Tuesday, September 29, 2009

THE B. MANAGER,M/S. MAGMA LEASING &FIN. LTD. & ANR Versus POTLURI MADHAVILATA & ANR.

Arbitration — Arbitration and Conciliation Act, 1996 — S. 8 r/w Civil Procedure Code — S. 151 — Arbitration agreement — Whether survives for the purpose of resolution of disputes arising under or in connection with the contract even if its performance has come to an end on account of termination due to breach — Hire purchase agreement for vehicle — Default in payment of few instalments — Vehicle seized — Suit for recovery filed — Arbitration Cl. 22 invoked — Clause couched in widest possible terms — Embraces all disputes, differences, claims and questions between the parties arising out of the said agreement or in any way relating thereto — Hire purchase agreement admittedly entered into — Held, arbitration Cl. 22 survives for purpose of their resolution although contract has come to an end on account of its termination

Arbitration — Arbitration and Conciliation Act, 1996 — S. 8 r/w Civil Procedure Code — S. 151 — Arbitration agreement — Reference to arbitration — For applicability, conditions to be satisfied: (a) that there exists an arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof

Supreme Court of India

CIVIL APPEAL NO.6399 of 2009

Judge(s): Tarun Chatterjee,R. M. Lodha

Date of Judgment: 18 September, 2009

THE B. MANAGER,M/S. MAGMA LEASING &FIN. LTD. & ANR

Versus

POTLURI MADHAVILATA & ANR.


JUDGEMENT

R.M. Lodha, J.

Leave granted.

2. The core question that falls to be determined in this appeal by special leave is : does the arbitration agreement survive for the purpose of resolution of disputes arising under or in connection with the contract even if its performance has come to an end on account of termination due to breach ?

3. MAGMA Leasing Limited Public United Company (for short, `MAGMA') is a financial institution engaged in the business of providing funds for purchase of plant and machinery and other assets by way of hire purchase. Smt. Potluri Madhavilata-respondent no. 1 (hereinafter referred to as `hirer) entered into an agreement of hire purchase with MAGMA for purchase of a motor vehicle (Bolero Camper-AP 16 TV 1263) on January 31, 2005. As per the terms of hire purchase agreement, the hirer was required to pay hire purchase price in 46 installments. It appears that the hirer committed default in payment of few installments and as a result thereof, MAGMA seized the said vehicle from the hirer on August 6, 2005. MEGMA also sent a notice to the hirer intimating her that hire purchase agreement has been terminated. Thereafter some correspondence seems to have ensued between the parties.

4. The hirer then filed a suit against MAGMA in the Court of Senior Civil Judge, Vijayawada seeking recovery of possession of the aforesaid vehicle and for restraining MAGMA from transferring the said vehicle.

5. MAGMA, upon receipt of notice of the aforesaid proceedings, made an application (I.A. No. 490 of 2006) before the trial court under Section 8 of the Arbitration and Conciliation Act, 1996 (for short , `Act, 1996') read with Section 151 of the Code of Civil Procedure praying therein that the dispute raised in the suit be referred to an arbitrator and the proceedings in the suit be stayed.

6. The hirer contested the aforesaid application on the ground that the hire purchase agreement having been terminated, the arbitration agreement does not survive and the matter need not be referred to the arbitration.

7. The First Additional Senior Civil Judge, Vijayawada vide order dated December 4, 2006 dismissed the application made by MAGMA under Section 8 of the Act, 1996.

8. Not satisfied with the order of the trial court, MAGMA filed a civil revision petition before the High Court of Andhra Pradesh.

9. The Division Bench dismissed the revision petition on April 30, 2007 holding that upon termination of the hire purchase agreement, the arbitration agreement does not survive. The present appeal by special leave arises from this order.

