I.T.C. LIMITED …PETITIONER
Vs.
GEORGE JOSEPH FERNANDES & ANR. …RESPONDENT

DATE OF JUDGMENT: 06/02/1989

BENCH: SAIKIA, K.N. (J) OZA, G.L. (J)

CITATION: 1989 AIR 839 1989 SCR (1) 469 1989 SCC (2) 1 JT 1989 (1) 552 1989 SCALE (1)283

ACT:

Arbitration Act, 1940: Sections 32, 33, 34.

Stay of Legal proceedings–Whether court has jurisdic- tion to decide validity of contract containing Arbitration clause–Existence of a valid agreement–Whether condition precedent.

Jurisdiction of court to decide on–Validity and legali- ty of contract–Whether to be decided on affidavits and documents or on evidence.

Constitution of India 1950, Article 136.

Interference by Supreme Court–With discretion of courts under Section 34 of Arbitration Act, 1940–When called for.

Contract Act, 1872: Section 20.

Mistake of fact–Nature of–An erroneous opinion as to the value of the contracted thing–Not a mistake of fact–Common mistake of both parties must be about the same vital fact–Common mistake and Mutual Mistake–Distinction between.

Fishing trawlers–Refrigeration system–Deficiency–Required temperature Minus 20 Degree F–Attained temperature Minus 10 Degree F–Whether mutual mistake.

Words & Phrases: Naturali ratione inunitilis.

Ex turpi causa non oritur actio—Meaning of.

HEADNOTE:

Under an import licence dated 3rd March, 1971 issued by the Chief Controller of Imports and Exports the respondent imported two fishing trawlers with the financial assistance of the second respondent Canara Bank. The respondent con- ducted negotiations with the appellant for a charter-party agreement in respect of the said trawlers. On 21st March, 1977, an agreement between the parties was executed 470 under which the appellant agreed to take on charter hire the said two trawlers for the purpose of deep sea fishing for a period of two years with an option to continue the hire for a further period of three years. Under the terms of the agreement the respondent was to deliver the said trawlers to the appellant at Vishakhapatnam within seven days of the receipt of approval from the Chief Controller of Imports and Exports or no objection certificate from the Canara Bank, for making the said trawlers fully operational and to ascer- tain the cost of such repairs. The appellant charterer was then to conduct fishing trials to ascertain actual condi- tions and thereafter the charter hiring was to commence from the date the fishing trials were ended.

On 18th August, 1977, the Chief Controller of Imports and Exports granted permission to the respondent to charter the said trawlers to the appellant on the conditions that the charter rent would be Rs.50,000 per month per trawler and that the charter would be for a period of three years.

On 30th September, 1977, the respondent delivered the said two trawlers for repairs to the appellant.

On 2nd February, 1978, the parties modified the agree- ment revising the rate of charter hire and the date of commencement of hire, to the extent that the charter hire would commence from 15th January, 1978 and the revised rate of hire would be Rs.6,25,000 per trawler per year.

The appellant charterer raised objections alleging that the trawlers suffered from inherent and latent defects in the refrigeration system which was an essential part of such trawlers and as such the trawlers were not fully operational because even after carrying out extensive repairs the re- frigeration system could not be brought to the required standard of minus 20 degree F but attained only minus 10 degree F.

On 29.9.1978, the appellant instituted a suit in the original side of the Calcutta High Court claiming (i) a decree for a sum of Rs.39,64,341 towards cost, charges, damages and compensation incurred on the said trawlers and, (ii) a declaration that the agreement was contrary to the terms of the permission granted by the Chief Controller of Imports and Exports and consequently illegal and against public policy and void; (iii) that the Parties had entered into the agreement on the basic fundamental assumption that by effecting necessary repairs the trawlers would be made fully operational but the assumption was subsequently dis- covered to be mistaken because of the deficiency in the refrigeration system and it rendered the agreement void.

471 The respondent filed an application under Section 34 of the Arbitration Act, 1940 praying that the suit instituted by the appellant, and all proceedings therein be stayed because the disputes were wholly covered by the arbitration clause as contained in the modified agreement dated 2nd February, 1978 which was binding between the parties.

The Single Judge held that there was no invalidity for non-compliance of the conditions of the licence granted because necessary permission was obtained in respect of the agreement from the Chief Controller of Imports and Exports and the modifications of the agreement did not impair its validity; though in a particular case if there was any doubt about facts, the matter had to be decided by trial on evi- dence but in the instant case, having regard to the admitted facts and conduct of the parties it was not necessary to set down the matter for trial on evidence; there was no illegal- ity or mutual mistake; that the alleged fundamental breach was wholly covered by the arbitration clause; that the arbitration clause was valid and binding between the par- ties; and that all the conditions of Section 34 were satis- fied. Accordingly, the Single Judge granted stay of the suit and directed the parties to take immediate steps for initia- tion of reference under the arbitration agreement.

The judgment and order of the Single Judge was confirmed by the Division Bench by dismissing the appeal.

In this appeal by special leave it was contended on behalf of the appellants that (i) the subject-matter of the suit, namely, the question whether the agreement was void ab initio for mutual mistake was not arbitrable; and the courts below erred in holding so; (ii) assuming that the subject- matter was arbitrable, the court should not have exercised its jurisdiction on the application under Section 34 because it involved complicated questions of fact and in exercising such jurisdiction the courts acted without jurisdiction;

(iii) the court should have decided only after taking oral and documentary evidence and not merely on affidavits; (iv) the agreement was void being violative of the conditions of the permission granted by the Chief Controller of Imports and Exports; (v) the agreement itself having been void ab initio due to mutual mistake, the arbitration clause per- ished with it and the courts below erred in holding that the disputes were arbitrable.

Dismissing the appeal, the Court,

HELD: 1. Section 34 deals with the staying of a suit where there 472 is an arbitration agreement concerning the subject-matter of the suit and between the same parties. For the Court to have power to exercise the discretion conferred upon it by this section, there must have been a valid agreement to submit to arbitration. Where the objection is that the arbitration is a nullity, it amounts to an objection of want of jurisdic- tion. The term “arbitration agreement” includes “agreement to refer”, and “submission” to Arbitrator. A submission forming part of a void contract is itself void and cannot be enforced. [484B-C]

1.1 Whether a particular dispute arising out of a par- ticular contract is referable to arbitration or not, must necessarily depend on the intention of the parties as em- bodied in the arbitration clause. If the dispute is squarely covered by the arbitration clause, the relevant provisions of the Act will be attracted. The question whether the dispute in the suit fails within the arbitration clause really pre-supposes that there is such agreement and in- volves consideration of two matters, that is (i) what is the dispute in the suit, and (ii) what dispute the arbitration clause covers. It is incumbent upon the court to decide whether there is a binding contract for arbitration between the parties. If it is found that the dispute in the suit is not covered by the arbitration clause the application for stay may be dismissed. [488H; 489A]

2. Where in an application under Section 34 of the Act an issue is raised as to the validity or existence of the contract containing the arbitration clause, the court has to decide first of all whether there is a binding arbitration agreement, even though it may involve incidentally a deci- sion as to the validity or existence of the parent contract.

If the arbitration clause is so wide as to have included the very validity or otherwise of the contract on the grounds of fraud, mis-representations, mutual mistake or any valid reason the arbitrator will surely have jurisdiction to decide even that dispute. The proper approach would be to examine the issue raised in the suit and to ascertain wheth- er it squarely falls within the compass of the arbitration clause and take a decision before granting the stay of the suit. If an issue is raised as to the formation, existence or validity of the contract containing the arbitration clause, the court has to exercise discretion to decide or not to decide the issue of validity or otherwise of the arbitration agreement even though it may involve incidental- ly a decision as to validity or existence of the challenged contract. Should the Court find the parent contract to be void ab initio or illegal or non-existent, it will be with- out jurisdiction to grant stay. If the challenged contract is found to be valid and binding and the dispute raised in the suit covered by the arbitration clause, stay of the suit may be justified. [491F-G; 492A-B, D-F] 473

2.1 In the instant case, considering the issues raised, the arbitration clause and the surrounding circumstances and the part played by the parties pursuant to the charter party since execution to the modification and thereafter till objection raised by the appellant-plaintiff. it must be held that the trial court did not err in proceeding to decide the issue of validity or legality of the parent contract.

[492F-G]

3. Where the validity, existence or legality of the contract is challenged in suit on grounds de hors, independ- ent of, or external to the terms or stipulations of the contract, the court in an application under Section 34 of the Act shall have no jurisdiction to go into the question, and that in a large majority of cases it would be applica- ble, in appropriate cases, having regard to the nature of the dispute raised in the pleadings of the suit, the compass and scope of the arbitration clause in the contract, the surrounding facts and circumstances of the case having a bearing on the question of genuine grievance failing outside or inside the arbitration agreement and the objects and spirit of the Arbitration Act, the Court may be justified in deciding the validity, existence or legality of the chal- lenged contract containing the arbitration agreement.

[488A-C]

3.1 In the instant case, the arbitration clause formed part of the agreement. The arbitration agreement is not the same as the contract in the charter party. It cannot, there- fore, be said that the validity or otherwise of the charter party was covered by the arbitration clause. [489D-E] Jee Lae v. Lord Dalmeny, [1927] 1 Ch. 300; Heyman v.

Darwins, [1942] A.C. 356; Monro v. Bognor Urban District Council, [1915] 3 K.B. 167; Jawaharlal Burman v. Union of India, [1961] INSC 283; [1962] 3 S.C.R. 769: Waverly Jute Mills Co. Ltd. v.

Raymon & Co. (India) Pvt. Ltd.[1964] INSC 150; ,3 S.C.R. 209; A.I.R. 1963 S.C. 90; Khardah Co. Ltd. v. Raymon & Co. India Ltd., [1962] INSC 207; [1963] 3 S.C.R. 183; Renusagar Co. v. General Electric Co., [1984] INSC 143; [1985] 1 S.C.R. 432; Anderson Wright Ltd. v. Moran and Company, [1955] 1 S.C.R. 862; Damodar Valley Corporation v.K.K. Kar[1973] INSC 204; , [1974] 2 S.C.R. 240; Hirji Mulji v. Cheong Yue Steamship Co., [1926] A.C. 497; applied.

Banwari Lal v. Hindu College, A.I.R. 1949 East Punjab 165;

Johurmull Parasram v. Louis Dreyfus Co. Ltd. 52 C.W.N.

(1947-48) 137 A.I.R. 1949 Cal 179; Pramada Prasad v. Sagar Mal Aggarwal, A.I.R. 1952 Patna 352; Narsingh Prasad v.

Dhanraj Mills. I.L.R. 21 Patna 544; A.I.R. 1943 Patna 53;

Birla Jute Manufacturing Co. Ltd. v. Dulichand. A.I.R. 1953 Calcutta 450; W.F. Ducat & Co. Pvt. Ltd. v.

474 Hiralal Pannalal, A.I.R. 1976 Calcutta 126; General Enter- prises v. Jardine Handerson Ltd., A.I.R. 1978 Calcutta 407;

Khusiram v. Hanutmal, [1948] 53 C.W.N. 505, approved.

4. In the instant case, facts were admitted. [493B-C] All the relevant documents and affidavits were before the Court and were considered by it. Therefore no illegality was committed by the trial court in not setting down the matter for trial on evidence and deciding the validity and legality of the matter without taking oral evidence. [49211;

493B]

4.1 Even if it appears that the discretion could have also been exercised to decide the issue of invalidity in a trial on evidence adduced, this court would not substitute its view for that of the trial court, unless the ends of justice required it to be done. This Court would not lightly interfere under Article 136 of the Constitution with the concurrent exercise of discretion of the courts below under Section 34 of the Arbitration Act. Before it can justly do so, the appellant must satisfy the Court, on the relevant facts referred to by the Courts below, that they exercised their discretion in a manifestly unreasonable or perverse way which was likely to defeat the ends of justice. The appellant has failed to do so in the instant case. [493C, E-F] Ormarod v. Todmordon, [1882] 8 Q.B.D. 664; Charles Osenton and Co. v. Johnston, [1942] A.C. 130; Gardner v.

Jay, [1885] 29 Ch. D. 50; Printers (Mysore) Pvt. Ltd. v.

Pothan Joseph[1960] INSC 91; , [1960] 3 S.C.R. 713, applied.

5. Where the parties make mutual mistake misunderstand- ing each other and are at cross purposes, there is no real correspondence of offer and acceptance and the parties are not really consensus ad idem. There is thus no agreement at all; and the contract is void. Section 20 is concerned with common mistake of fact and not mutual mistake. A common mistake is there where both parties are mistaken about the same vital fact although both parties are ad idem, e.g., the subject matter of the contract has already perished. A con- tract in such a case is void. Where each party is mistaken as to the other’s intention, though neither realises that the respective promises have been misunderstood, there is mutual mistake. 1493H; 494A-B]

6. A mistake will not affect assent unless it is the mistake of both parties, and is as to the existence of some quality which makes the thing 475 without the quality essentially different from the thing as it was believed to be. Neither party can rely upon his own mistake to say that it was a nullity from the beginning, no matter that it was a mistake which to his mind was fundamen- tal, and no matter that the other party knew that he was under a mistake. A fortiori, if the other party did not know of the mistake but shared it. The question is not what the parties had in their minds, but what reasonable third par- ties would infer from their words or conduct. The court has to ascertain the “sense of the promises”. [496E; 495G-H]

7. The application of the doctrine of mutual mistake depends upon the true construction of the contract made between the parties. A mutual misunderstanding will not nullify a contract but only if the terms of contract con- strued in the light of the nature of the contract and of the circumstances believed to exist at the time it was done show that it was never intended to apply to the situation which in reality existed at that time, will the contract be held void. Thus a mistake as to an essential and integral element in the subject matter of the contract will avoid the con- tract. A mistake as to the quality of the article contracted for may not always avoid the contract. A distinction, there- fore, should be drawn between a mistake as to the substance of the thing contracted for, which will avoid the contract and mistake as to its quality which will be without effect.

According to circumstances even a mistake as to the sub- stance of the thing contracted for may not necessarily render a contract void. Thus there must be a difference so complete that, if the contract were enforced in the actual circumstances which have unexpectedly emerged, this would involve an obligation fundamentally different from that which the parties believed they were undertaking. [496A-H]

8. From the series of steps taken for repairs and the stipulations in the charter party including the modifica- tions thereof, it is not possible to hold that it was a case of mutual mistake as to a quality which made the trawlers transferred essentially different from the trawlers that the parties in their minds agreed to transfer. Therefore, there was no mutual mistake and the contract would not be avoided on this ground. [498C-D] Cooper v. Phibbs, [1867] UKHL 1; [1867] L.R. 2 H.L. 149; Ear/Beauchamp v. Winn., [1873] 6 H.L. 223; Hudders field Banking Co. v.

Henry Lister & Sons, [1895] 2 Ch. 273; Bell v. Laver Brs.

Ltd.[1931] UKHL 2; , [1932] A.C. 161; Kannedy v. Panama Royal Mail Co., [1867] L.R. 2 Q.B. 580; Smith v. Hughes, [1871] L.R. 6 Q.B.

597; Solle v. Butcher, [1950] 1 K.B. 671:

476 Fraderick E. Rose (London) Ltd. v. William H. Pim Junior & Co. Ltd. [1953] 2 Q.B. 450; Sheikh Brothers LId. v. Arnold, [1957] A.C. 136; referred to.

U.P. Government v. Nanhoo Mal, A.I.R. 1960 All. 420, approved.

9. It is settled law that where the subject matter of a reference is illegal, no award can be of any binding effect.

If the contract itself was illegal, the controversy as to whether it was illegal or not would not be a dispute arising out of the contract as also would be the question whether the contract was void ab initio. When, however, it is found that a binding contract was made which was not illegal what follows from such a contract would be covered by the expres- sion “dispute arising out of contract”. To stay a suit under Section 34 the Court has to see whether there was a valid agreement to have the dispute settled by arbitration and that the proceedings are in respect of a dispute so agreed to be referred. [498E, (;-H; 499A]

10. Public policy imposes certain limitations on the freedom of contract by forbidding the making of certain contracts. In such cases though all other requisites for formation of the contract are complied with, parties to such forbidden contracts are not allowed to enforce any rights under them. In clear cases the law strikes at the agreement itself by making the contract illegal. However, the effect and nature of illegality are by no means uniform and will depend upon the facts and circumstances of each case. Where a statute makes a contract illegal or where a certain type of contract is expressly prohibited there can be no doubt that such a contract will not be enforcible. [499B-D]

11. A contract which was not illegal from the beginning may be rendered illegal later by the method of performance which did not comply with the statutory requirements. The appellant’s burden was to show that the charter party was illegal to take it out of the arbitration clause for if the contract is illegal and not binding on the parties the arbitration clause would also be not binding. Once it is shown to have been illegal it would be unenforcible as ex turpi causa non oritur actio. [499G-H]

12. One who knowingly enters into a contract with im- proper object cannot enforce his rights thereunder. The appellant in the instant case was also a party to the agree- ment of charter party in respect of the two imported trawl- ers. Though it purported to be actual user’s licence 477 there was no violation of this condition in view of the express permission granted by the Controller of Imports and Exports allowing the chartering of the two imported trawl- ers. The modifications to the contract did not make any alteration so as to make the agreement contrary to the terms and conditions of the permission inasmuch as the permission was for a period of three years. The option to continue hire of the trawlers for a further period of three years did not ipso facto violate the permission. There was also no viola- tion as to the duration of the charter party. [499H; 500C-E] Taylor v. Barnett, [1953] 1 W.L.R. 562; Anderson Wright Ltd. v. Moran and Company, [1955] 1 S.C.R. 862; In Re arbi- tration between Mahmoud and Isphani, [1921] 2 K.B. 176;

applied.

13. The Courts below were right in holding that the matters were arbitrable apart from the question of illegali- ty, invalidity of the contract. The question of invalidity of the contract due to the alleged mutual mistake would be de hors and independent of the contract and as such would not be referable under the arbitration clause. In so far as the question of illegality of the charter party is concerned as the appellant has not established that the charter party was illegal or void as initio, the question whether the modification as alleged had rendered the contract illegal would be covered by the arbitration clause. [500F-G]

14. In the instant case, the reliefs claimed in the suit other than the question of ab initio invalidity or illegali- ty of the contract would be referable. However, it will be within the jurisdiction of the arbitrator to decide the scope of his jurisdiction. The Court cannot make a contract between the parties and its power ends with the interpreta- tion of the contract between them. The same principle also applies to the arbitration agreement unless the parties to the arbitration agreement authorises the court to make and modify the agreement. The arbitrator shall proceed in ac- cordance with law to decide the questions including that of jurisdiction, if raised. [501C-1). E]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1795 of 1982.

From the Judgment and Order dated 3.2. 1982 of the High Court of Calcutta in Appeal No. 75 of 1981.

Shanti Bhushan, Ms. Lira Goswami, S. Ganesh, R. Narain and D.N. Mishra for the Appellant.

478 C.S. Vaidyanathan, S.R. Setia, K.V- Mohan and K.V.

Viswanathan for the Respondents.

The Judgment of the Court was delivered by K.N. SAIKIA, J. This appeal by special leave is from the appellate judgment of the Calcutta High Court in Appeal No.

75 of 1981 dismissing the appeal and upholding the judgment of the learned Single Judge granting stay of the appellant’s suit on the respondent’s application under section 34 of the Arbitration Act, 1940.

The appellant as plaintiff has instituted suit No. 736 of 1978 on 29.9.1978 in the original side of the Calcutta High Court against the respondent as first de- fendant and Canara Bank as second defendant stating in the plaint, inter alia, that the first defendant, was the sole and absolute owner of two fishing trawlers, Ave Maria-I and Ave maria-II, registered under No. 1567 dated 30th January, 1974 and No. 1568 dated 30th January, 1974 with the Regis- trar of Indian Ships, Cochin that the said trawlers were imported by the first defendant with financial assistance of the second defendant, Canara Bank, under Import Licence No.

P/CC/2062299 dated 3rd March, 1971 issued by or on behalf of the Chief Controller of Imports & Exports, Ministry of Commerce, Government of India, New Delhi, that in or about March, 1977 the first defendant as owner agreed to charter and the plaintiff as charterer agreed to take on charter for the purpose of deep sea fishing, the said two trawlers on the terms and conditions contained in a “Bare Boat Charter Party” dated the 21st March, 1977, hereinafter called, the agreement, executed at Calcutta, subject to the owner first defendant obtaining the requisite permission in writing from the Chief Controller of Imports & Exports and the No Objec- tion Certificate of the second defendant for chartering the said trawlers; that within seven days of receipt of the approval of the Chief Controller of Imports & Exports or no objection certificate from the Canara Bank the first defend- ant owner will deliver the said trawlers to the plaintiff charterer at the Port of Vishakapatnam for carrying out the inspection of the said trawlers by its authorised agents to ascertain repairs to be carried out to the trawlers for making them fully operational without any defect whatsoever and also to ascertain the cost of such repairs and thereaf- ter the Chatterer will undertake the repairs at the cost of the owner and bring them to fully operational condition without any defect including all aspects of refrigeration equipment; that the charterer will then conduct fishing trials to ascertain actual condition of the trawlers and in case the condition is fully satisfied according to the Charterer, and the 479 owner furnishes to the Charterer all documents certifying sea-worthiness and also supplies proof of compliance of pre-condtions, the Charter hiring shall commence on or from the date fishing trials are ended; that the charterer shall pay to the owner Rs.50,000 per trawler per month payable in advance every month and shall continue to pay up to and including the date of redelivery of each trawler to the owner at Vishakapatnam (unless lost-sunk); that he shall keep a deposit of Rupees one lakh per trawler with the owner during the period of the agreement to be adjusted without interest towards the charter hire against the last two months of charter period; that by a Letter No.

CG/N-2-143-70-71 dated 18th August, 1977 the Chief Control- ler of Imports & Exports granted permission to the first defendant to charter the said trawlers to the plaintiff on a charter rental of Rs.50,000 per month per trawler for a period of three years; that the owner delivered the said two trawlers for repairs to the plaintiff at Vishakapatnam on or about 30th September, 1977 and thereafter on or about 2nd February, 1978 the parties agreed to modify the agreement in the manner stated in a subsequent written agreement dated 2nd February, 1978 executed at Calcutta; and that according to the agreement after modification, the charter hire com- menced from 15.1.1978 and the charter hire revised to Rs.6,25,000 per trawler per year.

The plaintiff’s main averments in the plaint are that the permission dated 18th August, 1977 granted by the Chief Controller of Imports & Exports to the first defendant for chartering the said trawlers to the plaintiff was given under the said Import Licence to the first defendant and the permission was given subject to two conditions, namely, that the charter rental would be Rs.50,000 per month and that the charter would be for a period of three years but the agree- ment dated 21st March, 1977 was, in fact, for a period of two years with an option to the plaintiff to continue the hire for a further period of three years and as such the agreement was in contravention of and contrary to the terms of the said permission and consequently to the said Import Licence, and hence, illegal, against public policy and void;

that the plaintiff and the first defendant entered into the agreement and its modification dated 2nd February, 1978 on the basic, essential and fundamental assumption that the trawlers would be made fully operational and free from all defects by effecting repairs as contemplated thereby but the assumption was mistaken and not true and was subsequently discovered to be so mistaken that it rendered the agreement with its modifications void; that pursuant to the agreement the plaintiff paid to the first defendant through the second defendant the initial deposit of Rupees two lakhs in respect of the said two trawlers of the 480 charter rent as agreed up to and for the month of July 1978, but in or about early September 1978 the plaintiff having discovered the agreement to have been void and illegal called upon the first defendant to take back or obtain permission of the said trawlers lying at Vishakapatnam at the risk and cost of the first defendant but he failed and neglected to do so; and that the first defendant is bound to pay or make compensation for all the advantages which he had received under the agreement and its modifications and the costs, charges and expenses which the plaintiff has incurred on the said trawlers, being assessed at Rs. 39,64,34 1 as per Schedule ‘D’ to the plaint. In the alternative it has been averred that in supplying the said trawlers the first defendant committed a fundamental breach of the agreement and its modifications which went to the root and affected the very substance of the same and which made its perform- ance impossible and such a breach on the part of the first defendant has produced a situation fundamentally different from anything which the parties could as reasonable persons have contemplated when the agreement was entered into, and as the plaintiff has not been able to use or obtain any benefit out of the said trawlers, the plaintiff never was nor is bound by the obligation under the agreement and the modification thereof and was entitled to and had duly re- scinded the same and the plaintiff had in the premises suffered loss and damages which the first defendant is bound to compensate and such loss and damage is assessed reasona- bly at Rs.39,64 341 particulars whereof have been given in Schedule ‘D’ thereof; and that the plaintiff is entitled to recover the said sum of Rs.39,64,34 1 as money paid to and or on account of the first defendant and expenses so in- curred without any consideration and or for consideration which has totally failed and/or to the use of the first defendant.

