Input:
Civil Appeal No. 1177 (NCE) of 1986.
From the Judgment and order dated 17.1.1986 of the Allahabad High Court (Election Tribunal) in Election Petition No. 54 of 1985.
R.K. Garg and Ravi Parkash Gupta for the Appellant.
Qamarrudin and Mrs. Qamarrudin for the Respondents.
The Judgment of the Court was delivered by 633 VENKATARAMIAH, J.
This appeal is filed under section 116A of the Representation of the People Act, 195 l (hereinafter referred A to as 'the Act ') by the appellant against the Judgment dated January 17, 1986 of the High Court of Allahabad in Election Petition No. 34 of 1985 dismissing the Election Petition.
The election to the Uttar Pradesh State Legislative Assembly from Constituenc No. 41 Gunnaur, Village Mirzapur, District Baduan took place in early March, 1985.
16 candidates contested at the said election.
Respondent No. I Smt.
Pushpa Devi was declared elected having secured 23006 votes.
The next highest number of votes was secured by Shri Naurangi Singh.
He secured 20735 votes.
The difference between the votes secured by Respondent No. l and the votes secured by Respondent No. 2 was in the order of 227 l votes.
Respondent No. 8, who was working as a teacher in the Babu Ram Singh Intermediate College, Baburala, Baduan was also one of the candidates in the election.
He secured 3606 votes, which were more than the difference between the votes secured by Respondent No., and by Respondent No. 2.
The appellant, who was an elector at the said election, filed the Election Petition, out of which this appeal arises, contending that Respondent No. 8, who was working as a teacher in the Babu Ram Singh Intermediate College, Baburala, Baduan, was holding an office of profit under the State Government and, therefore, the acceptance of his nomination by the Returning officer was illegal.
Since Respondent No. 8 secured 3606 votes, which were higher than the difference between the votes secured by Respondent No. I and the votes secured by Respondent No. 2, the election of Respondent No. I should be considered as having been materially affected by the wrongful acceptance of the nomination paper of Respondent No. 8 and the election of Respondent No. 1 was liable to be set aside.
The Election Petition was contested by Respondent No. 1.
It was pleaded by Respondent No. 1 that the acceptance of the nomination paper of Respondent No. 8 was not illegal since Respondent No. 8 was not holding an office of profit under the State Government and secondly even if the acceptance of the nomination paper of Respondent No. 8 was illegal, the election could not be set aside since the result of the election was not materially affected thereby.
The High Court held that the acceptance of the nomination paper of Respondent No. 8 was not illegal as Respondent No. 8 was not holding an office of profit under the State Government and it further held that even if the acceptance of the nomination paper of Respondent No. 8 was illegal, the appellant had not established that the result of the election of Respondent No. I had been materially affected on the facts and in the H 634 circumstances of the case.
The High Court accordingly dismissed the petition.
Aggrieved by the judgment of the High Court the appellant has filed this appeal.
Since it is possible to dispose of this appeal on the second ground we do not propose to express any opinion in this case on the question whether Respondent No. 8 was, in fact, holding an office of profit under the State Government or not on the date on which the nomination paper was filed or on the date of the election.
We leave the said question open.
In order to decide the second question it is necessary to set out the relevant part of section 100 of the Act which reads thus: "100.
Grounds for declaring election to be void (1) Subject to the provisions of sub section (2) if the High Court is of opinion . . . . . . . . . (c) that any nomination has been improperly rejected; or (d) that the result of the election, in so far as it concerns a returned candidate, has been materially affected (i) by the improper acceptance of any nomination, or. . " Section 100 of the Act makes a distinction between the effect of improper rejection of any nomination and the effect of the improper acceptance of any nomination on the election.
If a nomination of any person at an election has been improperly rejected the election of the returned candidate is liable to be set aside without any further proof because it is difficult to visualise the number of votes which the person whose nomination has been rejected would have secured at the election and there is every likelihood of the returned candidate not securing the highest number of votes.
It is for this reason clause (c) of section 100(1) of the Act states that if the High Court is of the opinion that any nomination has been improperly rejected it shall declare the election of the returned candidate to be void.
Sub clause (i) of clause (d) of sub section (1) of section 100 of the Act is, however, worded differently.
It says that if the High Court is of opinion that the result of the election insofar as it concerns the returned candidate has been materially affected by the improper acceptance of any nomination it 635 shall declare the election of the returned candidate as void.
Sub clause (i) of clause (d) of section 100( I) of the Act requires a petitioner in an election petition to establish two grounds in order to get the election of the returned candidate set aside, namely, (i) that there has been improper acceptance of any nomination; and (ii) that by reason of the entry of the candidate whose nomination has been improperly accepted into the contest the result of the election insofar as the returned candidate is concerned has been materially affected.
The reason for making a distinction between a case falling under clause (c) of section 100(1) of the Act and a case falling under sub clause (i) of clause (d) of section 100( I) of the Act can be explained with reference to a hypothetical case.
Let us assume that the returned candidate has secured at an election 30,000 votes and 20,000 votes have been secured by a candidate who has secured the next highest number of votes.
We shall assume that a third candidate, whose nomination paper had been improperly accepted has secured just 1000 votes.
In this case even if it is held while deciding an election petition that the nomination of the third candidate has been improperly accepted, there is no justification to set aside the election of the successful candidate because even if all the votes secured by the third candidate are added to the candidate who has secured the next highest number of votes he would be a person who has secured 21000 votes and the successful candidate would still be a person who has secured the highest number of votes at the election.
In this hypothetical case it has to be held that the result of the election has not been materially affected at all.
Such election petition has necessarily to be rejected.
This Court was called upon to decide a case similar to the present one in Vashist Narain Sharma vs Dev Chandra and others.
; In that case the returned candidate Vashist Narain Sharma had secured 12868 votes and Vireshwar Nath Rai secured the next highest number of votes, i.e.,10,996.
The difference in the number of votes secured by these two candidates was 1872.
Another candidate by name Dudh Nath at the election, whose validity was in issue in that case, had secured 1983 votes.
There were also two other candidates in the field.
One of the grounds in the election petition, out of which the above case arose, was that the election of the returned candidate was liable to be set aside since the nomination paper of Dudh Nath had been improperly accepted by the Election Commissioner.
The Court in that case held that the burden of proving that the result of the election had been materially affected on account of the improper acceptance of a nomination was on the petitioner and that even if there was wrongful acceptance of the nomination having regard to the number of votes secured by the several candidates it was not possible to hold that the 636 result of the election had been materially affected.
In Samant N. Balakrishna etc.
vs George Fernandez and Ors etc.
; , section 100( l)(d)(i)) of the Act again arose for consideration.
In that case this Court commented at pages 643 644 on the decision in Vashist Narain Sharma 's case (supra) thus: "Mr. Chari relies upon the rulings of this Court where it has been laid down how the burden of proving the effect on the election must be discharged.
He referred to the case reported in Vashist Narain Sharma vs Dev Chandra and Surendra Nath Khosla vs Dilip Singh and the later rulings of this Court in which Vashist Narain 's case has been fol.
lowed and applied.
In our opinion the matter cannot be considered on possibility.
Vashist Narain 's case insists on proof.
If the margin of votes were small something might be made of the points mentioned by Mr. Jethmalani.
But the margin is large and the number of votes earned by the remaining candidates also sufficiently huge.
There is no room, there fore, for a reasonably judicial guess.
The law requires proof.
How far that proof should go or what it should contain is not provided by the Legislature.
In Vashist 's case and in Inayatullah vs Diwanchand Mahajan, the provision was held to prescribe an impossible burden.
The law has however remained as before.
we are bound by the rulings of this Court and must say that the burden has not been successfully discharged.
We cannot overlook the rulings of this Court and follow the English rulings cited to us.
" The very same question was considered by this Court in Chhedi Ram vs Jhilmit Ram and others, by a bench of which one of us (Venkataramiah, J.) was a member.
The judgment in that case was delivered by Chinnappa Reddy, J.
In that case the returned candidate Jhilmit Ram had secured 17, 822 votes and Chhedi Ram, the runner up had secured 17449 votes.
Thus the difference between the successful candidate and the candidate who secured next highest votes was 373 votes.
There were four other candidates, of whom Moti Ram secured 6710 votes.
Chhedi Ram challenged the election of Jhilmit Ram on the ground that Moti Ram was a Kahar by caste, not entitled to seek election from the reserved constituency, i.e., his nomination had been improperly accepted and the result of election was materially affected.
The High Court found that Moti Ram was a Kahar by caste 637 and not a member of the scheduled Castes.
Having arrived at the conclusion that Moti Ram 's nomination had been accepted improperly, the High Court was not prepared to set aside the election of Jhilmit Ram as it took the view that the result of the election had not been shown to have been affected in view of the improper acceptance of the nomination of Moti Ram.
The election petition in that case was, therefore, dismissed.
Chhedi Ram then preferred an appeal to this Court against the judgment of the High Court.
This Court allowed the appeal.
In the course of the judgment Chinnappa Reddy, J. Observed thus "2.
We are afraid the appeal has to be allowed.
Under section l00(1)(d) of the Representation of the People Act, 195 1, the election of a returned candidate shall be declared to be void if the High Court is of opinion that the result of the election, in so far as it concerns the returned candidate, has been materially affected by the improper acceptance of any nomination.
True, the burden of establishing that the result of the election has been materially affected as a result of the improper acceptance of a nomination is on the person impeaching the election.
The burden is readily discharged if the nomination which has been improperly accepted was that of the successful candidate himself.
On the other hand, the burden is wholly incapable of being discharged if the candidate whose nomination was improperly accepted obtained a less number of votes than the difference between the number of votes secured by the candidate who got the next highest number of votes.
