Appeal No. 696 of 1966.

Appeal by special leave from the judgment and order dated September 13, 1963 of the Madras High Court in Writ Appeal No. IO of 1962.

P. Ram Reddy and A. V. Rangam, for the appellant.

R. Ganapathy Iyer, for the respondent.

The Judgment of the Court was delivered by Ramaswami, J.

The question of law involved in this appeal is whether the purchaser of business carried on by a dealer as defined in the Madras General Sales Tax Act, 1939 (Madras Act No. IX of 1939), hereinafter called the 'Act ', can be made liable for arrears of sales tax due from the dealer in respect of transactions of sale which took place before the, transfer of the business under Rule 21 A of the Rules framed in exercise of the powers conferred on the State Government by section 19 of the Act.

The respondent purchased, by a registered instrument dated October 5, 1956, the business carried on by one Purushottam Raju under the name All India Trading Company.

Purushottam Raju was the sole proprietor of the business and had been assessed to sales tax in respect of his turnover for the years 1948 49 and 1949 50.

The assessee paid some amounts towards sales tax thus determined, but there remained some arrears of sales tax i.e., Rs. 3836 4 0 for 1948 49 and Rs. 1218 1 9 for 1949 50.

The Sales tax authorities attempted to recover the arrears of tax from the respondent as the purchaser of the business.

The respondent 6 63 denied liability to pay sales tax but his contention was over ruled by the Deputy Commercial Tax Officer.

The respondent appealed to the Commercial Tax Officer as well as to the Board of Revenue, but the appeals were dismissed.

The respondent thereafter moved the Madras High Court under article 226 of the Constitution for the issue of a writ in the nature of certiorari to quash the orders of the Commercial Tax Officer and the Board of Revenue.

Ganapatia Pillai, J. who heard the petition dismissed it.

The respondent took the matter in appeal under the Letters Patent.

The Division Bench consisting of section Ramachandra Iyer, C.J. and Ramakrishnan, J. reversed the judgment of the Single Judge, holding that Rule 21 A of the Sales Tax Rules was illegal and ultra vires and the respondent was not liable to pay the sales tax due from his predecessor in title, Purushottam Raju.

This appeal is brought, by special leave, from the judgment of the Division Bench of the Madras High Court dated September 13, 1963 in Writ Appeal No. 10 of 1962.

Rule 21 A was framed by the State Government under the rule making power granted to it under section 19(1) and (2) of the Act.

Rule 21 A reads as follows : "When the ownership of the business of a dealer liable to pay the tax under the Act is entirely transferred, any tax payable in respect of such business and remaining unpaid at the time of the transfer shall be recoverable from the transferor or the transferee as if they were the dealers liable to pay such tax, provided that the recovery from the transferee of the arrears of taxes due prior to the date of the transfer shall be only to the extent of the value of the business he obtained by transfer.

The trans feree shall also be liable to pay tax under the Act on the sales of goods effected by him with effect from the date of such transfer and shall within thirty days of the transfer apply for registration or licence, as the case may be, unless he already holds a certificate of registration or licence, as the case may be.

" Section 19 ( 1 ) and 1 9 (2) (c) are to the following effect "19.

(1) The State Government may make rules to carry out the purposes of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for (c) the assessment to tax under this Act of businesses which are discontinued or the ownership of which has changed;" 664 The first question to be considered in this appeal is whether Rule 21 A is intra vires of the power of the State Government under sections 19(1) and (2) of the Act.

Section 3(1) of the Act is the charging section.

It imposes a liability to pay sales tax on every dealer for each year, and the tax is to be calculated on his total turnover for that year.

Section 2(b) of the Act defines a "dealer" as "a person who carries on the business of buying, selling .

goods".

The word "turnover" is defined in section 2(i) of the Act to mean "the aggregate amount for which goods are either bought or sold by a dealer, whether for cash or for deferred payment or other valuable consideration. ".

It is manifest that a person who purchases a business as a 'dealer ' can be assessed to sales tax only in respect of his turnover and under the scheme of the charging provision of the Act the purchaser of the business has nothing to do with the sales effected by the seller of the business.

The turnover in respect of such sales remains therefore the turnover of the transferor and not of the transferee.

By the amending Act of 1959 (Act 1 of 1959) an express provision was inserted by which the transferee of the business was made liable for the arrears of sales tax due from the transferor.

But there is no such provision in the Act for the period with which we are concerned in the present case.

The question is whether the State Government has authority under its rule making power under section 19 of the Act to create a legal fiction by which the transferee of the business is constituted as the dealer liable to pay the tax in respect of the turnover of the transferor.

On behalf of the appellants Mr. Ram Reddy suggested that the State Government has power under section 19(1) and 19(2) (c) of the Act to frame the impugned rule.

We are unable to accept this argument as correct.

Section 19(1) of the Act empowers the State Government to make rules to carry out the purposes of the Act, but the section cannot be utilised to enlarge the scope of section 10 regarding recovery and payment of tax from some other person other than a "dealer" under the Act.

We also consider that the State Government has no authority under section 19(2)(c) of the Act to enact the rule.

Section 19(2)(c) deals with the assessment to tax of businesses which are discontinued or the ownership of which has changed.

It is true that the word "assessment" in the scheme of sales tax and income tax legislation is a term of varying import.

The word is used sometimes to mean the computation of income, sometimes the determination of the amount of tax payable, and sometimes the whole procedure laid down in the Income tax Act for imposing liability on the tax payer.

As the Judicial Committee, however, said in Badridas Daga vs C.I.T (1), the words 'assess ' and 'assessment ' refer primarily to the computation of the amount.

of income.

In Chatturam vs C.I.T. Bihar(1), the Federal Court pointed out, relying upon the decision of the House of Lords in (1) , 21 1.

(2) , 665 Whitney vs Commissioners of Inland Revenue("), that the liability to tax does not depend upon assessment.

The liability is definitely created by sections 3 and 4 of the Income tax Act which are the charging sections and the assessment order under section 23 only quantifies the liability which has already been definitely and finally created by the charging sections and the provision in regard to assessment relates only to the machinery of taxation.

In our opinion, the principle of these decisions applies to the interpretation of the Act in the present case.

We consider that, in the context and background of other sections of the Act, the word 'assessment ' used in section 19(2)(c) does not include the power of recovering tax assessed from a person other than the assessee.

It follows therefore that Rule 21 A is beyond the rule making power of the State Government either under section 19(1) or section 19(2)(c) of the Act.

It was then submitted by Mr. Ram Reddy that Rule 21 A may be supported by the language of section 10(1) of the Act which states "10.

Payment and recovery of tax. (1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than fifteen days from the date of service of the notice.

" It was contended that under this section the whole of the amount outstanding on the date of default is charged on the property of the person liable to pay the tax.

In the present case, the business which was transferred to the respondent was hence charged with the payment of sales tax and it was open to sales tax authorities to proceed against the assets of the business for realising the amount of sales tax due.

In our opinion, there is no justification for this argument.

Section 10 of the Act as it stood before the Madras General Sales tax (3rd amendment) Act, 1956 (Act No. XV of 1956) read as follows "The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than fifteen days from the date of service of the notice.

In default of such payment, the whole of the amount then remaining due may be recovered as if it were an arrear of land revenue.

" This section was amended by section 8 of the Madras General Sales tax (3rd amendment) Act, 1956 which reads as follows (1) 666 "Substitution of new section for section 10 in Madras Act IX of 1939.

For section 10 of the principal Act, the following section shall be substituted, namely "10.

If default is made in paying according to the notice of assessment, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act. . .

The 3rd Amendment Act, 1956 received the assent of the President on October 1, 1956 but it was published in the Madras Gazette on October 8. 1956.

Section 5 of the Madras General Clauses Act (Madras Act No. 1 of 1891) provides as follows "5.

(1) Where any Act to which this Chapter applies is not expressed to come into operation, on a particular day, then, it shall come into operation on the day on which the assent thereto of the Governor, the Gover nor General or the President, as the case may require, is first published in the Official Gazette.

