Input:
vil Appeal No. 2080 (L) of 1977.
Appeal by Certificate from the Judgment and Order dated 20.12.74 of the Calcutta High Court in Appeal No. 104 of 1972.
R.N. Nath and Rathin Das for the Appellant S.P. Khera, M. Quamaruddin and Mrs. M. Quamaruddin for the Respondents.
G.S. Chatterjee for the State.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal, by certificate granted under Article 133(1)(a) of the Constitution, is directed against judgment and order of the High Court of Judicature at Calcutta dated December 20, 1974, in Appeal No. 104 of 1972.
Karnani Properties Ltd., appellant herein, is a company incorporated under the Companies Act, 1913.
It owns several mansion houses known as Karnani Mansions at Park Street, Calcutta.
There are about 300 flats in these mansions which have been let out to tenants.
The appellant provides various facilities to its tenants in these flats, e.g. free supply of electricity, washing and cleaning of floors and lavato ries, lift service, electric repairs and replacing, sanitary repairs and replacing, etc., and for that purpose the appel lant employ over 50 persons, namely sweepers, plumbers, malis, lift man, durwans, pumpmen, electric and other mis tries, bill collectors and bearers, etc., in connection with these properties.
A dispute arose between the employees of the appellant represented by Barabazar Zamandar Sangh (hereinafter referred to as 'the union ') and the appellant with regard to wages, scales of pay, dearness allowance and gratuity.
The Government of West Bengal, by order dated July 29, 1967, referred for adjudication to the 6th Industrial Tribunal, West Bengal, the industrial dispute relating to: (a) Fixation of Grades and Scales of pay of the different categories of workmen; (b) Dearness Allowance; and (c) Gratuity.
937 The appellant raised preliminary objections with regard to the validity of the reference before the Industrial Tribunal on the ground that the alleged dispute is not an industrial dispute and that the reference is barred by Section 19 of the (hereinafter referred to as 'the Act ') for the reason that in 1960 there was an Award on the basis of settlement made with the union, and the said Award has not been terminated by either of the parties and is still binding on the parties.
The Industrial Tribunal, by its order dated August 24, 1968, overruled the said preliminary objections raised by the appellant and thereafter the Tribunal gave the Award dated March 3, 1969.
The Industrial Tribunal expressed its inability to fix any grades and scales of pay of the workmen for the reason that the evidence adduced by the Union on this issue was scrappy, none too convincing and not very much acceptable.
As regards dearness allowance the Industrial Tribunal held that since November, 1964 the price index of working class in Calcutta has considerably gone up from 460 to 750 points (as was in October, 1968), i.e. roughly by 300 points.
The Industrial Tribunal awarded enhanced DA at the rate of Rs.60 per month (Rs.20 per 100 points) to the sweeper, bearer, helper, mali, mazdoor, lift man, head sweeper, durwan, pumpman, and as sistant electric mistry.
DA at the , 'ate of Rs.54 per month (Rs. 18 per 100 points) was awarded to the plumber, raj mistry, head durwan, electric mistry and driver and bill collector.
It was also directed that the said rates of DA would remain in force as long as the price index will remain between 600 to 800 points and if the price index goes up beyond 800 points the rate of DA will be revised according to the rates mentioned and if it goes below 600 points it also may be revised accordingly.
With regard to gratuity the Industrial Tribunal pointed out that under the existing scheme gratuity is payable to every workmen after completion of three years continued, faithful and satisfactory service at the rate of 10 days consolidated salary for every com pleted year of service since the date of appointment.
The Industrial Tribunal held that three years ' period was too short to make a workman entitled to gratuity and that "satisfactory" and "faithful" are vague terms.
The Industri al Tribunal framed a scheme of gratuity whereunder after completion of six years of continuous service with the appellant every workmen on retirement or on death will get an amount of gratuity at the rate of 10 days ' consolidated salary for every completed year of service since the date of appointment and a workman who resigns voluntarily would also be entitled to get the gratuity at the same rate provided he completed 10 years of continuous service.
The Industrial Tribunal also directed that if the termination of service is the result of misconduct which caused financial loss to the employer 938 that loss would first be compensated from the gratuity payable to employee and the balance, if any, should be paid to him.
It was also directed that the services of the work men prior to 1950 would not be taken into consideration for the purpose of payment of gratuity.
The appellant filed a writ petition in the High Court under Article 226 of the Constitution wherein the. order dated August 24, 1968 and the Award dated March 7, 1969 given by the Industrial Tribunal were challenged.
The said writ petition was heard by a learned single Judge, who by his judgment dated March 17 & 20, 1972, dismissed the said writ petition.
Before the learned single Judge it was urged that the Award made by the Industrial Tribunal was without jurisdiction for the reason that the appellant does not carry on an "industry" as defined in the Act and that the dispute between the appellant and the workmen cannot come within the ambit of industrial dispute, and also.
for the reason that there was a previous Award dated March 3, 1960 which has not been terminated and was still subsisting and in view of the said Award the present reference was invalid and further that no dispute was raised between the workmen and the appellant prior to the reference before the Indus trial Tribunal and as such the Tribunal has no jurisdiction to deal with the matter.
The learned single Judge rejected all these objections.
He held that in view of the nature of the activity carried on the appellant does carry on an industry within the meaning of the Act and the dispute between the appellant and its workmen come within the ambit of the Act.
As regards the Award dated March 3, 1960 the learned single Judge found that the workmen concerned had given notice to terminate the previous Award and as such the existence of previous Award and as such the existence of previous Award would not preclude a fresh reference.
The learned single Judge observed that no specific plea was raised by the appellant before the Industrial Tribunal challenging the order and the reference on the ground that there was no such dispute prior to the reference between the workmen and the appellant about the questions referred to in the order of reference and that whether there was any demand or not is a question of fact.
the learned single Judge, however, held that from the evidence it is clear that the workmen concerned had demanded before the order of reference in their charter of demands dearness allowance and provident fund and gratuity and as such there was a dispute between the workmen concerned and the employers before the order of reference was made.
The Award was challenged on merits before the learned single Judge on the ground that the Industrial Tribunal did not consider the appellant 's capaci ty to pay in granting dearness allowance to the workmen concerned.
The learned single Judge 939 rejected the said contention on the view that reading the Award as a whole it could not be contended that the Tribunal did not take into consideration either the capacity to pay or the leval of the cost of living.
The appellant filed an appeal against the judgment of the learned single Judge which was dismissed by a Division Bench of the High Court by its judgment and order dated December 20, 1974.
The learned Judges agreed with the deci sion of the learned single Judge that the appellant is carrying on an industry under Section 2(j) of the Act.
Before the Division Bench it was contended on behalf of the appellant that the earlier Award was made on the basis of a settlement between the two parties and that since the said Award was in a nature of settlement it could only be termi nated in accordance with the provisions of Section 19(2) of the Act relating to termination of a settlement.
The learned Judges of the Division Bench held that the said contention was not raised by the appellant before the Tribunal and also before the learned single Judge and it could not be raised for the first time at the stage of the appeal and that it cannot be considered to be a pure question of law because for a settlement under Section 2(p) of the Act the necessary requirements of settlement as laid down in the statute and the rules have to be satisfied and whether the necessary recruitments have been satisfied or not will involve inves tigation into facts.
The learned Judges were, however, of the view that even if the said plea was allowed to be raised it could not be accepted inasmuch as the materials on record do not establish that the requirement of "settlement" as defined in Section 2(p) of the Act are satisfied in respect of the earlier Award.
It was held that an Award does not necessarily cease to be an Award merely because the same was made on the basis of a settlement arrived at between the parties and that the earlier Award was an "Award" within the meaning of Section 2(b) of the Act and was not a settlement as contemplated by Section 2(p) of the Act.
With regard to the termination of the earlier Award, the learned Judges have held that in the facts and circumstances of the case it had been validly terminated in accordance with Section 19(6) as well as Section 19(2) of the Act.
Before the Division Bench it was urged on behalf of the appellant that the Tribunal has not considered the financial capacity of the appellant while making the Award with regard to dearness allowance and reliance was placed on certain documents which were filed before the Division Bench.
The learned Judges held that in considering the findings arrived at by the Tribunal the Court should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the 940 Tribunal should not be allowed to be placed before the Court in a writ petition for determining whether the findings of the Tribunal are justified or not and that in the instant case no proper grounds have been made out for not producing the materials which were then available at the time of the hearing before the Tribunal and why the said documents could not be produced even before the learned single Judge.
