to Mr. Chaturvedi after earning normal brokerage. The AO found that all 13 POs were actually tainted POs relating to the Securities Scam of 1992 and that they had been issued by the SCB under extra ordinary circumstances. The SCB had informed the ACIT Circle 7 (3) that it had been a victim of a massive fraud perpetrated in 1992 by certain brokers in collusion with certain ex-employees of the SCB to siphon out funds from the bank. It was also informed that SCB had filed an FIR with CBI in which Mr. Jaideep Pathak, an ex-employee was named as one of the accused and all the above referred 13 POs were part of total 15 POs fraudulently issued by Sh. Pathak. 31. It must be noticed here that even during the course of the assessment proceedings the AO required the Assessee to show cause as to why the said sum of Rs.1,02,95,000/- should not be added to his total income under Section 69A of the Act. The Assessee filed a petition before the CIT under Section 144A of the Act challenging the above proposal. This application was disposed of by the Additional CIT by an order dated 22/25th September, 1995. 32. The direction sought by the Assessee from the Additional CIT was that the AO should put to the Assessee, the material gathered by him on the basis of which the addition was proposed to be made. In the said order dated 22/25th September, 1995 the Additional CIT noted the fact that the AO of Mr. Jaideep Pathak had held that there was an apparent case of financial quid pro quo against Mr. Pathak and had already added a sum of Rs.5.68 crores, equal to the amount of said 15 POs, as Mr. Pathak\u201fs income from other sources. It was noticed therein that \"13 out of these 15 POs were received by Mr. Anoop Jain, the Assessee and were utilised by him for purchasing the units and shares from different banks.\" 33. According to the Additional CIT the above facts appeared to be \"sufficient justification to the AO to suspect the Assessee\u201fs claim that the transactions relating to 13 POs of SCB were normal business transactions.\" He started investigation to find out the truth. The Additional CIT set out the gist of the evidence collected by the AO but added that it was \"not exhaustive nor is it possible for me to describe it fully due to time constraint.\" 34. However it was concluded that \"prima facie there appears to be a collusion between the Assessee and DDC in obtaining the 13 POs from Standard Chartered Bank through a financial quid pro quo with Mr. Jaideep Pathak.\" The objective behind the collusion appeared to be to invest heavily in the booming stock market prior to the Budget of 1992 and make a big and quick profit on sale of the shares subsequently. However, the additional CIT added as under: \"15. However, I hasten to add that before coming to a final and fair conclusion in this regard it would be necessary to consider all the facts, materials, and surrounding circumstances of the case including the materials and arguments advanced by the assessee in this regard. This will be lengthy and time consuming exercise and I do not have adequate time for this purpose. However, I am satisfied that the AO is capable of passing a fair and judicious order after considering all relevant facts, materials and surrounding circumstances of the case. I, therefore, direct him to do so and decide the issues on merits and in accordance with law.\" 35. When the matter went back to the AO he referred to not this paragraph but subsequent paragraphs of the order of the CIT where the attention was drawn to the AO to the decision of the ITAT Delhi in ITO v. DC Rastogi 39 ITD 490. The AO then proceeded to hold that the Assessee had acquired a pay order of Rs.1,02,95,000 from SCB \"after a financial quid pro quo of an equal amount\". On this very basis he added the amount to the income of the Assessee. On the same basis he further concluded that the amount constituting the remaining 12 POs should also be added to the income of the Assessee. 36. Thus it is seen that the very basis for making the additions is the inference drawn by the AO that the Assessee had received the above POs and spent the monies for purchase of shares and units as a result of some \u201efinancial quid pro quo\u201f. 37. This Court has again examined the evidence in some detail. There are certain facts that stand out which showed that the aforementioned amounts received by the Assessee as POs did not belong to him. The Assessee was only a conduit through whom the amounts were floated. One of the essential conditions in Section 69A of the Act is that the Assessee should be the \"owner of the money\" and it should not be recorded in his books of accounts. This was a pre-condition to the next step of the Assessee offering no explanation about the nature and source of the acquisition of such money. 38. In the present case the evidence placed before the AO clearly indicated that Mr. Chaturvedi confirmed that the draft of Rs.1,02,95,000/- was given by him to the Assessee and that the transactions of purchase of units were done by the Assessee on his behalf. Books of accounts maintained by Mr. Chaturvedi confirmed the above statement. 39. Added to this is the fact that CBI recovered securities and cash worth Rs.4,73,19,836/- from Mr. Chaturvedi and he claimed that these were held on behalf of Mrs. Sneh Pathak, the proprietor of SMI. This was to be read with the statement of Mr. Jaideep Pathak, an employee of the SCB, stating that the drafts worth Rs.5,68,74,958/- were issued by him on instructions of Mr. Hiten P.Dalal. 40. The two letters issued by SCB dated 21st August and 25th August, 1995 to the AO are significant. They clearly state in regard to the cheque of Rs.1,02,95,000/- issued in favour of SBH that as per the records \"there were no written instructions from M/s Jain & Company to this effect.\" They also confirmed that the money was not received back by SCB. The letter dated 25th August, 1995 in this regard is even more detailed. It was confirmed that: \"The above Pay Order is a part of 15 Pay Orders which were issued by the said Mr. Jaideep Pathak to siphon out funds from the Bank. The circumstances surrounding these Pay Orders have been investigated by Deputy Superintendent of Police, Central Bureau of Investigation (CBI) in SCB\u201fs case Ref No. RC-11 (S) 92-Bom.\" 41. This obviously meant that the above POs had been issued without obtaining any corresponding deposit of money into SCB by anyone else. Certainly the Assessee did not seem to have been involved at all. The addition of the sum of Rs.5,17,45,958/- to the income of Mr. Jaideep Pathak by his AO is another significant aspect. The said addition was part of the larger sum of Rs.5,68,79,958/- added to his income. The question of adding the same amount in the hands of the assessee clearly was not permissible. 42. The following reasoning of the CIT (A) in disbelieving the case of the Revenue appears to be an acceptable analysis of the evidence. \"36. During the course of the hearing of the appeal, the A.C. was confronted with the letter of SCB stating that no security was received by them against the issue of draft of Rs.1,02,95,000/-. The A.O. admitted that his case does not rest any longer on the deposit of money with the bank of equivalent amount and the case of the department now is that this money was given by the assessee to Mr. Jaideep Pathak, the manager of SCB in his personal capacity for obtaining the draft in his favour. If this is so, it means that the assessee had utilised his unaccounted money to obtain the white money by way of a draft from the bank. If that is so, there was no need for him to attempt to conceal his bank account in the corporation bank, Bombay as is claimed by the department. Secondly, the draft would have been utilised by the assessee for his own benefit and it has not been shown by the A.O. whether it was so. On the contrary, the amount of Rs.1,02,95,000/- has been utilised for issuing 24 drafts in favour of certain parties on the instruction of Mr. DDC which fact is confirmed by DDC. Thus, the subsequent conduct of the assessee does not support the case of the department that the money was given by the assessee to Mr. Jaideep Pathak to obtain the drafts and is rather disproved by the facts stated above including the chargesheet filed by the CBI where the facts and modus operandi adopted have been discussed in details. 37. The theory of the A.O. is also not sustainable on another consideration. If the money belonged to the assessee and the purpose was to launder the same as is made out, then it has to be explained as to why Mr. DDC is supporting the contention of the assessee that the money was supplied by him which belonged to Shri Maharaj Investment. It was argued on behalf of the revenue that the assessee was acting in collusion with Mr. DOC and that is why the case of the assessee is being supported by him. 38. However, this contention is without any merit as even as per the case of the department, no money has been invested by Mr. DDC. If the assessee and Mr. DDC were acting in collusion then it stands to reason that both will be making the investments and not merely the assessee. No such investment by Mr. DDC is even alleged by the Department. Further, from the conduct of the parties and the subsequent events, it appears that no benefit was to accrue to Mr. DDC and if that is so then the story of collusion is not supported by the facts. As already stated, the chargesheet filed by CBI disproves this contention totally. It may however, be mentioned that certain assets were found by the CBI in the possession of Mr. DDC which have been surrendered by him to the CBI. He claimed that these assets were held by him on behalf of SMI and not on his own behalf. He had not stated that this money belonged to the assessee or he himself and this claim has not been disproved and on the contrary is accepted by the Deptt. in case of Mr. Jaideep Pathak.\" 43. As rightly noted by the CIT (A) there was no evidence to show that the 24 cheques stated to have been issued by the Assessee on behalf of Mr. Chaturvedi were utilised by the Assessee and were meant for the benefit of the Assessee. 44. In other words, there was nothing to show that the Assessee had benefited in any way from any of the above transactions. As regards the test of human probabilities if there was no evidence whatsoever to the contrary it could have been resorted to draw certain inference. 45. However, in the present case there appears to be overwhelming evidence to show the involvement of Mr. Chaturvedi acting on behalf of Mrs. Sneh Pathak for SMI. The CBI also did not choose to proceed against the Assessee and that discounts the case of any collusion between the Assessee and Mr. Chaturvedi along with Mr. Pathak. It does appear that the Assessee was at the highest used as a conduit by the other parties and did not himself substantially gain from these transactions. 46. In that view of the matter, the concurrent view of both the CIT (A) and the ITAT that the addition of the aforementioned sum to the income of the Assessee was not warranted, does not call for interference. The question of law framed is accordingly answered in the affirmative i.e. in favour of the Assessee and against the Revenue. The appeal is accordingly dismissed. S. MURALIDHAR, J. TALWANT SINGH, J. 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{"id": "80182706", "text": "REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 10873 OF 2018 [ARISING OUT OF SLP(CIVIL) NO.5895 OF 2018] M/S HINDON FORGE PVT. LTD. & ANR. \u2026APPELLANTS VERSUS THE STATE OF UTTAR PRADESH THROUGH DISTRICT MAGISTRATE GHAZIABAD & ANR. \u2026RESPONDENTS WITH CIVIL APPEAL NO. 10874 OF 2018 [ARISING OUT OF SLP(CIVIL) NO.12841 OF 2018] JUDGMENT R.F. NARIMAN, J. 1. Leave granted. 