" In the present case, the Act is not expressed to come into operation on any particular date, but as it was published in the Madras Gazette on October 8, 1956, the Act came into operation on that date and not before.

In the present case, the registered instrument by which the business was transferred to the respondent is dated October 5, 1956 and the amending Act has therefore no application.

We accordingly reject the argument of the appellants on this aspect of the case and hold that Rule 21 A is ultra vires of the rule making power of the State Government under the, Act.

It was next argued on behalf of the appellants that upon a true construction of the registered instrument dated October 5, 1956 the respondent undertook to pay not only Sch.

I liabilities but also other liabilities like sales tax imposed in regard to the business.

It was, however, disputed by Mr. Ganapathy Iyer on behalf of the respondent that there was any undertaking on the part of the respondent to discharge the liabilities in regard to arrears of sales tax.

But even on the assumption that the respondent undertook to pay the arrears of sales tax due by the transferor, it does not follow 66 7 that there is a liability created inter se between the State Government on the one hand and the transferee on the other hand.

To put it differently, it is not open to the State Government to rely on the instrument inter vivos between the transferor and the transferee and to contend that there is any contractual obligation between the transferee and the State Government who is not a party to the instrument.

We accordingly reject the argument of the appellants on this aspect of the case also.

For these reasons we hold that the judgment of the Division Bench of the High Court dated September 13, 1963 is correct and this appeal must be dismissed with costs.

R.K.P.S. Appeal dismissed.

Summary: By a registered instrument dated October 5, 1956, the respondent purchased the business carried on by a dealer as defined in the Madras General Sales Tax Act IX of 1939.

Summary: The dealer had been assessed to sales tax in respect of his turnover for the years 1948 49 and 1949 50 and had paid a part of the sales tax determined as due from him with the balance amount remaining in arrears.

Summary: The sales tax authorities attempted to recover the arrears from the respondent as the purchaser of the business and although he denied liability, his contention was overruled by the Deputy Commercial Tax Officer.

Summary: His appeal to the Board of Revenue was also dismissed and he thereafter filed a Writ Petition under article 226 of the Constitution, challenging the orders of the C.T.O. and the Board.

Summary: A Single Bench of the High Court dismissed the appeal but a Division Bench allowed a Letters Patent Appeal holding that Rule 21 A of the Sales Tax Rules under which the arrears were sought to be recovered from the respondent, was illegal and ultra vires the Act.

Summary: In the appeal to the Supreme Court it was contended, Inter alia, on behalf of the department (i) that Rule 21 A was valid having been made in exercise of the rule making power granted to the State Government under sections 19(1) and 19(2) (c) of the Act whereby it could make rules for the assessment to tax under the Act of businesses which were discontinued or the ownership of which had changed; (ii) that further more under section 10, the whole of the amount outstanding on the date of the default was charged on the property of the person liable to pay the tax; therefore, in the present case, the business which was transferred to the respondent was charged with the payment of sales tax and it was open to the sales tax authorities to proceed against the assets of the business for realising the amount of sales tax due; and (iii) that upon a true construction of the registered instrument dated October 5, 1956, the respondent undertook to pay all liabilities like sales tax imposed in regard to the business.

Summary: HELD: dismissing the appeal: (i) Rule 21 A was beyond the rule making power of the State Government either under section 19(1) or section 19(2)(c) and was therefore ultra vires the Act.

Summary: [666 E F] Although by the amending Act 1 of 1959, an express provision was inserted by which the transferee of the business was made liable for the arrears of sales tax due from the transferor, there was no Such provision in the Act during the period covered by the present case.

Summary: [664 D] it is manifest that the person who purchases a business as a 'dealer ' can be assessed to sales tax onlY in respect of his turnover and under the scheme of the charging provision of the Act, the purchaser of the busi 662 ness has nothing to do with the sales effected by the seller of the business, The turnover in respect of such sales remains.

Summary: therefore, the turnover of the transferor and not of the transferee.

Summary: [664 C] Although section 19(2)(c) deals with the assessment to tax of businesses which are discontinued or the ownership of which has changed, in the context and background of other sections of the Act, the word "assessment" used in para 19(2)(c) does not include the.

Summary: power of recovering tax assessed from a person other than the assessee.

Summary: [664 F G; 665 B C] Badridas Daga vs C.I.T., , 211; Chatturam vs C.I.7.

Summary: Bihar.

Summary: ; and Whitney vs Commissioners of Inland Revenue, , relied on.

Summary: (ii) section 10 of the Act as amended and sought to be relied upon had not come into force until October 8, 1956; in the present case the registered instrument by which the business was transferred to the respondent was dated October 5, 1956 and the amended section therefore had no Application.

Summary: [666 F] (iii) It was not open to the State Government to rely on the instrument inter vivos between the transferor and the transferee and to contend that there was any contractual obligation between the transferee and the State Government who was not a party to the instrument.

Summary: [667 BC]


Appeal No. 647 of 1966.

Appeal by special leave from the judgment and decree dated June 19, 24, 1963 of the Gujarat High Court in Appeal No. 704 of 1960 from Appellate Decree.

P. K. Chatterjee and section P. Nayar, for the appellant.

I. N. Shroff, for respondent No. 1.

section K. Dholakia and Vineet Kumar, for respondent No. 2.

The Judgment of the Court was delivered by Sikri, J.

This appeal by special leave arises out of the suit filed by Bhaishankar Avalram Joshi, hereinafter referred to as the plaintiff, for a declaration that the order of dismissal, dated February 2/4, 1955, passed by the Inspector General of Prisons, Saurashtra, was illegal and void on the ground that it contravened the provisions of article 311 (2) of the Constitution.

The plaintiff also prayed for a decree for Rs. 2,690 being arrears of his pay from April 1, 1954 to May 7, 1956.

The plaintiff failed before the Civil Judge, Rajkot, but on appeal succeeded before the District Judge, Central Saurashtra, inasmuch as he declared order dated February 2/4, 1955, illegal and void.

The plaintiff appealed to the High Court claiming arrears of salary and the State of Bombay filed cross objections praying that the suit be dismissed.

The second appeal was heard by the High Court of Gujarat (Miabhoy, J.) who directed that the decree passed by the lower appellate court "be varied so as to show that the appellant (plaintiff) continued to be in Government service till the date of the suit only and there will be a decree for Rs. 2,690 919 being arrears of pay due to the appellant (plaintiff) upto the date of the suit.

There will be a further provision in the decree that the liability arising out of the declaration that the appellant is in Government service is the liability of the State of Gujarat and that the liability for the payment of the arrears of pay is the liability of the State of Maharashtra".

The State of Maharashtra filed as application for leave to appeal under the Letters Patent but this ' was dismissed.

The appeal is now before us.

The learned counsel for the appellant the state of Maharashtra , contends ,first, that the High Court erred in holding that there had been a breach of article 311(2) of the Constitution, as, according to him, there was no duty to supply a copy of the report of the enquiry held against the plaintiff.

Secondly, he contends that the High Court erred in fastening the liability in respect of the arrears of pay on the State of Maharashtra.

Before we deal with the above points we may give a few facts.

The plaintiff entered service in the Gondal State in 1927 as a jailor.

The Gondal State merged with the United States of Saurashtra.

On March 6, 1953, the plaintiff was appointed senior jailor, Surendranagar District Jail.

On March 25, 1954, he was suspended, and at that time he was acting as Accountant at Rajkot Central Jail.

On March 7, 1954, he was served with a charge sheet.

In substance the charges were that while he was serving at Surendranagar he had committed certain acts of mis appropriation of food stuffs meant for prisoners, maltreatment of prisoners and acceptance of illegal gratification from them.

The plaintiff filed a written statement on September 4, 1954, and an enquiry was held by Mr. Gangopadhyay.

The plaintiff appeared before that officer and cross examined witnesses.

He also examined himself and some witnesses.