The learned Judges further held that even if the said documents are taken into consideration the same would be of no partic ular assistance to the appellant inasmuch as the said docu ments consist mainly of balance sheets and assessment or ders, and that the legal position is settled that while computing gross profits for the purpose of revising wage structure and dearness allowance the provision made for taxation, depreciation and development rebate cannot be deducted and the provisions of the Companies Act contained in Sections 205 and 211 and the principles of accountancy involved in preparation of profit and loss accounts have no relevance or bearing while considering the revision of wages and dearness allowance.
The learned Judges have held that on the materials on record the Tribunal was justified in making the Award and that the materials on record before the Tribu nal establish that the amount ordered by the Tribunal was not beyond the financial capacity of the appellant.
Aggrieved by the decision of the Division Bench of the High Court the appellant has flied this appeal after obtain ing leave to appeal from the High Court under Article 133(1)(a) of the Constitution.
Shri R.N. Nath, the learned counsel for the appellant, has submitted that the High Court was in error in holding that the appellant is an industry under Section 2(j) of the Act.
Shri Nath has submitted that in arriving at the said conclusion the learned Judges of the Division Bench of the High Court have relied upon the decision of this Court in Management of Safder Jung Hospital vs Kuldip Singh Sethi, [ ; which decision was overruled by this Court in Bangalore Water Supply & Sewerage Board vs R. Rajappa and Others, ; The submission of Shri Nath is that in accordance with the principles laid down in Bangalore Water Supply & Sewerage Board Case, (supra) the appellant cannot be taken to be carrying on an "industry" under Section 2(j) of the Act.
In our opinion there is no substance in this contention.
It is no doubt true that the learned Judges of the Division Bench of the High Court have placed reliance on the decision of this Court in the Safdar Jung Hospital Case, (Supra) for holding that the appellant is carrying on an industry under Section 2(j) of the Act and the decision in Safdar Jung Hospital case, (supra) has 941 been overruled by a larger Bench of this Court in Bangalore Water Supply & Sewerage case, (supra).
But this does not mean that the view of the High Court that the appellant is carrying on an industry under Section 2(j) of the Act is erroneous.
In Safdar Jung Hospital case, (supra), a six member Bench of this Court had overruled the earlier deci sion in State of Bombay vs Hospital Mazdoor Sabha, ; and gave a restricted interpretation to the definition of "industry" contained in Section 2(j) of the Act.
Bangalore Water Supply & Sewerage Board, case (decided by a seven member Bench of this Court) by overruling the decision in Safdar Jung Hospital case, has restored the Hospital Mazdoor Sabha case.
In other words, the effect of decision on Bangalore Water Supply & Sewerage Board case, is that the expression "industry" as defined in Section 2(j) has to be given the meaning assigned to it by this Court in the earlier decisions in D.N. Banerjee vs P.R. Mukherjee, ; , Corporation of the of Nagpur vs Its employees, [ ; and the Hospital Mazdoor Sabha case Krishna Iyer, J., who delivered the main judgment in Bangalore Water Supply & Sewerage Board case, has summed up the principles which are decisive, positively and nega tively, of the identity of "industry" under the Act.
The first principle formulated by the learned Judge is as under: "I, Industry, as defined in Section 2(j) and explained in Banerjee has a wide import: (a) Where (i) systematic activity (ii) organised by cooper ation between employer and employee, (the direct) and sub stantial element is chimerical) (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale prasad or food), prima facie, there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrele vant, be the venture in the public joint or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer employee relations.
(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the under taking.
" 942 If the said principles are applied to the facts of the present case and there can be no doubt that the activity carried on by the appellant satisfies the requirements of the definition of "industry" contained in Section 2(j) of the Act.
In this regard, it may be mentioned that the learned Judges of the Division Bench of the High Court have found as under: "(i) The Memorandum of Association of the appellant company indicate that the principal object for which the appellant company was incorporated is to acquire by purchase, trans fer, assignment or otherwise lands, buildings and landed properties of all description and in particular to acquire from the Karnani Industrial Bank Ltd., the immovable proper ties now belonging to the said Bank and to improve, manage and develop the properties and to let out the same on lease or otherwise dispose of the same.
(ii) The principal business of the company is to deal with the real property and it is a real estate company.
(iii) The income which the appellant derives is not from mere letting out the properties to the tenants and that the tenants pay not only for mere occupation of the property but also for enjoyment of the various services which are ren dered by the appellant to the tenants and to which services the tenants are entitled as a matter of right for the occu pation of the premises.
(iv) The services which are rendered to the tenants and about which there does not appear to be any dispute are: (a) elaborate arrangements for supply of water; (b) free supply of electricity; (c) washing and cleaning of floors and lavatories; (d) lift services; (e) electric repairs and replacing; and (f) sanitary repairs and replacing etc.
943 (v) For offering these services to the tenants, the appel lant has employed a number of workmen and these services which undoubtedly confer material benefits on the tenants and constitute material services, are rendered by the em ployees.
(vi) The employees of the appellant company are engaged in their respective calling or employment to do their work in rendering the services.
(vii) Activity carried on by the appellant company is un doubtedly not casual and is distinctly systematic.
(viii) The work for which labour of workmen is required is clearly productive of the services to which the tenants are entitled and which also form a part of the consideration for the payments made by the tenants.
(ix) The appellant carries on its business with a view to profits and it makes profits and declares dividends out of the profits earned.
From the aforesaid findings recorded by the High Court, with which we find no reason to disagree, it is evident that the activity carried on by the appellant falls within the ambit of the expression "industry" defined in Section 2(j) of the Act as construed by this Court in Bangalore Water Supply & Sewerage Board case (supra).
The Award of the Industrial Tribunal cannot, therefore, be assailed on the basis that the appellant is not carrying on an industry under the Act.
Shri Nath has next contended that the Industrial Tribu nal was not competent to make the Award as the earlier Award dated March 3, 1960, had not been validly terminated.
He has urged that the earlier Award was in the nature of a settle ment under Section 2(p) of the Act and it could be terminat ed only in accordance with Section 19(2) of the Act.
Shri Nath has pointed out that for terminating a settlement under Section 19(2) a written notice is necessary whereas for termination of an Award under Section 19(6) of the Act a written notice is not required and a notice is sufficient.
In our opinion this contention does not require consid eration in view of the finding recorded by the learned Judges of Division Bench of the High Court that the letter dated November 24, 1966 was a notice 944 under Section 19(6) as well as under Section 19(2) of the Act.
It has been found that the said letter of the union which was addressed to the Labour Commissioner was sent to the appellant company and that in the said letter there is a clear intimation of the intention of the employees to termi nate the Award and from the letter of the appellant dated February 13, 1967 it appears that the appellant had become aware of the intention of the union to terminate the Award and that the order of reference was made on July 29, 1967, long after the expiry of the period of two months.
It is not the requirement of Section 19(2) of the Act that there should be a formal notice terminating a settlement and notice can be inferred from the correspondence between the parties (See: Indian Link Chain Manufacturers Ltd. vs Their Workmen, ; In the aforesaid facts and circumstances the High Court was justified in holding that the Award dated March 3, 1960 had been validly terminated before the passing of the order of reference.
Shri Nath has urged that there has been non compliance of the provisions of Section 19(7) of the Act which lays down that no notice given under sub section (2) or sub sec tion (6) shall have effect unless it is given by a party representing the majority of the persons bound by the set tlement or Award as the case may be.
This question has been raised by the appellant for the first in this Court.
It involves an inquiry into questions of fact which cannot be made at this stage.
The same, therefore, cannot be allowed to be agitated.
Shri Nath has lastly urged that the Industrial Tribunal was in error in making the Award in relation to Dearness Allowance without examining the capacity of the appellant to pay the additional amount and that the High Court should have remanded the matter to the Tribunal for considering this issue in the light of the documents which were submit ted by the appellant before the High Court.
We find no substance in this contention.
The High Court has rightly held that in considering the finding arrived at by the Tribunal the High Court while exercising its jurisdiction under Article 226 of the Constitution should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the Tribunal should not normally be allowed to be placed before the Court.
The appellant has not been able to show why the said documents were not produced before the Tribunal.
It is not the case of the appellant that the Tribunal had precluded the appellant from producing these documents.
In these circumstances we find no justification for accepting the plea of the learned counsel for the appel lant for 945 reconsideration of the Award of the Tribunal in the light of the documents submitted by the appellant during the pendency of the appeal before the High Court.
