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Civil Appeal No. 4 (NCE) of 1987.
From the Judgment and order dated 2.12.1986 of the High Court of Gauhati in Election Petition No. 2 of 1986.
Govind Mukhoty, Anil Nauriya and Mrs. Rekha Pandey for the Appellant.
Miss Halida Khatoon, Abdul Sattar and R.C. Kaushik for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal is filed by the appellant Dewan Joynal Abedin against the judgment dated December 2, 1986 of the High Court at Gauhati setting aside his election to the Legislative Assembly of Assam at the election held on the 16th December, 1985 from the 22 Salmara South Legislative Assembly Constituency on an election petition filed by respondent No. 1 Abdul Wazed alias Abdul Wazed Miah in Election Petition No. 2 of 1986.
The last date for making nominations for election from the aforesaid constituency was 22nd November, 1985 and the date for the scrutiny of nominations was November 23, 1985.
The appellant, the Ist respondent and the second respondent Bazlul Basit were the three candidates on whose behalf nomination papers had been filed before the expiry of the time fixed for making nominations.
Respondent No. 3, M. Bhattacharjee, was the Returning officer.
At the time of the scrutirly respondent No. 2 raised objection to the nomination of respondent No. 1 on the ground that respondent No. 1 had not comp 374 leted 25 years of age on the date of scrutiny as required by Article 173(b) of the Constitution which provided that a person was not qualified to be chosen to fill a seat in the Legislature of a State unless he was in the case of a seat in the Legislative Assembly not less than twenty five years of age and in the case of seat in the Legislative Council not less than thirty years of age.
The proposer of one of the nomination papers filed on behalf of the respondent No. 1 prayed for some time to refute the objection.
The Returning officer, however, proceeded to reject the nomination papers filed on behalf of the Ist respondent on 23.11.1985 holding that the Ist respondent had not completed 25 years of age and therefore was not qualified to be a member of the Legislative Assembly.
The election process continued with only the appellant and the second respondent as the candidates and after the poll the appellant was declared as having been elected on the basis of the larger number of votes secured by him.
Thereupon the Ist respondent filed the election petition before the High Court out of which this appeal arises contending that he had infact completed 25 years of age on the date of his nomination and that the rejection of his nomination papers was erroneous.
The Ist respondent further contended that on account of the rejection of his nomination papers the election of the appellant was liable to be set aside under section 100(1)(c) of the Representation of the People Act, 1951 (hereinafter referred to as 'the Act ') which provided that the election of a successful candidate was liable to be set aside on the ground that any nomination had been improperly rejected.
In the course of his written statement the appellant raised several pleas, and of them three were material for purposes of this case.
First he pleaded that the Ist respondent had not completed 25 years of age on the date of scrutiny of nominations and therefore the nomination papers had been rightly rejected, secondly he pleaded that the Ist respondent had not subscribed an oath as required by Article 173(a) of the Constitution and therefore the Ist respondent was not qualified to contest the election and thirdly he pleaded that the Ist respondent was also disqualified to be chosen to fill a seat in the Legislature of the State as on the date of scrutiny of the nominations the Ist respondent had a subsisting contract entered into by him with the Government on Assam under which he had been treated as a lessee of the Phulbari Ghat Ferry for the period between 1.4.1985 and 31.3.1986.
The Ist respondent pleaded that he had completed the age of twenty five years on the date of scrutiny of nomination that he had subscribed an oath as required by Article 173(a) of the Constitution and that while it was true that he had entered into such a contract he had been released from the said contract on 21.11.1985 by the Executive Engineer concerned and therefore there was no subsisting 375 contract between him and the Government of Assam on the date of A scrutiny.
On the basis of these pleas Issue No. S and Issue No. 6 were framed by the High Court which read as follows: 5.
Whether the nomination paper of the petitioner has been improperly rejected? If so, whether the election of the respondent is void? or, Whether the nomination paper of the petitioner was liable to be rejected as alleged in para 7 of the written statement? 6.
Whether the petitioner had incurred disqualification under section 9A of the Representation of the People Act? After recording the evidence produced by the parties the learned Judge of the High Court who tried the election petition held that the Ist respondent had completed the age of 25 years on the date of scrutiny and therefore he had the necessary qualification for being a member of the Legislative Assembly.
He accordingly held on the first part of issue No. S in favour of the Ist respondent.
On the second part of issue No. S the learned Judge held that the appellant had not proved that the Ist Respondent had not subscribed on oath as required by law.
On issue No. 6 the learned Judge held that the.
Ist respondent had been relieved from the charge of Phulbari Ghat Ferry with effect from 21.
1985 and therefore there was no subsisting contract between the Ist respondent and the Government of Assam on the date of scrutiny of nominations and therefore the Ist respondent was not disqualified under section 9 A of the act.
In view of his findings recorded on Issues Nos. 5 and 6 the learned Judge came to the conclusion that the rejection of the nomination papers filed on behalf of the Ist respondent was improper and therefore the election was liable to be set aside.
He accordingly set aside the election of the appellant.
Aggrieved by the judgment of the learned Judge the appellant has filed this appeal under section 116 A of the Act.
When this appeal was taken up for hearing on the first date it was noticed that the High Court had not considered the question whether section 9 A of the Act was attracted at all to the contract in question as it appeared to be not one of those contracts which had the effect of disqualifying a candidate under section 9 A of the Act.
The case thereafter was adjourned to a subsequent date for hearing to enable the learned counsel to make their submissions on the above question also.
By the next date of hearing the appellant filed a petition before the 376 Court seeking an amendment of the written statement raising the plea that the Ist respondent was also disqualified from contesting the election as he held an office of profit under the State Government by virtue of the contract that had been entered into by him with the State Government even though the contract in question may not be one of those contracts specified in section 9 A of the Act.
In other words it was contended that the Ist respondent was disqualified under Article 191(1)(a) of the Constitution which provided that a person would be disqualified for being chosen as, and for being, a member of the Legislative Assembly of a State if he held any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder.
It is necessary to refer to one aspect of the case.
Although before the High Court it was urged by the appellant that the Ist respondent had not subscribed on oath in compliance with the provisions of Article 173 of the Constitution and thus he was not eligible to contest the t) election and that the High Court had negatived the said contention, no arguments were addressed before us by the learned counsel for the appellant questioning the finding of the High Court on the above question.
We do not, therefore, find it necessary to discuss the evidence relating to the above issue.
Three questions arise for consideration in this appeal: (i) whether the 1st respondent had not completed the age of 25 years on the last date for filing nomination?; (ii) whether the contract in question said to have been entered into by the Ist respondent with the Government of Assam to collect the toll at the ferry was a contract for the execution of any works undertaken by the Government of Assam attracting section 9 A of the Act and if so whether the said contract was subsisting on the date of scrutiny of nomination?; and (iii) whether the Ist respondent held an office of profit under the Government of Assam by virtue of being a lessee of the right to collect the toll at the ferry? on the question of the age of the Ist respondent there is practically no evidence adduced on behalf of the appellant.
The Electoral Roll, which was marked as Exhibit 7, in the case showed that the Ist respondent was aged 29 years.
In support of his case 7 the Ist respondent had examined three witnesses, P.W. 2 Aripulla, P.W. 3 Sirajul Islam and P.W. 6 Habibar Rahman.
He also produced his High School Leaving Certificate (Exhibit 12) which showed that he was above 25 377 years on the date of the nomination.
The High Court has summed up its conclusion of the above question at paragraph 14 of its judgment thus: "14.
As already held that the High School leaving Certificate (Ext 12) and admission register cannot be rejected.
The oral evidence of the witnesses relating to the age has not been shaken in the cross examination.
As regards age, the relatives are best witnesses.
Considering the High School Leaving Certificate (Ext 12) Electoral Roll (Ext 7) and oral evidence of PW 2 Aripulla, PW 3 Silajul Islam and PW 6 Habibar Rahman, it is concluded on the age of the petitioner on the date for making nomination or scrutiny of nomination that he had completed the age of 25 years.
We have gone through the evidence bearing on the above question.
We are of the view that the High Court was right in upholding that the Ist respondent was more than 25 years of age on the date of scrutiny and he was eligible to be a member of the Legislative Assembly.
Thus the ground on which the Returning officer had rejected his nomination papers is untenable.
This takes us to the next question, namely, whether the Ist respondent was disqualified for being chosen as a member of the Legislative Assembly on account of the contract entered into by him in the course of his trade or business with the Government of Assam subsisting on the date of scrutiny of nominations as provided by section 9 A of the Act.
Section 9 A of the Act reads thus: "9 A. Disqualification for Government contracts, etc.
A person shall be disqualified if, and for so long as, 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 Government.
" There is a public ferry at Phulbari ghat, which is under the control of the Executive Engineer, Public Works department, Goalpara (Roads) Division.
It is admitted by the Ist respondent that he was the lessee of the tolls of the said public ferry for the period between 1.4.1985 and 31.3.1986 but his case, however, was that he had been relieved from the said contract on 21.11.
But the appellant 378 pleaded in the course of his written statement that only on 25.
l 1.1985, that is on the date of scrutiny of the nomination papers, the Executive Engineer had at the request of the appellant, allegedly made on 18.11.1985 released the petitioner from the contract and that the order of release had been made after the scrutiny was over.