He was also allowed to appear through an Advocate in the enquiry proceedings.

The Enquiry Officer made a report and on or about January 7, 1955, the following notice was issued to him calling upon him to show cause why he should not be dismissed from service "To Shri Bhaishanker A. Joshi, Accountant, Rajkot Central Prison (Under suspension) Charges framed against you under this office No. C/ 14 dated 27 3 54 and in particular the charges of having accepted illegal gratification from prisoner Ratilal Jivan have been established to the satisfaction of Government.

You are hereby asked to show cause why the punishment of dismissal from service should not be inflicted upon You.

920 You should please submit your reply to this office, through the Superintendent, Rajkot Central Prison,, within a week from the date of receipt of this letter without fail.

Sd/ M. J. BHATT Inspector General of Prisons, Government of Saurashtra.

" The plaintiff filed a written statement.

He was dismissed by the Inspector General of Prisons by his order dated February 2/4, 1955.

This order was amended on February 9, 1955, in which it was stated that "the aforesaid order should be read so as to show that the plaintiff was dismissed from service on account of charge of accepting, illegal gratification from prisoner Ratilal Jivan having been conclusively proved against him in the departmental inquiries conducted against him by the Government".

In the plaint the plaintiff alleged that copy of the enquiry report was never supplied to him, and consequently he had not been given reasonable opportunity within the meaning of article 311 of the Constitution.

The State of Bombay admitted that the plaintiff was not supplied with a copy of the report of the Enquiry Officer, but pleaded that the plaintiff had not asked for copy of the report and had not been prejudiced by the non supply of the copy of the report.

The High Court held that the failure on the part of the competent authority to provide the plaintiff with a copy of the report of the Enquiry Officer amounted to denial of reasonable opportunity contemplated by article 311(2) of the Constitution.

It seems to us that the High Court came to a correct conclu sion.

The plaintiff was not aware whether the Enquiry Officer reported in his favour or against him.

If the report was in his favour, in his representation to the Government he would have utilised its reasoning to dissuade the Inspector General from coming to a contrary conclusion, and if the report was against him he would have put such arguments or material as he could to dissuade the Inspector General from accepting the report of the Enquiry Officer.

Moreover, as pointed out by the High Court, the Inspector General of Prisons had the report before him and the tentative conclusions arrived at by the Enquiry Officer were bound to influence him, and in depriving the plaintiff of a copy of the report he was handicapped is not knowing what material was influencing the Inspector General of Prisons.

921 As observed by Gajendragadkar, J., as he then was, in Union of lndia vs H. C. Goel(1), "the enquiry report along with the evidence recorded constitute the material on which the Government has ultimately to act.

That is the only purpose of the enquiry held by competent officer and the report he makes as a result of the said enquiry".

It is true that the question whether reasonable opportunity has or has not been afforded to the Government servant must depend on the facts of each case, but it would be in very rare cases indeed in which it could be said that the Government servant is not prejudiced by the non supply of the report of the Enquiry Officer.

In the result we must over rule the first contention urged on behalf of the appellant, the State of Maharashtra.

The plaintiff is not concerned with the second contention but it is a dispute between the State of Maharashtra and the State of Gujarat.

As is well known, the State of Bombay was reorganised into the above two States and the Bombay Reorganisation Act, 1960, contained various provisions for the apportionment of assets and liabilities between the two States.

We are here concerned with sections 60 and 61 of the Bombay Reorganisation 1960, which read thus : "60.

(1) Where, before the appointed day, the State of Bombay has made any contract in the exercise of its executive power for any purposes of the State, that contract shall be deemed to have been made in the exercise of the executive power, ( a) if such purposes are, as from that day, exclusively purposes of either the State of Maharashtra or the State of Gujarat, of that State; and (b) in any other case, of the State of Maharashtra; and all rights and liabilities which have accrued, or may accrue, under any such contract shall, to the extent to which they would have been rights or liabilities of the State of Bombay, be rights or liabilities of the State of Maharashtra or the State of Gujarat, as the case may be; Provided that in any such case as is referred to in clause (b), the initial allocation of 'rights and liabilities made by this sub section shall be subject to such financial adjustment as may be agreed upon between the State (1) ; ,728.

922 of Maharashtra and the State of Gujarat, or, in default of such agreement, as the Central Government may by order direct.

(2) For the purposes of this section there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract (a)any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract; and (b any liability in respect of expenses incurred in or in connection with any such proceedings.

(3)This section shall have effect subject to the other provisions of this Part relating to the apportionment of liabilities in respect of loans, guarantees and other financial obligations; and bank balances and securities shall, notwithstanding that they partake of the nature of contractual rights, be dealt with under those provisions.

Where, immediately before the appointed day, the State of Bombay is subject to any liability in respect of any actionable wrong other than breach of contract, that liability shall, (a) if the cause of action arose wholly within the territories which, as from that day, are the territories of the State of Maharashtra or the State of Gujarat, be a liability of that State; and (b) in any other case, be initially a liability of the State of Maharashtra but subject to such financial adjustment as may be agreed upon between the States of Maharashtra and Gujarat or, in default of such agreement, as the Central Government may by order direct." The learned counsel for the State of Maharashtra contends that the liability to pay arrears of pay was not a liability arising out of a contract but was a liability in respect of an actionable wrong other than a. breach of contract.

This Court in State of Bihar vs Abdul Majid(1) held "that the rule of English Law that a civil servant cannot maintain a suit against the Crown for the recovery of arrears of salary does not prevail in India and it has been negatived by the provisions of the statute law in India".

Mahajan, C.J., speaking for the Court, observed at p. 802: "As regard torts of its servants in exercise of sovereign powers, the company was not, and the Crown in (1) ; 923 India was not, liable unless the act has been ordered or ratified by it.

Be that as it may, that rule has no application to the case of arrears of salary earned by a public servant for the period that he was actually in office.

The present claim is not based on tort but is based on quantum meruit or contract and the court is entitled to give relief to him.

" It may be that these observations are not conclusive on the point under consideration.

It seems to us, however, that some elements of relationship between a public servant and Government are based on contract within the meaning of section 60 of the Bombay Reorganisation Act, 1960.

In particular, the liability to pay salary, when it has been fixed, arises out of a contract to pay salary.

Authority is not lacking even in England where a special relationship exists between the Crown and its public servants.

In Owner or section section Raphael v, Brandy(1) the head note reads A stoker on board a merchant ship, who was en titled to wages from the shipowners, and also as a stoker in the Royal Naval Reserve to 6 pound a year as a retainer, was injured by an accident on the ship which disabled him from continuing to serve in the Royal Naval Reserve Held, that the stoker was entitled under the Workmen 's Compensation Act, 1906, to compensation from the shipowners not only in respect of his wages but also of the retainer, which must be taken into account as earnings under a concurrent contract of service.

" The Lord Chancellor in the course of the speech observed "A point was made before your Lordships which does not appear to have been made in the Court below, that there was no contract with the Crown at all here.

The authorities cited_go no further than to say that when there is an engagement between the Crown and a military or naval officer the Crown is always entitled to determine it at pleasure, and that no obligation contrary to that would be recognized or valid in law.

It was then said that there were not here concurrent contracts.

I agree with Fletcher Moulton L.J. that this is almost a typical case of concurrent contracts, because the workman was being paid wages for his services on board a merchant ship, and at the same time he was earning his 6 pound a year by virtue of his engagement with the Crown; and he was giving an equivalent for that, (1) 924 because he was keeping himself fit and doing the work which he stipulated to do.

" It is true that Lord Goddard, C.J., in Inland Revenue Commissioners vs

Hambrook(1) observed : "If I may be bold enough to express a conclusion on a matter on which the Judicial Committee hesitated in Reilly vs R (2) , it is that an established civil servant is appointed to an office and is a public officer, remune rated by moneys provided by Parliament, so that his employment depends not on a contract with the Crown but on appointment by the Crown, though there may be as indicated in Reilly vs R. (2) exceptional cases, as for instance an engagement for a definite period where there is a contractual element in or collateral to his employment." But in the Court of Appeal nothing was said about these observations.

