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1973 (11) TMI 105
Issues Involved:
1. Respondent's right to continue in service after statutory cessation.
2. Validity of reliance on the enquiry report in the termination order.
3. Breach of statutory conditions for termination by the University Council.
4. Implied engagement and its validity under statutory provisions.
Detailed Analysis:
1. Respondent's Right to Continue in Service After Statutory Cessation:
The University of Kashmir issued a resolution terminating the services of a Professor, which was challenged and deemed void by the High Court. The University appealed, arguing that the respondent's employment ceased statutorily under Section 52(4) of the Jammu and Kashmir University Ordinance, 1969. The Ordinance mandated that all contracts with the University would terminate 60 days post-commencement unless extended by the Chancellor. The High Court found that the respondent was impliedly reappointed, but the Supreme Court disagreed, stating that the statutory cessation was clear and the respondent's continuance was not legally valid.
2. Validity of Reliance on the Enquiry Report in the Termination Order:
The University Council relied on an enquiry report to terminate the respondent, which the High Court found unlawful. The Supreme Court noted that the enquiry commenced under the 1965 Act lapsed with the 1969 Ordinance, making the report invalid. The reliance on this report for termination was a statutory violation, rendering the termination order illegal. The Court declared the termination order void due to its reliance on an invalid enquiry report.
3. Breach of Statutory Conditions for Termination by the University Council:
The High Court held that the termination did not comply with statutory regulations, as the enquiry report could not be the basis for punitive action post-1969 Ordinance. The Supreme Court confirmed that the University Council's decision based on the enquiry report was unlawful. The statutory conditions for termination were breached, as the respondent's employment could only be terminated per statutory regulations, which were not followed.
4. Implied Engagement and Its Validity Under Statutory Provisions:
The High Court inferred a fresh appointment by implied contract due to the respondent's continued service. The Supreme Court rejected this, emphasizing that statutory bodies must operate within their defined powers. The University Council alone had the authority to appoint professors, and no such appointment was made for the respondent. The Vice-Chancellor's actions, including extending probation, were beyond his statutory powers and could not legitimize the respondent's continued employment. The doctrine of implied engagement was deemed inapplicable in this statutory context.
Conclusion:
The Supreme Court held that the respondent had no legal right to continue in service after the statutory cessation period. The termination order was invalid due to reliance on an unlawful enquiry report, but the respondent's implied engagement was not legally sustainable. The High Court's order of reinstatement was quashed, and both parties were directed to bear their own costs.
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1973 (11) TMI 104
Issues Involved:
1. Disconnection of a partner's personal telephone line due to arrears of the partnership firm's telephone charges.
2. Exhaustion of the power to disconnect a telephone line after it has been exercised once.
Issue-Wise Detailed Analysis:
1. Disconnection of a Partner's Personal Telephone Line Due to Arrears of the Partnership Firm's Telephone Charges:
The petitioner, a businessman and partner in Shakti Oil Mills, faced disconnection of his personal telephone line (No. 184) due to the firm's arrears on its telephone line (No. 491). The petitioner contended that his personal line should not be disconnected for the firm's arrears.
The court examined the Indian Telegraph Act, 1885, and the Indian Telegraph Rules, 1951. Rule 443 allows disconnection of any telephone rented by a subscriber if there is a default in payment. The court clarified that a partnership firm is not a legal entity distinct from its partners, as established by the Supreme Court in Her Highness Maharani Mandalsa Devi v. H. Ramnarain Private Ltd. Thus, the firm's liability is the joint and several liability of all its partners under Section 25 of the Indian Partnership Act, 1932.
The court concluded that the petitioner, being a partner, was jointly and severally liable for the firm's arrears. Therefore, the disconnection of his personal telephone line was justified under Rule 443.
2. Exhaustion of the Power to Disconnect a Telephone Line After It Has Been Exercised Once:
The petitioner argued that once the Telephone Department exercised its power to disconnect a telephone line, it could not do so again. The court found no merit in this argument, stating that the power to disconnect can be exercised as long as the default continues and there are telephone lines available for disconnection.
The court emphasized that a subscriber must pay for all telephone charges, and if in default, all telephone lines rented by the subscriber can be disconnected under Rule 443. The power to disconnect is not exhausted after a single exercise but continues until the default is rectified.
Conclusion:
The court held that the petitioner was liable for the arrears of Shakti Oil Mills and that the Telephone Department acted within its powers under Rule 443 by disconnecting the petitioner's personal telephone line. The petition was dismissed, and the court found no substance in the petitioner's arguments.
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1973 (11) TMI 103
Issues:
Conviction under Section 302 of the Penal Code based on eyewitness testimony and approver's evidence.
Analysis:
The case involved the conviction of the appellant under Section 302 of the Penal Code based on the testimony of the sole eyewitness, Ghanshyam, and the approver, Ratnakar Prusti. The High Court upheld the conviction primarily relying on Ghanshyam's testimony, despite discrepancies between his evidence and that of the approver. The Trial Court had acquitted all accused due to disbelief in Ghanshyam and the approver. The High Court's decision was based on the assessment that Ghanshyam's testimony was more reliable, even though the approver's evidence was concurrently discarded. The High Court's reliance on Ghanshyam's testimony was criticized due to serious infirmities in the case, such as the late tendering of pardon to the approver and lack of corroboration for his evidence.
The High Court's evaluation of Ghanshyam's testimony was questioned due to various inconsistencies and omissions in his evidence. Ghanshyam's failure to disclose the names of the accused immediately after the incident, as well as discrepancies in his statements to different individuals, raised doubts about the reliability of his testimony. The High Court's dismissal of these crucial points and its reliance on Ghanshyam's testimony without considering the lack of light at the crime scene, where identification of the assailants would have been challenging, further weakened the prosecution's case.
The Trial Court's reasoning for rejecting the eyewitness testimony was based on the lack of sufficient light at the crime scene, making identification improbable. The discrepancies in Ghanshyam's actions and statements after the incident, along with the absence of immediate disclosure of the accused's names, cast doubt on the credibility of his testimony. These serious infirmities led the Supreme Court to conclude that the evidence of the sole eyewitness was unreliable, resulting in the acquittal of the appellant and his release from imprisonment.
In summary, the Supreme Court overturned the conviction of the appellant under Section 302 of the Penal Code, emphasizing the inconsistencies and shortcomings in the eyewitness testimony and the approver's evidence. The Court found the prosecution's case lacking in credibility and reliability, leading to the appellant's acquittal and immediate release.