The High Court had, therefore, to consider the question whether the order of release had been made on the 21.11.1985 or on 25.11.1985 after the scrutiny of nomination papers.
On a consideration of the evidence led by the parties, the High Court held that the Ist respondent had been relieved of the charge of the ferry on 21.
11.1985 and that he was not disqualified under section 9 A of the Act.
As stated earlier when the matter was argued before us on the first date of hearing the learned counsel for the parties were asked to make their submission on the question whether a lease of the ferry tolls attracted the provisions of section 9 A of the Act and the learned counsel have made their submissions in that behalf.
The management of a public ferry is governed by the provisions of the Northern India Ferries Act, 1878 (hereinafter referred to as 'the Ferries Act ') which has been extended to the State of Assam.
section 8 of the Ferris Act reads thus: "8.
Letting ferry tolls by auction The tolls of any public ferry may, from time to time, be let by public auction for a term not exceeding five years with the approval of the Commissioner, or by public auction, or otherwise than by public auction, for any term with the previous sanction of the State Government.
The lessee shall conform to the rules made under this Act for the management and control of the ferry, and may be called upon by the officer in whom the immediate superintendence of the ferry is vested, or, if the ferry is managed by a municipal or other public body under section 7 or section 7 A, then by that body, to give such security for his good conduct and for the punctual payment of the rent as the officer or body, as the case may be.
thinks fit.
When the tolls are put up to public auction, the said officer or body, as the case may be, or the officer conducting the sale on his or its behalf may, for reasons recorded in writing, refuse to accept the offer of the highest bidder, and may accept any other bid, or may withdraw the tolls from auction.
379 Section 9 of the Ferries Act provides for the recovery of arrears from the lessee.
Section 10 of the Ferries Act provides for the cancellation of the lease by the Government.
Section 11 of the Ferries Act provides for the surrender of the lease by the lessee.
Section 12 of the Ferries Act makes provision for the promulgation of rules which inter alia may provide for the control and the management of all public ferries within a division and for regulating the traffic at such ferries; for regulating the time and manner at and in which, and the terms on which, the tolls of such ferries may be let by auction, and prescribing the persons by whom auctions may be conducted and when the tolls of a ferry have been let under section 8 of the Ferries Act for collecting the rents payable for the tolls of such ferries.
Section 13 of the Ferries Act prohibits plying of any ferry within two miles of a public ferry without sanction from the appropriate authority.
Section 14 of the Ferries Act provides that whoever uses the approach to, or landing place of, a public ferry is liable to pay the tool payable for crossing such ferry.
Under section 15 of the Ferries Act provision is made for fixing the rates of tolls.
It says that the tolls, according to such rates as are, from time to time, fixed by the State Government? shall be levied on all persons, animals, vehicles and other things crossing any river by a public ferry and not employed or transmitted on the public service.
The State Government is, however, given power to declare that any persons, animals vehicles or other things shall be exempt from payment of such tolls.
Where tolls of a ferry have been let under section 8 of the Ferries Act any such declaration, if made after the date of the lease, shall entitle the lessee to such abatement of the rent payable in respect of the tolls as may be fixed by the Commissioner of the Division or such other officer as the State Government may, from time to time, appoint in this behalf by name or in virtue of his office.
The Rules have been framed by the Chief Engineer, Assam under section 12 of the Ferries Act for purposes of the control and management of and for regulating the traffic at all Government ferries.
Under the said Rules, for Government ferries suitable ferry boats, engines or mars are supplied at the expense of the Public Works Department.
The lessee shall be responsible as a bailee for these boats, engines and mars and he shall, on the expiry or earlier termination of his lease, return them to the Executive Engineer in good condition, allowance being made for fair wear and tear.
The lessee who acquires the right to collect toll is bound to cross over on tender of payment in cash of the authorised toll or on production of a season ticket or pass, all persons desiring to cross within the hours for which the ferry according to the terms of the lease is open.
He is precluded from carrying persons whom he may know or suspect to be fugitives from justice or to be bent upon an unlawful 380 purpose.
He cannot carry over at any one time in his ferry boat or mar more than the number of persons, animals, vehicles or other things specified in his lease as permitted to be so ferried.
He has to provide a shed 15 feet long by 15 feet broad, on each side of the ferry for the temporary accommodation of persons wishing to cross.
The lessee has to furnish monthly a return in the prescribed form supplied to him by the Executive Engineer giving particulars which are required to be furnished through it.
The approach roads to all Government ferries and low level bridges are constructed and maintained by the Public Works Department The lessee is responsible for conveying immediate information of damage to approaches to the concerned authorities.
The Public Works Department has to provide sufficient means for embarking and disembarking all persons, animals, vehicles and things which a lessee is bound to cross over at his ferry with the exception of ropes and tying posts for securing the mar.
All Government ferries shall generally be let by public auction; provided that, for special reasons to be recorded in writing, the Executive Engineer or Sub Divisional officer, Public Works Department, may reserve any ferry from lease and may work it direct.
Collection of tolls by departmental agency will only be resorted to when absolutely unavoidable.
The auction sale of the right to carry passengers at the ferry is held by the Deputy Commissioner/Civil Sub Divisional officer or some officer deputed by him for the purpose.
The person whose bid is accepted has to pay the purchase money in accordance with the Rules.
If there is any default on the part of the lessee in paying the amount payable by him, the lease is liable to be cancelled.
These are broadly the features of the contract between a lessee of a ferry and the Government.
The question for consideration is whether a person who takes on lease a ferry under section 8 of the Ferries Act becomes disqualified for contesting the election to the State Legislature under section 9 A of the Act.
At this stage it is necessary to set out the history of the provisions contained in section 9 A of the Act.
When the Act was enacted originally there was section 7 of the Act the relevant part of which reads as follows: "7.
A person shall be disqualified for being chosen as and for being a member of the either House of Parliament or of the Legislative Assembly or Legislative Council of a State . . . . . . . . (d) If, whether by himself or by any person or body of persons in trust for him or for his benefit or on his 381 account he has any share or interest in a contract for the supply of goods to, or for the execution of any works or the performance of any services undertaken by the appropriate Government .
" In 1958 this provision was amended.
In the Statement of objects and Reasons of the Representation of the People (Amendment) Bill, 1958.
which was enacted as the Representation of the People (Amendment) Act, 1958 it was stated as follows: "The language of section 7(d) of the 1951 Act which provides for disqualification in case of contracts with the Government is wide and vague enough to bring any kind or category of contract within its scope and it has been a fruitful source of election disputes in the past.
Persons who only occasionally broadcast any talk from the radio station or contribute article to any Government publication may come within the mischief of this section.
" The Bill was referred to a Select Committee of Parliament.
The said Select Committee reported on December 15, 1958 with regard to the proposed redrafting of Section 7(d).
The Select Committee suggested as follows: "The Committee have carefully considered the proposed substituted clause (d) of section 7 of the Representation of the People Act, 1951.
The Committee feel that in view of the expanding activities of the Central and State Governments as the biggest purchasers and suppliers of goods including food grains and other essential commodities, a large number of persons in the country will have some contractual relationship with the Governments in these matters.
Under the circumstances it will not be proper to disqualify all such persons who are having contractual dealings with the Governments from standing for election or being elected as members of Parliament or State Legislatures.
The Committee, therefore feel that the better course would be altogether to omit the existing clause (d) of section 7 of the Act.
" This suggestion was not, of course accepted.
After the amendment in 1958 section 7(d) of the Act read thus: H 382 "7.
A person shall be disqualified for being chosen as, and for being a member of either House of Parliament or of the Legislative Assembly or Legislative Council of a State . . . . . . . . . (d) If there subsists a contract entered into in the course of his trade or business by him with the appropriate Government for the supply of goods to, or for the execution of any works undertaken by that Government.
" By the Representation of the People (Amendment) Act, 1966 some of the provisions of the Representation of the People Act were amended.
On that occasion sections 7, 8, 9 and some other provisions of the Act, which provided for the disqualification of persons for being chosen as members of Parliament or of the State Legislature were substituted by new sections 7, 8, 8A, 9, 9A, 10 etc.
The present section 9 A was enacted in the place of the former section 7(d).
Section 9 A of the Act was enacted in the same pattern in which section 7(d), stood after the amendment in 1958.
An explanation was, however, added to it which provided that only by reason of the fact that the Government had not performed its part of the contract either wholly or in part, it could not be said that the contract which attracted section 9 A was subsisting where a contract had been fully performed by the person by whom it had been entered into with the appropriate Government.
An analysis of section 9 A of the Act shows that only in two cases a person would be disqualified if he has entered into a contract with the appropriate Government in the course of his trade or business which is subsisting on the date of scrutiny of nomination.
They are (i) when the contract is one for supply of goods to the appropriate Government and (ii) where the contract is for the execution of any works undertaken by that Government.
If a contract belonging to either of the two categories is subsisting on the date of the nomination, the person will be disqualified for being chosen as a member.
In the present case the contract is not one for supply of goods to the Government.
It does not, therefore, fall under the first class of contracts which create the disqualification.