It will be remembered that the Privy Council had said in Reilly vs R(2) that "their Lordships are not prepared to accede to this view of the contract, if contract there be.

If the terms of the appointment definitely prescribe a term and expressly provide for a power to determine "for cause" it appears necessarily to follow that any implication of a power to dismiss at pleasure is excluded.

" Even Lord Goddard, C.J., in Terrell vs Secretary of State for the Colonies(3) observed that "the case (Reilly vs R.) (2) shows that there may be contractual rights existing before determination of a contract at will which are not inconsistent with a power to determine," and he stuck to this in Hambrook 's case(1) by stating : "Although it is clear that no action for wrongful dismissal can 'be brought by a discharged civil servant, I may be allowed to say that I adhere to the opinion which I expressed in Terrell vs Secretary of State for the Colonies(1) that he could recover his salary for the time during which he has served.

He would claim on a quantum mersuit and I am fortified in this view by Reilly vs R. (2), by R. vs Doultre(4) and by Bushe vs R(5) referred to in Robertson 's book at p, 338." (1)[1956] 1 All E.R. 807, 811 12.

(2) ; 179.

(3) [1953] 2Q.B.482,499.

(4) (5) (May 29, We are here concerned with a choice between section 60 and section 61, which lay down two broad categories.

It seems to us that the decree of the High Court decreeing payment of arrears of salary is truly a liability in proceedings relating to a contract within section 60(2)(a) of the Act.

It is true, as held by this Court in the State of Tripura vs The Province of East Bengal(1), that the words ,actionable wrong other than breach of contract ' in this context are wide words and include something more than torts, but even so where a suit is brought by a Government servant for arrears of salary, the decree more properly falls under section 60 of the Act rather than under section 61.

In the result the appeal fails and is dismissed with costs to the respondent, Baishankar Avalram Joshi.

The State ' of Gujarat will bear its own costs in this appeal.

R.K.P.S. Appeal dismissed.

Summary: The first respondent while he was holding the post of a Senior Jailor in March, 1954, was suspended on the allegations that he had committed certain acts of misappropriation and maltreatment of prisoners.

Summary: After January, 1955.

Summary: A show cause notice was then issued to him to which he replied by a written statement.

Summary: The respondent was dismissed by an order of Inspector General of Prisons in February, 1955.

Summary: The respondent filed a suit for a declaration that enquiry report was never supplied to him and consequently he had not been given reasonable opportunity within the meaning of article 311 of the Constitution.

Summary: He also prayed for a decree for arrears of pay from April, 1954 to May, 1960.

Summary: His suit was dismissed by the trial court but he succeeded in the first appeal where the order of dismissal was declared illegal and void.

Summary: An appeal by the respondent to the High Court claiming arrears of salary was allowed.

Summary: As the State of Bombay had, in the meantime, been reorganised, the High Court also directed that the liability for arrears of salary upto the date of suit would be that of the State of Maharashtra and the liability arising out of the declaration that the appellant was in Government service would be the liability of the State of Gujarat.

Summary: A Letters Patent appeal filed by the State of Maharashtra was dismissed.

Summary: In appeal to this Court, it was contended, inter alia, on behalf of the appellant that the liability to pay arrears of pay was not a liability arising out of a contract within the meaning of section 60 of the Bombay Reorganisation Act of 1960 but it was a liability in respect of an actionable wrong other than a breach of contract within the meaning of section 61 of the Act.

Summary: HELD: (1) The High Court had rightly found that the failure on the part of the competent authority to provide the respondent with a copy of the report of the Enquiry Officer amounted to denial of reasonable opportunity contemplated by article 311(2) of the Constitution.

Summary: The Inspector General of Prisons had the report before him and the tentative conclusions arrived at by the Enquiry Officer were bound to influence him and in depriving the plaintiff of a copy of the report he was handicapped in not knowing what material was influencing the Inspector General of Prisons.

Summary: [920 F] Union of India vs H. C. Goel, ; , 728, referred to.

Summary: It is true that the question whether reasonable opportunity has or has not been ' afforded to the Government servant must depend on the facts 918 of each case, but it would be in very rare cases indeed in which it could be said that the Government servant is not prejudiced by the non supply of the report of the Enquiry officer.

Summary: [921 B] (2) The decree of the High Court decreeing payment of arrears of salary is truly a liability in proceedings relating to a contract within section 60(2) (a) of the Act.

Summary: Although the words 'actionable wrong ' other than breach of contract in this context are wide words and include something more than torts, but even so where a suit is brought by a Government servant for arrears of salary the decree more properly falls under section 60 of the Act rather than under a. 61.

Summary: [925 B] State of Tripura vs The Province of East Bengal, ; , 44, State of Bihar vs Abdul Majid, [1954] S.C.R. 786, Owner of section section Raphael vs Brandy, , Inland Revenue Commissioner vs Hambrook, [1956] 1 AR E.R. 807, 811 12, Reilly vs R., , 179; Terrell vs Secretary of State for the Colonies, , 499; R. vs Doultre, and Bushe vs R., (May 29, 1869, The Times), considered.


Appeal No. 52 of 1957.

Appeal from the judgment and decree dated April 22, of 1953, of the Patna High Court in Appeal from Original Decree No. 162 of 1946.

K.N. Bhattacharya and P. K. Chatterjee, for appellants.

N.C. Chatterjee, A. V. Viswanatha Sastri, R. section Chatterji and D. N. Mukherjee, for respondents Nos. 2 to 6. 1961.

March 22.

The Judgment of the Court was delivered by SUBBA RAO, J.

This appeal by certificate granted is directed against the judgment of the High Court of Judicature at Patna dated April 23, 1953, confirming that of the Subordinate Judge, Dhanbad, dated November 30, 1946.

The plaintiffs and the defendant are adjoining colliery owners at Kujama.

The plaintiffs ' land lies immediately to the south of the defendants ' land.

On August 2, 1,894, Raja of Jharia granted mukarrari lease of the coal and coal mining rights in 300 bighas of land in village Kujama to Satya Karan Banerjee and Girish Chandra Samanta.

On June 15,1900, his son, Raja Durga Prasad Singh, granted coal and coal 494 mining rights in respect of 400 bighas out of 592 bighas to one Jugal Kishore Lal.

Samanta purchased the leasehold interest of Banerji, and thereafter on November 23, 1900, it appears that Samanta bad surrendered his rights under the previous lease in favour of the Raja and taken a fresh lease of the same 300 bighas on a reduced rent.

On June 10, 1901, Jugal Kishore Lal granted a lease of 96 bighas out of his 400 bighas to one D. M. Mathews.

On the very same day D. M. Mathews, in his turn, granted a lease to one Walji Kheta in respect of the said 96 bighas.

Walji Kheta executed a kabuliat in favour of M. Mathews on October 11, 1901.

Walji Kheta represented the defendants.

By diverse transfers, the interest of Samanata vested in Bagdigi Kujama Collieries Limited.

The plaintiffs case was that as a result of a letter written by the Inspector of Mines on August 18, 1941, the plaintiffs made an inquiry and came to know that the defendants had encroached upon their coal mines on the northern side and removed coal from the encroached portion and had rendered the remaining coal of the encroached portion unworkable.

On those allegations, they asked for the following reliefs: (a)That the intermediate boundary line between the plaintiffs ' coal land and the defendants ' coal land be ascertained and fixed.

(b)That the area encroached upon by the defendants be ascertained and the defendants be directed to vacate the same,.

(c)That a permanent injunction be issued against the defendants restraining them from encroaching upon the plaintiffs ' coal land and cutting and removing coal therefrom.

(d)That an enquiry be made and the quantity of coal cut and removed by the defendants from the plaintiffs ' coal land as also the quantity of the coal rendered unworkable be ascertained and a decree for the value thereof by way of damages be granted to the plaintiffs against the defendants.