In both these situations, the answers are obvious.
The complication arises only in cases where the candidate, whose nomination was improperly accepted, has secured a large number of votes than the difference between the number of votes secured by the successful candidate and the number of votes got by the candidate securing the next highest number of votes.
The complication is because of the possibility that a sufficient number of votes actually cast for the candidate whose nomination was improperly accepted might have been cast for the candidate who secured the highest number of votes next to the successful candidate, so as to upset the result of the election, but whether a sufficient number of voters would have so done, would ordinarily remain a speculative possibility only.
In this situation, the answer to the question whether the result of the 638 election could be said to have been materially affected must depend on the facts, circumstances and reasonable probabilities of the case, particularly on the difference between the number of votes secured by the successful candidate and the candidate securing the next highest number of votes, as compared with the number of votes secured by the candidate whose nomination was improperly accepted and the proportion which the number of wasted votes (the votes secured by the candidate whose nomination was improperly accepted) bears to the number of votes secured by the successful candidate.
If the number of votes secured by the candidate whose nomination was rejected is not disproportionately large as compared with the difference between the number of votes secured by the successful candidate and the candidate securing the next highest number of votes, it would be next to impossible to conclude that the result of the election has been materially affected.
But, on the other hand, if the number of votes secured by the candidate whose nomination was improperly accepted is disproportinately large as compared with the difference between the votes secured by the successful candidate and the candidate securing the next highest number of votes and if the votes secured by the candidate whose nomination was improperly accepted bears a fairly high proportion to the votes secured by the successful candidate, the reasonable probability is that the result of the election has been materially affected and one may venture to hold the fact as proved.
Under the Indian Evidence Act, a fact is said to he proved when after considering the matters before it, the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
If having regard to the facts and circumstances of a case, the reasonable probability is all one way, a court must not lay down an impossible standard of proof and hold a fact is not proved.
In the present case, the candidate whose nomination was improperly accepted had obtained 67 10 votes, that is, almost 20 times the difference between the number of votes secured by the successful candidate and the candidate securing the next highest number of votes.
Not merely that.
Th number of votes secured by the candidate whose nomination was improperly accepted bore a fairly high proportion to the number 639 Of votes secured by the successful candidate it was a little over one third.
Surely, in that situation, the result of the election may safely be said to have been affected.
" In the case before us Respondent No. I had secured 23006 votes and Respondent No. 2 had secured 20735 votes.
The margin thus was of 22371 votes.
Respondent No. 8, the validity of whose nomination was questioned, had secured 3606 votes.
It is no doubt true that if we assume that all the 3606 votes secured by Respondent No. 8 would have gone to Respondent No. 2, Respondent No. 2 would have been the successful candidate.
at the election.
Having regard to the facts of this case we feel that it is not possible to hold that the appellant in this appeal has established that the result of the election of the returned candidate had been materially affected because the difference between the votes secured by Respondent No. 1 and the votes secured by Respondent No. 2 was 2272 votes.
Respondent No. 8 had secured only about 1 7th of the number of votes polled by the Respondent No. l and there were 15 candidates (excluding respondent No. 8) contesting the election.
It is not possible to reach a finding in this case by making a judicial guess that all the 3606 voters who had voted in favour of Respondent No. 8 would have cast their votes in favour of Respondent No. 2 alone.
Even if about 1350 of them had cast their votes in favour of any of the other 14 candidates (including the returned candidate) Respondent No. 2 could not have become the candidate who had secured the highest number of votes at the election.
At this stage it is relevant to refer to the observation of Gulam Hasan, J. In Vashist Narain Sharma 's, case (supra) which run thus: "But we are not prepared to hold that the mere fact that the wasted votes are greater than the margin of votes between the returned candidate and the candidate securing the next highest number of votes must lead to the necessary inference that the result of the election has been materially affected.
That is a matter which has to be proved and the onus of proving it lies upon the petitioner.
It will not do merely to say that all or majority of the wasted votes might have gone to the next highest candidate.
The casting of votes at an election depends upon a variety of factors and it is not possible for any one to predicate how many or which proportion of the votes will go to one or the other of the candidates.
While it must be recognised that the petitioner in such a case of confronted with a difficult situation, it is not possible to relieve him of the duty imposed upon him H 640 by section 100(1)(c) and hold without evidence that the duty has been discharged.
Should the petitioner fail to adduce satisfactory evidence to enable the Court to find in his favour on this point, the inevitable result would be that the Tribunal would not interfere in his favour and would allow the election to stand.
" In the case before us we are of the view that the High Court was right in observing that the appellant or any other party had not placed satisfactory evidence to reach the conclusion that all or a sufficient number of the wasted votes which had been cast in favour of Respondent No. 8 would have gone in favour of Respondent No. 2, had Respondent No. 8 not been one of the candidates at the election.
The High Court has on the evidence before it held that "in the context particularly of the poll being heavy and the contestants being large in number 16 in all it remains unreasonable to guess that if the respondent No. 8 were excluded from the arena of contest the wasted votes would have gone to the respondent No. 2 thereby enabling him to succeed.
The burden Iying upon the petitioner remains clearly undischarged and the speculative possibility does not attain the level of proof.
" We agree with the above observation of the High Court since the appellant has not discharged the burden which clearly lay on him or proving that the result of the election had been materially affected even assuming that the nomination of Respondent No. 8 had been improperly accepted.
This appeal should, therefore, fail.
We accordingly dismiss it.
We, however, make no order as to costs.
N.P.V. Appeal dismissed.

Output:
% In the election to the Uttar Pradesh State Legislative Assembly from constituency No. 41 held in early March, 1985, 16 candidates contested.
Respondent No. 1 was declared elected having secured 23,006 votes.
Respondent No. 2 secured 20,735 votes being the next highest.
The difference of votes secured by them was in the order of 2,271 votes.
Respondent No. 8 who was working as a teacher in a college and who was one of the candidates secured 3,606 votes which were more than the difference between the votes secured by respondent No. 1 and 2.
The appellant who was an elector at the said election filed an election petition contending that respondent No. 8 was holding an 'office of profit ' under the State Government as he was working as a teacher in a college and therefore, the acceptance of his nomination by the returning officer was illegal, that since respondent No. 8 secured 3,606 votes which were higher than the difference between the votes secured by respondent No. 1 and respondent No. 2, the election of respondent No. 1 should be considered as having been materially affected by the wrongful acceptance of the nomination paper of respondent No. 8, and the election of the respondent No. 1 was, therefore, liable to be set aside.
Respondent No.1 contested the election petition pleading that the acceptance of the nomination paper of respondent No. 8 was not illegal since he was not holding an office of profit under the State Government, and that even if the acceptance was illegal the election could not be set aside since the result of the election was not materially affected thereby.
Dismissing the petition, the High Court held that the acceptance of the nomination paper of respondent No. 8 was not illegal as he was not holding an office of profit under the State Government and that 631 even if the acceptance of the nomination paper was illegal, the appellant had not established that the result of the election of respondent No. 1 had been materially affected on the facts and in the circumstances of the case.
In the appeal to this Court on the question: whether the appellant had established that the result of the election of respondent No. 1 had been materially affected by the wrongful acceptance of the nomination paper of respondent No. 8.
Dismissing the appeal to this Court, ^ HELD: The appellant has not discharged the burden which clearly lay on him of proving that the result of the election had been materially affected, even assuming that the nomination of respondent No. 8 had been improperly accepted.
[640E] Section 100 of the Representation of the People Act makes a distinction between the effect of improper rejection of any nomination, and the effect of the improper acceptance of any nomination on the election.
If a nomination of any person at an election had been improperly rejected the election of the returned candidate is liable to be set aside without any further proof because it is difficult to visualise the number of votes which the person whose nomination has been rejected would have secured at the election and there is every likelihood of the returned candidate not securing the highest number of votes.
[634E G] Clause (c) of sub section (1) states that if the High Court is of the opinion that any nomination has been improperly rejected it shall declare the election of the returned candidate to be void.
[634Gl Sub clause (i) of clause (d) of sub section (1) requires a petitioner in an election petition to establish two grounds in order to get the election of the returned candidate set aside.
namely (i) that there has been improper acceptance of any nomination and (ii) that by reason of entry of the candidate whose nomination has been improperly accepted into the contest the result of the election insofar as the returned candidate is concerned has been materially affected.
[635A B] Having regard to the facts of the instant case it is not possible to hold that the appellant has established that the result of the election of the returned candidate had been materially affected because the dif 632 ference between the votes secured by respondent No. 1, the returned candidate and respondent No. 2, the candidate who secured next highest votes was 2,271 votes.
Respondent No. 8, the validity of whose nomination was questioned, had secured only about 1/7th of the number of votes polled by respondent No. 1 and there were 15 candidates (excluding respondent No. 8) contesting the election.
It is not possible to reach a finding in this case by making a judicial guess that all the 3606 voters who had voted in favour of respondent No. 8 would have cast their votes in favour of respondent No. 2 alone.
Even if about 1350 of them had cast their votes in favour of any of the other 14 candidates (including the returned candidate) respondent No. 2 could not have become the candidate who had secured the highest number of votes at the election.
[639C E] The High Court was, therefore, right in taking the view that the appellant or any other party had not placed any satisfactory evidence to reach the conclusion that all or sufficient number of wasted votes which had been cast in favour of respondent No. 8 would have gone in favour of respondent No. 2, had respondent No. 8 not been one of the candidates at the election, that in the context particularly of the poll being heavy and the contestants being large in number, 16 in all It was unreasonable to guess that if the respondent No. 8 were excluded from the arena of contest the wasted votes would have gone to the respondent No. 2 thereby enabling him to succeed, and that the burden Iying upon the petitioner remained clearly undischarged and the speculative possibility did not attain the level of proof.