The appeal is, therefore, dismissed with costs.
During the pendency of this appeal, the appellant has made a deposit before the Tribunal.
The respondent .union will be entitled to withdraw the said amount along with the interest that has accrued on it.
T.N.A. Appeal dismissed.

Output:
The appellant, a real estate company, was engaged in the business of letting out its property on lease, Besides it was also rendering various services to its tenants such as electricity and water supply, washing and cleaning, lift services, electrical and sanitary repairs on payment basis.
For rendering these services the appellant company employed a number of workmen.
A dispute arose between the employees and the appellant company with regard to wages, scales of pay, dearness allowance and gratuity.
The State Government re ferred the disputes to Industrial Tribunal for adjudication.
The appellant company contested the reference before the Tribunal by raising a preliminary objection that the alleged dispute was not an industrial dispute and that the reference was barred by Section 19 of the since there was an earlier binding award, based on settlement with the Union, which was not terminated by either parties.
934 By an order dated August 24, 1968 the Tribunal overruled the preliminary objection and gave the award dated March 3. 1969 enhancing the dearness allowance of the employees.
The Tribunal also framed a revised gratuity scheme but did not fix any grades and pay scales of workmen for want of con vincing evidence.
The appellant company filed a writ petition in the High Court challenging the Tribunal 's order dated August 24, 1968 as well as the Award dated March 7, 1969 contending: (i) that the Award was without jurisdiction because the appel lant company was not carrying on 'industry ' and the alleged dispute was not an 'Industrial Dispute ' and that the previ ous Award was not terminated and was still subsisting; (ii) that no dispute was raised between the workmen and the appellant prior to the reference before the Tribunal; and (iii) that the Tribunal did not consider the appellant 's capacity to pay dearness allowance to the workmen.
A single judge of the High Court dismissed the writ petition by rejecting all the contentions.
The appellant filed an appeal against the judgment of the single judge before a Division Bench of the High Court which was also dismissed.
Against the decision of the Division Bench of the High Court the appellant company filed an appeal to this Court, contending: (i) that the High Court was in error in holding that the appellant was an 'industry ' under Section 2(j) of the Act; (ii) that the Tribunal was not competent to make the Award since the earlier Award, which was in the nature of a settlement under Section 2(p), was not terminated in accordance with section 19(2) by giving a formal written notice; (iii) that there was non compliance with the provi sions of Section 19(7) of the Act; and (iv) that the Indus trial Tribunal was in error in making the Award in relation to Dearness Allowance without examining the capacity to pay the additional amount and that the High Court should have remanded the matter to the Tribunal for considering this issue in the light of the documents which were submitted by the appellant before the High Court.
Dismissing appeal, this Court, HELD: 1.
The activity carried on by the appellant compa ny falls within the ambit of the expression "industry" defined in Section 2(j) of the .
The Award of the Industrial Tribunal cannot, there fore, be assailed on the basis that the appellant is 935 not carrying on an 'industry ' under the Act.
[943E] Bangalore Water Supply & Swerage Board v .R. Rajappa and Ors., ; , applied.
Management of Safdar jung Hospital vs Kuldip Singh Sethi, ; ; State of Bombay vs Hospital Mazdoor Sabha, ; ; D.N. Banerjee vs P.R. Mukherjee, ; and Corporation of the City of Nagpur vs Its employees; , , referred to. 2.
It is not the requirement of Section 19(2) of the that there should be a formal notice terminating a settlement, and notice can be inferred from the correspondence between the parties.
[944B] Indian Link Chain Manufacturers Ltd. vs Their Workmen, [1972] I SCR 790, applied.
2.1 In view of the finding of the Division bench that the letter of employees Union dated November 24, 1966 was a notice under section 19(6) as well as section 19(2) of the and that the said letter contained a clear intimation of the intention of the employ ees to terminate the Award, the High Court was justified in holding that the earlier award had been validly terminated before the passing of the order of reference.
[943H; 944A B ] 3.
The High Court was right in taking the view that while exercising its jurisdiction under Article 226 of the Constitution the High Court should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the Tribu nal should not normally be allowed to be placed before the Court.
[944F G] 3.1 In the instant case the appellant has not been able to show why the documents relied on by it were not produced before the Tribunal.
Therefore there is no justification for accepting the plea of the appellant for reconsideration of the Award of the Tribunal in the light of the documents submitted by the appellant during the pendency of the appeal before High Court.
[944G H] 4.
A question raised for the first time in the Supreme Court involving an inquiry into questions of fact cannot be allowed to be agitated.
[944E] 936


Input:
Appeal No. 687 of 1965.
Appeal by special leave from the judgment and decree dated October 3, 1961 of the Punjab High Court in Letters Patent Appeal No. 405 of 1958.
C. B. Agarwala and K. P. Gupta, for the appellant.
section N. Anand, for respondent No. 1.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal by special leave from a judgment and order of the Punjab High Court in Letters Patent Appeal No. 405 of 1956.
The matter arises out of an application for execution of an order for possession passed on a compermise between the parties.
The Division Bench of the Punjab High Court felt itself unable to help the decree holder because of an earlier decision in the execution proceedings which was held to constitute res judicata against her.
The main question for consideration is, whether it was right in doing so.
The relevant facts are as follows.
As far back as April 1950.
Harbans Lal, the late husband of the appellant before us, obtained an order for eviction from the Rent Controller against Lal Chand and Ram Rattan Dass Jain in respect of certain, premises which were being used as a factory.
This decree was upheld in appeal and in July 1951 the decree holder applied for execution.
The court bailiff made a report dated the 14th July 1951 that on his going to give delivery of possession resistance was offered by a number of persons and being apprehensive of breach of peace he could not effect delivery of possession.
The judgment debtors appear to have approached the Department of Industries and informed them of the attempt at their eviction by the, decree holder.
The copy of a letter from the Extra Assistant Director of Industries to the Chief Inspector of Factories dated July 18, 1951 exhibited at the instance of the judgment debtors, goes to show that the machinery installed in the factory could not be removed without 7 Sup.
C.I./68 8 508 the prior permission of the Chief Inspector of Factories.
Obviously the judgment debtors wanted to thwart the decree holder from getting possession through court by invoking the aid of the East Punjab Factories (Control of Dismantling) Act XX of 1948, hereinafter referred to as the Act.
The judgment debtors applied for stay of execution of the decree on August 23, 1951.
The Subordinate Judge issued notices but did not grant stay.
On appeal the District Judge accepted the appeal noting that the Subordinate Judge had not given any finding about the applicability of the Act.
He had before him the report of the bailiff that possession of the premises could not be given over as there were machinery stored therein.
By order dated October 11, 1951 he directed the Subordinate Judge to decide the objections under the Act.
The Subordinate Judge framed a number of issues including one which read : 'whether the judgment debtors could not be dispossessed of the factory and machinery could not be dismantled without permission of the Government ?" Taking evidence of the parties and noting the contents of the letter of the Industries Department, he observed that the judgment debtors had not secured permission but the decree holder might follow up the matter through court.
He stayed execution of the decree in so far as it involved the dismantling or removal of the machinery but allowed the same for securing possession of the part of the premises where no machinery was stored.
This was on 7th February, 1953.
Both parties filed appeals from this order which were dismissed.
The appellate court was of the view that machinery and spare parts were lying practically in all the rooms of the building and the locking and sealing of the factory would result in its closure which would go against the provisions of the above mentioned Act.
The decree holder was therefore directed to pursue the matter with the State Government.
Incidentally, the court noted that the decree holder had not challenged the proposition that the court could not order delivery of possession without the requisite sanction for the dismantling of the factory.
This order dated 22nd April 1953 was not challenged by any appeal to the High Court.
It appears that the court consigned the execution proceedings to the record room on July 25, 1953.
On August 18, 1953 the decree holder applied for execution proceedings being restarted.
On November 7, 195 3 the executing court observed that a reply from the State Government had been received to the effect that permission for demolition of the factory could not be given.
execution file was therefore ordered to be consigned to the record room once more.
From this order.
an appeal was preferred by the 'decree holder.
The Additional District Judge held that in view of.the imperative provisions of section 3 of the Act the decree holder could not be granted posses 509 sion in execution of the decree and dismissed the appeal by order dated January 8, 1954.
On further appeal, a learned Judge of the High Court by order dated July 13, 1955 observed that in the execution proceedings no evidence had been adduced on the points arising under Punjab Act XX of 1948.
