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Appeal No. 81 of 1954.
Appeal from the judgment and order dated the 10th March 1953 of the Bombay High Court in Income tax Reference No. 35 of 1952.
B. J. Kolah and I. N. Shroff for the appellant.
G. N. Joshi, Porus A. Mehta and R. H. Dhebar for the respondent.
May 10.
The following Judgments were delivered.
BHAGWATI J. Two questions were referred by the Income tax Appellate Tribunal to the High Court of Bombay under section 66(1) of the Indian Income tax Act.
(1) Whether there is any material to justify the assessment of Rs. 30,000 (Rupees thirty thousand) from out of the sum of Rs. 61,000 (Rupees sixtyone thousand) (for Income tax and Excess Profits Tax and Business Profits Tax purposes) representing the value of high denomination notes which were encashed on the eighteenth day of January one thousand nine hundred and forty six, and (2) Whether in any event by reason of the orders of the Revenue Authorities not having found *at the alleged item was from alleged undisclosed business profits the assessment of Rs. 30,000 (Rupees thirty thousand) is in law justified for Excess Profits Tax and Business Profits Tax purposes? The High Court answered the first question in the affirmative but refused to answer the second question, being of the opinion that even though it had asked the Tribunal to refer that question under section 66 (2) of the Act, it had no jurisdiction to do so inasmuch as the appellants had not asked the Tribunal to refer 629 the second question and, therefore, no question arose of the Tribunal refusing to raise that question or to submit it for the decision of the High Court.
The appellants area partnership firm doing business in Mill Stores at Ahmedabad.
Their head office is in Ahmedabad and their branch office is in Bombay.
The Governor General on 12th January 1946 promulgated the High Denomination Bank Notes (Demonetisation) Ordinance, 1946 and High Denomination Bank Notes ceased to be legal tender on the expiry of 12th day of January 1946.
Pursuant to clause 6 of the Ordinance the appellants on 18th January 1946 encashed high denomination notes of Rs. 1,000 each of the face value of Rs. 6 1,000.
This was done in the calendar year 1946 being the account year corresponding with assessment year 1947 48.
During the assessment proceedings for the year 1947 48 the Income tax Officer called upon the appellant to prove from whom and when the said high denomination notes of Rs. 61,000 were received by the appellants and also the bona fides of the previous owners thereof.
After examining the entries in the books of account of the appellants and the position of the Cash Balances on various dates from 20th December 1945 to 18th January 1946 and the nature and extent of the receipts and payments during the relevant period, the Income tax Officer came to the conclusion that in order to sustain the contention of the appellants he would have to presume that there were 18 high denomination notes of Rs. 1,000 each in the Cash Balance on 1st January 1946 and that all cash receipts after 1st January 1946 and before 13th January 1946 were received in currency notes of Rs. 1,000 each, a presumption which he found impossible to make in the absence of any evidence.
He, therefore, added the sum of Rs. 61,000 to the assessable income of the appellants from undisclosed sources.
On appeal to the Appellate Assistant Commissioner the appellants produced before him affidavits of three persons to show that the appellants had received Rs. 20,000 in 1,000 rupees currency notes on 28th 630 December 1945, Rs. 15,000 in 1,000 rupees currency notes on 6th January 1946 and Rs. 8,500 in 1,000 rupees currency notes (making Rs. 8,000) on 8th January 1946, thus aggregating to Rs. 43,500 during the relevant period.
The Appellate, Assistant Commissioner did not accept the statements contained in the said affidavits and dismissed the appeal and confirmed the order of the Income tax Officer.
An appeal was taken by the appellants before the Income tax Appellate Tribunal.
The Tribunal after taking into consideration all the materials which bad been placed before the Appellate Assistant Commissioner, including the said affidavits, was of the opinion that if it was to accept the appellants ' contention, it would mean that practically every payment above Rs. 1,000 was received by the appellants in high denomination notes, which was almost impossible.
The Tribunal could not say that the appellants bad no high denomination notes with them.
It accepted the books of account of the appellants but thought that the cash balance on 18th January 1946 could not have sixtyone high denomination notes.
It came to the conclusion that the appellants appeared to have put in high denomination notes in the cash balance and taken the other notes away.
It accepted the appellants ' explanation only in regard to 31 notes and directed that the appellants ' assessment for the year under reference be reduced by that amount and dismissed the rest of the appeal.
The appellants applied to the Tribunal for stating a case and referring the first question of law to the High Court for its opinion under section 66(1) of the Act.
The Tribunal rejected the said application holding that no question of law arose from its order.
The appellants thereupon applied to the High Court under section 66(2) of the Act for an order directing the Tribunal to state a case and refer the questions set out in the application.
The High Court directed the Tribunal to state a case and refer the two questions of law set out hereinabove to it for its decision under section 66(2) of the Act.
In stating the case and referring the said questions of law to the High 631 Court, the Tribunal pointed out that the second question was not urged before the Tribunal at any stage and hence it was not dealt with by it in its original order.
The reference was heard by the High Court and the High Court answered the first referred question in the affirmative, but did not answer the second referred question.
The High Court held that there were materials before the Tribunal to hold that the sum of Rs. 30,000 represented the income of the appellants from undisclosed sources and that the finding of the Tribunal was a finding of fact based on materials before it and even if it was an inference drawn by the Tribunal, the inference was based on the facts and materials before the Tribunal.
The High Court observed that it was impossible to say that the inference drawn by the Tribunal from the circumstances was an unreasonable inference or an arbitrary and capricious inference or an inference which no judicial tribunal could ever draw.
It, therefore, answered the first referred question in the affirmative.
As regards the second referred question, the High Court held that question was not raised by the appellants in their application for reference under section 66(1) of the Act and, therefore, it bad no jurisdiction to ask the Tribunal to state a case on a particular question of law, where the appellants themselves had never asked the Tribunal to refer such a question to the High Court and that even though it had directed the Tribunal under section 66(2) to refer the said question, as it had no jurisdiction to ask the Tribunal to refer the said question, it was not open to it to answer the second question which had been raised by the Tribunal at its instance and refused to answer it.
On a petition made by the appellants for leave to appeal to this court, the High Court granted a certificate that this was a fit case for appeal to this court and hence this appeal.
It may be mentioned at the outset that the assessment of the appellants by the Income tax Officer was under section 23(3) and section 26 A of the Act.
The 632 books of account of the appellants were accepted by the Income tax Officer and the only scrutiny made by the Income tax Officer was whether at the relevant date, i.e. on 12th January 1946, the appellants had in their cash 61 notes of high denomination of Rs. 1,000 each.
The cash book entries from 20th December 1945 up to 18th January 1946 were put in before the Income tax Officer and they showed that on 28th December 1945 Rs. 20,000 were received from the Anand Textiles, and there was an opening balance of Rs. 18,395 on 2nd January 1946.
Rs. 15,000 were received by the appellants on 7th January 1946 from the Sushico Textiles and Rs. 8,500 were received by them on 8th January 1946 from Manihen, widow of Shah Maneklal Nihalchand.
Various other sums were also received by the appellants from 2nd January 1946 up to and inclusive of 1 1 th January 1946, which were either multiples of Rs. 1,000 or were over Rs. 1,000 and were thus capable of having been paid to the appellants in high denomination notes of Rs. 1,000.
There was a cash balance of Rs. 69,891 2 6 with the appellants on 12th January 1946, when the High Denomination Bank Notes (Demonetisation) Ordinance 1946 was promulgated and it was the case of the appellants that they had then in their custody and possession 61 high denomination notes of Rs. 13000, which they encashed through the Eastern Bank, on 18th January 1946.
The appellants further sought to support their contention by procuring before the Appellate Assistant Commissioner the affidavits of Kuthpady Shyama Shetty, General Manager of Messrs Shree Anand Textiles, in regard to payment to the appellant is of a sum of Rs. 20,000 in Rs. 1,000 currency notes on 28th December 1945, Govindprasad Ramjivan Nivetia, proprietor of Messrs Shusiko Textiles, in regard to payment to the appellants of a sum of Rs. 15,000 in Rs. 1,000 currency notes on 6th January 1946 and Bai Maniben, widow of Shah Maneklal Nihalchand, in regard to payment to the appellants of a sum of Rs. 8,500 (Rs. 8,000 thereout being in Rs. 1,000 currency notes) on 8th January 1946.
The appellants were not in a position to give further 633 particulars of Rs. 1,000 currency notes received by them during the relevant period, as they were not in the habit of noting these particulars in their cash book and therefore relied upon the position as it could be spelt out of the entries in their cash book coupled with these affidavits in order to show that on 12th January 1946 they had in their cash balance of Rs. 69,891 2 6, the 61 high denomination currency notes of Rs. 1,000 each, which they encashed on 18th January 1946 through the Eastern Bank.
Both the Income tax Officer and the Appellate Assistant Commissioner discounted this suggestion of the appellants by holding that it was impossible that the appellants had on hand on 12th January 1946, the 61 high denomination currency notes of Rs. 1,000 each, included in their cash balance of Rs. 69,891 2 6.
The calculations.
, which they made involved taking into account all payments received by the appellants from and after 2nd January 1946, which were either multiples of Rs. 1,000 or were over Rs. 1,000.
There was a cash balance of Rs. 18,395 6 6 on band on 2nd January 1946, which could have accounted for 18 such notes.