[640B D] Vashist Narain Sharma vs Dev Chandra and others, ]1955] 1 S.C.R. 509; Samant N. Balakrishna etc.
vs George Fernandez and Ors.
; , and Chhedi Ram vs Jhilmit Ram and others, p ] , referred to.


Input:
Civil Appeal No. 716 of 1968 Appeal by Special Leave from the Judgment and order dated the 2nd March, 1967 of the Patna High Court in Letters Patent Appeal No. S of 1962.
section C. Mishra and U. P. Singh for the appellant.
S N. Prasad , A. K. Srivastava, M. section Narasimhan and B. P. Singh for the respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This appeal, by special leave, turns substantially on the application of section 6 of the Bihar Land Reforms Act, 1950 (hereinafter called, the Act), to the case situation the facts having been decided concurrently and finally in favour of the appellant.
Still he lost at the stage of the Letters Patent Appeal, because 3 Division Bench of the High Court held that he had been robbed of his right to sue by Section 6 of the Act.
We may set out the relevant facts briefly.
Although a number of items of immovable property were involved in the suit, which was for ejectment on title.
the lands now in dispute are bakasht lands in the 'B ' Schedule to the plaint.
for easy reference called suit lands.
Regarding the rest the plaintiff 's suit has been decreed.
several items of property were gifted by one Ram Badan Singh to his two wives whose names were duly mutated in the revenue register.
The further course of the proprietary history takes us to the creation of a wakf and the office of mutawalli which are not relevant to the controversy before us but are interesting when we remember that the donees were Hindus and yet they had executed a wakf and constituted themselves as mutawallis.
This shows how community life absorbs and blends jural concepts, overriding religion in the creation of an inter laced legal culture.
This is by the way.
742 We may now take up the thread at the point where by further Gift deeds and transfers the lands covered be the original gift deeds case to vest in the plaintiff and defendants, second party.
they divided them as per a partition deed Exhibit 4 'a dated (October 30, 1952 whereby the suit lands fell to the exclusive share of the plaintiff, along with some other items while other properties were similarly allotted to defendants 2nd party.
Undaunted by this fact defendants, second ;3 party, sold the suit lands to the defendants first party alleging an oral partition sometime before August 1952 and under cover of that case, committed trespass.
Thereupon, a scramble for possession these properties and a proceeding under section 145 Cr.
P.C. ensued in which the defendants, first party, got their possession upheld by the Magistrate`s order dated 5.4.1954.
Inevitably the plaintiff brought the present suit in April 1955 for a declaration of his title, for possession and mesne profits on the score that his exclusive possession was by force taken away in July August 1954 by defendants, first party.
The latter put forward the plea of prior oral partition and exclusive hostile possession, tracing their claim through defendants second party.
The courts of fact found against the defendants and decreed the suit as prayed for, but in Letters Patent Appeal, the present contestig respondents, i.e., the defendants 1st party, urged with success that the plaintiff had lost his title thanks to the operation of sections 3 and 4 of the Act and could not salvage any interest under section 6 thereof.
The defeated plaintiff has come up to this Court, as appellant, assailing the findings of the High Court mainly on three grounds: According to Shri section C. Misra, learned counsel for the appellant section 6 of the Act applied to his case and so there was no vesting of title in the State of the suit lands.
He further pressed that, any way, this case, resting on the Act, which had been on the statute block for several years had not been set up at the earlier stages of the litigation and should not have been permitted at the Letters Patent Appeal stage in the High Court for the first time.
His third contention was that the deed of partition Exhibit 4/a was not legally divestative of rights in view of the provisions of the Estates Partition Act, 1897 which, in his submission, empowered the Collector alone to partition the properties, which not having been done, the lands remained in co ownership wherefore the possession of the defendants, first party, was that of co sharers.
If that were so, the possession of one co sharer was constructive possession of the other co sharer and the plaintiff was thus in khas possession under section 2k of the Act and, on that basis, section 6 of the Act saved the disputed properties from vesting in the State.
All these three fold contentions were sought to be repelled by counsel for the respondent and we proceed to examine them.
We may as well mention here, but dilate on it later, that certain items out of the B Schedule bakasht lands are, on the showing of defendants second party, not in their possession, although the plaintiff has averred.
, in his pleading, dispossession of all the B Schedule lands The legal impact of this circumstance on section 4(a) and the schemes of the Act has to be gauged, in the context of the relief claimed by the plaintiff and the eligibility of possessory benefits of the contesting defendants.
743 The central issue obviously is the resolution of the competition between vesting of the suit lands in the State by virtue of sections 3 and 4 and their exemption from such deprivation by the saving provision in section 6 in favour of tile plaintiff.
A close up of the profile of the land reform law would help us appreciate the purpose and programme of the statute and the meaning of the provision under construction .
The project, as highlighted in the Preamble in grandiose and in keeping with Part IV of thus Constitution, but ill actual implementation drags its feet.
Indeed, counsel on both sides were readily agreed only on one point, viz., that neither his Act nor the law setting a ceiling on land ownership slumbering the statue book since 1962, has been seriously enforced.
The Ninth Schedule to the Constitution can immunise a legislation from forensic challenge but what schedule can invigorate a half inert Administration into quick implementation of welfare oriented, urgently needed, radical legislation now Lying mummified in the books ? If the assertion of non implementation of land reforms laws made at the bar were true, the Bihar State Government has much to answer for to 'We the People of India ' and to the stultified legislature whose 'reform ' exercise remains in suspended animation.
In this very case, before the High Court, the Advocate General has appeared for the plaintiff landowner and yet the State has not bestirred itself to appear and claim the suit lands.
We are left in obscurity on the vital point, neither counsel nor the records throwing any light on whether the State has been given notice in the case in the High Court.
The social transformation cherished by the Constitution involved re ordering of the land system and a vigilant administration would have intervened in this 20 year old litigation long ago and extinguished the private contest to the advantage of the State.
The feudal will may, not unoften, furtively hide, in strategic positions may, be.
We may begin consideration of the merits of the rival cases by a broad projection of the Act.
Its basic object is to extinguish the proprietary rights and transfer absolutely, and free from all private interests, such ownership to the Stat.
The tillers are not to be up rooted and so, they i.e., the raiyats and under raiyats are to be settled on terms of fair rent.
The Act, making; a simplistic dischotomy sufficient for our study, thus absolutely vests in the State all lands, freed from all private rights (sec. 3) as from a date notified under section 4, but carves out of this land mass and leaves untouched.
apart from raiyati holdings, the bakasht lands in the khas possession of the 'intermediary ' i.e., the prior full owner (sec. 6).
Lands not falling within the saved category will be directly managed by the State (sec. 13), if need be, by ejecting trespassers if they are found ill illegal occupation [sec. 4(g)]. 'rh valuable rights attached to or imbedded in lands, like trees, fisheries, minerals also go to the State.
A seemingly bold legislation stroke of substantial land nationalisation will be reduced to pathetic futility if the flood gates of evasion are kept ajar by plausible but diluted interpretation of section 6 as urged by the landlords.
The Court must suppress the mischief and advance the remedy .
Indeed.
if we may anticipate our conclusion, the pronouncements of this Court in Surajnath Ahir vs 744 Prithinath Singh(1) and Ram Ran Bijai Singh & Ors vs Behari Singh @ Bagandha Singh,( ') bar and bolt the, door of escape in a big way and counsel for the appellant has striven to impress on us the need to reconsider and distinguish that view because it is inconsistent with vintage jurisprudence and Anglo American concepts bearing on possession of an owner.
Let us get down to an openheart surgery in a limited way to check upon the soundness of this cardinal submission.
The consternation expressed by appellant 's counsel that the High Court 's interpretation of sec.
6 will create rights in rank trespassers and distort and defeat the right to possess enjoyed by Zamindars does not, by itself, disturb us.
We are in a juridical province of agrarian reform.
The creative legal ideas needed to effectuate this developmental plan are conceptually alien to the old land law and 'rural ' jurisprudence, wearing as they do radical contenance.
The Court, in the process of construction must help the chariot of land reform move forward and sections 3 and 6 are the vital wheels.
Having regard to the significance of the State 's presence even in private litigation bearing on eviction and the like, section 4(ee) provides for notice to the State in certain classes of cases but the present suit and later proceedings are not covered by the term of section 4(ee) and counsel on either side, when we enquired, did not show interest in taking steps to implead the State or otherwise to give notice to it in the present appeal.
We have to Leave it at that.
The consequence of non impleader or absence of notice to the State will naturally be visited on the parties, in the sense that the State will not be bound by this adjudication and its rights vis a vis the plaintiff and the defendants, first party will remain unaffected.
So also of other third parties on the suit lands.
We have already adverted to the skeletal scheme of the Act, of vesting the lands in the State and saving in the hands of proprietors such lands as are in their khas possession, including certain categories spelt out in s.6 by settling them on fair rents under the State.
So, the crucial concept of khas possession calls for judicial scrutiny rather closely so i has loopholes for escape through the meshes of s.6 may not frustrate the land reform law itself.
But what is legitimately due by way of legislative justice to erstwhile proprietors should not be denied.
With this and in view, the Legislature has defined khas possession in s.2k which reads thus: G "2.