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1973 (11) TMI 102
Issues Involved:
1. Validity of the application of the U.P. Government Premises (Rent Recovery and Eviction) Act, 1952.
2. Legitimacy of the requisition of the premises under the Defence of India Rules.
3. Right of the Government to recover arrears of rent or damages under the Act.
4. Whether the premises in question were "Government premises" under the Act.
Issue-wise Detailed Analysis:
1. Validity of the application of the U.P. Government Premises (Rent Recovery and Eviction) Act, 1952:
The High Court held that the Act could not be applied to cases where the letting had been done prior to the passing of the Act. The Supreme Court disagreed, stating that the Act's purpose is to provide a summary procedure for the recovery of rent and eviction from government premises. The Act applies to arrears of rent and damages for unauthorized occupation of government premises, regardless of when the letting or unauthorized occupation commenced. The Supreme Court emphasized that the Act's provisions, including Sections 4, 6, and 12, are applicable as long as the premises are "Government premises" and the arrears of rent or damages are within the limitation period.
2. Legitimacy of the requisition of the premises under the Defence of India Rules:
The Supreme Court noted that no valid requisition order under Rule 75A of the Defence of India Rules was produced. The District Magistrate's purported requisition under Rule 81(2)(bb) was also invalid as the power of requisition under Rule 75A was not delegated to him. Therefore, the premises could not be considered requisitioned property or "Government premises" under Section 2(c) of the Act.
3. Right of the Government to recover arrears of rent or damages under the Act:
The Supreme Court clarified that the Act allows the Government to recover arrears of rent and damages for unauthorized occupation through a summary procedure. Sections 4 and 6 provide for the recovery of arrears of rent, while Section 12 deals with the recovery of damages for unauthorized occupation. The liability to pay arrears of rent or damages must be outstanding and within the limitation period. The Supreme Court rejected the High Court's view that the Act does not apply to cases where the letting occurred before the Act's commencement, as this would defeat the Act's purpose.
4. Whether the premises in question were "Government premises" under the Act:
The Supreme Court found that the premises were not "Government premises" as defined in Section 2(c) of the Act because no valid requisition order was produced. Consequently, the Act did not apply, and the defendants could not recover the claimed amount as arrears of Land Revenue under the Act.
Conclusion:
The Supreme Court dismissed the appeal, holding that the premises were not "Government premises" under the Act and that the Act did not apply. The defendants were not entitled to recover the amount claimed as arrears of Land Revenue. The decree of the High Court was upheld, and the parties were directed to bear their own costs.
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1973 (11) TMI 101
Issues: Conviction based on discovery of stolen items, reliability of evidence, interference with trial court's order of acquittal, credibility of witnesses
In this judgment by the Supreme Court of India, the appellant was convicted under Section 411 of the Penal Code by the High Court based on the discovery of a wrist watch and churis allegedly stolen during a dacoity. The trial court had acquitted all accused, but the High Court convicted the appellant. The Supreme Court analyzed the evidence and found that the High Court was not justified in interfering with the trial court's order of acquittal. The discovery of the wrist watch and churis was central to the conviction, but the circumstances of their recovery raised doubts. The wrist watch was produced by someone else, not seized directly from the appellant, and the witnesses did not fully support the seizure. Similarly, the churis were discovered in the appellant's shop, but the witnesses did not adequately corroborate the seizure. The High Court heavily relied on the testimony of the Circle Inspector, but the Supreme Court found discrepancies in his conduct, such as inaccuracies in the seizure memo and mishandling of the seized items. The Court concluded that the evidence provided by the Circle Inspector was not reliable and did not inspire confidence. As a result, the order of conviction and sentence was set aside, and the trial court's decision was restored. Additionally, a Criminal Miscellaneous Petition filed by the State for a re-hearing of the appeal was rejected by the Court.
This judgment raises significant issues regarding the reliability of evidence in criminal cases, the standard of proof required for conviction, and the boundaries of appellate interference with trial court decisions. It highlights the importance of corroborative evidence and the need for meticulous handling of seized items by law enforcement officials. The Court's meticulous analysis underscores the critical role of evidence in criminal proceedings and the high threshold for overturning trial court verdicts. The judgment serves as a reminder of the principles of justice, emphasizing the need for a robust evidentiary foundation to sustain criminal convictions and the judiciary's duty to ensure fair and impartial adjudication.
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1973 (11) TMI 100
Issues:
Interference with order of acquittal by High Court.
Analysis:
The case involved the appellant being acquitted by the Additional Sessions Judge of the charge of murdering his wife's brother, Narayan. However, the High Court of Bombay overturned the acquittal and convicted the appellant under Section 302 of the Penal Code, sentencing him to life imprisonment. The main issue in the appeal was whether the High Court was justified in interfering with the order of acquittal. The Supreme Court highlighted the powers of the appellate court in reviewing evidence in appeals against acquittal, emphasizing that the appellate court should provide substantial and compelling reasons for overturning an acquittal. The Court referred to previous judgments to establish the principles guiding appellate review of acquittal orders, emphasizing the need for the appellate court to consider all evidence and express reasons for disagreeing with the trial court's findings.
The prosecution's case relied on witnesses, including alleged eye-witnesses Ramnath Aurora and Bhanushali Parpia. The Supreme Court scrutinized the testimony of these witnesses to assess the validity of the High Court's decision to convict the appellant. The Court pointed out inconsistencies and discrepancies in the statements of the witnesses, particularly regarding the timing and content of their statements to the police. The Court highlighted the importance of establishing the credibility and reliability of witness testimony in criminal cases, especially in cases where the death penalty is at stake. The Supreme Court analyzed the conflicting statements made by the witnesses and criticized the High Court's reliance on witness testimony that lacked consistency and veracity.
The Supreme Court delved into the specifics of witness testimony, focusing on the statements made by Ramnath Aurora and Bhanushali Parpia regarding the identification of the appellant and the events surrounding the murder. The Court raised doubts about the reliability of the witnesses' accounts, pointing out discrepancies and improbabilities in their testimonies. The Court highlighted the trial court's valid reasons for rejecting the evidence of the alleged eye-witnesses and criticized the High Court for not providing sufficient grounds to overturn the trial court's decision. The analysis underscored the importance of thorough scrutiny of witness testimony and the need for clear and convincing evidence to support a conviction in criminal cases.
In conclusion, the Supreme Court allowed the appeal, set aside the High Court's conviction and sentence, and acquitted the appellant, ordering his release. The detailed analysis of witness testimony and the lack of substantial reasons provided by the High Court for overturning the acquittal formed the basis for the Supreme Court's decision. The judgment emphasized the critical role of evidence and credibility assessment in criminal trials and reiterated the high standard of proof required for conviction in cases involving serious criminal charges.
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1973 (11) TMI 99
Issues Involved:
1. Whether the appellant was a creditor at the date of the scheme of arrangement.
2. Whether the judgment-creditor became a secured creditor by reason of the attachment and subsequent deposit of moneys into Court by the garnishee.
3. Whether the scheme of arrangement was binding on the appellant.
4. The impact of the winding-up order on the scheme of arrangement and the rights of the judgment-creditor.
5. The applicability of Section 51 of the Provincial Insolvency Act, 1920, by virtue of Section 529 of the Companies Act, 1956.