The appellants received thereafter as shown in their cash book several sums of monies aggregating to over Rs. 45,000 in multiples of Rs. 1,000 or sums over Rs. 1,000, which could account for 45 other notes of that high denomination, thus making up 63 currency notes of the high denomination of Rs. 1,000 and these 61 currency notes of Rs. 1,000 each, which the appellants encashed on 18th January 1946 could as well have been in their custody on 12th January 1946.
This was, however, considered impossible by both the Income tax Officer and the Appellate Assistant Commissioner as they could not consider it within the bounds of possibility that each and every .payment received by the appellants after 2nd January 1946 in multiples of Rs. 1,000 or over Rs. 1,000 was received by the appellants in high denomination notes of Rs. 1,000 each. ' It was by reason of their visualisation of such an impossibility that they negatived the appellants ' contention.
It has to be noted, however, that beyond there 82 634 calculations of figures, no further scrutiny was made by the Income tax Officer or the Appellate Assistant Commissioner of the entries in the cash book of the appellants.
The cash book of the appellants was raccepted and the entries therein were not challenged.
No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party.
The appellants took it that the affidavits of these parties were enough and neither the Appellate Assistant Commissioner, nor the Incometax Officer, who was present at the hearing of the appeal before the Appellate Assistant Commissioner, considered it necessary to call for them in order to cross examine them with reference to the statements made by them in their a affidavits.
Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits.
This being the position, the state of affairs, as it ob tained on 12th January 1946, had got to be appreciated, having, regard to those entries in the cash books and the affidavits filed before the Appellate Assistant Commissioner, taking them at their face value.
The entries in the cash books disclosed that, taking the number of high denomination notes at 18 on 2nd January 1946, there came in the custody or possession of the appellants after 2nd January 1946 and up to 12th January 1946, 49 further notes of that high denomination, making 67 such notes in the aggregate, out of which 61 such notes could be encashed by the appellants on 18th January 1946 through the Eastern Bank.
A mere calculation of the nature indulged in by the Income tax Officer or the Appellate Assistant Commissioner was not enough, without any further scrutiny, to dislodge the position taken up by the appellants, supported as it was, by the entries in the cash book and the affidavits put in by the appellants before the Appellate Assistant Commissioner.
The Tribunal also fell into the same error.
It could 635 not negative the possibility of the appellant being in possession of a substantial number of these high deno mination currency notes.
It, however, considered that it was impossible for the appellants to have bad 61 such notes in the cash balance in their hands on 12th January 1946 and then it applied a rule of the thumb treating 31 out of such 61 notes as within the bounds of possibility, excluding 30 such notes as not covered by the explanation of the appellants.
This was pure surmise and had no basis in the evidence, which was on the record of the proceedings.
The High Court treated this finding of the Tribunal as a mere finding of fact.
The position in regard to all such findings of fact, as to whether they can be questioned in appeal, is thus laid down by the House of Lords in Cameron vs Prendergast (Inspector of Taxes) (1): "Inferences from facts stated by the Commissioners are matters of law and can be questioned on appeal.
The same remark is true as to the construction of documents.
If the Commissioners state the evidence and hold upon that evidence that certain results follow, it is open to the Court to differ from such a holding".
To the same effect are the observations of the House of Lords in Bomford vs Osborne (H. M. Inspector of Taxes) (2): "No doubt there are many cases in which Commissioners, having had proved or admitted before them a series of facts, may deduce therefrom further conclusions which are themselves conclusions of pure fact.
But in such cases the determination in point of law is that the facts proved or admitted provide evidence to support the Commissioners ' conclusions".
The latest pronouncement of the House of Lords on this question is to be found in Edwards (Inspector of Taxes) vs Bairstow and Another(3).
Viscount Simonds observed at page 586: "For it is universally conceded that, though it is (1) [1940]8I.T.R.(Suppl.)75,81.
(2) [1942] 10 I.T.R. (Suppl.) 27, 34.
(3) 636 a pure finding of fact, it may be set aside on grounds which have been stated in various ways but are, I think, fairly summarised by saying that the court should take that course if it appears that the Commissioners have acted without any evidence or upon a view of the facts which could not reasonably be entertained".
and Lord Radcliffe expressed himself as under at page 592: "If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously erroneous in point of law.
But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal.
In those circumstances, too, the court must intervene".
It follows, therefore, that facts proved or admitted may provide evidence to support further conclusions to be deduced from them, which conclusions may themselves be conclusions of fact and such inferences from facts proved or admitted could be matters of law.
The court would be entitled to intervene if it appears that the fact finding authority has acted without any evidence or upon a view of the facts, which could not reasonably be entertained or the facts found are such that no person acting judicially and properly instructed as to the relevant law would have come to the determination in question.
The High Court recognised this position in effect but went wrong in applying the true principles of interference with such findings of fact to the present case.
The attempt which was made by the High Court to probe into the mind of the Tribunal by trying to discard the affidavit of Govindprasad Ramjivan Nivetia in regard to the payment of Rs. 15,000 to the appellants in 15 currency notes of Rs. 1,000 each on 6th January 1946 and thus reducing the aggre gate sum of Rs. 43,500 to Rs. 28,500 and justifying the figure of Rs. 31,000 arrived at by the Tribunal was really far fetched and contrary to the terms of 637 the tribunal ' s order itself,the Tribunal not having given any inkling, whatever, of what was at the back of its mind when it fixed upon the figure Rs. 31,000.
Really speaking the Tribunal had not indicated upon what material it held that Rs. 30,000 should be treated as secret profit or profits from undisclosed sources and the order passed by it was bad.
The appellants had furnished a reasonable explanation for the possession of the high denomination notes of the face value of Rs. 61,000 and there was no justification for having accepted it in part and discarded it in relation to a sum of Rs. 30,000.
The case was analogous to the one before the Patna High Court in Chunilal Ticamchand Coal Co. Ltd. vs Commissioner of Income tax, Bihar and Orissa(1) and should have been similarly decided in favour of the appellants.
For the reasons indicated above, we are of the opinion that the High Court was in error in answering the first referred question in the affirmative.
It ought to have answered it in the negative and held that there were no materials to justify the assessment of Rs. 30,000 from out of the sum of Rs. 61,000, for Income tax and Excess Profits Tax and Business Profit Tax purposes representing the value of the high denomination notes which were encashed on 18th January 1946.
In view of the above it is not necessary for us to go into the question whether the High Court ought to have answered the second referred question also.
The answer to the first referred question being in the ' negative, the very basis for Excess Profits Tax and Business Profits Tax disappears and the second referred question becomes purely academical.
The result, therefore, is that the appeal is allowed and the first referred question is answered in the negative.
The appellants will have their costs here as well as in the High Court.
VIMNKATARAMA AYYAR J.
I agree to the order just proposed; but I prefer to rest my decision on the (1) 638 ground that the finding of the Tribunal that high denomination notes of the value of Rs. 30,000 represented the concealed* profits of the appellant is not supported by any evidence, and is, in consequence, erroneous in point of law and liable to be set aside.
The evidence on record has been exhaustively reviewed in the judgment just delivered, and there is no need to traverse the same ground again.
To put the matter in anut shell, the accounts of the appellant have been accepted by the Tribunal as genuine, and it is impossible to say, having regard to the cash balance as shown therein, that the notes in question could not have been included therein.
The Tribunal observes that it is unlikely that so many high denomination notes would have been held as part of the cash on hand for such a large number of days.
That, no doubt, is highly suspicious; but the decision of the Tribunal must rest not on suspicion but on legal testimony.
For the respondent, Mr. Joshi con.
tended that the cash balance shown in the books could not be accepted as true, because the appellant had ample time to rewrite the accounts, as the Ordinance was issued on 12th January 1946 and the year of account of the assessee was the Calendar year.
Whether the accounts are genuine or not is a pure question of fact, and a finding on a question of fact is as much binding on the Revenue as on the subject.

Output:
The appellants, a partnership firm assessed under sections 23(3) and 26 A of the Income tax Act, were called upon by the Income tax Officer during the assessment year 1947 48 to explain how and when they came to possess 61 thonsand rupee currency notes which they had encashed on the 18th January, 1946, after the promulgation of the High Denomination Bank Notes (Demonetisation) Ordinance of 1946, under which such notes ceased to be legal tender on the expiry of the 12th of January, 1946.
The assessees produced their cash book entries from the 20th December, 1946, to the 18th January, 1946, which were accepted as correct by the Income tax Officer, who, however, made no further scrutiny of the accounts, and,the entries showed that on the 12th of January, 1946, the cash balance in hand was Rs. 69,891 2 6.
The case of the appellants was that the said notes were a part of the cash balance and in further support of their case they filed before the Appellate Assistant Commissioner three affidavits by persons actually making the payments, in respect of certain entries in the cash book to prove that Rs. 20,000 on the 28th December, 1946, Rs. 15,000 on the 6th of January, 1946, and Rs. 8,000, out of a sum of Rs. 8,500, on the 6th of January, 1946, were paid in thousand rupee notes.
The Income tax Officer and the Appellate Assistant Commissioner in appeal, on a calculation of their own, held that the possession by the appellants of so many thousand rupee notes was an impossibility and that these notes must represent income from, undisclosed sources and as such be added to the assessable income of the appellants.