Definitions In this Act, unless there is anything repugnant in the subject or context, (k) 'khas possession ' used with reference to the possession of a proprietor or tenure holder of any land used for agricultural or horticultural purposes means the possession of such proprietor or tenure holder by cultivating (1) (2) 745 such land or carrying on horticultural operations thereon himself with his own stock or by his own servants or by hired labour or with hired stock; Explanation : "Land used for horticultural purposes" ' means lands used for the purpose of growing fruits, flowers or vegetables." He who runs and read will readily make out that what is meant is actual possession with one 's feet on the land, plough in the field and hands in the soil, although hired labour is also contemplated.
The emphatic point is that possession is actual possession and admits of no dilution except to the extent s.6 itself, by an inclusive process permits.
This basic idea banishes the importation of the right to possess as tantamount to khas possession.
It would be a perversion of definition to equate the two.
Of course, Shri section C. Misra, appearing for the appellant, has preset before us that jurisprudentially even the right to possess should be regarded as possession.
Indeed, this Court has had occasion to consider and construe the relevant provision in Surajnath Ahir and Ram Ran Bijai Singh (supra) and our task is largely to explain and adopt.
Before we examine this quintessential aspect presented before us will complex scholarship by Shri section C. Misra we Had better make.
short shrift of certain other questions raised by him.
He has desired ` us, by way of preliminary objection, not to give quarter to the plea, founded on section 6 of the Act, to non suit his client, since it was a point raised be nova at Letters Patent state.
The High Court have thought to this objection but overruled it, if we may say so rightly.
The Court narrated the twists and turns of factual and legal circumstances which served lo extenuate the omission to urge the point earlier but hit the nail on the head when it held that it was well settled that a pure question of law going to the root of the case and based on undisputed or proven facts could be raised even before the Court of last resort, provided the opposite side was not taken by surprise or otherwise unfairly prejudiced.
Lord Watson, in Connecticut Fire Insurance Company vs Kavanach,(1) stated the law thus: When a question of law is raised for the first time in a Court of last resort upon the construction of a document or upon facts either admitted or proved beyond controversy, it is not only competent but expedient in the interest of justice to entertain the plea.
The expediency of adopting that course may be doubted when the plea cannot be disposed of without deciding nice questions of fact in considering which the Court of ultimate review is placed in a much less advantageous position than the courts below.
But their Lordships have no hesitation in holding that the course ought not any case to be followed unless the Court is satisfied that the evidence upon which they are asked to decide establishes beyond doubt that the facts if fully investigated would have supported the new plea." (1) , 480.
17 L925SupCI /75 746 We agree with the High Court that the new plea springs from the common case of the parties, and nothing which may work injustice by allowance of this contention at the late stage of the Letters Patent Appeal has been made out to our satisfaction.
Therefore, we proceed to consider the impact and applicability of s.6 of the Act to the circumstances of the present case.
Counsel for the appellant, in his turn, in this Court went a step further to raise two new points not urged in the prior state of the litigation.
We have heard him but arc not persuaded to, agree with him.
According to him, the defendants, first party, had stated in their written statement that their possession of the disputed items as based on the order of the Magistrate under s.145 Cr. P.C.`.
That order having been found erroneous, no benefit could accrue to the defendants.
So stated, it is a little obscure and indeed the point itself is obscure.
There was a proceeding under s.145 Cr.
P.C. before the criminal court in view of the dispute regarding the claims of actual possession.
In the order of the Magistrate, the oral partition relied on by the defendants was held proved and the subsequent deed of partition relied on by the plaintiff held not been acted upon.
Counsel says that this led to the occupation by trespass of the suit properties.
Since the Magistrate 's order had led to this prejudicial consequence it was not proper to permit the party to benefit by his own wrong founded on an 'actus curiae '.
We see no force at all in this contention.
The Magistrate did not direct possession of the B shedule properties to be handed over to the defendants, first parts, but declared their actual possession.
He has done no wrong nor conferred any unjust advantage.
There is no principle on which it could be held that these circumstance deprive a party of the benefit of his possession and d of the dispossession of the plaintiff flowing from s.6 of the Act; if any rights accrued from a statutory provision, it could not withheld for the reasons urged by counsel for the appellant The next new discovery in this Court turns on the absence of jurisdiction of the civil court to give relief when the substance the matter falls within the special jurisdiction of the revenue authorities .
Counsel submitted that this new point occurred to him on reflection and was being pressed by him because it had force .
The plaintiff 's prayer .
for declaration of title and for possession was negatived by the High Court in the light of s.6 of the Act wherein it was held that he had no khas possession and his interests could not in any manner be saved by that provision It was not a case of the defendant claiming or securing any relief regarding possession but the plaintiff"s title standing negatived.
The suit itself was for ejectment on little and sans title, ejectment could not be granted The title of the plaintiff was sought to be rested on s.6 at the letters patent Appeal level but on a construction of that Provision the Court held against him In short the High Court did nothing to investigate into the possession of parties but on the admitted fact that the Defendants" first party, were in possession by trespass the plaint alleges this the Court Dismissed the suit, since section 6 of the Act divested 747 the plaintiff of his quondam proprietorship.
Moreover, there is nothing in section 35 of the Act, relied on by counsel to substantiate his submission, depriving the civil court of its jurisdiction to decide questions of declaration of title and consequential relief of possession.
Section 35 deals with different types of suits Indeed, s.6(1) with which we are concerned, also contains no inhibition against the civil court 's power to decide the issue of title and right to possession of the plaintiff and, as a necessary corollary, the claim of actual possession set up by the defendants first party Nor, can section 6(2) inferentially interdict the plenary power of the civil court.
In short, the plea of bar of the restriction is specious and fails Another peripheral issue invoked before the High Court and here to undo the defendant 's claim of exclusive possession and consequential absence of khas possession in the plaintiff was based on the provisions of the Estates Partition Act, 1897.
Shri Misra propounded what, unfortunately, strikes us as a fallacious proposition.
He went to the extreme extent of maintaining that a partition of lands, to be valid, should be in terms of the Estates Partition Act, 1897 and.
until then, a deed or decree effecting division by metes and bounds does not legally operate.
If so, Ex.4/a remains an arrangement for separate enjoyment between co owners, title continuing, joint.
The follow up of this reasoning is that the suit properties are in the possession of co shares viz, defendants first party (derived from defendents., second party) and possession of one co sharer is possession of the other.
The plaintiff thus is in constrictive possession good enough to bring him into the rescue shelter provided by s.6 Of the Act.
He relied on the ruling in Mahanth Ram Bhushan Das vs Ramrati Kuer(1) and the various provisions of the Estates partition Act to Make out his thesis.
The support derived from the decision is more apparent than real because, as noticed by the High Court, the suit there was not, unlike here, brought on the foot of` a partition and the ruling(r laid down that any 'amicable division ' among, co sharer would not bind the Revenue until the partition was effected as visualised under the Estates Partition Act.
Shri Misra 's study of the provisions of the said Act is free from confusion, save in one fundamental respect That one point, missed by him, is that the whole statutory project is to protect the land revenue, not to affect title.
The partition is valid, it divests title, it binds all; but, so far as land revenue liability is concerned, it relieves parties from the burden falling, on the other sharer 's land only if the exercise prescribed in the Estates Partition Act is gone through.
The statute is a Protective fiscal armour not a mono for division among co owners to travel.
Section 7 makes it clear.
Not that Courts have lost power to decree partition nor that co owners have become impotent to separate their shares voluntarily but that land revenue shall not be prejudiced without the procedure under that Act being gone through.
More clinching is the fact that the plaintiff has here come to Court on the sole case of partition by metes and bounds and has founded his relief not as co sharer (1) 1965 Bihar L. J. 119.
748 but as exclusive owner.
Seeming legal ingenuity has small chance in A court and to miss the point and pertinence of a measure is to travel to a wrong destination.
Now we come to the master problem presented at learned length by Shri section C. Misra and deferentially listened to by us to discover its substance and the solution. 'A 'blind understanding ' has been the result, and as his argument concluded we 'came out by the same door, as in (we) went '.
It behaves us to set out counsel 's submission and the setting of the Act to explain why we do not agree with him and what we regard is the master key to the construction of section 6.
We must first appreciate that it is a land reform law we are interpreting and not just an ordinary statute.
The social economic thrust of the law in this area should not be retarded by judicial construction but filliped by the legal process, without departing from the plain meaning and objective of the Act.
We may delineate the content and contours of section 6 with which we arc directly concerned in the present case.
The preamble to the Act, which sheds skylight on the statute, reads: "An Act to provide for the transference to the State of the interests of proprietors and tenure holders in land and of the mortgages and lessees of such interests including in tersest in trees, forests, fishries, jalkars, ferries, hats bazaars.
mines and minerals and to provide for the constitution of a l and Commission for the State of Bihar with powers to advise the State Government on the agrarian policy to be pursued by the State Government consequent upon such transference and for other matters connected therewith" From this it is fairly clear that the legislative goal s to liquidate all intermediary interests and vest the ultimate ownership on land in the State.
In this sense, the import of the Act is a tepid measure of land nationalisation.
Section 3 in unmistakable language vests the absolute proprietorship in all the lands in Bihar in the State, the succeeding sections spell out details.
F We may here read sections 3, 4(g) and 6(1) of the Act: "3.
Notification vesting an estate or tenure in the State (1) The State Government may, from time to time, by notification declare that the estates or tenures of a proprietor or tenure holder, specified in the notification, have passed to and become vested in the State.
(2) The notification referred to in sub section (1) shall be published in the official Gazette A copy of such notification shall be sent by registered post, with acknowledgement due, to the proprietor of the estate recorded in the general registers of revenue paying or revenue free lands maintained under the Land Registration Act, 1876 (Ben.