2. These matters come to us from a Full Bench judgment of Signature Not Verified the Allahabad High Court dated 06.02.2018. By an order of Digitally signed by R NATARAJAN Date: 2018.11.01 16:54:29 IST Reason: reference dated 19.09.2017, a learned Single Judge noticed divergent opinions expressed by two different Benches of the Allahabad High Court on the question whether an application under section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as the \u201cSARFAESI Act\u201d or the \u201cAct\u201d), at the instance of a borrower, is maintainable even before physical or actual possession of secured assets is taken by banks/financial institutions in exercise of their powers under section 13(4) of the Act read with rule 8 of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the \u201c2002 Rules\u201d). After discussing the various provisions of the Act, the 2002 Rules and judgments of the Supreme Court, the Full Bench summarised the true legal position according to it as follows: \u201c29. The upshot of legal position that emerges from the judgments of the Supreme Court, insofar as the question referred to for our consideration is concerned, briefly stated, is as under: (a) The remedy of an application under Section 17(1) is available only after the measures under Section 13(4) have been taken by the Bank/FIs against the borrower. (b) The issue of notice under Section 13(2) to the borrower and communication contemplated by Section 13(3-A) stating that his representation/objection is not acceptable or tenable, does not attract the application of principles of natural justice. In other words, no recourse to an application under Section 17(1), at that stage, is available/maintainable. (c) The borrower/person against whom measures under Section 13(4) of the Act are likely to be taken, cannot be denied to know the reason why his application or objections have not been accepted, as a fulfilment of the requirement of reasonableness and fairness in dealing with the same. (d) One of the reasons for providing procedure under Section 13(4) read with Rule 8 for taking possession is that the borrower should have a clear notice before the date and time of sale/transfer of the secured assets, in order to enable him to tender the dues of the secured creditor with all other charges or to take a remedy under Section 17, at appropriate stage. (e) The time of 60 days is provided after the \u201cmeasures\u201d under Section 13(4) have been taken so as to enable the borrower to approach DRT and in such an eventuality, the DRT shall have a jurisdiction to pass any order/interim order, may be subject to conditions, on the application under Section 17(1) of the Act. (f) The scheme of relevant provisions of the Act and the Rules shows that the Bank/FIs have been conferred with powers to take physical (actual) possession of the secured assets without interference of the Court and the only remedy open to the borrower is to approach DRT challenging such an action/measure and seeking appropriate relief, including restoration of possession, even after transfer of the secured assets by way of sale/lease, on the ground that the procedure for taking possession or dispossessing the borrower was not in accordance with the provisions of the Act/Rules. (g) If the dues of the secured creditor together with all costs, charges and expenses incurred by them are tendered to them (secured creditors) before the date fixed for sale or transfer, the assets shall not be sold or transferred and in such an eventuality, possession can also be restored to the borrower. (h) If the possession is taken before confirmation of sale, it cannot be stated that the right of the borrower to get the dispute adjudicated upon is defeated. The borrower's right to get back possession even after the sale remains intact or stands recognised under the scheme of the provisions of the Act. (i) The borrower is not entitled to challenge the reasons communicated or likely measure, to be taken by the secured creditor under Section 13(4) of the Act, unless his right to approach DRT, as provided for under Section 17(1), matures. The borrower gets all the opportunities, at different stages, either to clear the dues or to challenge the measures under Section 13(4) or even to challenge the reasons rejecting his objections/not accepting the objections, after the measures under Section 13(4) have been taken. (j) While the banks have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting DRT with authority, after conducting an adjudication into the matters, to declare any such action invalid and also to restore even though the possession may have been made over to the transferee. (k) The safeguards provided under the scheme make it further clear that if the Bank/FIs proceeds to take actual possession of the assets that cannot be stalled by the interference of a Court. (l) If DRT after examining the facts and circumstances of the case and on the basis of evidence produced by the parties, comes to the conclusion that any of the measures referred to in Section 13(4), taken by the secured creditor is not in accordance with the provisions of the Act, it may by order declare that the recourse taken to any one or more measures is invalid and restore possession to the borrower. (m) Any transfer of secured asset after taking possession thereof by the secured creditor shall vest in the transferee all rights in, or in relation to the secured asset as if the transfer had been made by the owner of such secured assets. (n) No remedy under Section 17(1) can be taken by the borrower unless he loses actual (physical) possession of the secured assets. In other words, before losing actual possession or unless the secured creditor obtains physical possession of the secured asset under Section 13(4), it is not open to the borrower to take a remedy under Section 17(1) of the Act.\u201d The court then went on to hold: \u201c31. Section 13(4) of the Act provides that if the borrower fails to discharge his liability within the period prescribed under Section 13(2), the secured creditor can take recourse to one of the measures, such as taking possession of the secured assets, including the right to transfer by way of lease, assignment or sale for realising the secured asset. From the language of this provision, it is further clear that taking measure under Section 13(4)(a) would mean taking actual (physical) possession, and if we do not read it in the said provision to say so, the right and power of the secured creditor to transfer the assets by way of lease, assignment or sale for realizing the secured assets, as provided for therein, would render redundant. In other words, putting such an interpretation on the language of Section 13(4) of the Act would be atrocious and would defeat the very objective of bringing the legislation. It is, therefore, not possible to hold that taking \u201cmeasures\u201d under Section 13(4)(a) also means taking only \u201csymbolic possession\u201d and not \u201cphysical possession\u201d. We record further reasons to say so in following paragraph. From the scheme of Section 13(4) and Sections 14 and 17 of the Act and the relevant Rules 8 and 9 of the Rules, it appears to us that unless physical possession is taken, the measure, contemplated under Section 13(4), cannot be stated to have been taken. 31.1. One of the rights conferred on a secured creditor is to transfer by way of lease, the secured asset, possession or management whereof has been taken under clauses (a) or (b) of sub-section (4) of Section 13. We have already held that sale or assignment of the secured assets could only be undertaken if actual physical possession has been taken over by the bank/FI\u2019s. If we pose a question whether right to transfer the secured assets by way of lease could be exercised without taking actual physical possession of the secured asset or management of the business of the borrower, our answer would be obviously in the negative. 31.2. The word \u2018lease\u2019 has not been defined under the Act, but it has been used in the Act in the same sense as under the Transfer of Property Act, 1882. Thereunder, Section 105 defines lease as \u201ctransfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lease is a contract between the lessor and the lessee for the possession and profits of land, etc. on one side and the recompense by rent or other consideration on the other. The estate transferred to the lessee is called the leasehold. The estate remaining in the lessor is called the reversion. 31.3. The absolute owner, who is under no personal incapacity can grant lease for any term he pleases. However, the limited owner like a tenant for life can grant lease but it would not endure beyond his death. The Supreme Court in Associated Hotels of India Ltd. v. R.N. Kapoor, AIR 1959 SC 1262, while making a distinction between lease and license observed thus:\u2014 \u201cA lease is a transfer of an interest in land. The interested transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease, and it follows from it that the lessee gets that right to the exclusion of the lessor. Under S. 52 if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the permissive for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property. There is, therefore, clear distinction between the two concepts.\u201d 31.4. One of the essential indicia of lease is parting of exclusive possession by the lessor to the lessee with conferment of reciprocal right in the lessee to protect his possession during subsistence of the lease to the exclusion of the lessor. Although in some cases, a licensee may also be given exclusive possession of a property, but as observed above, parting of exclusive possession to the lessee is a sine qua non for creating a valid lease. Thus, where a person is not in physical possession of a property nor in a position to deliver physical possession in future, he is incompetent to create a valid lease. The reason being that he is not in a position to confer upon the lessee the right to enjoy the property to the exclusion of the lessor and everyone else. 31.5. It thus necessarily follow that the ultimate object of taking possession of the secured asset or management of the business of the borrower would not be achieved unless the secured creditor is in a position to further exercise his right to transfer the same, inter alia, by way of lease or sale, which could be possible only if physical (actual) possession has been taken over and not constructive or symbolic possession. The language of Section 13(6) also supports our view. Thus, while there is no bar in first taking symbolic possession of the secured assets, but it is implicit in sub-section (4) of Section 13 that the secured creditor has to thereafter proceed to take physical (actual) possession in order to exercise its right to transfer by way of lease, assignment or sale.\u201d xxx xxx xxx \u201c34. Thus, the scheme of the provisions of Sections 13 and 17 of the Act, read with Rules 8 and 9 of the Rules, would show that the \u201cmeasure\u201d taken under Section 13(4)(a) read with Rule 8 would not be complete unless actual (physical) possession of the secured assets is taken by the Bank/Financial Institutions. In our opinion, taking measure under Section 13(4) means either taking actual/physical possession under clause (a) of sub-section (4) of Section 13 or any other measure under other clauses of this Section and not taking steps to take possession or making unsuccessful attempt to take measure under Section 13(4) of the Act. Similarly, following the procedure laid down under Section 14 and/or Rules 8 and 9, where the Bank meets with resistance, would only mean taking steps to seek possession under Section 13(4)(a) and the \u201cmeasure\u201d under sub-section (4)(a) of Section 13 would stand concluded only when actual/physical possession is taken or the borrower loses actual/physical possession. It is at this stage alone or thereafter, the borrower can take recourse to the provisions of Section 17(1) of the Act. The transfer of possession is an action. Mere declaration of possession by a notice, in itself, cannot amount to transfer of possession, more particularly where such a notice meets with resistance. When the possession is taken by one party, other party also loses it. In the present case, adversial possession in being claimed by the secured creditor against the borrower. It is not possible that both will have possession over the secured assets. The possession of the secured creditor would only come into place with the dispossession of the borrower. We may also observe that in a securitisation application under Section 17(1), the borrower will have to make a categoric statement that he lost possession or he has been dispossessed and pray for possession. 