Detailed Analysis:
1. Creditor Status at the Date of the Scheme of Arrangement:
The appellant supplied goods to the respondent-company, and due to non-payment, a decree was passed on July 8, 1960. However, before the suit, a scheme of arrangement was sanctioned on August 18, 1958, for unsecured creditors. The appellant contended that he was not a creditor at the date of the scheme because the debt was denied by the respondent-company. The court noted that the term "creditor" is not defined in the Companies Act but inferred from Section 390(c) that unsecured creditors who filed suits or obtained decrees are of the same class as other unsecured creditors.
2. Secured Creditor Status:
The main issue was whether the judgment-creditor became a secured creditor by the attachment and subsequent deposit of moneys into Court by the garnishee. The court examined various authorities and concluded that in India, attachment does not create a charge or lien but prevents alienation. However, when the money is brought into Court, the judgment-creditor is entitled to insist on payment. The court held that the appellant was a secured creditor since the moneys were deposited in Court before the winding-up order.
3. Binding Nature of the Scheme of Arrangement:
The respondent-company argued that the scheme of arrangement was binding on all creditors, including the appellant, and that the judgment-creditor could only receive 25% in cash and the rest in debentures. The court found that the scheme of arrangement was binding on the appellant only if he was an unsecured creditor at the date of the scheme. However, since the appellant was deemed a secured creditor, the scheme was not binding on him.
4. Impact of the Winding-Up Order:
The winding-up order was passed on April 22, 1964, but deemed to commence from August 30, 1963. The court noted that the winding-up order effectively canceled the scheme of arrangement. The Supreme Court's judgment in J.K. (Bom) P. Ltd. v. New Kaiser-I-Hind Sp. & Wvg. Co. clarified that once a winding-up order is made, the scheme of arrangement cannot govern the rights and obligations of the parties. Thus, the judgment-creditor's rights were not governed by the scheme after the winding-up order.
5. Applicability of Section 51 of the Provincial Insolvency Act:
The court considered whether Section 51 of the Provincial Insolvency Act, 1920, applied by virtue of Section 529 of the Companies Act, 1956. Section 51 provides that assets realized before the presentation of an insolvency petition cannot vest in the Receiver. The court concluded that Section 51 did not apply directly but could be considered by analogy. The court held that the judgment-creditor was entitled to the moneys deposited in Court as assets realized before the winding-up order.
Conclusion:
The Letters Patent Appeal was allowed, and the judgment and decree of the learned single Judge were set aside. The court directed that the judgment-creditor be paid the decretal amount with interest from the moneys deposited in Court by the garnishee. The respondent-company was ordered to pay the costs of the judgment-creditor, and the judgment-creditor was entitled to withdraw the money from the Court on or after January 10, 1974.
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1973 (11) TMI 98
Issues Involved:
1. Validity of preference shareholders' entitlement to arrears of cumulative dividends in the event of winding up.
2. Interpretation of the Articles of Association versus the Prospectus.
3. Applicability of Section 205 of the Companies Act, 1956, to a company in liquidation.
4. Rights of preference shareholders in the context of winding up.
Detailed Analysis:
1. Validity of Preference Shareholders' Entitlement to Arrears of Cumulative Dividends in the Event of Winding Up:
The core issue revolves around whether preference shareholders are entitled to arrears of cumulative dividends, as per the Articles of Association, even if the company has not commenced business or made any profits. The Articles of Association, specifically clause 7, state that preference shareholders have the right to a fixed cumulative preferential dividend at 9.5% per annum and, in the event of winding up, the right to repayment of capital and arrears of dividend, whether earned, declared, or not, up to the commencement of winding up, in priority to equity shareholders. The court concluded that there is nothing illegal in Article 7 permitting arrears of dividends, whether earned, declared, or not, to be paid in priority to equity shareholders.
2. Interpretation of the Articles of Association Versus the Prospectus:
The court highlighted a discrepancy between the Prospectus and the Articles of Association. The Prospectus mentions "repayment of capital and any arrears of dividend earned, whether declared or not," while Article 7 states "repayment of capital and arrears of dividend whether earned, declared or not." The court clarified that the terms of the Articles of Association take precedence over the Prospectus. The language in the Articles is deemed correct and necessary to avoid controversy, as supported by precedents and authoritative texts on company law.
3. Applicability of Section 205 of the Companies Act, 1956, to a Company in Liquidation:
The company argued that Section 205, which restricts the payment of dividends to profits, invalidates the provision in the Articles allowing for arrears of dividends to be paid in winding up. However, the court noted that Section 205 applies only to a company as a going concern and not to one in liquidation. Section 511, which governs the distribution of assets in winding up, allows for the Articles to dictate the distribution among members according to their rights and interests. Therefore, Article 7 is not contrary to the Act as it applies specifically to winding up and not to the management and administration of the company.
4. Rights of Preference Shareholders in the Context of Winding Up:
The court examined the rights of preference shareholders as set out in the Articles and relevant case law. It was established that preference shareholders are entitled to arrears of dividends in a winding up, even if such dividends were not declared or the company did not earn sufficient profits while it was a going concern. This interpretation aligns with various judicial precedents and authoritative texts, which emphasize that the rights of shareholders must be determined by the terms of the Articles of Association. The court affirmed that the protection given to preference shareholders by Article 7 cannot be ignored or curtailed unless there is a statutory provision necessitating such a course.
Conclusion:
The court ruled in favor of the preference shareholders, affirming their right to arrears of cumulative dividends up to the commencement of winding up, in priority to the equity shareholders, as per Article 7 of the Articles of Association. The reference by the Liquidator was answered against the company, and the costs of the reference were to come out of the company's funds, with other parties bearing their own costs.
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1973 (11) TMI 97
Issues Involved:
1. Validity of the Kerala Motor Vehicles (Taxation of Passengers and Goods Amendment) Act, 1970 (Act 18 of 1971).
2. Validity of the Motor Vehicles (Kerala Third Amendment) Act, 1971 (Act 34 of 1971).
3. Whether Act 18 of 1971 levies a tax on passengers or on the income of operators.
4. Legality of the retrospective validation of levy and collection of taxes by Act 18 of 1971.
5. Competency of the legislature to amend Section 43 of the Motor Vehicles Act, 1939, to include retrospectively tax within fare.
Detailed Analysis:
1. Validity of the Kerala Motor Vehicles (Taxation of Passengers and Goods Amendment) Act, 1970 (Act 18 of 1971):
The primary issue was whether Act 18 of 1971 levies a tax on passengers or on the income of operators. It was held that the tax is on passengers and goods, not on the income of the operators. The Kerala High Court in Thomman case and the Supreme Court in Sainik Motors case supported this view, stating that the tax is on passengers and goods, and the operators act as agents to collect the tax. The amendment clarified the tax collection mechanism, making it explicit that passengers and consignors of goods pay the tax to the operators, who then pay it to the government.