He therefore said as follows : "On the present record it is not possible for me to decide whether the execution of the decree would defeat the provisions of section 3 of the Punjab Act XX of 1948.
That being the position of matters, I set wide the order passed by the Subordinate courts and direct the court of execution to give fresh decision on the points that arise under section 3 of Punjab Act XX of 1948.
In proceedings pursuant to this order parties will be given opportunity to examine hearing on the points that arise under section 3 of Punjab Act XX of 1948.
" On remand the Subordinate Judge by order dated 30th De cember, 1955 hold that the Act was not intended to cover involuntary dismantling in execution of orders of competent courts : further the Rent Restriction Act, 1949 passed after Act XX of 1948 did not take any notice of the prohibition contained in the said Act ' In the result he found that the respondent was liable to be ejected in execution of the decree for eviction but as the application had become over a year old it would be struck off the file and the decree holder be at liberty to take out execution of the decree by a fresh application.
The judgment debtors went up in appeal to the court of the District Judge.
The District Judge by order dated December 31, 1956 hold that the Act did not apply to involuntary dismantling of factories and that the issue raised by the Subordinate Judge in this connection did not arise but in fact it had been decided against the landlord by the High Court in Revision.
According to him, the order of the High Court Went to show that section 3 of Act XX of 1948 covered delivery of possession even in execution of the order of the Rent Controller or otherwise the revision application would, have been accepted by him straightaway.
In the result he dismissed the execution petition.
The appellant went up in Second Appeal to the High Court at Chandigarh.
A single Judge of that Court dismissed the appeal.
The decree holder filed a Letters Patent Appeal.
Although of the view that delivery of possession was not barred in execution of the decree by Act XX of 1948, the Division Bench concluded that so far as the parties before it were concerned, the matter had become, res judicata inconsequence of the decisions of the executing court and the first appellate court on the 510 first execution application and the decision of a single Judge in revision on the previous occasion in the second execution application.
Section 3 sub section
(1) of East Punjab Act XX of 1948 provides as follows : "No person shall, without the written permission of the State Government or of an officer authorised in this behalf by the State Government, dismantle any factory or remove from a factory any spare parts kept for maintaining the machinery of the factory in order.
" The Act which contains only eight sections makes no reference to any decree for possession against the owner of a factory.
By ordering delivery of possession of the premises the executing court does not make an order for dismantling a factory and a bailiff charged with execution of a warrant for possession does not infringe the above provision of law by rendering possession of the property to the decree holder.
So far as the judgment debtor ' the owner of the factory, is concerned, it would be his look out to take the matter up with.
the State Government, if necessary and we have no doubt that in a 'case like this where there is no collusion between the decree holder and the judgment debtors the State Government would not prosecute the judgment debtors or refuse to accord sanction to the judgment debtors for removal of the machinery from the premises of which they could not lawfully continue in possession.
it appears that the Subordinate Judge, the District Judge and the Judges of the Punjab High Court were all of the view that the Act did not bar the delivery of possession in execution of a decree.
In our opinion there was no final order about the inexecut ability of the decree on the first application for execution which was consigned to the record room by order dated July 25, 1953.
Further, the judgment of the learned single Judge of the Punjab High Court dated July 13, 1955 did not decide the question as fin whether the decree for possession would be inexecutable in view of Act XX of 1948.
He stated expressly that It was not possible for him to decide whether, the execution of the decree would defeat the provisions of section 3 of Punjab Act XX of 1948 and being unable to come to a decision on the record he remanded the matter to the court of execution.
He found himself unable to interpret the section on the evidence before him.
The proceedings subsequent to the remand order culminated in the order of the Division Bench from which the present appeal arises.
The order dated July 13, 1955 was not a final order which put a seal on the proceedings.
The course of litigation subsequent to the order for eviction in 1950 is truly amazing.
For 17 years the decree holder has 511 been unable to reap the fruits of the decree although practically all the courts felt that the Act of 1948 could not be called in aid by the judgment debtors to resist execution by delivery of possession.
We cannot but condemn in very strong terms the attitude ,of the judgment debtors who, to say the least, are persons who have little regard for sanctity of their own solemn promise made before a court of law.
On June 29, 1,950 in Miscellaneous Civil Appeal No. 39 of 1950 they stated on oath that they had reached an agreement with the landlord that they would "remain on the premises only up till 31st March 1951 when they would of their own accord vacate the premises" and on their failure to do so the landlord would be entitled to take out execution against them.
Even before the time to vacate the premises came, one of the judgment debtors filed a suit for a perpetual injunction to restrain the decree holder from obtaining possession in terms of the consent order of 29th June 1950.
The suit was dismissed on July 11, 1951.
The judjement debtors also lost the appeal filed against that dismissal.
At every step and turn for nearly two decades they have successfully resisted delivery of possession by raising an illusory plea.
Learned counsel for the respondents argued that even now his clients can urge the plea that the decree was not executable because of the provisions of Act XX of 1 1948.
According to him, the agreement was in contravention of a statute and 'the respondents could not be estopped from pleading or proving facts which would render the agreement void.
His, case was that Act XX of 1948 being in force on June 29, 1950 any agreement arrived at between the parties in contravention of its provisions would not be binding on the parties.
No exception can be taken to the broad proposition of law but no question of estoppel ever arose in this case because Act XX of 1948 did not operate as a bar to the delivery of possession of premises in execution of a decree.
In the result, the appeal is allowed with costs throughout from the 18th August 1953 irrespective of any order in that behalf made at any time thereafter.
It is unfortunate the decree holder has been kept out of possession so long; but she is partly responsible for it herself.
If she had preferred an appeal from the order of the District Judge passed on 22nd April, 1953 to the High Court.
probably her troubles would have ended long ago.
Y.P. Appeal allowed.

Output:
The eviction of the Respondent 'from the appellants premises, which was used as a factory, was decreed and application for execution of an order for possession was made.
The respondents resisted the execution on the plea that the machinery installed in the factory could not be re moved without the prior permission of chief Inspector of Factories as provided by the East Punjab Factories (Control of Dismantling) Act.
The premises was allowed.
Both parties appealed.
The appellate Court took of the machinery was stayed, but the Possession of the part the premises was allowed.
Both parties appealed.
The appellate Court took the view that the machinery and spare parts were lying practically in all the rooms, and the locking and sealing of the factory would result in its closure which would be against the provisions of the Act, and therefore directed the appellant to pursue the matter with the State Government.
The order dated April 22, 1953 was not challenged by any appeal.
But the appellant restarted the execution proceedings in which it was held that the State Government had refused permission for demolition of the factory, so the file was ordered to be consigned to the record room. 'Me appellant filed an appeal, which was dismissed, but in further revision the High Court by its order dated July 13, 1955 observed that on the record it was not possible to decide whether the execution of the decree would defeat the provisions of section 3 of the Act, so it set aside the order and directed the executing court to give decision on points that arose under section 3 of the Act. 'Me executing court found that the provisions of the Art did not prohibit the execution and as such the respondents were liable to ejectment but since the application had become over a year old it would be 'struck off the file with liberty to make a fresh application.
The respondents appealed.
The District Judge held that the Act did not apply to involuntary dismantling of factories and that the issue raised by the executing court did not arise but in fact it had been decided against the appellant by the High Court in revision.
The appellant 's appeal to High Court was dismissed by a Single Judge, and in the Letters Patent Appeal, it was held that the delivery of possession was not barred in execution of decree by the Act, but the matter had become res judicata in consequence of the decisions in the first execution application and the decision of the High Court dated July 13 1955 in the second execution applica tion.
Allowing the appeal, HELD : The Act does not bar the delivery of possession in execution, of a decree.
It makes no reference to any decree for Possession against the owner of a factory.
By ordering delivery of possession of the premises, the executing court does not make an order for dismantling a factory and a bailiff charged with execution of a warrant for possession, does not infringe the provision of law by rendering possession of the property to the decree holder.
[510 C D] 507 There was no final order about the inexecutability of the decree on the first application for execution.
Further the High Court by its order dated July 13, 1955, did Dot decide the question as to whether the decree for possession would be inexecutable in view of the Act.
It stated expressly that it was not possible for it to decide whether the execution of the decree would defeat the provisions of the Act, and being unable to come to a decision on the record it remanded the matter to the court of execution.
It found itself unable to interpret the section on the evidence beforeit.