The plaintiff accordingly claimed, inter-alia, a decla- ration that the agreement dated 2 Ist March, 1977 and the modifications thereof dated 2nd February, 1978 were, and are illegal, against public policy and void; a decree for Rs.39,64,341 against the first defendant; alternatively an enquiry into the amount due to the plaintiff from the first defendant and decree for a sum found due on such enquiry; in the alternative decree for the same amount as compensation for loss and damage and or as money paid to or expenses incurred without any consideration or for consideration which has totally failed or to the use of the first defend- ant; and further and other reliefs.

In the matter of the aforesaid Suit No. 736 of 1978, hereinafter referred to as ‘the suit’, the first defendant after receiving summons 481 and entering appearance moved on 25th April, 1979 and appli- cation under section 34 of the Arbitration Act, 1940, here- inafter referred to as ‘the Act’, impleading the plaintiff (instant appellant) as first respondent and Canara Bank second defendant as second respondent stating, inter-alia, that the agreement as modified on 2nd February, 1978 con- tained an arbitration clause; that the agreement has been and is perfectly binding and not violative of the conditions of the permission granted by the Controller of Imports & Exports; that the defects in the refrigeration system as alleged are factually wrong; that the plaintiff, his serv- ants and agents have themselves materially deteriorated the machines and hence no amount was payable to the plaintiff as claimed in the plaint; and that all the disputes, conten- tions alleged to have arisen between the plaintiff and the defendant were wholly covered by the said arbitration clause contained in the agreement which was binding between the parties. Accordingly, it was prayed that the suit and all proceedings therein be stayed and interim orders, costs and other reliefs be granted. The plaintiffs filed affidavit in opposition to the application and the applicant first de- fendant filed affidavit in reply.

The learned Single Judge in his judgment dated 11.2.

1981 held, inter alia, that there was no question of inva- lidity for non-compliance of the conditions of the licence granted to the first defendant-applicant as necessary per- mission was obtained in respect of the agreement from the Chief Controller of Imports and Exports vide his letter dated 18th August, 1977 and the modification of the agree- ment on 2nd February, 1978 could not and did not materially alter its terms to impair its validity and there was sub- stantial compliance with the obtained permission; that though in a particular case if there was any doubt about facts, the matter had to be decided by trial on evidence, in this case, having regard to the admitted facts and conduct of the parties, it was not necessary to set down the matter for trial on evidence to determine the facts as the same could not be disputed; that having regard to the conduct of the parties in admitted documents, being the licence of the petitioner granted by the Chief Controller of Import & Export in respect of the said two trawlers and the provi- sions of the Import and Export Control Act, 1947, and Appen- dix 31 of the Import & Export Trade Control Hand Book for Rules and Procedures, 1979, the correspondence between the parties before the alleged discovery of purported mistake and illegality by the respondent (plaintiff) and particular- ly the letter dated 18th July, 1978 from the respondent No.

1 (plaintiff) to the applicant 1(first defendant) and the Balance Sheet of the plaintiff (Respondent No. 1) I.T.C.

Ltd, for the year 1978, there is no question of any illegal- ity or any mutual mistake; that the alleged 482 fundamental breach is wholly covered by the arbitration clause as it wide enough to include the same; that the arbitration clause is valid and binding between the parties; that the allega- tion of breach of contract and the claims made are within the jurisdiction of the arbitrator; and that all the condi- tions under section 34 of the Act have been satisfied in this case. Accordingly the learned Judge granted stay of the suit and directed the parties to take immediate steps for initiation of reference under the arbitration agreement.

On appeal, the learned Division Bench by an elaborate and erudite judgment dismissed the appeal holding, inter- alia, that in the facts and circumstances of the case it could not be held that the trial court erred in exercising its discretion to decide the controversy, namely, whether the contract being void the arbitration clause also was void, in the application without evidence and on the basis of pleadings only, nor was the discretion exercised improp- erly; that the learned Judge was not wrong in coming to the conclusion that the mistake as pleaded as to quality of the goods was not a mistake of such nature as to make the thing contracted for something different, and in holding that there was no case of mutual mistake of such a type as to quality of the thing contracted for which could have avoided the parent contract which contained the arbitration clause;

and that the learned Single Judge was right in so far as he held that the matters were arbitrable apart from the ques- tion of illegality of the contract. It was further held that there was no breach of conditions of the permission or the provisions of the Import & Export Control Act to render the contract illegal or void; and that the Court having held that all the contentions and allegations were arbitrable, the granting stay in the suit was reasonable and proper.

Mr. Shanti Bhushan, the learned counsel for the appel- lant submits, inter-alia, that the subject matter of the suit, namely, the question whether the agreement was void ab-initio for mutual mistake was not arbitrable at all and the learned Courts below erred in holding so; that even assuming but not admitting that the subject matter was arbitrable, it having involved complicated questions of facts the court ought not to have exercised jurisdiction on the application under section 34 and in doing so it acted without jurisdiction and, assuming that the court had juris- diction, it should have decided only after taking oral and documentary evidence and not merely on affidavits; that the agreement itself having been void ab initio due to mutual mistake the arbitration clause, namely, clause 18 of the charter party, also perished with it and there was no scope for arbitration at all and the learned 483 courts below erred in holding that all the contentions raised and allegations made in the suit were arbitrable under the arbitration clause; and that the agreement was void being violative of the conditions of the permission and for that matter the import licence and the provisions of the Import and Export Control Act.

Mr. C.S. Vaidyanathan, the learned counsel for the respondent refuting submits that there having been no mutual mistake so as to invalidate the agreement, the arbitration clause remains binding and the subject matter of the suit has rightly been held to be arbitrable; that the court rightly exercised jurisdiction on the application under section 34 of the Arbitration Act on the basis of the affi- davits and at no stage before argument the appellant as respondent No. 1 applied to the court for permission to adduce oral evidence, and stay of the suit was granted in accordance with law on the basis of the evidence on record;

that the agreement as modified was not void on the ground of violation of the permission or of the import licence or of the provisions of the Import & Export Control Act; and that the direction to proceed to arbitration is just and proper and the respondent has no objection to a Retired Supreme Court Judge being appointed arbitrator.

The first question to be decided in this appeal, there- fore, is whether in an application under section 34 of the Indian Arbitration Act the court has jurisdiction to decide the validity of the Contract containing the arbitration clause, and if so, whether it has to be decided on affida- vits or on evidence.

To decide the question we may conveniently refer to the provisions of section 34 of the Arbitration Act;

Section 34: Power to stay legal proceedings where there is an arbitration agreement. Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay proceed- ings; and if satisfied that there is no suffi- cient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time, when the proceedings were commenced, and 484 still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.

This section deals with the staying of a suit where there is an arbitration agreement concerning the subject- matter of the suit and between the same parties, for the Court to have power to exercise the discretion conferred upon it by this section, there must have been a valid agree- ment to submit to arbitration. Where the objection is that the arbitration is a nullity, it amounts to an objection of want of jurisdiction. The term “arbitration agreement” includes “agreement to refer”, and “submission” to arbitra- tor. A submission forming part of a void contract is itself void and cannot be enforced. Where a firm of bookmakers had engaged in betting transactions with the defendants on the terms that any dispute which might arise should be referred to arbitration, it was held that the whole contract was void and unenforceable and that the defendants could not be compelled to submit to arbitration: Joe Lee v. Lord Dalneny, [1927] 1 Ch. 300. Where there is no valid arbitration agree- ment on the subject matter of the suit, there is no justifi- cation for staying a suit for that will deprive the plain- tiff of his fight to sue on that subject matter.

In Heyman v. Darwins, [1942] A.C. 356, Lord Macmillan pointed out at Pages 370-371:

“If it appears that the dispute is whether there has ever been a binding contract between the parties, such a dispute cannot be covered by an arbitration clause in the challenged contract. If there has never been a contract at all, there has never been as part of it an agreement to arbitrate. The greater includes the less. Further, a claim to set aside a contract on such grounds as fraud, duress or essential error cannot be the subject matter of a reference under an arbitration clause in the contract sought to be set aside. Again, an admittedly binding contract containing a general arbitration clause may stipulate that in certain events the contract shall come to an end. If a question arises where the con- tract has for any such reason come to an end I can see no reason why the arbitrator should not decide that question. It is clear, too, that the parties to a contract may agree to bring it to an end to all intents and purposes and to treat it as if it had never existed. In such a case, if there be an arbitration clause in the contract, it perishes with the con- 485 tract. If the parties substitute a new con- tract for the contract which they have abro- gated the arbitration clause in the abrogated contract cannot be invoked for the determina- tion of questions under the new agreement. All this is more or less elementary.” Earlier in Monro v. Bognor Urban District Council, [1915] 3 K.B. 167; where a building contract had been en- tered into between the plaintiff and the defendants for a construction of sewerage works contained an arbitration clause which provided that if at any time any question, dispute or difference should arise between the parties upon or in relation to or in connection with the contract, the matter should be referred to arbitration and during the progress of the works disputes arose between the parties mainly as to the nature of the site upon which the works had to be carried out, which the plaintiff alleged was different from that which he had been led to believe by the specifica- tions. The plaintiff having brought an action against the defendants claiming, inter alia, damages for fraudulent misrepresentation whereby he was induced to enter into the contract, the defendants took out a summons asking that all proceedings in the action be stayed and the matter be re- ferred to arbitration. It was held that the action, being based on fraud, referred to matters wholly outside the powers of the arbitrator, with which he could not possibly deal, and so could not be said to be a question, dispute or difference upon or in relation to or in connection with the contract and as such referable to arbitration under the arbitration clause.

In Jawaharlal Burman v. Union of India, [1962] 3 S.C.R.

769 it was held that section 32 of the Act creates a bar against the institution of suits with regard to an arbitra- tion agreement or award on any ground whatsoever. Thus if a party affirms the existence of an arbitration agreement or its validity it is not open to the party to file a suit for the purpose of obtaining a declaration about the existence of the said agreement or its validity. The bar to the suit thus created by section 32 of the Act inevitably raises the question as to what remedy is open to a party to adopt in order to obtain an appropriate declaration about the exist- ence or validity of an arbitration agreement. 1t was held that having regard to the scheme of sections 31, 32 and 33 of the Act in matters which fail within the bar created by section 32, if a suit cannot be filed it is not necessarily intended that an application can be made under the Court’s powers provided for by section 31 and impliedly recognised by section 32 of the Act. In the later part of section 33 an application can be made to have the effect or purport of the agreement 486 determined but not its existence. That means that an appli- cation to have the effect of the agreement can be made provided the existence of the agreement is not in dispute, and that a party affirming the existence of an arbitration agreement cannot apply under section 3 for obtaining a decision that the agreement in question exists.

In Waverly Jute Mills Co. Ltd. v. Raymon & Co. (India) Pvt. Ltd., [1964] INSC 150; [1963] 3 S.C.R. 209; A.I.R. 1963 S.C. 90 the Constitution Bench reiterated the decision in Khardah Co.

Ltd. v. Raymon & Co. India Ltd., [1962] INSC 207; [1963] 3 S.C.R. 183 where it was held that if a contract is illegal and void, the arbitration clause which is one of the terms of the contract thereof must also perish along with it and that a dispute relating to the validity of the contract is in such a case for the court and not for the arbitration to decide. Where the arbitration clause is a term of the particular contract whose validity is in question it has no existence apart from the impugned contract and must perish with it.

In Renusagar Co. v. General Electric Co., [1984] INSC 143; [1985] 1 S.C.R. 432 at page 507 it has been reiterated that though section 34 of the Arbitration Act, 1940 confers a discretion upon the Court in the matter of granting stay of legal proceedings where there is an arbitration agreement, it cannot be disputed that before granting the stay the Court has to satisfy itself that arbitration agreement exists factually and legally and that the disputes between the parties are in regard to the matters agreed to be referred to arbitration and that decided cases have taken the view that the Court must satisfy itself about these matters before the stay order is issued. In other words, Court under section 34 must finally decide those issues before granting stay.

Among High Court decisions reference may be made to Banwari Lal v. Hindu College, Delhi, A.I.R. 1949 East Punjab 165 wherein it has been held at paragraph 33 that the Arbi- tration Act has been enacted merely with the object of consolidating the law relating to arbitrations, and the question of the existence or validity of the contract con- taining an arbitration agreement being not a matter falling within the purview of the Act, it cannot be said, with any show of reason, that section 32 takes away the jurisdiction of the courts to give appropriate relief in suit brought either to contest or to establish, the existence or validity of the contract. In Johurmull Parasram v. Louis Dreyfus Cx.

Ltd., 52 C.W.N. (1947-48) 137; A.I.R. 1949 Cal. 179 it was held at para 14 that the court must consider a suit as it is pleaded and framed. If it comes to a conclusion that a suit as pleaded in a suit on the contract or arising out of the contract containing the arbitration clause 487 then the suit should be stayed. But on the other hand if the suit is pleaded as a suit independent of the contract then the Court has no power to stay the suit although it is satisfied that the frame of the suit is merely a means of avoiding the consequences of alleging the true nature of the claim. In considering the question of stay of the suit the Court is not entitled to go into the question as to what is substantially the nature of the claim. So also in Pramada Prasad v. Sagar Mal Aggarwal, A.I.R. 1952 Patna 352 it was observed that from the language of the Section 34 it is clear that party can apply to stay a legal proceeding only when the repudiation is of the right or obligation in re- spect of any matter agreed to be referred, and not when the very existence of the agreement is repudiated. The court relied on the decision in Monro v. Bognor Urban District Coun, [1915] 3 K.B. 167. In Narsingh Prasad v. Dhanraj Mills, I.L.R. 21 Patna 544; A.I.R. 1943 Pat 53 Harries, C.J.

held that where an agreement is impeached on the ground of fraud and the dispute is as to the factum or validity of contract, such a dispute does not fail under the arbitration clause and should be decided by the Court. Similarly in Birla Jute Manufacturing Co. Ltd. v. Dulichand, AIR 1953 Calcutta 450 it was held at paragraph 15 that a dispute as to the validity of the contract cannot be held to be within an arbitration agreement contained in the contract itself and such a dispute cannot be referred to arbitrators or dealt with by them under such an agreement, unless the parties agreed to include it in the arbitration clause.

Otherwise where the contract itself is repudiated in the sense that its original existence or its binding force is challenged, for example, where it is said that the parties were never ‘ad idem’ or where it is said that the contract is voidable ad initio on the ground of fraud, misrepresenta- tion or mistake and it has been avoided, the parties are not bound by any contract and escape the obligation to perform any of its terms, including the arbitration clause, unless the provisions of that clause are wide enough to include the question of jurisdiction as well. In W.F. Ducat & Co. Pvt.

Ltd. v. Hiralal Pannalal, A.I.R. 1976 Calcutta 126, Salil K.

Roy Choudhary, J. held at paragraph 8 that where in a suit the plaintiff alleges that the contract containing the arbitration clause is void and illegal and prima facie it appears that there are sufficient grounds on which the legality of the said contract has been challenged for non- compliance of the statutory requirement, the court should decline to exercise discretion in favour of the stay of the suit. Similarly in General Enterprises v. Jardine Handerson Ltd., A.I.R. 1978 Calcutta 407, Sabyasachi Mukharji, J., as his Lordship then was, held that if the contract containing the arbitration clause was obtained by fraud the stay of the suit could not be granted under Section 34 of the Act. Thus, while there is not doubt 488 about the law as enunciated in the above English and Indian decisions, namely, where the validity, existence or legality of the contract is challenged in the suit on grounds de hors, independent of, or external to the terms or stipula- tions of the contract, the court in an application under Section 34 of the Act shall have no jurisdiction to go into the question, and that in large majority of cases it would be applicable, in appropriate cases, having regard to the nature of the dispute raised in the pleadings of the suit, the compass and scope of the arbitration clause in the contract, the surrounding facts and circumstances of the case having a bearing on the question of genuine grievance falling outside or inside the arbitration agreement and the objects and spirit of the Arbitration Act, the court may be justified in deciding the validity, existence or legality of the challenged contract containing the arbitration agree- ment. In Heyman v. Darwins, (supra) Viscount Simon, L.C.

stated thus:

“if the dispute is whether the contract which contains the clause has ever been entered into at all that issue cannot go to arbitration under the clause, for the party who denies that he has ever entered into the contract is thereby denying that he had ever joined in the submission. Similarly, if one party to the alleged contract is contending that it is void ab initio (Because for example, the making of such a contract is illegal), the arbitration clause cannot operate for on this view the clause itself also is void. But, in a situa- tion where the parties are at one in asserting that they entered into a binding contract, but a difference has arisen between them whether there has been a breach by one side or the other, or whether circumstances have arisen which have discharged one or both parties from further performance, such differences should be regarded as difference which have arisen ‘in respect of’ or ‘with regard to’ or ‘under’ the contract, and an arbitration clause which uses these, or similar, expressions should be construed accordingly.” Section 34 of the Arbitration Act, deals with the staying of a suit where reference concerning the subject matter of the suit and between the same parties is pending. This section corresponds to Section 4 of the English Arbitration Act.

Whether a particular dispute arising out of a particular contract is referable to arbitration or not must necessarily depend on the intention of the parties as embodied in the arbitration clause. If the dispute is squarely covered by the arbitration clause the 489 relevant provisions of the Act will be attracted. Section 32 puts a bar to suits contesting arbitration agreement or award by providing that notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be enforced, set aside, amended modified or in any way affected or otherwise than as provided in the Act. Section 33 of the Act provides that any party to an arbitration or any person claiming under him desiring to challenge the existence or validity of an arbitration agree- ment or an award to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit.

It may be noted that section 32, 33 and 34 speak of an arbitration agreement as defied in section 2(a) of the Act which means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. In the instant case the arbitration clause forms a part of the agreement, namely, the charter party.

The question is whether the validity or otherwise of the charter party itself can be said to have been covered within the arbitration clause. On scrutiny of clause 18 we find that any dispute or difference in respect of the construc- tion, meaning or effect or as to the rights and liabilities of the parties thereunder or any other matter arising out of this agreement shall be referred to arbitration. Can the validity of the contract itself as embodied in the charter party be said to have arisen out of the contract or can the validity or otherwise of the contract in the charter party itself be said to be construction, meaning or effect or rights and liabilities of the party thereunder? In our opinion, the answer is in the negative. The arbitration agreement is not the same as the contract in the charter party. It cannot, therefore, be said that the validity or otherwise of the chartery party was covered by clause 18. In Khardah Company Ltd. v. Raymon & Co. (India) Pvt. Ltd., [1962] INSC 207; [1963] 3 S.C.R. 183 the appellant company entered into a contract on September 7, 1955 for the purchase of certain goods and clause 14 thereto provided that all disputes arising out of or concerning the contract should be referred to the arbitration of the Bengal Chamber of Commerce. The respondents having failed to deliver the goods as agreed the appellants applied to the Bengal Chamber of Commerce for arbitration and an award made in favour of the appellant.

Thereupon the respondent filed an application in the High Court of Calcutta under 490 section 33 of the Arbitration Act, 1940 challenging the validity of the award on the ground that the contract dated September 7, 1955 itself was illegal as it was in contraven- tion of the notification of the Central Government dated October 29, 1953. It was held that the dispute as to the validity of the contract dated September 7, 1955, was not one which the arbitrators were competent to decide under clause 14 and that in consequences the respondents were entitled to maintain the application under section 33 of the Act and that where an agreement is invalid every part of it including clause as to arbitration contained therein must also be invalid. In Anderson Wright Ltd. v. Moran and Compa- ny, [1955] 1 S.C.R. 862 it has been laid down that in order that a stay may be granted under section 34 of the Act, it is necessary, among others, that the legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred and the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitrator in accordance with the arbitration agree- ment. The question whether the dispute in the suit falls within the arbitration clause really pre-supposes that there is such agreement and involves consideration of two matters, i.e. (i) what is the dispute in the suit and (ii) what dispute the arbitration clause covers. It is incumbent upon the Court to decide whether there is a binding contract for arbitration between the parties. If it is found that the dispute in the suit is not covered by the arbitration clause the application for stay may be dismissed. In Damodar Valley Corporation v.K.K. Kar[1973] INSC 204; , [1974] 2 S.C.R. 240 it has been held that as the contract is an outcome of the agreement between the parties it is equally open to the parties thereto and to Court to bring to an end or to treat it as if it never existed. It may also be open to the parties to terminate previous contract and substitute in the place a new contract or alter the original contract in such a way that it cannot subsist. In all these cases since the entire contract is put to an end to, the arbitration clause, which is a part of it, also perishes along with it. Where, therefore, the dispute between the parties is that the contract itself does not subsist either as a result of its being substituted by a new contract or by rescission on alteration, that dispute cannot be referred to the arbitration as the arbitration clause itself would perish if the averment was found to be valid.

As the very jurisdiction of the arbitrator is dependent upon the existence of the arbitration clause under which he is appointed, the parties have no right to invoke a clause which perished with the contract. In case of rescission it would put an end to the rights of the parties to the con- tract in future but it may permit claiming of damages either for previous breaches or for the breach which constitute the termination. The contract being consensual, the question whether the 491 arbitration clause survives or perishes would depend on the nature of the controversy and its effect upon the existence of survival of the contract itself. A dispute as to the binding nature of the contract cannot be determined by resort to arbitration because the arbitration clause itself stands or falls according to the determination of the ques- tion in dispute. As was held in Hirji Mulji v. Cheong Yue Steamship Co., [1926] A.C. 497, “a contract that has deter- mined is in the same position as one that has never been concluded at all”. In Heyman v. Darwins, (supra) Lord Porter pointed out “that it is not in every instance in which it is claimed that the arbitrator has no jurisdiction the Court, will refuse to stay an action. If this were the case such a claim would always defeat an agreement to submit disputes to arbitration, at any rate, until the question of jurisdiction had been decided. The Court to which an application for stay is made is put in possession of the facts and arguments and must in such a case make up its mind whether the arbitrator has jurisdiction or not as best it can on the evidence before it. Indeed, the application for stay gives an oppor- tunity for putting these and other considerations before the court that it may determine whether the action shall be stayed or not.” These observations were accepted by S.R.

Das, J in the case of Khusiram v. Hanutmal, [1948] 53 C.W.N.

505,518 wherein it was held that where on an application made under section 34 of the Arbitration Act for stay of a suit, an issue is raised as to the formation, existence or validity of the contract containing the arbitration clause, the Court is not bound to refuse a stay but may in its discretion, on the application for stay, decide the issue as to the existence or validity of the arbitration agreement even though it may involve incidentally a decision as to the validity or existence of the present contract (Emphasis supplied). Their Lordships in Anderson Wright Ltd. v. Moran and Company, (supra) reiterating the above passage observed:

“We are in entire agreement with the view enunciated above.” Thus, where in an application under section 34 of the Act an issue is raised as to the validity or existence of the contract containing the arbitration clause, the court has to decide first of all whether there is a binding arbitration agreement, even though it may involve incidentally a deci- sion as to the validity or existence of the parent contract.

The court has to bear in mind that a contract is an agree- ment enforcible at law and that it is for the parties to make their own contract and not for the court to make one for them. Court is only to interpret the contract. The stipulations in the contract have, therefore, to be examined in the light of the dispute raised in the pleadings of the suit. If it is found that the dispute raised in the suit outside or independent of the contract it follows that the arbitration clause will not encompass that dispute. However, as the parties were 492 free to make their own contract they were also free to have agreed as to what matters would be referred to arbitration.

If the arbitration clause is so wide as to have included the very validity or otherwise of the contract on the grounds of fraud, misrepresentations, mutual mistake or any valid reason the arbitrator will surely have jurisdiction to decide even that dispute. Two extreme cases have to be avoided, namely, if simply because there is an arbitration clause all suits including one questioning the validity or existence or binding nature of the parent contract is to be referred to arbitrator irrespective of whether the arbitra- tion clause covered it or not, then in all cases of con- tracts containing arbitration clause the parties shall be deprived of the right of a civil suit. On the other hand if despite the arbitration clause having included or covered ex facie even a dispute as to the existence, validity or bind- ing nature of the parent contract, to allow the suit to proceed and to deprive the arbitrator of his jurisdiction to decide the question will go contrary to the policy and objects of the Arbitration Act as embodied in Sections 32, 33 and 34 of the Act. Both the extremes have, therefore, to be avoided. The proper approach would be to examine the issues raised in the suit and to ascertain whether it squarely fails within the compass of the arbitration clause and take a decision before granting the stay of the suit. If an issue is raised as to the formation existence or validity of the contract containing the arbitration clause, the court has to exercise discretion to decide or not to decide the issue of validity or otherwise of the arbitration agreement even though it may involve incidentally a decision as to validity or existence of the challenged contract. Should the court find the present contract to be void ab initio or illegal or non-existent, it will be without jurisdiction to grant stay. If the challenged contract is found to be valid and binding and the dispute raised in the suit covered by the arbitration clause, stay of the suit may be justified.