The question for determination is whether the contract to collect toll at a Government ferry entered into in accordance with the Ferries Act amounts to a contract for the execution of any works undertaken by the Government.
At this stage we should remember that the words 'or the performance of any services ' 383 were omitted from section 7(d) by the amendment made in the year 1958.
In N. Satyanathan vs K. Subramanyan and others; , this Court had occasion to construe section 7(d) of the Act before its amendment in 1958.
In that case the appellant was a contractor who had entered into an agreement with the Central Government whereby he had contracted with the Governor General for the provision of a Motor Vehicle Service for the conveyance of postal articles and mail bags.
Under the contract the Governor General had agreed to pay to the contractor 200 per month during the subsistence of the agreement as his remuneration for service to be rendered by him.
The appellant therein was held to be disqualified under section 7(d) of the Act, as it stood then, as he had undertaken to carry out a service which the Government had undertaken to do.
The Court said that "it cannot be gainsaid that the Government in the Postal Department is rendering a very useful service and that the appellant has by his contract with the Government undertaken to render that kind of service on a specified route.
The present case is a straightforward illustration of the kind of contract contemplated by section 7(d) of the Act.
" The Court took the above view in view of the presence of words 'the performance of any service ' under section 7(d) of the Act, as it stood then.
Those words were omitted from section 7(d) on its amendment in the year 1958 and section 9 A of the Act as it stands today also does not contain those words.
In Ram Padarath Mahto vs Mishri Singh & Anr., [1961] 2 S .C .
R. 470 a similar question arose for consideration .
The appellant in that appeal was a member of a joint Hindu family which carried on the business of Government stockists of grain under a contract with the Government of Bihar.
His nomination for election to the Bihar Legislative Assembly was rejected on the ground that he was disqualified under section 7(d) of the Act, as he had an interest in a contract for the performance of services undertaken by the Bihar Government.
The appellant contended that the service undertaken by the Government was the sale of foodgrains under the Grain Supply Scheme and the contract was not for the sale of such foodgrains and did not attract the provisions of section 7(d) of the Act.
This Court held that the contract was not one for the purpose of any service undertaken by the Government and the appellant therein was not disqualified under section 7(d) of the Act.
The Court held that a contract of bailment which imposed on the bailee the obligation to stock and store the foodgrains in his godowns was not a contract for the purpose of the service of sale of grain which the Government had undertaken.
The Government had undertaken the work of supplying grain but the contract was not one for the supply of grain.
The Court distinguished the decision in N. Satyanathan vs K. Subramanyam, 384 (supra) while reaching the conclusion that the appellant was not disqualified for being chosen as a member of the Bihar Legislature.
So even at a time prior to the amendment of section 7(d) of the Act in the year 1958 it was possible to take the view that certain types of contracts entered into with the appropriate Government, even though they were subsisting on the date of scrutiny of nomination did not disqualify a person from being chosen as a member of the State Legislature.
It is pertinent to refer to the observation made by Gajendragadkar, J. in Ram Padarath Mahto 's case (supra) which runs as under: "It may sound technical, but in dealing with a statutory provision which imposes a disqualification on a citizen it would be unreasonable to take merely a broad and general view and ignore the essential points of distinction on the ground that they are technical.
The narrow question is: if the State Government undertook the work of supplying the grain, is the contract one for the supply of grain?; In our opinion, the answer to this question must be in the negative; that is why we think the High Court did not correctly appreciate the effect of the contract when it held that the said contract brought the appellant s case within the mischief of section 7(d).
" Unless the contract in question is one which clearly falls under section 9 A of the Act, it would not be proper to hold that the person who is a party to the contract is disqualified for being chosen as a member to the State Legislature.
In B. Lakshmikantha Rao vs D. Chinna Mallaiah and others the question that arose for consideration was whether a person who was carrying on the business in arrach and toddy under a contract with the Government under the provisions of the Andhra Pradesh Excise Act, 1968 was disqualified for being chosen as a member of the Legislature.
The facts of that case briefly stated were thus.
There was an agreement between the highest bidder, i.e., the returned candidate and the Government in respect of the carrying on the business in arrack and toddy.
A perusal of the relevant provisions i.e., sections 15 and 17 of the Andhra Pradesh Excise Act and rule 21 of the Rules framed under that Act as well as the agreements signed by the returned candidate, showed that the highest bidder had to deposit the monthly rentals and purchase the arrack from the Government at the issue price and sell the same to the public.
If there were any arrears in the monthly rentals the same could be recovered as arrears of land revenue.
Similarly with regard to the toddy shop he had to tap the toddy from the trees allotted to him by 385 the Government by paying the tree tax and sell the toddy to the public.
For the toddy shop also he had to pay monthly rentals and if he fell in arrears the same could be recovered as arrears of land revenue.
There were other incidental conditions in the agreements.
The Andhra Pradesh High Court held that since the contracts entered into by the successful candidate with the State Government to sell arrack and toddy did not come within the mischief of section 9 A of the Act as they were neither for supply of goods to the Government nor for the execution of any works undertaken he did not suffer from any disqualification for being chosen as a member of the Legislative Assembly.
We have gone through the above decision carefully.
We are of the view that the High Court was right in the said case in holding that the returned candidate had not suffered from any disqualification by reason the fact that he was an excise contractor.
In the present case the position of the Ist respondent is more or less similar to the position of the returned candidate in the decision of the Andhra Pradesh High Court.
The Ist respondent had acquired in the public auction the right to collect the toll by paying the amount which he had offered to pay under the contract.
He had not undertaken thereby any contract for execution of any works undertaken by the Government.
The word 'works ' in the expression in 'execution of any works ' appearing in section 9 A of the Act is used in the sense of 'projects ', 'schemes ', 'plants ', such as building works, irrigation works, defence works etc.
The Ist respondent in this case had not undertaken to carry on any such work.
According to the Shorter oxford English Dictionary the expression 'work ' means a structure or apparatus of some kind; an architectural or engineering structure, a building edifice.
When it is used in plural, i.e., as 'works ' it means 'architectural or engineering operations; a fortified building; a defensive structure, fortification; any of the several parts of such structure '.
The word 'works ' used in Entry 35 of List II of the Seventh Schedule of the Constitution of India which reads as "works, lands and building vested in or in the possession of the State" is used in the same sense.
The running of boats across inland waterways in a topic which falls under Entry 32 of List III of the Seventh Schedule which reads thus: "Shipping and navigation on inland waterways as regards mechanically propelled vessels, and the rule of the road on such waterways, and the carriage of passengers and goods on inland waterways subject to the provisions of List I with respect to national waterways.
" It is, therefore, difficult to hold that when a person acquires the right to collect toll at a public ferry under section 8 of the Ferries Act he is performing a contract of execution of works undertaken by the Government.
It 386 may have been perhaps different if the words 'in performance of any services ' which were present in section 7(d) of the Act, as it stood prior to its amendment in 1958 had been there is section 9 A of the Act.
We do not find any substance in the argument urged on behalf of the appellant that because under Condition No. 10 of the form of lease prescribed under the Ferries Act the lessee is under an obligation during the period of lease to mark buoys or in any other suitable manner, all submerged obstruction or dangerous rocks in the rivers within half a mile of the landing ghats and shall be held responsible for any loss of damage caused to the marboats striking against such submerged obstructions or dangerous rocks it should be held that the Ist respondent had undertaken to execute works undertaken by the Government.
The above condition only requires the lessee to mark buoys or in any other suitable manner the places where there were any submerged obstruction or dangerous rocks within half a mile of the landing ghats.
Having regard to the conditions of the lease and the provisions of the Act and the Rules made thereunder we are clearly of the view that the activity undertaken by the lessee under the agreement cannot be considered as an agreement for execution of works undertaken by the State Government.
We are, therefore, of the view that the contract which the Ist respondent had entered into with the State Government even though it was subsisting on the date of scrutiny of nominations would not have the effect of disqualifying him for being chosen as a member of the State Legislative Assembly since section 9 A of the Act is not at all attracted to such a case.
The learned counsel for the appellant however tried to justify the rejection of the nomination papers of the Ist respondent on the ground that the appellant was holding an office of profit under the State Government when the contract to ply the boats at the ferry was subsisting.
We find it difficult to agree with the learned counsel that under the contract in question the Ist respondent had been inducted into any office under the State Government.
An 'office ' means a public or private employment with certain duties to be performed.
The words 'office ' and 'officer ' are used sometimes in a wide sense and sometimes in a narrow sense.
A lawyer is sometimes called an officer of the Court.
But still he is not holding any office profit as such for purposes of the law of elections.
A lessee of tolls under the Ferries Act is only a contractor who under the lease acquires the right to collect whatever toll is paid by persons who the ferry against payment to Government in 387 advance whatever amount he had agreed to pay at the time of auction.
Whether he makes any profit in that business or not depends ultimately on the amount of toll he is able to realise during the whole period of lease.
Such a contract is essentially in the nature of a business.
It cannot be termed as an office in any sense.
A transaction of lease under the Ferries Act is not a lease of an office.