Act 7 of 1876), or in case where the estate is not entered in 749 any such registers and in the case of tenure holders, to the proprietor of the estate or to the tenureholder of the tenure is the Collector is in possession of a list of such proprietors or tenure holders together with their addresses, and such posting shall be deemed to be sufficient service of the notification on such proprietor or., where such notification is sent book post to the tenure holder, on such tenure holder for the purposes of this Act.
(3) The publication of such notification, in the Official Gazette shall be conclusive evidence of the notice of the declaration to such proprietors or tenure holders whose interests are affected by the notification" "4.
Consequences of the vesting of an estate or tenure in the State Notwithstanding anything contained in any other law for the time being in force or in any contract, on the publication of the notification under sub section (1) of section 3 or sub section (1) or (2) of section 3A the following consequences shall ensue, namely: (g) Where by reason of the vesting of any estate or tenure or any part thereof in the State under provision of this Act, the Collector is of opinion that the State is entitled to the direct possession of any property he shall, by an order in writing served in the prescribed manner on the person in possession of such property, require him to deliver possession thereof to the State or show cause, if any, against the order within a time to be specified therein and if such person fails to deliver possession or show cause or if the Collector rejects any cause shown by such person after giving him a reasonable opportunity of being heard, the Collector shall for reasons to be recorded" take or cause to be taken such steps or use or cause to be used such force as, in his opinion, may be necessary for securing compliance with the order or preventing a breach of the peace: Provided that if the order under clause (g) is passed by an officer below the rank of the Collector of a district, an appeal shall, if preferred within sixty days of the order., lie to the Collector of the district and the Collector shall dispose of the appeal in accordance with the prescribed procedure" "6.
Certain other lands in khas possession of intermediaries to be retained by them on payment of rent as raiyats having occupancy rights (1) on and from the date of vesting all lands used for agricultural or horticultural purposes, which were in khas possession of an intermediary on the date of such vesting, including (a)(1) proprietor 's private lands let out under a lease for a term of years or under a lease from year 750 to year, referred to in section 116 of the Bihar A Tenancy Act, 1885 (8 of 1885), (ii) landlord 's privileged lands let out under a registered lease for a term exceeding one year or under a lease, written or oral" for a period of one year or less, referred to in section 43 of the Chota Nagpur Tenancy Act, 1908 (Ben.
Act 6 of 1908), (b) lands used for agricultural or horticultural purposes and held in the direct possession of a temporary lease of an estate or tenure and cultivated by himself with his own stock or by his own servants or by hired labour or with hired stock, and (c) lands used for agricultural or horticultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof; shall, subject to the provisions of section 7A and 7B be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold r them as a raiyat under the State having occupancy rights in respect of such lands subject to the payment of such fair and equitable rent as may be determined by the Collector in the prescribed manner: Provided that nothing contained in this sub section shall entitle an intermediary to retain possession of any naukarana land or any land recorded as chaukidari or goraiti jagir or mafi goraiti in the record of rights or any other land in respect of which occupancy right has already accrued to a raiyat before the date of vesting.
Explantion.
For the purposes of this sub section. 'naukarana land ' means land held as a grant burdened with service in lieu of rent or held simply in lieu of wages for services to he rendered.
" Although there is a blanket vesting of proprietorship in all the lands in the State, the legislation is careful, in this initial state of agrarian reform, not to be too deprivatory of the cultivating possession of those who have been tilling the land for long.
Therefore, while the consequence of the vesting is stated to be annihilation of all interests, encumbrances and the like in the land, certain special categories of rights are saved.
Thus, raiyats and under raiyats are not dispossessed and their rights are preserved.
The full proprietor 's khas possession is if so not disturbed.
Certainly.
the large landholders, whose lands have for long been under tenancy, lose their lands to the State by virtue of the vesting operation (of course, compensation is provided for).
751 Nevertheless, the reform law concedes the continuance of a limited species of interests in favour of those Zamindars.
The three fold class of lands is brought into the saving bucket by including them in the khas possession of the proprietors.
They are legislatively included in khas possession by an extended itemisation in section 6(1).
The purpose and the purport of the provision is to allow the large land holders to keep possession of small areas which may be designated as the private or privileged or mortgaged lands traditionally held directly and occasionally made over to others, often servants or others in the shape of leases or mortgages.
The crucial point to remember is that section 3 in its total sweep" transfers all the interests in all lands to the State, the exception being lesser interests under the State set out in detail in sections 5, 6 and 7.
So much so, any person who claims full title after the date of vesting notified under section 4 has no longer any such proprietorship.
All the same, he may have a lesser right if he falls within the saving provisions viz., sections 5, 6 and 7 Sections 5 and 7 do not apply here.
The claim of the plaintiff is that he can sustain his right to recover possession in this suit, as coming within the oasis of section 6(1).
There is no case that the sub clauses (a), (b) and (c) of section 1) 6(1) apply.
Counsel 's contention is that he comes within the ambit of the main paragraph, being allegedly in khas possession.
To appreciate the further discussion, it is useful to recapitulate that the appellant has averred in his plaint that he had been dispossessed as early as 1954 by a brazen act of trespass by the contesting respondents who were holding adversely to him.
Undaunted by this fatal fact counsel claimed to be in possession and argued still.
The focus was turned by him on the concept of khas possession defined in section 2(k).
He presented a historical perspective and suggested that the genesis of khas possession could be traced to the Bengal Tenancy Act, 1885.
May be, the draftsmen might have drawn upon those earlier land tenure laws for facility, but we must understand right at the outset that the Constitution of India has inaugurated a new jurisprudence as it were, guided by Part IV and reflected in Part II.
When there has been a determined break with traditional jurisprudence and a big endeavour has been made to over turn a feudal land system and substitute what may be called transformation of agrarian relations, we cannot hark back to the bygone jura or hold a new legislation captive within the confines of vanishing tenurial thought.
De hors the historical links a break away from the past in the socio legal system is not accomplished by worship of the manes of the law khas possession means what the definition, in plain English, says.
The definition clause is ordinarily a statutory dictionary, and viewed that way, we have in the early part of this judgment explained how it means actual, cultivatory possession nothing less nothing else.
Of course, section 6(1) makes a special addition by 'including ' other demised lands by express enumeration.
Section 6 does not stop with merely saving lands in khas possession of the intermediary (erstwhile proprietor) but proceeds to include certain lands outstanding on temporary leases or mortgages with others.
752 as earlier indicated.
These are private lands as known to the Bihar Tenancy Act, privileged lands as known to the Chota Nagpur Tenancy Act, land outstanding with mortgagees, pending redemption and lands which are actually being cultivated by the proprietor himself.
Ordinarily what is outstanding with lessees and mortgagees may not fall within khas possession.
The Legislature, however, thought that while: the permanent tiller 's rights should be protected and therefore, raiyats and under raiyats should have rights directly under the state, eliminating the private proprietors, the Zamindar or proprietor also should be allowed to hold under the State., on payment of fair rent, such lands as have been in his cultivatory possession and other lands which were really enjoyed as private or privileged lands or mortgaged with possession by him.
With this end in view, section 6(1) enlarged its scope by including the special categories.
The word 'include ' is generally used in interpretation clauses in order to enlarge the meaning of that words or phrases occurring in the body of the statute.
It is obvious that section 6(1) uses the word 'including ' to permit enlargement of the meaning of khas possession for the limited purpose of that section, emphasising thereby that, but for such enlargement, the expression khas possession excludes lands outstanding even with temporary lessees.
It is perfectly plain, therefore, that khas possession has been used in the restricted sense of actual possession and to the small extent it had to be enlarged for giving relief to proprietors in respect of 'private ' 'privileged ' and mortgaged lands inclusive expressions had to be employed.
Khas possession is actual possession, that is "a foothold on the land, an actual entry, a possession in fact, a standing upon it, an occupation of it, as a real, administrative act done"(l).
Constructive possession or possession in law is what is covered by the sub clauses of section 6(1).
Even so, it is impossible to conceive, although Shri Misra wanted us to accept, that possession is so wide as to include a mere right to possess, when the actual dominion over the property is held by one in hostility to the former.
Possession, correctly understood, means effective, physical control or occupation.
"The word possession is sometimes used inaccurately as synonymous with the right to possess".
(Words and Phrases, 2nd Edn., John B. Sounders., p.151).
"In the Dictionary of English Law (Earl Jowitt) 1959 at p. l 367 "possession" is defined as follows: 'possession, the visible possibility of exercising physical control over a thing, coupled with the intention of doing so, either against all the world, or against all the world except certain persons.
There are, therefore, three requisites of possession.
First, there must be actual or potential physical control.
Secondly, physical control is not possession, unless accompanied by intention; hence, if a thing is put into the hand of a sleeping person, he has not possession of it.
Thirdly, the possibility and intention must be visible or evidence by external signs for if the thing shows no signs of being under the control of anyone, it is not possessed; . ' In the end of all, however the meaning of 'possession ' must depend on the context." (ibid.
p. 153).
May be, in certain situations, possession may cover right to possess.
It is thus clear that in Anglo American jurisprudence also, possession is actual possession and in a limited set of cases, may include constructive possession, but when (1) American Jurisprudence, Words & Phrases Vol. 33, p. 103.
753 there is a bare right to possess bereft of any dominion or factum of control, it will be a strange legal travesty to assert that an owner is in possession merely because he has a right to possess when a rival, in the teeth of owner 's opposition, is actually holding dominion and control over the land adversely, openly and continuously.
Admittedly in the present case" the possession of the plaintiff had ceased totally at least two years before the vesting under section 4 took place.
This situation excludes khas possession.
We have the uniform authority of this Court to hold that the possession of a trespasser, by no stretch of imagination, can be deemed to be khas possession or even constructive possession of the owner.