35. Issuance of possession notice, as observed earlier, gives borrower and the public in general an intimation that the secured creditor has taken possession of the property and at that stage, it is quite possible, may be in view of resistance or if the Banks chooses to take only symbolic possession, to state that the secured creditor has taken symbolic/constructive possession and not physical possession, but that by itself would not entitle the borrower to raise challenge under Section 17(1) of the Act, as held by the Supreme Court in Noble Kumar (supra). Unless the borrower loses actual (physical) possession, he cannot take recourse to provisions of Section 17(1). Even while taking steps under Section 13(4) of the Act read with Rule 8 of the Rules, in a given case, the bank may not physically dispossess the borrower and wait till it takes steps to conduct actual sale/auction of the secured assets i.e. till he issues notice under Rule 8(6) of the Rules. Even that by itself, from the scheme of the Act and the Rules, in the backdrop of the objective of the Act, in our opinion, does not confer any right to take recourse to Section 17(1). The borrower can file securitisation application under Section 17(1) only when he physically loses possession.\u201d xxx xxx xxx \u201c40. We are, therefore, of the firm and considered opinion that taking \u201csymbolic possession\u201d or issuance of possession notice under Appendix IV of the Rules, meeting with any resistance, cannot be treated as \u201cmeasure\u201d/s taken under Section 13(4) of the Act and, therefore, the borrower at that stage cannot file an application under Section 17(1) before DRT. In other words, a securitisation application under Section 17(1) of the Act is maintainable only when actual/physical possession is taken by the secured creditor or the borrower loses actual/physical possession of the secured assets. Once the right to approach DRT matures and securitisation application under Section 17(1) is filed by the borrower, it is open to DRT to deal with the same on merits and pass appropriate orders in accordance with law. Thus, the question referred to for our consideration stands answered in terms of this judgment. The judgment of this Court in Aum Jewels (supra), in our opinion, does not enunciate the correct law.\u201d 3. Shri Neeraj Kishan Kaul, learned Senior Advocate, appearing on behalf of the appellants, has placed before us all the relevant sections under the SARFAESI Act as well as the relevant rules under the 2002 Rules. He has referred to the Statement of Objects and Reasons of both the original Act as well as the Amendment Act made in 2004 pursuant to a judgment of this Court in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311 (\u201cMardia Chemicals\u201d). According to Shri Kaul, the scheme of section 13 is that a notice of default once served under section 13(2) of the Act may call upon the borrower to discharge in full his liability to the secured creditor within 60 days from the date of notice, failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4) of section 13. He relied upon section 13(3-A) which made it clear that even though reasons are communicated under the said sub-section, since no measures were actually taken under section 13(4), there is no right at that stage for the borrower to prefer an application to the Debts Recovery Tribunal under section 17 of the Act. According to the learned Senior Advocate, section 13(4)(a) makes it clear that \u201cpossession\u201d of the secured assets of the borrower may be taken under this provision. Obviously, such possession is to be taken under the rules framed under the Act. Rule 8(1) makes it clear that possession is taken under the 2002 Rules by delivering a possession notice prepared in the form contained in Appendix IV to the rules, and by affixing the notice on the outer door or at such conspicuous place of the property. Once this is done, and the possession notice is published in two leading newspapers under sub-rule (2), the form contained in Appendix IV makes it clear that notice is given to the public in general that possession has been taken in exercise of powers contained under section 13(4) of the Act read with rule 8 of the 2002 Rules. As soon as this takes place, according to Shri Kaul, since \u201csymbolic possession\u201d has been so taken, the right of the borrower to approach the Debts Recovery Tribunal for relief under section 17 gets crystallized. He also relied upon sub-rule (3) to argue that possession may be taken under this sub-rule which is \u201cactual\u201d as opposed to \u201csymbolic\u201d possession under sub-rule (1). According to the learned Senior Advocate, the moment possession is taken either under rule 8(1) or under rule 8(3), section 13(6) gets attracted thereby making it clear that a transfer of secured asset, after taking such possession, shall vest in the transferee all rights in, or in relation to, the secured asset transferred as if the transfer had been made by the owner of such secured asset. According to Shri Kaul, after symbolic possession is taken under rule 8(1), rules 8(5) to 8(8) and rule 9 can then be followed in order to effect sale of property of which symbolic possession has been taken. Shri Kaul attacked the judgment of the Full Bench, stating that the conclusion of the Full Bench that the borrower would have to wait until actual physical possession of the secured asset is taken would create great hardship in that a running business of the borrower would be taken over without the borrower being able to approach the Debts Recovery Tribunal, and would have to wait until after the sale takes place to recover possession under section 17(3), even if he is able to show that the steps taken by the secured creditor are in violation of the provisions of the Act. Thus, if symbolic possession is taken contrary to section 13(2) prior to 60 days from the date of the notice mentioned therein, all borrowers would have to wait until physical possession is taken and/or a sale notice is issued to get back their running business after the business is brought to a grinding halt. This could not possibly have been the intention of the legislature. 4. Shri C.U. Singh, learned Senior Advocate, appearing on behalf of respondent no. 2, took us through the statutory provisions and the 2002 Rules and argued that the High Court may have gone beyond what was argued by his predecessor before the High Court. Shri Singh emphasised that his limited argument before this Court is that the stage of symbolic possession is not a stage at which any prejudice is caused to the borrower as he may continue to run his business. Section 13(6) does not come in at this stage at all, and section 13(13), which interdicts a borrower after receipt of a notice under section 13(2) to transfer by way of sale, lease or otherwise, other than in the ordinary course of business, any of his secured assets without prior written consent of the secured creditor, is the only restraint that continues to attach after symbolic possession is taken. According to him, as no prejudice is caused to the borrower at this stage, it is clear that \u201cpossession\u201d spoken of in section 13(4) can only mean actual physical possession. This becomes clear on a reading of section 13(4)(c) which makes it clear that a manager can only manage the secured assets the possession of which has been taken over by the secured creditor, if actual physical possession has been parted with. According to the learned Senior Advocate, therefore, the object of the Act will be defeated if a debtor can approach the Debts Recovery Tribunal at such stage when no prejudice is caused to him, thereby rendering what is statutorily granted to a creditor futile. He relied upon observations in various Supreme Court judgments to buttress his stand that it is only at the stage of actual physical possession that an application can be filed under section 17 and not before. 5. Shri Ranjit Kumar, learned Senior Advocate, appearing on behalf of the respondents in Civil Appeal arising out of SLP(C) No.12841 of 2018, went on to argue that all the sub-clauses in section 13(4) must be construed together. If that is done, it is clear that under sub-clauses (b) and (c), management and possession must physically be taken over. Therefore, under sub-clause (a), the expression \u201cpossession\u201d must also mean actual physical possession. According to the learned Senior Advocate, the measures taken under section 13 must also be read with sections 14 and 15. It is clear that under section 14, actual physical possession is to be handed over by the Chief Metropolitan Magistrate or the District Magistrate to the secured creditor, and under section 15, management of the business has actually to be taken over as two managements cannot possibly continue at the same time. Read in this light, the scheme of the Act, therefore, is clear and it becomes equally clear that only actual physical possession is referred to in section 13(4)(a) before a section 17 application can be filed. He also referred to section 17(3) to further argue that restoration of possession of secured assets could only refer to restoration of actual physical possession thereby strengthening his interpretation of sections 13 and 17 of the Act. According to him, under section 19, compensation is also payable where possession taken is not in accordance with the provisions of the Act and 2002 Rules, again making it clear that when the Court or Tribunal directs the secured creditor to return such secured asset to the borrowers, compensation may be paid. Returning secured assets obviously would mean assets of which physical possession has been taken. When it came to reading rules 8(1) and 8(3) of the 2002 Rules, according to Shri Ranjit Kumar, rule 8(3) is the next step after symbolic possession is taken over under rule 8(1), and without taking of actual physical possession under rule 8(3), no sale can be made of any secured assets. Like Shri C.U. Singh before him, he agreed that the High Court had perhaps gone a little too far in its conclusion, and that the moment any real prejudice is caused to the borrower, the borrower can certainly approach the Tribunal. This would also include the stage at which a sale notice is issued under rule 8. 6. Shri Ashish Dholakia, learned Advocate, appearing for the intervenor, State Bank of India, referred to the objects of the 2002 Act and relied upon the judgment of this Court in Standard Chartered Bank v. V. Noble Kumar & Ors., (2013) 9 SCC 620 (\u201cNoble Kumar\u201d). He argued that if we were to grant an opportunity to a debtor to approach the Tribunal at the stage of symbolic possession, there would be little difference between the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the \u201cRecovery of Debts Act\u201d) and the SARFAESI Act, and thus, we would destroy the very object for which the SARFAESI Act was enacted, namely, so that banks could recover their debts by selling properties outside the court process, something that the Recovery of Debts Act did not envisage. He also referred to and relied upon section 3 of the Transfer of Property Act for the definition of \u201ca person is said to have notice\u201d and Explanation II in particular, which referred to actual possession. According to him therefore, the correct stage would be the stage at which actual physical possession has been taken, upon which a debtor may then approach the Debts Recovery Tribunal under section 17. 