The defendants denied that they had encroached upon the plaintiff , ' coal land and stated that the suit was barred by limitation.

They further pleaded that the 495 plaintiffs would not be entitled to any damages.

The learned Subordinate Judge held that the defendant had encroached upon the plaintiff ' coal land, that the suit was not barred by limitations and that they would be entitled to the reliefs prayed for.

On appeal, the High Court of Patna accepted all the findings of the learned Subordinate Judge and dismissed the appeal.

Hence the present appeal.

The first question that arises for consideration is whether the defendants had encroached Upon the plaintiffs ' coal land.

The answer to this question depends upon the correct, delineation of the boundary line between the plaintiffs ' leasehold and the defendants ' leasehold.

It is common case that the southern boundary of the appellants ' leasehold is conterminous with the northern boundary of the respondents ' lease hold.

Learned counsel for the appellant contends that the said boundary should be fixed solely with reference to the boundaries given in the lease of 1894, whereas learned counsel for the respondents contends that no plan has been annexed to the said lease and, therefore, the boundary could more satisfactorily and definitely be fixed with reference to the plans annexed to the subsequent lease deeds executed in favour of the successors in interest of the appellant and the respondents.

To appreciate the rival contentions it is necessary to consider the various lease deeds in some detail.

On August 2, 1894, Raja Jaimangal Singh executed the lease deed (exhibit 1) in respect of 300 bighas in favour of the respondents ' predecessor in interest.

In that lease deed the northern boundary is described to be the remaining portion of mauza Kujama and the western boundary is described as Chatkari Jorh.

The foot note to the lease reads, "measuring 1101 feet in length running north and south by the side of the said Chatkari Jorh and area being 300 bighas by such measurement".

No plan was annexed to this lease deed.

On June 15, 1900, Jugal Kishore Lal, the predecessor in interest of the appellant, had obtained a lease (exhibit C) of 400 bighas 496 from Raja Durga Prasad Singh, the son of the previous Raja.

The southern boundary of this leasehold is given as the northern boundary limit of the leasehold land of Girish Chandra Samanta and others and the western boundary is shown as the eastern boundary of Chatkari Jorh as per the map annexed.

This lease deed clearly shows that the southern boundary of this plot is conterminous with the northern boundary of the leasehold land in favour of Samanta.

It may also be noticed at this stage that the map annexed to this lease deed has not been filed by the appellants.

It appears that Samanta purchased the interest of Banerji in the leasehold of 1894 and thereafter at the request of Samanta, on November 23, 1900, Durga Prasad Singh gave a fresh lease of the same holding to Samanta and incorporated a map in that lease, i.e., exhibit 3(b).

There, the northern boundary of the leasehold is described as the leasehold of Rajkumar Jugal Kishore Lal Singh Bahadur.

The plan, exhibit 3(b), annexed to this lease deed shows the boundary line between the two leaseholds.

The said plan is drawn to scale and the boundary line is drawn between point A marked in the plan and point B marked therein.

As the plan is a part of the lease deed, it is clear from the plan that the northern boundary of the leasehold of Samanta is the said line.

On June 10, 1901, Jugal Kishore Lal, that is, the predecessor in interest of the appellant demised a plot of 96 bighas carved out from his leasehold to Mathews under a deed exhibit C(1).

Mathews in turn demised under exhibit D the said land of 96 bighas to Walji Khetan representing the appellant.

In both these documents the southern boundary is shown as the northern boundary of the leasehold land of Samanta.

One interesting feature is that a map has been referred to in each of the documents and the said map shows that the line drawn from point A to point B is the boundary between the two leaseholds.

It may be mentioned that the said boundary line is exactly the same as that found in exhibit 3(b).

These documents to which the defendants ' predecessors were parties contain a clear admission that the boundary line between the two leaseholds i.e., between appellant 's and that of the respondents ' is the line between 497 A and B shown in plan exhibit 3(b).

We have no doubt that if the plan annexed to exhibit C was produced by the appellant, it would have also established that the dividing line between the two leaseholds is that found in exhibit 3(b).

The appellant, in our view, has suppressed the said plan and, therefore, in the circumstances, we are justified to draw an inference that, if produced, it would be against appellant 's contention.

From the aforesaid documentary evidence we hold, agreeing with the courts below, that the southern boundary of the appellant 's holding, which is conterminous with the northern boundary of the respondents ' holding, is the line between points A and B shown in exhibit 3(b).

The next question addressed by the courts below is how to ascertain the point A.

The argument of learned counsel for the appellant is that the map translated into words indicates that the correct boundary should be a line drawn from the true meeting point of the four villages Pandebera, Jharia Khas, Lodhna and Kujama at a bearing of 82.15 ', whereas the contention of the respondents is that the line actually drawn on the lease map correctly lays down the northern boundary of the respondents ' leasehold.

It is settled law that a map referred to in a lease should be treated as incorporated in the lease and as forming part of the document: see Darapali Sadagar vs Najir Ahamed (1).

As in this case the map is drawn to scale and incorporated in the lease deed, it is not permissible to ignore the starting point of the boundary line and adopt instead any scientific point based on survey.

The Commissioner appointed by the court tested the position of the six trijunction pillars shown in the map of lease dated November 23, 1900, and found that two of the trijunction pillars were in their correct positions.

On the basis of these two trijunction pillars, the Commissioner relaid, by the process of superimposition, the northern boundary line of the leasehold property, The point A in the map so laid does not tally with the point where the aforesaid four villages actually meet.

He pointed out that the correct (1)(1923) I.L.R 50 Cal 394 63 498 point where the said four villages met would be 1680 feet only from the trijunction pillar of Lodhna, Kujama and Madhuban, whereas the point A was at a distance of 1750 feet from the said trijunction pillar.

But learned counsel for the appellant contends that according to exhibit 3 the western boundary should be according to the revenue plan and, therefore, point A should be fixed at a distance of 1680 feet from the trijunction pillar, as that is the distance according to the revenue plan.

But a perusal of exhibit I shows that there is no reference in regard to the western boundary to revenue records.

That apart, even if 1680 feet is taken as the distance between the injunction pillar and point A in 'the map, it demonstrates that the measurement given in exhibit 3 was incorrect, for, there the distance was shown only as 1101 feet.

But a more serious objection to the argument is that it is not permissible for a court to reconstruct the plan with reference to revenue records when the plan is self contained and drawn to scale.

To summarize: the question is whether the disputed extent is part of the respondents ' holding or that of the appellant 's holding.

The map, exhibit 3(b), annexed to the lease deed executed in favour of the respondents ' predecessor in interest clearly demarcates the boundary line between the holdings of the appellant and the respondents, and according to that plan the disputed extent falls within the boundary of the respondents ' holding.

The lease of the appellant 's predecessor, i.e., exhibit C, also refers to a map, but the appellant withheld it.

In the sub leases created by the appellant, maps were annexed and the boundary therein is in accord with that in exhibit 3(b).

Those documents contain clear admissions supporting the case of the respondents.

No reliance can be placed upon the recitals in exhibit 1, as it is demonstrated that the extent given in respect of the western boundary is incorrect.

On the aforesaid material both the courts have held that the disputed extent of land is part of the holding of the respondents.

It is well settled that a map referred to in a lease should be treated as incorporated in the lease and as 499 forming part of the said document.

In this case the maps accepted by us are drawn to scale and the boundary is clearly demarcated.

The courts were, therefore, certainly right in accepting the boundaries drawn in the plan without embarking upon an attempt to correct them with reference to revenue records.

The question really is one of fact and we accept the finding.

The next question is whether the suit was barred by limitation.

The encroachment by the appellant on the respondents ' colliery and the removal of coal therefrom are alleged to have taken place in or about the year 1932.

The respondents in the plaint averred that they came to know of the said encroachment and removal of coal by the appellant after they received the letter dated August 18, 1941, from the Inspector of Mines and before that they had absolutely no knowledge or information whatsoever regarding thereto.