2. Validity of the Motor Vehicles (Kerala Third Amendment) Act, 1971 (Act 34 of 1971):
Act 34 of 1971 amended Section 43 of the Motor Vehicles Act, 1939, adding Sub-section (1A), which allowed fares and freights to be inclusive of the tax payable by passengers or consignors of goods. This amendment was validated retrospectively, ensuring that directions regarding fares issued from 1 March 1963 were inclusive of the tax. The Supreme Court upheld this amendment, stating that it was within the legislature's competence to amend the Motor Vehicles Act to include tax in the fare.
3. Whether Act 18 of 1971 levies a tax on passengers or on the income of operators:
The Supreme Court confirmed that the tax is on passengers and goods, not on the income of operators. The measure of the tax is based on the fare and freight charged, but the incidence of the tax falls on passengers and consignors of goods. The operators are merely agents collecting the tax on behalf of the government.
4. Legality of the retrospective validation of levy and collection of taxes by Act 18 of 1971:
The retrospective validation was challenged on the grounds that operators did not collect the tax from passengers between July 1966 and October 1971. The Court held that the fare fixed from 1 July 1963 included the tax, and operators collected the tax along with the fare. The retrospective validation was deemed reasonable and necessary to render the levy and collection lawful. The Supreme Court cited Rai Ramkrishna case, stating that retrospective recovery of tax does not alter its character and remains a tax on passengers and goods.
5. Competency of the legislature to amend Section 43 of the Motor Vehicles Act, 1939, to include retrospectively tax within fare:
The Supreme Court held that it was within the legislature's competence to amend Section 43 of the Motor Vehicles Act, 1939, to include tax within fare retrospectively. The amendment clarified that fares fixed could include the tax payable by passengers or consignors of goods. This validation was necessary to address the issues raised in Thomman case and ensure the proper collection of tax.
Conclusion:
The Supreme Court upheld the validity of Acts 18 and 34 of 1971, confirming that the tax is on passengers and goods, not on the income of operators. The retrospective validation of levy and collection of taxes was deemed lawful and reasonable. The legislature was competent to amend Section 43 of the Motor Vehicles Act, 1939, to include tax within fare retrospectively. The petitions and appeals were dismissed, and the decision of the Kerala High Court was upheld.
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1973 (11) TMI 96
Issues Involved:
1. Jurisdiction of a judge appointed under Article 224A of the Constitution to try an election petition under Section 80A of the Representation of the People Act, 1951.
2. Authority of the Chief Justice to reassign an election petition from one judge to another after the trial has commenced.
Detailed Analysis:
1. Jurisdiction of a Judge Appointed under Article 224A
The primary issue was whether a person sitting and acting as a judge of the High Court under Article 224A of the Constitution can exercise the jurisdiction to try an election petition under Section 80A of the Representation of the People Act, 1951. The court examined Article 224A, which allows the Chief Justice of a High Court, with the President's consent, to request a retired judge to sit and act as a judge of the High Court. The court emphasized that while sitting and acting, such a person "shall have all the jurisdiction, powers and privileges of, but shall not otherwise be deemed to be, a Judge of that High Court."
The court concluded that the phrase "while so sitting and acting" means that the person requested has the jurisdiction, powers, and privileges of a judge of the High Court during the period for which they are requested to sit and act. The court rejected the appellant's contention that Surajbhan J., appointed under Article 224A, was not a judge of the High Court for the purposes of Section 80A of the Act. The court held that for the purposes of jurisdiction, powers, and privileges, a person requested under Article 224A is indeed a judge of the High Court.
2. Authority of the Chief Justice to Reassign an Election Petition
The second issue was whether the Chief Justice could reassign an election petition to another judge after the trial had commenced. Initially, the election petition was entrusted to Vyas J. by the then Chief Justice. However, due to administrative reasons and at the request of Vyas J., the Chief Justice reassigned the petition to Surajbhan J.
The court noted that there is nothing in Section 80A of the Act that prevents the Chief Justice from reassigning an election petition. The court found no legal infirmity in the Chief Justice's order to reallocate the petition to Surajbhan J. The court also referenced the case of Zikar v. The State, which stated that a Chief Justice cannot withdraw and transfer a case from one division bench to another without concurrence but found it inapplicable as it did not address the reassignment of cases between individual judges.
Conclusion:
The court held that:
1. A person requested to sit and act as a judge under Article 224A has the jurisdiction, powers, and privileges of a High Court judge for the purposes of Section 80A of the Representation of the People Act, 1951.
2. The Chief Justice has the authority to reassign an election petition from one judge to another even after the trial has commenced, especially when requested by the judge initially assigned.
However, considering the special facts and circumstances, the court deemed it appropriate and in the interest of justice to have the election petition tried by a permanent judge of the High Court. The court set aside the order dated August 10, 1973, and directed that the election petition be heard by a permanent judge assigned by the Chief Justice. The appeal was allowed, and the parties were directed to bear their own costs.
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1973 (11) TMI 95
Issues Involved:
1. Whether criticism of an administrative act of the High Court or any court could amount to contempt of court.
2. Whether pejorative imputations about a court or judge, even if contained in an appeal to a higher court or in a remedial representation to a correctional authority, constitute contempt.
3. Whether the statements made by the appellant in various annexures amounted to gross contempt of court.
4. The appropriateness of the sentence imposed by the High Court.
5. The relative position of the Government of Orissa and the High Court regarding disciplinary control over Subordinate Judges.
Issue-wise Detailed Analysis:
1. Criticism of Administrative Acts as Contempt:
The court examined whether criticism of administrative acts by the High Court could amount to contempt. It was argued that purely administrative acts, like recruitments, transfers, and postings, routine disciplinary action against subordinate staff, and executive acts in running the establishment, should not attract contempt jurisdiction. The court highlighted that the contempt power is meant to protect the public and not judicial personnel. However, it concluded that the suspension of the District Judge was integrally connected with the administration of justice and thus fell within the ambit of contempt jurisdiction.
2. Imputations in Appeals and Representations:
The court considered whether statements made in appeals to the Governor and in special leave petitions to the Supreme Court could constitute contempt. It was noted that while a large margin must be allowed for allegations in remedial representations, reckless excesses could vitiate what otherwise could have been legitimate grievances. The court emphasized that even in remedial processes, irrelevant or unvarnished imputations could amount to contempt if they were made without good faith.
3. Statements in Various Annexures:
The court analyzed the contents of Annexures 8, 13, 14, 16, and 20 to determine if they amounted to gross contempt. It found that these annexures contained statements that grossly vilified the High Court and its judges, attributing mala fides, bias, and improper motives. The court concluded that these statements scandalized the High Court and affected the administration of justice, thereby constituting criminal contempt.