In the instant case considering the issues raised, the arbitration clause and surrounding circumstances and the part played by the parties pursuant to the charter party since execution to the modification and thereafter till objection raised by the appellant plaintiff, we are of the view that the learned trial court did not err in proceeding to decide the issue of validity or legality of the parent contract.

The question whether the validity and legality of the parent contract could be decided without taking oral evi- dence need not detain us long. All the relevant documents and affidavits were before the court and were considered.

Mr. Shanti Bhushan submits that in deep sea fishing, use of trawlers, requirement and standard of refrigeration system in the trawlers so as to maintain 20F temperature in their fish- 493 holds are highly technical matters and given the opportunity the appellant plaintiff could have produced expert evidence in the matter. Counsel, however, states, that at no stage of the proceedings before argument any written or even oral application was made seeking permission to adduce oral evidence. Admittedly, it was only during agreement that oral prayer was made. We are, therefore, of the view that no illegality was committed by the trial court in this regard considering the facts and circumstances of the case. The learned judge rightly observed that if there was any doubt about facts, the matter had to be decided by trial on evi- dence, in this case the admitted facts could not be disput- ed. The learned courts have also exercised discretion to grant stay. Even if it appears that the discretion could have also been exercised to decide the issue of invalidity in a trial on evidence adduced, this court would not substi- tute its view for that of the trial court, unless the ends of justice required it to be done. Since it was said by the Court of Appeal in Ormerod v. Todmordon, [1882] 8 Q.B.D. 664 that while it had jurisdiction to review the descreation of the judge it would not do so except in a case in which it clearly though that the judge had wrongly exercised his discretion and that an injustice had thereby been done by his order. This was approved in Charles Osenton & Co. v.

Johnston, [1942] A.C. 130 holding that a legitimate exercise of the jurisdiction would not be disturbed in appeal but a wrongful exercise of the discretion will be corrected by the House of Lords. Referring to Gardner v. Jay, [1885] 29 Ch.

D. it was ruled in the Printers (Mysore) Pvt. Ltd. v. Pothan Joseph, [1960] INSC 91; [1960] 3 S.C.R. 713 that this court would not light- ly interfere under Article 136 of the Constitution with the concurrent exercise of discretion of the Courts below under Section 34 of the Act. Before it can justly do so, the appellant must satisfy the court, on the relevant facts referred by the courts below, that they exercised their discretion in a manifestly unreasonable or perverse way, which was likely to defeat the ends of justice. The appel- lant has failed to do so in this case.

The next question is whether the learned courts below were correct in holding that there was no mutual mistake so as to render the agreement void ab initio under section 20 of the Contract Act.

Section 20 of the Indian Contract Act, 1872 provides that where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. The explanation to the section says that an erroneous opinion as to the value of the thing which forms subject-matter of the agreement is not to be deemed a mistake as to a matter of fact. Where the parties make mutual mis- 494 take misunderstanding each other and are at cross purposes, there is no real correspondence of offer and acceptance and the parties are not really consensus ad idem. There is thus no agreement at all; and the contract is also void. A common mistake is there where both parties are mistaken about the same vital fact although both parties are ad idem, e.g. the subject-matter of the contract has already perished. The contract in such a case is void as the illustrations to the section make clear. In U.P. Government v. Nanhoo Mal, A.I.R.

1960 Allahabad 420 it has been observed that section 20 is concerned with common mistake of fact and not mutual mis- take. A common mistake is made or shared alike by both while mutual means made or entertained by each of the persons towards or with regard to each other. In Cooper v. Phibbs, [1867] UKHL 1; [1867] L.R. 2 H.L. 149, A agreed to take a lease of a fish- ery from B, though contrary to the belief of both parties at the time, A was tenant for life of the fishery and B had no title at all. Lord Westbury applied the principle that if parties contract under a mutual mistake and misapprehension as to their relative and respective rights, the result is that the agreement is liable to be set aside as having proceeded upon a common mistake. The transfer of ownership being impossible, the stipulation was naturali ratione inunitilis. This principle of Cooper v. Phibbs has been followed in Earl Beauchamp v. Winn [1873] 6 H.L. 223 and Hudders field Banking Co. v. Henry Lister & Sons, [1895] 2 Ch. 273. However, Lord Atkin in Bell v. Lever Bros Ltd., [1931] UKHL 2; [1932] A.C. 161; (1931) All E.R. Rep. 1, 27 followed in Kennedy v. Panama Royal Mail Co., [1867] L.R. 2 Q.B. 580 and Smith v. Hughes, [1871] L.R. 6 Q.B. 597 described the state- ment of Westbury too wide and said that the correct view was that there was a contract which the vender was either inca- pable of performing or had committed breach of a stipulation as to title; the contract was unenforceable but not void. In Bell v. Lever Bros Ltd., (supra) an agreement of service between the company and two of the directors of its subsidi- ary company was terminated on payment of compensation. The parties proceeded on the assumption that the service agree- ment was not liable to immediate termination by reason of misconduct of the directors which assumption proved to be mistaken. Fraud was however negatived. In an action by the company for recession of contract and repayment of moneys paid the agreement was set aside on the ground of mutual mistake as to the quality of the service contract. The accepted proposition was that whenever it is to be inferred from the terms of the contract or its surrounding circum- stances that the consensus has been reached upon the basis of a particular contractual assumption, and that assumption is not true, the contract is avoided; i.e. it is void ab initio if the assumption is of present fact and it ceases to bind if the assumption is of future 495 fact. The assumption must have been fundamental to the continued validity of the contract or a foundation essential to its existence. Lord Atkin observed that the common stand- ard for mutual mistake and implied conditions as to the existing or as to future fact is: Does the state of new facts destroy the identity of the subject-matter as it was in the original state of facts? In the words of Lord Than- kerton the error must be such that it either appeared on the face of the contract that the matter as to which the mistake existed was an essential and integral element of the sub- ject-matter of the contract or was an inevitable inference from the nature of the contract that all parties so regarded it. Where each party is mistaken as to the other’s inten- tion, though neither realises that the respective promises have been misunderstood, there is mutual mistake. The illus- tration in Cheshire and Fifoots Law of Contract is, if B were to offer to sell his Ford Comina Car to A and A were to accept in the belief that the offer related to a Ford Zeph- yr. In such a case, no doubt, if the minds of the parties could be probed, genuine consent would be found wanting. But the question is not what the parties had in their minds, but what reasonable third parties would infer from their words or conduct. The court has to ascertain “the sense of the promises”. In other words, it decides whether a sensible third party would take the agreement to mean what A under- stood it to mean or what B understood it to mean, or whether indeed any meaning can be attributed to it at all. Blackman J in Smith v. Hughes, [1871] L.R. 6 Q.B. 597,607 said “if whatever a man’s real intention may be he so conducts him- self what a reasonable man would believe that he was assent- ing to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree the other party’s terms”.

This case establishes that a contract is void at law only if some term can be implied in both offer and accept- ance which prevents the contract from coming into operation.

In Solle v. Butcher, [1950] 1 K.B. 671 (691) Lord Denning said that once a contract has been made, that is to say, once the parties, whatever their in most states of mind, have to all outward appearances agreed with sufficient certainty in the same terms on the subject-matter, then the contract is good unless and until it is set aside for fail- ure of some condition on which the existence of the contract depends, or for fraud, or on some equitable ground. Neither party can rely upon his own mistake to say that it was a nullity from the beginning, no matter that it was a mistake which to his mind was fundamental, and no matter that the other party knew that he was under a mistake. A fortiori, if the other party did not know of the 496 mistake but shared it. There is no doubt that the applica- tion of the doctrine of mutual mistake depends upon the true construction of the contract made between the parties. A mutual misunderstanding will not nullify a contract but only if terms of the contract construed in the light of the nature of the contract and of the circumstances believed to exist at the time it was done show that it was never intend- ed to apply to the situation which in reality existed at that time, will the contract be held void. Mistake as to the quality of the article contracted for may not always avoid the contract. As Lord Atkin said in Bell v. Lever Bros Ltd.

(supra) mistake as to the quality of the thing contracted for raises more difficult questions. In such a case a mis- take will not affect assent unless it is the mistake of both parties, and is as to the existence of some quality which makes the thing without the quality essentially different from the thing as it was believed to be. A distinction has, therefore, to be made between a mistake as to substance or essence on the one hand, and a mistake as to quality or attributes on the other. A mistake of the former type, will avoid the contract whereas a mistake of the latter type will not. Such a distinction was made in Kennedy v. Panama, Royal Mail Co. Ltd., (supra). It may be said that if there be misapprehension as to the substance of the thing there is no contract; but if it be a difference in some quality or accident, even though the misapprehension may have been the actuating motive to the purchaser, yet the contract remains binding. Thus a mistake as to an essential and integral element in the subject-matter of the contract will avoid the contract. A mistake will not affect assent unless it is the mistake of both parties, and is as to the existence of some quality which makes the thing without the quality essential- ly different from the thing as it was believed to be. A distinction, therefore, should be drawn between a mistake as to the substance of the thing contracted for, which will avoid the contract and mistake as to its quality which will be without effect. According to circumstances even a mistake as to the substance of the thing contracted for may not necessarily render a contract void as was observed in Solle v. Butcher (supra). Similarly in Frederick E. Rose (London) Ltd. v. William H. Pim Junior & Co. Ltd., [1953] 2 Q.B. 450 where both parties entered into a contract for the sale of horse-beans, which were quite different from the feveroles which they each believed them to be, yet the contract was held not to be void. Thus there must be a difference so complete that, if the contract were enforced in the actual circumstances which have unexpectedly emerged, this would involve an obligation fundamentally different from that which the parties believed they were undertaking. In Sheikh.

Brothers Ltd. v. Arnold, [1957] A.C. 136; Belly. Lever Bros (supra) was applied.

497 Applying the above principles of law to the facts of the instant case, we find that the two fishing trawlers Ave Maria-I and Ave Mariall were imported by the respondent on 30.1.1974 and were operated by him based at Vishakapatnam.

At the time of negotiations survey report relating to the trawlers dated 20.2. 1977 of ABS Worldwide & Technical Services India Pvt. Ltd. was handed over by the respondent to the appellant and thereafter the agreement was executed on 21.3.1977. Delivery of the trawlers was to be made seven days after receipt of the approval or no objection certifi- cate for carrying out inspection to ascertain repairs to be carried out for making the trawlers fully operational and to ascertain the cost of such repairs. On 10.7. 1977 trawlers were delivered to the charterer for inspection and repairs.

On 12.11.1977 the charterer wrote to the owner asking for payment of hire charges from 1.10.1977 and pointing out delays in repairs. The owner also requested the charterer to pay port charges with effect from 1.10.1977. On 2.2.1978 the charter party was modified to the extent that charter hire would commence from 15.1.1978 and that as the charterer had incurred substantial charges on repairs the owner shall bear only Rs. 1.5 lakhs per trawler for repairs carried out up to the commencement of the charter hire. The charter hire was revised to Rs.6,25,000 per trawler per year and an amount of Rs.6,70,000 paid towards deposit and charter hire from 15.1.1978 to May 1978. In the first week of March, 1978 the charterer paid Rs. 1,04,000 towards charter hire for June 1978. On 18.7.1978 the charterer wrote to the owner setting out payments made and claiming adjustment of Rs.90,000 towards repair charges and transferring Rs.14,000 towards charter hire. It was only on 14.9.1978 that the charterer for the first time raised some complaints and objections on the trawlers and questioned the very validity of the agree- ment. On 14.9. 1978 the trawlers were inspected by Kamath & D’Abrie Marine Surveyors who submitted their report on 26.9.

1978 and the suit was filed on 29.9. 1978.

The appellant-plaintiff’s averment, as we have already mentioned, is that the trawlers suffered from inherent and latent defects in the refrigeration system which was an essential part of such trawlers and which were not discover- able by ordinary diligence at the time of entering into the agreement on 21st March 1977 and as such they were not fully operational. It is not their grievance that there was no refrigeration system at all in the trawlers but that only it was not of a particular standard, namely that even after extensive repairs it could not be brought to the standard of minus 20 degree F but attained only minus 10 degree F. The learned counsel for the appellant submits that 498 for deep sea fishing the temperature in the trawler’s fish- hold has to be minus 20 degree F and minus 10 degree F would not be adequate and as a result the trawlers cannot be used for deep sea fishing. The grievance has been made that no opportunity to lead expert evidence on this question was available to the appellant. The question, therefore, arises under the facts and circumstances of the case, namely, whether the deficiency in the refrigeration systems to the extent of minus 10 degree F made the trawlers essentially different from trawlers with a refrigeration system of minus 20 degree F. The other question is whether this standard of the refrigeration system was in the minds of the parties at the time of entering into the contract and there was a mutual mistake regarding this, and the contracting minds were, therefore, not ad idem. From the series of steps taken for repairs and the stipulations in the charter party in- cluding the modifications thereof we are unable to hold that it was a case of mutual mistake as to a quality which made the trawlers transferred essentially different from the trawlers that the parties in their minds agreed to transfer.

This being the position we have to agree with the learned courts below that there was no mutual mistake and the con- tract would not be avoided on this ground.

The next question is that of illegality or otherwise of the agreement. The learned trial court exercised its discre- tion to go into the question and arrived at the finding that there was no illegality on the ground of violation of the permission or the condition of licence granted by the Chief Controller of Exports and Imports. The learned lower appel- late court upheld that finding. It is settled law that where the subject matter of a reference is illegal no award can be of any binding effect. In Taylor v. Barnett, [1953] W.L.R.

562; the plaintiff had agreed to purchase goods from the defendants. The defendants had agreed to deliver. The goods were subject to the price control, sales at price in excess of the control price being forbidden by regulations at the time of making the contract (though not at the time of the delivery). The control price was less than the agreed price.

The umpire awarded the plaintiffs damages and the award was good on the face of it, but it was held that the award should be set aside for illegality. If the contract itself was illegal, the controversy as to whether it was illegal or not would not be a dispute arising out of the contract as also would be the question whether the contract was void ab initio. When, however, it is found that a binding contract was made which was not illegal what follows from such a contract would be covered by the expression “dispute arising out of the contract”. To stay a suit under section 34 of the Act the Court has to see, inter-alia, whether there was a valid agreement to have the dispute concerned settled by arbitration and that the 499 proceedings are in respect of a dispute so agreed to be referred. In Taylor v. Barnett, (supra) Singleton J; ex- pressed the opinion that an arbitrator is guilty of miscon- duct if he knows or recognises that a contract is illegal and thereafter proceeds to make award upon dispute arising under that contract. The illegality of a contract can be an issue in deciding want of jurisdiction. The first and essen- tial pre-requisite to making an order of stay under section 34 of the Act, as was ruled in Anderson Wright Ltd. (supra) is that there is a binding arbitration agreement between the parties to the suit which is sought to be stayed. Public policy imposes certain limitations on the freedom of con- tract by forbidding the making of certain contracts. In such cases though all other requisites for formation of the contract are complied with, parties to such forbidden con- tracts are not allowed to enforce any rights under them. In clear cases the law strikes at the agreement itself by making the contract illegal. However, the effect and nature of illegality will depend upon on the facts and circum- stances of each case. Thus, the effects of illegality are by no means uniform. In other words, the effect of illegality is not the same in all cases. Where a statute makes a con- tract illegal or where a certain type of contract is ex- pressly prohibited there can be no doubt that such a con- tract will not be enforcible. In Rearbitration between Mahmoud and Isphani, [1921] 2 K.B. 716 by a war time statu- tory order it was forbidden to buy or sell linseed oil without a licence from the Food Controller. The plaintiff had a licence to sell to other licenced dealers. He agreed to sell and deliver to the defendant a quantity of linseed oil, and before the contract was made, asked the defendant whether he possessed a licence, the defendant falsely as- sured him that he did. Subsequently; however, the defendant refused to accept the oil on the ground that he had no licence. The plaintiff having brought an action for damages for nonacceptance, the Court of Appeal refused to entertain the action even if the plaintiff-was ignorant, at the time the contract was made, of the facts which brought it within the statutory prohibition observing that it was a clear and unequivocal declaration by the legislature in the public interest that this particular kind of contract shall not be entered into. A contract which was not illegal from the beginning may be rendered illegal later by the method of performance which did not comply with the statutory require- ments. The appellant’s burden was to show that the charter party was illegal to take it out of the arbitration clause for if the contract is illegal and not binding on the par- ties the arbitration clause would also be not binding. Once it is shown to have been illegal it would be unenforcible as ex turpi causa non oritur actio. Again it is a settled principle that one who knowingly enters into a contract with improper object cannot enforce his rights thereunder. The learned 500 counsel for the appellant submitted that the import of trawlers was subject to the conditions of the import li- cence, and one of the conditions was that the goods imported under it will be utilised in the licence holder’s factories and that no portion thereof will be sold or will be permit- ted to be utilised by any other party or placed with any financier other than the banks authorised to deal in the foreign exchange and State Financial Corporation, provided that particulars of goods to be pledged are reported by the licence to the licencing authorities. We are of the view that this was a proforma condition in the licence No.

P/CC/206299 dated3.3.1971 and could not appropriately be applied to the two imported trawlers. Needless to observe that the appellant plaintiff was also a party to the agree- ment of charter party in respect of the two imported trawl- ers. We are also of the view that though it purported to be actual user’s licence there was no violation of this condi- tion in view of the express permission granted by the Con- troller vide his Memo No. GG.IV/28/143/70/71/374 dated 17.8.1977 with specific reference to the licence No.P/CC/2062299 dated 3.3.1971 allowing the chartering of the two imported trawlers to be delivered to plaintiff M/s.

I.T.C. India Ltd. We also agree with the learned courts below that the modifications dated 2.2.1978 did not make any alteration so as to make the agreement contrary to the terms and conditions of the permission inasmuch as the permission was for a period of three years. The option to continue hire of the trawler for a further period of three years did not ipso facto violate the permission. There was also no viola- tion as to the duration of the charter party.

The next question is whether the dispute under the charter party raised in the suit are arbitrable. The divi- sion bench held that the learned Single Judge was right in so far as he held that the matters were arbitrable apart from the question of illegality, invalidity of the contract.

We agree with this view inasmuch as it is obvious that the question of invalidity of the contract due to the alleged mutual mistake would be de hors and independent of the contract and as such would not be referable under the arbi- tration clause, In so far as the question of illegality of the charter party is concerned as the appellant plaintiff has not established that the charter party was illegal or void ab initio the question whether the modification as alleged had rendered the contract illegal would be covered by arbitration clause which reads:

“Any dispute or difference at any time arising between the parties hereto in respect of the construction meaning or effect or as to the rights and liabilities of the parties afore- said hereunder or any other matter arising out of this 501 agreement, shall be referred to arbitration in accordance with the subject to the provision of the Indian Arbitration Act, 1940 or any statutory modification or re-enactment thereto or thereof for the time being in force and the venue of Arbitration shall be Madras or Cal- cutta, and not elsewhere and the Award or Awards in such arbitration shall be made a rule of court of competent jurisdiction at the instance of either party”.

We agree that under the above clause the reliefs claimed in the suit other than the question of ab initio invalidity or illegality of the contract would be referable. However, it will be within the jurisdiction of the arbitrator to decide the scope of his jurisdiction as we have said earlier that the court cannot make a contract between the parties and its power ends with interpretation of the contract between them. The same principle also applies to the arbi- tration agreement unless of course, the parties to the arbitration agreement authorises the court to make and modify the agreement for themselves.

Mr. C.S. Vaidyanathan for the respondents states that the respondent shall have no objection to a retired Judge of the Supreme Court being appointed as Arbitrator and the respondents shall not raise the question of limitation as indicated by Mr. Shanti Bhushan learned counsel for the appellant. We have no doubt that the Arbitrator so appointed shall proceed in accordance with law to decide the questions including that of the jurisdiction, if raised.

In the result, we find no merit in this appeal and hence it is dismissed leaving the parties to bear their own costs.

T.N.A. Appeal dis- missed.

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IN THE SUPREME COURT OF INDIA
PT. PARMANAND KATARA …PETITIONER
Vs.
UNION OF INDIA & ORS. …RESPONDENT
DATE OF JUDGMENT28/08/1989
BENCH: MISRA RANGNATH OZA, G.L. (J)
CITATION:
1989 AIR 2039 1989 SCR (3) 997
1989 SCC (4) 286 JT 1989 (3) 496
1989 SCALE (2)380

ACT: Constitution of India, 1950: Article 21–Obligation on the State to preserve life–Every doctor has professional obligation to extend services to protect life–All Government hospitals/Medical institutions to pro vide immediate medical aid in all cases. Indian Medical Council Act, 1860: Section 33–Indian Medical Council/Code of Medical Ethics–Clauses 10 and 13–Obligation to sick–Patient not to be neglected–Court emphasized necessity to provide immediate medical aid. Practice and Procedure: Medical professional–Law courts will not summon unless evidence is necessary–Should not be made to wait and waste time unnecessarily.

HELD: (1) Article 21 of the Constitution casts the obligation on the State to preserve life. [1005G] (2) There can be no second opinion that preservation of human life is of paramount importance. That is so on account of the fact that once life is lost, the status quo ante cannot be restored as resurrection is beyond the capacity of man. [1005F] (3) The patient whether he be an innocent person or a criminal liable to punishment under the laws of the society, it is the obligation of those who are incharge of the health of the community to preserve life so that the innocent may be protected and the guilty may be punished. Social laws do not contemplate death by negligence to tantamount to legal punishment. [1005F] (4) Every doctor whether at a Government hospital or otherwise has the professional obligation to extend his services with due expertise for protecting life. [1006A] (5) No law or State action can intervene to avoid/delay the discharge of the paramount obligation cast upon members of the medical profession. The obligation being total, absolute and paramount, laws of procedure whether in statute or otherwise which would interfere with the discharge of this obligation cannot be sustained and must, therefore, give way. [1006B] 999 (6) The Court gave directions for giving adequate pub- licity to the decision in this case by the national media, the Doordarshan and the all India Radio, as well as through the High Courts and the Sessions Judges. [1006E-F] Per G.L. Oza, J. (concurring) (1) The Code of Medical Ethics framed by the Medical Council was approved on 23rd October, 1970. This only re- veals an unfortunate state of affairs where the decisions are taken at the highest level good intentioned and for public good but unfortunately do not reach the common man and it only remains a text good to read and attractive to quote. [1007D-E] (2) It is clear that there is no legal impediment for a medical professional when he is called upon or requested to attend to an injured person needing his medical assistance immediately. There is also no doubt that the effort to save the person should be the top priority not only of the medi- cal professional but even of the police or any other citizen who happens to be connected with the matter or who happens to notice such an incident or a situation. [1008F] (3) The members of the legal profession, our law courts and everyone concerned will also keep in mind that a man in the medical profession should not be unnecessarily harassed for purposes of interrogation or for any other formality and should not be dragged during investigations at the police station and it should be avoided as far as possible. [1009C] (4) Law courts will not summon a medical professional to give evidence unless the evidence is necessary and even if he is summoned, attempt should be made to see that the men in this profession are not made to wait and waste time unnecessarily. [1009D]

ORIGINAL JURISDICTION: Writ Petition (Criminal) No. 270 of 1988.

(Under Article 32 of the Constitution of India).

Pt. Parmanand Katara-in-person.

A.D. Singh, U.R. Lalit (N.P.). R.B. Misra. Ms. A. Subha- shini, B.R. Agarwala, Ms. Sushma Manchanda, Ms. Suman Rasto- gi and Ms.

1000 Indu Malhotra (N.P.) for the Respondents.

The following Judgments of the Court were delivered RANGANATH MISRA, J. The petitioner who claims himself to be a ‘small human right activist and fighting for the good causes for the general public interest’ filed this applica- tion under Article 32 of the Constitution asking for a direction to the Union of India that every injured citizen brought for treatment should instantaneously be given medi- cal aid to preserve life and thereafter the procedural criminal law should be allowed to operate in order to avoid negligent death and in the event of breach of such direc- tion, apart from any action that may be taken tot negli- gence, appropriate compensation should be admissible. He appended to the writ petition a report entitled ‘Law helps the injured to die’ published in the Hindustan Times. In the said publication it was alleged that a scooterist was knocked down by a speeding car. Seeing the profusely bleed- ing scooterist, a person who was on the road picked up the injured and took him to the nearest hospital. The doctors refused to attend on the injured and told the man that he should take the patient to a named different hospital locat- ed some 20 kilometers away authorised to handle medico-legal cases. The samaritan carried the victim, lost no time to approach the other hospital but before he could reach, the victim succumbed to his injuries.

The Secretary, Ministry of Health & Family Welfare of the Union of India, the Medical Council of India and the Indian Medical Association were later impleaded as respond- ents and return to the rule has been made by each of them.