7. Having heard learned counsel for the parties, we may first set out the Statement of Objects and Reasons for the 2002 Act. The Statement of Objects and Reasons for the 2002 Act read as follows: \u201cStatement of Objects and Reasons.\u2014The financial sector has been one of the key drivers in India's efforts to achieve success in rapidly developing its economy. While the banking industry in India is progressively complying with the international prudential norms and accounting practices there are certain areas in which the banking and financial sector do not have a level playing field as compared to other participants in the financial markets in the world. There is no legal provision for facilitating securitisation of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institutions. Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government for the purpose of examining banking sector reforms have considered the need for changes in the legal system in respect of these areas. These Committees, inter alia, have suggested enactment of a new legislation for securitisation and empowering banks and financial institutions to take possession of the securities and to sell them without the intervention of the court. Acting on these suggestions, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 was promulgated on the 21st June, 2002 to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto. The provisions of the Ordinance would enable banks and financial institutions to realise long-term assets, manage problem of liquidity, asset liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. 2. It is now proposed to replace the Ordinance by a Bill, which, inter alia, contains provisions of the Ordinance to provide for\u2014 (a) registration and regulation of securitisation companies or reconstruction companies by the Reserve Bank of India; (b) facilitating securitisation of financial assets of banks and financial institutions with or without the benefit of underlying securities; (c) facilitating easy transferability of financial assets by the securitisation company or reconstruction company to acquire financial assets of banks and financial institutions by issue of debentures or bonds or any other security in the nature of a debenture; (d) empowering securitisation companies or reconstruction companies to raise funds by issue of security receipts to qualified institutional buyers; (e) facilitating reconstruction of financial assets acquired by exercising powers of enforcement of securities or change of management or other powers which are proposed to be conferred on the banks and financial institutions; (f) declaration of any securitisation company or reconstruction company registered with the Reserve Bank of India as a public financial institution for the purpose of Section 4-A of the Companies Act, 1956; (g) defining \u201csecurity interest\u201d as any type of security including mortgage and charge on immovable properties given for due repayment of any financial assistance given by any bank or financial institution; (h) empowering banks and financial institutions to take possession of securities given for financial assistance and sell or lease the same or take over management in the event of default, i.e. classification of the borrower's account as non-performing asset in accordance with the directions given or guidelines issued by the Reserve Bank of India from time to time; (i) the rights of a secured creditor to be exercised by one or more of its officers authorised in this behalf in accordance with the rules made by the Central Government; (j) an appeal against the action of any bank or financial institution to the concerned Debts Recovery Tribunal and a second appeal to the Appellate Debts Recovery Tribunal; (k) setting-up or causing to be set-up a Central Registry by the Central Government for the purpose of registration of transactions relating to securitisation, asset reconstruction and creation of security interest; (l) application of the proposed legislation initially to banks and financial institutions and empowerment of the Central Government to extend the application of the proposed legislation to non-banking financial companies and other entities; (m) non-application of the proposed legislation to security interests in agricultural lands, loans not exceeding Rupees One lakh and cases where eighty per cent of the loans are repaid by the borrower. 3. The Bill seeks to achieve the above objects.\u201d Section 13 with which we are concerned reads as follows: \u201c13. Enforcement of security interest.\u2014(1) Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4): [Provided that\u2014 (i) the requirement of classification of secured debt as non-performing asset under this sub-section shall not apply to a borrower who has raised funds through issue of debt securities; and (ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the debenture trustee;] (3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower. [(3-A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate 3[within fifteen days] of receipt of such representation or objection the Ins. by Act 44 of 2016, S. 11(i) (w.e.f. 1-9-2016). Ins. by Act 30 of 2004, S. 8 (w.r.e.f. 11-11-2004). Subs. for \u201cwithin one week\u201d by Act 1 of 2013, S. 5(a) (w.e.f. 15-1-2013). reasons for non-acceptance of the representation or objection to the borrower : Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under Section 17 or the Court of District Judge under Section 17-A.] (4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:\u2014 (a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; [(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset: Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: Provided further that where the management of whole, of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt;] Subs. by Act 30 of 2004, S. 8 (w.r.e.f. 11-11-2004). Prior to substitution it read as: \u201c(b) take over the management of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured asset;\u201d (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. (5) Any payment made by any person referred to in clause (d) of sub-section (4) to the secured creditor shall give such person a valid discharge as if he has made payment to the borrower. [(5-A) Where the sale of an immovable property, for which a reserve price has been specified, has been postponed for want of a bid of an amount not less than such reserve price, it shall be lawful for any officer of the secured creditor, if so authorised by the secured creditor in this behalf, to bid for the immovable property on behalf of the secured creditor at any subsequent sale. (5-B) Where the secured creditor, referred to in sub- section (5-A), is declared to be the purchaser of the immovable property at any subsequent sale, the amount of the purchase price shall be adjusted towards the amount of the claim of the secured creditor for which the auction of enforcement of security interest is taken by the secured creditor, under sub-section (4) of Section 13. (5-C) The provisions of Section 9 of the Banking Regulation Act, 1949 (10 of 1949) shall, as far as may be, apply to the immovable property acquired by secured creditor under sub-section (5-A).] Ins. by Act 1 of 2013, S. 5(b) (w.e.f. 15-1-2013) (6) Any transfer of secured asset after taking possession thereof or take over of management under sub-section (4), by the secured creditor or by the manager on behalf of the secured creditor shall vest in the transferee all rights in, or in relation to, the secured asset transferred as if the transfer had been made by the owner of such secured asset. xxx xxx xxx (13) No borrower shall, after receipt of notice referred to in sub-section (2), transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor.\u201d Section 14(1) of the Act reads as follows: \u201c14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.\u2014(1) Where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured assets, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him\u2014 (a) take possession of such asset and documents relating thereto; and (b) forward such asset and documents to the secured creditor: xxx xxx xxx\u201d Section 15(1) of the Act reads as follows: \u201c15. Manner and effect of takeover of management.\u2014(1) 6[When the management of business of a borrower is taken over by a 7[asset reconstruction company] under clause (a) of Section 9 or, as the case may be, by a secured creditor under clause (b) of sub-section (4) of Section 13], the secured creditor may, by publishing a notice in a newspaper published in English language and in a newspaper published in an Indian language in circulation in the place where the principal office of the borrower is situated, appoint as many persons as it thinks fit\u2014 (a) in a case in which the borrower is a company as defined in the Companies Act, 1956 (1 of 1956), to be the directors of that borrower in accordance with the provisions of that Act; or (b) in any other case, to be the administrator of the business of the borrower. xxx xxx xxx\u201d Section 17 of the Act reads as follows: \u201c8[17. Application against measures to recover secured debts].\u2014(1) Any person (including Subs. for \u201cWhen the management of business of a borrower is taken over by a secured creditor\u201d by Act 30 of 2004, S. 9 (w.r.e.f. 11-11-2004). Subs. for \u201csecuritisation company or a reconstruction company\u201d by Act 44 of 2016, S. 3(i) (w.e.f. 1-9-2016). Subs. for \u201cRight to appeal\u201d by Act 44 of 2016, S. 14(i) (w.e.f. 1-9-2016). borrower,) aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorised officer under this chapter, 9[may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken: [Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.] [Explanation.\u2014For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17.] [(1-A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdiction\u2014 (a) the cause of action, wholly or in part, arises; (b) where the secured asset is located; or (c) the branch or any other office of a bank or financial institution is maintaining an account in which debt claimed is outstanding for the time being.] Subs. for \u201cmay prefer an appeal\u201d by Act 30 of 2004, S. 10 (w.r.e.f. 21-6-2002). Ins. by Act 30 of 2004, S. 10 (w.r.e.f. 21-6-2002). Ins. by Act 30 of 2004, S. 10 (w.r.e.f. 11-11-2004). Ins. by Act 44 of 2016, S. 14(ii) (w.e.f. 1-9-2016). [(2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub- section (4) of Section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. [(3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to the borrower or other aggrieved person, it may, by order,\u2014 (a) declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditor as invalid; and Subs. for sub-sections (2) and (3) by Act 30 of 2004, S. 10 (w.r.e.f. 11-11-2004). Prior to substitution sub-sections (2) and (3) read as: \u201c(2) Where an appeal is preferred by a borrower, such appeal shall not be entertained by the Debts Recovery Tribunal unless the borrower has deposited with the Debts Recovery Tribunal seventy-five per cent of the amount claimed in the notice referred to in sub-section (2) of Section 13: Provided that the Debts Recovery Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section. (3) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder.\u201d Subs. by Act 44 of 2016, S. 14(iii) (w.e.f. 1-9-2016). Prior to substitution it read as: \u201c(3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of Section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management of the business to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred to in sub-section (4) of Section 13 taken by the secured creditors as invalid and restore the possession of the secured assets to the borrower or restore the management of the business to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of Section 13.