4. Appropriateness of the Sentence:
The High Court had sentenced the appellant to two months of simple imprisonment, considering his previous convictions for contempt. The Supreme Court, while acknowledging the appellant's defiant attitude and lack of apology, decided to modify the sentence to a fine of Rs. 1,000 or, in default, three months of simple imprisonment. The court took into account the appellant's nearing the end of his judicial career and a sort of mania against the High Court that had clouded his reason.
5. Disciplinary Control Over Subordinate Judges:
The court addressed the issue of the relative position of the Government of Orissa and the High Court concerning disciplinary control over Subordinate Judges. The High Court had struck down some rules framed by the State Government, which it found contravened Article 235 of the Constitution. The Supreme Court, however, chose not to express any opinion on the constitutionality of the impugned rules, allowing the State's appeal to be withdrawn without prejudice to its contentions.
Conclusion:
The Supreme Court upheld the conviction of the appellant for criminal contempt but modified the sentence to a fine of Rs. 1,000 or three months of simple imprisonment in default. The court emphasized the importance of balancing freedom of expression and the need to maintain public confidence in the judiciary. It also clarified that while administrative acts closely connected with judicial functions could attract contempt jurisdiction, purely administrative or personal acts of judges should not. The court refrained from making a definitive ruling on the constitutional issues regarding the disciplinary control over Subordinate Judges, allowing the State's appeal to be withdrawn.
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1973 (11) TMI 94
Issues Involved:
1. Whether the reference by the respondent Electricity Company to the Arbitration of the Central Electricity Authority operates as a bar to the Constitution of a Rating Committee by the Board under Section 57A of the Electricity (Supply) Act, 1948.
2. Interpretation of the provisions of the Sixth Schedule and its applicability to disputes between the Board and the Electricity Company.
3. The legal standing of the Board in relation to the State Government concerning arbitration clauses in the licence.
Detailed Analysis:
Issue 1: Whether the reference by the respondent Electricity Company to the Arbitration of the Central Electricity Authority operates as a bar to the Constitution of a Rating Committee by the Board under Section 57A of the Electricity (Supply) Act, 1948.
The court examined whether the Electricity Company's reference to arbitration under the Sixth Schedule barred the Board from constituting a Rating Committee. The Electricity Company argued that the arbitration clause in para XVI of the Sixth Schedule allowed them to refer disputes to the Authority, thus preventing the Board from forming a Rating Committee. The court analyzed Section 57A and its provisos, concluding that the reference to arbitration must be between the licensee and the State Government, not the Board. Therefore, the Board's formation of the Rating Committee was not barred by the Electricity Company's arbitration reference.
Issue 2: Interpretation of the provisions of the Sixth Schedule and its applicability to disputes between the Board and the Electricity Company.
The court delved into the Sixth Schedule, which outlines financial principles to prevent consumer exploitation by the licensee. The court noted that the Schedule's provisions are incorporated into the licence issued by the State Government to the licensee. The court emphasized that disputes under para XVI of the Sixth Schedule pertain to the interpretation of its provisions and matters arising therefrom. However, the court found that such disputes must be between the State Government and the licensee, not the Board. The court also highlighted that the Board, not being a party to the original licence, could not invoke the arbitration clause in para XVI for disputes with the Electricity Company.
Issue 3: The legal standing of the Board in relation to the State Government concerning arbitration clauses in the licence.
The court scrutinized whether the Board could be considered a substitute for the State Government in arbitration matters. The court referred to Section 60(1) of the Act, which transfers obligations from the State Government to the Board post-constitution. However, the court clarified that this transfer does not extend to arbitration clauses in the licence. The court cited the Amalgamated Electricity Company Ltd. v. N.S. Bathena case, reinforcing that the arbitration clause is an engagement between the State Government and the licensee, binding only them. Consequently, the Board could not invoke para XVI for arbitration with the licensee.
Conclusion:
The court concluded that the reference to arbitration by the Electricity Company did not bar the Board from constituting a Rating Committee. The court emphasized that the arbitration clause in para XVI of the Sixth Schedule applies only to disputes between the State Government and the licensee, not the Board. The court remanded the case to the High Court for further proceedings on other issues raised in the Special Civil Application, as they were not addressed due to the initial finding. The costs were to be determined in the cause.
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1973 (11) TMI 93
Issues Involved:
1. Whether the original contract of sale containing an arbitration clause was superseded by a subsequent arrangement.
2. Whether the appellants participated in the suit proceedings, thereby disentitling them to relief under Section 34 of the Arbitration Act, 1940.
Detailed Analysis:
Issue 1: Supersession of the Original Contract
The primary question was whether the original contract containing an arbitration clause was superseded by a subsequent arrangement. The court examined the original contract and the subsequent agreement dated September 13, 1969. The original contract was governed by the Sale of Goods Act, 1930, which required the seller to deliver goods and the buyer to pay for them. The defendants breached this contract by failing to honor the bills of exchange. They then proposed a new arrangement to secure the plaintiff's forbearance, which was accepted and formalized in the agreement dated September 13, 1969.
The court noted that the new agreement included an unconditional acknowledgment of debt, a schedule of payments, a deed of guarantee, a pledge of shares and debentures, and an irrevocable power of attorney. This new arrangement was considered a valid contract enforceable at law and constituted accord and satisfaction of the original contract.
The court held that the original contract, including its arbitration clause, was superseded by the new arrangement. It cited precedents like British Russian Gazette and Trade Outlook, Limited v. Associated Newspapers, Limited and Union of India v. Kishorilal Gupta and Bros., which supported the view that a new agreement could extinguish prior rights and obligations, including arbitration clauses.
The court concluded that the arbitration clause in the original contract did not survive the new arrangement, as the latter was a self-contained document that introduced new rights and obligations, making the original contract inoperative and unenforceable.
Issue 2: Participation in Suit Proceedings
The second issue was whether the appellants had taken steps in the suit proceedings, thereby disentitling them to relief under Section 34 of the Arbitration Act. The court observed that the defendants had filed a reply to the plaintiff's application for an interim injunction and requested that the application be taken up after filing the written statement. This indicated their intention to contest the injunction based on the merits of the case to be detailed in the written statement.
The court noted that the defendants had also filed an application under Order 39 Rule 4 for setting aside the ex-parte temporary injunction, further demonstrating their submission to the court's jurisdiction. The court referenced State of Uttar Pradesh v. M/s. Janki Saran Kailash Chandra and Ford's Hotel Co., Ltd. v. Barlett, which held that actions like seeking adjournments or filing replies amounted to taking steps in the proceedings.
The court distinguished the present case from Sansarchand Deshraj v. State of M.P., where the defendants had explicitly mentioned the subsistence of an arbitration agreement in their reply. In the present case, the defendants did not make such a mention, and their actions were deemed to have submitted to the court's jurisdiction.
The court concluded that the defendants had taken steps in the suit proceedings, thereby disentitling them to relief under Section 34 of the Arbitration Act.