On behalf of the Union of India, the Under Secretary in the Ministry of Health & Family Welfare filed an affidavit appending the proceedings of the meeting held on 29.5. 1986 in which the Director-General of Health Services acted as Chairman. Along with the affidavit, decisions of papers relating to the steps taken from time to time in matters relating to matters relevant to the application but confined to the Union Territory of Delhi were filed. A report in May, 1983, submitted by the Sub-Committee set up by the Home Department of the Delhi Administration on Medico-Legal Centers and Medico-Legal Services has also been produced.

The Secretary of the Medical Council of India in his affida- vit referred to clauses 10 and 13 of the Code of Medical Ethics drawn up with the approval of the Central Government under s. 33 of the Act by the Council, wherein it had been said:

“10 . Obligations to the sick:

1001 Though a physician is not bound to treat each and every one asking his services except in emergencies for the sake of humanity and the noble traditions of the profession, he should not only be ever ready to respond to the calls of the sick and the injured, but should be mindful of the high character of his mission and the responsibility he incurs in the discharge of his ministrations, he should never forget that the health and the lives of those entrusted to his care depend on his skill and attention. A physician should endea- vour to add to the comfort of the sick by making his visits at the hour indicated to the patients.

13. The patient must not be neglected:

A physician is fee to choose whom he will serve. He should, however, respond to any request for his assistance in an emergency or whenever temperate public opinion expects the service. Once having undertaken a case, the physician should not neglect the patient, nor should he withdraw from the case without giving notice to the patient, his relatives or his responsible friends sufficiently long in advance of his withdrawal to allow them to secure another medical attendant. No provi- sionally or fully registered medical practi- tioner shall wilfully commit an act of negli- gence that may deprive his patient or patients from necessary medical care.” The affidavit has further stated:

“The Medical Council of India therefore ex- pects that all medical practitioners must attend to sick and injured immediately and it is the duty of the medical practitioners to make immediate and timely medical care avail- able to every injured person whether he is injured in accident or otherwise. It is also submitted that the formalities under the Criminal Procedure Code or any other local laws should not stand in the way of the medi- cal practitioners attending an injured person.

It should be the duty of a doctor in each and every casualty department of the hospital to attend such person first and thereafter take care of the formalities under the Criminal Procedure Code. The life of a person is far more important than the legal formalities. In view of this, the deponent feels that it is in 1002 the interest of general human life and welfare that the Government should immediately make such provisions in law and amendments in the existing laws, if required, so that immediate medical relief and care to injured persons and/or serious patients are available without any delay and without waiting for legal for- malities to be completed in the presence of the police officers. The doctor attending such patients should be indemnified under law from any action by the Government/police authori- ties/any person for not waiting for legal formalities before giving relief as a doctor would be doing his professional duty; for which he has taken oath as medical practition- er.

It is further submitted that it is for the Government of India to take necessary and immediate steps to amend various provi- sions of law which come in the way of Govern- ment Doctors as well as other doctors in private hospitals or public hospitals to attend the injured/serious persons immediately without waiting for the police report or completion of police formalities. They should be free from fear that they would be unneces- sarily harassed or prosecuted for doing his duty without first complying with the police formalities ………. It is further submit- ted that a doctor should not feel himself handicapped in extending immediate help in such cases fearing that he would be harassed by the Police or dragged to Court in such a case. It is submitted that Evidence Act should also be so amended as to provide that the Doctor’s diary maintained in regular course by him in respect of the accident cases would be accepted by the courts in evidence without insisting the doctors being present to prove the same or subject himself to cross-examina- tion/harassment for long period of time.” The Indian Medical Association which is a society registered under Act 21 of 1860 through its Secretary has stated in the affidavit that the number of deaths occurring on account of road accidents is on the increase due to lack of timely medical attention. In the affidavit it has further stated:

“The second reason is on account of the pre- vailing police rules and Criminal Procedure Code, which necessitate the fulfilment of several legal formalities before a victim can be rendered medical aid. The rationale behind this com- 1003 plicated procedure is to keep all evidence intact. However, time given to the fulfilment of these legal technicalities sometimes takes away the life of a person seriously injured.

Members of public escorting the injured to the nearest hospital are reluctant to disclose their name or identity as he is detained for eliciting information and may be required to be called for evidence to Courts in future.

Similarly, the private practicing doctors are harassed by the police and are, therefore, reluctant to accept the roadside casualty.

It is submitted that human life is more valuable and must be preserved at all costs and that every member of the medical profession, may, every human being, is under an obligation to provide such aid to another as may be necessary to help him survive from near-fatal accidents.” The Committee under the Chairmanship of the Director-General of Health Services re- ferred to above had taken the following deci- sions:

“1. Whenever any medico-legal case attends the hospital, the medical officer on duty should inform the Duty Constable, name, age, sex of the patient and place and time of occurrence of the incident, and should start the required treatment of the patient. It will be the duty of the Constable on duty to inform the con- cerned Police Station or higher police func- tionaries for further action.

Full medical report should be pre- pared and given to the Police, as soon as examination and treatment of the patient is over. The treatment of the patient would not wait .for the arrival of the Police or com- pleting the legal formalities.

2, Zonalisation as has been worked out for the hospitals to deal with medico- legal cases will only apply to those cases brought by the Police. The medico-legal cases coming to hospital of their own (even if the incident has occurred in the zone of other hospital) will not be denied the treatment by the hospital where the case reports, nor the case will be referred to other hospital be- cause the incident has occurred in the area which belongs to the zone of any other hospi- tal. The same police formalities as given in para 1 above will be followed in these cases.

1004 All Government Hospitals, Medical Institutes should be asked to provide the immediate medical aid to all the cases irre- spective of the fact whether they are medico- legal cases or otherwise. The practice of certain Government institutions to refuse even the primary medical aid to the patient and referring them to other hospitals simply because they are medico-legal cases is not desirable. However, after providing the pri- mary medical aid to the patient, patient can be referred to the hospital if the expertise facilities required for the treatment are not available in that Institution.” (underlining are ours) To the said affidavit of the Union of India also, the minutes of the 10th Meeting of the Standing Committee on Forensic Medicine (a Committee set up by the Ministry of Home Affairs of the Government of India) held on 27.4.1985 have been appended. These minutes show that the Committee was a high-powered one consisting of the Director General, the Joint Secretary of the Ministry of Health of the Govern- ment of India, a Professor from the All Indian Institute of Medical Sciences, the Professor of Forensic Medicine from Maulana Azad Medical College, New Delhi, the Director & Professor of Forensic Medicine, Bhopal, the Deputy Director, Central Forensic Science Laboratory, Calcutta and certain officers of the Ministry. The proceedings indicate that the Director-Generals of Police, Tamil Nadu and Uttar Pradesh were also members of the Committee. From the proceedings it appears that the question of providing medico-legal facili- ties, at the upgraded primary health centers throughout the country was under consideration but the Committee was of the opinion that time was not ripe to think of providing such facilities at the upgraded primary health centers. One of the documents which forms part of the Union of India’s affidavit is the copy of a letter dated 9th of May, 1978 which indicates that a report on some aspects of Medico Legal Practice in India had been prepared and a copy of such report was furnished to the Health Secretaries of all the States and Union Territories more than eleven years back.

From these documents appended to the affidavit of the Union of India, it is clear that the matter has been engag- ing the attention of the Central Government as also of the Governments of the States and the Union Territories for over a decade. No improvement of the situation,, however, is perceptible and the problem which led to the filing of this petition seems to exist in hospitals and private nursing homes and clinics throughout the country.

1005 In course of the hearing, we directed the petitioner to place on record for the consideration of the Court and the respondents a draft guideline which could be prescribed to ease the situation keeping the professional ethics in view.

When the same was filed, copies thereof were circulated to the respondents and all parties have been heard on the basis of the guidelines submitted on behalf of the petitioner.

The Medical Council of India has placed on record a copy of the Code of Medical Ethics and counsel has made a statement that there is no prohibition in law justifying the attitude of the doctors as complained. On the other hand, he stated that it is a part of the professional ethics to start treating the patient as soon as he is brought before the doctor for medical attention inasmuch as it is the paramount obligation of the doctor to save human life and bring the patient out of the risk zone at the earliest with a view to preserving life. In the affidavit filed on behalf of the Union of India on 3rd August, 1989, it has been said:

“There are no provisions in the Indian Penal Code, Criminal Procedure Code, Motor Vehicles Act etc. which prevent Doctors from promptly attending seriously injured persons and acci- dent case before the arrival of Police and their taking into cognisance of such cases, preparation of F.I.R. and other formalities by the Police. However, the deponent most humbly submits that the respondent shall always abide by the directions and guidelines given by the Hon’ble Court in the present case.” There can be no second opinion that preservation of human life is of paramount importance. That is so on account of the fact that once life is lost, the status quo ante cannot be restored as resurrection is beyond the capacity of man. The patient whether he be an innocent person or be a criminal liable to punishment under the laws of the society, it is the obligation of those who are in-charge of the health of the community to preserve life so that the inno- cent may be protected and the guilty may be punished. Social laws do not contemplate death by negligence to tantamount to legal punishment.

Article 21 of the Constitution casts the obligation on the State to preserve life. The provision as explained by this Court in scores of decisions has emphasised and reiter- ated with gradually increasing emphasis that position. A doctor at the Government hospital positioned to meet this State obligation is, therefore, duty-bound to 1006 extend medical assistance for preserving life. Every doctor whether at a Government hospital or otherwise has the pro- fessional obligation to extend his services with due exper- tise for protecting life. No law or State action can inter- vene to avoid/delay the discharge of the paramount obliga- tion cast upon members of the medical profession. The obli- gation being total, absolute and paramount, laws of proce- dure whether in statutes or otherwise which would interfere with the discharge of this obligation cannot be sustained and must, therefore, give way. On this basis, we have not issued notices to the States and Union Territories for affording them an opportunity of being heard before we accepted the statement made in the affidavit of the Union of India that there is no impediment in the law. The matter is extremely urgent and in our view, brooks no delay to remind every doctor of his total obligation and assure him of the position that he does not contravene the law of the land by proceeding to treat the injured victim on his appearance before him either by himself or being carried by others. We must make it clear that zonal regulations and classifica- tions cannot also operate as fetters in the process of discharge of the obligation and irrespective of the fact whether under instructions or rules, the victim has to be sent elsewhere or how the police shall be contacted, the guideline indicated in the 1985 decision of the Committee, as extracted above, is to become operative. We order accord- ingly.

We are of the view that every doctor wherever he be within the territory of India should forthwith be aware of this position and, therefore, we direct that this decision of ours shall be published in all journals reporting deci- sions of this Court and adequate publicity highlighting these aspects should be given by the national media as also through the Doordarshan and the All India Radio. The Regis- try shall forward adequate number of copies of this judgment to every High Court so that without delay the respective High Courts can forward them to every Sessions Judge within their respective jurisdictions and the Sessions Judges in their turn shall give due publicity to the same within their jurisdictions. The Medical Council of India shall forward copies of this judgment to every medical college affiliated to it. Copies of the judgment shall be forwarded to every State Government with a direction that wide publicity should be given about the relevant aspects so that every practicing doctor would soon become aware of the position.

In case the State Governments and the Union Territories which have not been heard file any representation against the direction, they shall have liberty to appear before this Court and ask for appropriate 1007 direction within three months from now. Applications filed after that date shall not be entertained by the Registry of this Court. Until altered, this judgment shall be followed.

Before we part with the case, we place on record our appreciation of the services rendered by the petitioner by inviting the attention of the Court to the problem raised in this case. We must also place on record our appreciation of the cooperation and understanding exhibited by the Union of India in the relevant Ministry, the Medical Council of India and the Indian Medical Association.

No order for costs.

OZA, J. I entirely agree with what has been observed by my learned brother and also agree with the directions indi- cated in the Order made by Hon’ble Shri Justice R.N. Misra but I would like to add:

As has been quoted by my learned brother, a high power committee by the Government of India was appointed at a high level and this was long before and the proceedings of 29th May, 1986 have been filed and have also been quoted. The Medical Council of India alongwith their affidavit have filed Code of Medical Ethics which everyone in the medical profession is expected to follow but still the news item which is the starting point of this petition is of 1988. The Code of Medical Ethics flamed by the Medical Council was approved on 23rd October, 1970. This only reveals an unfor- tunate state of affairs where the decisions are taken at the higher level good intentioned and for public good but unfor- tunately do not reach the common man and it only remains a text good to read and attractive to quote.

It could not be forgotten that seeing an injured man in a miserable condition the human instinct of every citizen moves him to rush for help and do all that can be done to save the life. It could not be disputed that inspite of development economical, political and cultural still citi- zens are human beings and all the more when a man in such a miserable state hanging between life and death reaches the medical practitioner either in a hospital (run or managed by the State) public authority or a private person or a medical professional doing only private practice he is always called upon to rush to help such an injured person and to do all that is within his power to save life. So far as this duty of a medical professional is concerned its duty coupled with human instinct, it needs no decision nor any code of ethics nor any rule or law. Still in the Code of Medical Ethics framed by the Medical Council of India Item 13 specifically provides for it. Item 13 reads as under:

1008 “13. The patient must not be neglected.

A physician is free to choose whom he will serve. He should, however, respond to any request for his assistance in an emergency or whenever temperate public opinion expects the service. Once having undertaken a case, the physician should not neglect the patient, nor should he withdraw from the case without giving notice to the patient, his relatives or his responsible friends sufficiently long in advance of his withdrawal to allow them to secure another medical attendant. No provi- sionally or fully registered medical practi- tioner shall wilfully commit an act of negli- gence that may deprive his patient or patients from necessary medical care.” Medical profession is a very respectable profession.

Doctor is looked upon by common man as the only hope when a person is hanging between life and death but they avoid their duty to help a person when he is facing death when they know that it is a medico-legal case. To know the re- sponse of the medical profession the Medical Council of India and also the All India Medical Association were no- ticed and were requested to put up their cases.

Some apprehensions were expressed because of some misun- derstanding about the law of procedure and the police regu- lations and the priorities in such situations. On the basis of the affidavit filed by the Union of India and considering the matter it is clear that there is no legal impediment for a medical professional when he is called upon or requested to attend to an injured person needing his medical assist- ance immediately. There is also no doubt that the effort to save the person should be the top priority not only of the medical professional but even of the police or any other citizen who happens to be connected with the matter or who happens to notice such an incident or a situation. But on behalf of the medical profession there is one more apprehen- sion which sometimes prevents a medical professional in spite of his desire to help the person, as he apprehends that he will be witness and may have to face the police interrogation which sometimes may need going to the police station repeatedly and waiting and also to be a witness in a court of law where also he apprehends that he may have to go on number of days and may have to wait for a long time and may have to face sometimes long unnecessary cross-examina- tion which sometimes may even be humiliating for a man in the medical profession and in our opinion it is this appre- hension which prevents a medi- 1009 cal professional who is not entrusted with the duty of handling medico-legal cases to do the needful, he always tries to avoid and even if approached directs the person concerned to go to a State hospital and particularly to the person who is in charge of the medico-legal cases. We there- fore have no hesitation in assuring the persons in the medical profession that these apprehensions, even if have some foundation, should not prevent them from discharging their duty as a medical professional to save a human life and to do all that is necessary but at the same time. We hope and trust that with this expectation from the members of the medical profession, the policy, the members of the legal profession, our law courts and everyone concerned will also keep in mind that a man in the medical profession should not be unnecessarily harassed for purposes of inter- rogation or for any other formality and should not be dragged during investigations at the police station and it should be avoided as far as possible. We also hope and trust that our law courts will not summon a medical professional to give evidence unless the evidence is necessary and even if he is summoned, attempt should be made to see that the men in this profession are not made to wait and waste time unnecessarily and it is known that our law courts always have respect for the men in the medical profession and they are called to give evidence when necessary and attempts are made so that they may not have to wait for long. We have no hesitation in saying that it is expected of the members of the legal profession which is the other honourable profes- sion to honour the persons in the medical profession and see that they are not called to give evidence so long as it is not necessary. It is also expected that where the facts are so clear it is expected that necessary harassment of the members of the medical profession either by way of requests for adjournments or by cross examination should be avoided so that the apprehension that the men in the medical profes- sion have which prevents them from discharging their duty to a suffering person who needs their assistance utmost, is removed and a citizen needing the assistance of a man in the medical profession receives it.

We would also like to mention that whenever on such occasions a man of the medical profession is approached and if he finds that whatever assistance he could give is not sufficient really to save the life of the person but some better assistance is necessary-it is also the duty of the man in the medical profession so approached to render all the help which he could and also see that the person reaches the proper expert as early as possible.

R.S.S. Petition disposed of.

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IN THE SUPREME COURT OF INDIA

KALYAN SINGH, LONDON TRAINED, CUTTER,JOHRI BAZAR, JAIPUR …PETITIONER
Vs.
SMT. CHHOTI AND ORS. …RESPONDENT

DATE OF JUDGMENT : 01/12/1989
BENCH: SHETTY, K.J. (J) MUKHARJI, SABYASACHI (J) AHMADI, A.M. (J)
CITATION:
1990 AIR 396 1989 SCR Supl. (2) 356
1990 SCC (1) 266 JT 1989 (4) 439
1989 SCALE (2)1238
CITATOR INFO : R 1990 SC1742 (2)

J U D G M E N T

ACT:

Indian Succession Act: Will–Execution and validity–Open to court to look into surrounding circum- stances brought out in evidence.

Civil Procedure Code: Order I Rule 8–Representative Suit-Permission of court–Mandatory.

Indian Evidence Act: Sections 63 and 79–Secondary evidence-Correctness and proof of certified copy–Necessity of.

HELD: In the absence of permission under Order I Rule 8 CPC to file a representative suit which is mandatory any member of the community may successfully bring a suit to assert his right in the community property or for protecting such property. Such a suit need not comply with the require- ments of Order I Rule 8 C.P.C. and the suit against Bhonri- lal even if it was not a representatives suit on behalf of the Darjee Community would be a suit of this category.

[363D-E] It is essential that trust worthy and unimpeachable evidence should be produced before the Court to establish genuineness and authenticity of the Will. It must be stated that the factum of execution and validity of the Will cannot be determined merely by considering the evidence produced by the propounder. In order to judge the credibility of wit- nesses and disengage the truth from falsehood the Court is not confined only to their testimony and demeanour. It would be open to the court to consider circumstances brought out in the evidence or which appear from the nature and contents of the documents itself. It would be also open to the Court to look into surrounding circumstances as well as inherent improbabilities of the case of reach a proper conclusion on the nature of the evidence adduced by the party. [366E-F] The Will in the instant case, constituting the plaintiff as a sole legatee with no right whatever to the testator’s wife seems to be unnatural. It casts a serious doubt on the genuineness of the Will. The Will has not been produced for very many years before the Court or 358 public authorities even though there were occasions to produce it for asserting plaintiff’s title to the property.

The plaintiff was required to remove these suspicious cir- cumstances by placing satisfactory material on record. He has failed to discharge his duty. This Court concurs with the conclusion of the High Court and rejects the Will as not genuine. [368A-B] Section 63 of the Evidence Act mentions five kinds of secondary evidence. Clauses (1), (2) and (3) refer to copies of documents; clause (4) refers to counter-parts of docu- ments and clause (5) refers to oral accounts of the contents of documents. Correctness of certified copies referred to in clause (1) is presumed under section 79 but that of other copies must be proved by proper evidence. A certified copy of a registered sale deed may be produced as secondary evidence in the absence of the original. [369B-C] H. Venkatachala lyengar v. B.N. Thimmajamma & Ors., [1959] Supp. I SCR 426; Rani Purnima Devi & Anr. v. V. Kumar Khagendra Narayan Dev & Anr., [1962] 3 SCR 195; Smt. Indu Bala Bose & Ors. v. Manindra Chandra Bose & Anr., [1981] INSC 192; [1982] 1 SCC’ 20 and Mst. Biro v. Atma Ram & Ors., AIR 1937 PC 101.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 135 I(N) of 1973.

From the Judgment and Decree dated 14.3.1973 of the Rajasthan High Court in S.B. Civil Second Appeal No. 201 of 1966.

K.K Jain, Pramod Dayal and A.D. Sanget for the Appellant.

U.N. Bachavat, Sushil Kumar Jain, Sudhanshu Atreya and L.C. Agarwala for the Respondents.

The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. This appeal by special leave is from the judgment of the Rajasthan High Court dated March 14, 1973 in S.B. (Civil) 2nd Appeal No. 201of 1966.

The case has a long history. It is concerned with a garden (baghichi) with temples of Sri Satyanarayanji, Sri Mahadeoji and other buildings at Motidungri Road in Jaipur.

The local Darjees (Tailors) claim that it is their community property. According to them 359 it is known as ‘Baghichi Darjian’ since it belongs to Darji community. The property however, was the subject-matter of several litigations. It was claimed by different persons at different intervals on different grounds. One Narayan was admittedly ‘Pujari’ of the Temples. There was allegation that Narayan purported to have sold the Baghichi in favour of one Khawas Bala Bux. The Panchas of Darjian community filed a suit for cancellation of the sale-deed and posses- sion of the baghichi. The suit was also for declaration of the right to administer the trust of the temples and the other properties. Narayan was the first defendant in that suit. He did not contest the suit. He was, however, summoned and his statement was recorded on July 8, 1925, wherein he admitted that he was only the Pujari of the temples. The other defendants in the suit set up rival title to the property relying upon the sale deed of Samvat 1932 in the name of Raghunath. The trail court dismissed the suit but on appeal the District Judge decreed it. That decree was af- firmed by the former Chief Court, Jaipur by judgment Ex. A8 dated September 15, 1928.

Thereafter, for about 23 years there was no problem and there was no rival claimant to the property. But the dispute started after the death of Narayan. His eldest son Bhonrilal respondent 3 herein, made attempts to get his name mutated in the revenue records as owner of the baghichi. It appears that Bhonrilal after the death of his father was acting as Pujari of the temples. The Darjian community authorised Kalyan Singh, the appellant herein, as well as one khawas Suraj Narayan to bring an action for ejectment of Bhonrilal.

In 1951 they instituted a suit for his ejectment. In that suit Bhonrilal admitted the Panchayat’s right to the baghichi but raised a number of other pleas including his title by adverse possession. In 1966 the Munsif Court (West Jaipur) decreed the suit in favour of the Darji community.

In 1958 the appeal against that decree was dismissed by the senior civil Judge, Jaipur City. Bhonrilal preferred Second Apeal No. 8C of 1958 in the High Court of Rajasthan and obtained stay of delivery of possession on depositing mesne profits at Rs.25 per month. On September 15, 1960, the High Court dismissed the second appeal. Thus the title of the Darjee community in respect of the baghichi was again recog- nised.

Even before disposal of the aforesaid second appeal, Ganga Ram the younger brother of Bhonrilal started another round of litigation. On December 12, 1959, he brought a declaratory suit claiming that he is owner of the property consisting of baghichi and temples. In this appeal we are concerned with the fight claimed by him. The suit was pri- marily against the present appellant Kalyan Singh and Suraj 360 Narayan, since deceased. Bhonrilal was also impleaded as the third defendant. Ganga Ram based his title to the property under a sale deed dated Baishakh Sudi 12th Samvat 1932 (about 1875 A.D.) and also on a will dated Asaj Sudi 12th Samvat 1973 (about 1916 A.D.). It was further alleged that the bagichi belonged to Bhagala and Girdhari and they sold the same to Raghunath Brahmin. Raghunath constructed the temple of Sri Satyanarainji and other buildings. Raghunath had only one son called Gaurilal and he was issueless.

Garuilal executed a will giving all his properties to Ganga Ram. It was alleged that the earlier suit against Bhonrilal was collusive between the parties. With these allegations, Ganga Ram prayed for the following reliefs:

“(a) the plaint of the plaintiff be decreed and the plaintiff be declared as the owner of the aforesaid property. The plaintiff is the owner of the property mentioned in Para No. 1.

The decree which the defendant Nos. 1 and 2 had obtained on 20.8. 1956 against the Defend- ant No. 3 and was upheld by the Senior Civil Judge on 6.2. 1958, is null and void against the claim of the plaintiff.” The appellant the first defendant in the suit denied plaintiff’s title to the baghichi. He also denied the title of Bhagala and Girdhari. It was maintained that the baghichi was community property of Darjees and Narayan was only a ‘Pujari’ of the temples. Narayan continued as Pujari till his death in 1950 and thereafter his eldest son Bhonrilal was acting as Pujari. Reference was made to the judgment of the Chief Court of Jaipur in the first suit against Narayan and judgments in the second suit against Bhonrilal. In view of those litigations and judgments rendered therein, it was claimed that the present suit was barred by principle of res ]udicata. It was also specifically stated that the suit against Bhonrilal was not collusive but brought on behalf of the Darjee community in a representative capacity.