The appellant denied the said allegation and stated that the respondents all along knew and had been aware that the portion of coal land in question belonged to and was the property of the appellant.

In particular the appellant alleged that the respondents must have the knowledge of it since 1932 when there was a survey by the Department of Mines.

On the said pleadings issue 3 was framed which reads, "Is the suit barred by limitation?" The learned Subordinate Judge found, on the evidence, that the proceedings in 1932 had nothing to do with the delineation of the boundary line between the two holdings.

He held that article 48 of the Limitation Act applied to the suit and that the appellant had failed to prove that the respondents had knowledge of the sinking of the quarries and pits in the encroached land.

On appeal the High Court accepted the finding.

Though the High Court held that the burden of proof to establish knowledge on the part of the respondents beyond the prescribed time was on the appellant, it has given the finding on the assumption that the initial burden was on the respondents to prove that they had knowledge of the said encroachment only within three years thereof.

There are, therefore, concurrent findings of fact on the 500 question of knowledge.

But learned counsel for the appellant contended that the finding is vitiated by the burden of proof having been wrongly thrown on the appellant.

This submission is not accurate, for, as we have pointed out, the High Court arrived at the finding of fact on the assumption that the initial burden of proof was on the respondents.

It is common case that article 48 of the Limitation Act governs the period of limitation in respect of the present suit.

It reads: ___________________________________________________________ Period Time from Description of suit.

of which period limitation begins to run.

___________________________________________________________ For specific moveable When the per property lost, or son having acquired by theft, or the right to dishonest misappro the posses priation or conver Three sion of the sion, or for com years.

property first pensation for wrong learns in ful taking or detain whose posses ing the same.

sion itis.

__________________________________________________________ The article says that a suit for recovery of specific movable property acquired by conversion or for compensation for wrongful taking or detaining of the suit property should be filed within three years from the date when the person having the right to the possession of the property first learns in whose possession it is.

The question is, on whom the burden to prove the said knowledge lies? The answer will be clear if the article is read as follows: A person having the right to the possession of a property wrongfully taken from him by another can file a suit to recover the said specific moveable property or for compensation therefore within three years from the date when lie first learns in whose possession it is.

Obviously where a person has a right to sue within three years from the date of his coming to know of a, certain fact, it is for him to prove that he had the knowledge of the said fact on a particular date, for 501 the said fact would be within his peculiar knowledge.

That apart, section 3 of the Limitation Act makes it obligatory on a court to dismiss a suit barred by limitation, although limitation has not been set up as a defence, indicating thereby that it is the duty of a plaintiff to establish, at any rate prima facie, that the suit is within time.

It is the obligation of the plaintiff to satisfy the court that his action is not barred by lapse of time: see Lalchand Marwari vs Mahanth Rampur Gir (1) and Rajah Sahib Perhlad Sein vs Maharajah Rajender Kishore Sing (2) .

Looking from a different perspective, we arrive at the same result.

Under the Evidence Act there is an essential distinction between the phrase "burden of proof" as a matter of law and pleading and as a matter of adducing evidence.

Under section 101 of the Evidence Act, the burden in the former sense is upon the party who comes to court to get a decision on the existence of certain facts which he asserts.

That burden is constant throughout the trial; but the burden to prove in the sense of adducing evidence shifts from time to time having regard to the evidence adduced by one party or the other or the presumption of fact or law raised in favour of one or the other.

In the present case the burden of proof in the former sense is certainly on the respondents.

But the question is whether they have adduced evidence which had the effect of shifting the onus of proof to the appellant.

On behalf of the respondents, their Colliery Manager was examined as P. W. 2.

He stated in his evidence that the appellant had encroached upon the South Kujamal Colliery in Seam Nos. 10, 11 and 12 and another special seam, known as 4 feet seam and that in August, 1941, be came to know about the encroachment for the first time when the Mines Department forwarded a plan of the joint workings of the two collieries of the parties.

He also stated that he had no knowledge of the encroachment before.

In the cross examination, two suggestions were made to him, namely, that in 1932 there was a survey of the plaintiffs ' and defendants ' coal land by the Mines Department and that Seam Nos. 11 and 12 were (1) Pat. 312.

(2) (1869) 12 M.I.A. 292.

502 worked by the appellant by open quarry system.

He denied that he had any knowledge of the said two facts.

The evidence of this witness has been accepted by the learned Subordinate Judge, and the High Court also accepted his evidence, though in its view it was not very satisfactory.

This evidence, therefore, prima facie, proves that the respondents had knowledge of the encroachment only in 1941.

Let us now consider some of the decisions cited at the Bar.

A division beach of the Patna High Court in Sundarji Shivji vs Secretary of State for India (1) held that "when a defendant in an action based on tort seeks to show that the suit is not maintainable by reason of the expiry of the statutory period of limitation, it is upon him to prove the necessary facts".

There the suit was for conversion of property, and the learned Judges applied article 48 of the Limitation Act to the said suit.

After noticing the words in the last column of the article, the learned Judges proceeded to observe thus: " The starting date of limitation in the case of conversion is the date when the person who has the right to possession first learns of the act of conversion.

" Adverting to the burden of proof, the learned Judges observed: "There is nothing in the pleadings which would show precisely at what period tile plaintiff or the plaintiff 's agent, which is the same thing, became aware of the sale and its wrongfulness, that is to say, became aware of the fact of conversion.

The defendant was unable to provide us with any materials to fix that date and therefore his plea of limitation fails altogether, because he is unable to show a date outside the period of three years which would entitle him to succeed.

" With great respect to the learned Judges, we hold that this case had not been correctly decided.

The burden of proof, as we have explained earlier is on a plaintiff who asserts a right, and it may be, having regard to the circumstances of each case, that the (1) Pat, 752, 760.

503 onus of proof may shift to the defendant.

But to say that no duty is cast upon the plaintiff even to allege the date when they had knowledge of the defendant 's possession of the converted property and that the entire burden is on the defendant is contrary to the tenor of the article in the Limitation Act and also to the rules of evidence.

A division bench of the Calcutta High Court in Kalyani Prasad Singh vs Borrea Coal Co. Ltd. (1) did not accept the view of the Patna High Court, but followed that of the Bombay High Court in the Bank of Bombay vs Fazulbhoy Ebrahim (2).

In the context of the application of article 48 of the Limitation Act, the learned Judges of the Calcutta High Court observed thus: "The burden of proof rests upon the party who substantially asserts the affirmative of the issue. .

We are of opinion that the onus is upon the plaintiff in these suits to prove that the knowledge of his father wag within three years of the suit.

" In Talyarkhan vs Gangadas (3), Rangnekar, J., formulated the legal position thus: "The onus is on the plaintiff to prove that he first learnt within three years of the suit that the property which he is seeking to recover was in the possession of the defendant.

In other words, he has to prove that he obtained the knowledge of the defendant 's possession of the property within three years of the suit, and that is all.

If he proves this, then to succeed in the plea of limitation the defendant has to prove that the fact that the property was in his possession became known to the plaintiff more than three years prior to the suit.

" We accept the said observations as representing the correct legal position on the subject.

The appellant gave evidence to show that the encroachment was prior to 1932, but there is no acceptable evidence on their part to establish that the respondents came to know of the removal of coal by the appellant or their possession of the coal removed beyond three years prior to the suit.

Learned counsel (1) A.I.R. 1946 Cal.

123,127 (2) (3) Bom.

848, 860.

504 took us through the correspondence that passed between the parties and the Mining Department in 1932.

But it does not prove that the respondents had knowledge of the fact that the appellant had encroached upon any portion of their coal mines.

Emphasis is also laid upon the fact that there was quarry system of working in the mines and a contention is advanced that quarrying is done openly and, therefore, the respondents must have had knowledge of the said fact.

But the courts found from Commissioner 's maps that in the encroached portion, there were only underground workings and that the quarries were mostly outside the encroached area.