Conclusion:
The court dismissed the appeal, holding that the original contract containing the arbitration clause was superseded by a subsequent arrangement, and the defendants had taken steps in the suit proceedings, making them ineligible for a stay under Section 34 of the Arbitration Act. The appeal was dismissed with costs, and counsel's fee was set at Rs. 200.
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1973 (11) TMI 92
Issues:
- Interpretation of provisions of Delhi Rent Control Act, No. 59 of 1958 regarding sub-letting and possession.
- Determination of sub-letting in the absence of evidence.
- Burden of proof in eviction cases based on sub-letting allegations.
- Evaluation of evidence in establishing sub-letting.
- Applicability of legal principles in determining mixed questions of law and fact.
Analysis:
The case involved an appeal by special leave from an order passed by the single Judge of the High Court of Delhi in a second appeal under section 39 of the Delhi Rent Control Act, No. 59 of 1958. The respondent landlord alleged that the appellant had sub-let the premises to her husband, Sohan Singh, who was running a business in the shop. The Rent Controller and Rent Control Tribunal held that there was no sub-letting as the appellant and Sohan Singh were living as husband and wife. The High Court, however, found in favor of sub-letting, leading to the appeal.
The appellant argued that the High Court erred in interfering with the concurrent finding of fact without any substantial question of law. The Supreme Court agreed, emphasizing that sub-letting is distinct from permissive user and should not be presumed without evidence. The High Court wrongly relied on provisions of the Act that were not applicable to the facts of the case.
In cases where eviction is sought based on sub-letting, the burden of proof lies with the landlord to establish sub-letting. Despite the respondent's allegations, no evidence was produced to prove sub-letting, and the appellant denied any such arrangement. The evidence presented, including the appellant and Sohan Singh's testimony, indicated a husband-wife relationship and joint business operation, not sub-letting. The Rent Courts' findings were based on factual inference and common sense, not legal principles.
The High Court's decision to interfere with the concurrent findings of fact was deemed erroneous as no substantial question of law was involved. The judgment highlighted that the legal status of marriage was irrelevant in an eviction suit, and the determination of sub-letting was a factual matter, not a mixed question of law and fact. As a result, the Supreme Court allowed the appeal, set aside the High Court's order, and restored the decision of the Rent Control Authorities with costs throughout.
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1973 (11) TMI 91
Issues:
1. Conviction under Section 408 of the Penal Code for breach of trust.
2. Lack of direct evidence of entrustment to the appellant.
3. Scrutiny of evidence by the High Court.
4. Defense of the appellant regarding the amounts received.
5. Lack of evidence on the mode of keeping accounts and cash tallying.
6. Reliance on appellant's signature in the branch office books.
7. Inadequate evidence to prove breach of trust.
Analysis:
The judgment involves the appellant, accused No. 3, who was convicted under Section 408 of the Penal Code for breach of trust involving a sum of Rs. 7,000. The appellant, along with two others, was tried and convicted by the learned Magistrate, sentenced to six months of rigorous imprisonment. The Sessions Judge acquitted accused No. 1 but upheld the conviction of the appellant and accused No. 2. The High Court confirmed this decision, leading to the appellant's appeal to the Supreme Court by special leave.
The case revolved around the appellant, who was the Manager of a cooperative society with branch offices. Allegations stated that the appellant misappropriated funds entrusted to him for transfer between branch and head offices. The prosecution relied on entries in account books to prove the entrustment of funds, but the High Court noted the lack of direct or indirect evidence supporting this claim.
The defense presented by the appellant was that he received two separate amounts, totaling Rs. 9,500, not the alleged Rs. 7,000 and Rs. 9,500 separately. The High Court raised concerns about the lack of evidence regarding the accounting practices, cash handling procedures, and the absence of detailed information on the business operations presented during the trial.
The High Court primarily relied on the appellant's signature in the branch office books as evidence of entrustment. However, the Supreme Court highlighted discrepancies in the interpretation of the appellant's statement under the CrPC, emphasizing that the admission of the signature should be viewed in its entirety, not selectively.
Ultimately, the Supreme Court found a lack of credible evidence to support the breach of trust charge against the appellant. The judgment concluded by allowing the appeal, setting aside the conviction and sentence, and discharging the bail bond of the appellant.
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1973 (11) TMI 90
Issues Involved:
1. Legality of the appellant's reversion from the post of Office Superintendent.
2. Validity of the administrative order keeping the post of Office Superintendent in abeyance.
3. Applicability of Article 102 vs. Article 120 of the Limitation Act, 1908.
4. Entitlement to arrears of salary, pension, and gratuity.
Detailed Analysis:
1. Legality of the Appellant's Reversion:
The appellant was reverted from the post of Office Superintendent to Assistant Office Superintendent without holding any enquiry as required by the Disciplinary and Appeal Rules of the Railway. The High Court held that the order of reversion was penal and violated the procedural safeguards under Section 240(3) of the Government of India Act, making it void and "non est." Consequently, the appellant was legally entitled to hold the post of Office Superintendent and receive the corresponding salary until retirement.
2. Validity of the Administrative Order Keeping the Post in Abeyance:
The Trial Court held that the administrative order keeping the post of Office Superintendent in abeyance could not be questioned in a civil suit. However, the High Court found that the order was not bona fide and was a device to circumvent the difficulties arising from the reversion order. The High Court ruled that the alleged order of abeyance resulted in definite prejudice and loss to the appellant, making the suit legally maintainable.
3. Applicability of Article 102 vs. Article 120 of the Limitation Act, 1908:
The Supreme Court addressed whether Article 102 or Article 120 of the Limitation Act, 1908, applied to the case. The Court noted that previous decisions, including those in Shri Madhav Laxman Vaikunthe v. The State of Mysore and Jai Chand Sawhney v. Union of India, had established that Article 102 applied to claims for arrears of salary. The Court held that the Legislature's inaction to amend the Limitation Act despite these decisions indicated acceptance of this interpretation. Therefore, the appellant's suit for arrears of salary was barred by time under Article 102.
4. Entitlement to Arrears of Salary, Pension, and Gratuity:
The High Court decreed that the appellant, upon superannuation, was entitled to gratuity and pension as per the service rules, based on his retirement as Office Superintendent. The Supreme Court modified this decree, holding that only the amount falling within three years of the suit filing could be decreed, as per Article 102 of the Limitation Act, 1908. The Court directed that the arrears of pension and gratuity be calculated based on the salary scale applicable to the post of Office Superintendent.
Conclusion:
The Supreme Court partly allowed the appeal, modifying the High Court's decree to limit the arrears of salary to the period within three years of the suit filing. The Court expressed regret over the unjust treatment of the appellant and urged the Union of India to consider equitable relief despite the legal bar due to the limitation period. Each party was directed to bear its own costs.