In State of Uttar Pradesh vs Satya Narain Prasad, ; this Court dealing with a case in which the question involved related to the termination of lease under section 10 of the Ferries Act has referred to the right of a lease as one having the character of a business in the following passage at page 200: "In construing section 10 of the Act it has to be borne in mind that it deals with the cancellation of a lease of tolls of a public ferry.
In other words, once the notice in effective valuable rights of a lessee came to an end.
This is recognised by the Legislature by providing a six month 's notice.
This period is given so that he can wind up this particular business. " (underlining by us) It is urged that since the Ist respondent had the right to secure the services of the police whenever needed the Ist respondent should be deemed a person holding an office of profit.
The right to requisition the services of the police again did not make the Ist respondent a person holding an office of profit.
In fact for that matter anybody may complain to the police and seek their assistance when there is threat to public property or to the person or property of any person.
We hold that the Ist respondent was not holding an office of profit when he was a lessee under the Ferries Act just like an Excise contractor or a fair price shop dealer who sells grains supplied by Government is not such a holder of office of profit.
In view of the above findings it is not necessary to decide the question whether the lease was subsisting on the date of scrutiny of nomination or not Thus in any view of the matter it cannot be held that the Ist respondent was disqualified for being chosen as a member of the State Legislature.
The rejection of his nomination papers was, therefore, improper.
The election of the appellant was, therefore, rightly set aside by the High Court on the ground mentioned in section 100 1)(c) of the Act.
388 The appeal, therefore, fails and it is dismissed.
Having regard to the peculiar features of the case we direct the parties to bear their own costs both in this Court and in the High Court.
N.P.V. Appeal dismissed.

Output:
% The first respondent filed an election petition before the High Court for setting aside the election of the appellant to the State Legislative Assembly under section 100(1)(c) of the Representation of the People Act, 1951, contending that the rejection of his nomination papers by the Returning officer was erroneous as he had, in fact, completed 25 years of age on the date of his nomination.
The petition was opposed by the appellant contending that as the first respondent had not completed 25 years of age on the date of scrutiny of nominations, the nomination papers had been rightly rejected, that as the first respondent had not subscribed the oath as required by article 173(a) of the Constitution, he was not qualified to contest the election, and that the first respondent was also disqualified to be chosen to fill a seat in the Legislature of the State, as on the date of scrutiny of the nominations he had a subsisting contract entered into by him with the Government, under which he had been treated as a lessee of the Ferry for the period between 1.4.85 to 31.3.86.
The High Court framed issues on the basis of pleas raised by parties and, after recording their evidence held that the first respondent had completed the age of 25 years on the date of scrutiny and, therefore, had necessary qualification for being a member of the Legislative 371 Assembly, that the appellant had not proved that the first respondent had not subscribed the oath as required by law, and that as the first respondent had been relieved from the charge of the Government ferry with effect from 21.11.85, there was no subsisting contract between the first respondent and the Government on the date of scrutiny of nominations and, therefore, he was not disqualified under section 9 A of the Act.
It accordingly came to the conclusion that the rejection of the nomination papers filed on behalf of the first respondent was improper and set aside the election of the appellant.
In the appeal before this Court, a further plea was raised on behalf of the appellant that the first respondent was also disqualified from contesting the elections as he held an office of profit under the State Government by virtue of the contract entered into by him with the State Government, even though the contract in question may not be one of those contracts specified in section 9 A of the Act.
Dismissing the appeal, ^ HELD: 1.
The first respondent was not disqualified for being chosen as a member of the State Legislature.
The rejection of his nomination papers was improper.
The election of the appellant was, therefore, rightly set aside by the High Court, on the ground mentioned in Section 100(1)(c) of the Representation of the People Act 1951.
[387G H] 2.1 An analysis of section 9 A of the Representation of the People Act, 1951 shows that only in two cases a person would be disqualified if he has entered into a contract with the appropriate Government in the course of his trade or business which is subsisting on the date of scrutiny of nomination.
They are (1) when the contract is one for supply of goods to the appropriate Government and (2) where the contract is for execution of any works undertaken by that Government.
Unless the contract in question is one which clearly falls under section 9 A of the Act it cannot be held that the person who is a party to the contract is disqualified for being chosen as a member of the State Legislature.[382F G] In the instant case, the contract is not one for supply of goods to Government.
The first respondent had acquired in the public auction the right to collect the toll by paying the amount offered by him under the contract and had not undertaken any contract for execution of any works undertaken by the Government.
When a person acquires a right to collect toll at a public ferry under section 8 of the Ferries Act.
it cannot be 372 held that he is performing a contract for execution of works undertaken by the Government.
[385D, G H] Merely because under one of the conditions of the Form of lease prescribed under the Ferries Act, the lessee is under an obligation during the period of lease to mark buoys or in any other suitable manner all submerged obstructions or dangerous rocks in the rivers within half a mile of the landing ghats, and shall be held responsible for any loss or damage caused to the marboats striking against such submerged obstructions or dangerous rocks it cannot be held that the first respondent had undertaken to execute works undertaken by the Government.
[386B C] Having regard to the conditions in the lease and the provisions of the Ferries Act and the rules made thereunder the activity undertaken by the lessee under the agreement cannot be considered as an agreement for execution of works undertaken by the State Government and, therefore, the contract, which the first respondent had entered into with the State Government, even though it was subsisting on the date of the scrutiny of nominations, would not have the effect of disqualifying him for being chosen as a member of the State Legislative Assembly, since section 9 A of the Representation of the People Act, 1951 is not at all attracted to such a case.
[386D E] B. Lakshmikantha Rao vs D. Chinna Mallaiah and others, approved.
N. Satyanathan vs K. Subramanyan and others; , explained.
Ram Padarath Mahto vs Mishri Singh & Anr., ; referred to.
2.2 A lessee of tolls under the Ferries Act is only a contractor who under the lease acquires the right to collect whatever toll is paid by persons who use the ferry against payment to Government in advance whatever amount he has agreed to pay at the time of auction.
Whether he makes any profit in that business or not depends ultimately on the amount of toll he is able to realise during the whole period of lease.
Such a contract is essentially in the nature of a business.
It cannot be termed as an office in any sense.
A transaction of lease under the Ferries Act is not a lease of an office.
The first respondent was, therefore, not holding an office of profit when he was a lessee under the Ferries Act just like an 373 Excise Contractor or a fair price shop dealer who sells grains supplied by Government is not such a holder of office of profit.[386H; 387A B, F] State of Uttar Pradesh vs Satya Narain Prasad, ; , referred to.
2.3 The High Court was right in upholding, on the basis of the evidence of the three witnesses examined by the first respondent and the electoral roll and the High School Leaving Certificate, that the first respondent was more than 25 years of age on the date of scrutiny and was thus eligible to be a member of a Legislative Assembly.
[377D]


Input:
vil Appeal No. 308 of 1964.
Appeal by special leave from the judgment and order dated September 10, 1962 of the Calcutta High Court in Income tax Reference No. 115 of 1957.
A.V. Viswanatha Sastri, B. Sen Gupta and P.K. Ghosh, for the appellant.
N.D. Karkhanis and R.N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Shah, J.
The appellant is a Hindu undivided family and carries on business as a dealer in "iron scrap and hardware".
Messrs Hoare Miller and Company Ltd. hereinafter called 'the Company ' were owners of a jute pressing factory installed on a piece of land belonging to the Company.
Adjacent to that land were two pieces of land: one was leasehold, and the other held by the Company as a licensee from the Government of West 604 605 Bengal.
On January 21, 1941 the Company leased out to one Ramnath Bajoria the jute pressing factory together with the machinery standing on the land owned by the Company for ten months commencing from January 10, 1941.
Ramnath Bajoria failed to vacate and deliver up possession of the premises demised to him, after the expiry of the period of the lease, and the Company instituted a suit in ejectment against him.
By an agreement dated October 31, 1942 the appellant agreed to purchase all the rights of the Company in the factory and the appurtenant premises for Rs. 2,45,000.
On November 14, 1942 the Company delivered to the appellant possession of the property agreed to be sold, save and except the factory demised under the lease to Ramnath Bajoria and the machinery included in the lease.
On February 26, 1943 the Company executed a conveyance in favour of the appellant conveying the factory and the appurtenant premises.
On June 12, 1943 the appellant agreed to sell to one Ranada Prasad Saha the property purchased from the Company for Rs. 4,73,364/3/6 free from all encumbrances.
On August 10.
1943 the appellant was substituted as a plaintiff in the suit filed by the Company against Ramnath Bajoria, and obtained possession of the factory premises.
By a deed of conveyance dated September 30, 1943 the appellant conveyed to Ranada Prasad Saha the factory and the appurtenant premises and delivered possession thereof.
In the deed of conveyance the property sold was described in three separate Schedules.
Schedule I, Press House, office, residential buildings and three warehouses on land owned by the Company: Schedule 11 ; leasehold land together with a warehouse known as Kalibari godown: Schedule II1; two warehouses on land held as licensee by the Company from the Government of West Bengal.
The Income tax Officer.
District Ii(1), CAlcutta.
brought to tax in the hands of the appellant Rs. 2,24,864 bring the profit arising out of the sale of the property to Ranada Prasad Saha.
The Income tax Appellate Tribunal partially modified the order and reduced the total income by Rs. 7,000.