Neither the Appellate Assistant Commissioner nor the Income tax Officer, who was present at the hearing of the appeal, called for the deponents in order to cross examine them with reference to their statement in the affidavits.
The Appellate, Tribunal on appeal accepted the explanation of the assesses in respect of 31 of the notes but not with regard to the rest and rejected their application for a reference of the matter to the High Court.
The assessees moved the High Court and the Tribunal was directed under section 66(2) to state 627 a case for its decision.
In answering the main question, the High Court was of the opinion that the finding of the Tribunal was a finding of fact or an inference based on such finding and it was not possible to say that such finding or inference was unreasonable or arbitrary.
Held (per curiam), that the High Court was in error in refusing to interfere with the finding of the Tribunal which was based on no evidence and the appeal must succeed.
Per C.J. and BHAGWATI J. Conclusions based on facts proved or admitted may be conclusions of fact but whether a particular inference can legitimately be drawn from such conclusions may be a question of law.
Where, however, the fact finding authority has acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, the court is entitled to interfere.
Chunilal Ticamchand Coal Co. Ltd. vs Commissioner of Income tax, Bihar and Orissa, ([1955]) , applied.
Cameron vs Prendergast (Inspector of Taxes), ([1940] 8 I.T.R. (Suppl.) 75), Bomford vs Osborne (H. M. Inspector of Taxes), ([1942] 10 I.T.R. (Suppl.) 27) and Edwards (Inspector of Taxes) vs Bairstow and Another, ([1955] , referred to.
The High Court was in error in treating the finding of the Tribunal as a finding of fact and failed to apply the true principles of interference applicable to such cases.
The entries in cash book and the statements made in the affidavits in support of the explanation.
which were binding on the Revenue and could not be questioned, clearly showed that it was quite within the range of possibility that the appellants had in their possession the 61 high denomination notes on the relevant date and their explanation could not be assailed by a purely imaginary calculation of the nature made by the Income tax Officer or the Appellate Assistant Commissioner.
The Tribunal made a wrong approach and while accepting the appelants ' explanation with regard to 31 of the notes, it had absolutely no reason to exclude the rest as not covered by it in absence of any evidence to show that the excluded notes were profits earned by the appellants from undisclosed sources.
The appellants having given a reasonable explanation the Tribunal could not, by applying a rule of thumb, discard it so far as the rest were concerned and act on mere surmise.
Per VENKATARAMA AYYAR J.
The finding of the Tribunal that high denomination notes of the value Rs. 30,000 represented concealed profits of the appellants being unsupported by any evidence amounted to an error of law and was liable to be set aside.
That so many notes of high denomination should have been held as part of 628 the cash for so long a time, might be highly suspicious but decisions must be founded on legal testimony and not on suspicion.
The question whether the accounts were genuine or not was a pure question of fact and a finding that they were genuine was binding both on the Revenue and the subject.


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Civil Appeal No. 156(N) of 1976.
From the Judgment and Order dated 3.12.1974 of the Allahabad High Court in Writ Petition No. 418 of 1974.
Ms. Rachna Gupta and Ms. Rani Chhabra for the Appellant.
729 R. Bana for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
This Civil Appeal by Special Leave is directed against the Judgment of the High Court of Judica ture at Allahabad (Lucknow Bench) dated 3.12.1974.
The High Court by a common order disposed of number of Writ Petitions but we are concerned with Writ Petition No. 418/74 filed by Dr. Bhagwan Din Misra who is respondent No. 1 before us.
Brief facts of the case are that in the month of August, 1973 an advertisement appeared in the daily Newspaper "National Herald" inviting applications for the post of Reader in 'Linguistics ' in the Department of Hindi of the University of Lucknow.
Interview of the candidates was held on 8.4.74 at 3.00 p.m. by a Selection Committee consisting of five members viz. the Vice Chancellor of the University, Dr. K.N. Shukla, Head of the Department of Hindi and Modern Indian Languages Lucknow University, Dr. Bhagirath Misra, Head of the Department of Hindi Saugar University, Saugar, Dr. Harbanslal Sharma, Head of the Department of Hindi, Aligarh Muslim University, Aligarh and Shri Shyam Sunder, Head of the Department of Hindi Bihar University, Muzaffar pur.
It may be noted that the three experts from outside as mentioned above were experts in Hindi Literature and not Linguistic experts.
The Selection Committee after interview ing the various candidates recommended the name of the appellant, Dr. Triloki Nath Singh for being appointed to the post of Reader Linguistics in Hindi Department and the respondent No. 1, Dr. Bhagwan Din Misra was placed in the second position.
Dr. Bhagwan Din Misra, respondent No. 1 filed a writ petition in the High Court inter alia stating that the Selection Committee was not a legally constituted Committee and its recommendation should not be acted upon.
The writ petition was contested on behalf of the University as well as by the appellant.
The High Court held that the prospectus of the University showed that 'Linguistics ' was a separate subject of study.
There were two courses in M.A. Part I and Part II, one in Hindi Language and Literature, and, the other in Linguistics.
The High Court observed that even candidates, having passed the B.A. examination in Sanskrit or English, or M.A. Examination in Sanskrit or English were also eligible for admission in M.A. in Linguistics in the Department of Hindi.
Linguistics was thus a separate subject of study and even graduates, who might not have passed the 730 B.A. Examination with Hindi, were entitled to be admitted and awarded the degree of M.A. in Linguistics.
The Chancel lor under Statute 17 1 of the University was required to nominate experts out of the panel of experts in the subject of 'Linguistics '.
The High Court further held that having regard to the fact that 'Linguistics ' was a separate subject of study in the University of Lucknow and the Chancellor had drawn a panel of experts in 'Linguistics ', the nomination of experts out of the panel drawn for the subject of Hindi suffered from a serious legal infirmity, substantially affecting the constitution of the Selection Committee, which could not have been cured under Section 66(a) of the Uttar Pradesh State Universities Act, 1973 (hereinafter as the Act of 1973) and as such the recommendation of the Selection Committee was liable to be quashed.
The High Court as a result of the above findings allowed writ petition No. 418/74 and quashed the recommendation of the Selection Committee dated 8th April, 1974 for appoint ment to the post of Reader in 'Linguistics ' in the Depart ment of Hindi.
Dr. Triloki Nath Singh has thus filed the present appeal challenging the order of the High Court.
We have heard counsel for both the parties.
It may be mentioned that the Lucknow University neither filed any appeal against the order of the High Court nor any counsel appeared on its behalf before us.
Learned counsel for the appellant contended that under Explanation II to sub section (5) of Section 31 of the Act of 1973 the experts drawn out of the panel of experts in Hindi could make selection of Reader in 'Linguistics ' in the Department of Hindi.
It was further contended that in view of the fact that a Reader in 'Linguistics ' was to be appointed in the Depart ment of Hindi as such experts in Hindi Language and Litera ture were also qualified to act as experts for the selection of Reader in 'Linguistics '.
Learned counsel tried to seek support from the papers taught for M.A. in Linguistics as well as for M.A. in Hindi in order to convince that some papers were common to both the subjects, and as such there was nothing wrong or illegal in case the experts of Hindi Language and Literature were appointed for the selection of Reader in Linguistics.
On the other hand learned counsel for the respondent No.1 supported the Judgment of the High Court.
It was sub mitted by him that Linguistics was a separate subject of study for M.A. Part I and Part II and merely because the post of Reader in Linguistics was in the 731 Department of Hindi, it would not make any difference and the experts of Hindi Language and Literature cannot be appointed as experts in the Selection Committee for the selection of Reader in Linguistics.
We have considered the arguments advanced by learned counsel for both the parties and have perused the record.
There is no controversy between the parties that the pro spectus of Lucknow University Department of Hindi and Modern Indian Languages prescribed the courses of study for M.A. Part I and Part II in the subject of Hindi Language and Literature, and Linguistics separately.
The prospectus of Lucknow University, Department of Hindi and Modern Indian Languages prescribed the following courses of study for M.A. Part I and Part II for Hindi Language and Literature and the other for Linguistics M.A. Parts I and II There shall two courses in M.A. Parts I and II one in Hindi Languages and Literature and the other in Linguistics.
Students may choose either of these two courses.
M.A. part I (Language and Literature) Paper I Prachin Hindi Kavya Paper II Madhyayugeen Kavya Paper III Basic and Modern Indian Language Paper IV History Hindi Literature and Criticism Paper V Adhunik Hindi Gadya M.A. and Part II (Language and Literature) There shall be four papers and a viva voce test.
Paper I Linguistics and Historical Grammar of Hindi Paper II Vishesh Kavi Paper III Adhunik Kavya Paper IV Essay or Thesis or Folk Literature.
M.A. Part I (Linguistics) Paper I Introduction to the principle of General Linguistics 732 Paper II Phonetics and Phonemics Paper III Descriptive Grammar of Hindi Paper IV Applied Linguistics.
M.A. Part 11 (Linguistics) There will be four papers and a viva voce test.
Paper I Morphology and syntex Paper II Comparative and Historical Linquisitics with special reference to Indo Aryan and Hindi Language.
Paper III Dialectology with special reference Hindi Area.
Paper IV Essay or Thesis.
The above courses of study show beyond any manner of doubt that Hindi Language and Literature and, Linguistics are two different and separate subjects.