The trial Judge on considering the evidence produced by the parties decreed the suit declaring the plaintiff as owner of the suit property. It was also declared that the plaintiff is not bound by the judgment and decree dated September 15, 1928 of the Chief Court of the erstwhile State of Jaipur. But no reference was made to the judgment and decree obtained in the suit against Bhonrilal. No declara- tion was given that it was not binding on the plaintiff though that relief was specifically sought for. Perhaps the plaintiff did not press that point. Kalyan Singh and Suraj Narayan appealed to the District Court. The 361 learned District Judge dismissed the appeal. He also did not refer to the judgment in the suit against Bhonrilal. He only examined the validity of the said Sale deed and Will and held that they were proved to have been executed. The de- fendants approached the High Court in Second Appeal No.

201/41 Before the High Court, they sought to produce addi- tional evidence. They moved an application under Order 41 Rule 27 C.P.C. to accept a certified copy of the judgment dated September 15, 1928 of the Chief Court of the erstwhile Jaipur State and a copy of the statement of Narayan recorded in that suit. The High Court accepted the judgment of the Chief Court of Jaipur State, but rejected the Statement of Narayan.

During the pendency of the appeal in the High Court Suraj Narain died and his name was deleted from the appeal memo. Ganga Ram also died and his wife and son were brought on record as his legal representatives.

The principal question argued before the High Court related to the validity of sale deed (Ex. 3) and will (Ex.

4) which formed the foundation of Gangaram’s title to the suit property. The High Court rejected both the documents.

The sale deed Ex. 3 was rejected as inadmissible in evi- dence. The will Ex. 4 was disregarded in view of the suspi- cious circumstances surrounding its execution. These conclu- sions would have been sufficient for allowing the appeal and dismissing the suit. But the High Court did not do that and instead rounded off the discussion as follows:

“The plaintiff is undoubtedly in possesion of the Baghichi and it cannot be gainsaid that he was not a party to the previous litigation and he is not claiming the property though his father Narayan or his brother Bhonrilal. Apart from everything, the suit does not seem to have been filed against Kalyan Singh and another in a representative capacity in ac- cordance with Order 1 Rule 3 Civil Procedure Code. There was no application for permission to sue them in their representative capacity.

Therefore, in spite of my having reached the conclusion regarding the document Ex. 3 and 4 against the plaintiff respondents I am not inclined to interfere with the decree of the court below though I do feel that the litiga- tion against Kalyan Singh and another in their individual capacity was a fruitless exercise.

‘ ‘ 362 Kalyan Singh the defendant has now appealed challenging the decree of the High Court.

Counsel for the appellant has a two fold contention. In the first place, it was argued that the Darjee community in their representative suit against Bhonrilal has obtained a decree declaring their title to the property and that decree could not be nullified by the present suit against individu- als. The High Court instead of holding that the plaintiffs suit was a fruitless exercise, ought to have dismissed the suit. Secondly, it was urged that the High Court after discarding the sale deed Ex. 3 and will Ex. 4 ought to have non-suited the plaintiff since there is no other material whatever to support his title to the property.

Normally, these contentions would have been accepted without much discussion, but we have to consider the submis- sions of counsel for the respondents. He challenged the correctness of the findings on all material points. It is, therefore, necessary to examine the judgment in greater detail.

We will first consider whether the previous suit against Bhonrilal was a representative suit on behalf of the Darjee community. It was argued for the respondents that it was only a suit on behalf of the ‘Panchayat Darjian’ and not a representative suit on behalf of the Darjee community. Our attention was drawn to the trail court order dated November

16. 1962 in the present suit. Thereunder the trial court has rejected an application for amendment of written statement.

It was observed that the defendants in the affidavit have not denied allegations of the plaintiff that the suit against Bhonrilal was not in a representative capacity. But the Court made that observation only on perusing the affida- vits of parties for a limited purpose of considering the amendment application and not on an issue arising out of pleadings in the suit. In fact, the court has not framed any issue on that controversy although the defendant in the written statement has asserted that it was a representative suit on behalf of the Darjee community. The view expressed in the order dated November 1962 is therefore, unacceptable.

Counsel for the appellant however, relied upon state- ments from judgments in the previous suit in support of his contention that it was representative suit on behalf of the Darjee community. Ex. A-2 is the judgment of the trial court. It begins with a sentence: “This is a representative suit by the plaintiffs Kalyan Singh and Suraj Narayan on behalf of the Panchayat Darjian for recovery of possession of the 363 baghichi.” But this statement may not help counsel for the appellant, since the suit was said to be on behalf of the ‘Panchayat Darjian’ and not Darjee community. Ex. A-4 is the High court judgment in the second appeal arising out of that suit. There the High court has stated: “That the suit was brought by Kalyan Singh and another against Bhonrilal by the representatives of Darjee community.” Here again we do not find much support to the appellant. The suit might have been instituted by representatives of the Darjee community, but that by itself was not sufficient to constitute the suit as a representative suit. For a representative suit, the court’s permission under Order 1 Rule 8 of the Code of Civil Procedure is mandatory. One does not know whether any such permission was obtained. The pleading in that suit or the order obtained under Order 1 Rule 8 has not been produced.

There is no other evidence to support the contention of either of the parties. In the absence of necessery material the conclusion one way or the other as to the nature of the previous suit will not be justified.

But that does not mean that the plaintiff could succeed ignoring the judgment and decree in the suit against Bhonri- lal. It must be stated that any member of a community may successfully bring a suit to assert his right in the commu- nity property or for protecting such property by seeking removal of encroachments thereform. Such a suit need not comply with the requirements of Order 1 Rule 8. The suit against Bhonrilal even if it was not a representative suit on behalf of the Darjee community would be a suit of this category. Kalyan Singh and another claimed that the baghichi was their community property and Bhonrilal was a trespasser.

They brought the suit to recover possession from Bhonrilal.

The suit was decreed. The rival title claimed by Bhonrilal by adverse possession was negatived. So long as that decree operates it would be futile to decree the present suit. The observation of the High Court that the present suit is a fruitless exercise could therefore, be sustained on this ground if not for the reasons stated.

The validity of the will may now be considered. On this question, the High Court said:

“Having read the evidence of these witnesses I am satisfied that according to the ordinary standard of proving a document the document Ex. 4 can be said to have been proved. Howev- er, there are two disturbing elements sur- rounding the execution of the will. The first striking feature of this will is that even though the wife of Gaurilal was living at 364 the time as she had survived him, no provision whatsoever had been made regarding her by Gaurilal in the alleged will Ex. 4. Then the second striking feature is that even though litigation had been going on almost for years this will had not been referred to by anyone.

In the first suit Narain was a defendant he had not contested the suit and the proceedings remained ex parte against him. However, he was called by the Court and his statement was recorded. The judgment of the Jaipur Chief Court shows that he had laid no claim to the property and took the position that he was a Pujari at the baghichi. Then subsequently when suit was filed by the Darzi community against Bhonrilal, no reference came to be made to this will Ex. 4 Learned counsel for the re- spondents, as I have already observed, sug- gested that Narain or Bhonrilal could not be expected to make any reference to the will as that would be detrimental to the stand taken by them. The argument, no doubt, looks attrac- tive, but if it is examined in the light of none other than the statement of Ganga Ram himself it cannot stand the scrutiny. Gangaram had referred to the earlier litigation in the plait, but when he entered the witnesses box he had taken a somersault. He was asked wheth- er he was aware of the previous litigation and he said, he did not know of it. He was then questioned with reference to para 5 of the plaint as to how the facts had been mentioned by him therein and he kept mum and had no answer. He also admitted that it was Narain who had given him the document, Ex. 4 some 5 or 7 years after the death of Gaurilal i.e.

some 30 or 35 years back. In that situation there was no mention of the alleged will in any of the two previous suits. It is also remarkable that even upto the High Court Bhonrilal had asserted his own possession over the property and had also obtained a stay order on payment of mesne profits vide Ex. A- 7.

XXXXX XXXXXX XXXXXXX The will is, therefore, not free from suspi- cion and it has not been dispelled. My con- science in this regard is not satisfied and therefore, I am unable to hold that Ex. 4 was the last will of Gaurilal in favour of Ganga Ram”.

Counsel for the respondents however, urged that the plain- tiff has 365 proved its execution by producing one of the attestors and the scribe and their evidence has not been disbelieved by the High Court. We were referred, in particular, to the evidence of plaintiff PW 3, Ramdeo PW 4 and Sham Sunder PW

7. We have perused their testimony and we are of the opinion that it is far from satisfactory. The plaintiff has deposed that Gaurilal was issueless and hence executed the will bequeathing the property to him. Ramdeo claims to be the attesting witness to the will. He has stated that the plain- tiff was 10-11 years old when the will was executed. But the plaintiff himself has deposed that he was then a boy of 2-3 years. Ramdeo has given his age as 55 years when he deposed in the court on January 5, 1962. If we go by that age Ramdeo must have been a boy of 9 years when he attested the will in 19 16 Sham Sundar claims to be the scribe of the will. He has deposed that after he wrote the will attestation was made by witnesses but he has not named any one of them. He has not even referred to Ramdeo as an attesting witness.

It was said that the plaintiff was adopted son of Gauri- lal, and was thus the object of his affection for the exclu- sive bequest. But there is no reference in the will that he was the adopted son. The plaint also makes no reference to his adoption by Gaurilal. Nor there is any other material to lend credence to such relationship. On the contrary, the Temple register shows that he was the son of Narayana.

Even if we proceed on the plea that the plaintiff was adopted son of Gaurilal, there seems to be little reason to justify the bequest exclusively m his favour. It is now not in dispute that Gaurilal’s wife was living at the time of execution of the will, but no provision was made for her maintenance. In the normal course, the wife would be the first to be thought of by the husband executing a will. She should have been the first beneficiary of her husband’s bounty unless there was odium or embittered feelings between them. But there is no such evidence and it was not even the plaintiff’s case that their relationship was strained. Why then she should be excluded altogether? It is indeed baf- fling since it runs counter to our societal values.

Yet there is another circumstance which tells against the genuineness of the will. The will purports to have been executed in 1916 and Gangaram instituted the suit in 1959.

The will had not seen the light of the day till the institu- tion of the suit. It is not as if Gangaram or his brother or father had no opportunity to produce the will to assert rights over the property in question. The plaintiff has stated in his evidence that his father Narayan handed over the will to 366 him. Narayan was therefore, aware of the execution of the will. Yet he did not disclose it to the court in the suit against him. His statement was recorded on July 8, 1925 wherein he had admitted that he was only the Pujari of the temple and the wife of Baldeo sold the property. He did not say that his son Gangaram became owner of the property under the will executed by Gaurilal. In ,he second suit, Bhonrilal set up independent title to the property by adverse posses- sion. That claim was totally destructive of Gangaram’s title. It cannot be said that Gangaram was ignorant of that litigation till he filed the suit. His evidence does not lead to that inference. In fact the plaint averments and his statements in the court lead to the contrary. Gangaram, however, made no attempt to produce the will in that suit.

In the long period of 43 years, none made any attempt to rely upon the will against the claim of the Darji community when the community representatives have successfully brought two suits. This would not have been the natural conduct of person if the will had been really in existence.

It has been said almost too frequently to require repe- tition that a will is one of the most solemn documents known to law. The executant of the will cannot be called to deny the execution or to explain the circumstances in which it was executed. It is, therefore, essential that trustworthy and unimpeachable evidence should be produced before the court to establish genuineness and authenticity of the will.

It must be stated that the factum of execution and validity of the will cannot be determined merely by considering the evidence produced by the propounder. In order to judge the credibility of witnesses and disengage the truth from false- hood the court is not confined only to their testimony and demeanour. It would be open to the court to consider circum- stances brought out in the evidence or which appear from the nature and contents of the documents itself. It would be also open to the court to look into surrounding circum- stances as well as inherent improbabilities of the case to reach a proper conclusion on the nature of the evidence adduced by the party.

In H. Venkatachala lyengar v. B.N. Thimmajamma & Ors., [1959] Supp. 1 SCR 426 Gajendragarkar, J., as he then was, has observed that although the mode of proving a will did not ordinarily differ from that of proving any other docu- ment, nonetheless it requires an element of solemnity in the decision on the question as to whether the document pro- pounded is proved as the last will and testament of departed testator. Where there are suspicious circumstances, the onus would be on the propounder to explain them to the satisfac- tion of the court before the will could be accepted as genuine. Where there are 367 suspicious circumstances, the Court would naturally expect that all legitimate suspicions should be completely removed before the document is accepted as the last will of the testator. These principles have been reiterated in the subsequent decisions of this Court in Rani Purnima Devi & Anr. v. V. Kumar Khagendra Narayan Dev & Anr., [1962] 3 SCR 195 and Smt. Indu Bala Bose & Ors. v. Manindra Chandra Bose & Anr., [1981] INSC 192; [1982] 1 SCC 20.

The Privy Council in Mr. Biro v. Atma Ram & Ors., AIR 1937 PC 10 1 had an occasion to consider an analogous case where the wife was practically disinherited and there was unexplained delay in producing the will in public. There the alleged will by a testator gave only a life estate to his daughter who was the only child and who was to get some property at her marriage. The bulk of the estate was vested in the widow of the testator and three other women, namely, his mother, his step-mother and his paternal aunt. These women though entitled under the Hindu Law only to mainte- nance, were made joint owners equally with the widow of the testator. None of the devisees could get the estate parti- tioned or alienate it for necessity. It was however, provid- ed that the lady, who survived the other three devisees, would become the absolute owner of the estate. The widow of the testator would not get her husband’s estate, if she predeceased any of her co-devisees. The will was not pro- duced until 22 years after its execution though there were occasions to produce it, had it been in existence. Consider- ing these circumstances, the Privy Council observed (at 104):

“It is most unlikely that a person having a wife and a minor unmarried daughter, who should be the objects of his affection, would make a will which would practically disinherit them.

That the testament is unnatural and runs counter to the ordinary sentiments of persons, having a status in society similar to that of Harbans Lal, cannot be seriously disputed. But this is not the only circum- stances which tells against its genuineness.

The will purports to have been executed on 24th August 1900, and the testator died within a month of that date. But it is strange that it was not produced until 1922, after the com- mencement of the present litigation. During this long period of 22 years, which inter- vened, there were occasions when the widow or her advisers could have produced the document, if it had been in existence; but they did not do so …… ” 368 ,The will in the present case, constituting the plaintiff as a sole legatee with no right whatever to the testator’s wife seems to be unnatural. It casts a serious doubt on genuine- ness of the will. The will has not been produced for very many years before the court or public authorities even though there were occasions to produce it for asserting plaintiff’s title to the property. The plaintiff was re- quired to remove these suspicious circumstances by placing satisfactory material on record. He has failed to discharge his duty. We therefore, concur with the conclusion of the High Court and reject the will as not genuine.

This takes us to the validity of the sale deed Ex. 3.

The High Court rejected the document with the following observations:

“Ex. 3 is neither a certified copy given under any of the provisions of the Evidence Act nor is it a copy made from the original by any mechanical process. It also does not appear to have been made or compared from the original as there is no verification or endorsement of the kind and it does not come under clauses 1 or 5 of section 63 ei- ther. No one has given the oral account of the contents of the original document. If in place of primary evidence secondary evidence is admitted without any objection at the proper time then the parties are precluded from raising the question that the document has not been proved by primary evidence but by second- ary evidence. But where there is no secondary evidence as contemplated by Section 66 of the Evidence Act then the document cannot be said to have been proved either by primary evidence or by secondary evidence.” The basis of the plaintiff’s title relates back to the sale deed dated Baisakh Sudi 12 Samvat 1932 (1875 A.D.). It was said to be a registered sale deed by which Bhagala Girdhari purported to have sold the baghichi to Raghunath Brahmin. The plaintiff has not produced the original sale deed. Nor a certified copy of it has been produced. All that we find from the record is an ordinary copy of a sale deed Ex. 3 produced by Gopal Prasad PW 1. Gopal Prasad has stated that Ex. 3 was a copy submitted by the parties along with the original sale deed for registration. The original sale deed was said to have been returned to the party after its registration and a copy was kept in the file. But Gopal Prasad has no personal knowledge about the registration of the sale deed, nor he has produced the register to indicate that that sale deed was registered and a copy was kept in the record. Ex. 3 produced 369 by him does not bear any endorsement to the effect that it was a true copy of the original.

The High Court said, and in our opinion very rightly, that Ex. 3 could not be regarded as secondary evidence.

Section 63 of the Evidence Act mentions five kinds of sec- ondary evidences. Clause (1), (2) and (3) refer to copies of documents; clause (4) refers to counterparts of documents and clause (5) refers to oral accounts of the contents of documents. Correctness of certified copies referred to in clause (1) is presumed under Section 79; but that of other copies must be proved by proper evidence. A certified copy of a registered sale deed may be produced as secondary evidence in the absence of the original. But in the present case Ex. 3 is not a certified copy. It is just an ordinary copy. There is also no evidence regarding contents of the original sale deed. Ex. 3 cannot, therefore, be considered as secondary evidence. The appellate Court has a right and duty to exclude such evidence.

In the result, the appeal is allowed, modifying the judgment and decree of the High Court. The judgment and decree of the trial court as affirmed by the District Court are set aside and the plaintiff’s suit is dismissed.

Since the original plaintiff died leaving behind his widow during pendency of the appeal before the High Court, we make no order as to costs.

R.N.J. Appeal allowed.

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IN THE SUPREME COURT OF INDIA

ADHUNIK GRAH NIRMAN SAHAKARI SAMITI LTD. ETC. …PETITIONER
Vs.
STATE OF RAJASTHAN & ANR. …RESPONDENT

DATE OF JUDGMENT : 28/02/1989
BENCH: OZA, G.L. (J) SAIKIA, K.N. (J)
CITATION:
1989 AIR 867 1989 SCR (1) 848
1989 SCC Supl. (1) 656 JT 1989 Supl. 46
1989 SCALE (1)511

J U D G M E N T

ACT:

Rajasthan Land Reforms and Acquisition of Land Owners Estate Act, 1963: Sections 2(b), 2(d), 2(f) and 7–‘Estate’–What is–‘Land’ situated within boundaries of Umaid Bhavan Palace–Held do not fall within definition of ‘estate’.

Rajasthan Urban Property (Restriction of Transfers) Act, 1973: Section 3(2)–Prohibition on transfer of land–Trans- fer effected after August 16, 1971–Held not void.

HELD: 1. No action under the provisions of the Rajasthan Land Reforms and Acquisition of Land Owners Estate Act, 1963 could be taken against the appellant and all notices or actions taken are thus quashed. [864F-G]

2. It is clear that the lands in the instant case will not fall within the definition of ‘land’ as described in sec. 2(g) and therefore it could not vest in the State not it would be acquired under the provisions of the Act and in that event these appellants are entitled to hold their lands and the question whether the lands are agricultural or not is not very material. [858D-E]

3. Section 2B clearly talks of land or right, title or interest in land held by land owner and land is defined in Section 2F. It is therefore 851 clear that if this property did not fail within the ambit of the definition of ‘land’ it could not be said to be ‘estate’ under Section 2B and therefore could not vest in the State under Section 7. [861F]

4. The lands were within the boundaries of the Umaid Bhavan Palace which is the private property in accordance with the inventory prepared and approved by Government of India, and therefore will not fail within the ambit of the definition of ‘land’ as defined in Section 2F and thus will not fail within the ambit of the ‘estate’ which could vest under the provisions of this Section. [863D]

5. Section 3(2) of the Rajasthan Urban Property (Re- strictions of Transfers) Act, 1973 was enacted keeping in view the Rajasthan Urban Property Ceiling Act. Section 3(2) did not provide that the transfer will be invalid but it only provided that in spite of the transfer the property will be deemed to be owned by such person thereby meaning the transferor so that when the Ceiling Act is brought into force the transferor may not take advantage of the transfer to defeat the provisions of the Ceiling Act. [859C]

6. In fact, after the Ceiling Act was brought into force a prohibition was again imposed on the transfer and admit- tedly the transfers in the instant case are not after the Rajasthan Urban Property Ceiling Act 1972 which provided by section 5 that the transfers made after the commencement of the Act was null and void. It could not, therefore, be said that the transfers in the instant case after August 16, 1971 were void. [859G] (C.A. No. 1145/87–Naveen Grah Nirman Sahkari Samiti Ltd. v. State of Rajasthan was permitted to be withdrawn, as the appellants had chosen to come to this Court when in fact they were not parties in the judgment before the High Court.). [864G-H]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1144-48 of 1987.

From the Judgment and Order dated 29.9.1986 of the Rajasthan High Court in D.B. Civil Special Appeal Nos. 3, 4, 5 of 1978 and 79 of 198 1 and 354 of 1984.

Dr. L.M. Singhvi, G.L. Sanghi, V.M. Tarkunde, Dalveer Bhandari, Ms. Rachna Joshi, K.N. Toshi, Lekh Rai Mehta, Gopal Singh, Sushil K. Jain and Sudharshan Atreya for the Appellants.

852 G. Ramaswamy, Additional Solicitor General P.S. Poti, Badridas Sharma, R.C. Maheshwari and Manoj Jain for the Respondents.

The Judgment of the Court was delivered by OZA, J. These appeals have come to this Court against the judgment of the Division Bench of the High Court of Rajasthan dated 29.9.86 wherein the learned Judges disposed of the following appeals by the impugned judgment and against this after grant of leave these appeals are before us:

(1) The State of Rajasthan and Anr. v. Prajapati Grah Nirman Samiti Ltd., D.B. Civil Special Appeal No. 3 of 1978.

(2) The State of Rajasthan & Anr. v. Adhunik Grah Nirman Samiti Limited, D.B. Civil Special Appeal No. 4 of 1978.

(3) The State of Rajasthan and Anr. v. M/s. Jai Marwar Company Pvt. Ltd., D.B. Civil Special Appeal No. 5 of 1978.

(4) Trustees of Major Maharaja Hari Singh Benefit of Defence Service Personnel Charitable Trust v. The State of Rajasthan and Others, D.B. Civil Special Appeal No. 79 of 1981.

(5) State of Rajasthan and another v. Maharaja Gaj Singh Ji, D.B. Civil Special Appeal No. 354 of 1984.

Initially the three writ petitions were filed before the High Court of Rajasthan by i) Prajapati Grah Nirman Samiti Limited, ii) Adhunik Grah Nirman Samiti Ltd. and iii) M/s.

Jai Marwar Company Private Limited. It was alleged that these three parties purchased respective areas of land for price by registered sale deeds two dated 4.11.71 and one dated 5.11.71 from Shri Gaj Singh, the erstwhile ruler of the Jodhpur State. These lands form part of Khasra No. 42 1 in the revenue records. There is yet another adjacent land which also was in dispute in other matters than these three which was Khasra No. 426.

Facts which are not in dispute are that after attainment of independence on 15th August, 1947 the rulers of the erstwhile princely States of Banswara, Bikaner, Bundi, Dungarpur, Jaipur, Jaisalmer, Jhalawar, Jodhpur, Kishangarh, Kota, Mewar, Partabgarh, Shahpura and Tonk entered into a Covenant with the Government of India 853 integrating these states into one. Article 12 of the said Covenant provided for the private properties of the rulers of the Covenanting States. In clause (1) of this article it was prescribed that the ruler of each of the Covenanting State shall be entitled to the full ownership, use and enjoyment of all private properties (as distinct from State properties), belonging to him on the date of his making over the administration of the State. In accordance with the aforesaid clause in the Covenant, a list of private proper- ties of the ruler of the former State of Jodhpur was pre- pared and.it was approved by the Government of India on 24th March, 1949. In the said list of private properties the immovable properties were divided into three categories.

Category ‘A’ consists of properties which were to be regard- ed as the family property of the Maharaja of Jodhpur and which will not be transferred. Category ‘B’ consists of properties which were to be regarded as family properties of Maharaja of Jodhpur but which will be disposable by him if he and his heir agree to do so. Category ‘C’ consists of property which is the absolute property of the Maharaja of Jodhpur with full rights of disposal. In the case in hand we are only concerned with Category ‘C’ property and in this category Umaid Bhawan Palace alongwith the area as per plan attached including the Chittar Tank and the Bijolai Tank and buildings was included.

Maharaja Hanwant Singh who was the signatory to the Covenant died in 1952 and after his death he was succeeded by his son Shir Gaj Singh who was minor at that time. During the minority of Shri Gaj Singh an administrator was appoint- ed for the purpose of administration of the estate of the minor Maharaja.