The learned Subordinate Judge and the High Court refused to base any finding on mere probabilities without clear evidence to sustain them.

We cannot therefore hold that the findings of the courts are vitiated by an error of law by the burden of proof having been wrongly thrown on the appellant.

We accept the findings of the High Court that the respondents had knowledge of the appellant 's encroachment of their coal mines only in the year 1941 which was within three years of the date of the filing of the suit.

The only other outstanding question that remains for consideration is that covered by Issue No. 7.

In paragraph 11 of the plaint, the plaintiffs allege that under the Indian Mines Act and the Rules and Regulations made thereunder the plaintiffs are bound to keep a barrier of 25 feet to the south of the defendant 's working and, therefore, the coal that is still left in the encroached area is not by any means accessible to the plaintiffs and being thus wholly unworkable is entirely lost to them for ever.

In the written statement the defendants did not deny the fact that the coal still left in the encroached area was lost to the plaintiffs, but only stated that it was purely a question of statutory obligation on the part of the plain.

tiffs with which the Defendant had nothing to do.

The learned Subordinate Judge accepted the case of the plaintiffs and held that the coal that was left in the encroached area was entirely lost to them by being rendered unworkable.

The High Court accepted the finding.

Learned counsel for the appellant contends that under the Rules the respondents could request the mining authorities to exempt them from the operation of rule 76 of the Indian Coal Mines Regulation, 1946, and if exemption was granted, they could remove the coal left by the appellant in the encroached area.

This possibility of the respondents getting an exemption from the operation of the rule was not raised either before the learned Subordinate Judge or before the High Court.

Nor can we hold in favour of the appellant on the basis of such a possibility.

We, therefore, accept the concurrent finding of fact arrived at by the courts below in respect to this issue.

No other point was raised.

The appeal fails and is dismissed with costs.

Appeal dismissed.

Summary: The appellants and the respondents were owners of adjoining collieries and the suit out of which the present appeal arose was one brought by the respondents for certain reliefs on the allegation that the appellants had encroached upon their coal mines and removed coal from the encroached portion and that they came to know of the said encroachment and removal of coal after they had received the letter dated August 18, 1941, from the Inspector of Mines.

Summary: The appellant denied the encroachment and pleaded that the suit was barred by limitation inasmuch as the respondents had knowledge of the encroachment in 1932 then there was a survey by the Department of Mines.

Summary: The trial judge found on evidence that the proceedings in 1932 had nothing to do with the matter, held that article 48 of the Limitation Act applied to the suit and that the appellants had failed to prove that the respondents had knowledge of the sinking of the quarries and pits in the encroached land and decreed the suit.

Summary: The High Court on appeal accepted the finding of the trial court and although it placed the burden of proving knowledge on the part of the respondents beyond the prescribed time on the appellants, nevertheless proceeded on the assumption that the initial burden to prove that they had knowledge of the said encroachment within the period was on the respondents and affirmed the decree of the trial court.

Summary: Held, that the burden of proof had not been misplaced.

Summary: Under article 48 of the Indian Limitation Act, which prescribes a three years ' limitation from the date of the knowledge, the initial onus is obviously on the plaintiff to prove that date since it would be within his special knowledge.

Summary: Moreover, under section 3 of the Act, which makes its obligatory on the court to dismiss a suit barred by limitation, even though such a plea is not set up in defence, it is for the plaintiff to establish that the suit is not so barred.

Summary: Lalchand Marwari vs Mahant Rampur Gir, pat.

Summary: (P.C.) 312 and Rajah Sahib Perhalad Seim vs Maharajah Rajender Kishore Singh, (1869) 12 M.I.A. 292, referred to.

Summary: Under the there is an essential distinc tion between burden of proof as a matter of law and pleading and as a matter of adducing evidence and under section 101 of the 493 Act the burden in the former sense is always on the plaintiff and never shifts, but the burden in the latter sense may according to the evidence led by the parties and presumptions of law or fact raised in their favour.

Summary: Sundarji Shivji vs Secretary of State for India, Pat. 752, disapproved.

Summary: Kalyani Prasad Singh vs Borrea Coal Co. Ltd., A.I.R. 1946 Cal.

Summary: 123, Bank of Bombay vs Fazulbhoy Ebrahim, and Talyarkhan vs Gangadas, Bom.

Summary: Held, further, that it is well settled that a map referred to in a lease is a part of the lease.

Summary: Where, therefore, the map is drawn to scale and clearly demarcates the boundary it is not permissible to ignore it and reconstruct the boundary with reference to the revenue records.

Summary: Darapali Sadagar vs jajir Ahmad, Cal. 394, referred to.


Civil Appeal No. 50 of 1961.

Appeal by special leave from the Award dated March 10, 1959, of the Industrial Tribunal.

Kozhikode, in I.D. No. 89 of 1958.

A. V. Viswanatha Sastri and T. V. R. Tatachari, for the appellant, Janardan Sharma, for the resondents.

January 29.

The Judgment of the Court was delivered by WANCHOO.J.

This is an appeal by special leave in an industrial matter.

The brief facts necessary for present purposes are these.

The appellant in a saw mill carrying on business in Kozihkode in 824 the State of Kerala.

One Sankaran was in the employ of the appellant as a crosscutter.

It is said that on June 21, 1958, Sankaran came drunk to they mill and abused the Engineer, the Secretary and others and threatened them with physical violence.

He was caught hold of by other workmen and taken outside.

It is said that he came again a short time later at 4 30 p.m. and abused the same persons again.

Thereupon the appellant served a charge sheet on Sankaran on June 24, 1958 acting out the above facts and asked him to show cause why his services should not be terminated on account of his grave indiscipline and misconduct.

Sankaran gave an explanation the same day denying the allegations of fact made against him, though he admitted that he had come to the mill at the relevant time for taking his wages for that week.

On June 25, 1958 Sankaran was informed that in view of his denial, a departmental inquiry would be held and he was also placed under suspension pending inquiry.

The same day Sankaran protested against his suspension and requested that in any case the departmental inquiry should be expedited.

As no inquiry was held till July 2, 1958, Sankaran again wrote to the appellant to hold the inquiry as early as possible.

On July 8, 1958, the appellant terminated the services of Sankaran under r. 18 (a) of the Standing Orders without holding any departmental inquiry and the order was communicated to Sankaran the same day.

In that order the appellant informed Sankaran that the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank and file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if he was retained in the service of the appellant, and therefore it considered that no inquiry should be held.

A dispute was then raised by the union which was referred to the industrial tribunal for adjudication by the Government of Kerala in October 1958.

The tribunal held that 825 something seemed to have happened on the afternoon of June 21, 1958 but there was no evidence to prove what had actually happened.

It further held that the appellant had intended to take disciplinary action against the workman but subsequently departmental proceedings were dropped and action was taken under r. 18(a) of the Standing orders.

The tribunal was of the view that this was a colourable exercise of the power given under r. 18(a) to the appellant and therefore its action could not be upheld as a bona fide exercise of the power conferred.

The tribunal also pointed out that no attempt was made before it to defend the action taken under r. 18 (a) by proving the alleged misconduct.

Two witnesses were produced before the tribunal in connection with the alleged misconduct, but the tribunal did not rely on them on the ground that the important witnesses, namely, the Engineer, the Secretary and other members of the staff whose evidence would have been of more value had not been produced and no explanation had been given why they were not produced.

The tribunal therefore held that on the facts it could not come to the conclusion that Sankaran had come drunk to the mill and abused or attempted to assault either the Engineer or the Secretary or other officers.

In the result the order of discharge was set aside and Sankaran was ordered to be reinstated.

The appellant thereupon applied for special leave which was granted; and that is how the matter has come up before us.

The main contention of the appellant is that it is entitled under r. 18 (a) of the Standing Orders to dispense with the service of any employee after complying with its terms.