It is also impor tant to note that even graduates who have not passed the B.A. examination with Hindi could be admitted and awarded the degree of M.A. in Linguistics.
Merely because the Lin guistics is also a subject of study in one paper of Hindi, it cannot be said that Linguistics and Hindi Language and Literature fall under the same subject of study in the University.
It is an admitted position that separate Panel of Experts was drawn for the subjects of Hindi and Linguis tics.
As the Learned counsel for the appellant has strenuously placed reliance on Explanation II to sub section (5) of Section 31 of the Act of 1973 it is necessary to reproduce the same.
Sub Section (5) of Section 31 reads as under: "31.(5)(a) A panel of six or more experts in each subject of study shall be drawn up by the Chancellor after consulting the corresponding Faculty in Indian Universities or such academic bodies or research institutions in or outside Uttar Pradesh as the Chancellor may consider necessary.
Every expert to be nominated by the Chancellor under sub section (4) shall be a person whose name is borne on such panel.
(b) The Board of each Faculty shall maintain a standing panel of sixteen or more experts in each subject of study, and every expert to be nominated by the Vice 733 Chancellor under sub section (4) shall be a person whose name is borne on the panel.
(c) A panel referred to in clause (a) or clause (b) shall be revised after every three years.
" Explanation/ For the purposes of this sub section, a branch of subject in which a separate course of study is prescribed for a post graduate degree or for Part I or Part II thereof shall be deemed to be a separate subject of study.
Explanation 11 Where the post of teacher to be selected is common to more than one subject of study, the expert may belong to either of such subjects of study.
The High Court while considering a similar argument made before it held that Explanation II could be availed of by the Chancellor when he has drawn a fresh panel of experts in each subject of study under sub section (5)(a).
The High Court further held that Explanation II cannot be divorced from the substantive provision contained in sub section (5)(a).
It cannot stand independently of and separate from the sub section.
The Explanation must be read so as to harmonise and clear up any ambiguity in the main sub sec tion.
The High Court thus concluded that Explanation II was wholly inapplicable to the instant case and the question had got to be determined whether the experts who constituted the Selection Committee were the experts drawn out of the panel, under Clauses 168 and 169 of the Statutes.
The High Court then observed that according to the prospectus of the Uni versity Linguistics was a separate subject of study in the University of Lucknow and the Chancellor had a panel of experts on Linguistics drawn under Statutes 168 and 169, the nomination of experts out of the panel drawn for the subject of Hindi suffered from a serious legal infirmity substan tially affecting the constitution of the Selection Committee which could not have been cured by Section 66(a) of the Act.
We are examining the matter in a slightly different manner.
Even if the panel already constituted by the Chan cellor prior to the coming into force of the Uttar Pradesh State Universities Act, 1973, is treated as a panel consti tuted under sub section (5)(a) of Section 31 of the Act of 1973 Explanation II does not render any help to the appel lant.
We are in complete agreement with the High Court that subject of Hindi Language and Literature and the subject of Linguistics are entirely 734 separate subjects of study.
This is clearly borne out from Explanation 1 to sub section (5)(a) of Section 31 of the Act of 1973.
Explanation I lays down in a clear manner that for the purpose of this sub section, a branch of subject in which a separate course of study is prescribed for a post graduate degree or for Part I or Part II thereof shall be deemed to be a separate subject of study.
The prospectus of the University makes it abundantly clear that separate courses of study are prescribed for M.A. Part I or Part II in respect of Hindi on the one hand and Linguistics on the other.
Explanation II lays down that where the post of teacher to be selected is common to more than one subject of study, in that case the expert may belong to either of such subjects of study.
The advertisement issued in the present case was placed before us and which clearly made a mention at Serial No. 24 "One Reader in Linguistics in the Depart ment of Hindi".
At Serial No. 23 there was a separate men tion "There Readers in Hindi".
The qualifications essential for the above posts as mentioned in the advertisement reads as under: "QUAlIFICATIONS: ESSENTIAL: First or high Second Class Master 's Degree and Doctorate in the subject concerned with a good academic record and experience of teaching honours/postgraduate classes for not less than five years and published research work of high standard in the subject concerned.
The essen tial degree qualification for the post of Readers in Faculty of Law will be LL.M. degree.
" The above provision laying down essential qualifications also goes to show that first or high second class degree and doctorate in the subject concerned was an essential qualifi cation.
As already mentioned above posts were mentioned separately for three Readers in Hindi and one Reader in Linguistics in the Department of Hindi.
Explanation II could only apply in a case where the post of teacher to be select ed was common to more than one subject of study.
Advertise ment no where provided that one Reader in Linguistics in the Department of Hindi was to be selected as common to more than one subject of study.
Merely because the post of Reader in Linguistics was required in the Department of Hindi, it cannot be held that such Reader in Linguistics was to teach the subject of Linguistics as well as the subject of Hindi Language and Literature.
It may also be noted that from a perusal of the above advertisement alongwith the prospectus of the University clearly goes to show that for the post of 735 Reader in Linguistics it was necessary to have an essential qualification of first or high second class Master 's degree and Doctorate in the subject of Linguistics.
Explanation II can apply in a case where one common teacher is to be se lected for more than one subject of study and in that con tingency it provides that the expert may belong to either of such subjects of study.
In the case in hand before us the advertisement did not mention that the post of one Reader in Linguistics in the Department of Hindi was common with any other subject of study.
Thus the appointment of all the experts in the present case of subject of Hindi for the selection of one Reader in Linguistics in the Department of Hindi was totally wrong and illegal.
In view of the discussion made above, we do not find any ground in the appeal to interfere with the Order of the High Court.
In the result this appeal fails and is rejected with no order as to costs.
R.S.S. Appeal failed.

Output:
A Selection Committee consisting of five Members was constituted to recommend names for appointment to the post of Reader in 'Linguistics ' in the Department of Hindi of the University of Lucknow.
The Selection Committee after inter viewing the candidates recommended the name of the appellant while respondent No. 1 was placed in the second position.
Respondent No. 1 filed a writ petition in the High Court challenging the recommendations of the Selection Committee on the ground that the Selection Committee was not legally constituted because three experts on the Committee were experts in Hindi Literature and not Linguistic experts.
The High Court allowed the petition and inter alia held that under Statute 171 of the University, the Chancellor was required to nominate experts out of the panel of experts in the subject of 'Linguistics ', which was a separate subject of study in the University; that the nomination of experts out of the panel drawn from the subject of Hindi suffered from a serious legal infirmity; and that Explanation II to sub section (5) of Section 31 of the U.P. State Universities Act, 1973 was wholly inapplicable to the instant case.
Before this Court it was contended on behalf of the appellant that in view of the fact that a Reader in 'Lin guistics ' was to be appointed in the Department of Hindi as such experts in Hindi Language and Literature were also qualified to act as experts for the selection of Reader in 'Linguistics '.
Respondent No. 1, while supporting the judgment Of the High Court, submitted that Linguistics was a separate sub ject of study for M.A. Part I and Part II and merely because the post of Reader in Linguistics was in the Department of Hindi, it would not make any difference and the experts of Hindi Language and Literature could not be 728 appointed as experts in the Selection Committee for the selection of Reader in Linguistics.
Dismissing the appeal, this Court, HELD: (1) The prospectus of the University makes it abundantly clear that separate courses of study are pre scribed for M.A. Part I or Part II in respect of Hindi on the one hand and Linguistics on the other.
[734B] (2) The subject of Hindi Language and Literature and the subject of Linguistics are entirely separate subjects of study.
This is clearly borne out from Explanation I to sub section (5)(a) of section 31 of the Universities Act.
[733H; 734A] (3) Explanation I lays down in a clear manner that for the purpose of this sub section, a branch of subject in which a separate course of study is prescribed for a post graduate degree, or for Part I or Part II thereof, shall be deemed to be a separate subject of study.
[734A] (4) It is an admitted position that separate Panels of Experts were drawn for the subjects of Hindi and Linguis tics.
[732E] (5) In the instant case, the advertisement no where provided that one Reader in Linguistics in the Department of Hindi was to be selected as common to more than one subject of study.
Merely because the post of Reader in Linguistics was required in the Department, it cannot be held that such Reader in Linguistics was to teach the subject of Linguis tics as well as the subject of Hindi Language and Litera ture.
[734G H] (6) Explanation II to sub section (5) of section 31 of the Universities Act can only apply in a case where one common teacher is to be selected for more than one subject of study and in that contingency it provides that the expert may belong to either of such subjects of study.
[735A B]


Input:
ivil Appeal Nos.
1694 1709 of 1991.
From the Judgment and Order ' dated 23.1.1990 of the A.P. Administrative Tribunal, Andhra Pradesh in R.P. Nos.
13986/89, 24045 50/89, 25091/89, 1027 & 2111/.89, 28925 26/89, 28929 to 31/89 and O.A. No. 1918 of 1990.
K. Madhava Reddy and G. Prabhakar for the Appellants.
M.K. Ramamurthi, section Markandeya and Ms. C. Markandeya for the Respondents.
The following Order of the Court was delivered: This is an appeal by the State Government of Andhra Pradesh by special leave: Challenge is to the order of the State Administrative Tribunal directing the benefit of the Government Order of 18.11.1981 to be extended to selection of the Sub Inspectors of Police which is done through the State level Recruitment Board.