In 1964 the Rajasthan Legislative Assembly enacted the Act which received the ascent of the President of India on 6.4.1964 and was published in the Rajasthan Gazette dated 13.4.1964. The Act was enacted to provide for the acquisi- tion of the estates of landowners. Under Section 7 of the Act a provision was made for issuing a notification by the State Government appointing a date for the vesting in the State Government of the estates or all landowners situated anywhere in Rajasthan. In exercise of the powers under Section 7 a notification was issued on 11th August, 1964 which was published in the Rajasthan Gazette dated 13.8.1964 and by this notification the State Government appointed 1.9.1964 as the date of vesting of all the estates of land- owners situated within the State.

Notice under Section 9A of the said Act were issued on 19.11.1975 to the petitioners by Collector, Jodhpur stating that trans- 854 fers of the aforesaid lands are null and void and they shall deliver possession before 29.11.1975 or within 10 days of the receipt of the notice whichever is later, to the Sub Divisional Officer, Jodhpur. It appears that one more notice dated 8.12.1975 was issued by the Sub Divisional Officer, Jodhpur by which he appears to have taken the possession of the aforesaid lands by affixing a notice as required by Rule 8 of the Rajasthan Land Reforms and Acquisition of Land Owners Estate Rules, 1964.

The petitioner’s case before the Court below was that this land is not liable to acquisition under the said Act and therefore they sought a direction that the said orders and notices be quashed. It was contended before the Court below that in the definition of ‘land’ as defined in Section 2F after sub-clause (d) of this Act provide for properties which shall not be included in the definition of ‘land’ and as this property fell within the ambit of that property which was excluded from the definition of ‘land’ it was contended that it could not be acquired under the provisions of Sec. 7 of the Rajasthan Land Reforms and Acquisition of Land-owners’ Estate Act.

The learned Judge Justice M.L. Jain, after examining the list of private properties and the material placed on record by both the parties came to the conclusion that these lands failing within Survey No. 421 which fell within the property included in the schedule of private properties in category ‘C’ and therefore it being a private property included in the inventory prepared according to the Covenant, the acqui- sition under the provisions of this Act was held to be bad.

The learned Judge on the basis of documents also came to the conclusion that on 1.9.64 which was the relevant date noti- fied as the date of vesting this property was not agricul- tural land and was also included in the private property of the ruler of Jodhpur shown within the boundary of the site plan of Umaid Bhawan Palace. Consequently the learned Judge came to the conclusion that the transfer made by the ex- ruler in favour of these petitioners was not bad.

The learned Judge considering the submissions came to the conclusion:

“Now, Shri Gaj Singh is an Ex-Ruler and therefore a landown- er. The Schedule I of the Inventory of his private proper- ties also specified the properties which are his absolute property with full rights of disposal. Item No. 1(a) relat- ing to Jodhpur is as follows:

855 (a) Umaid Bhawan Palace as per. plan attached including the Chittar Tank.

A plan was attached to the inventory which contains the heading “site plan of Umaid Bhawan Palace. Private property of His Highness and Maharaja Sahib Sahadir, Jodhpur, is shown in the red.” It is admitted that the land in dispute to which these writ petitions relate fails within the area bounded by the red line in the said site plan. It is, there- fore futile on the part of the State Government to contend that the land though covered by the site plan, is not part of the palace as specified in the inventory. The State maintains that the Umaid Bhawan Palace has its own walled enclosure and further a long line of hills separates the land in dispute from the main palace. The learned Dy. Gov- ernment Advocate urged that what the law excludes is the palace and not all the lands which are shown in the site plan. The Word ‘palace’ should be constructed only to in- clude the area of the palace which is bounded by walls. I do not see any force in this argument because the definition of land excludes the palace as specified in the inventory and the inventory specifies the area of the Umaid Bhawan Palace as per plan attached and the attached plan includes the land in dispute. I am, therefore unable to give the word “palace” a restricted meaning as convassed by the learned Dy. Govern- ment Advocate. That being so, the disputed land fails out- side the estate and has consequently not vested in the State Government.” The learned Judge after considering various documents which were filed and which were the records of the Government as regards the nature of the land as to whether it is agricul- tural land or not came to the conclusion that:

“The documents clearly demonstrate that the land in dispute is not an agricultural and rather it forms part of the Abadi land. In the revenue records, Khasra Nos. are allotted not only to agricultural plot but they are also allotted to Banjar land and to Abadi land as well. The copies of the Jamabandi and Girdwari filed by the State shows that the land is Padat and does not carry and land revenue. It is, therefore, clear that the land in question being an Abadi land is not covered by the provisions of the Act. It appears 856 as has been contended that the land in order that it vests in the State Government, should be an agricultural land. The amended long title of the Act states that it is an Act to provide for the acquisition of the Estates of landowners and for other measures of agrarian reforms removal of intermedi- aries allotment of land to landless person, development of agriculture. If the acquired land is meant for allotment to agriculturist then the land must be an agricultural land as indicated above. The land in question was not an agricultur- al land and if at all it was so at any time in the past, it long ago ceased to be so at least as early as in 1948, when according to the private property settlement, it was includ- ed in the Umaid Bhawan Palace premises.” Trustees of Major Maharaja Hari Singh Benefit of Defence Service Personnel Charitable Trust also filed a petition before the Rajasthan High Court. This pertains to Survey No.

426 and this came up for heating before Hon’ble the Chief Justice of Rajasthan Shri K.D. Sharma who while considering the matter observed:

“At the outset, I may observe that it is not disputed before me that Umaid Bhawan Palace situated in Jodhpur is the absolute property of Maharaja Gaj Singh of Jodhpur, who has full rights of disposal thereof. This fact is borne out by the inventory marked Annexure 1 which was prepared and approved by the Government of India in pursuance of Article 12 of the Covenant entered into by late Maharaja Hanwant Singh with the Government of India at the time of accession of the former Jodhpur State to the Union of India. It will not be out of place to mention that the term ‘land’ defined in section 2 of the Act as amended by the amendment Act, 1975, does not include forts, palaces, buildings and build- ing plots specified in the inventory. Hence, Umaid Bhawan Palace of which Maharaja Gaj Singh is the absolute owner, does not fall within the purview of the definition of the word ‘land’ given in the section 2 of the Act as amended upto date.” In Misc. Petition No. 1872/75 filed by Maharaja Shri Gai Singh came up for consideration before Hon’ble the Chief Justice of Rajasthan Shri Justice Banerjee and by order dated 20.12. 1983 relying on the judgment passed by Justice M.L. Jain in the case of Prajapati 857 Grah Nirman Samiti Ltd. v. State of Rajasthan allowed the petition of Maharaja Gaj Singh and quashed the notices which were issued.

It is thereafter that the State Government in the mat- ters decided by Justice M.L. Jain and by Justice Banerjee and the trust, in the case decided by Justice K.D. Sharma went up in appeal under Letters Patent and by the impugned judgment, the Division Bench disposed of all these appeals and hence these appeals have come before us after grant of leave.

Learned counsel for the appellants contended that this Act i.e. Rajasthan Land Reforms and Acquisition of Land- owners Estate Act, 1963 was brought into force in 1964.

According to the definition of ‘Estate’ it could refer to either land or right, title or interest in land held by landowner. The land, according to the learned counsel, is defined in section 2 sub-clause (f). This definition is an inclusive definition and it first refers to land held for the purpose of agriculture. Thereafter it has been further stated that it does not include forts, palaces, buildings, building plots specified in the inventory and the inventory has also been defined in Section 2 sub-clause (g) which refers to the inventory of the private properties made in pursuance of the Covenant and finally approved by the Cen- tral Government. Learned Counsel for the appellants mainly raised two questions: i) that as these lands were not agri- cultural lands they do not fall within the ambit of this definition of ‘land’. It was also contended that in any event as it fails within the boundaries of Umaid Bhawan Palace which is a property included in the inventory as the private property of the rulers of Jodhpur approved by the Government of India, this will not fall within the ambit of the definition of ‘land’ in Section 2F. Consequently it could not be said to be an estate as defined in Sec. 2b and as such by application of this Act this could not vest in the State Government and in this view it was contended that the judgment delivered by the Division Bench has omitted to decide this question and for no reason felt that let a reference under Section 12 be decided. It was also contended that the Division Bench could not come to a different con- clusion then one which was reached by Justice M.L. Jain and Hon’ble Chief Justice Shri Banerjee.

Learned counsel appearing for the State of Rajasthan attempted to contended that this property falls within the boundary of the Umaid Bhawan Palace according to the site plan could not be conclusively held as an attempt was also made to suggest that the original plan should have been summoned from the Central Government but the 858 learned counsel could not explain the admissions made at the various stages in these proceedings about the plan which was filed in these petitions and also could not give any expla- nation as to why when these proceedings have been going on since 1975, the State Government could not obtain an offi- cial copy of the site plan from the Government of India and produce it before the High Court. In fact the admission in the documents and affidavits filed before the High Court and the orders passed by the revenue authorities which have been at length dealt with by the learned counsel and relied upon by the High Court could not be explained by the learned counsel appearing for the State. Similarly the question as to whether this land was agricultural or not also was dis- puted by the learned counsel on the basis that the revenue record entry showed that this has been agricultural land although the record referred to by the counsel for the appellants also indicated that this area during the State times was included in the development plan of the Jodhpur town.

Counsel for parties frankly conceded that if the lands in dispute fail within the boundaries of the Umaid Bhawan Palace as shown in the site plan which was part of the inventory prepared at the time of the Covenant and approved by Government of India, it is clear that these lands will not fall within the definition of ‘land’ as described in Sec. 2(g) and therefore it could not vest in the State nor it could be acquired under the provisions of this Act and in that event these appellants are entitled to hold their lands and the question whether the lands are agricultural or not is not very material.

Learned counsel for the respondent State distinguished the case of Naveen Grah Nirman Samiti on a different footing as they claimed to be the transferees from Jai Marwar Compa- ny Private Limited and this transfer Was at a time when the transfer was prohibited and that question has not been gone into by the High Court as these petitioners have chosen to come to this Court when in fact they were not parties in the judgment before the High Court. Learned counsel for the petitioner in the petition by Naveen Grah Nirman Samiti in view of the objections raised by learned counsel for the respondent State frankly conceded that this petition was not before the High Court and in view of this he submitted that he may be permitted to withdraw this petition.

Learned counsel for the respondent also raised an objec- tion about the transfer of these lands in view of Section 3(2) of Rajasthan Urban Property (Restrictions of Transfers) Act, 1973. Section 3(2) of 859 this Act provided that after the 16th day of August, 1971 if any person has transferred any urban property owned by such person such transfer shall be deemed to be a transfer made to defeat the provisions of this Act and the property so transferred shall for the purposes of this Act be deemed to be owned by such person. On this basis it was contended that as the transfers have been effected by Maharaj Shri Gaj Singh after 16th August, 1971 they will be void whereas learned counsel for the appellants contended that this Act was enacted in contemplation of the Rajasthan Urban Property Ceiling Act which was to be enacted and it was for the purpose of that Act that Sec. 3(2) of this Act was enacted to restrict transfer of urban property but it did not de- clare transfer to be void but said that in spite of the transfer the property will be deemed to be owned by such person i.e. transferor. The idea was that while applying the law of ceiling the holder of the property may not defeat the provisions of that Act by these transfers and ultimately this Act was repealed and the repeal was by Rajasthan Urban Property (Restrictions of Transfers) Repeal Act, 1978 and that Act did not protect anyone of these provisions. In fact this question was raised before the Division Bench and the learned Judges of the Division Bench in the impugned judg- ment observed:

“In view of the repeal of 1973 Act the cloud which has been cast on the title of the petitioners in the writ petitions giving rise to these. appeals by section 3(2) of the 1973 Act, was removed, and, therefore, we are unable to accept the contention of the learned Government Advocate.” It is apparent that this Section prohibiting transfers was enacted keeping in view the Act on ceiling in contemplation and that is why as indicated earlier Section 3(2) did not provide that the transfer will be invalid but it only pro- vided that in spite of the transfer the property will be deemed to be owned by such person thereby meaning the trans- feror so that when the ceiling Act is brought into force the transferor may not take advantage of the transfer to defeat the provisions of the Ceiling Act. In fact after the Ceiling Act was brought into force a prohibition was again imposed on the transfer and admittedly the transfers with which we are concerned are not after that as it is clear that the Rajasthan Urban Property Ceiling Act, 1972 when was enacted provided by Section 5 of that Act that the transfers which were made after the commencement of the Act was declared null and void. In fact the learned Judges of the Division Bench considered this aspect of the matter and negatived the contention advanced by the learned counsel for the respond- ents in the words indicated above and in our opinion that conclusion could not be assailed.

860 As regards the question as to whether the lands in dispute i.e which fail within Khasra Nos. 421 and 426 fall within the purview of the definition of ‘land’ as contained in Section 2F of the Act is concerned it is consistently held by the High Court that as the land fell within the exception of Section 2F it would not fail within the defini- tion of ‘land’ (Section 2(f) reads:

“land” means and land held or let for purposes of agricul- ture or for purposes ancilliary thereto including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agri- cultural labourers and village artisans and includes– (a) tanks, lakes, ponds, river and water channels held for purposes of irrigation.

(b) surface of hills, (c) landing grounds or strips, and (d) shikargah but does not include forts, palace buildings and building plots, specified in the inventory.” The last part of this provisions “but does not include forts, palace buildings, building plots specified in the inventory” is the relevant portion of the definition which was considered by the Court below and is the question which deserves to be considered. The Inventory has also been defined in Section 2(d) which means inventory of the private property of the ruler prepared in pursuance of Article 12 of the Convenant and finally approved by the Government of India.

In the High Court in all these petitions the plea raised was that the inventory of the private property of the ex- ruler of the Jodhpur State Maharaj Shri Gaj Singh contained an item of property shown as Umaid Bhawan Place and the boundaries therein were indicated to be in red in the site plan attached alongwith it. So far as the inventory and inclusion of this property in the .inventory of the private property is concerned it is not disputed even before us. In the High Court the site plan and the properties included in the red boundary forming part of the property Umaid Bhawan Palace was also not disputed. All the judgments in the High Court are based on this admission and appa- 861 rently the affidavits filed on behalf of the State before the High Court clearly and categorically admitted this position and even went to the extent of saying that this was verified and found to be correct and the plan filed with the petition having a red boundary was admitted and therefore it was not disputed that Khasra Nos. 42 1 and 426 fell within the boundary of Umaid Bhawan Palace which in accordance with the definition of ‘land’ quoted above will be excluded from the definition and what is excluded from the definition of ‘land’ in Section 2F could not vest in the State in view of language of Section 7. Section 7 reads:

Acquisition of estates-(1) As soon as may be after the commencement of this Act, the Government may for the purpose of carrying out agrarian reform in accordance with the provisions of this Act, by notification in the Official Gazette,appoint a date for the acquisition of landowner’s estates in the State and for their vesting in the State Government.

(2) The date appointed under this Section in relation to the acquisition of landowners’ estates in the State in this Act referred to as the date of vesting of such estates.” This talks of the vesting of the estate and the estate itself has been defined in Sec. 2B which reads:

“estate” means land or right, title or interest in land held by a landowner;” This clearly talks of land or right, title or interest in land held by landowner and land as already discussed above is defined in Section 2F it is therefore clear that if this property did not fall within the ambit of the definition of land it could not be said to be estate under Section 2B and therefore could not vest in the State under Section 7.

It was in this view that counsel for both the parties frankly conceded that if this falls within the exception to the definition of ‘land’ provided in Section 2F the further question about the land being agricultural or not is of no consequence.

An attempt was made by the learned counsel during the course of arguments to suggest that it is no doubt true that all through the State Government and on behalf of the State Government the affidavits that were filed in the High Court this was admitted that these lands in 862 dispute fell within the red boundary of the site plan and the site plan is the site plan of the Umaid Bhawan Palace which is included in the inventory of the private property of the ruler finally approved by the Government of India. It is also not seriously disputed that there are orders passed by some revenue officers in respect of these matters where it has been held that these lands fell within the red bound- ary which is the correct boundary of Umaid Bhawan Palace in the inventory approved by the Government of India as the private properties of the ex-ruler. Only an attempt was made by Additional Solicitor General who appeared for the State to suggest that the Central Government alone may have the original and therefore wanted this Court to summon the original but learned counsel had no explanation why this could not be done in all these years to which he had no answer and therefore it is plain that so far as these facts are concerned the State could not now be permitted to raise any objection in respect of the site plan and the boundary in red of Umaid Bhawan Palace.

After the hearing was concluded an attempt has been made on behalf of the State and certain papers have been filed which pertains to some returns filed in connection with the assessment in respect of the building Umaid Bhawan Palace which has been described as Hotel Marudhar and on that basis probably a suggestion is made that in this the ex-ruler has submitted a plan for assessment of the property tax wherein he has not showed this part of the property which is the subject matter of the dispute. Apparently these papers pertain to some proceedings of assessment of property per- taining to Marudhar Hotel with which we are not concerned and on that basis it could not be said that what has been admitted all through as the boundary of the Umaid Bhawan Palace is not correct. No reliance could be placed on these additional papers.

Before the High Court in Writ Petition No. 1924/75 Additional Collector Jodhpur who is also described as the Officer Incharge of the case has filed a counter in return and in this it is stated:

That the Photostat copy and the true copy of the Covenant and the site plan submitted by the petitioner alongwith the aforesaid application have been got verified to be the true and exact copies of the original covenant and the plan attached with the inventory of the private properties of the Ex-ruler of Jodhpur. The duly verified copy of the plan is being submitted for your perusal.” 863 and the same reply filed by the said Additional Collector has been verified on affidavit by the same officer who in his affidavit states:

“That the photostat copy of the convenant as also the true copy of the plan referred in the Schedule of the inventory of the private properties of Ex-ruler. Ex-ruler Jodhpur supplied to the respondents have been got verified from the Chief Engineer P.W.D. B & R Rajasthan, Jaipur and the office of the General Administration Department, Rajasthan, Secre- tariat, Jaipur.” In view of these circumstances therefore so far as the land in dispute i.e. Khasra Nos. 421 and 426 is concerned the admission made by the State and which was also clear from various documents which have been considered by the High Court in their judgments in these petitions clearly show that these lands were within the boundaries of the Umaid Bhawan Palace which is the private property in accordance with the inventory preparted and approved by Government of India and therefore which will not fall within the ambit of the definition of the ‘land’ as defined in Section 2F and thus will not fall within the ambit of the ‘estate’ which could vest under the provisions of this Section and in this view of the matter even without going into the the question about whether land being agricultural or not the view taken by Justice M.L. Jain is the only view which could be sus- tained.

Even as regards the question as to whether this land is agricultural or not it will be relevant to note. Learned counsel for the State has relied on some Khasra, Girdwari and Jamabandi of Sam vat 2030to 2032 relating to Khasra No.

421. It is described as Padat and it is contended that this land will be agricultural land as it also includes waste land. Even on the basis of the record on which reliance is placed by the learned counsel for the State that no land revenue is assessed on this land. On the contrary counsel for the appellant referred to a notification published in the Jodhpur Government Gazette dated February 10, 1934 and this notification states that the Development Department shall have control over the disposal of land for building sites and the building regulation shall operate over the area within a radius of three miles from the Sojati Gate and it is not disputed that these lands fell within three miles radius from Sojati Gate. Learned counsel also referred to a letter written to Urban Improvement Trust. The Settlement Officer is alleged to have stated that the plan was careful- ly perused, checked and tallied with the corresponding old settlement record of Samvat 1979 together with the site plan of Umaid 864 Bhawan Palace which indicates the private property of His Highness the Maharaja Sahib Bahadur Jodhpur duly verified on 12.11.1958 by the then Deputy Secretary, G.A.D. and the Commissioner, Jodhpur Division, Jodhpur wherein the said land is included in the premises of Umaid Bhawan Palace. The Settlement Officer further added that the fact that this land had never been assessed to rents, that it never has been cultivated and that it is included within the Umaid Bhawan Palace is sufficient to show that it is “abadi land” within the meaning and definition under Section 158 of the Rajasthan Land Revenue Act, 1956. The view expressed by the Government that this land does not appear to be agricultural land is fully established and it was on the basis of these documents that the learned Judge Shri M.L. Jain came to the conclusion that:

“The documents clearly demonstrate that the land in dispute is not an agricultural and rather it forms part of the Abadi land. In the revenue records, Khasra Nos. are allotted not only to agricultural plot but they are also allotted to Banjar land and to Abadi land as well. The copies of the Jamabandi and Girdwari filed by the State shows that the land is Padat and does not carry any land revenue. It is, therefore, clear that the land in question being an Abadi land is not covered by the provisions of the Act.” It is clear that the contention raised by the learned coun- sel for the respondent that this land is an agricultural land also cannot be accepted and in view of our conclusions reached above it is clear that the view taken by learned Judge Shit M.L. Jain is the only view which could be taken.

Consequently the appeals filed by the appellants including Prajapati Grah Nirman Sahakari Samiti Ltd. v. State of Rajasthan & Ors. are allowed. The judgment passed by the Division Bench of High Court of Rajasthan in the appeals is set aside and it is held that no action under the provisions of Rajasthan Land Reforms and Acquisition of Landowners’ Estate Act, 1963 could be taken against the appellants and all notices or actions taken are hereby quashed. The appel- lants shall be entitled to costs of these appeals. Costs quantified at Rs. 10,000.

So far as Civil Appeal No. 1145/87 Naveen Grah Nirman Sahkari Samiti Ltd. v. State of Rajasthan is concerned we see no reason not to permit him to withdraw. The petition and appeal is therefore permitted to be withdrawn.

N.V.K. Appeals allowed.

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IN THE SUPREME COURT OF INDIA

UNION OF INDIA & ANR. …PETITIONER
Vs.
RAGHUBIR SINGH (DEAD) BY LRS. ETC. …RESPONDENT

DATE OF JUDGMENT : 16/05/1989

BENCH: PATHAK, R.S. (CJ) VENKATARAMIAH, E.S. (J) MUKHARJI, SABYASACHI (J) MISRA RANGNATH NATRAJAN, S. (J)

CITATION: 1989 AIR 1933 1989 SCR (3) 316 1989 SCC (2) 754 JT 1989 (2) 427 1989 SCALE (1)1337

CITATOR INFO : RF 1990 SC 261 (20,21) E 1990 SC 981 (9,24) D 1991 SC 730 (7) RF 1991 SC1893 (20,22) F 1991 SC2027 (9) RF 1992 SC1488 (8,14) RF 1992 SC2219 (92)

ACT:

Land Acquisition (Amendment) Act, 1894: Sections 30(2) and 15–Solatium payable under Section 23(2) increased to 30 per cent-Amending Section–Whether applicable to awards made prior to April 30, 1982. Held applies to awards made by the Collector or Court between April 30, 1982 and Sept. 1984 and not before–Benefit extends to appeals taken from such awards only.

Constitution of India–Articles 145, 137 and 141–Deci- sion of a Division Bench rendered earlier in point of time—-Whether binding on a subsequent Division Bench comprised of equal number of Judges or of more Judges.

HELD:

Solatium is awarded under sub-section (2) of Section 23 of the Land Acquisition Act. Before the Amendment Act was enacted, the Sub-section provided for solatium at 15 per cent of the market value. By the change introduced by the Amendment Act the amount has been raised to 30 per cent of the market value. Sub-section (2) of Section 30 of the Amendment Act specifies the category of cases to which the amended rate of solatium is attracted. [322D] 318 What Parliament intends to say is that the benefit of Section 30(2) will be available to an award by the Collector or the Court made between 30th April 1982 and 24th September 1984 or to an appellate order of the High Court or of the Supreme Court which arises out of an award of the Collector or the Court made between the two said dates. The word ‘or’, is used with reference to the stage at which the proceeding rests at the time when the benefit under Section 30(2) is sought to be extended. If the proceeding has terminated with the award of the Collector or of the Court made between the aforesaid two dates, the benefit of Section 30(2) will be applied to such award made between the aforesaid two dates.

If the proceeding has passed to the stage of appeal before the High Court or the Supreme Court, it is at that stage when the benefit of Section 30(2) will be applied. But in every case the award of the Collector or of the Court must have been made between April 30, 1982 and September 24, 1984. [339D-G] A pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be bind- ing, it is not necessary that it should be a decision ren- dered by the full Court or a Constitution Bench of the Court. For the purpose of imparting certainty and endowing due authority, decisions of this Court in the future should be rendered by Division Benches of at least three Judges unless, for compelling reasons that is not conveniently possible. [337C-D] The Land Acquisition Bill 1982, was introduced in the House of the People on 30th April, 1982 and upon enactment the Land Acquisition Act, 1984, commenced operation with effect from 24th Sept. 1984. Section 15 of the Amendment Act amended Section 23(2) of the parent Act and substituted the words “30 per cent” in place of the words “15 per cent”.

Parliament intended that the benefit of the enhanced solati- um should be made available albeit to a limited degree even in respect of acquisition proceedings taken before the date.