10. Despite service, hirer has not chosen to appear before this court.

11. The hire purchase agreement contains the following clause for arbitration :

"22. Arbitration : All disputes, differences, claims and questions whatsoever arising out of this agreement between magma and/or its representatives and/or its assigns on the one hand and the Hirer/s and the Guarantor/s on the other hand touching and concerning these presents or anything herein contained or in any way relating to or arising from these presents shall be referred to a sole arbitrator to be appointed by Magma Leasing Limited. The Arbitrator so appointed shall formulate his own procedure and shall be entitled to dispense with filing of pleadings or taking of any evidence and shall be entitled to dispose off the proceedings in a summary manner. The Arbitrator shall have summary powers. The award of such arbitrator so appointed shall be final and binding on all the parties to this agreement. Such arbitration proceedings will be at Kolkata. The sole arbitrator shall pronounce the award as expeditiously as possible after entering on the reference or within such time as he may deem expedient. The pronouncement of the award by the arbitrator in a meeting of the parties fixed after the conclusion of the arbitration proceedings shall be deemed to be the publication of the award and shall be construed as the date of receipt of the award by the Hirer/s/Guarantor/s and Magma. The costs and expenses of the arbitration proceedings shall be borne by the Hirer/s/Guarantor/s. The Arbitrator shall hold his sittings at Kolkata."

12. The House of Lords in Heyman and Another v. Darwins Ltd.1 had discussed elaborately on the scope of arbitration clause in the context of a dispute arising on the question of repudiation of a contract. That was a case where 1 (1942) 1 ALL ER 337 the contract was repudiated by one party and accepted as such by another. The contract between the parties contained an arbitration clause providing for that any dispute between the parties in respect of the agreement or any of the provisions contained therein or anything arising thereout should be referred to arbitration. Viscount Simon, L.C., summarised the legal position with regard to scope of an arbitration clause in a contract as follows :

"An arbitration clause is a written submission, agreed to by the parties to the contract, and, like other written submissions to arbitration, must be construed according to its language and in the light of the circumstances in which it is made. If the dispute is as to 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 has 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 is also void.

If, however, the parties are at one in asserting that they entered into a binding contract, but a difference has arisen between them as to whether there has been a breach by one side or the other, or as to whether circumstances have arisen which have discharged one or both parties from further performance, such differences should be regarded as differences 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. By the law of England (though not, as I understand, by the law of Scotland), such an arbitration clause would also confer authority to assess damages for breach, even though it does not confer upon the arbitral body express power to do so.

I do not agree that an arbitration clause expressed in such terms as above ceases to have any possible application merely because the contract has "come to an end," as, for example, by frustration. In such cases it is the performance on the contract that has come to an end."

Viscount Simon, L.C. concurred with the view expressed by Lord Dunedin in Scott & Sons v. Del Sel, (1923) S.C.(H.L.) 37 and observed:

".........The reasoning of LORD DUNEDIN applies equally to both cases. It is, in my opinion, fallacious to say that, because the contract has "come to an end" before performance begins, the situation, so far as the arbitration clause is concerned, is the same as though the contract had never been made. In such case a binding contract was entered into, with a valid submission to arbitration contained in its arbitration clause, and, unless the language of the arbitration clause is such as to exclude its application until performance has begun, there seems no reason why the arbitrator's jurisdiction should not cover the one case as much as the other."

13. Lord Macmillan, Lord Wright and Lord Porter though expressed their views separately but all of them agreed with the statement of law summarised by Viscount Simon, L.C..

14. In Union of India v. Kishorilal Gupta and Bros.2, Subba Rao, J. (as His Lordship then was) while dealing with the question whether the arbitration clause of the original contract survived after the execution of settlement of the contract referred to the judgment of House of Lords in Heyman exhaustively and held :

2 (1960) 1 SCR 493 "Uninfluenced by authorities or case-law, the logical outcome of the earlier discussion would be that the arbitration clause perished with the original contract. Whether the said clause was a substantive term or a collateral one, it was nonetheless an integral part of the contract, which had no existence de hors the contract. It was intended to cover all the disputes arising under the conditions of, or in connection with, the contracts. Though the phraseology was of the widest amplitude, it is inconceivable that the parties intended its survival even after the contract was mutually rescinded and substituted by a new agreement. The fact that the new contract not only did not provide for the survival of the arbitration clause but also the circumstance that it contained both substantive and procedural terms indicates that the parties gave up the terms of the old contracts, including the arbitration clause. The case-law referred to by the learned Counsel in this connection does not, in our view, lend support to his broad contention and indeed the principle on which the said decisions are based is a pointer to the contrary.