The proceedings subsequent to the remand order culminated in theorder of the Division Bench from which the present appeal arose.
The order dated July 13, 1955 was not a final order which put a seal on the proceedings.
[510 F H]


Input:
Criminal Appeal No. 653 of 1986 From the Judgment and Order dated 31.1.1983 of the Karnataka High Court in Crl.
A. No. 451 of 1981 D.N. Diwede, M. Veerappa and Ashok Kumar Sharma for the Appellant.
R. Satish for the Respondent.
The Judgment of the Court was delivered by NATARAJAN, J.
The light hearted and casual manner of disposal of the case against the respondent in C.C. No. 442 of 1980 (P.R. No. 198/80) on the file of his court by the Additional Munsif cum Additional Judicial Magistrate (First Class) Madhugiri and the refusal of the High Court of Karna taka to enhance the sentence of the respondent in exercise of its powers under Section 377 Criminal Procedure Code in Criminal Appeal No. 451/81 preferred by the State has com pelled the State of Karnataka to approach this Court under Article 136 1105 of the Constitution to file this Appeal by Special Leave.
The respondent has entered appearance but has not con tested the appeal.
The respondent was charged under Sections 279,337, and 304 A Indian Penal Code and Sections 89(a) and 89(b) of the Motor Vehicles Act for having driven an Express bus bearing Registration No. MYT 30(36 in a rash and negligent manner at about 8.30 P.M. on 30.4.80 on the Madhugiri Hosakere Road and hitting a bullock cart as a result of which one of the persons travelling in the cart Rangappa alias Veeramallapa sustained fatal injuries and another passenger sustained simple injuries.
After the accident the respondent failed to secure medical assistance to the injured persons and also failed to report the accident to the police authorities.
The respondent pleaded guilty to all the charges and was accordingly convicted.
However, in awarding sentences to the respondent for the several convictions, the Magistrate imposed trivial amounts of fines which had the effect of making the trial and the convictions a mere farce.
The sentences awarded are as follows: Offence Sentence provided under Sentence Awarded I.P.C./M.V. Act 1.
Sec.279 IPC (Punishable with imprisonment Fine of Rs.25/ of either description for a i/d to undergo term which may extend to six S.I. for one months or with fine which week.
may extend to one thousand rupees or with both) 2.
Sec.337 IPC (Punishable with imprison Fine of Rs.50/ ment of either description i/d to undergo for a term which may extend S.I. for twenty to six months or with fine five days.
which may extend to five hundred rupees or with both. ) 3.
Sec.304 A (Punishable with imprisonment Fine of Rs.250/ IPC of either description for a i/d to undergo term which may extend to two S.I. for one years or with fine or with month.
both. ) 1106 4.
Sec.89(a) r/w (Punishable with fine which Fine of Rs.10/ Sec.
112 Moto may extend to one hundred in default to Vehicles Act rupees) undergo S.I. for five days.
Sec.89(b) r/w (Same as for Section 89(a)) Same sentence Sec.
112 Motor as above.
Vehicles Act Perturbed and shocked by the callous manner in which the Magistrate had dealt with the case, the State preferred an appeal under Section 377 Cr.
P.C. to the High Court of Karna taka for enhancement of sentence.
The High Court, we regret to note has declined to interfere with the sentence on the grounds which have no basis or relevance.
The High Court was alive to the trivial nature of the sentences awarded by the Magistrate and has observed: "The sentence imposed appears to be a lenient one." Nevertheless, the High Court has declined to exercise its powers under Section 377 Cr.
P.C. and the strange reasons given by it are as follows: "The judgment of conviction and sentence has been delivered on January 30, 1981.
We are today at the fag end of January, 1983.
The award has been hanging over the head of the accused for a very long time.
Which should have made him undergo a lot of mental agony and torture.
It is no doubt true that one death has taken place and injuries have been caused to one person.
The sentence imposed appears to be a lenient one.
Therefore, con sidering the fact the appeal is pending for a long time and it must have caused the accused a lot of mental anxiety, we think that the appeal should be dismissed with an observation that in such serious cases the court is expected to take a serious view of the matter and not to be lenient in such matters.
With this observation the appeal is dismissed.
" The utter disregard shown by the Magistrate to the nature of the offences, particularly the one under Section 304 A I.P.C., and the sentences provided for them under the Indian Penal Code and Motor Vehicles Act, by imposing what may be termed as 'flea bite ' sentences on the respondent, should have spurred the High Court to not only pass appro priate strictures against the Magistrate but also to set right matters by enhancing the sentence at least for the conviction under Section 304 A I.P.C. to a conscionable level in exercise of its powers under Section 377 I.P.C. 1107 The High Court has failed to comprehend that the re spondent has been let off with a total fine of Rs.345 for his convictions under all the five charges relating to the death of one person and the sustainment of injuries by another due to his rash and negligent driving besides his failure to secure medical assistance to the victims as well as his failure to make a report to the authorities about the accident.
The reasons given by the High Court are really non existent as well as irrelevant ones.
It is not as if the respondent had been charged or convicted for a grave offence punishable with death or imprisonment for life and his fate had remained in suspense for a long time and as a conse quence thereof, he had undergone mental agony and torment for a long period of time.
Here was a case where the re spondent had not only driven his bus in a reckless manner and caused the death of one person and injuries to another but he had also attempted to escape prosecution by failing to report the accident to the police authorities.
Considera tions of undue sympathy in such cases will not only lead to miscarriage of justice but will also undermine the confi dence of the public in the efficacy of the criminal judicial system.
It need be hardly pointed out that the imposition of a sentence of fine of Rs.250 on the driver of a Motor Vehi cle for an offence under Section 304 A I.P.C. and that too without any extenuating or mitigating circumstance is bound to shock the conscience of any one and will unmistakably leave the impression that the trial was a mockery of jus tice.
We are, therefore, constrained to do what the High Court should have done but failed to do viz. enhance the sentence in the interests of justice.
We, however, feel that the ends of justice would be met by enhancing the sentence for the most serious of the charges for which the respondent has been convicted viz. the charge under Section 304 A I.P.C.
Accordingly we enhance the sentence for the conviction under Section 304 A I.P.C. to six months R.I. and fine of Rs. 1,000 in default to undergo R.I. for two months.
We leave undisturbed the other convictions and sentences.
To the extent indicated above the appeal will stand allowed.
The respondent shall forthwith be taken into custo dy to serve out the sentence.
A.P.J. Appeal allowed.

Output:
The respondent was charged under sections 279, 337, 304 A IPC and Sections 89(a) and 89(b) of the Motor Vehicles Act for having driven an Express Bus in a rash and negligent manner hitting a bullock cart as a result of which one of the persons traveling in the cart sustained fatal injuries and the other person sustained simple injuries.
After the accident the respondent failed to secure medical assistance to the injured person and also failed to report the accident to the police authorities.
The respondent pleaded guilty to all the charges and was convicted and sentenced to pay a total fine of Rs. 345 under all the five charges.
In the appeal preferred by the State for enhancement of sentence, the High Court declined to interfere with the sentence.
Allowing the appeal of the State, HELD: (1) The Magistrate in utter disregard to the nature of offences, particularly the one under Section 304 A IPC and the sentences provided for them under the ' IPC and the Motor Vehicles Act, imposed 'flea bite ' sentences on the respondent.
This should have spurred the High Court to not only pass appropriate strictures against the Magistrate but also to set right the matter by enhancing the sentence at least for the conviction under Section 304 A IPC in exercise of its powers under Section 377 Cr.
P.C. [1106G H] 1104 (2) The High Court has failed to comprehend that the respondent has been let off with a total fine of Rs. 345 for his convictions under all the five charges.
The reasons given by the High Court are really nonexistent as well as irrelevant ones.
Here was a case where the respondent had not only driven his bus in a reckless manner and caused the death of one person and injuries to another but he had also attempted to escape prosecution by failing to report the accident to the police authorities.
[1107A B] (3) Consideration of undue sympathy will not only lead to miscarriage of justice but will also undermine the effi cacy of the criminal judicial system.
The imposition of a sentence of fine of Rs. 250 on the driver in such a case and that too without any extenuating or mitigating circumstances is bound to shock the conscience of any one and will unmis takably leave the impression that the trial was a mockery of justice.
[1107C E] (4) The ends of justice would be met by enhancing the sentence for the most serious of the charges namely under Section 304 A IPC to six months R.I. and fine of Rs.1000 in default to undergo R.I. for two months.