The Government Order which has been extracted in the Order of the Tribunal reads thus: "Notwithstanding anything in the Andhra Pra desh State and Subordinate Service Rules or the Special Rules, candidates seeking appoint ment of all the non gazetted posts of all services, and seeking eligibility in general educational test who have obtained the basic educational qualifications prescribed for direct recruitment eligibility for promotion in the special rules governing such posts, through Telugu medium, shall be given weight age in the matter of selection to such posts by awarding them 5% of the total aggregate maximum marks of the relevant competitive examination held by the Andhra Pradesh Public Service Commission for recruitment acquiring eligibility to such posts.
566 "Having regard to the avowed policy of the Government to introduce Telugu progressively in the State in the coming years and as Telugu has been 'introduced as official language at Directorage level and also in the lower courts in certain Districts of the State and so as to give preference to candidates who have ob tained the basic educational qualification through the medium of Telugu, Government have after careful examination decided in consulta tion with the Andhra Pradesh Public Service Commission that such candidates to give weightage of 5% of the total aggregate maximum marks of all the competitive examinations of the Andhra Pradesh Public Service Commission for recruitment to all the non gazetted poStS of all services.
There is no dispute that the Order in its own terms applies to selection carried on through the State Public Service Commission; nor is there any dispute that the selection of Sub Inspectors, for the relevant period was being carried on by a body other than the State Public Service Commission.
The Tribunal observed as follows: "We cannot the rule too literally and defeat the object and purpose with which it has been made.
If the object and purpose are kept in view, then ' we have no hesitation m holding that it applies to all selections irrespective of the body that makes selections in the State.
We see no merit in the literal con struction suggested by Sri Sagar.
" We are told that the validity of the Government Notifi cation under challenge on the ground that the Government have no authority to make such a direction and that chal lenge is in an independent petition pending disposal before this Court.
Since this petition is not one challenging the Notification but seeking its extension to areas not covered by the Notification in terms, disposal of this petition has no bearing on the petition which challenges the Notifica tion.
The State Government is the authority to take a policy decision.
Whether the decision is tenable or not in law, as we have just pointed out, is not to be decided here.
But since Government in their wisdom have specifically confined the application of the Notification to recruitment through the State Public Service Commission, we have not been 567 able to appreciate the decision of the Tribunal that it was also available to be extended to selection through bodies other than the State Public Service Commission.
Mr. Ramamurti appearing in.
support of the respondents ' cause has pointed out that if the Government Notification is confined to selection through the State Public Service CommissiOn, the Government Notification would be hit by Article 14 of the Constitution.
Therefore, according to Mr. Ramamurti, it was open to the Tribunal to read down the requirement by saying that the benefit of the Notification would be applicable to all categories of selection.
We have not been able to agree with Mr. Ramamurti that when the Notification is specific and is intended to apply to a specified group of cases for selection, it would be open to the Tribunal to extend its application beyond what has been clearly.
Specified.
It is one matter to say that the Notification applied in a limited way may be hit by law; it is another to say that contrary to the restriction im posed, the Tribunal would allow the Notification to have general application.
We are inclined to agree with Mr. Madhava Reddy for the State that the Tribunal exceeded its jurisdiction in lifting the restriction imposed.
by the, Government in the matter of benefit of 5% of total aggregate marks to those candidates who wrote their papers in Telugu language.
The appeal is allowed and the order of the Tribu nal stands vacated.
No costs. ' T.N.A. Appeal al lowed.

Output:
The Government of Andhra Pradesh issued an order dated 18.11.81 which provided that in respect of appointments to NonGazetted posts of all services, candidates who have obtained their basic educational qualification through the medium of Telugu shall be given weightage of 5% marks.
But the benefit of the order was confined to selection made through the State Public Service Commission.
The State Administrative Tribunal held that the order applies to ' all selections irrespective of the body that makes selection in the State and extended the benefit of the order to the selection of the Sub Inspectors of Police made through the State level Recruitment Board.
Against the order of the Tribunal, the State of Andhra Pradesh filed an appeal to this Court.
Allowing the appeal, this Court, HELD: 1.
The Tribunal exceeded its jurisdiction in lifting the restriction imposed by the Government in the matter of benefit of 5% marks.
The order of the Tribunal is vacated.
[567D E] 2.
The State Government is the authority to take a policy decision.
Whether the decision is tenable or not in law, is not to be decided by the Court.
Since Government in their wisdom have specifically confined the application of the Notification to recruitment through the State Public Service Commission, the decision of the Tribunal that it was also available to be extended to selection through bodies other than the State Public Service Commission, cannot be appreciated.
[566H, 567A] 565 3.
When the Notification is specific and is intended to apply to a specified group of cases for selection, it would not be open to the Tribunal to extend its application beyond what has been clearly specified.
It is one matter to say that the Notification applied in a limited way may he hit by law; it is another to say that contrary to the restriction imposed, the Tribunal would allow the Notification to have general application.
[S67C]


Input:
Appeal No. 910 of 1970.
(From the Judgment and order dated 16 6 1975 of the Orissa High Court in Election Petition No. 1/74).
D.P. Singh, R.P. Singh, Rajiv Dutta, Mrs. Nilma, L.R. Singh and R.K. Jain, for the Appellant.
Santosh Chatterjee, G.S. Chaterjee and D.P. Mukherjee, for the Respondent.
The Judgment of H.R. Khanna and N.L. Untwalia, JJ. was delivered by Khanna, J. V. R. Krishna Iyer, J gave a sepa rate concur ring opinion.
KHANNA, J.
On an election petition filed by Ratnakar Mohanty respondent, the election of Jugal Kishore Patnaik appellant to the Orissa Legislative Assembly from Bhadrak constituency was declared to be void by the Orissa High Court and as such set aside.
The appellant has filed the present appeal against the judgment of the High Court.
Bhadrak assembly constituency is a single member general constituency.
During the general elections to the Orissa Legislative Assembly held in February 1974, the respondent filed four nomination papers for being elected from this constituency.
At the time of scrutiny on January 36, 1974, objection was raised at the instance of Balaram Sahu, one of the contesting candidates, before the Returning Officer that the respondent was disqualified for being chosen as a member of the Assembly as there subsisted contracts between him and the Government of Orissa for execution of certain works.
The respondent, it was accordingly asserted, was disqualified under section 9A of the Representation of the People Act, 1951 (hereinafter referred to as the Act) from seeking election.
Some documents were also produced before the Returning Officer to show that proceedings had been initiated by the Block Development Officer for realisation of certain amounts alleged to be due under those contracts from the respondent.
The Returning Officer upheld the objection and rejected the nomination papers of the re spondent.
Four candidates contested the election, but the main contest was between the appellant, a Congress nominee, who secured 25,522 votes, and Balaram Sahu, art Utkal Congress nominee, who secured 18,723 votes.
The result of the election was declared on February 28, 1974.
Petition to.
challenge the election of the appellant was filed by the respondent on April 12, 1974.
The case of the respondent as set up in the election petition was that his nomination papers had been improperly rejected by the Returning Officer.
According to the re spondent, the works on account 51 of which he had been held to be disqualified by the Return ing Officer had been undertaken by him not in his personal capacity but as the Sarpanch of Rahanj Gram Panchayat under the Bhadrak Panchayat Samiti.
The respondent, therefore, prayed that the election of the appellant be declared to be void.
The petition was resisted by the appellant.
Objections were raised on his behalf that the petition was liable to be dismissed for non compliance with sections 81, 82 and 83 of the Act.
It was also averred that the nomination papers filed by the respondent were not in conformity with sections 33 and 34 of the Act.
On merits, the appellant stated that the respondent was disqualified under section 9A of the Act from seeking election to the Legislative Assembly of Orissa because he had on the date of filing of the nomination papers subsisting contracts with the Government of Orissa in course of his trade and business for execution of work undertaken by the Government.
Following issues were framed by the High Court: ISSUES 1.
Is the election petition liable to be dismissed for noncompliance of sections 81, 82 and 83 of the Representation of the People Act, 1951 ? 2.
Whether the nomination paper filed by the petitioner was in substantial compliance of sec tions 33 and 34 of the Representation of the People Act, 1951 ? 3.
Was the petitioner disqualified under section 9A of the Representation of the People Act, 1951 having subsisting contract with the Govern ment of Orissa in course of his trade and busi ness for execution of work undertaken by the Gov ernment on the date of the filing of the nomination ? 4.
To what relief, if any, the petitioner is entitled to in the facts and circumstances of the case ?" Issues (1) to (3) were decided by the High Court in favour of the respondent and against the appellant.
In the result, the election of the appellant was declared to be void.
In appeal before us Mr. D.P. Singh has at the outset assailed on behalf of the appellant the finding of the High Court on issue No. (1 ).
The challenge to the finding on issue No. (1 ) is, however, confined only to alleged infraction of sub section (3) of section 81 of the Act.
According to that sub section, every election petition shall be accompanied by as many copies thereof as there are re spondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
Mr. Singh contends that no attested copy of the election petition signed by the petitioner was filed along with the petition.
This conten tion has been: controverted by Mr. Chatterjee on behalf of the respondent, who submits that a copy of the petition attested by the respondent under his own signature was filed along with the petition.