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1973 (11) TMI 89
Issues Involved:
1. Whether the decree dated September 23, 1964, is a nullity and, as such, in executable.
2. Whether the executing court was competent to go behind the decree and question its validity.
3. Whether the decree was passed without satisfying the statutory grounds for eviction under the Bombay Rent Control Act, 1947.
Issue-wise Detailed Analysis:
1. Whether the decree dated September 23, 1964, is a nullity and, as such, in executable:
The appellant was a tenant in arrears of rent since October 16, 1961. The landlords served a notice terminating the tenancy and requiring payment of arrears. They subsequently filed a suit for possession based on non-payment of rent for over a year and the bona fide requirement of the premises. A compromise was reached, and a decree was passed on September 23, 1964, with terms including the tenant's agreement to vacate by September 30, 1968, and payment of arrears and mesne profits. The tenant later contended that the decree was a nullity as the court did not satisfy itself about the grounds for eviction under the Bombay Rent Act. The executing court initially accepted this objection, but the Extra Assistant Judge later overturned this, finding ample material in the compromise to satisfy the statutory grounds.
2. Whether the executing court was competent to go behind the decree and question its validity:
The executing court rejected the tenant's story of adjustment and satisfaction of the decree but accepted the objection that the decree was void for lack of judicial satisfaction of the eviction grounds. The Extra Assistant Judge, however, found that admissions in the compromise provided sufficient material for the court to be satisfied about the statutory grounds for eviction. The Supreme Court held that if a decree on its face shows some material for statutory grounds, the executing court must accept and execute it. The executing court can look at the original trial court record to verify the existence of such material but cannot question the trial court's findings.
3. Whether the decree was passed without satisfying the statutory grounds for eviction under the Bombay Rent Control Act, 1947:
The appellant's counsel argued that no decree for eviction could be passed without the Rent Court's satisfaction of statutory grounds based on extrinsic material. The respondent's counsel contended that the statutory grounds were admitted in the compromise, implying the court's satisfaction. The Supreme Court agreed with the latter, noting that admissions in the compromise constituted material facts for eviction under Section 12(3)(a) of the Bombay Rent Act. The tenant's admission to pay arrears and mesne profits indicated abandonment of any dispute over standard rent, thus satisfying the statutory ground for eviction.
Conclusion:
The Supreme Court concluded that the decree was not a nullity as it was based on sufficient material indicating the statutory grounds for eviction. The executing court was not competent to question the decree's validity if it showed prima facie material for statutory grounds. The appeal was dismissed with costs.
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1973 (11) TMI 88
Issues Involved:
1. Whether the claim application filed by the appellant under Section 15(2) of the Payment of Wages Act was time-barred.
2. Whether the deduction of wages for the period of inactive service was justified under Rule 2044 of the Railway Establishment Code and Section 7(2)(h) of the Payment of Wages Act.
3. Whether the appellant's claim for Running Allowance was rightly disallowed due to the failure to amend the petition in time.
Detailed Analysis:
1. Limitation of Claim Application:
The primary issue was whether the appellant's claim application under Section 15(2) of the Payment of Wages Act was time-barred. The appellant argued that the limitation period should start from the date of actual deduction of wages, which was either March 11, 1959, or February 13, 1959, when the decision to treat the period of inactive service as leave without pay was communicated. The respondents contended that the limitation period started from the date of dismissal, January 3, 1956, as wages accrued monthly.
The court interpreted the first proviso to Section 15(2) of the Payment of Wages Act, which provides two alternative starting points for limitation: the date of deduction of wages or the date when the payment of wages was due. The court emphasized that these two termini are distinct and may not always coincide. In the appellant's case, the deduction took place on February 18, 1959, when it was decided to treat the period of inactive service as leave without pay. Therefore, the application filed on August 13, 1959, was within the six-month limitation period.
2. Justification of Wage Deduction:
The second issue was whether the deduction of wages for the period of inactive service was justified under Rule 2044 of the Railway Establishment Code and Section 7(2)(h) of the Payment of Wages Act. The Additional District Judge had held that the deduction was valid as it was made under the order of a competent authority.
The court referred to the decision in Devendra Pratap Narain Rai Sharma v. State of U.P., which held that Rule 54 of the U.P. Government Fundamental Rules, similar to Rule 2044 of the Railway Establishment Code, does not apply when dismissal is declared invalid by a civil court. Therefore, the deduction of wages was not justified, and the appellant was entitled to a refund of the deducted amount.
3. Claim for Running Allowance:
The third issue was whether the appellant's claim for Running Allowance was rightly disallowed due to the failure to amend the petition in time. The appellant had initially claimed Traveling Allowance, which he later sought to amend to Running Allowance. The Authority did not permit the amendment as it was not carried out within the prescribed period.
The court held that while the Code of Civil Procedure does not govern amendments of applications under Section 15(2) of the Act, the Authority can devise its own procedure based on principles of justice, equity, and good conscience. The appellant was found guilty of gross negligence for not amending the application in time. Furthermore, Running Allowance is counted towards average pay only when leave does not exceed one month, and the appellant was not entitled to it for the entire period of inactive service.
Conclusion:
The court reversed the finding of the Additional District Judge regarding the limitation and held that the application was within time. It also found that the deduction of wages was not justified and restored the order of the Prescribed Authority, directing the refund of the deducted amount. However, the claim for Running Allowance was rightly disallowed due to the appellant's negligence in amending the application.
Observations on Government Litigation:
The court, while concurring with the judgment, expressed concerns about the government's approach to litigation, emphasizing the need for a just settlement of claims and avoiding unnecessary litigation. The court highlighted the importance of the state acting as a virtuous litigant, concerned only with justice and social justice.
Appeal Allowed.
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1973 (11) TMI 87
Issues Involved:
1. Legality of the seizure and the extension of the statutory period for issuing a show cause notice.
2. Validity of the order of confiscation and penalty without providing a reasonable opportunity to be heard.
3. Dismissal of the appeal for non-compliance with the pre-deposit requirement.
4. Entitlement to the return of seized goods after the statutory period.
Detailed Analysis:
1. Legality of the Seizure and Extension of Statutory Period:
The petitioner, a registered partnership firm, had its factory premises raided by Customs Officers on May 26, 1969, resulting in the seizure of synthetic yarn and fabrics under Section 110 of the Customs Act, 1962. The Collector of Customs extended the statutory period for issuing a show cause notice by two months on November 27, 1969, without notifying the petitioner. The petitioner contended that this extension was illegal and invalid as it was done ex parte and without notice. The court referred to Sections 110, 112, and 124 of the Act, and the Supreme Court's interpretation in Assistant Collector of Customs v. Charon Das Malhotra, which held that the extension of time without offering an opportunity to show cause was illegal and a nullity. Consequently, the extension order dated November 27, 1969, was deemed illegal.