Rule 18 (a) is in these terms: "When the management desires to determine the services of any permanent workmen 826 receiving 12 as.

or more as daily wages, otherwise than under rule 21, he shall be given 14 days notice or be paid 12 days wages.

" It may be mentioned that r. 21 deals with case of misconduct and provides for dismissal or suspension for misconduct and in such a case the workman so suspended is not entitled to any wages during the period of suspension.

The claim thus put forward on behalf of the appellant is that it is entitled under r. 18(a) of the Standing orders which is a term of contract between the appellant and its employees to dispense with the service of any employee at any time by just giving 14 days notice or paying 12 days wages.

We are of opinion that this claim of the appellant cannot be accepted, and it is too late in the day for an employer to raise such a claim for it amounts to a claim "to hire and fire" an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication for over a long period of time now.

As far back as 1952, the Labour Appellate Tribunal had occasion to consider this matter relating to discharge by notice or in lieu thereof by payment of wages for a certain period without assigning any reason: (see Buckingham and Carnatic Co. Ltd. Etg.

vs Workers of the Company.

etc.) (1).

It was of opinion that even in a case of this kind the requirement of bona fides is essential and if the terminataton of service is a colourable exercise of the power or as a result of victimisation or unfair labour praction the industrial tribunal would have the jurisdiction to intervene and set aside such termination.

Further it held that where the termination of service is capricious, arbitrary or unnecessarily harsh on the part of the employer judged by normal standards of a reasonable man that may be cogent evidence of victimisation or unfair labour practice.

These observations 827 of the Labour Appellate Tribunal were approved by this Court in The Chartered Bank, Bombay vs The Chartered Bank Employees ' Union (1).

and Assam Oil Company vs Its Workmen (2).

Therefore if as in this case the employer wanted to take action for misconduct and then suddenly dropped the departmental proceedings which were intended to be held and decided to discharge the employee under r. 18 (a) of the Standing orders, it was clearly a colourable exercise of the power under that rule in as much as that rule was used to get rid of an employee instead of following the course of holding an inquiry for misconduct, notice for which had been given to the employee and for which a departmental inquiry was intended to be held.

The reason given by the appellant in the order terminating the services of Sankaran of July 8, 1958, namely, that the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank and file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if Sankaran were retained in service, cannot be accepted at its face value; so that the necessity for an inquiry intended to be held for misconduct actually charged might be done away with.

In any case even if the inquiry was not held by the appellant and action was taken under r. 18 (a) it is now well settled, in view of the decisions cited above, that the employer could defend the action under r. 18(a) by leading evidence before the tribunal to show that there was in fact misconduct and therefore the action taken under r. 18(a) was bona fide and was not colourable exercise of the power under that rule.

But the tribunal has pointed out that the employer did not attempt to do so before it.

It satisfied itself by producing two witnesses but withholding the important witnesses on this question.

In the circumstances, if the tribunal did not accept the evidence of the two witnesses 828 who were produced it cannot be said to have gone wrong.

Learned counsel for the appellant however urges that the employer was empowered to take action under r. 18 (a) of the Standing orders and having taken action under that rule, there was nothing for it to justify before the tribunal.

We have already said that this position cannot be accepted in industrial adjudication relating to termination of service of an employee and has not been accepted by industrial tribunals over a long course of years now and the view taken by industrial tribunals has been upheld by this Court in the two cases referred to above.

Learned counsel for the appellant, however, relies on the decision of this Court in Parshotam Lal Dhingra vs Union of India.

(1) That was however a case of a public servant and the considerations that apply to such a case are in our opinion entirely different.

Stress was laid by the learned counsel on the observations at p. 862 where it was observed as follows: "It is true that the misconduct, negligence inefficiency or other disqualification may be the motive or inducing factor which influences the Government to take action under the terms of the contract of employment or the specific service rule, nevertheless, if a right exists under the contract or the rule, to terminate the service, the motive operating on the mind of the Government is, as Chagla C. J. has said in Srinivas Ganesh vs Union of India (2) (supra), wholly irrelevant.

It is urged that the same principle should be applied to industrial adjudication.

It is enough to say that the position of government servants stands on an entirely different footing as compared to industrial employees.

Articles 310 and 311 of the Constitution apply to government servants and it is in the 829 light of those Articles read with the Rules framed under article 309 that questions relating to termination of service of government servants have to be considered.

No such constitutional provisions have to be considered when one is dealing with industrial employees.

Further an employer cannot now press his right purely on contract and say that under the contract he has unfettered right "to hire and fire" his employees.

That right is now subject to industrial adjudication and even a power like that granted by r. 18 (a) of the Standing orders in this case, is subject to the scrutiny of industrial courts in the manner indicated above.

The appellant therefore cannot rest its case merely on r. 18 (a) and say that having acted under that rule there is nothing more to be said and that the industrial court cannot inquire into the causes that led to the termination of service under r. 18 (a).

The industrial court in our opinion has the right to inquire into the causes that might have led to termination of service even under a rule like 18(a) and if it is satisfied that the action taken under such a rule was a colourable exercise of power and was not bona fide or was a result of victimisation or unfair labour practice it would have jurisdiction to intervene and set aside such termination.

In this case the tribunal held that the exercise of power was colourable and it cannot be said that view is incorrect.

The appellant failed to satisfy the tribunal when the matter came before it for adjudication that the exercise of the power in this case was bona fide and was not colourable.

It could have easily done so by producing satisfactory evidence; but it seems to have rested upon its right that no such justification was required and therefore having failed to justify its action must suffer the consequences.

Learned counsel for the appellant also drew our attention to another decision of this Court in 830 The Patna Electric Supply Co. Ltd. Patna vs Bali Rai(1).

That case in our opinion has no application to the facts of this case because that case dealt with an application under section 33 of the Industrial Disputes Act while the present proceedings are under section 10 of the Act and the considerations which apply under section 33 are different in many respects from those which apply to an adjudication under section 10.

The appeal therefore fails and is hereby dismissed with costs.

Appeal dismissed.

Summary: S, employed by the appellant as a cross cutter in the saw mill was asked to show cause why his services should not be terminated on account of grave indiscipline and misconduct and he denied the allegations of fact.

Summary: He was thereafter informed about a department enquiry to be held against him and was suspended pending enquiry.

Summary: Purporting to act under r. 18(a) of the Standing Orders, the appellant terminated the services of S, without holding any departmental enquiry.

Summary: The industrial tribunal to which the dispute was referred held, that action taken, after dropping the proposed departmental proceedings was not bonafide and was a colourable exercise of the powerconferred under r. 18(a) of the Standing order and since no attempt was made before it to defend such action by proving the alleged misconduct, it passed an order for reinstatement of S, The appellant contended that as the termination was strictly in accordance with the terms of contract under r. 18(a) of the Standing Orders, it was entitled to dispense 823 with the service of an employee at any time by first giving 14 days notice or, paying 12 days wages.

Summary: ^ Held, that the employer 's decision to discharge the employee under r. 18(a) of the Standing Orders after dropping the enquiry intended to be held for misconduct was clearly a colourable exercise of the power, and an employer could not press his right purely on contract and say that under the contract he has unfettered right "to hire and fire" his employees, right was subject to industrial adjudication and even a power like that granted by r. 18(a) of the Standing orders in this case was subject to the scrutiny of industrial courts.

Summary: Even in a case of this kind the requirement of bona fides was essential and if the termination of service was a colourable exercise of power, or was a result of victimisation or unfair labour practice, the tribunal had jurisdiction to intervene and set aside such termination.

Summary: Buckingham and Carnatic Co. Ltd. vs Workers of the Company, , referred to.

Summary: The Chartered Bank Bombay vs The Chartered Bank Employees Union. ; and Assam Oil Company vs Its Workmen, [1960] 3 S.C.R. 457, followed.

Summary: Held, further, that the principle relating to termination of Government service stands on an entirely different footing as compared to industrial employees and the same principle could not be applied to industrial adjudication.

Summary: Parshotaa Lal Dhingra vs Union of India, ; , distinguished.