It is further pointed out that the said attested copy of the petition was sent along with the 52 summons to the appellant, but as., he declined to accept the summons, the attested copy along with the summons was af fixed at his residence.
The above stand of the respondent is borne out by the report of the process server.
Mr. Singh has assailed the correctness of the above report of the process server, and has contended that in the index attached to the petition there was no reference to the copy.
As against that, it is submitted on behalf of the respondent that it is not the usual practice in the High Court to refer to the copy of the petition in the index.
There are, in our opinion, some broad facts of the case which lend support to the finding of the High Court on issue No. (1 ) that the election petition was accompanied by an attested copy signed by the respondent.
Endorsement dated April 15, 1974 made by an officer of the High Court shows that a copy of the election petition had been flied.
We find no cogent reason as to why an officer of the High Court should make a false endorsement on the petition if,, in fact, no such copy had been filed.
As regards the factum o.f the, attestation of the copy by the respondent under his own signature we find that the appellant cannot in the very nature of things assert positively that the copy had not been attested by the respondent as, according to.
him, he did not see that copy.
The copy was also not available on the record as the same had been affixed at the residence of the appellant when he, according to the report of the proc ess server, declined to accept the summons.
Before summons were issued to the appellant, the following endorsement was made by an officer of the High Court in respect of the election petition flied by the respondent: "Defect Nil.
" We see no cogent ground to question the correctness of this endorsement which clearly lends support to the inference that the copy filed with the petition had been attested by the respondent and that the petition did not suffer from lack of compliance with the: procedural requirement.
Mr. Singh has next assailed the correctness of the, finding of the High Court on issue No. (2).
It is urged that the respondent obtained signatures of his proposers on blank nomination papers, subsequently filled in the columns and then filed the nomination papers.
It is, in our opinion not necessary to express opinion about three of the nomination papers as we find that one of the, nomination papers in.
any case did not suffer from any such alleged infirmity.
This nomination paper of the respondent was signed by Laksh mikant Mahapotra (PW 3 ) as proposer.
Evidence of this witness dearly shows that he signed, the nomination paper as proposer of the respondent after the various columns in that paper had been filled in.
Nothing has been brought to our notice as to why the statement of the witness in this respect be not accepted.
As at least one of the nomination papers filed by the respondent was in compliance with the.
legal requirement,.
the High Court, in our opinion, correct ly decided issue No. (2).
In view of the above finding, it is not necessary to express opinion on the point as to whether a nomination paper should be hold to be invalid in case the 53 signature of the proposer is obtained before filling in the columns of the nomination paper.
It has been faintly argued that Balaram Sahu, who raised objection to the validity of the nomination papers of the respondent, was not impleaded as a party in the election petition and as such the: petition was liable to be dis missed for non joinder of parties.
This submission too is bereft of force.
According to section 82 of the Act, a petitioner shall join as respondents to his petition where the petitioner, in addition to claiming a declaration that the election of all or any of the returned candidates is void, claims a further declaration that he himself or any other candidates has, been duly elected, all the contesting candidates other than the petitioner, and where no such further declaration is claimed, all the returned candidates.
It is further provided that if allegations of any corrupt practice are made in the petition against any other candi date, he too shall be joined as a respondent.
In the present case, there was no prayer made by the respondent in the election petition that he or any other person should be declared to have been duly elected.
There was also no allegation of corrupt practice against any candidate.
In the circumstances, the requirements of law should be held to be fully satisfied when the respondent impleaded the suc cessful candidate, namely, the appellant, as a respondent in the petition.
Contention has also been advanced on behalf of the appellant that the objections of Balaram Sahu before the Returning Officer about the validity of the nomination papers of the respondent were raised in collusion with the respondent.
The appellant, who has been duly elected,, should not, according to the contention, suffer because of any order made on such collusive objections.
In this respect we find that .there is no factual basis for the assertion that the objections which were raised by Balaram Sahu about the validity of the nomination papers of the respondent were of collusive character.
On the contrary, the appellant in the course of his written statement stated in respect of the objections as under: "At the time of the scrutiny valid and genuine objec tions were filed against the petitioner on the ground that there was subsisting contract between the petitioner and the Government of Orissa and as such he was disqualified to be a candidate." In view of the unequivocal assertion of the appellant in the written statement that the objections were valid and genuine, it would not be permissible for the appellant to take an inconsistent stand in appeal and urge that those objections had been filed in collusion with the. respondent.
Apart from that, we find that according to section 100 (1) (e) of the Act, 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.
In view of the imperative nature of the provision, it is open to question as to whether the courts cam in the event of an improper rejection of nomination, afford relief to the successful candidate on the score that the objections re sulting in the improper rejection of the nomination, were collusive.
Whether the legislature would do something in the matter is essentially for the legislature to 54 decide.
We need not, however, dilate upon this aspect of this case in the face of our finding that the appellant has clearly admitted in the written statement that the objec tions which were filed about the validity of the nomination papers of the respondent were not collusive but were genu ine.
Lastly, Mr. Singh has assailed the finding of the High Court on issue No. (3).
Although during the course of the trial of the election petition the appellant relied upon 15 items to show that the respondent had entered into works contracts with the State Government, in this Court Mr. Singh has ,confined his argument to only two items, namely, item No. (1) and item No. (8).
Item No. (1) relates to an ad vance of Rs. 100 for repair of Erein School.
The case of the respondent is that the above amount was received by him as Sarpanch of Gram Panchayat Rahanj and that the said work had to be executed by that Gram Panchayat and not by the respondent personally.
The High Court accepted the stand of the respondent, and we find no cogent ground to take a different view.
exhibit 43 is letter dated December 3, 1968 signed by the Sub Divisional Officer Bhadrak to the Certifi cate Officer for recovery of Rs. 7,017/ .
This letter shows that the aggregate sum of Rs. 7,017, of which Rs. 100 was a part, constituted the fund of the Gram Panchayat.
Order dated May 25, 1965 of the Block Development Officer also shows that the work on account of which Rs. 100 were paid had to be executed through the agency of Rahani Gram Pan chayat.
To similar effect is the statement of PW 9 Khages war Roy.
Block Development Officer.
The evidence of this witness shows that the amount in question was given to the Gram Panchayat for repair work.
The above material, in our opinion,, clearly shows that the contract for the execution of the repair work, which is the subject matter of item No. (1 ), was not entered into with the respondent in his per sonal capacity and that the said work had to be.
executed by the Gram Panchayat.
So far as item No. (8) is concerned, the same relates to work of wooden culvert No. 9 on Jamujhari Khirkona road.
exhibit 55 is the written agreement relating to this contract.
Perusal of the agreement makes it clear that the tender in respect of this work was accepted on behalf of the Modern Labour Co operative Contract Society, of which the respond ent was the PreSident.
The document thus shows that it was not the respondent but the society which entered into con trac to the execution of the above work, and the respondent signed the document in his capacity as the President of that Society.
Apart from the above, we agree with the High Court that the above contract was not subsisting on the date of the filing of the nomination paper.
The agreement for the execution of the above work was dated May 8, 1964.
On November 24., 1966 an order was made by the Block Develop ment Officer that the construction work of the culvert had been completed since long and final measurements too had already been made.
The total work was found to be worth Rs. 4,253.70.
It was further observed in the order that Rs. 722 should be paid on account of the above work after deduct ing the previous advances and cost of the material.
The contractor was directed to return the material used in the tubewell.
The above order of the Block Development 55 Officer shows that the cost of the material and the amounts advanced to tile respondent were deducted before direction was given for payment of Rs. 722 to the contractor.
Mr. Singh has laid particular stress upon the direction in the order of the Block Development Officer that the contractor should return the material used in the tubewell.
In respect of the material used in the tubewell, it appears to us that the said material was also returned by the contractor the same day the order was made.
According to the testimony of RW 11 J.K. Satpathy Block Development Officer, if the mate rial required to be returned as per that last order was not returned, the final bill amount in respect of that work could not have been paid.
Rs. 722 were, however, admittedly paid on November 24, 1966.
The factum of that payment clearly points to the conclusion that the contractor re turned the material used in the tubewell before the payment of Rs. 722 was made to him.
There is also nothing to show that any demand was made ' to the contractor subsequent to 1966 for return of the material used in the tubewell.
The absence of any such demand, even though a long period has elapsed since 1966, clearly goes to show that no, material used in the, tubewell remained with the contractor.
It cannot, therefore be said that the said contract was sub sisting on the date the respondent filed his nomination paper.
We consequently uphold the finding of the High Court on items (1) and (8) under issue No. (3).
As a result of the above, we dismiss the appeal, but in the circumstances without costs.
KRISHNA IYER, J., Whole hearted is my agreement with the judgment of my learned brother Khanna J., both in the con clusions and in the reasonings.
This does not obviate an extra opinion on certain deeper, though peripheral, as pects of the law thrown up.
by the facts, disturbing in their implications and laying bare certain gaping gaps in the election law.
In a democracy,, the electoral process has a strategic role and in India it has constitutional status although canalysed by the Representation of the People Act, 1951 (hereinafter called the Act).
Lord Holt long ago observed:(1) "A right that a man has to give his vote at an election of a person to represent him in Parlia ment, there to concur to.
the making of laws, which are to bind his liberty and property, is a most transcendent thing, and of an high nature, and the law takes notice of it as such in divers statutes .