It sought to effectuate that intention by enacting Section 30(2) in the Amendment Act. [337G-H; 338A] There can be no doubt that the benefit of the enhanced solatium is intended by Section 30(2) in respect of an award made by the Collector between 30th April 1982 and 24th September 1984. Likewise the benefit of the enhanced solati- um is extended by Section 30(2) to the case of an award made by the Court between April 30, 1982 and September 24, 1984, even though it be upon reference from an award made before April 30, 1982. [338E] 319 One of the functions of the Superior Judiciary in India is to examine the competence and validity of legislation both in point of legislative competence as well as its consistency with the Fundamental Rights. In this regard the Courts in India possess a power not known to the English Courts. [323G-H] Exp. Canon Selwyn, [1872] 36 JP 54 and Cheney v. Conn, [1968] 1, All ER 779, referred to.

The range of judicial review recognised in the Superior Judiciary of India is perhaps the widest and the most exten- sive known to the world of law. The power extends to examin- ing the validity of even an amendment to the Constitution for now it has been repeatedly held that no Constitutional amendment can be sustained which violates the basic struc- ture of the Constitution. [324B] His Holiness Kesavananda Bharti Sripadagalavaru v. State of Kerala, [1973] Suppl. SCR 1; Smt. Indira Nehru Gandhi v.

Shri Raj Narain, [1976] 2 SCR 347; Minerva Mills Ltd. and others v. Union of India and others, [1980] 2 SCC 591; S.P.

Sampath Kumar etc. v. Union of India and Ors., [1986] INSC 261; [1987] 1 SCR 435.

The Court overruled the statement of the law laid down in the cases of State of Punjab v. Mohinder Singh & Anr. and Bhag Singh and Others v. Union Territory of Chandigarh and preferred the interpretation of Section 30(2) of the Amend- ment Act rendered in K. Kamalajammanniavaru (dead) by Lrs.

v. Special Land Acquisition Officer.

Oliver Wendell Holmes, “The Common Law”, p. 5; Oliver Wendell Homes, “Common Carriers and the Common Law”, [1943] 9 Curr. L.T. 387, 388; Julius Stone, “Legal Systems & Law- yers Reasoning”, p. 58-59; Roscoe Pound, “An Introduction to the Philosophy of Law”, p. 19; “The Judge as Law Maker”, pp.

25-6.

Myers v. Director of Public Prosecutions, L.R. 1965 A.C.

1001 & 1021; The Bengal Immunity Company Limited v. The State of Bihar and Others, [1955] 2 SCR 603; Street Tramways v. London County Council, [1898] UKHL 1; 1898 A.C. 375; Radcliffe v. Ribble Motor Services Ltd., 1939 A.C. 215; 245; Dr. Alan Paterson’s “Law Lords”, [1982] pp. 156-157; Jones v. Secretary of State for Social Services, [1972] A.C. at 966; Ross-Smith v.

Ross-Smith, [1963] A.C. 280, 303; Indyka v. Indyka, [1969] I A.C. 33, 69; Construction by Jones, at 966; Steadman v.

Steadman, [1976] A.C. 536, 542; DPP v. Myers, [1965] A.C.

1001, 320 1022; Cassell v. Broome,/1972] A.C. 1027, 1086; Haughton v.

Smith, [1975] A.C. 476,500; Knullerv. DPP, [1973] A.C.

435,455; Conway v. Rimmer, [1968] UKHL 2; [1968] A.C. 910, 938; Tramways case[1914] HCA 15; , [1914] 18 C.L.R. 54; State of Washington v. Dawson & Co., 264 U.S. 646, 68 L. Ed. 219; David Burnel v. Coronado Oil & Gas Company, [1932] USSC 66; 285 U.S. 393, 76 L.Ed. 815; Compare National Bank v. Whitney, 103 U.S. 99, 26 L.Ed. 443-444;

Compensation to Civil Servants, L.R. 1929 A.C. 242, A.I.R.

1929 P.C. 84, 87; Attorney-General of Ontario v. The Canada Temperance Federation, L.R. 78 I.A. 10; Phanindra Chandra Neogy v. The King, [1953] INSC 24; [1953] S.C.R. 1069; State of Bombay v.

The United Motors (India) Ltd.[1953] INSC 24; , [1953] S.C.R. 1069; Maganlal Chhagganlal (P) Ltd. v. Municipal Corporation of Greater Bombay & Ors., [1974] INSC 91; [1975] 1 SCR 1; Lt. Col. Khajoor Singh v. The Union of India & Anr., [1960] INSC 267; [1961] 2 SCR 828; Keshav Mills Compa- ny v. Commissioner of Income Tax[1965] INSC 25; , [1965] 2 SCR 908, 921;

Sajjan Singh v. State of Rajasthan, [1964] INSC 246; [1965] 1 SCR 933, 947948; Girdhari Lal Gupta v.D.H. Mill[1970] INSC 165; , [1971] 3 SCR 748;

Pillani Investment Corporation Ltd. v.I.T.O. ‘A’ Ward, Calcutta & Ant., [1971] INSC 321; [1972] 2 SCR 502; Ganga Sugar Company v.

State of Uttar Pradesh[1979] INSC 190; , [1980] 1 SCR 769, 782; Javed Ahmed Abdul Hamid Pawala v. State of Maharashtra, AIR 1985 SC 231;

T.V. Vatheeswaran v. The State of Tamii Nadu, [1983] INSC 12; AIR 1983 SC 361; Sher Singh & Ors. v. State of Punjab, [1983] INSC 27; AIR 1983 SC 465;

Triveniben v. State of Gujarat, AIR 1989 SC 142; John Martin v. The State of West Bengal, [1975] INSC 10; [1975] 3 SCR 211; Haradhan Saha v. State of West Bengal, [1974] INSC 152; [1975] 1 SCR 778; Bhut Nath Mate v.

State of West Bengal[1974] INSC 24; , AIR 1974 SC 806; Mattulal v. Radhe Lal, [1974] INSC 103; [1975] 1 SCR 127; Acharaya Maharajshri Narandraprasadji Anandprasadji Maharaj etc. etc. v. The State of Gujarat & Ors., [1974] INSC 193; [1975] 2 SCR 317; Union of India & Ors. v. Godfrey Philips India Ltd., [1985] INSC 219; [1985] 4 SCC 369; Jit Ram v. State of Haryana, [1980] INSC 85; [1980] 3 SCR 689; Motilal. Padampat Sugar Mills v.

State of U. P.[1978] INSC 254; , [1979] 2 SCR 641.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2839-40 of 1989 etc.

From the Judgment and Order dated 6.12. 1984 of the Delhi High Court in R.F.A. Nos. 113 and 114 of 1968.

K. Parasaran, Attorney General, T.S. Krishnamurthy Iyer, B.R.L. Iyengar, M.S. Gujaral, F.S. Nariman, A.K. Ganguli, K.

Swamy, C.V. Subba Rao, R.D. Agrawala, P. Parmeshwaran, O.P.

Sharma, R.C. Gubrele, K.R. Gupta, R.K. Sharma, K.L. Rathee, Chandulal Verma, Subhash Mittal, S. Balakrishnan, N.B.

Sinha, K.K. Gupta, Sanjiv B. Sinha, M.M. Kashyap, P.C.

Khunger, Swaraj 321 Kaushal, Pankaj Kalra, S.K. Bagga, Ravinder Narain, Sumeet Kachwala, S. Sukumaran, K.R. Nagaraja, S.S. Javali, Ms. Lira Goswami, D.K. Das, B.P. Singh, Ranjit Kumar, Santosh Hegde, M.N. Shroff, P.N. Misra, D.C. Taneja, P.K. Jena, A.K. Sanghi and M. Veerappa for the appearing parties.

The Judgment of the Court was delivered by PATHAK, CJ. The question of law referred to us for decision in these cases is:

“Whether under the Land Acquisition Act, 1894 as amended by the Land Acquisition (Amendment) Act, 1984 the claimants are entitled to sola- tium at 30 per cent of the market value irre- spective of the dates on which the acquisition proceedings were initiated or the dates on which the award had been passed”? It would suffice if we briefly refer to the facts in the Civil Appeals arising out of Special Leave Petitions Nos.

8194-8195 of 1985: Union of India & Another v. Raghubir Singh.

The land belonging to the respondents in village Dhaka was taken by compulsory acquisition initiated by a notifica- tion under-s. 4 of the Land Acquisition Act, 1894 issued on 13 November, 1959. The award with regard to compensation was made by the Collector on 30 March, 1963. A reference under- s. 18 of the Act was disposed of by the Additional District Judge on 10 June, 1968. He enhanced the compensation. The respondents preferred an appeal to the High Court claiming further compensation. During the pendency of the appeal the Land Acquisition (Amendment) Bill 1982 was introduced in Parliament on 30 April, 1982, and became law as the Land Acquisition (Amendment) Act, 1984 when it received the assent of the President on 24 September, 1984. The High Court disposed of the appeal by its Judgment and Order dated 6 December, 1984. While it raised the rate of compensation, it also raised the rate of interest payable on the compensa- tion, and taking into account the change in the law effected by the Land Acquisition (Amendment) Act, 1984 (referred to hereinafter as “the Amendment Act”) it awarded solatium at 30 per cent of the market value. The Judgment and Order of the High Court is the subject of these appeals.

When these cases came up before a Bench of two learned Judges 322 (E.S. Venkataramiah and R.B. Misra, JJ.) on 23 September, 1985, they referred to two earlier decisions of this Court and expressed the view that the question set forth above required re-examination by a larger Bench of five Judges. It was further directed that the other questions involved in the petitions would be considered after the aforesaid ques- tion had been resolved by the larger Bench. The two deci- sions referred to in the Order of the learned Judges are K.

Kamalajammanniavaru (dead) by Lrs. v. Special Land Acquisi- tion Officer[1985] INSC 24; , [1985] 1 S.C.C. 582 decided by O. Chinnappa Reddy and Sabyasachi Mukharji, JJ. on 14 February, 1985 and Bhag Singh and Ors. v. Union Territory of Chandigarh, [1985] INSC 176; [1985] 3 S.C.C. 737 decided by P.N. Bhagwati, C.J., A.N. Sen and D.P. Madon, JJ. on 14 August, 1985.

Solatium is awarded under sub-s. (2) of s. 23 of the Land Acquisition Act. Before the Amendment Act was enacted the sub-section provided for solatium at 15 per cent of the market value. By the change introduced by the Amendment Act the amount has been raised to 30 per cent of the market value. Sub-s. (2) of s. 30 of the Amendment Act specifies the category of cases to which the amended rate of solatium is attracted. In K. Kamalajammanniavaru, (supra), the two learned Judges held that sub-s. (2) of s. 30 referred to orders made by the High Court or the Supreme Court in ap- peals against an award made between 30 April, 1982 and 22 September, 1984, and that therefore solatium at 30 per cent alone pursuant to sub-s. (2) of s. 30 had to be awarded in such cases only. In Bhag Singh (supra), however, the three learned Judges held that sub-s. (2) of s. 30 referred to proceedings relating to compensation pending on 30 April, 1982 or filed subsequent to that date, whether before the Collector or before the Court or the High Court or the Supreme Court, even if they had finally terminated before the enactment of the Amending Act. In taking that view they overruled K. Kamalajammanniavaru, (supra) and approved of the opinion expressed in another case, State of Punjab v.

Mohinder Singh and another, [1986] 1 S.C.C. 365 decided by S. Murtaza Fazal Ali, A. Varadarajan and Ranganath Misra, JJ. on 1 May, 1985.

At the outset, a preliminary objection has been raised by Shri B.R.L. Iyengar to the validity of the reference of these cases to a larger Bench. He contends that the mere circumstance that a Bench of two learned Judges finds itself in doubt about the correctness of the view taken by a Bench of three learned Judges should not provide reason for refer- ring the matter to a larger Bench. The preliminary objection raised by Shri Iyengar has been vigorously resisted by the 323 appellants. Having regard to the submissions made before us, we think it necessary to lay down the law on the point.

India is governed by a judicial system identified by a hierarchy of courts, where the doctrine of binding precedent is a cardinal feature of its jurisprudence. It used to be disputed that Judges make law. Today, it is no longer a matter of doubt that a substantial volume of the law govern- ing the lives of citizens and regulating the functions of the State flows from the decisions of the superior courts.

“There was a time:’ observed Lord Reid, “when it was thought almost indecent to suggest that Judges make law–They only declare it …….. But we do not believe in fairy tales any more “The Judge as law Maker” p. 22.” In countries such as the United Kingdom, where Parliament as the legislative organ is supreme and stands at the apex of the constitution- al structure of the State, the role played by judicial law- making is limited. In the first place the function of the courts is restricted to the interpretation of laws made by Parliament, and the courts have no power to question the validity of Parliamentary statutes, the Diceyan dictum holding true that the British Parliament is paramount and all powerful. In the second place, the law enunciated in every decision of the courts in England can be superseded by an Act of Parliament. As Cockburn CJ. observed in Exp. Canon Selwyn, [1872] 36 JP 54.

“There is no judicial body in the country by which the validity of an Act of Parliament could be questioned. An act of the Legislature is superior in authority to any Court of Law”.

And Ungoed Thomas J., in Cheney v. Conn, [1968] 1 All ER 779 referred to a Parliamentary statute as “the highest form of law …..which prevails over every other form, of law.” The position is substantially different under a written Consti- tution such as the one which governs us. The Constitution of India, which represents the Supreme Law of the land, envis- ages three distinct organs of the State, each with its own distinctive functions, each a pillar of the State. Broadly, while Parliament and the State Legislature in India enact the law and the Executive government implements it, the judiciary sits in judgment not only on the implementation of the law by the Executive but also on the validity of the Legislation sought to be implemented. One of the functions of the superior judiciary in India is to examine the compe- tence and validity of legislation, both in point of legisla- tive competence as well as its consistency with the Funda- mental Rights. In this regard, the courts in India possess a power not known to the English 324 Courts. Where a statute is declared invalid in India it cannot be reinstated unless constitutional sanction is obtained therefore by a constitutional amendment or an appropriately modified version of the statute is enacted which accords with constitutional prescription. The range of judicial review recognised in the superior judiciary of India is perhaps the widest and the most extensive known to the world of law. The power extends to examining the validi- ty of even an amendment to the Constitution, for now it has been repeatedly held that no constitutional amendment can be sustained which violates the basic structure of the Consti- tution. (See His Holiness Kesavananda Bharati Sripadagalava- ru v. State of Kerala, [1973] Suppl. SCR 1; Smt. Indira Nehru Gandhi v. Shri Raj Narain, [1976] 2 SCR 347; Minerva Mills Ltd. and others v. Union of India and others, [1980] 2 SCC 591 and recently in S.P. Sampath Kumar etc. v. Union of India and Ors., [1986] INSC 261; [1987] 1 SCR 435. With this impressive expanse of judicial power, it is only right that the superi- or courts in India should be conscious of the enormous responsibility which rests on them. This is specially true of the Supreme Court, for as the highest Court in the entire judicial system the law declared it is, by Article 141 of the Constitution, binding on all courts within the territory of India.

Taking note of the hierarchical character of the judi- cial system in India, it is of paramount importance that the law declared by this Court should be certain, clear and consistent. It is commonly known that most decisions of the courts are of significance not merely because they consti- tute an adjudication on the rights of the parties and re- solve the dispute between them, but also because in doing so they embody a declaration of law operating as a binding principle in future cases. In this latter aspect lies their particular value in developing the jurisprudence of the law.

The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transaction forming part of his daily affairs. And, therefore, the need for a clear and consistent enunciation of legal principle in the decisions of a Court.

But like all principles evolved by man for the regula- tion of the social order, the doctrine of binding precedent is circumscribed in its governance by perceptible limita- tions, limitations arising by reference to the need for re- adjustment in a changing society, a re-adjustment of legal norms demanded by a changed social context. This need for 325 adapting the law to new urges in society brings home the truth of the Holmesian aphorism that “the life of the law has not been logic it has been experience”. Oliver Wendell Holmes, “The Common Law” p. 5 and again when he declared in another study that Oliver Wendell Holmes, “Common Carriers and the Common Law”, (1943) 9 Curr. L.T. 387, 388 “the law is forever adopting new principles from life at one end,” and “sloughing off” old ones at the other. Explaining the conceptual import of what Holmes had said, Julius Stone elaborated that it is by the introduction of new extra-legal propositions emerging from experience to serve as premises, or by experience-guided choice between competing legal propositions, rather than by the operation of logic upon existing legal propositions, that the growth of law tends to be determined. Julius Stone, “Legal Systems & Lawyers Rea- soning”, pp. 58-59.

Legal compulsions cannot be limited by existing legal propositions, because there will always be, beyond the frontiers of the existing law, new areas inviting judicial scrutiny and judicial choice-making which could well affect the validity of existing legal dogma. The search for solu- tions responsive to a changed social era involves a search not only among competing propositions of law, or competing versions of a legal proposition, or the modalities of an indeterminacy such as “fairness” or “reasonableness”, but also among propositions from outside the ruling law, corre- sponding to the empirical knowledge or accepted values of present time and place, relevant to the dispensing of jus- tice within the new parameters.

The universe of problems presented for judicial choice- making at the growing points of the law is an expanding universe. The areas brought under control by accumulation of past judicial choice may be large. Yet the areas newly presented for still further choice, because of changing social, economic and technological conditions are far from inconsiderable. It has also to be remembered, that many occasions for new options arise by the mere fact that no generation looks out on the world from quite the same van- tage-point as its predecessor, nor for the matter with the same perception. A different vantage point or a different quality of perception often reveals the need for choice- making where formerly no alternatives, and no problems at all, were Perceived. The extensiveness of the areas for judicial choice at a particular time is a function not only of the accumulation of past decisions, not only of changes in the environment, but also of new insights and perspec- tives both on old problems and on the new problems thrown up by changes entering the cultural and social heritage.

326 Not infrequently, in the nature of things there is a gravity-heavy inclination to follow the groove set by prece- dential law. Yet a sensitive judicial conscience often persuades the mind to search for a different set of norms more responsive to the changed social context. The dilemma before the Judge poses the task of finding a new equilibri- um, prompted not seldom by the desire to reconcile opposing mobilities. The competing goals, according to Dean Roscoe Pound, invest the Judge with the responsibility “of proving to mankind that the law was something fixed and settled, whose authority was beyond question, while at the same time enabling it to make constant readjustments and occasional radical changes under the pressure of infinite and variable human desires.” Roscoe Pound, “an Introduction to the Phi- losophy of Law” p. 19. The reconciliation suggested by Lord Reid in “The Judges as Law Maker” pp. 25-6 lies in keeping both objectives in view, “that the law shall be certain, and that it shall be just move with the times.” An elaboration of his opinion is contained in Myers v. Director of Public Prosecutions, L.R. 1965 A.C. 1001, where he expressed the need for change in the law by the court and the limits within which such change could be brought about. He said:

ibid at p. 1021.

“I have never taken a narrow view of the functions of this House as an appellate tribu- nal. The common law must be developed to meet changing economic conditions and habits of thought, and I would not be deterred by ex- pressions of opinion in this House in old cases. But there are limits to what we can or should do. If we are to extend the law it must be by the development and application of fundamental principles. We cannot introduce arbitrary conditions or limitations: that must be left to legislation. And if we do in effect change the law, we ought in my opinion only to do that in cases where our decision will produce some finality or certainty.” Whatever the degree of success in resolving the dilemma, the Court would do well to ensure that although the new legal norm chosen in response to the changed social climate repre- sents a departure from the previously ruling norm, it must, nevertheless. carry within it the same principle of certain- ty, clarity and stability.

The profound responsibility which is.borne by this Court in its choice between earlier established standards and the formulation of a new code of norms is all the more sensitive and significant because the 327 response lies in relation to a rapidly changing social and economic society. In a developing society such as India the law does not assume its true function when it follows a groove chased amidst a context which has long since crum- bled. There will be found among some of the areas of the law norms selected by a judicial choice educated in the experi- ence and values of a world which passed away 40 years ago.

The social forces which demand attention in the cauldron of change from which a new society is emerging appear to call for new perceptions and new perspectives. The recognition that the times are changing and that there is occasion for a new jurisprudence to take birth is evidenced by what this Court said in The Bengal Immunity Company Limited v. The State of Bihar and Others, [1955] 2 SCR 603, when it ob- served that it was not bound by its earlier judgments and possessed the freedom to overrule its judgments when it thought fit to do so to keep pace with the needs of changing times. The acceptance of this principle ensured the preser- vation and legitimation provided to the doctrine of binding precedent, and therefore, certainty and finality in the law, while permitting necessary scope for judicial creativity and adaptability of the law to the changing demands of society.

The question then is not whether the Supreme Court is bound by its own previous decisions. It is not. The question is under what circumstances and within what limits and in what manner should the highest Court over-turn its own pronouncements.

In the examination of this question it would perhaps be appropriate to refer to the response of other jurisdictions, specially those with which the judicial system in India has borne an historical relationship. The House of Lords in England provides the extreme example of a judicial body which until recently disclaimed the power to overrule it- self. It used to be said that the House of Lords did never overrule itself but only distinguished its earlier deci- sions. An erroneous decision of the House of Lords could be set right only by an Act of Parliament. (See Street Tramways v. London County Council, [1898] UKHL 1; [1898] A.C. 375 and Radcliffe v.

Ribble Motor Services Ltd., [1939] A.C. 215,245. ) Apparent- ly bowing to the pressure of a reality forced upon it by reason of a rapidly gathering change in the prevailing socio-economic structure, on 26 July, 1966, Lord Gardiner, L.C., made the following statement on behalf of himself and the Lords of Appeal in Ordinary:

“Their lordship regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. It provides at least 328 some degree of certainty upon which individu- als can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules.

Their lordships nevertheless recog- nise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose therefore to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.

In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal Law.” Since then the House of Lords has framed guidelines in a series of cases decided upto to 1975 and the guidelines have been summarised in Dr. Alan Paterson’s “Law Lords” 1982: pp.

156-157. He refers to several criteria articulated by Lord Reid in those cases.

1. The freedom granted by the 1966 Practice Statement ought to be exercised sparingly (the ‘use sparingly’ crite- rion) (Jones v. Secretary of State for Social Services, [1972] A.C. at 966.

2. A decision ought not to be overruled if to do so would upset the legitimate expectations of people who have entered into contracts or settlements or otherwise regulated their affairs in reliance on the validity of that decision (the ‘legitimate expectations’ criterion) (Ross Smith v.

Ross-Smith, [1963] A.C. 280, 303 and Indyka v. Indyka, [1969] I A.C. 33, 69.)

3. A decision concerning questions of construction of statute or other documents ought not to be overruled except in rare and exceptional cases (the ‘Construction’ criterion) Jones, at 966.

4(a) A decision ought not to be overruled if it would be impracticable for the Lords to foresee the consequences of departing from it (the ‘unforseeable consequences’ crite- rion) (Steadman v. Steadman, [1976] A.C. 536,542. (b) A decision ought not to be overruled if to do so would involve a change that ought to be part of a 329 comprehensive reform of the law. Such changes are best done ‘by legislation following on a wide survey of the whole field’ (the ‘need for comprehensive reform’ criterion) (DPP v. Myers, [1965] A.C. 1001, 1022; Cassell v. Broome, [1972] UKHL 3; [1972] A.C. 1027, 11086 and Haughton v. Smith, [1975] A.C.

476,500).

5. In the interest of certainty, a decision ought not to be overruled merely because the Law Lords consider that it was wrongly decided. There must be some additional reasons to justify such a step (the ‘precedent merely wrong’ crite- rion) Knuller v. DPP, [1973] A .C. 435,455;

6. A decision ought to be overruled if it causes such great uncertainty in practice that the Parties’ advisers are unable to give any clear indication as to what the courts will hold the law to be (the ‘rectification of uncertainty’ criterion) Jones, at 966; Oldendroll & Co. v. Tradex Export, S.A. 1974 479,533,535.

7. A decision ought to be overruled if .in relation to some broad issue or principle it is not considered just or in keeping with contemporary social conditions or modern conceptions of public policy (the ‘unjust or outmoded’ criterion) ibid Conway v. Rimmer, [1968] UKHL 2; [1968] A.C. 910,938.

Dr. Paterson noted that between the years 1966 and 1988 there were twenty nine cases in which the House of Lords was invited to overrule one of its own precedents, that the House of Lords did so in eight of them, while in a further ten cases at least one of the Law Lords was willing to overrule the previous House of Lords precedent. In a consid- erable number of other cases, however, the Law Lords seemed to prefer to distinguish the earlier decisions rather than overrule them.