In Surajnath Ahir (supra) this Court considered the definition of khas possession in the Act in the context of section and after adverting to Brij Nandan Singh vs Jamuna Prasad, on which Shri Misra placed massive reliance, observed: "Reliance was placed by the High Court on the case reported as Brijnandan Singh vs Jamuna Prasad for the construction put on the expression 'khas possession ' to include subsisting title to possession as well, and therefore for holding that any proprietor, whose right to get khas possession of the land is not barred by any provision of law, will have a right to recover possession and that the State of Bihar shall treat him as a raiyat with occupancy right and not as trespasser.
We do not agree with this view when the definition of khas possession ' means the possession of a proprietor or tenure holder either by cultivating such land himself with his own stock or by his own servants or by hired labour or with hired stock.
The mere fact that a proprietor has a subsisting title to possession over certain land on the date of vesting would not make that land under his 'khas possession ' ".
The attempt to distinguish this decision on the score that the observation is obiter does not appeal to us and the rule laid down there is in conformity with the principle as we have earlier expounded.
The law has been indubitably laid down in Ram Ran Bijai Singh (supra) where a Bench of five Judges of this Court discussed khas possession in section 2k and the scope of section 6 of the Act.
The same Full Bench(1) case earlier referred to was pressed before the learned Judges, and over ruling that case, Ayyangar,, J. speaking for the Court stated the law in these unmincing words: "Mr. Sarjoo Prasad however relied on certain observations in the judgment of the Full Bench of the Patna High Court in Sukdeo Das vs Kashi Prasad where the learned Judges appear to consider the possession even of a trespasser who has not perfected his title by adverse possession for the time requisite under the Indian Limitation Act as the khas possession of the true owner.
We consider that this equation of the right to possession with 'khas possession ' (1) A.I.R. 1958 Pat.
754 is not justified by principle or authority.
Besides this is also inconsistent with the reasoning of the Full Bench by which constructive possession is treated as within the concept of khas possession.
The possession of the contesting defendants in the present case was in their own right and adverse to the plaintiff, even on the case with which the appellants themselves came into Court." .
In this context the plea made by the plaintiffs relevant to the character of the possession of the contesting defendants assumes crucial importance, for if they were admittedly trespassers then they could not be said to hold the property on behalf of the mortgagors and the entire basis of the argument as to the property being ill the khas possession of the plaintiffs would disappear.
It was on the basis of their possession being wrongful that a claim was made against them for mesne profits and it was on the footing of their being trespassers that they were sued and possession sought to be recovered from them.
In these circumstances we consider that it is not possible for the appellants to contend that these tenants were in possession of the property on behalf of the mortgagor and in the character of their rights being derived from the mortgagor. ' The Court rejected the theory that the possession of a trespasser was that of the owner.
Other decisions of the Patna High Court and this Court were referred to at the bar but the position having been made unmistakable by the two cases just mentioned, we do not wish to burden this judgment with case law any further.
The conclusion we, therefore, draw is that on the facts found indeed, on the facts averred in the plaint the plaintiff had no khas possession of the suit lands and cannot use section 6 as a rescue raft.
His title was lost when section 4 was notified as applicable to the suit lands by section 3 in 1956.
Without title he could not maintain the action for recovery of possession.
But that is not the end of the matter.
He is certainly entitled to mesne profits from the defendants, first party, until the date of vesting, i.e." January 1, 1956.
We, grant him a decree in this behalf subject to the qualification mentioned below.
Again, the contesting defendants, in paragraph 27 of their written statement, have admitted that they had no possession of or connection with some of the plots mentioned in Schedule to the plaint and set out therein.
The High Court has dismissed the suit in entirety after noticing the admission of the contesting defendants that they have not been in possession of those items covered by paragraph 27 of the written statement.
The plea in that paragraph is that these lands have been made over to the defendants, second party.
It is undeniable that the plaintiff had title to the entire Schedule properties as against defendants.
first party, and second party.
If defendants, first party. were not in possession and defendants, second party,, were in possession, the plaintiff would still be entitled to a decree for possession of the same.
It neither is in possession the presumption that the owner is in possession holds good and he is entitled to that 755 possession being restored to him.
Therefore, a decree for possession of these items covered by paragraph 7 of the written statement filed on behalf of the contesting defendants, first party, is also granted.
Here we must utter a word of caution and condition our decree accordingly.
The State, by the vesting operation, has become the owner and very probably the plaintiff cannot sustain any claim to be in possession as against the State.
While we do not investigate this aspect, we wish to make it perfectly plain that the rights of the State, as against the plaintiff, in regard to the items for which we are giving him a decree, will not in any manner be affected.
Likewise, if some third party is in possession of those items unclaimed by the defendants, first party, their possession, if any, also will not be prejudiced.
After all, the decree of this Court can bind and regulate the rights of the parties to the litigation and not others.
Inevitably, the mesne profits which we have decreed will be confined to those items which are found to be in the possession of the defendants, first party.
There is a disturbing feature about this case.
We have already indicated how there is an apparent indifference on the part of the State in securing its rights granted by the Act.
Here is a case where the defendants, first party,, are rank trespassers and have no evident equity in their favour.
Section 4(f) declares that the Collector shall be deemed to have taken charge of the estates and interests vested in the State This means he has a public duty to take charge of lands vested in the State.
Surely, a responsible public officer like the Collector, charged with a duty of taking delivery of possession of lands which by virtue of the vesting the State is entitled to take direct possession of, will proceed to dispossess the trespasser.
In this case, defendants first party, are trespassers and the plaintiff being out of the pale of section 6, the State is entitled to the direct possession of the suit lands.
We expect the Collector to do his duty by section 4(g).
Counsel for the respondents drew our attention to rule 7H: "7 H. How to deal with cases in which proprietor, etc. not found in possession on the date of vesting If the Collector holds on the report of enquiry held under rule 7 E or 7 F that the outgoing proprietor or tenure holder, or his temporary lessee or mortgagee" was not in possession of the lands or buildings referred to in rule 7 G, he shall fix the fair rent or ground rent thereof in the manner prescribed in these rules and the person who may be found to be in possession of such lands or buildings shall thereupon be liable to pay the rent or ground rent so fixed to the State Government with effect from the date of vesting.
" Although we need not elaborately study the implications of this pro vision, it is fairly clear that this rule does not confer any right or equity to be in possession in favour of d trespasser.
All that it does is to make the man in possession, be he trespasser or not, "liable to pay the rent or ground rent so fixed to the State Government with effect from the date of vesting. ' It is the liability to pay rent that is created, not the equity to claim possession.
After all, the land reform 756 measure is intended to conserve as much land as is available in the hands of the State and any trespasser who distorts this claim and snatches possession, cannot benefit by his wrong.
May be.
there are special circumstances which may persuade the State to give possession of any land either to its erstwhile proprietor or to one who has been in long possession rightly of wrongly.
We do not make any observation in that behalf but point out that prima facie section 4(f) and (g) and rule 7 H attract the jurisdiction of the State and its revenue 13 authorities.
The policy of the Act includes the State taking over and managing lands not saved by sections 5, 6 and 7 and are not found to be in possession of the proprietor so that the eventual distribution to the landless and the like may be worked out smoothly.
The appeal is dismissed in substantial measure except to the extent of the relief by way of mesne profits and possession in regard to a few items mentioned in paragraph 27 of the contestants ' written statement The parties will bear their costs throughout in the peculiar circumstances of the case.
This judgment will not affect the rights, if any.
either party may seek or has secured from the State.
V.M.K. Appeal dismissed.

Output:
Section 3 of the Bihar Land Reforms Act, 1 950, transfers all interests in estates or tenures of a proprietor or tenure holder to the State as from a date notified under section 4.
Section 6 carves out of this land mass and leaves untouched, apart from raiyati holdings the bakasht lands in Khas possession of the 'intermediary ' i.e., the prior full owner.
Several items of property were gifted by one Ram Badan Singh to his two wives whose names were duly mutated in the revenue register.
By further gift deeds and transfers the lands covered by the original gift deeds can to vest in the plaintiff and defendants, second party.
They divided them as per a partition deed Exhibit 4/a dated October 30, 1952 whereby the suit lands fell to the exclusive share, of the plaintiff along with some other items while other properties were similarly allotted to defendants 2nd party.
Despite this fact defendants, second party, sold the suit lands to the defendants first party alleging an oral partition sometime before August 1952 and under cover of that ease, committed trespass.
Thereupon, a scramble for possession of these properties and a proceeding under section 145 Cr.
P.C. ensued in which the defendants, first party, got their possession upheld by Magistrate 's order dated S 4 1954.
The plaintiff brought the present suit in April 1955 for a declaration of ' his title, for possession and mesne profits on the score that his exclusive possession was by force taken away in July August 1954 by defendants first party the latter put forward the plea of prior oral partition and exclusive hostile possession, tracing their claim through defendants second party.
The courts of tact found against the defendants and decreed the suit, but in Letters Patent Appeal, the respondents i.e., the defendants 1st party succeeded on the ground that the plaintiff had lost his title on account of the operation of sections 3 and 4 of the Bihar Land Reforms Act, 1950.
In this appeal filed on the basis of the special leave granted by this court, it was contended for the appellant that (i) Section 6 of the Act applied to the facts of the case and so there was no vesting of title in the State of the suit lands; (ii) This case, resting on the Act, which had been on the statute book for several ' years, had not been set up at the earlier stages of the litigation at and should not have been permitted at the Letters Patent Appeal stage in the High Court for the first time; and (iii) The deed of partition was not legally divestative of rights in view of the provisions of the Estates Partition Act, 1897, which empowered the Collector along to partition the properties, which not having been done, the lands remained in co ownership therefore the possession of ' the defendants first party, was that of co sharers.