The right of voting at the elec tion of burgesses is a thing of highest impor tance, and so great a privilege, that it is a great injury to deprive the plaintiff of it . " And, if I may add,, this widespread right belongs to every common citizen.
In such circumstances, nO one can gainsay the need for the provisions regulating disqualifications affecting the adult franchise to run for elective office to be fool proof to that degree that the little man of India may confidently participate in the political process without being exposed to booby traps of the law.
Quoted in University of Pensylvania Law Review 1968 p. 24 (Vol. 117).
56 In this case an election was honestly fought and won by the appellant but the verdict has been reduced to a Dead Sea fruit by a surprise blow of the law because the respondent 's nomination, on the captious objection of the defeated candi date (the appellant being innocent, at that stage, of rais ing any obstructive tactic), was illegally rejected The facts, already set out by my learned brother, disclose that the wrong rejection by the Returning Officer was on the score that he had subsisting contracts with the State Government.
This ground was plausibly urge.d before the Returning Officer by a candidate who polled poorly.
The Officer was taken in by the specious plea and rejected the respondent 's nomination.
Its aftermath, long after the election was fought and won, is that people 's verdict has been stultified and its victim is the then innocent appel lant.
Had there been any procedure for double quick deter mination of objections to nominations with early appellate finality attached to it, the lurking danger of the whole process being ultimately baulked on account of antecedent official error would not have arisen a consummation devout ly to be wished.
Nor does it require great imagination to make provision in this behalf, but its omission has led to the martyrdom of the appellant and the orphanage of the electorate.
Yet another legislative insufficiency surrounding section 9A of the Act needs to be highlighted.
This provision, as has been explained earlier by my learned brother, disqualifies a person from being a candidate if there subsists a contract entered into by him in the course of his trade or business with the appropriate government for the supply of goods to, or for the execution of any works undertaken by, that gov ernment.
It is followed by an Explanation which is more or less a legal fiction.
The rugged edges of ambiguity of section 9A especially as to how long and in what sense can a contract be said to be subsisting envelop the disbarment provision with subtle legal questions.
The common man of India is the .potential candidate and is he to risk his candidature en the niceties of the law of contracts ? In this context we must remember that the vast and various developmental works undertaken by the State and its subsidiaries and executed by a large number of little construction contractors made it very desirable that the disqualificatory net should not be cast too wide to disfranchise innumerable persons and must be easy of ascertainment if uncertainty is not to overhang elections in our political system.
In this very case sever al problems were mooted, somewhat difficult to answer.
How long does a contract subsist ? Is every liability arising on a breach of contract, a claim under the contract attracting the lethal coils of section 9A ? If government money is involved in the execution of the work.
does the contract necessarily become one with government ? A host of other questions may mystify the legal imports of the taboo section 9A sets out and yet every lay man is imperilled by this vague provision in the exercise of his electoral right.
Such a brooding fear and haunting provisions is counter productive and may per haps have to be redrafted in the light of experience in court.
These are problems not of high sounding law but affecting the common man in the exercise of his most demo cratic right.
Nietzche once said: ,The great problems are in the streets.
The inaugural error in the drawing up of our election law, as is illustrated by this 57 case, is that sophisticated provisions amenable to logico linguistic feats or subtle interpretation of civil law ill suit a regulatory area of the political process where the small individual offers himself for electoral contest.
I choose to make these observations and draw the attention of the concerned instrumentalities only because in my humble view the court has an activist role to tell the nation, through its judgment or other designated channels where the law misfires, or how the law stands in need of reform.
This case therefore induces me to make what may be regarded as obiter: "The little case, the ordinary case, is a constant occasion and vehicle for creative choice and creative activity, for the shaping and on going reshaping of our law.
"(1) More than a hundred years ago Lord Chancellor Westbury made certain seminal observations(2): "The first thing, then, that strikes every member of our profession who directs his mind beyond the daily practical necessity of the cases which come before him is, that We have no machinery for noting, arranging, generalising and deducing conclusions from the observations which every scientific mind could naturally make on the way in which the law is worked in the country .
Take any particular department of the common law take, if you please, any particular stat ute.
Why is there not a body of men in this country whose duty it is to collect a body of judicial statistics, or, in the more common phrase, make the necessary experiments to see how far the law is fitted to the exigencies of society, the necessi ties of the times, the growth of wealth, and the progress of mankind ? . " Way back in 1921,, Benjamin N. Cardozo, then a Judge of New York 's highest court, said :(3) "The Courts are not helped as they could and ought to be in the adaptation of law to justice.
The reason they are not helped is because there is no one whose business it is to give warning that help is needed . .
We must have a courier who will carry the tidings of distress .
To day courts and legislature work in separation and aloofness.
The penalty is paid both in the wasted effort of production and in the lowered quality of the product.
On the one side, the judges, left to fight against anachronism and injustice by the methods of judge made law, are distracted by the conflicting promptings of justice and logic, of consistency and mercy, and the output of their labors bears the token of the strain.
On the other side, the legislature, informed only casually and intermittently of the needs and problems of the courts, without expert or responsible or disinter ested or systematic advice (1) Quoted in (1961 62) Vol.
71 Yale Law Jownal p. 259.
(2) Quoted in Vol.
128, Mod.
L.R.p. 1.
(3) Address to the Association of the Bar of the City of New York quoted in (3) supra.
6 1003 SCI/76 58 as to the workings of one rule or another, patches the fabric here and there, and mars often when it would mend.
Legislature and courts move on in proud and silent isolation.
Some agency must be found to.
mediate between them.
" May be, as has been done in the State of New York, the establishment of a Law Revision Commission charged with comprehensive law reform duties with direct link with the law court may go a long way to meet the felt need.

Output:
On the ground that there were subsisting contracts between him and the State Government for execution of cer tain works, the nomination papers of the respondent for the general election to the State Assembly were rejected by the Returning Officer under section 9A of the Representation of the People Act, 1951 at the instance of one of the contesting candidates.
In the election that ensued the appellant was declared elected.
The respondent in his election petition contended that the works on account of which he had been disqualified had been undertaken by him, not in his personal capacity, but as the Sarpanch of the Gram Panchayat.
The High Court held that the respondent was not disqualified under section 9A of the Act and declared the election void.
On appeal, it was contended that the objections regard ing the validity of the nomination papers of the respondent were raised in collusion with the respondent and a duly elected candidate should not be made to suffer because of an order made on such collusive objections.
Dismissing the appeal, HELD: (1 )(a) The appellant has clearly admitted in his written statement that objections which were filed about the validity of the respondent 's nomination papers were not collusive but genuine.
[53 G] (b) According to Sec.
100(1)(c) of the Act, if the High Court is of the opinion that any nomination had been improp erly rejected, it shall declare the election of the returned candidate to be void.
In view of the imperative nature of the provision, it is open to question as to whether courts can, in the event of an improper rejection of nomination, afford relief to the successful candidate on the score that the objections resulting in the improper rejection of nomi nation, were collusive.
Whether the legislature would do something in the matter is essentially for the legislature to decide, [53 G H] (2) A perusal of one of the disputed items shows that the tender in respect of the work was accepted on behalf of a Cooperative Society of which the respondent was the Presi dent.
It was not the respondent but the Society which entered into contract for the execution of the work and he signed the documents in his capacity as President of the.
Society.
The contract was not subsisting on the date of filing of the nomination paper.
In respect of another item the contract was not entered into with the. respondent in his personal capacity but the work had to be executed by the Gram Panchayat.
[54F G] Krishna Iyer J. (concurring) (1) In the instant case the Returning Officer was taken in by the specious plea that the respondent had` subsisting contracts with the State Government an& rejected his nomination papers.
Its aftermath was that the.
people 's verdict had been stultified.
Had there been any procedure for quick determination of objections to nominations with early appellate finality attached to it, the lurking danger of the whole process being ultimately baulked on account of antecedent official error would not have arisen.
[56 C] (2) The ambiguity in section 9A, especially as to how long and in what sense can a contract be said to be subsisting envelopes the disbarment provision with subtle legal ques tions such as: how long does a contract subsist ? Is every 50 liability arising on a breach of contract a claim under the contract the Provisions of s .
A9 ? If Government money is involved in the execution of the work does the contract necessarily become one with Government ? It is very de sirable that the disqualificatory net should not be cast too wide to disfranchise innumerable persons and must be easy of ascertainment if must be uncertainty is not to overhang elections [56 EH]


Input:
Appeal No. 222 of 1956.
40 Appeal by special leave from the judgment and decree dated December 8, 1953, of the former Nagpur High Court in Misc.
Civil Case No. 55 of 1950.
C. K. Daphtary, Solicitor General of India, K. K. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the appellant.
The respondent did not appear.
October 3.
The Judgment of the Court was delivered by SARKAR J.
This is an appeal brought by special leave against the judgment of the High Court at Nagpur, delivered on a reference under section 66(1) of the Income tax Act.
The appeal is by the Commissioner of Income tax, Madhya Pradesh and Bhopal.
The respondents are the assessees Vyas & Dotiwala.
The respondents have not appeared in this appeal.
We shall presently set out the facts but before we do that, we wish to state that the assessment years concerned were 1945 46 and 1946 47.
Though there were two separate assessment orders in respect of these years, ultimately when they came up before the Appellate Tribunal they were consolidated into one appeal.