\u201d. (b) restore the possession of secured assets or management of secured assets to the borrower or such other aggrieved person, who has made an application under sub-section (1), as the case may be; and (c) pass such other direction as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13.] (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub- section (4) of Section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of Section 13 to recover his secured debt. [(4-A) Where\u2014 (i) any person, in an application under sub- section (1), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy,\u2014 (a) has expired or stood determined; or Ins. by Act 44 of 2016, S. 14(iv) (w.e.f. 1-9-2016). (b) is contrary to Section 65-A of the Transfer of Property Act, 1882 (4 of 1882); or (c) is contrary to terms of mortgage; or (d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of Section 13 of the Act; and (ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause (b) or sub- clause (c) or sub-clause (d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act.] (5) Any application made under sub-section (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application: Provided that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such application made under sub-section (1). (6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in sub-section (5), any party to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an order for expeditious disposal of the pending application by the Debts Recovery Tribunal. (7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder.]\u201d Rule 8 of the 2002 Rules reads as follows: \u201c8. Sale of immovable secured assets.\u2014(1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property. (2) 16[The possession notice as referred to in sub- rule (1) shall also be published, as soon as possible but in any case not later than seven days from the date of taking possession, in two leading newspapers], one in vernacular language having sufficient circulation in that locality, by the authorised officer. [(2-A) All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes prescribed under sub-rule (1) and sub-rule (2) of rule 8.] Subs. for \u201cThe possession notice as referred to in sub-rule (1) shall also be published in two leading newspaper\u201d by S.O. 1837(E), dated 26-10-2007 (w.e.f. 26-10-2007). Ins. by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016). (3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who shall take as much care of the property in his custody as a owner of ordinary prudence would, under the similar circumstances, take of such property. (4) The authorised officer shall take steps for preservation and protection of secured assets and insure them, if necessary, till they are sold or otherwise disposed of. (5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods:\u2014 (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or (b) by inviting tenders from the public; [(c) by holding public auction including through e-auction mode; or] (d) by private treaty. (6) the authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5): Provided that if the sale of such secured asset is being effected by either inviting tenders from the Subs. by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016). Prior to substitution it read as: \u201c(c) by holding public auction; or\u201d public or by holding public auction, the secured creditor shall cause a public notice in two leading newspapers one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include,\u2014 (a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor; (b) the secured debt for recovery of which the property is to be sold; (c) reserve price, below which the property may not be sold; (d) time and place of public auction or the time after which sale by any other mode shall be completed; (e) depositing earnest money as may be stipulated by the secured creditor; (f) any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property. (7) Every notice of sale shall be affixed on a conspicuous part of the immovable property and may, if the authorised officer deems it fit, put on the website of the secured creditor on the Internet. (8) Sale by any methods other than public auction or public tender, shall be on such terms as may be settled 19[between the secured creditor and the proposed purchaser in writing].\u201d Appendix IV to the 2002 Rules reads as follows: Subs. for \u201cbetween the parties in writing\u201d by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016). \u201cAPPENDIX IV [See rule 8(1)] POSSESSION NOTICE (for immovable property) Whereas The undersigned being the authorised officer of the \u2026\u2026\u2026..\u2026\u2026\u2026\u2026\u2026\u2026\u2026. (name of the Institution) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest 20[Act, 2002 (54 of 2002)] and in exercise of powers conferred under Section 13(12) read with 21[Rule 3] of the Security Interest (Enforcement) Rules, 2002 issued a demand notice dated \u2026\u2026\u2026\u2026\u2026\u2026. calling upon the borrower Shri \u2026\u2026\u2026\u2026\u2026\u2026..\u2026\u2026\u2026. /M/s \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 to repay the amount mentioned in the notice being Rs \u2026\u2026\u2026\u2026\u2026 (in words \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026) within 60 days from the date of receipt of the said notice. [The borrower having failed to repay the amount, notice is hereby given to the borrower and the public in general that the undersigned has taken possession of the property described herein below in exercise of powers conferred on him under sub- section (4) of Section 13 of Act read with Rule 8 of the Security Interest Enforcement) Rules, 2002 on this the \u2026\u2026.day of \u2026.. of the year\u2026\u2026] The borrower in particular and the public in general is hereby cautioned not to deal with the property and any dealings with the property will be subject to the charge of the \u2026\u2026\u2026\u2026.. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. (name of the Institution) for an amount Rs. \u2026\u2026\u2026\u2026\u2026\u2026.. and interest thereon. Subs. for \u201cOrdinance\u201d by S.O. 103(E), dated 2-2-2007 (w.e.f. 2-2-2007). Subs. for \u201cRule 9\u201d by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016). Subs. by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016). [The borrower\u2019s attention is invited to provisions of sub-section (8) of Section 13 of the Act, in respect of time available, to redeem the secured assets.] Description of the Immovable Property All that part and parcel of the property consisting of Flat No. \u2026\u2026 /Plot No. \u2026\u2026\u2026 In Survey No. \u2026\u2026\u2026\u2026/City or Town Survey No. \u2026\u2026\u2026\u2026 /Khasara No. \u2026\u2026.\u2026\u2026\u2026\u2026\u2026 within the registration sub-district \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. and District \u2026\u2026\u2026\u2026\u2026\u2026\u2026.. Bounded: On the North by On the South by On the East by On the West by sd/- Authorised Officer (Name of Institution) Date: Place:\u201d 8. This Court in Mardia Chemicals (supra) after referring in detail to the provisions of the Act held: \u201c48. The next safeguard available to a secured borrower within the framework of the Act is to approach the Debts Recovery Tribunal under Ins. by G.S.R. 1046(E), dt. 3-11-2016 (w.e.f. 4-11-2016). Section 17 of the Act. Such a right accrues only after measures are taken under sub-section (4) of Section 13 of the Act. xxx xxx xxx 59. We may like to observe that proceedings under Section 17 of the Act, in fact, are not appellate proceedings. It seems to be a misnomer. In fact it is the initial action which is brought before a forum as prescribed under the Act, raising grievance against the action or measures taken by one of the parties to the contract. It is the stage of initial proceeding like filing a suit in civil court. As a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of the Act in the present case. We may refer to a decision of this Court in Ganga Bai v. Vijay Kumar[(1974) 2 SCC 393] where in respect of original and appellate proceedings a distinction has been drawn as follows: (SCC p. 397, para 15) \u201cThere is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of civil nature and unless the suit is barred by statute one may, at one's peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute.\u201d xxx xxx xxx 62. As indicated earlier, the position of the appeal under Section 17 of the Act is like that of a suit in the court of the first instance under the Code of Civil Procedure. No doubt, in suits also it is permissible, in given facts and circumstances and under the provisions of the law to attach the property before a decree is passed or to appoint a receiver and to make a provision by way of interim measure in respect of the property in suit. But for obtaining such orders a case for the same is to be made out in accordance with the relevant provisions under the law. There is no such provision under the Act. xxx xxx xxx 80. Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under Section 13(4) of the Act have been taken, a mechanism has been provided under Section 17 of the Act to approach the Debts Recovery Tribunal. The abovenoted provisions are for the purpose of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows: 1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days\u2019 notice before proceeding to take any of the measures as provided under sub-section (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be, must be communicated to the borrower. In connection with this conclusion we have already held a discussion in the earlier part of the judgment. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under Section 17 of the Act, at that stage. 2. As already discussed earlier, on measures having been taken under sub- section (4) of Section 13 and before the date of sale/auction of the property it would be open for the borrower to file an appeal (petition) under Section 17 of the Act before the Debts Recovery Tribunal. 3. That the Tribunal in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose. 4. In view of the discussion already held in this behalf, we find that the requirement of deposit of 75% of the amount claimed before entertaining an appeal (petition) under Section 17 of the Act is an oppressive, onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down. 5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court.\u201d Close on the heels of this judgment, the 2002 Act was amended on 30.12.2004 with effect from 11.11.2004. The Statement of Objects and Reasons for the Amended Act reads as under: \u201cStatement of Objects and Reasons.\u2014The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected thereto. The Act enables the banks and financial institutions to realise long-term assets, manage problems of liquidity, asset liability mis-match and improve recovery by exercising powers to take possession of securities, sell them and reduce non- performing assets by adopting measures for recovery or reconstruction. The Act further provides for setting up of asset reconstruction companies which are empowered to take possession of secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured assets and take over the management of the business of the borrower. 2. The Hon\u2019ble Supreme Court, in the case of Mardia Chemicals Ltd. v. Union of India, A.I.R. 2004 S.C. 2371 : (2004) 4 S.C.C 311, inter alia,\u2014 (a) upheld the validity of the provisions of the said Act except that of sub-section (2) of Section 17 which was declared ultra vires Article 14 of the Constitution. The said sub-section provides for deposit of seventy-five per cent. of the amount claimed before entertaining an appeal (petition) by the Debts Recovery Tribunal (DRT) under Section 17; (b) observed that in cases where a secured creditor has taken action under sub-section (4) of Section 13 of the said Act, it would be open to borrowers to file appeals under Section 17 of the Act within the limitation as prescribed therefor. It also observed that if the borrower, after service of notice under sub-section (2) of Section 13 of the said Act, raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief that may be, must be communicated to the borrower. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under Section 17 of the Act, at that stage. 3. In view of the above judgment of the Hon\u2019ble Supreme Court and also to discourage the borrowers to postpone the repayment of their dues and also enable the secured creditor to speedily recover their debts, if required, by enforcement of security or other measures specified in sub-section (4) of Section 13 of the said Act, it had become necessary to amend the provisions of the said Act. 4. Since the Parliament was not in session and it was necessary to take immediate action to amend the said Act for the above reasons, the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Ordinance, 2004 was promulgated on the 11th November, 2004. 5. The said Ordinance amends the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Companies Act, 1956. Chapter II of the Ordinance which amends the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,\u2014 (a) require the secured creditor to consider, in response to the notice issued by the secured creditor under sub-section (2) of Section 13 of the said Act, any representation made or objection raised by the borrower and cast an obligation upon the secured creditor to communicate within one week of receipt of such representation or objection the reasons for non- acceptance of the representation or objection to the borrower and take possession of the secured asset only after reasons for not accepting the objections of the borrower have been communicated to him in writing; (b) enable the borrower to make an application before the Debts Recovery Tribunal without making any deposit (instead of filing an appeal before the Debts Recovery Tribunal after depositing seventy-five per cent. of the amount claimed with the notice by the secured creditor); (c) provides that the Debts Recovery Tribunal shall dispose of the application as expeditiously as possible and dispose of such application within sixty days from the date of such applications so that the total period of pendency of the application with such Tribunal shall not exceed four months; (d) make provision for transfer of pending applications to any one of the Debts Recovery Tribunal in certain cases; (e) enables any person aggrieved by any order made by the Debts Recovery Tribunal to file an appeal to the Debts Recovery Appellate Tribunal after depositing with the Appellate Tribunal fifty per cent. of amount of debt due from him, as claimed by the secured creditor or determined by the Debts Recovery Tribunal, whichever is less; (f) enables the borrower residing in the State of Jammu and Kashmir to make an application to the Court of District Judge in that State having jurisdiction over the borrower and make provision for filing an appeal to the High Court from the order of the Court of District Judge; (g) makes provision for validation of the fees levied under the said Act before the commencement of this Ordinance. xxx xxx xxx\u201d The Act was accordingly amended in accordance with the aforesaid judgment. 9. The judgment in Mardia Chemicals (supra) had made it clear in paragraph 80 that all measures having been taken under section 13(4), and before the date of sale auction, it would be open for the borrower to file a petition under section 17 of the Act. This paragraph appears to have been missed by the Full Bench in the impugned judgment. 10. A reading of section 13 would make it clear that where a default in repayment of a secured debt or any instalment thereof is made by a borrower, the secured creditor may require the borrower, by notice in writing, to discharge in full his liabilities to the secured creditor within 60 days from the date of notice. It is only when the borrower fails to do so that the secured creditor may have recourse to the provisions contained in section 13(4) of the Act. Section 13(3-A) was inserted by the 2004 Amendment Act, pursuant to Mardia Chemicals (supra), making it clear that if on receipt of the notice under section 13(2), the borrower makes a representation or raises an objection, the secured creditor is to consider such representation or objection and give reasons for non- acceptance. The proviso to section 13(3-A) makes it clear that this would not confer upon the borrower any right to prefer an application to the Debts Recovery Tribunal under section 17 as at this stage no action has yet been taken under section 13(4). 11. When we come to section 13(4)(a), what is clear is that the mode of taking possession of the secured assets of the borrower is specified by rule 8. Under section 38 of the Act, the Central Government may make rules to carry out the provisions of the Act. One such rule is rule 8. Rule 8(1) makes it clear that \u201cthe authorised officer shall take or cause to be taken possession\u201d. The expression \u201ccause to be taken\u201d only means that the authorised officer need not himself take possession, but may, for example, appoint an agent to do so. What is important is that such taking of possession is effected under sub-rule (1) of rule 8 by delivering a possession notice prepared in accordance with Appendix IV of the 2002 Rules, and by affixing such notice on the outer door or other conspicuous place of the property concerned. Under sub-rule (2), such notice shall also be published within 7 days from the date of such taking of possession in two leading newspapers, one in the vernacular language having sufficient circulation in the locality. This is for the reason that when we come to Appendix IV, the borrower in particular, and the public in general is cautioned by the said possession notice not to deal with the property as possession of the said property has been taken. This is for the reason that, from this stage on, the secured asset is liable to be sold to realise the debt owed, and title in the asset divested from the borrower and complete title given to the purchaser, as is mentioned in section 13(6) of the Act. There is, thus, a radical change in the borrower dealing with the secured asset from this stage. At the stage of a section 13(2) notice, section 13(13) interdicts the borrower from transferring the secured asset (otherwise than in the ordinary course of his business) without prior written consent of the secured creditor. But once a possession notice is given under rule 8(1) and 8(2) by the secured creditor to the borrower, the borrower cannot deal with the secured asset at all as all further steps to realise the same are to be taken by the secured creditor under the 2002 Rules. 12. Section 19, which is strongly relied upon by Shri Ranjit Kumar, also makes it clear that compensation is receivable under section 19 only when possession of secured assets is not in accordance with the provision of this Act and rules made thereunder.24 The scheme of section 13(4) read with rule 8(1) therefore makes it clear that the delivery of a possession notice together with affixation on the property and publication is one mode of taking \u201cpossession\u201d under section 13(4). This being the case, it is clear that section 13(6) kicks in as soon as this is done as the expression used in section 13(6) is \u201cafter taking possession\u201d. Also, it is clear that rule 8(5) to 8(8) also kick in as soon as \u201cpossession\u201d is taken under rule 8(1) and 8(2). The statutory scheme, therefore, in the present case is that once possession is taken under rule 8(1) and 8(2) read with section 13(4)(a), section 17 gets attracted, as this is one of the measures referred to in section 13(4) that has been taken by the secured creditor under Chapter III. 13. Rule 8(3) begins with the expression \u201cin the event of\u201d. These words make it clear that possession may be taken alternatively under sub-rule (3). The further expression used in That this is the general scheme of the Act is also clear from section 17(2) which states that the Debts Recovery Tribunal, when an application is filed before it, shall consider whether any of the measures referred to in section 13(4) taken by the secured creditor are in accordance with the provisions of the Act and rules made thereunder. sub-rule (3) is \u201cactually taken\u201d making it clear that physical possession is referred to by rule 8(3). Thus, whether possession is taken under either rule 8(1) and 8(2), or under rule 8(3), measures are taken by the secured creditor under section 13(4) for the purpose of attracting section 17(1). 14. The argument made by the learned counsel for the respondents that section 13(4)(a) has to be read in the light of sub-clauses (b) and (c) is therefore incorrect and must be rejected. Under sub-clause (c), a person is appointed as manager to manage the secured assets the possession of which has been taken over by the secured creditor only under rule 8(3). Further, the rule of noscitur a sociis cannot apply. Sub-clause (b) speaks of taking over management of the business of the borrower which is completely different from taking over possession of a secured asset of the borrower. Equally, sub-clause (d) does not speak of taking over either management or possession, but only speaks of paying the secured creditor so much of the money as is sufficient to pay off the secured debt. These arguments must therefore be rejected. 15. Equally fallacious is the argument that section 13(4) must be read in the light of sections 14 and 15. There is no doubt whatsoever that under section 14(1), the Magistrate takes possession of the asset and \u201cforwards\u201d such asset to the secured creditor. Equally, under section 15 there is no doubt that the management of the business of a borrower must actually be taken over. These are separate and distinct modes of exercise of powers by a secured creditor under the Act. Whereas sections 14 and 15 have to be read by themselves, section 13(4)(a), as has been held by us, has to be read with rule 8, and this being the case, this argument must also be rejected. 16. Yet another argument was made by the learned counsel for the respondents that section 17(3) would require restoration of possession of secured assets to the borrower, which can only happen if actual physical possession is taken over. Section 17(3) is a provision which arms the Debts Recovery Tribunal to give certain reliefs when applications are made before it by the borrower. One of the reliefs that can be given is restoration of possession. Other reliefs can also be given under the omnibus section 17(3)(c). Merely because one of the reliefs given is that of restoration of possession does not lead to the sequitur that only actual physical possession is therefore contemplated by section 13(4), since other directions that may be considered appropriate and necessary may also be given for wrongful recourse taken by the secured creditor to section 13(4). This argument again has no legs to stand on. 17. Another argument made by learned senior counsel for the respondents is that if we were to accept the construction of section 13(4) argued by the appellants, the object of the Act would be defeated. As has been pointed out hereinabove in the Statement of Objects and Reasons of the original enactment, paragraphs 2(i) and 2(j) make it clear that the rights of the secured creditor are to be exercised by officers authorised in this behalf in accordance with the rules made by the Central Government. Further, an appeal against the action of any bank or financial institution is provided to the concerned Debts Recovery Tribunal. It can thus be seen that though the rights of a secured creditor may be exercised by such creditor outside the court process, yet such rights must be in conformity with the Act. If not in conformity with the Act, such action is liable to be interfered with by the Debts Recovery Tribunal in an application made by the debtor/borrower. Thus, it can be seen that the object of the original enactment also includes secured creditors acting in conformity with the provisions of the Act to realise the secured debt which, if not done, gives recourse to the borrower to get relief from the Debts Recovery Tribunal. Equally, as has been seen hereinabove, the Statement of Objects and Reasons of the Amendment Act of 2004 also make it clear that not only do reasons have to be given for not accepting objections of the borrower under section 13(3-A), but that applications may be made before the Debts Recovery Tribunal without making the onerous pre-deposit of 75% which was struck down by this Court in Mardia Chemicals (supra). The object of the Act, therefore, is also to enable the borrower to approach a quasi- judicial forum in case the secured creditor, while taking any of the measures under section 13(4), does not follow the provisions of the Act in so doing. Take for example a case in which a secured creditor takes possession under rule 8(1) and 8(2) before the 60 days\u2019 period prescribed under section 13(2) is over. The borrower does not have to wait until actual physical possession is taken (this may never happen as after possession is taken under rule 8(1) and 8(2), the secured creditor may go ahead and sell the asset). The object of providing a remedy against the wrongful action of a secured creditor to a borrower will be stultified if the borrower has to wait until a sale notice is issued, or worse still, until a sale actually takes place. It is clear, therefore, that one of the objects of the Act, as carried out by rule 8(1) and 8(2) must also be subserved, namely, to provide the borrower with instant recourse to a quasi-judicial body in case of wrongful action taken by the secured creditor. 