The Tribunal then drew up a statement of case and referred the following question to the High Court of Judicature at Calcutta: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the surplus of Rs. 2,35,211 received by the assessee as a result of the sale of the jute press referred to in the Appellate order arose out of an adventure in the nature of trade and was therefore rightly assessed to tax?" The High Court answered the question in the affirmative.
With special leave granted by this Court, the appellant has appealed to this Court.
L/P(N)4SCI 12 606 At the material time, capital gains were not taxable, and the only question failing to be determined is whether profit made by the appellant by sale of the property to Ranada Prasad Saha was taxabIe under section 10 of the Indian Income tax Act.
The Tribunal found the following facts proved: The appellant was carrying on business in iron scrap and hardware and never carried on any business in jute or in pressing jute.
At the material time when the purchase of the Jute Press was made, the appellant had, because of abnormal conditions prevailing in the town of Calcutta, closed its business in iron scrap and hardware.
The appellant purchased the jute press and the premises appurtenant thereto subject to litigation pending in the High Court, effected certain repairs and kept the factory in running condition, but made no attempt to start or organise the business of pressing jute, and his plea that he was not able to secure labour for working the press was not true.
Soon after he bought the factory, the appellant received an offer from Ranada Prasad Saha to buy the factory and he immediately accepted the offer to sell it to him.
These facts in the view of the Tribunal indicated that the appellant purchased the jute press, subject to litigation, with the sole object of reselling at profit at the earliest opportunity, and therefore the transaction was in the nature of a trading venture.
The High Court substantially agreed with this view.
Section 10 of the Indian Income tax Act, 1922 makes profits and gains of business, profession or vocation carried on by an assessee taxable.
The expression "business" is defined in section 2(4) as inclusive of "any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce or manufacture".
It is common ground that the transaction of purchase and sale of the factory and appurtenant premises was an isolated venture.
To reiterate the sequence of material events: the appellant agreed to purchase the Jute Press from the Company on October 31, 1942 subject to litigation pending in the High Court of Calcutta: possession of the property except the premises in the occupation of the tenant was obtained on November 14, 1942 and the sale deed was obtained on February 26, 1943: on June 12, 1943 the appellant agreed to sell the press to Ranada Prasad Saha: on August 10, 1943 the appellant was substituted as plaintiff in the suit flied by the Company against Ramnath Bajoria, and after obtaining possession of the demised premises the appellant executed on September 30, 1943 a sale deed conveying the property and delivered possession to Ranada Prasad Saha.
Do these facts make out the case that the transaction was an adventure in the nature of trade? It is for the revenue to establish that the profit earned in a transaction is within the taxing provision and is on that account liable to be taxed as income.
The nature of the transaction must 607 be determined on a consideration of all the facts and circumstances which are brought on the record of the income tax authorities.
It has consistently been held by this Court that the question whether profit in a transaction has arisen out of an adventure in the nature of trade is a mixed question of law and fact: see G. Venkataswami Naidu & Company vs The Commissioner of Income tax(1) in which case this Court held that the expression "adventure in the nature of trade" in sub section
(4) of section 2 of the Act postulates the existence of certain elements in the adventure which in law would invest it with the character of trade or business and that a tribunal while considering a question whether a transaction is or is not an adventure in the nature of trade, before arriving at its final conclusion on facts, has to address itself to the legal requirements associated with the concept of trade or business.
Such a question is one of mixed law and fact and the decision of the tribunal thereon is open to consideration under section 66(1) of the Act.
See also Saroj Kumar Maiumdar vs Commissioner of Income tax, West Bengal(2).
A large number of cases were cited at the Bar in support of the respective contentions of the Commissioner and the assessee.
Passages from judgments in the same case were often cited claiming support for the respective contentions.
No useful purpose would be served by entering upon a detailed analysis and review of the observations made in the light of the relevant facts, for no single fact has decisive significance, and the question whether a transaction is an adventure in the nature of trade must depend upon the collective effect of all the relevant materials brought on the record.
But general criteria indicating that certain facts have dominant significance in the context of other facts have been adopted in the decided cases.
If, for instance, a transaction is related to the business which is normally carried on by the assessee, though not directly part of it, an intention to launch upon an adventure in the nature of trade may readily be inferred.
A similar inference would arise where a commodity is purchased and sub divided, altered, treated or repaired and sold, or is converted into a different commodity and then sold.
Magnitude of the transaction of purchase, the nature of the commodity, subsequent dealings and the manner of disposal may be such that the transaction may be stamped with the character of a trading venture: for instance, a man who purchases a large quantity of aeroplane linen and sells it in different lots, and for the purpose of selling starts an advertising campaign, rents offices, engages an advertising manager, a linen expert and a staff of clerks, maintains account books normally used by a trader, and passes receipts and payments in connection with the linen through a separate banking account: Martin vs Lowry(3): a person who carries on a money lending business purchases very cheaply a (2) [1959] Supp. 1 S.C.R. 640.
(2) (3) 608 vast quantity of toilet paper and within a short time thereafter sells the whole consignment at a considerable profit: Rutledge vs The Commissioner of Inland Revenue(1); a person even though he has no special knowledge of the trade in wines and spirits, purchases a large quantity of whisky sells it without taking delivery of it at a considerable profit: Commissioners of Inland Revenue vs Fraser(2), may be presumed having regard to the nature of the commodity and extent of the transaction coupled with the other circumstances, to be carrying on an adventure in the nature of trade.
These are cases of commercial commodities.
But a transaction of purchase of land cannot be assumed without more to ' be a venture in the nature of trade.
A director of a company carrying on the business of ware houseman purchasing a number of houses with a view to resale, and selling them at a profit some years after the purchase: Commissioners of Inland Revenue vs Reinhold(3): a person carrying on business in various lines, including an Engineering Works, purchasing land which was under requisition by the Government, negotiating sale thereof before the land was derequisitioned, and selling it after the land was released: Saroj Kumar Mazumdar vs Commissioner of Income tax, West Bengal(4); and a syndicate formed to acquire, an option over a rubber estate with a view to earn profit, and finding the estate acquired too small acquiring another estate and selling the two estates at a profit: Leeming vs Jones(3) may not be regarded as commencing a venture in the nature of trade.
These are cases in which the commodity purchased and sold is not Ordinarily commercial, and the manner of dealing with the commodity does not stamp the transaction as a trading venture.
It may be emphasized from an analysis of these cases that a profit motive in entering a transaction is not decisive, for, an accretion to capital does not become taxable income, merely because an asset was acquired in the expectation that it may be sold at profit.
Purchase of the property by the appellant was an isolated transaction not related to the business of the appellant.
The Tribunal and the High Court were, in our judgment, in error in holding that the right of the Company was not sold to the appellant in the lands in Sch.
II and Sch.
III properties.
The land in Sch.
II was leasehold, and on it was constructed a warehouse and the land in Sch.
III was held as a licensee and two warehouses were standing thereon.
The conveyance by the Company to the appellant is not on the record, but the recitals in the deed dated September 30, 1943 definitely indicate that the rights of the Company without any reservation were purchased by the appellant, and the appellant sold its entire rights in the properties in Schs.
I, (1) (2) (3) (4) 11 T.C.297.
(5) 15 T.C.333.
609 II and III without any reservation.
It is true that the appellant had put the factory in a working condition, but had not organized a jute pressing business, had not obtained a licence for working the factory, had not attempted to secure orders for pressing jute, and had not employed labourers, The appellant 's claim that it was not s9 done because the appellant could not secure labourers has not been accepted.
But that is not a decisive circumstance.
The factory was in the occupation of the lessee Ramnath Bajoria and possession was obtained after August 10, 1943.
But before the 10th of August an agreement of sale was executed by the appellant in favour of Ranada Prasad Saha.
In the light of the sequence of events, the inference that the appellant had no intention to commence doing jute pressing business does not necessarily follow.
Even if that inference be regarded as binding upon the Court it cannot be presumed that the sole intention of the appellant was to start a venture in the nature of trade.
Barring the expectation of profit and realization of profit by sale of the property, there is no evidence bearing on the intention with which the property was purchased.
In the deed of conveyance dated September 30, 1943 there is a reference to delivery of "joists, girders, fabricated steel, C.I. roofs, bolts, nuts, hooks and ceiling planks, being portions of the materials of the godowns and structures" standing on the land described in the third schedule.
It was submitted that after purchasing the factory and the appurtenant premises the appellant demolished "certain godowns" in Sch.
III land and sold the material as scrap.
This, it was claimed, was if not part of the business = a venture similar to the normal business of the appellant.
But there is no evidence on the record as to how many warehouses stood originally on Sch.
III land.
The sale deed dated September 30, 1943 clearly states that there were two warehouses on steel frames on the land held as licensee by the Company and possession of these was given to the purchaser Ranada Prasad Saha.
Beside these warehouses there were three warehouses on the land described in Sch.
I and one warehouse on the land described in Sch.
It is not claimed that these warehouses were insufficient for carrying on the business of jute pressing: nor is there any evidence that the warehouse or warehouses which were demolished were in a serviceable condition.
The only fact which may be taken to be established is that a warehouse or warehouses were demolished by the appellant and the materials were sold as part of the property sold under the deed dated September 30.