[1107.E F]


Input:
Civil Appeal No. 11 IS(NT) of 1975.
WITH Civil Appeal Nos, 1226 & 1227(NT) of 1975.
From the Judgment and Order dated 18.9.1974 and 11.10.74 of the Andhra Pradesh and Calcutta High Court.
In case referred No. 15 of 1973 and matter No. 7 10 of 1970 respec tively B.B. Ahuja, Ms. A. Subhashini, K.C. Dua for the Appel lant in C.A. No. 1118 of 1975.
159 Harish N. Salve, Vivek Gambhir and Preveen Kumar for the Appellant in C.A. No. 1226 27 of 1975.
A. Subba Rao for the Respondent in C.A. No. 1118 of 1975.
B.B. Ahuja, K.C. Dua and Miss. A. Subhashini for the Re spondent in C.A. Nos.
1226 27 of 1975.
1226 & 1227/NT/1975, on a certificate, under Sec.
29(1) of the , (Act) by the assessee raise a question as to the proper construction of the proviso to Sec.
4(1)(a) of the Act, which provides for exemption respecting transferred assets which would other wise be includible in the wealth of the assessee under sec.
4(1)(a) of the Act.
The condition for the grant of the exemption under the proviso is that the transfer of the asset is either charge able to gift tax or is not chargeable under sec.
5 of the .
The particular point for consideration is whether, on the language of the proviso, the exemption is attracted only to such gifts as were chargeable to tax for any assessment year commencing "after the 31st day of March, 1964," as understood by the Revenue or whether the gifts even made earlier would attract the benefit of the exemption as claimed by the assessees.
There appears a divergence of judicial opinion on the point in the High Courts.
In C.W.T. vs Smt.
Sarala Debi Birla, ; T. Saraswathi Achi vs C.I.T., ; C.W.T. vs Seth Nand Lal Ganeriwala, ; M.G. Kollankulam vs C.I.T., Malti Harseey vs C.W.T., and C.W.T. vs Rasesh N. Mafatlal, several High Courts have construed the provision in the manner suggested by the Revenue.
C.W.T. vs Hashmatunnisa Begum, has taken the opposite view extending a wider benefit of the exemption.
The opinion of the Calcutta High Court in 1011TR 488, which is representative of the view in favour of Revenue, is under appeal in CA 1226 and 1227 of 1985 and the opinion of the Andhra Pradesh High Court in which is favour able to the assessee is under appeal 160 No. CA 1118 of 1975 preferred by the Revenue.
In CA 1118 of 1975 the assessee Smt.
Hashmatunnisa Begam, the legal representative of the late Nawab Zabeer Yar Jung Bahadur, claimed in respect of the assessment year 1967 68, that the value of the immovable properties gifted by the late Nawab to his wives before 1.4.
1964 should not be included in the net wealth of the Nawab as on the valua tion dated 31.9.1966.
The Nawab under three deeds of gift one dated 25.5.1962, in favour of Smt.
Hashmatunnisa Begum, his first wife, and two other deeds dated 17.8.1962 and 26.4.1962, in favour of Smt.
Fareed Jehan Begum his second wife, gifted in their favour certain lands and buildings of a total value of Rs. 1,96,950.
The gifts were chargeable to gift tax and were accordingly assessed to gift tax in the assessment year 1963 64.
On behalf of the estate of the Nawab who later dies on 16.12.1968 it was claimed in the proceedings for assessment to wealth for the Assessment Year 1967 68.
That though the gifts were otherwise includible as belonging to the Nawab under sec.
4(I)(a)(i), as the trans fers made to the spouses otherwise than for adequate consid eration, however, as the gifts were chargeable to gifttax, the proviso to sec.
4(I)(a) was attracted and that the assets so transferred were not includible in the net wealth of the Nawab "for any assessment year commencing after the 3 1st day of March 1964".
The Wealth tax Officer rejected this claim.
The Appellate Asst.
Commissioner, in the assessee 's appeal, confirmed the assessment.
In the assessee 's further appeal before the Appellate Tribunal, the Tribunal, on a particular construction of the proviso, allowed the appeal and held that the assets transferred, which had attracted gift tax, were not includible in the net wealth of the Nawab for the assessment year 1964 65 onwards.
At the instance of the Revenue, the following question of law was referred to the High Court for its opinion: "Whether, on the facts and in the circum stances of the case, the assessee was entitled to exclude, under the proviso to section 4(1)(a) of , the value of the assets gifted to his wives in the Wealth tax assessment for the assessment year 1967 68?" The High Court agreed with the construction placed on the proviso by the Tribunal and answered the question in the affirmative and against the revenue.
The revenue has come up in appeal by special leave.
In CA 1226 and 1227 of 1975 the assessment years concerned are 1964 65 and 1965 66 corresponding to the valuation dates 161 31.3.
1964 and 31.3.1965.
On 7.10.1959 Smt.
Sarladevi Birla, the assessee, made a gift of Rs.l,O0,011, to her minor daughter Smt.
Manju Rani Birla.
The assets so transferred were included in the assessee 's wealth for the two assess ment years 1964 65 and 1965 66 under sec.
4(I)(a)(ii) of the .
The claim of the assessee that the proviso to sec.
4(I)(a) operated to exclude the asset from the net wealth of the assessee as the transfer was chargeable to gift tax was not accepted by the Wealth tax Officer, who completed the assessment including the transferred asset in the assessee 's net wealth.
The assessee 's appeal before the Appellate Asst.
Commissioner was unsuccessful.
However, the Appellate Tribunal accepted the contention of the assessee and by its appellate order dated 11.5.1970 allowed the assessee 's appeal holding that on a true con struction of the proviso, so long as the gift was chargeable to or exempt under sec.
5 from gift tax to that extent sec.
4(I)(a) ceased to have operation and the statutory fiction embodied in it was not attracted and that as at the relevant time the gift was chargeable to gift tax.
The exemption was to operate from the assessment year commencing after 31.3.1964.
At the instance of the revenue, the Appellate Tribunal referred the following question of law for the opinion of the High court: "Whether on the facts and in the circumstances of the case and on a proper interpretation of section 4(1)(a) of the as amended by the Wealth tax (Amendment) Act, (Act 46) of 1964, the sum of Rs. 1,00,011 gifted by the assessee to her minor daughter could be included in computing her net wealth"? The High Court of Calcutta in reversal of the view taken by the Tribunal answered the question in the affirmative and against the assessee.
The assessee has come up in appeal by certificate.
We have heard Shri B.B. Ahuja, learned counsel for the revenue and Shri Harish Salve and Shri Subba Rao, for the assessees.
The controversy generated on the point leading to the divergence of the judicial opinion on the point is at tributable to the somewhat inelegant and inappropriate phraseology of the provision.
To appreciate the relevant contentions it is necessary to notice the words of the proviso: 162 "Provided that where the transfer of such assets or any part thereof is either charge able to gift tax under the (18 of 1958), or is not chargeable under Section 5 of that Act, for any assessment year commencing after the 3 1st day of March, 1964, (but before the 1st day of April, 1972), the value of such assets or part thereof, as the case may be, shall not be included in comput ing the net wealth of the individual;" The words "but before the 1st day April 1972" was later introduced by the Financee (No. with effect from 1.4.
This was introduced by the amending Act of 1964, but given effect to from 1.4.1965 by the notification.
Under the various clauses of Sec.
4(1)(a) certain transfers of assets made by an individual in favour or for the benefit of the spouse or a minor child, not being a married daughter, of such individual, are required to be ignored and the trans ferred assets included in the wealth of the assessee, as belonging to him.
Section 4(1)(a) aims at foiling an indi vidual 's attempt to avoid or reducing the incidence to wealth tax by transferring the assets to or for the benefit of the spouse or the minor child of the individual by re quiring the inclusion of such transferred assets in comput ing the net wealth of the individual.
However, the proviso makes the provision inoperative where and in so far as the transferred asset is either chargeable to gift tax under or is exempt under sec.
5 of the .
The controversy surrounds the question whether the expression "for any assessment year commencing after 31st day of March 1964", occurring in the proviso should be read with the first part and as referring to the eligibility of the gifts for exemption with reference to the point of time at which the gifts were made or whether that expression does not condition the identity of the eligible gifts but only signifies the starting point for the exemp tion from wealth tax.
Assessees contend that the date of the gift is immaterial and as long as the transfer is chargeable to gifttax or is exempt under sec.