18. Another argument that was raised by learned senior counsel for the respondents is that the taking of possession under section 13(4)(a) must mean actual physical possession or otherwise, no transfer by way of lease can be made as possession of the secured asset would continue to be with the borrower when only symbolic possession is taken. This argument also must be rejected for the reason that what is referred to in section 13(4)(a) is the right to transfer by way of lease for realising the secured asset. One way of realising the secured asset is when physical possession is taken over and a lease of the same is made to a third party. When possession is taken under rule 8(1) and 8(2), the asset can be realised by way of assignment or sale, as has been held by us hereinabove. This being the case, it is clear that the right to transfer could be by way of lease, assignment or sale, depending upon which mode of transfer the secured creditor chooses for realising the secured asset. Also, the right to transfer by way of assignment or sale can only be exercised in accordance with rules 8 and 9 of the 2002 Rules which require various pre-conditions to be met before sale or assignment can be effected. Equally, transfer by way of lease can be done in future in cases where actual physical possession is taken of the secured asset after possession is taken under rule 8(1) and 8(2) at a future point in time. If no such actual physical possession is taken, the right to transfer by way of assignment or sale for realising the secured asset continues. This argument must also, therefore, be rejected. 19. Shri Ashish Dholakia, learned Advocate, appearing for the intervenor, State Bank of India, argued that if we were to upset the Full Bench judgment, there would be little difference between the Recovery of Debts Act and the SARFAESI Act as banks would not be able to recover their debts by selling properties outside the court process without constant interference by the Debts Recovery Tribunal. We are of the view that this argument has no legs to stand on for the reason that banks and financial institutions can recover their debts by selling properties outside the court process under the SARFAESI Act by adhering to the statutory conditions laid down by the said Act. It is only when such statutory conditions are not adhered to that the Debts Recovery Tribunal comes in at the behest of the borrower. It is needless to add that under the Recovery of Debts Act, banks/financial institutions could not recover their debts without intervention of the Debts Recovery Tribunal, which the SARFAESI Act has greatly improved upon, the only caveat being that this must be done by the secured creditor following the drill of the SARFAESI Act and rules made thereunder. Shri Dholakia then referred to and relied upon section 3 of the Transfer of Property Act, 1882. Under the said section, \u201ca person is said to have notice\u201d of a fact when he actually knows that fact, or when, but for willful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it. Shri Dholakia referred to and relied upon Explanation II to this definition, which reads as under: \u201cExplanation II.\u2014Any person acquiring any immoveable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.\u201d We fail to understand what relevance Explanation II could possibly have for a completely different statutory setting, namely, that of the SARFAESI Act and the 2002 Rules thereunder. For the purpose of the Transfer of Property Act, a person acquiring immovable property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. For the purpose of the SARFAESI Act read with the 2002 Rules, the taking of possession by a secured creditor of the secured asset of the borrower would include taking of possession in any of the modes prescribed under rule 8, as has been held by us hereinabove. This argument must also, therefore, be rejected. 20. We now come to some of the decisions of this Court. In Transcore v. Union of India & Anr., (2008) 1 SCC 125, this Court formulated the question which arose before it as follows: \u201c1. A short question of public importance arises for determination, namely, whether withdrawal of OA in terms of the first proviso to Section 19(1) of the DRT Act, 1993 (inserted by amending Act 30 of 2004) is a condition precedent to taking recourse to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (\u201cthe NPA Act\u201d, for short).\u201d To this, the answer given is in paragraph 69, which is as follows: \u201c69. For the above reasons, we hold that withdrawal of the OA pending before DRT under the DRT Act is not a precondition for taking recourse to the NPA Act. It is for the bank/FI to exercise its discretion as to cases in which it may apply for leave and in cases where they may not apply for leave to withdraw. We do not wish to spell out those circumstances because the said first proviso to Section 19(1) is an enabling provision, which provision may deal with myriad circumstances which we do not wish to spell out herein.\u201d Thereafter, the Court went on to discuss whether recourse to take possession of secured assets of the borrower in terms of section 13(4) of the Act would comprehend the power to take actual possession of immovable property. In the discussion on this point in paragraph 71 of the judgment, learned counsel on behalf of the borrowers made an extreme submission which was that the borrower who is in possession of immovable property cannot be physically dispossessed at the time of issuing the notice under section 13(4) of the Act so as to defeat adjudication of his claim by the Debts Recovery Tribunal under section 17 of the Act and that therefore, physical possession can only be taken after the sale is confirmed in terms of rule 9(9) of the 2002 Rules. This submission was rejected by stating that the word \u201cpossession\u201d is a relative concept and that the dichotomy between symbolic and physical possession does not find place under the Act. Having said this, the Court went on to examine the 2002 Rules and held: \u201c74. \u2026\u2026\u2026 Thus, Rule 8 deals with the stage anterior to the issuance of sale certificate and delivery of possession under Rule 9. Till the time of issuance of sale certificate, the authorised officer is like a Court Receiver under Order 40 Rule 1 CPC. The Court Receiver can take symbolic possession and in appropriate cases where the Court Receiver finds that a third-party interest is likely to be created overnight, he can take actual possession even prior to the decree. The authorised officer under Rule 8 has greater powers than even a Court Receiver as security interest in the property is already created in favour of the banks/FIs. That interest needs to be protected. Therefore, Rule 8 provides that till issuance of the sale certificate under Rule 9, the authorised officer shall take such steps as he deems fit to preserve the secured asset. It is well settled that third-party interests are created overnight and in very many cases those third parties take up the defence of being a bona fide purchaser for value without notice. It is these types of disputes which are sought to be avoided by Rule 8 read with Rule 9 of the 2002 Rules. In the circumstances, the drawing of dichotomy between symbolic and actual possession does not find place in the scheme of the NPA Act read with the 2002 Rules.\u201d If the whole of paragraph 74 is read together with the extracted passage, it becomes clear that what is referred to in the extracted passage is the procedure provided by rule 8(3). It is clear that the authorised officer\u2019s powers, once possession is taken under rule 8(3), include taking of steps for preservation and protection of the secured assets which is referred to in the extracted portion. Thus, the final conclusion by the Bench, though general in nature, is really referable to possession that is taken under rule 8(3) of the 2002 Rules. Whether possession taken under rule 8(1) and 8(2) is called symbolic possession or statutory possession, the fact remains that rule 8(1) and rule 8(2) specifically provide for a particular mode of possession taken under section 13(4)(a) of the Act. This cannot be wished away by an observation made by this Court in a completely different context in order to repel an extreme argument. This Court was only of the opinion that the extreme argument made, as reflected in paragraph 71 of the judgment, would have to be rejected. This judgment therefore does not deal with the problem before us: namely, whether a section 17(1) application is maintainable once possession has been taken in the manner specified under rule 8(1) of the 2002 Rules. 21. Another case strongly relied upon by learned counsel for the respondents is Noble Kumar (supra). This judgment decided that it is not necessary to first resort to the procedure under section 13(4) and, on facing resistance, then approach the Magistrate under section 14. The secured creditor need not avail of any of the remedies under section 13(4), and can approach the Magistrate straightaway after the 60-day period of the notice under section 13(2) is over, under section 14 of the Act. This Court therefore held: \u201c35. Therefore, there is no justification for the conclusion that the Receiver appointed by the Magistrate is also required to follow Rule 8 of the Security Interest (Enforcement) Rules, 2002. The procedure to be followed by the Receiver is otherwise regulated by law. Rule 8 provides for the procedure to be followed by a secured creditor taking possession of the secured asset without the intervention of the court. Such a process was unknown prior to the SARFAESI Act. So, specific provision is made under Rule 8 to ensure transparency in taking such possession. We do not see any conflict between different procedures prescribed by law for taking possession of the secured asset. The finding of the High Court in our view is unsustainable. 36. Thus, there will be three methods for the secured creditor to take possession of the secured assets: 36.1. (i) The first method would be where the secured creditor gives the requisite notice under Rule 8(1) and where he does not meet with any resistance. In that case, the authorised officer will proceed to take steps as stipulated under Rule 8(2) onwards to take possession and thereafter for sale of the secured assets to realise the amounts that are claimed by the secured creditor. 