From this circumstance, an inference that the entire property was purchased with intent to demolish and dispose of as scrap cannot be raised.
Granting that the appellant made a profitable bargain when he purchased the property.
and granting further that the appellant had when he purchased it a desire to sell the property if a favourable offer was forthcoming.
these could not without other 610 circumstances justify an inference that the appellant intended by purchasing the property to start a venture in the nature of trade.
Absence of advertisement inviting offers for purchasing the property, and absence of brokers in the negotiations for sale between the appellant and Ranada Prasad Saha, are circurmtances which lead to no positive inference.
There is nothing to show that the appellant desired to convert the property to some other use.
No brokers were employed for entering into a transaction of sale.
It appears that Ranada Prasad Saha on coming to learn that the factory was for sale approached the Company after the sale deed was executed in favour of the appellant and he was informed that it had already been sold to the appellant.
Thereafter Saha contacted the appellant and agreed to purchase the property.
The property purchased was not sudh that an inference that a venture in the nature of trade must have been intended by the appellant in respect thereof may be raised.
A person purchasing a jute press may intend to start his own business even if he is not already in that business, or he may let it out on favourable terms.
The property purchased by the appellant was capable of being let out and it had in fact been let out by the Company before the date of sale in favour of the appellant.
It was capable of fetching annual income, and there is no evidence that at the material time it could not be reasonably let out.
We therefore discharge the answer given by the High Court in respect of the question submitted by the Tribunal and record a negative answer.
The appeal is allowed.
The Commissioner to pay the costs in this Court and the High Court.
Appeal allowed.

Output:
The assessee who was dealing in iron scrap and hardware had purchased a jute press and sold it at a profit.
The Income tax Officer brought to tax in the hands of the assessee, the profit arising out of this sale.
The Appellate Tribunal modified the order and reduced the total income.
At the instance of assessee the Tribunal referred to the High Court, the question, whether the surplus received by the assessee as a result of the sale of the jute press arose out of an adventure in the nature of trade and was, therefore, liable to tax.
The High Court answered the question in affirmative.
In appeal; HELD: The question must be answered in the negative.
Granting that the assessee made a profitable bargain when he purchased the property and granting further that the assessee had, when he purchased it, a desire to sell the property, if a favourable offer was forthcoming, these could not without other circumstances, justify an inference that the assessee intended by purchasing the property to start a venture in the nature of trade.
[609H 610A] A profit motive in entering a transact on is no decisive, for, an accretion to capital does not become taxable income, merely because an asset was acquired in the expectation that it may be sold at a profit.
[608F] Purchase of the property by the assessee was an isolated transaction not related to the business of the assessee.
[608G] Case law referred to.


Input:
appeal No. 1923 of 1966.
Appeal by special leave from the order dated February 14, 1966 of the Central Govt.
Labour Court, Rajasthan, Jaipur in Misc.
Application No. CLC 4 of 1964.
G. L. Sanghi and P.M. Tiwari for the appellant.
111 M. K Ramamurthi, J. Ramamurthi and Vineet Kumar, for the respondent.
The Judgment of the Court was delivered by Mitter, J.
This appeal by special leave is from an order of the Central Government Labour Court, Rajasthan passed on February 14, 1966 on an application under section 33 C (2) of the filed by the respondent, Hari Har Nath Bhargava, holding that the latter was entitled to supervisory allowance under paragraph 164 (b) (9) of the Sastry Award even for the period when the latter was not actually performing supervisory duties.
The facts in this case may be shortly stated.
The respondent was appointed a clerk by the State Bank of Jaipur in 1949.
He was transferred to Kota in the year 1952.
He was entrusted with supervisory work from 6th April, 1954.
The bank executed a power of attorney in his favour on May 31, 1954 in pursuance of a resolution of its Board of Directors passed on 20th May, 1954.
He was transferred from Kota to Jaipur on July 12, 1955.
On December 27, 1955 he was posted at Sikar where he had to perform supervisory duties.
On January 1, 1956 he was promoted to the cadre of junior officers of the bank.
On March 31, 1964 the respondent filed an application before the Central Government Labour Court, Rajasthan under section 33 C (2) praying for computation of special allowance under what is known as the Sastry Award on the ground that he had been discharging supervisory duties from 6th April, 1954 to 1st January, 1956.
By this time the Bank of Jaipur had amalgamated with the Bank of Bikaner and the amalgamated bank, the appellant before us, came to be known as the State Bank of Bikaner and Jaipur.
The execution of the power of attorney dated 29th May, 1954 was admitted but the appellant denied "that the duties entrusted to the respondent constituted performance by him of any supervisory nature of work".
A point was also taken that although no period of limitation is laid down by any statute with regard to applications under section 33 C of the Act the respondent 's claim being a stale one should not be entertained.
112 The appellant amended its written statement in 1965 wherein it was stated that the respondent was only required to perform the functions enumerated in the power of attorney as and when so directed by the bank.
As a matter of fact, he had been entrusted with supervisory duties from 6th April, 1954 to 12th July, 1955 and thereafter from 27th December, 1955 to 6th January, 1956.
The respondent was examined before the Labour Court where he said that he was "the second signatory at Kota during the period, April 1954 to middle of July 1955".
At the Jaipur branch where he was transferred, there were many signatories above him, while at Sikar there was only another such signatory and he was the second officer.
Obviously what he meant by the word "signatory" was a person authorised by the bank to discharge the functions covered by the power of attorney.
The relevant portion of the said power of attorney read "The Bank do here by nominate constitute and appoint Shree Hari Har Nath Bhargava in the service of the said bank at Kota to be the true and lawful attorney of the said bank at its registered office at Jaipur aforesaid or at any other place or places in India where the said bank may have or establish branches or agencies and to which he may from time to time or at any time be appointed by the said bank as Branch Manager, Agent, Sub Agent, Accountant, or in any capacity whatever for and in the name of and on behalf of the said bank to do, transact jointly with Secretary, Manager, Sub Manager etc.
the matters and things mentioned thereafter.
" The matters mentioned included the endorsement of "hundies, drafts, cheques, warrants, railway receipts, pension bills and other negotiable and mercantile instruments and to commence, prosecute, enforce, defend, answer and oppose any suit or other legal proceedings and demands touching any matters in which the bank was or may thereafter be interested or concerned.
" 113 It is worthy of note that after the execution of the power of attorney the respondent was empowered to, discharge functions which could only be described as.
supervisory in nature and unless there was a command or direction that he should not act thereon or unless the power of attorney was cancelled his authority, to act in a supervisory capacity would continue in force.
The Sastry Award is not on record in extenso but paragraph 164 thereof quoted by the Labour Court shows; that certain categories of employees were to be considered as fit for special allowances.
These included inter alia stenographers, cashiers (other than routine clerks), supervisors, clerks in charge, departmental in charges and head clerks.
The award noted that although scales of basic pay and dearness allowance for clerical and subordinate staffs had been laid down for doing ordinary duties, there were certain posts even in these grades for which an incumbent required special qualifications or skill for the efficient discharge of the duties assigned and an extra payment in such cases was necessary by way of, recognition of and compensation for the skill or responsibility.
The award further noted that : "Having regard to the numerous banks of varying sizes and resources, it is not possible to have one general pattern of allowances for such special types of work. .
It is neither easy nor desirable to bring them all into one fairly general rule regardless of the bank 's past practice or present capacity." Paragraph 162 of the award shows that there were three, ways in which this extra payment might be provided for (1) The employee might be given additional increments in the same scale.
(2) He might be paid a lump sum allowance in addition to his other emoluments.
This was said to have the advantage of carrying a man even beyond the usual maximum limit.
(3) He might be given a higher scale leading up to a higher maximum. 114 According to the award it was on the whole better to adopt either the first or the second method or sometimes even a combination of both.
According to the Labour Court the underlying idea behind the said award was that when one general scale for clerical service had been provided in the award, it was thought just and proper that persons with special qualifications or skill required for discharging work carrying with it greater responsibility than the usual work should definitely get higher emoluments than the ordinary workmen.
The Labour Court said that "this did not mean that the person of the same qualifications and skill who had been granted the powers of attorney by the bank should be allowed special allowance only for any particular period unless a man was temporarily appointed to do supervisory work".
In the result, the Labour Court allowed the respondent supervisory allowance at Rs. 40 p.m. with ,effect from 6th April, 1954 to 31st December, 1955 with, consequential benefits.
It is to be noted however that although a point had been taken in the written statement of the bank about the delay in the filling of the application under section 33 C it had not been pressed before the Labour Court.
Mr. Sanghi appearing for the appellant was prepared to concede that so far as the periods 6th April, 1954 to 12th July, 1955 and 27th December, 1955 to 31st December, 1955 were concerned he was not contesting the claim.
But in so far as the period 13th July, 1955 to 27th December, 1955 was concerned, his client was pressing the appeal as a matter of principle as this would constitute a test case by which other similar cases might fall to be decided.
This Court had to deal with a case where an identical question arose.
In State Bank of Hyderabad vs V. A. Bhide (1) this Court had to consider the claims of the respondents in that appeal for payment of special allowance granted to supervisors under what were known as the Sastry and Desai awards.