5, whatever may be the year in which the gift was made, the exemption from gift tax must commences "for any assessment year commencing after the 31st day of March 1964".
If the expression "for any assessment year commencing after the 31st day of March, 1964" is intended to qualify and determine the gifts, the subject matters of which are eligible for exemption, then the literal construction, would be that the gifts made earlier to that period, 163 though chargeable to gift tax would not attract the benefit of exemption.
But the assessees say that the clause must be read as part of the second part of the proviso which contem plates the exemption.
So read, the clause would qualify the commencement of the benefit of the exemption and not the point of time when the Gift is required to be made to be eligible for the exemption from wealth tax.
The learned Judges of the High Court of Andhra Pradesh in the course of the Judgment under appeal in CA 1118 of 1975 observed: " . .
The words 'for any assess ment year commencing after the 31st day of March, 1964 ' are referrable to the assessment to be made under the .
They render the provisions of section 4(1)(a) inoperative irrespective of the fact whether the transferred asset was chargeable to gift tax or not chargeable to gift tax.
The proviso specifies the period of exemption upto 31st March, 1964.
Irrespective of the year of the gifts when the assets were gifted, they will not be included in the computation of the net wealth of the individual till the assessment year 1964 65.
We are, therefore, of the view that the intention of Parliament was to exempt transfers made under clauses (i) to (iv) of section 4(1)(a) from being computed in the net wealth of the individual upto the wealth tax assessment year commencing after 3 1st day of March, 1964 . . " 7.
Sri Ahuja submitted that the words "for any assess ment year commencing after the 31st day of 1964" could, in the context, only refer to the gift and gift tax assess ments.
The proviso, he said, which was introduced by way of an amendment, was brought into force with effect from 1.4.1965 by a notification which specified the commencement of the operation of the proviso and that, quite obviously, it would be redundant to read the clause under consideration as again referring to the commencement of the operation of the proviso.
While the clause under consideration related to and qualified the Gift tax assessments, the commencement of the exemption of the subjectmatter of the Gifts for purposes of wealth tax was controlled and determined by the commence ment of the operation of the proviso, which, by notification was specified as 1.4.1965.
Sri Ahuja submitted that the proviso was intended to effectuate the legislative policy that in respect of certain gifts made in favour of a spouse or a minor child, during a specified period, the assets transferred under the Gifts would have the benefit of exemption from the 164 operation of Section 4(1)(a).
This was because the legisla ture took into consideration that from 1.4.1964 onwards there was a sharp ascent in the rates of gift tax and that the assets which constituted the subject matter of such gifts attracting such high rates of gift tax should not also be included in the net wealth of the donor for wealth tax purposes which would otherwise be the consequence under Section 4(1)(a) of the Act.
As the proviso originally stood, gifts chargeable to gift tax for any assessment year com mencing after 3 1st March, 1964, attracted the benefit of exemption.
The outer limit for the period of such eligible gifts was later fixed by the amendment made by Finance (No. , w.e.f. 1.4.1972 which introduced the words 'but before the 1st day of April, 1972 '.
Accordingly, Sri Ahuja contends that only that class of gifts that were chargeable to gift tax for any assessment year 1964 65 or thereafter (but subject to the limit fixed by the 1971 amendment) which would otherwise fall under Section 4(1)(a) were eligible for the benefit of the exemption.
According to Sri Ahuja the plain words of the proviso leave no room for doubt and where the enactment is clear and admits of only one meaning and does not admit of two or more meanings, it would be the plain meaning that should be given effect to.
When the meaning is plain, says counsel, no resort could be had to any rules of construction which would denude the provision of its plain and ordinary meaning.
Sri Harish Salve presenting the case of the assessees sought to point out the intrinsic anomaly of the cases between a gift made, say, on 3 1st of March 1963 and one made the very next day i.e. 1st of April, 1963 on the other, to show that while in the first case even for the assessment year 1965 66 the transferred asset is includible in the wealth of the assessee, in the latter case it is exempt for all time to come thereafter.
Learned counsel pointed out that the criterion of higher rates of Gift tax as a justifi cation supporting the classification also fails in view of the fact that under the proviso it is not only the gifts chargeable to tax but also those exempt under sec.
5 that attract the exemption with the result that between two gifts which are both exempt under sec.
5 of the , one is for ever exempt from wealth tax in the hands of the donor while the other is includible in his wealth for purposes of wealth tax depending solely on the criterion of the date of gift whether the gift was made prior to 31st March 1963 or thereafter.
Here the criterion of classification of gifts on the basis of the exigibility for higher rates of tax, says Sri Salve, collapses and the cut off date determining the difference in consequences in the two different class of cases become wholly arbitrary.
Shri Salve submitted that a construction which promotes its constitutionality has to be pre 165 ferred to the one which, if accepted, would expose the provision to the vice of discrimination and unconstitution ality.
The essential basis of Sri Salve 's suggested construc tion rests on the requirement that the words "for any as sessment year commencing after the 31st day of March 1964" should not be read as part of the first part of the proviso relating to gift tax assessments but as part of the second part denoting the commencement of the operation of exemption from wealth tax.
This, we are afraid, will imboggle itself in the quagmire of irreconcilable constructional contradictions.
The amendment introducing the proviso was brought about by an amending Act of 1964; but the date of the commencement of its operation was left to be fixed by a Notification.
The effect of the Notification issued bringing the proviso into effect from 1.4.1965 would be wholly ignored by the con struction suggested by Sri Salve.
Secondly, the introduction of the words "but before the 1st day of April, 1972" would, if the construction suggested by Sri Salve is accepted, operate to take away the benefit of the exemption after 1.4.1972 and the exemption confined only to the assessment years between 1964 65 and 1972 73.
On a reading of the plain words of the proviso, the clause "for any assessment year commencing after 31st day of March, 1964" can only be read as relating to gift tax assessments and not to the wealth tax assessments.
But, Sri Salve contends that this literal construc tion would expose the provision to an attack on its consti tutionality on the ground that it brings about a discrimina tion between two classes of assessees on nothing more than an arbitrary cut off date.
The cases of gifts exempted under sec.
5, he says, illustrate the point as according to Sri Salve there could be no rational basis for discriminating between a gift exempted under sec.
5 made on 31.3.1963 on the one hand and 1.4.1963 on the other.
One of the pillars of statutory interpretation viz., the literalrule, demands that if the meaning of the Statuto ry Interpretation is plain and the Courts must apply regard less of the result.
The very concept of interpretation connotes the introduction of elements which are necessarily extrinsic to the words in the statue.
Though the words "interpretation" and "construction" are used interchangeably, the idea is somewhat different.
Dr. Patrick Devlin says: 166 " . .
A better word, I think, would be construction, because construction, although one often used it alternatively with interpre tation, suggests that something more is being got out in the elucidation of the subject matter than can be got by strict interpreta tion of the words used.
In the very full sense of the word 'construction ' the judges have set themselves in this branch of the law to try to frame the law as they would like to have it . . ".
[See: Samples of Law Making Oxford University Press p.70 71] "A statute" says Max Radin "is neither a literary text nor a divine revelation.
Its effect is, therefore, neither an expression laid on immutable emotional over tones nor a permanent creation of infallible wisdom.
It is a statement of situation or rather a group of possible events within a situation and as such it is essentially ambiguous.
" [See "Statutory Interpretation" 43 Har.
L.R. 863 (868)].
The observations of Lord Russel of Killowen in Attorney General vs Carlton Bank, though an early pronouncement, is refreshing from its broad common sense: "I see no reason why special canons of construction should be applied to any Act of Parliament, and I know of no authority for saying that a Taxing Act is to be construed differently from any other Act.
The duty of the Court is, in my opinion, in all cases the same, whether the Act to be construed relates to taxation or to any other subject, namely to give effect to the intention of the Legisla ture, as that intention is to be gathered from the language employed, having regard to the context in connection with which it is em ployed . .
Courts have to give effect to what the Legislature has said.
" The rule of construction that if the statutory provision is susceptible or admits of two reasonably possible views then the one which would promote its constitutionality should be preferred on the ground that the legislature is presumed not to have intended an excess of its own jurisdic tion, is subject to the further rule that it applies only where two views are reasonably possible on the statutory language.
If the words of the statute, on a proper construc tion, can be read only in a particular way, then it cannot be read in another way by a court of construction anxious to avoid its unconstitutionality.
In a case, as here, 167 a reference arises under 'Act ', the question of the consti tutionality of the 'Act ' cannot be examined and pronounced upon.