We shall now notice some of the authoritative statements in the textbooks and a few of the cases bearing on the question raised: In Chitty on Contract, 21st Edn., the scope of an arbitration clause is stated thus, at p. 322: "So that the law must be now taken to be that when an arbitration clause is unqualified such a clause will apply even if the dispute involve an assertion that circumstances had arisen whether before or after the contract had been partly performed which have the effect of discharging one or both parties from liability e.g. repudiation by one party accepted by the other, or frustration."

In "Russel on Arbitration", 16th Edn., p. 63, the following test is laid down to ascertain whether an arbitration clause survives after the contract is determined:

"The test in such cases has been said to be whether the contract is determined by something outside itself, in which case the arbitration clause is determined with it, or by something arising out of the contract, in which case the arbitration clause remains effective and can be enforced."

The Judicial Committee in Hirji Mulji v. Cheong Yue Steamship Company {(1926) A.C. 497} gives another test at p. 502:

"That a person before whom a complaint is brought cannot invest himself with arbitral jurisdiction to decide it is plain. His authority depends on the existence of some submission to him by the parties of the subject matter of the complaint. For this purpose a contract that has determined is in the same position as one that has never been concluded at all. It founds no jurisdiction."

A very interesting discussion on the scope of an arbitration clause in the context of a dispute arising on the question of repudiation of a contract is found in the decision of the House of Lords in Heyman v. Darwine Ltd.{(1942) All.E.R. 337}. There a contract was repudiated by one party and accepted as such by the other. The dispute arose in regard to damages under a number of heads covered by the contract. The arbitration clause provided that any dispute between the parties in respect of the agreement or any of the provisions contained therein or anything arising thereout should be referred to arbitration. The House of Lords held that the dispute was one within the arbitration clause. In the speeches of the Law Lords a wider question is discussed and some of the relevant principles have been succinctly stated. Viscount Simon, L.C. observed at p. 343 thus:

"An arbitration clause is a written submission, agreed to by the parties to the contract, and, like other written submissions to arbitration, must be construed according to its language and in the light of the circumstances in which it is made. If the dispute is as to 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 has 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 is also void.

If, however, the parties are at one in asserting that they entered into a binding contract, but a difference has arisen between them as to whether there has been a breach by one side or the other, or as to whether circumstances have arisen which have discharged one or both parties from further performance, such differences should be regarded as differences 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. By the law of England (though not, as I understand, by the law of Scotland) such an arbitration clause would also confer authority to assess damages for breach even though it does not confer upon the arbitral body express power to do so.

I do not agree that an arbitration clause expressed in such terms as above ceases to have any possible application merely because the contract has "come to an end", as, for example, by frustration. In such cases it is the performance of the contract that has come to an end."

The learned Law Lord commented on the view expressed by Lord Dunedin at p. 344 thus:

"The reasoning of Lord Dunedin applies equally to both cases. It is, in my opinion, fallacious to say that, because the contract has "come to an end" before performance begins, the situation, so far as the arbitration clause is concerned, is the same as though the contract had never been made. In such case a binding contract was entered into, with a valid submission to arbitration contained in its arbitration clause, and, unless the language of the arbitration clause is such as to exclude its application until performance has begun, there seems no reason why the arbitrator's jurisdiction should not cover the one case as much as the other."

Lord Macmillan made similar observations at p. 345:

"If it appears that the dispute is as to 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 whether the contract 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 contract. If the parties substitute a new contract for the contract which they have abrogated, the arbitration clause in the abrogated contract cannot be invoked for the determination of questions under the new agreement. All this is more or less elementary."

These observations throw considerable light on the question whether an arbitration clause can be invoked in the case of a dispute under a superseded contract. The principle is obvious; if the contract is superseded by another, the arbitration clause, being a component part of the earlier contract, falls with it. The learned Law Lord pin-points the principle underlying his conclusion at p. 347:

"I am accordingly of opinion that what is commonly called repudiation or total breach of a contract, whether acquiesced in by the other party or not, does not abrogate a contract, though it may relieve the injured party of the duty of further fulfilling the obligations which he has by a contract undertaken to the repudiating party. The contract is not put out of existence, though all further performance of the obligations undertaken by each party in favour of the other may cease. It survives for the purpose of measuring the claims arising out of the breach, and the arbitration clause survives for determining the mode of their settlement. The purposes of the contract have failed, but the arbitration clause is not one of the purposes of the contract."