It was there contended on behalf ,of the appellant bank that in order to claim the supervisory allowance the parties must establish that the main or essential duties entrusted to them and actually discharged by (1)[1969] them were duties and functions of a supervisory nature.
This Court considered the Sastry and Desai awards and observed (at p. 727) : ". before a person can claim the supervisory special allowance, he must establish that he has discharged the duties and functions which are similar to 0r the same as the duties or functions assigned to supervisors coming under category 9.
This decision [Lloyds Bank Ltd. vs Panna Lal Gupta and others (1)] also makes it clear that in deciding the status of an employee claiming the special allowance, the designation of the employee is not decisive and what determines the status is a consideration of the nature of the duties and functions assigned to the employee concerned.
" In our view the payment of a special allowance is called for when an employee discharges duties of a supervisory nature or is accorded the status of a person competent to discharge functions of a supervisory character.
If no power of attorney is execute& as in this case but in fact the employee is asked to render services of a supervisory character and the employee does such work at the request of the bank, he becomes entailed to the allowance.
Once however a power of attorney giving the wide powers of agency as was done in this case is executed, it should be held that the management had placed him in a category of persons with responsibility and the employee was to discharge the responsibility without any further request in that behalf.
It may be that the initial giving of power of attorney was necessitated by the fact that at Kota there was only one officer besides the respondent who could discharge duties like endorsing hundies, drafts etc.
and it became necessary for the bank to have a second officer who could carry on this kind of work.
But the power of attorney does not show that the bank thought it necessary to clothe the respondent with the said powers only for discharging his duties when he was at Kota.
The power of attorney was operative at any branch of the bank irrespective of the capacity which might be occupied by the respondent at a particular point of time.
It may be (1) 116 that at Jaipur there was a number of officers superior to the respondent who were empowered to discharge duties mentioned in the power of attorney but this does not necessarily lead to the inference that the respondent lost his responsibility or was denuded of the powers while he was at Jaipur.
If he discharged any of the duties men tioned in the power of attorney the same would be lawful and would be binding on the bank.
The fact that he was not actually called upon to discharge such functions did not take away from his responsibility or status of a person ,competent to discharge functions of a supervisory character and we see no reason why he should be deprived of supervisory allowance unless the bank gave him notice that he was not to act on the power of attorney while at Jaipur.
We therefore hold that the Labour Court had come to the correct conclusion.
Mr. Sanghi tried to urge the point that the Labour ,Court should not have entertained the application as being inordinately belated and that even though the Labour Court did not adjudicate on this point it was open to the bank to urge it before us.
We made it clear that we were not going to entertain this plea in view of the fact that although the point had been taken in the written statement of the bank, it was not agitated before the Labour Court and further was not taken even in the special leave petition.
In the result, the appeal is dismissed.
The order for costs made at the time of the grant of the special leave will stand.
S.C. Appeal dismissed.

Output:
The respondent, a clerk of the appellant bank, was entrusted with supervisory work and a general power of Attorney was executed in his favour to endorse Hundies cheques, warranty, Railway receipts, pension bills and other negotiable and mercantile instruments and to prosecute, defend, answer and oppose any suit etc.
on behalf of the appellant bank.
The respondent filed an application before the Labour Court, Rajasthan under section 33C (2) of the , praying for computation of special allowance under the Sastri Award, on the ground that he was discharging supervisory duties.
The Labour Court, allowed supervisory allowance of Rs. 40 p.m. with consequential benefits.
In appeal to this Court the appellant bank ,contended that since the respondent was not called upon to perform the functions enumerated in the power of attorney, he is not entitled to any special allowance.
Dismissing the appeal.
HELD : (i) The payment of a special allowance was called for when an employee discharged duties of a supervisory nature or was accorded the status of a person competent to discharge functions of a supervisory character.
[115d] (ii) Since the Management by the power of Attorney, had placed the respondent in a category of persons with responsibility and entrusted him with functions of a supervisory character and the employee was to discharge that responsibility, he was entitled to supervisory allowance no matter, whether he was actually called upon to discharge such functions or not for a certain period of time.
[1 15F, 11 6B] State Bank of ' Hyderabad vs V. A. Bhinde, [1969] 2 L. L. J. 713, referred to.


Input:
Appeal No. 21 of 1956.
Appeal from the judgment and decree dated August 12,1954, of the Bombay High Court in Appeal No. 45 of 1954, arising out of the judgment and decree dated February 17, 1954, of the said High Court in Suit No. 246 of 1956.
H. J. Umrigar, N. N. Keswani and R. H. Dhebar, for the appellant.
M. C. Setalvad, Attorney General of India, section M. Dubash and G. Gopalakrishnan, for the respondents.
March 25.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal on a certificate granted by the Bombay High Court.
The brief facts necessary for its disposal are these.
Messrs. section section Miranda Ltd (hereinafter called the respondent) is a company and was holding a trade and import licence of foreign liquor as well as a vendor 's licence under the Bombay Abkari Act (Bom.
V of 1878) (hereinafter 399 called the Act), upto the end of March 1949.
It used to keep the liquor in a bonded warehouse.
On April 2, 1948, the respondent was informed by the State of Bombay (hereinafter called the appellant) to remove S, the liquor from the bonded warehouse after paying the necessary excise duty.
In pursuance of this letter, the respondent paid the duty and got transport permits from the appellant.
It may be mentioned that the bonded warehouse was in the premises of the respondent itself and all that happened after the payment of the duty was that the liquor no longer remained in bond but came into possession of the respondent.
The transport permits were issued on April 5, 1948, and thereafter the respondent took over the liquor and some of it was sold.
On December 16, 1948, a notification was issued by the appellant (hereinafter referred to as the Notification) whereby the duty on foreign liquor was doubled.
Thereupon the respondent was asked by the appellant to pay the additional duty upon the liquor which was still lying in its godown and was also told that it would not be permitted to deal with that liquor until the additional duty was paid.
The respondent objected to this demand but paid the duty, which came to over two lacs of rupees, under protest.
Thereafter a notice was given by the respondent under section 80 of the Code of Civil Procedure to the appellant and was followed by a suit on the original side of the Bombay High Court.
The main contention of the respondent was that the Notification in so far as it imposed and levied additional duty on the stock of foreign liquor on which the duty had already been paid at the time of its issue ' from the bonded warehouse was illegal, invalid and ultra vires the Act and in particular beyond the scope of section 19 of the Act.
The respondent therefore claimed refund of the duty which it had paid under protest and also interest at 6 per cent.
per annum from the date of payment till the date of recovery.
The suit was resisted by the appellant, and its case was that the Notification was valid and that the respondent was bound to pay the duty prevailing on 400 the transport of the excisable articles at the time of transporting the same from its premises to another place within the State of Bombay.
Thus the only question that fell for consideration was whether the additional duty imposed and levied under the Notification was legally levied.
The learned judge, who tried the suit, was of the opinion that it was competent for the legislature to impose tax on excisable articles whenever they were transported from one place to another and that that power was delegated to the State Government which was thus competent to impose a duty on excisable articles not only once when they were transported in the beginning but also thereafter whenever they were transported from one place to another within the State before the goods passed into the hands of the consumer, and dismissed the suit.
The respondent went in appeal against the dismissal.
The appeal was heard by a Division Bench and was allowed and the suit was decreed with interest at certain rates.
The Division Bench was of the opinion that reading sections 10 and 19 together it was clear that when the duty mentioned in section 19 had been paid, the prohibition contained in section 10 must disappear subject to the Explanation to section 19.
It also held that the first proviso to section 19A of the Act was really a proviso to section 19 and determined the rate at which the duty was to be paid and that there could be no further imposition of duty against the terms of that proviso by the Notification.
The main contention on behalf of the appellant before us is that it is open to the legislature to impose excise duty at more points than one and that that was what has been done by the legislature in this case and the Government when it made the Notification in December 1948 was carrying out the provisions of the Act.
Reliance in this connection was placed on sections 3(10), 10 and 19 of the Act, and it is urged that reading these three sections, together it will be clear that the Notification was valid and within the powers of the State Government.
The relevant portion of the Notification is in these terms: 401 " In exercise of the powers conferred by section 19 of the Bombay Abkari Act, 1878 (Bombay V of 1878), and in partial supersession of all previous orders and notifications issued thereunder, that is to say, in so far as they relate to the imposition of excise and countervailing duties charged on the excisable articles specified in column 1 of Schedules A and B hereto annexed, the Government of Bombay is pleased to direct that (a) excise or countervailing duty, as the case may be, shall be imposed on the excisable articles specified in column 1 of Schedule A at the rate specified in columns 2 and 3 thereof, when such excisable articles are (i) imported into the Province in accordance with the provision of sub section (1) of section 9 of the said Act; or (ii) issued from any brewery, distillery 'or a warehouse established under the said Act in the Province; or (iii) transported from the premises of persons holding a Trade and Import license under the said Act to any place within the Province: Provided that no such duty shall be imposed on the excisable articles which have been imported into British India and were liable on such importation to duty under the Indian Tariff Act, 1934, or the : Provided further that if excise or countervailing duty has already been paid on such excisable articles for their import, issue or transport for consumption into, to or within any place in the Province, the amount of duty to be imposed shall be the difference between the amount of duty leviable at the rates specified in the said Schedule and that already paid on such articles; and (b). . . . . . . ".