In State of Punjab vs Prem Sukhdas, ; this Court made the point clear: " . .
This amounts to nothing short of legislation.
We think that the view is an impossible one.
The principle that, where a provision is capable of one of two interpretations, the interpretation which validates rather than one which may invalidate a provision applies only where two views are possible.
It cannot be pushed so far as to alter the meanings of the clear words used in an enactment and to, in effect, repeal statu tory provisions by making them useless without holding them to be void." [p. 410] (Emphasis Supplied) Even in regard to constitutionality of the classifica tion, it is not possible to rule out arguments as to the validity of classification as wholly unstateable.
In a taxing measure the legislature enjoys a wider latitude and its dispensations are based on an interaction of diverse economic, social, and policy considerations.
Further, if the proviso is bad for discrimination, it would follow that the converse situation brought about by the later amendment, a discrimination as between gifts made as between the 31st of March 1972 and on 1st April, 1972 might also become bad.
It is true that we are required to notice the provision as it stood at the relevant time.
We, however, should not be understood to have pronounced on the question of constitutionality.
That is the task of the Court in judicial review but the rule of preference of a particular construction amongst the alternatives, in order to avoid unconstitutionality is unavailable here.
Accordingly, while Civil Appeal No. 1226 and 1227 of 1975 preferred by the assessee are dismissed, CA No. 1118 of 1975 of the revenue is allowed and in reversal of the order dated 18.9.1974 of the Andhra Pradesh High Court the ques tion referred is answered in the negative and in favour of the revenue.
In the circumstances, the parties are left to bear and pay their own costs in these appeals.
N.P.V. C.A. Nos.
1226 & 1227/75 are dismissed C.A. No. 1118/75 is allowed.

Output:
In Civil Appeal No. 1118 of 1975 the respondent asses see 's husband gifted certain lands and buildings to his two spouses by three gift deeds dated 26.4.1962, 26.5.1962 and 17.8.1962.
The gifts were chargeable to gift tax and were accordingly assessed to gift tax In the assessment year 1963 64.
In the proceedings for assessment to wealth for the assessment year 1967 68, it was claimed on behalf of the estate of the assessee 's husband, who had later died on 16.12.1968 that as the gifts were chargeable to gift tax, the proviso to section 4(1)(a) was attracted and the assets so transferred were not includible in the net wealth of the deceased for any assessment year commencing after the 31st day of March, 1964.
The Wealth Tax Officer rejected this claim.
On appeal, the Appellate Assistant Commissioner confirmed the assessment.
Allowing the assessee 's further appeal, the Appellate Tribunal, on a particular construction of the proviso, held that the assets transferred, which had attracted gift tax, were not includible in the net wealth of the deceased for the assessment year 1964 65 onwards.
On a reference made at the Instant of the Revenue, the High Court agreed with the construction placed on the provi so by the Tribunal.
The Revenue filed an appeal, by Special leave In this Court.
156 The appellant assessee in Civil Appeal Nos.
1226 and 1227 of 1975, made a gift of certain amount to her minor daughter on 7.10.1959.
The assets so transferred were in cluded in the assessee 's wealth for the two assessment years 1964 65 and 1965 66 under section 4(1)(a)(ii) of the Wealth tax Act.
The claim of the assessee that the proviso to section 4(I)(a) operated to exclude the asset from the net wealth of the assessee as the transfer was chargeable to gift tax was not accepted by the Wealth tax Officer.
The Appellate As sistant Commissioner rejected the assessee 's appeal.
However, the Appellate Tribunal, accepting the conten tion of the assessee, allowed the assessee 's appeal and held that, on a true construction of the proviso, so long as the gift was chargeable to or exempt under section 5 from gift tax, to that extent section 4(1)(a) ceased to have operation and the statutory fiction embodied in it was not attracted and that since, the gift was chargeable to gift tax, at the relevant time, the exemption was to operate from the assessment year commencing after 31 3 1964.
The High Court, on a reference made at the instance of the Revenue reversed the Tribunal 's view.
Hence, the asses see filed the appeal, by certificate, in this Court.
In the appeals before this Court, it was submitted on behalf of the Revenue that the words "for any assessment year commencing after the 31st day of March, 1964" could, in the context only refer to the gift and gift tax assessments, that only that class of gifts which were chargeable to gift tax for any assessment year 1964 65 or thereafter (hut subject to the time limit fixed by the 1971 amendment) which would otherwise fail under section 4(1)(a) were eligible for the benefit of exemption, and that where the enactment was clear and admitted of only one meaning, and did not admit of two or more meanings, it would be the plain meaning that should be given effect to and no resort could be had to any rules of construction which would denude the provision of its plain and ordinary meaning.
On behalf of the assessees, it was contended that the date of the ' gift was immaterial and as long as the transfer was chargeable to gift tax or was exempted under section 5 what ever may be the year in which the gift was made, the exemp tion from a gift tax must commence for any assessment year commencing after the 31st day of March 1964", that these words should not be read as part of the first part of the proviso relating to gift tax assessments but as part of the second part denoting the commencement of the operation from Wealth tax, and that a construction which promoted its constitutionality has to be preferred to the 157 one which, if accepted, would expose the proviso to the vice of discrimination and unconstitutionality.
Allowing the appeal of the Revenue and dismissing the appeal of the assessee.
HELD: 1.
On a reading of the plain words of the proviso to section 4(1)(a) of the , the clause "for any assessment year commencing after 31st day of March, 1964" can only be read as relating to gift tax assesssments and not to the wealth tax assessments.
[165E] The amendment introducing the proviso was brought about by an amending Act of 1964, but the date of the commencement of its operation was left to be fixed by a Notification.
If the construction that the clause should be read as part of the second part, denoting the commencement of the operation of exemption from Wealth tax is accepted, effect of the Notification issued bringing the proviso into effect from 1.4.1965 would be wholly ignored, and the introduction of the words "but before the 1st day of April, 1972", by a later amendment would operate to take away the benefit of the exemption after 1.4.1972 and the exemption confined only to the assessment years between 1964 65 and 1972 73.
[165C D] Therefore, the gifts in question though chargeable to gift tax would not attract the benefit of exemption and would be liable to be included in the net wealth of the assessees.
[163A] T. Saraswathi Achi vs C.I.T., ; C.W.T. vs Seth Nand Lal Ganeriwala, ; M.G. Kol lankulam vs C.I.T., ITR 160 (Kerala), Malti Harseey vs C.W.T., and C.W.T. vs Rasesh N. Mafatlal, approved.
2.1 One of the pillars of statutory interpretation viz., the literalrule, demands that if the meaning of the Statuto ry Interpretation is plain, the Courts must apply regardless of the result.
[165G] 2.2 The very concept of interpretation connotes the introduction of elements which are necessarily extrinsic to the words in the statute.
Though the words "Interpretation" and "construction" are used interchangeably, the idea is somewhat different.
[165H] 2.3 The rule of construction that if the statutory provision is susceptible or admits of two reasonably possi ble views, then the one 158 which would promote its constitutionality should be pre ferred on the ground that the legislature is presumed not to have intended an excess of its own jurisdiction, is subject to the further rule that it applies only where two views are reasonably possible on the statutory language.
If the words of the statute, on a proper construction, can be read only in a particular way, then it cannot be read in another way by a court of construction anxious to avoid its unconstitu tionality.
[166G H] 2.4 In a case, as here, where a reference arises under 'Act ', the question of the constitutionality of the Act cannot be examined and pronounced upon by this Court.
That is the task of the Court in judicial review.
However, the rule of preference of a particular construction amongst the alternatives, in order to avoid unconstitutionality, is unavailable in the instant case.
[166H; 167A, F] 3.
In a taxing measure, the legislature enjoys a wider latitude and its dispensations are based on an interaction of diverse economic, social and policy considerations.
Further, if the proviso is bad for discrimination, it would follow that the converse situation brought about by the later amendment, a discrimination as between gifts made as between the 31st of March, 1972 and on 1st April, 1972 might also become bad.
This Court is required to notice the provi sion as it stood at the relevant time.
[167D E] State of Punjab vs Prem Sukhdas, ; and Attorney General vs Carlton Bank, , re ferred to.
Dr. Patrick Devlin: Samples of Law Making Oxford Uni versity Press, p. 70 71 and Max Radin "Statutory Interpreta tion" 43 Hat.
L.R. 863 (868), referred to.