Lord Wright, after explaining the scope of the word "repudiation" and the different meanings it bears, proceeded to state at p. 350:

"In such a case, if the repudiation is wrongful and the rescission is rightful, the contract is ended by the rescission; but only as far as concerns future performance. It remains alive for the awarding of damages, either for previous breaches, or for the breach which constitutes the repudiation. That is only a particular form of contract breaking and would generally, under an ordinary arbitration clause, involve a dispute under the contract like any other breach of contract."

This decision is not directly in point; but the principles laid down therein are of wider application than the actual decision involved. If an arbitration clause is couched in widest terms as in the present case, the dispute, whether there is frustration or repudiation of the contract, will be covered by it. It is not because the arbitration clause survives, but because, though such repudiation ends the liability of the parties to perform the contract, it does not put an end to their liability to pay damages for any breach of the contract. The contract is still in existence for certain purposes. But where the dispute is whether the said contract is void ab initio, the arbitration clause cannot operate on those disputes, for its operative force depends upon the existence of the contract and its validity. So too, if the dispute is whether the contract is wholly superseded or not by a new contract between the parties, such a dispute must fall outside the arbitration clause, for, if it is superseded, the arbitration clause falls with it."

15. In his separate but concurring judgment, A.K. Sarkar, J. (as His Lordship then was) exposited the legal position thus :

"Now I come to the nature of an arbitration clause. It is well settled that such a clause in a contract stands apart from the rest of the contract. Lord Wright said in Heyman's case that an arbitration clause "is collateral to the substantial stipulations of the contract. It is merely procedural and ancillary, it is a mode of settling disputes,....

All this may be said of every agreement to arbitrate, even though not a separate bargain, but one incorporated in the general contract". Lord Macmillan also made some very revealing observations on the nature of an arbitration clause in the same case. He said at pp. 373-4:

"I venture to think that not enough attention has been directed to the true nature and function of an arbitration clause in a contract. It is quite distinct from the other clauses. The other clauses set out the obligations which the parties undertake towards each other hinc inde, but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both the parties that, if any dispute arises with regard to the obligations which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution. And there is this very material difference, that whereas in an ordinary contract the obligations of the parties to each other cannot in general be specifically enforced and breach of them results only in damages, the arbitration clause can be specifically enforced by the machinery of the Arbitration Act. The appropriate remedy for breach of the agreement to arbitrate is not damages, but its enforcement."

It seems to me that the respective nature of accord and satisfaction and arbitration clause makes it impossible for the former to destroy the latter. An accord and satisfaction only releases the parties from the obligations under a contract but does not affect the arbitration clause in it, for as Lord Macmillan said, the arbitration clause does not impose on one of the parties an obligation in favour of the other but embodies an agreement that if any dispute arises with regard to the obligations which the one party has undertaken to the other, such dispute shall be settled by arbitration. A dispute whether the obligations under a contract have been discharged by an accord and satisfaction is no less a dispute regarding the obligations under the contract. Such a dispute has to be settled by arbitration if it is within the scope of arbitration clause and either party wants that to be done. That cannot be unless the arbitration clause survives the accord and satisfaction. If that dispute is not within the arbitration clause, there can of course be no arbitration, but the reason for that would not be that the arbitration clause has ceased to exist but that the dispute is outside its scope. I am not saying that it is for the arbitrator to decide whether the arbitration clause is surviving; that may in many cases have to be decided by the Court. That would depend on the form of the arbitration agreement and on that aspect of the matter it is not necessary to say anything now for the question does not arise.