If that were so.
the possession of one co sharer was constructive possession of the other co sharer and the plaintiff was thus in khas possession under section 2k of the Act and, on that basis, section 6 of the Act saved the disputed properties from vesting in the State.
Rejecting the contentions except to a small extent of modifying the decree, ^ HELD: (i) It is well settled that a pure question of law going to the root or the case and based on undisputed or proven f acts could be raised even before the Court of last resort, provided the opposite side was not taken by surprise or otherwise unfairly prejudiced [745 E F] Connecticut Fire Insurance Company vs Kavanach.
, 480.
referred to.
740 In the present case the new plea springs from the common case of the, parties and nothing which may work injustice by allowance of this contention has been made out.
[746 A] (ii) The Magistrate did not direct possession of the B Schedule properties to be handed over to the defendants, first party, but declared their actual possession.
He has done no wrong nor conferred any unjust advantage.
There is no principle on which it could be held that these circumstances deprive .
party of the benefit of his possession and of the dispossession of the plaintiff flowing from s.6 of the Act.
[746D E] (iii) Neither the provisions of section 6(1) nor those of section 35 contain any prohibition against the civil court 's power to decide the issue of the and right to possession of the plaintiff and, as a necessary corollary, the claim of actual possession set up by the defendants, first party.
Nor can section 6(2) inferentially interdict the plenary power of the Civil court.
[746.A B] (iv) The partition is valid, it divests title it binds all.
but, so far as land revenue liability is concerned, it relieves parties from the burden falling on the other sharer 's land only if the exercise prescribed in the Estates Partition Act is gone through.
The statute is a protective fiscal armour, not a monorail for division among co owners to travel.
Section 7 makes it clear.
Not that Courts have lost power to decree partition nor that co owners have become powerless to separate their shares voluntarily but that land revenue shall not be prejudiced without the procedure under that Act being gone through.
More clinching is the fact that the plaintiff has here come to Court on the sole case of partition by metes and bounds and has founded his relief not as co sharer but as exclusive owner.
[747 G H, 748 Al Mahanth Ram Bhushan Das V. Ramrati Kuer, 1965 Bihar L.J. 119, referred (v) The purpose and purport of section 6(1) is to allow the large land holders to keep possession of small areas which may be designated as the private or privileged or mortgaged lands traditionally held directly and occasionally made over to others, often servants or others, in the shape of leases or mortgages.
It is obvious that section 6(1) uses the word 'including ' to permit enlargement of the meaning of khas possession for the limited purpose of that section, emphasising thereby that, but for such enlargement, the expression khas possession excludes lands outstanding even with temporary lessees.
It is perfectly plain, therefore, that khas possession has been used in the restricted sense of actual possession and to the small extent it had to be enlarged for giving relief to proprietors in respect of 'private ', 'privileged ' and mortgaged lands, inclusive expressions had to be employed.
Khas possession is actual possession.
Constructive possession or possession in law is what is covered by sub clauses of section 6(1).
It is not correct to say mat possession is so wide as to include a mere right to possess, when the actual dominion over the property is held by one in hostility to the former. [751 AB, G H, 752 C E.] (vi) In Anglo American jurisprudence also possession is actual possession and in a limited set of cases, may include constructive possession, but when there is a bare right to possess bereft of any dominion or factum of control, it will be a strange legal travesty to assert that an owner is in possession merely because he has a right to possess when a rival, in the teeth of owner 's opposition.
is actually holding dominion and control over the land adversely, openly and continuously.
This court has rejected the theory that the possession of a trespasser was that of the owner.
[752 H, 753A, 754 D.] Surajnath Ahir vs Prithinath Singh , Ram Bijai Singh & Ors vs Behari Singh @ Bagandha Singh relied on.
Brij Nandan Singh vs Jamuna Prasad A.I.R. 1958 Pat. 589, referred to.
(vii) It is undeniable that the plaintiff had title to the entire Schedule properties as against defendants, first party, and second party.
If defendants.
first party, were not in possession the plaintiff would still be entitled for a decree 741 for possession of the same.
If neither is in possession, the presumption that the owner is in possession holds good and he is entitled to that possession being restored to him.
Therefore, the plaintiff is entitled to a decree for possession regarding the items of properly covered by paragraph, 27 of the written statement filed on behalf of the contesting defendants, first party.
the rights of the State as against the plaintiff in regard these items of property, will not in any manner be effected.
[754H. 755 A B] observation: Prima facie section 4 (f) and (g) of the Act and rule 7 H of the Rules framed under the Act attract the jurisdiction of the State and its revenue authorities.
In the present case, the defendants, first party, are rank trespassers and have no equity in their favour.
Section 4(f) declares that the Collectors shall be deemed to have taken charge of the estates and interests vested in the State.
This means he has a public duty to take charge of lands vested in the State.
Surely, a responsible public office like the Collector, charged with duty of taking delivery of possession of lands which by virtue of the vesting the State is entitled to take direct possession, will proceed to disposses the trespasser.
In this case, defendants, first party the trespassers and the plaintiff being out of the pale of section 6, the State ii entitled to the direct possession of the suit lands.
[756B, 755 D E]


Input:
Appeals Nos.
581 to 584 of 1966.
Appeals by special leave from the judgment and order dated March 26.
1964 of the Calcutta High Court in Income tax Reference No. 6 of 1961.
K. Sen, Bishan Narain, R.K. Chaudhuri and B.P. Maheshwari, for the appellant (in all the appeals).
Niren De, Solicitor General, T.A. Ramachandran, R. N. Sachthey and S.P. Nayar, for the respondent (in all the appeals) 354 The Judgment of the Court was delivered by Bhargava, J.
These appeals came up before this Court on the 17th April, 1967, when an order of remand was made by this Court, asking the Income tax Appellate Tribunal to submit a further statement of the case.
The question that has come up.
for consideration is : "Whether on the facts and circumstances of the case, the surplus derived by the assessee in the sale of its shares and securities in the relevant previous years was a revenue receipt and as such taxable under the Income Tax Act.
" The facts and circumstances under which the question was referred by the Tribunal for the opinion of the High Court are mentioned in that order of remand and need not be repeated.
In the order of remand, it was pointed out that it was not possible to find out from the statement of the case whether the Tribunal accepted the explanation of the assessee that, in the previous year relevant to the assessment year 1953 54, the control of McLeod & Co. Ltd. went out of the hands of the Directors of the assessee and it was for this reason that the assessee sold the shares of McLeod & Co. It was also pointed out further that the Tribunal had not stated what was the object of the assessee in buying 6,900 ordinary shares of McLeod & Co. It appeared from the order of the Income tax Officer that these shares were purchased in a number of lots from the year 1948 to 1950, and it was also not stated as to what was the object in buying other securities, and why did the assessee confine its activities mostly to the shares of McLeod & Co. Ltd. and the companies managed by McLeod & Co. Ltd. It was in the light of these omissions that the Tribunal was asked to send a supplementary statement.
That supplementary statement has now been received and the answer to the question has to be given on the basis of the facts contained in the original statement of the case as well as this supplementary statement.
The relevant facts which emerge out of these statements of the case are that the principal activity of the assessee was investment of its capital in shares and stocks.
It changed its investments by sale of its shares and stocks from time to time.
The income of the Company was primarily derived from dividends on shares and interest received by it on the investments.
These activities were covered by Clauses (1), (3) and (4) of the Memorandum of Association.
The activity mentioned as the object in Clause (2) is: "to acquire,hold, sell and transfer shares, stocks, Debentures, 'Debenture Stocks, Bond, obligations and 355 securities issued or guaranteed by any company constituted or carrying on business in British India and in the United Kingdom or in any colony, or dependency or possession thereof or in any foreign country and Debenture Stocks, Bonds, obligations and securities, issued or guaranteed by any Government, Sovereign, Ruler, Commissioners, public body or authority supreme, Municipal ' Local or otherwise whether at home or abroad." In the supplementary statement, the Tribunal has recorded the finding that, in its opinion, the purchases and sales of the shares in question were in pursuit of this clause (2) in the Memorandum of Association.
The Tribunal has further stated that the assessee had not placed any evidence as to the object behind the acquisition of the shares of McLeod & Co. Ltd and the shares of companies managed by McLeod & Co. Ltd., nor had the Income tax Officer ascertained the object behind such acquisitions.
The Tribunal was also unable to find out why the assessee had more or less confined its activities mostly to the shares of McLeod & Co. Ltd. and the companies managed by McLeod & Co. Ltd. The facts proved showed that, in the account year relevant to the assessment year in question, 21,046 shares were held by the Kanoria group, including 6,977 shares in McLeod & Co. Ltd. held by the assessee.
Mr. C.L. Kanoria resigned his office as Director of McLeod & Co. Ltd. on 17th March, 1952, and the approval of the Government to his resignation was given by the Central Government on 16th October, 1952.
Thereafter, Sri C.L. Bajoria joined the Directorate of McLeod & Co. Ltd. 6,900 shares.
were sold by the assessee to Sri C.L. Bajoria or his nominees on 27th May, 1952, at a time when Sri C.L. Kanoria had already sent in his resignation from the office of Director, but the resignation had not yet been accepted by the Government.
It has also, been found that Sri C.L. Bajoria acquired 12,440 shares in all.
including 6,900 shares purchased from the assessee; but there was no material on the record to prove that his group obtained a controlling interest in McLeod & Co. Ltd. as a result of acquisition of ' these shares.
As a fact, it was held that after the resignation of Sri C.L. Kanoria, Messrs C.L. Bajoria and Baijnath Jalan, both ; of M/s. Soorajmull Nagarmull, became Directors of McLeod & Co. Ltd. These are the principal facts on the basis of which it has to be determined whether the sale of these shares by the assessee resulted in a revenue receipt or in a capital gain.