Then follow the Schedules Which it is unnecessary to set out.
By the notification excise duty at the rates specified in the Schedules is imposed on excisable articles when they are transported from the premises of persons holding a trade and import licence under the said Act to any place within the State.
The second 402 proviso, however, provides that where some excise duty has already been paid in connection with transport, the amount of duty to be imposed under the Notification would be the difference between the duty leviable under the Notification and the duty already Paid.
The narrow question therefore is whether this additional duty can be legally levied by the State of Bombay and the answer to it will depend on the three provisions of the Act relied upon by the appellant.
3(10) defines "to transport" to mean "to move to one place from another place within the State ".
This definition is very wide and would cover any movement of excisable article at any stage from one place to another within the State.
Then comes section 10, the relevant portion of which is in these terms " No intoxicant and no hemp shall be exported or transported unless (a) the duty, if any, payable under Chapter VI has been paid or a bond has been executed for the payment thereof.
" This section thus forbids the transport of any excisable article unless the duty payable under Chapter VI (which deals with the subject of duties) has been paid.
Lastly, we come to section 19 which is the charging section and is in these terms " An excise duty or countervailing duty, as the case may be, at such rate or rates as the State Government shall direct may be imposed either generally or for any specified local area, on any excisable article (a) imported in accordance with the provision of sub section (1) of section 9; or (b) exported or transported in accordance with the provisions of section 10; or (c) manufactured under a license granted in accordance with the provisions of section 14 or section 15; Provided that (i) duty shall not be so imposed on any article which has been imported into India and was liable on such importation to duty under the Indian Tariff Act, 1894 or the : 403 Explanation Duty may be imposed under this section at different rates according to the places to which any excisable article is to be removed for consumption, or according to the varying strengths and quality of such article.
" This section gives power to the State Government to fix the rate or rates on which the duty will be levied on transport of excisable articles.
The Explanation to the section gives powers to the State Government to impose duties at different rates according to the places to which any excisable article is to be removed for consumption or according to the varying strengths and quality of such article.
The argument on behalf of the appellant is that in view of the very wide definition of the word " transport " and the prohibition of transport contained in section 10 without payment of duty it is clear that every time there is transport the duty becomes payable at the rate fixed by the State Government under section 19 and that there is nothing in these sections which in any way limitsthe power to levy duty at every stage of transport.
If this argument is accepted it will logically mean that every time there is transport of an excisable article duty will have to be paid till the excisable article has been actually consumed.
In other words when for example, the excisable article is transported from the bonded warehouse by a wholesaler he will have to pay duty on it; when a wholesaler sells to a retailer there is bound to be transport from the wholesaler 's premises to the retailer 's premises and the duty will have to be paid again.
Finally when the retailer sells it to a consumer there will again be transport from the retailer 's place to the consumer 's place and duty will have to be paid a third time.
Further if the interpretation as urged on behalf of the appellant is accepted, the duty will have to be paid again and again in the cases mentioned above, even though the rate remains the same.
The fact that in this particular case the rate was changed and that the State Government only demanded the extra duty will not affect the question of interpretation of the three provisions of the Act with which we are concerned.
Was it then the intention of the legislature when it 404 made these provisions to levy duty irrespective of the fact whether the rate was changed or not, again and again as an excisable article passed from the bonded warehouse to the wholesaler, from the wholesaler to the retailer and from the retailer to the consumer ? It is true that it was competent for the legislature to make such a provision; but the question is whether the three provisions which we have set out above, amount to making such a provision.
Sri Umrigar for the appellant fairly admits that if the rate of duty had not been changed there would not have been any demand of any further duty on any sale by the respondent which might have resulted in transport and that the practice was not to charge the same duty over again on sale by the wholesaler to the retailer or by the retailer to the consumer even though these sales resulted in transport except where the Explanation to section 19 applies.
If this practice is in accordance with law when there is no change in duty we cannot see how the excisable article which had been subjected to duty once will be liable to further duty equal to the difference when there is increase in the rate, (except of course where the Explanation to section 19 applies).
We see nothing in section 10 which lays down that every time there is transport, duty must be paid even though the duty has already been paid when the first transport of an excisable article takes place.
What section 10 prohibits is the transport of excisable article unless the duty has been paid thereon.
Once the duty has been paid the prohibition under section 10 no longer applies, unless the case is covered by the Expla.
nation to section 19.
However wide may be the definition of " transport " what has to be seen is whether the prohibition under section 10 is to apply even to those excisable articles on which duty has been paid.
On a plain reading of section 10, the prohibition under that section cannot apply to transport of excisable articles on which duty has been paid.
Section 19, which is the charging section, provides for levying of duty on transport in accordance with the provisions of section 10.
This brings us back to section 10 and the question again is whether the prohibition having been removed by payment of duty once, there is anything in section 10 which 405 requires that the duty should be paid again for transporting the goods on which duty has been paid.
As we read section 10 we find nothing in it which requires that duty should be paid again for transport once the duty has been paid and the prohibition removed subject always to the Explanation to section 19.
Under that Explanation if there are different duties in different regions and the excisable article which has paid duty of one region is removed to another region where the duty is different the excess will have to be paid in order that prohibition of transport in that region may be removed.
But apart from the cases covered by the Explanation we can see no justification for reading section 10 as giving power to impose duty on the same excisable article again and again as it moves in the course of trade from, say, the bonded warehouse to the wholesaler and from the wholesaler to the retailer and from the retailer to the consumer.
Plainly, therefore, once the duty has been paid and the prohibition under section 10 is removed the transport of the duty paid excisable article can take place free from any further imposition, except where it is transported to a region where the duty is different from the region where the duty is paid.
Nor do we find any power in the State Government to impose a duty at every movement during the course of trade in the words of section 19.
All that section 19 empowers the State Government to do is to fix the rate of duty on transport in accordance with section 10.
There is no delegation to the State Government anywhere in the Act of the power to impose duty from stage to stage during the movement of excisable articles in the course of trade.
It is true that the legislature has the power if it so chooses, to levy duty on every movement; but as we read the three provisions on which reliance has been placed we do not find any exercise of that power by the legislature.
Nor do we find any delegation by the legislature of any such power to the State Government.
The view therefore taken by the Division Bench that once the duty mentioned in section 19 has been paid the prohibition con tained in section 10 must disappear, (subject always to the Explanation to s, 19), and that there is nothing in 52 406 s.19 delegating any power to the State Government of levying excise duty more than once and at more than one point during the progress of the excisable goods from the time they leave the bonded warehouse till the time they reach the consumer is in our opinion correct.
It is not in dispute in this case that the Explanation to section 19 does not apply.
Turning now to the first proviso '.to section 19 A, it may be noticed that that section deals with the manner of levying duty.
But the first proviso goes further and lays down that where the duty is levied on issue from a bonded warehouse it will be at the rate in force on the date of issue.
We agree with the Division Bench that this proviso has no logical connection with section 19 A and would more properly be a proviso to section 19.
It has nothing to do with the manner of payment but is concerned with the liability to pay at the rate prevalent on the date of issue from the bonded warehouse.
If that is so, the quantum of tax is once for all determined by this proviso subject always to the Explanation to section 19 and cannot be increased thereafter.
Reference in this connection was made to section 15 A also.
But that section seems to have been inserted as a measure of abundant caution and does not appear to go further than section 10.
It seems to determine the time and manner of payment in cases where excisable articles are kept in a distillery or brewery or warehouse or other place of storage established or licensed under the Act where duty may not have been paid before such storage.
It is not the charging section and cannot be read to go beyond section 19 which is the charging section.
We are therefore of opinion that on this ground also no additional duty could be charged from the respondent in this case as the Explanation to section 19 has admittedly no application here.
The appeal therefore fails and is hereby dismissed with costs.
Appeal dismissed.

Output:
The respondent held a trade and import licence for foreign liquor as well as a vendor 's licence under the Bombay Abkari 51 398 Act.
It kept liquor in a bonded warehouse.
On April 2, 1948, the appellant asked the respondent to remove the liquor from the bonded warehouse after paying the necessary excise duty.
The respondent paid the duty, got the transport permits and took over the liquor, some of which it sold.
On December 16, 1948, the appellant issued a notification doubling the duty on foreign liquor and called upon the respondent to pay the additional duty on the liquor which was still lying in its godown.
The respondent contended that the imposition of additional duty on the stock on which duty had already been paid at the time of its issue from the bonded warehouse was illegal.
The appellants case was that the respondent was bound to pay the duty prevailing on the transport of liquor at the time of transporting the same from its premises to another place within the State of Bombay: Held, that the imposition of the additional excise duty was illegal.
Once the duty had been paid the liquor could be transported free from any further imposition, except where it was transported to a region where the duty was different from the region where the duty was paid.
There was no power in the State Government to impose duty at every movement during the course of the trade.
Though there was power in the legislature to levy duty at every movement of liquor, it had not exercised that power; nor had it delegated such power to the State Government.