The appeal before us likewise concerns both these assessment years.
It appears that in or about July 1943 when considerable difficulty was being felt about cloth, the Deputy Commissioner, Amraoti, evolved a scheme to solve that difficulty.
Under that scheme Kisanlal Vyas and a firm called Edulji Framji Dotiwala who have in these proceedings been referred to as Dotiwala, undertook to finance the scheme without charging any interest or profit and were appointed as financiers and also distributors of a variety of cloth called standard cloth for the town and camp of Amraoti and certain areas in the interior It is not necessary to set out the various details of the scheme and it will be sufficient to state that Vyas and Dotiwala, who as an association of persons are the assessees concerned, agreed to open an account in the Imperial Bank of India to be operated by them out of which the purchases 41 of the cloth were to be financed.
The orders for the cloth were to be placed by the Government with the mills and on the arrival of a consignment of cloth, the assessees were to pay to the Deputy Commissioner, Amraoti, the value of the consignment together with 6 1/4 per cent.
of the ex mill price.
The consignment was thereupon to be opened and its contents checked by the assessees and the officials and delivered to the assessees on their granting a receipt for the same.
The Deputy Commissioner would pay 4 1/2 per cent.
of the ex mill price to the assessees out of the amount paid by the latter as aforesaid for contingent expenses of working the scheme.
The scheme provided that the contingent expenses were not to exceed 3 percent.
of the ex mill price.
The cloth coming to the hands of the assessees was to be distributed in Amraoti town and camp through a shop to be opened by the assessees and in the interiors of the area concerned through Tehsildars with Patils under them.
The substance of the arrangement of distribution appears to have been that it would be entirely under the control of the Deputy Commissioner who made himself responsible to the assessees for the sale proceeds receivable from the Tehsildars.
The Deputy Commissioner was to decide the price for which the cloth was to be sold to the consumers and also the persons entitled to buy the cloth.
Out of the sale proceeds the Deputy Commissioner was to pay to the assessees whatever they had advanced on account of the cloth.
The most important provision in this scheme is para.
14 which is set out below.
Profits resulting from the scheme shall be utilised for such charitable purposes as may be decided on by the Deputy Commissioner in consultation with the advisory committee appointed to supervise the scheme.
It appears that the books of the assessees showed Rs. 34,737/ for the assessment year 1945 46 and Rs. 17,682/ for the assessment year 1946 47 as profits earned in working the scheme.
The Income tax Officer assessed the assessees to tax on the profits so earned.
6 42 The assessment orders made by this officer would appear to show that the only point urged by the assessees before him against the assessment was that the income was exempt from taxation under section 4(3)(i a) of the Indian Income tax Act, 1922.
The officer rejected this contention.
The assessees went up in appeal to the Appellate Assistant Commissioner, before whom the same contention appears to have been repeated.
The Appellate Commissioner confirmed the order of the Income tax Officer.
The assessees then appealed to the Appellate Tribunal.
The Tribunal held that the assessees had objected to the assessment before the Income tax Officer on two grounds, namely, that the income was Dot the income of the assessees and that the income was exempt from taxation under section 4(3)(i a), as appeared from their letter dated January 22, 1947.
One of these alone had been dealt with by that officer, as appears from his order earlier referred to.
The Appellate Tribunal agreed with the conten tion of the assessees that they were not liable to be taxed on the profits because these did not form their income.
The Tribunal was of the view that the scheme was the scheme of the Deputy Commissioner and completely under his control; that the assessees were merely the financiers and also managers under the Deputy Commissioner to carry out the scheme and that the assessees only helped to work the scheme.
The Tribunal held that the profits that may have resulted from such working were not therefore theirs nor represented their income and the assessees could not be assessed to income tax thereon.
In this view of the matter the Tribunal set aside the orders of assessment.
Thereafter, on the application of the revenue authorities the Tribunal referred the following question to the High Court under section 66(1) of the Act: Whether on the facts of this case any income accrued to Messrs. Vyas and Dotiwala as the result of their associating themselves as financiers in the scheme for the distribution of standard cloth; and, if so whether such income was assessable in their hands.
43 On that reference the High Court held that under the charging section in the Indian Income tax Act, 1922, namely, section 4, it was necessary for the revenue authorities to prove that the assessees received or should be deemed to have received income or profit from the scheme during the relevant period.
It held that the asseess had not actually received any such income and further that the expression " deemed to be received " in that section only meant deemed by the provision of the Act to be received, and no such provisions of the Act had been relied upon on behalf of the revenue authorities.
In this view of the matter the High Court answered the question framed, in the negative.
The learned Solicitor General contends that the High Court failed to appreciate the real question.
He says that the question was not whether income was received or deemed to be received but whether income had accrued and the point for decision was, as appeared from the judgment of the Tribunal, whether the profits formed the income of the assesses.
We agree with this criticism of the judgment of the High Court.
On the point that arises from the question framed, we think that the Tribunal went wrong.
It is not disputed that the assessees worked the scheme and such working produced the profits as found in the assessment orders.
The Tribunal thought that since the scheme was completely under the control of the Deputy Commissioner, the assessees could not be said to have carried on business by working the scheme.
We are unable to see that the fact of the control of the Deputy Commissioner can prevent the working of the scheme by the assessees from being a business carried on by them.
In our view, it only comes to this that the assessees had agreed to do business in a certain manner.
The fact that the Deputy Commissioner guaranteed the payment by the Tehsildars of the price due from them, to the assessees would indicate that the assessees were treated as the owners of the business.
It would indicate that if there had been no such guarantee, the loss due to the failure of the Tehsildars to pay their dues would have to be borne 44 by the assessees.
Again the claim, may be in the alternative, by the assessees for exemption under section 4(3)(i a) would not arise unless the assessees were carrying on a business.
Lastly, para.
14 of the scheme which we, have earlier set out, clearly contemplates profits resulting from the scheme.
The provision that the profits would be devoted to charity to be decided by the Deputy Commissioner, would indicate that without it the profits would have been utilisable by the assessees.
The profits belonged to the assessees and hence the necessity for this agreement so that the assessees might be made to spend them on charity.
If, as the Tribunal thought, the profits were of the Government, there was no necessity for the Government providing for the profits being expended on charity, for the Government if minded to do so, could have done it without such a provision.
The fact remains that the working of the scheme produced profits and apart from para.
14 such profits undoubtedly belonged to the assessees.
If they chose to agree by para.
14 to devote the profits to charity, that was their business; the profits made by them would not change their character and cease to be the assessees ' income because they agreed to devote their income to charity.
We might also say that there is nothing in the scheme which shows that the assessees had undertaken not to make any profits on the distribution work under the scheme; they had only agreed to finance the scheme without receiving any interest or profit.
Furthermore, since the assessees actually made the profits, they are liable to pay tax thereon whether they agreed not to make any profits or not.
We wish also to point out that it is not the assessees ' case that they have been made to pay out the profits for any charity.
For these reasons we think that the profits were the profits of the assessees and they are liable to pay tax on them.
With regard to the assessees ' claim for exemption under section 4(3)(i a), they are clearly not entitled to any.
That claim of the assessees has not been accepted by any of the Courts below.
Section 4(3)(i a) applies to income derived from business carried on on behalf of a religious and charitable institution when the income 45 is applied solely to the purpose of the institution and the business is carried on in the manner provided.
It is enough to say that the scheme, considered as a business, was not carried on on behalf of any religious or charitable institution.
Once it is held that the assessees made the profit, how they use it would not matter.
In the result, we would answer both parts of the question framed, in the affirmative.
We hold that the profits were the income which accrued to the assessees and such income is assessable to income tax and is not exempt from taxation under section 4(3)(i a).
The appeal is allowed with costs here and below.
Appeal allowed.

Output:
The Deputy Commissioner of Amraoti, evolved a scheme for the distribution of standard cloth.
The assessees agreed to finance the scheme without charging any interest and were appointed financiers and distributors.
The orders for the cloth were placed by the Government with the mills and the cloth was delivered to the assessees upon their paying the value of the cloth together with 6 1/4% of the ex mill price.
The Deputy Commissioner paid 4 1/2% of the ex mill price to the asses sees for contingent expenses of working the scheme.
The assessees distributed the cloth at prices fixed by the Deputy Commissioner through the Tehsildars and the Deputy Commissioner was responsible to the assessees for the sale proceeds receivable from the Tehsildars.
Out of the sale proceeds the Deputy Commissioner paid to the assessees whatever they had advanced on the cloth.
The profits from the scheme were agreed to be utilised for such charitable purposes as might be decided by the Deputy Commissioner.
The assessees contended that the income was not their income and that it was exempt from taxation under section 4(3) (i a) of the Income tax Act.
Held, that the profits were income which accrued to the assessees.
The assessees worked the scheme and such working produced the profits.
The fact of the control of the Deputy Commissioner could not prevent the working of the scheme by the assessees from being a business carried on by them.
The provisions in the agreement that the Deputy Commissioner guaranteed the payment by the Tehsildars of the price due from them, and that the profits would be devoted to charity decided by the Deputy Commissioner and the claim for exemption under section 4(3) (i a) all indicated that the assessees were the owners of the business.
Held further, that the profits were not exempt from taxation under section 4(3) (i a), as the business was not carried on behalf of any religious or charitable institution.