It appears to us that the facts and circumstances in this case can lead to.
no other conclusion, except that these shares were purchased and sold by the assessee with the motive of earning a profit by such purchases and sales and not with the object of investing its capital in these shares in order to derive 356 income from that investment.
It is true that the principal business of the assessee was to invest capital and to derive income from dividends on shares and interest on other investments; but at the same time, the object contained in the Memorandum of Association of the assessee Company clearly showed that one of the objects was also to deal in shares, stocks, debentures, etc., by acquiring, holding, selling and transferring them.
In the years prior to the assessment year, the case put forward by the assessee that the various acquisitions and sales of shares were in the nature of investments was accepted by The Department but such a decision given in the earlier years is not binding in the proceedings for assessment during subsequent years.
The particular shares no,in question.
it appears, were purchased between 31st March,1948 and 31st March, 1952.
The earliest purchases in March.1948 were at an average price of Rs. 267 13 0 per share.
In the next two years ended 31st March, 1949 and 31st March, 1950.the average purchase price was Rs. 201 8 0 and Rs. 182 10 0.and the last purchase in the year ended 31st March, 1952 was at the rate of Rs. 128 14 0.
On 1st April.
1952, the assessee 's total holding of shares in McLeod & Co. Ltd. was 6,977 at a total cost of Rs./4,29,587 4 0 out of the total holding of shareS, including shares in other companies, of the value of Rs. 17,58,741 4 0.Thus, on that date, the holdings in McLeod & Co. Ltd. formed the major part of the share holdings of the assessee.
It is significant that the shares were purchased during a period when their market price was continuously falling.
The earliest purchases in the year ended 31st March, 1948 were at an average price Rs. 267 13 0, while in the last of these three years ended 31st March 1952, the average price was Rs. 128 14 0.
The largest block of 4,757 shares was purchased in the year ended 31st March, 1950, when the average price was Rs. 182 10 0.
The assessment order of the Income tax Officer also shows that the shares were not only purchased in a rapidly falling market, but, in order to make these purchases the assessee had taken loans amounting to about Rs. 8 lacs at interest varying from 31/2% to 5 %.
The dividend being declared was at a very low rate, so that the return on this investment, after taking into account the interest paid and super tax to be paid, came to a very small percentage.
being less than 1%.
This circumstance that the shares were purchased at a time when their prices were falling and the return on investments was not at all substantial while loans had been taken to purchase these shares strongly points to a conclusion that the shares could not have been purchased as an investment to earn income from dividends and that the purchases of these shares were with the object of selling them subsequently at a profit.
The shares were in fact, sold at considerable profit subsequently and that is how the question of charging that profit to tax as revenue receipt has arisen.
The explanation sought to be given by the 357 assessee that the shares were, in fact, being held as investment and were sold simply because the control of McLeod & Co. Ltd. went out of the hands of the Directors of the assessee has not been proved, according to the supplementary statement of the case submitted by the Tribunal.
In fact, the Tribunal was not satisfied that even the purchasers, viz., the Bajoria group on buying these shares from the assessee acquired a controlling interest in McLeod & Co. Ltd. or in the companies managed by that Company.
The object of the sale as given by the assessee has therefore, remained unproved, whereas the fact that the purchases of the shares were made at a time when they were not expected to give a good return as investment and were actually sold at a very good profit leads to the reverse inference that the purchases and sales of these shares were an adventure in the nature of trade.
Even the sequence of events does not bear out the contention of the assessee.
Sri C.L. Kanoria first resigned on 17th March, 1952 and he sold his shares while his resignation was still pending for approval by the Government.
The sale took place on 27th May 1952, at a time when the resignation not having received the approval of the Government, the control of McLeod & Co. Ltd. group of companies was still with the Kanoria group.
The resignation was accepted on 16th October, 1952, about five months after the sale of the shares.
There is no evidence.
to show that, as a result this sale.
the control in the McLeod & Co. group of companies passed to the Bajoria group though M/s. C.L. Bajoria and Baijnath Jalan did subsequently loin the Directorate of McLeod & Co. Ltd. On these facts, it is not possible to hold that the Tribunal was incorrect in recording it5 conclusion that the sale of these shares by the assessee was not the result of control of the McLeod & Co. Ltd. passing from the. hands of Kanoria group to the Bajoria group.
In fact the Kanoria group was holding a majority 21,046 shares out of 40,000 shares in McLeod & Co. Ltd. even at the time when these shares were sold on 27th May, 1952.
The assessee thus having failed to prove the object of the sale of these shares, the inference that the shares were sold with the sole object of earning profit is justified.
This conclusion is further strengthened by the conduct of the assessee as found by the Tribunal in subsequent years.
In the year ended 31st March, 1955, the assessee again purchased a large number of shares of McLeod & Co. Ltd. These purchases were made between 23rd August, 1954 and 29th September, 1954.
The first purchases were made at a rate of Rs. 150/ per share.
and the purchases were continued even in the month of September when the rate rose to nearly Rs. 250/ per share.
This purchase of shares of McLeod & Co. Ltd. in the account year 1954 55.
when there was a rising market and when the control was no longer with the Kanoria group and having already passed to the 358 Bajoria group, clearly shows that the Tribunal was not wrong in inferring that the purchases of shares of McLeod & Co. Ltd. were not for the purpose of keeping controlling interest in that Company or for investment, but that the shares were being purchased and sold for earning profit, so that the transactions were an adventure in the nature of trade in these shares of McLeod & Co. Ltd. In this connection, Mr. A.K. Sen, learned counsel for the appellant drew our attention to the following view expressed in the remand order : "We are unable to answer the question referred because the mere fact that an investment company periodically varies its investments does not necessarily mean that the profits resulting from such variation is taxable under the Income tax Act.
Variation of its investments must amount to dealing in investments before such profits can be taxed as income under the Income tax Act.
" Reliance was also.
placed on the observations of this Court in Bengal and Assam Investors Ltd. vs Commissioner of Income tax, West Bengal(1), which were quoted in the remand order and are as follows : "It seems to us that, on principle before dividends on shares can be assessed under section 10, the assessee, be it an individual or a company or any other entity, must carry on business in respect of shares; that is to say, the assessee must deal in those shares.
It is evident that if an individual person invests in shares for the purpose of earning dividend, he is not carrying on a business.
The only way he can come under section 10 is by converting the shares into stock in trade, i.e., by carrying on the business of dealing in stocks and shares as did the assessee in Commissioner of Income Tax vs Bai Shirinbai K. Kooka(2) ' '.
It was urged that, in this case, the Tribunal has recorded no finding at all that the shares in McLeod & Co. Ltd. which were sold by the assessee were converted by it into stock in trade, nor has it been held that the variation of its investments by the assessee amounted to dealings in investments.
The facts that we found above show that, so far as the shares of McLeod & Co. Ltd. and the allied companies which were sold by the assessee and the income from which has been taxed as revenue income are concerned, the assessee, in fact, dealt with them as stock in trade.
It (1) (2) 359 is true that in the account books they were never shown as such; but we have indicated how the evidence and the material in this case lead to the conclusion that the shares were in fact purchased even initially not as investments, but for the purpose of sale at profit and that they were actually sold with the purpose of earning profit, so that the transactions amounted to an adventure in the nature of trade.
Learned counsel also referred ,to the decision of this Court in Ram Narain Sons (Pr.) Ltd. v Commissioner of Income tax, Bombay(1) to urge that the principal consideration in determining whether income from sale of shares is revenue income or capital gain, is to find out what was the purpose of purchase of those shares, and, if the purpose was investment, the fact that.
in varying the investment, the sale of those shares resulted in a profit will not.
make that profit revenue income.
The principle is perfectly ' correct, but is not applicable to.
the case before us on the finding mentioned by us above that even the initial purchase of these shares by the assessee was not for the purpose of investment for earning income from dividends, but was with a view to earn profit by resale of those shares.
In these circumstances we hold that the High Court was right in arriving at the conclusion that, on the facts and circumstances of the present case, the income derived by the assessee from the sale of its shares and securities in the relevant previous years was revenue receipt and as such taxable under the Income tax Act.
The appeals fail and are dismissed with costs.
One hearing fee.
Y.P. Appeals dismissed.

Output:
The principal activity of the assessee was investment of its capitals in shares and stocks.
It changed its investments by sale of its shares and stocks from time to time.
The assessee 's income was primarily derived from dividends on shares and interest derived by it on the investments.
The assessee purchased the shares of a company when their prices were falling by taking loan at interest and the return on investment was not at all substantial.
The assessee 's explanation that the shares were, in fact, being held as investment and were sold simply because the control of the company went out of the hands of the Directors of the assessee.
was not accepted by the Tribunal.
HELD: The income derived by the assessee.
from the sale of these shares was revenue receipt and as such taxable under the, Income tax Act.
From the evidence about the course of dealings and conduct of the assessee the conclusion followed that the purchases of the shares were not for the purpose of keeping controlling interest in that company, or for investment, but shares were being purchased and sold for earning profit, so that the transactions were an adventure in the nature of trade in these shares.
[359 A B] The acceptance by the Revenue, in the earlier years, that the acquisitions and sales of shares were in the nature of investments, was not binding in the proceeding for assessment during subsequent years.
[356 B C] Bengal and Assam Investors Ltd. vs Commissioner of income tax,West Bengal, and Commissioner of Income tax vs
Bai Shrinbai K. Kooka, , referred to.
Ram Narain Sons (P) Ltd. vs Commissioner of Income tax, Bombay. , held inapplicable.