2. Validity of the Order of Confiscation and Penalty:
The petitioner argued that the order of confiscation and penalty was invalid as the notice under Section 124 was issued after the expiry of the six-month period stipulated in Section 110. The court clarified that Section 124 does not prescribe a time limit for issuing a notice and that the six-month period in Section 110 affects only the seizure and not the validity of the notice. The court distinguished between procedural provisions in Chapter XIII and substantive provisions in Chapter XIV of the Act, concluding that the power to confiscate goods and impose penalties under Sections 111 and 112 is not dependent on the seizure provisions of Section 110.
3. Dismissal of the Appeal for Non-Compliance with Pre-Deposit Requirement:
The petitioner's appeal was dismissed for failing to deposit Rs. 15,000 as required under Section 129 of the Act. The petitioner contended that this condition was harsh and deprived him of the right to be heard in appeal. The court noted that the petitioner was heard on the amount to be deposited before the order was made and that the order was passed on merits. Therefore, the requirement to deposit Rs. 15,000 was deemed justified and not a denial of the right to appeal.
4. Entitlement to the Return of Seized Goods After the Statutory Period:
The petitioner claimed a right to the return of the seized goods after the expiry of the six-month period under Section 110(2). The court held that once an order of confiscation is passed under Section 111, the question of returning the goods does not survive. The court cited its previous decision in Special Civil Application No. 555 of 1971, which supported the conclusion that the right to return goods is extinguished once confiscation is ordered.
Conclusion:
The court dismissed the petition, upholding the orders of confiscation and penalty, and the dismissal of the appeal for non-compliance with the pre-deposit requirement. The rule issued on the petition was discharged with costs. The request for leave to appeal under Article 133 of the Constitution was rejected as the case did not involve any substantial question of law of general importance requiring determination by the Supreme Court.
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1973 (11) TMI 86
Issues Involved:
1. Ultra vires of the 1948 Order under Section 3 of the Essential Supplies (Temporary Powers) Act, 1946.
2. Continuance of the 1948 Order under the Essential Commodities Act, 1955.
3. Arbitrary powers of the executive in fixing prices under Section 3 of the Essential Commodities Act, 1955.
4. Infringement of fundamental rights under Articles 19(1)(f), 19(1)(g), and 31 of the Constitution.
5. Reasonableness of price fixation under the impugned notifications.
6. Channelisation and distribution of yarn.
7. Creation of monopoly and violation of Articles 19(1)(f), 19(1)(g), and 301 of the Constitution.
Issue-wise Detailed Analysis:
1. Ultra vires of the 1948 Order under Section 3 of the Essential Supplies (Temporary Powers) Act, 1946:
The petitioners argued that the Cotton Textiles (Control) Order, 1948, particularly clauses 22 and 30, was ultra vires the powers conferred on the Central Government by Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, as cotton yarn was not covered by the item "Cotton and woollen textiles." The court held that cotton yarn is included in the term "cotton textiles" based on legislative and judicial precedents, dictionary meanings, and the consistent legislative and executive understanding. The court cited various statutes and orders, including the Cotton Cloth and Yarn Control Orders of 1943 and 1945, the Tariff Act, 1934, and the Trade Marks Act, 1940, which treated yarn as part of cotton textiles.
2. Continuance of the 1948 Order under the Essential Commodities Act, 1955:
The petitioners contended that the provisions of the 1948 Order relating to cotton yarn could not be continued under the 1955 Act as cotton yarn was not covered by the item "Cotton and woollen textiles" and no notification had been issued declaring cotton yarn as an essential commodity. The court found that the 1948 Order was continued under Section 16(2) of the Essential Commodities Act, 1955, and cotton yarn was included in cotton textiles. The court noted that various legislative measures, including the Cotton Textiles (Control) Amendment Order, 1972, and the Essential Commodities Act, 1955, provided for the control of production, supply, and distribution of essential commodities, including cotton textiles.
3. Arbitrary powers of the executive in fixing prices under Section 3 of the Essential Commodities Act, 1955:
The petitioners argued that Section 3 of the Essential Commodities Act, 1955, could not confer arbitrary powers on the executive to fix prices unrelated to the cost of production and reasonable profit. The court held that the controlled price fixed under the impugned notifications was not arbitrary and constituted a reasonable restriction on the fundamental rights of the petitioners. The court referred to the recommendations of the Tariff Commission, which emphasized that price control must be comprehensive, fair to both producers and consumers, and periodically revised to cover changes in production costs.
4. Infringement of fundamental rights under Articles 19(1)(f), 19(1)(g), and 31 of the Constitution:
The petitioners contended that the impugned notifications violated their fundamental rights guaranteed by Articles 19(1)(f) and (g) and 31 of the Constitution. The court held that the controlled price fixed under the notifications was fair and reasonable, taking into account the cost of production, reasonable return, and the need to maintain equilibrium between supply and demand. The court cited various precedents, including Diwan Sugar & General Mills v. Union of India and Sri Krishna Rice Mills v. Joint Director (Food), which upheld the reasonableness of price control measures in the interest of the general public.
5. Reasonableness of price fixation under the impugned notifications:
The petitioners argued that the price fixation under the impugned notifications was arbitrary and did not consider relevant factors such as cost of production and reasonable profit. The court held that the price fixation was based on relevant considerations, including the recommendations of the Tariff Commission, market conditions, and the need to ensure availability of yarn at fair prices. The court noted that the controlled price was more than fair to the producers and reflected normal market conditions.
6. Channelisation and distribution of yarn:
The petitioners challenged the channelisation of yarn distribution through specified channels, arguing that it created a monopoly and violated their fundamental rights. The court held that the distribution control was intended to ensure availability of yarn at reasonable prices and eliminate profiteering, hoarding, and cornering. The court found that the channels of distribution were agencies of the State for distribution purposes and were guided by the provisions of clause 30 of the Cotton Textiles Order, 1948, and Section 3 of the Essential Commodities Act, 1955.
7. Creation of monopoly and violation of Articles 19(1)(f), 19(1)(g), and 301 of the Constitution:
The petitioners contended that the impugned orders created a monopoly in favor of specified persons and violated their fundamental rights. The court held that the distribution channels were not monopolies but were intended to ensure equitable distribution and availability of yarn at fair prices. The court noted that the selection of traders was based on ensuring availability of yarn to actual consumers at fair prices and eliminating unscrupulous practices. The court cited various precedents, including Bhatnagars & Co. v. Union of India and Mannalal Jain v. State of Assam, which upheld the reasonableness of canalisation orders in the interest of the general public.
Conclusion:
The court dismissed the petitions, holding that the impugned notifications and orders were valid, reasonable, and in the interest of the general public. The court emphasized that the controlled price and distribution measures were necessary to ensure availability of yarn at fair prices and eliminate hoarding, profiteering, and artificial shortages. The court found that the measures did not violate the petitioners' fundamental rights and were consistent with the objectives of the Essential Commodities Act, 1955.
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