36.2. (ii) The second situation will arise where the secured creditor meets with resistance from the borrower after the notice under Rule 8(1) is given. In that case he will take recourse to the mechanism provided under Section 14 of the Act viz. making application to the Magistrate. The Magistrate will scrutinise the application as provided in Section 14, and then if satisfied, appoint an officer subordinate to him as provided under Section 14(1-A) to take possession of the assets and documents. For that purpose the Magistrate may authorise the officer concerned to use such force as may be necessary. After the possession is taken the assets and documents will be forwarded to the secured creditor. 36.3. (iii) The third situation will be one where the secured creditor approaches the Magistrate concerned directly under Section 14 of the Act. The Magistrate will thereafter scrutinise the application as provided in Section 14, and then if satisfied, authorise a subordinate officer to take possession of the assets and documents and forward them to the secured creditor as under clause 36.2.(ii) above. 36.4. In any of the three situations above, after the possession is handed over to the secured creditor, the subsequent specified provisions of Rule 8 concerning the preservation, valuation and sale of the secured assets, and other subsequent rules from the Security Interest (Enforcement) Rules, 2002, shall apply.\u201d When this Court referred to the first method of taking possession of secured assets in paragraph 36.1.(i), this Court spoke of a case in which, once possession notice is given under rule 8(1), no resistance is met with. That is why, this Court states that steps as stipulated under rule 8(2) onwards to take possession, and thereafter, for sale of the secured assets to realise the amounts that are claimed by the secured creditor would have to be taken, meaning thereby that advertisement must necessarily be given in the newspaper as mentioned in rule 8(2), after which steps for sale may take place. This case again does not deal with the precise problem that is before the Court in this case. The observation made in paragraph 36.1.(i), which is strongly relied upon by the Full Bench of the High Court, to arrive at the conclusion that actual physical possession must first be taken before the remedy under section 17(1) can be availed of by the borrower, does not flow from this decision at all. 22. In Canara Bank v. M. Amarender Reddy & Anr., (2017) 4 SCC 735, this Court after referring to Mathew Varghese v. M. Amritha Kumar and Ors., (2014) 5 SCC 610, which held that the 30-day period mentioned under rule 8(6) is mandatory, then held: \u201c14. The secured creditor, after it decides to proceed with the sale of secured asset consequent to taking over possession (symbolic or physical as the case may be), is no doubt required to give a notice of 30 days for sale of the immovable asset as per sub-rule (6) of Rule 8. However, there is nothing in the Rules, either express or implied, to take the view that a public notice under sub-rule (6) of Rule 8 must be issued only after the expiry of 30 days from issuance of individual notice by the authorised officer to the borrower about the intention to sell the immovable secured asset. In other words, it is permissible to simultaneously issue notice to the borrower about the intention to sell the secured assets and also to issue a public notice for sale of such secured asset by inviting tenders from the public or by holding public auction. The only restriction is to give thirty days\u2019 time gap between such notice and the date of sale of the immovable secured asset.\u201d Though there was no focused argument on the controversy before us, this Court did recognise that possession may be taken over under rule 8 either symbolically or physically, making it clear that two separate modes for taking possession are provided for under rule 8. 23. Similarly, in ITC Limited v. Blue Coast Hotels Ltd. and Ors., AIR 2018 SC 3063, this Court held: \u201c45. As noticed earlier, the creditor took over symbolic possession of the property on 20.06.2013. Thereupon, it transferred the property to the sole bidder ITC and issued a sale certificate for Rs. 515,44,01,000/- on 25.02.2015. On the same day, i.e., 25.02.2015, the creditor applied for taking physical possession of the secured assets under Section 14 of the Act. 46. According to the debtor, since Section 14 provides that an application for taking possession may be made by a secured creditor, and the creditor having ceased to be a secured creditor after the confirmation of sale in favour of the auction purchaser, was not entitled to maintain the application. Consequently, therefore, the order of the District Magistrate directing delivery of possession is a void order. This submission found favour with the High Court that held that the creditor having transferred the secured assets to the auction purchaser ceased to be a secured creditor and could not apply for possession. The High Court held that the Act does not contemplate taking over of symbolic possession and therefore the creditor could not have transferred the secured assets to the auction purchaser. In any case, since ITC Ltd. was the purchaser of such property, it could only take recourse to the ordinary law for recovering physical possession. 47. We find nothing in the provisions of the Act that renders taking over of symbolic possession illegal. This is a well-known device in law. In fact, this court has, although in a different context, held in M.V.S. Manikayala Rao v. M. Narasimhaswami [AIR 1966 SC 470] that the delivery of symbolic possession amounted to an interruption of adverse possession of a party and the period of limitation for the application of Article 144 of the Limitation Act would start from such date of the delivery.\u201d 24. This judgment also speaks of the taking over of symbolic possession under the SARFAESI Act. The judgment then goes on to discuss whether a creditor could maintain an application for possession under section 14 of the Act once it takes over symbolic possession before the sale of the property to the auction purchaser. The Court referred to various authorities and arrived at the conclusion that a secured creditor remains a secured creditor when only constructive or symbolic possession is given, as the entire interest in the property not having been passed on to the secured creditor in the first place, the secured creditor in turn could not pass on the entire interest in the property to the auction purchaser. In this behalf, it is important to refer to section 8 of the Transfer of Property Act, 1882 which states as follows: \u201c8. Operation of transfer.\u2014 Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof. xxx xxx xxx\u201d Section 13(6) of the SARFAESI Act makes it clear that a different intention is so expressed by the Act, as any transfer of a secured asset after taking possession thereof, shall vest in the transferee all rights in the secured asset so transferred as if the transfer had been made by the owner of such secured asset. It is clear, therefore, that statutorily, under section 13(6), though only the lesser right of taking possession, constructive or physical, has taken place, yet the secured creditor may, by lease, sale or assignment, vest in the lessee or purchaser all rights in the secured asset as if the transfer had been made by the original owner of such secured asset. This aspect of the matter does not appear to have been noticed in the aforesaid judgment. The ultimate conclusion in the said judgment is, however, correct as a secured creditor remains a secured creditor even after possession is taken over as the fiction contained in section 13(6) does not convert the secured creditor into the owner of the asset, but merely vests complete title in the transferee of the asset once transfer takes place in accordance with rules 8 and 9 of the 2002 Rules. 25. We may also add that by a notification dated 17.10.2018, rule 8 has since been amended adding two sub-rules as follows: \u201c3. In the said rules, in rule 8\u2014 (i) in sub-rule (6), for the proviso, the following proviso shall be substituted, namely:- \u201cProvided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in the Form given in Appendix IV-A to be published in two leading newspapers including one in vernacular language having wide circulation in the locality.\u201d; (ii) for sub-rule (7), the following sub-rule shall be substituted, namely:\u2013 \u201c(7) every notice of sale shall be affixed on the conspicuous part of the immovable property and the authorised officer shall upload the detailed terms and conditions of the sale, on the web- site of the secured creditor, which shall include; (a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor; (b) the secured debt for recovery of which the property is to be sold; (c) reserve price of the immovable secured assets below which the property may not be sold; (d) time and place of public auction or the time after which sale by any other mode shall be completed; (e) deposit of earnest money as may be stipulated by the secured creditor; (f) any other terms and conditions, which the authorized officer considers it necessary for a purchaser to know the nature and value of the property.\u201d; Appendix IV-A which is now inserted by the said notification reads as follows: \u201cAPPENDIX - IV-A [See proviso to rule 8 (6)] Sale notice for sale of immovable properties E-Auction Sale Notice for Sale of Immovable Assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with proviso to Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002 Notice is hereby given to the public in general and in particular to the Borrower (s) and Guarantor (s) that the below described immovable property mortgaged/charged to the Secured Creditor, the constructive/physical ______________ (whichever is applicable) possession of which has been taken by the Authorised Officer of ______________ Secured Creditor, will be sold on \u201cAs is where is\u201d, \u201cAs is what is\u201d, and \u201cWhatever there is\u201d on ______________ (mention date of the sale), for recovery of Rs. due to the ______________ Secured Creditor from (mention name of the Borrower (s)) and ______________ (mention name of the Guarantor (s)). The reserve price will be Rs. ______________ and the earnest money deposit will be Rs. ______________ (Give short description of the immovable property with known encumbrances, if any) For detailed terms and conditions of the sale, please refer to the link provided in ______________ Secured Creditor\u2019s website i.e. www. (give details of website) Date: Authorised Officer Place:\u201d This appendix makes it clear that statutorily, constructive or physical possession may have been taken, pursuant to which a sale notice may then be issued under rule 8(6) of the 2002 Rules. Appendix IV-A, therefore, throws considerable light on the controversy before us and recognises the fact that rule 8(1) and 8(2) refer to constructive possession whereas rule 8(3) refers to physical possession. We are therefore of the view that the Full Bench judgment is erroneous and is set aside. The appeals are accordingly allowed, and it is hereby declared that the borrower/debtor can approach the Debts Recovery Tribunal under section 17 of the Act at the stage of the possession notice referred to in rule 8(1) and 8(2) of the 2002 Rules. The appeals are to be sent back to the Court/Tribunal dealing with the facts of each case to apply this judgment and thereafter decide each case in accordance with the law laid down by this judgment. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..J. (R.F. Nariman) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..J. 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