The High Court of Australia, the highest Court in the Commonwealth, has reserved to itself the power to reconsider its own decision, but has laid down that the power should not be exercised upon a mere suggestion that some or all the member of the later Court would arrive at a different con- clusion if the matter were res integra. In the Tramways case[1914] HCA 15; , [1914] 18 C.L.R. 54, Griffith, C.J., while doing so administered the following caution:

“In my opinion, it is impossible to maintain as an abstract proposition that Court is either legally or technically bound by previ- ous decisions. Indeed, it may, in a proper case, be 330 its duty to disregard them. But the rule should be applied with great caution, and only when the previous decision is manifestly wrong, as, for instance, if it proceeded upon the mistaken assumption of the continuance of a repealed or expired Statute, or is contrary to a decision of another Court which this Court is bound to follow; not, I think, upon a mere suggestion, that some or all of the members of the later Court might arrive at a different conclusion if the matter was res integra. Otherwise there would be grate danger of want of continuity in the interpretation of law.” In the same case, Barton, J. observed at p. 69:

” ….. I would say that I never thought that it was not open to this Court to review its previous decisions upon good cause. The question is not whether the Court can do so, but whether it will, having due regard to the need for continuity and consistency in the judicial decision. Changes in the number of appointed Justices can, I take it, never of themselves furnish a reason for review …..

But the Court can always listen to argument as to whether it ought to review a particular decision, and the strongest reason for an overruling is that a decision is manifestly wrong and its continuance is injurious to the public interest”.

In the United States of America the Supreme Court has explicitly overruled its prior decision in a number of cases and reference will be found to them in the judgment of Brandeis, J. in State of Washington v. Dawson & Co., 264 U.S. 646; 68 L.Ed. 219 where he said:

“The doctrine of Stare decisis should not deter us from overruling that case and those which follow it. The decisions are recent ones. They have not been acquiesced in. They have not created a rule of property around which vested interests have clustered. They affect solely matters of a transitory nature.

On the other hand, they affect seriously the lives of men, women and children, and the general welfare. Stare decisis is ordinarily, a wise rule of action. But it is not a univer- sal, inexorable command. The instances in which the Courts have disregarded its admonition a re many.” 331 Elaborating his point in his dissenting judgment in David Burnel v. Coronado Oil & Gas Company, [1932] USSC 66; 285 U.S. 393; 76 L.Ed.

815, Brandeis, J. observed:

“Stare decisis usually the wise policy, because in most matters it is more important that the applicable rule of law be settled right. Compare National Bank v. Whitney, 103 U.S.

99; 26 L.Ed. 443-444. This is commonly true even where the error is a matter of serious concern, provided correction can be had by legislation. But in cases involving the Feder- al Constitution, where correction through legislative action is practically impossible, this Court has often overruled its earlier decisions. The Court bows to the lessons of experience and the force of better reasoning recognising that the process of trial and error, so fruitful in the physical sciences, is appropriate also in the judicial function.” The Judicial. Committee of the Privy Council also took the view that it was not bound in law by its earlier deci- sions, but in In re Compensation to Civil Servants, L.R.

1929 A.C. 242; A.I.R. 1929 P.C. 84, 87 it declared that it “would hesitate long before disturbing a solemn decision by a previous Board, which raised an identical or even a simi- lar issue for determination” and reiterated that reservation in the Attorney-General of Ontario v. The Canada Temperance Federation, L.R. 76 Q.A. 10 and Phanindra Chandra Neogy v.

The King[1953] INSC 24; , [1953] SCR 1069.

These cases from England, Australia and the United States were considered by this Court in The Bengal Immunity Company Limited v. The State of Bihar and others, (supra), perhaps the first recorded instance of the Supreme Court in this country being called upon to consider whether it could overrule an earlier decision rendered by it. A Bench of seven Judges assembled to consider whether the majority decision of a Constitution Bench of five Judges in State of Bombay v. The United Motors (India) Ltd., [1953] INSC 24; [1953] S.C.R. 1069 should be reconsidered. Four Judges of the Bench of seven said it should and voted to overrule the majority decision in the United Motors, (supra). The remaining three voted to the contrary. Das, Acting C.J., speaking for himself and on behalf of Bose, Bhagwati and Jafar Imam, JJ, preferred the approach adopted by the United States Supreme Court since, in the view of that learned Judge, the position in India approximated more closely to that obtaining in the United states rather than to the position in England, where Parlia- ment could rectify the situation by a simple majority, and to that in Australia, where the mistake could be 332 corrected in appeal to the Privy Council. The learned Judge observed: “There is nothing in our Constitution which pre- vents us from departing from a previous decision if we are convinced of its error and its baneful effect on the general interests of the public.” And reference was made to the circumstance that Article 141 of the Constitution made the law declared by this Court binding on all Courts in India.

Speaking with reference to the specific case before the Court, the learned Judge referred to the far-reaching effect of the earlier decision in the United Motors (supra) on the general body of the consuming public, and that the error committed in the earlier decision would result in perpetuat- ing a tax burden erroneously imposed on the people, giving rise to a consequence “manifestly and wholly unauthorised.” The learned Judge observed:

“It is not an ordinary pronouncement declaring the rights of two private individuals inter se. It involves an adjudication on the taxing power of the States as against the consuming public generally. If the decision is errone- ous, as indeed we conceive it to be, we owe it to the public to protect them against the illegal tax burdens which the States are seeking to impose on the strength of that errone- ous recentdecision”. Cautioned that the Court should not differ merely because a contrary view appeared preferable, the learned Judge affirmed that “we should not lightly dissent from a previous pronouncement of this Court.” But if the previous decision was plainly erroneous, he pointed out, there was a duty on the Court to say so and not perpetuate the mistake. The appeal to the principle of stare decisis was rejected on the ground that (a) the decision intended to be overruled was a very recent decision and it did not involve overruling a series of decisions, and (b) the doc- trine of stare decisis was not an inflexible rule, and must, in any event, yield where following it would result in perpetuating an error to the detriment of the general wel- fare of the public or a considerable section thereof.

Since then the question as to when should the Supreme Court overrule its own decision has been considered in several cases. Relying on the Bengal Immunity case, Khanna, J. remarked that certainly in the law, which was an essen- tial ingredient of the Rule of Law, would be considerably eroded if the highest court of the land lightly overruled the view expressed by it in earlier cases. One instance where such overruling could be permissible was a situation where contextual values giving birth to the earlier view had altered substantially since.

333 In Maganlal Chhagganlal (P) Ltd. v. Municipal Corporation of Greater Bombay & Ors., [1974] INSC 91; [1975] 1 SCR 1 he explained:

“Some new aspects may come to light and it may become essen- tial to cover fresh grounds to meet the new situations or to overcome difficulties which did not manifest themselves or were not taken into account when the earlier view was pro- pounded. Precedents have a value and the ratio decidendi of a case can no doubt be of assistance in the decision of future cases. At the same time we have to, as observed by Cardozo, guard against the notion that because a principle has been formulated as the ratio decidendi of a given prob- lem, it is therefore to be applied as a solvent of other problems, regardless of consequences, regardless of deflect- ing factors, inflexibly. and automatically, in all its pristine generality (see Selected Writings, p. 31). As in life so in law things are not static.” In Lt. Col. Khajoor Singh v. The Union of India & Anoth- er[1960] INSC 267; , [1961] 2 SCR 828 the majority of this court emphasised that the court, should not depart from an interpretation given in an earlier judgment of the court unless there was a fair amount of unanimity that the earlier decision was manifestly wrong. In Keshav Mills Company v. Commissioner of Income Tax, [1965] INSC 25; [1965] 2 SCR 908,921 this court observed that a revision of its earlier decision would be justified if there were compelling and substantial reasons to do so. In Sajjan Singh v. State of Rajasthan, [1964] INSC 246; [1965] 1 SCR 933,947-948 the court laid down the test: ‘Is it absolutely necessary and essential that the question already decided should be reo- pened?’, and went on to observe: ‘the answer to this ques- tion would depend on the nature of the infirmity alleged in the earlier decision, its impact on public good and the validity and compelling character of the considerations urged in support of the contrary view.’ There can be no doubt, as was observed in Girdhari Lal Gupta v. D.H. Mill, [1970] INSC 165; [1971] 3 SCR 748 that where an earlier relevant statutory provision has not been brought to the notice of the court, the decision may be reviewed, or as in Pillani Investment Corporation Ltd. v. I.T.O. ‘A’ Ward, Calcutta & Anr., [1971] INSC 321; [1972] 2 SCR 502, if a vital point was not considered. A more compendious examination of the problem was undertaken in Keshav Mills Company v. Commissioner of Income Tax, (supra) where the Court pointed out:

“It is not possible or desirable, and in any case it would be inexpedient to lay down any principles which should 334 govern the approach of the Court in dealing with the ques- tion of reviewing and revising its earlier decisions. It would always depend upon several relevant considerations:–What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based? On the earlier occasion, did some patent aspects of the question remain unnoticed, or was the attention of the Court not drawn to any relevant and materi- al statutory provision, or was any previous decision of this Court bearing on the point not noticed? Is the court hearing such plea fairly unanimous that there is such an error in the earlier view? What would be the impact of the error on the general administration of law or on public good? Has the earlier decision been followed on subsequent occasions either by this Court or by the High Courts? And, would the reversal of the earlier decision lead to public inconven- ience, hardship or mischief? These and other relevant con- siderations must be carefully borne in mind whenever this Court is called upon to exercise its jurisdiction to review and revise its earlier decisions. These considerations become still more significant when the earlier decision happens to be a unanimous decision of the Bench of five learned Judges of this Court.” Much importance has been laid on observing the finality of decisions rendered by the Constitution Bench of this Court, and in Ganga Sugar Company v. State of Uttar Pradesh, [1979] INSC 190; [1980] 1 SCR 769, 782 the Court held against the finality only where the subject was ‘of such fundamental importance to national life or the reasoning is so plainly erroneous in the light of later thought that it is wiser to be ultimately right rather than to be consistently wrong’.

It is not necessary to refer to all the cases on the point. The broad guidelines are easily deducible from what has gone before. The possibility of further defining these guiding principles can be envisaged with further juridical experience, and when common jurisprudential values linking different national systems of law may make a consensual pattern possible. But that lies in the future.

There was some debate on the question whether a Division Bench of Judges is obliged to follow the law laid down by a Division Bench of a larger number of Judges. Doubt has arisen on the point because of certain observations made by O. Chinnappa Reddy, J. in 335 Javed Ahmed Abdul Hamid Pawala v. State of Maharashtra, AIR 1985 SC 23 1. Earlier, a Division Bench of two Judges, of whom he was one, had expressed the view in T.V. Vatheeswaran v. The State of Tamil Nadu, [1983] INSC 12; AIR 1983 SC 361 that delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle a person under sentence of death to invoke Article 21 of the Constitution and demand the quashing of the sentence of death. This would be so, he observed, even if the delay in the execution was occasioned by the time necessary for filing an appeal or for considering the reprieve of the accused or some other cause for which the accused himself may be responsible. This view was found unacceptable by a Bench of three Judges in Sher Singh & Ors. v. State of Punjab, [1983] INSC 27; AIR 1983 SC 465 where the learned Judges observed that no hard and fast rule could be laid down in the matter. In direct disagreement with the view in T.V. Vatheeswaran, (supra), the learned Judges said that account had to be taken of the time occupied by pro- ceedings in the High Court and in the Supreme Court and before the executive authorities, and it was relevant to consider whether the delay was attributable to the conduct of the accused. As a member of another Bench of two Judges, in Javed Ahmed Abdul Hamid Pawala, (supra) O. Chinnappa Reddy, J. questioned the validity of the observations made in Sher Singh, (supra) and went on to note, without express- ing any concluded opinion on the point, that it was a seri- ous question “whether a Division Bench of three Judges could purport to overrule the judgment of a Division Bench of two Judges merely because there is larger than two. The Court sits in Divisions of two and three Judges for the sake of convenience and it may be inappropriate for a Division Bench of three Judges to purport to overrule the decision of a Division Bench of two Judges. Vide Young v. Bristol Aero- plane Co. Ltd., [1944] 2 All ER 293. It may be otherwise where a Full Bench or a Constitution Bench does so.” It is pertinent to record here that because of the doubt cast on the validity of the opinion in Sher Singh, (supra), the question of the effect of delay on the execution of a death sentence was referred to a Division Bench of five Judges, and in Triveniben v. State of Gujarat, AIR 1989 SC 142 the Constitution Bench overruled T.V. Vatheeswaran, (supra).

What then should be the position in regard to the effect of the law pronounced by a Division Bench in relation to a case raising the same point subsequently before a Division Bench of a smaller number of Judges? There is no constitu- tional or statutory prescription in the matter, and the point is governed entirely by the practice in India of the Courts sanctified by repeated affirmation over a century of time. It cannot be doubted that in order to promote consist- ency and certainty 336 in the law laid down by a superior Court, the ideal condi- tion would be that the entire Court should sit in all cases to decide questions of law, and for that reason the Supreme Court of the United States does so. But having regard to the volume of work demanding the attention of the Court, it has been found necessary in India as a general rule of practice and convenience that the Court should sit in Divisions, each Division being constituted of Judges whose number may be determined by the exigencies of judicial need, by the nature of the case including any statutory mandate relative there- to, and by such other considerations which the Chief Jus- tice, in whom such authority devolves by convention, may find most appropriate. It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the rule has been evolved, in order to promote consistency and certainty in the devel- opment of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges. We may refer to a few of the recent cases on the point. In John Martin v. The State of West Bengal, [1975] INSC 10; [1975] 3 SCR 211 a Division Bench of three Judges found it right to follow the law declared in Haradhan Saha v. State of West Bengal, [1974] INSC 152; [1975] 1 SCR 778 decided by a Division Bench of five Judges, in preference to Bhut Nath Mate v. State of West Bengal, [1974] INSC 24; AIR 1974 SC 806 decided by a Division Bench of two Judges. Again in Smt. India Nehru Gandhi v. Shri Raj Narain, [1976] 2 SCR 347 Beg, J. held that the Constitution Bench of five Judges was bound by the Constitution Bench 01′ thirteen Judges in His Holiness Kesavananda Bharati Sripadagalavaru v. State of Kerala, [1973] Suppl. 1 SCR. In Ganapati Sitaram Balvalkar & Anr. v.

Waman Shripad Mage (Since Dead) Through Lrs., [1981] 4 SCC 143 this Court expressly stated that the view taken on a point of law by a Division Bench of four Judges of this Court was binding on a Division Bench of three Judges of the Court. And in Mattulal v. Radhe Lal, [1974] INSC 103; [1975] 1 SCR 127 this Court specifically observed that where the view expressed by two different Division Benches of this Court could not be reconciled, the pronouncement of a Division Bench of a larger number of Judges had to be, preferred over the deci- sion of a Division Bench of a smaller number of Judges. This Court also laid down in Acharaya Maharajshri Narandrapra- sadji AnandprasadjiMaharaj etc. etc. v. The State of Gujarat & Ors., [1974] INSC 193; [1975] 2 SCR 317 that even where the strength of two differing Division Benches consisted of the same number of Judges, it was not open to one Division Bench to decide the correctness or other-wise of the views of the other. The principle was reaffirmed in Union of India & Ors. v. Godfrey Philips India Ltd., [1985] 4 337 SCC 369 which noted that a Division Bench of two Judges of this Court in Jit Ram v. State of Haryana, [1980] INSC 85; [1980] 3 SCR 689 had differed from the view taken by an earlier Division Bench of two Judges in Motilal Padampat Sugar Mills v. State of U.P., [1978] INSC 254; [1979] 2 SCR 641 on the point whether the doctrine of promissory estoppel could be defeated by invoking the defence of executive necessity, and holding that to do so was wholly unacceptable reference was made to the well accepted and desirable practice of the later Bench referring the case to a larger Bench when the learned Judges found that the situation called for such reference.

We are of opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court. We would, however, like to think that for the purpose of imparting certainty and endowing due authority decisions of this Court in the future should be rendered by Division Benches of at least three Judges un- less, for compelling reasons that is not conveniently possi- ble.

Upon the aforesaid considerations, and in view of the nature and potential of the questions raised in these cases we are of the view that there was sufficient justification for the order dated 23 September, 1985 made by the Bench of two learned judges referring these cases to a larger Bench for reconsideration of the question decided in K. Kamalajam- mannivaru (dead) by Lrs., (supra) and Bhag Singh and Ors., (supra). The preliminary objection raised by learned counsel for the respondents to the validity of the reference is overrruled.

We now come to the merits of the reference. The refer- ence is limited to the interpretation of s. 30(2) of the Land Acquisition (Amendment) Act of 1984. Before the enact- ment of the Amendment Act, solatium was provided under s.

23(2) of the Land Acquisition Act (shortly, “the parent Act”) at 15% on the market value of the Land computed in accordance with s. 23(1) of the Act, the solatium being provided in consideration of the compulsory nature of the acquisition. The Land Acquisition Amendment Bill, 1982 was introduced in the House of the People on 30 April, 1982 and upon enactment the Land Acquisition Amendment Act 1984 commenced operation with effect from 24 September, 1984. S.

15 of the Amendment Act amended s. 23(2) of the parent Act and substituted the words ’30 per centum’ in place of the words ’15 per centum’. Parliament intended that the be- 338 nefit of the enhanced solatium should be made available albeit to a limited degree, even in respect of acquisition proceedings taken before that date. It sought to effectuate that intention by enacting s. 30(2) in the Amendment Act, S.

30(2) of the Amendment Act provides:

“(2) the provisions of sub-s. (2) of s. 23 ……of the principal Act, as amended by clause (b) of s.

15 ……..of this Act ……. shall apply and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court or to any order passed by the High Court or Supreme Court in appeal against any such award under the provisions of the principal Act after the 30th day of April, 1982 [the date of introduction of the Land Acquisition (Amendment) Bill, 1982, in the House of the People] and before the commencement of this Act.” In construing s. 30(2), it is just as well to be clear that the award made by the Collector referred to here is the award made by the Collector under s. 11 of the parent Act, and the award made by the Court is the award made by the Principal Civil Court of Original Jurisdiction under s. 23 of the parent Act on a reference made to it by the Collector under s. 19 of the parent Act. There can be no doubt that the benefit of the enhanced solatium is intended by s. 30(2) in respect of an award made by the Collector between 30 April 1982 and 24 September, 1984. Likewise the benefit of the enhanced solatium is extended by s. 30(2) to the case of an award made by the Court between 30 April 1982 and .24 September 1984, even though it be upon reference from an award made before 30 April, 1982.

The question is: what is the meaning of the words “or to any order passed by the High Court or Supreme Court on appeal against any such award?” Are they limited, as con- tended by the appellants, to appeals against an award of the Collector or the Court made between 30 April 1982 and 24 September 1984, or do they include also, as contended by the respondents, appeals disposed of between 30 April, 1982 and 24 September 1984 even though arising out of awards of the Collector or the Court made before 30 April, 1982. We are of opinion that the interpretation placed by the appellants should be preferred over that suggested by the respondents.

Parliament has identified the appeal before the High Court and the appeal before the Supreme Court by describing it as an appeal against ‘any such award’. The submission on behalf of the respondents is that the words ‘any such award’ mean the award made by the Collector or Court, and carry no 339 greater limiting sense; and that in this context, upon the language of s. 30(2), the order in appeal is an appellate order made between 30 April 1982 and 24-September 1984–in which case the related award of the Collector or of the Court may have been made before 30 April 1982. To our mind, the words ‘any such award’ cannot bear the broad meaning suggested by learned counsel for the respondents. No such words of description by way of identifying the appellate order of the High Court or of the Supreme Court were neces- sary. Plainly, having regard to the existing hierarchical structure of for a contemplated in the parent Act those appellate orders could only be orders arising in appeal against the award of the Collector or of the Court. The words ‘any such award’ are intended to have deeper signifi- cance, and in the context in which those words appear in s.

30(2) it is clear that they are intended to refer to awards made by the Collector or Court between 30 April, 1982 and 24 September, 1984. In other words s. 30(2) of the Amendment Act extends the benefit of the enhanced solatium to cases where the award by the Collector or by the Court is made between 30 April, 1982 and 24 September, 1984 or to appeals against such awards decided by the High Court and the Su- preme Court whether the decisions of the High Court or the Supreme Court are rendered before 24 September, 1984 or after that date. All that is material is that the award by the Collector or by the Court should have been made between 30 April, 1982 and 24 September, 1984. We find ourselves in agreement with the conclusion reached by this Court in K.

Kamalajammanniavaru (dead) by Lrs. v. Special Land Acquisi- tion Officer, (supra), and find ourselves unable to agree with the view taken in Bhag Singh and Others v. Union Terri- tory of Chandigarh, (supra). The expanded meaning given to s. 30(2) in the latter case does not, in our opinion, flow reasonably from the language of that sub-section. It seems to us that the learned judges in that case missed the sig- nificance of the word ‘such’ in the collocation ‘any such award’ in s. 30(2). Due significance must be attached to that word, and to our mind it must necessarily intend that the appeal to the High Court or the Supreme Court, in which the benefit of the enhanced solatium is to be given, must be confined to an appeal against an award of the Collector or of the Court rendered between 30 April, 1982 and 24 Septem- ber, 1984.

We find substance in the contention of the learned Attorney General that if Parliament had intended that the benefit of enhanced solatium should be extended to all pending proceedings it would have said so in clear language.

On the contrary, as he says, the terms in which s. 30(2) is couched indicate a limited extension of the benefit. The Amendment Act has not been made generally retrospective with 340 effect from any particular date, and such retrospectivity as appears is restricted to certain areas covered by the parent Act and must be discovered from the specific terms of the provision concerned. Since it is necessary to spell out the degree of retrospectivity from the language of the relevant provision itself, close attention must be paid to the provi- sions of s. 30(2) for determining the scope of retrospective relief intended by Parliament in the matter of enhanced solatium. The learned Attorney General is also right when he points out that it was never intended to define the scope of the enhanced solatium on the mere accident of the disposal of a case in appeal on a certain date. Delays in the superi- or Courts extend now to limits which were never anticipated when the right to approach them for relief was granted by statute. If it was intended that s. 30(2) should refer to appeals pending before the High Court or the Supreme Court between 30 April, 1982 and 24 September, 1984, they could well refer to proceedings in which an award had been made by the Collector from anything between 10 to 20 years before.

It could never have been intended that rates of compensation and solatium applicable to acquisition proceedings initiated so long ago should now enjoy the benefit of statutory en- hancement. It must be remembered that the value of the land is taken under s. 11(1) and s. 23(1) with reference to the date of publication of the notification under-s.4(1), and it is that date which is usually material for the purpose of determining the quantum of compensation and solatium. Both s. 11(1) and s. 23(1) speak of compensation being determined on the basis, inter alia, of the market value of the land on that date, and solatium by s. 23(2), is computed as a per- centage on such market value.

Our attention was drawn to the order made in State of Punjab v. Mohinder Singh, (supra), but in the absence of a statement of the reasons which persuaded the learned Judges to take the view they did we find it difficult to endorse that decision. It received the approval of the learned Judges who decided Bhag Singh (supra), but the judgment in Bhag Singh, (supra) as we have said earlier, has omitted to give due significance to all the material provisions of s.

30(2), and consequently we find ourselves at variance with it. The learned Judges proceeded to apply the principle that an appeal is a continuation of the proceeding initiated before the Court by way of reference under-s. 18 but, in our opinion, the application of a general principle must yield to the limiting terms of the statutory provision itself.

Learned counsel for the respondents has strenuously relied on the general principle that the appeal is a re-hearing of the original matter, but we are not satisfied that he is on good ground in invoking that principle. Learned counsel 341 for the respondents points out that the word ‘or’ has been used in s. 30(2), as a disjunctive between the reference to the award made by the Collector or the Court and an order passed by the High Court or the Supreme Court in appeal and, he says, properly understood it must mean that the period 30 April, 1982 to 24 September, 1984 is as much applicable to the appellate order of the High Court or of the Supreme Court as it is to the award made by the Collector or the Court. We think that what Parliament intends to say is that the benefit of s. 30(2) will be available to an award by the Collector or the Court made between the aforesaid two dates or to an appellate order of the High Court or of the Supreme Court which arises out of an award of the Collector or the Court made between the said two dates. The word ‘or’ is used with reference to the stage at which the proceeding rests at the time when the benefit under-s. 30(2) is sought to be extended. If the proceeding has terminated with the award of the Collector or of the Court made between the aforesaid two dates, the benefit of s. 30(2) will be applied to such award made between the aforesaid two dates. If the proceeding has passed to the stage of appeal before the High Court or the Supreme Court, it is at that stage when the benefit of s.

30(2) will be applied. But in every case, the award of the Collector or of the Court must have been made between 30 April, 1982 and 24 September, 1984.

In the result we overrule the statement of the law laid down in Mohinder Singh, (supra) and in Bhag Singh and Anoth- er, (supra) and prefer instead the interpretation of s.

30(2) of the Amendment Act rendered in K. Kamalajammanniava- ru (dead) by Lrs. (supra).

The cases will now be listed before a Division Bench of three learned Judges for hearing on the merits of the other points raised in the cases.

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