In my view therefore an accord and satisfaction does not destroy the arbitration clause. An examination of what has been called the accord and satisfaction in this case shows this clearly. From what I have earlier said about the terms of the settlement of February 22, 1949, it is manifest that it settled the disputes between the parties concerning the breach of the contract for kettles camp and its consequences. All that it said was that the contract had been broken causing damage and the claim to the damages was to be satisfied "in terms of the settlement". It did not purport to annihilate the contract or the arbitration clause in it. I feel no doubt therefore that the arbitration clause subsisted and the arbitrator was competent to arbitrate. The award was not in my view, a nullity.

The position is no different if the matter is looked at from the point of view of Section 62 of the Contract Act. That section is in these terms:

"Section 62. If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed."

The settlement cannot be said to have altered the original contract or even to have rescinded it. It only settled the dispute as to the breach of the contract and its consequences. For the same reason it cannot be said to substitute a new contract for the old one. As I have earlier stated it postulates the existence of the contract and only decides the incidence of its breach."

16. In the case of National Agricultural Coop. Marketing Federation India Ltd. v. Gains Trading Ltd.3, this Court held thus:

"6. The respondent contends that the contract was abrogated by mutual agreement; and when the contract came to an end, the arbitration agreement which forms part of the contract, also came to an end. Such a contention has never been accepted in law. An arbitration clause is a collateral term in the contract, which relates to resolution disputes, and not performance. Even if the performance of the contract comes to an end on account of repudiation, frustration or breach of contract, the arbitration agreement would survive for the purpose of resolution of disputes arising under or in connection with the contract. (Vide Heyman v. Darwins Ltd.[(1942)AC356], Union of India v. Kishorilal Gupta & Bros (AIR 1959 SC 13) and Naihati Jute Mills Ltd. v. Khyaliram Jagannath (AIR 1968 SC 522). This position is now statutorily recognised. Sub-section (1) of Section 16 of the Act makes it clear that while considering any objection with respect to the existence or validity of the arbitration agreement, an arbitration clause which forms part of the contract, has to be treated as an agreement independent of the other terms of the contract; and a decision that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause."

17. Recently, in the case of P.Manohar Reddy & Bros. vs. Maharashtra Krishna Valley Development Corporation And Ors4., while dealing with the argument of the respondent therein that in terms of the contract the claim for extra work or additional work should have been raised during the pendency of the contract itself and not after it came to an end, this Court 3 (2007) 5 SCC 692 4 (2009) 2 SCC 494 considered the concept of separability of the arbitration clause from the contract and made the following observations :

"27. An arbitration clause, as is well known, is a part of the contract. It being a collateral term need not, in all situations, perish with coming to an end of the contract. It may survive. This concept of separability of the arbitration clause is now widely accepted. In line with this thinking, the UNCITRAL Model Law on International Commercial Arbitration incorporates the doctrine of separability in Article 16(1). The Indian law -- the Arbitration and Conciliation Act, 1996, which is based on the UNCITRAL Model Law, also explicitly adopts this approach in Section 16(1)(b), which reads as under:

"16. Competence of Arbitral Tribunal to rule on its jurisdiction.--(1) The Arbitral Tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,--

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

(b) a decision by the Arbitral Tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause."

(emphasis supplied) Modern laws on arbitration confirm the concept.

28. The United States Supreme Court in a recent judgment in Buckeye Check Cashing Inc. v. Cardegna [546 US 460 (2005)] acknowledged that the separability rule permits a court "to enforce an arbitration agreement in a contract that the arbitrator later finds to be void". The Court, referring to its earlier judgments in Prima Paint Corpn. v. Flood & Conklin Mfg. Co.[18 L.Ed. 2d 1270] and Southland Corpn. v. Keating [465 US 1 (1984)], inter alia, held:

"Prima Paint and Southland answer the question presented here by establishing three propositions.

First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract."

But this must be distinguished from the situation where the claim itself was to be raised during the subsistence of a contract so as to invoke the arbitration agreement would not apply."

18. The statement of law expounded by Viscount Simon, L.C. in the case of Heyman as noticed above, in our view, equally applies to situation where the contract is terminated by one party on account of the breach committed by the other particularly in a case where the clause is framed in wide and general terms. Merely because the contract has come to an end by its termination due to breach, the arbitration clause does not get perished nor rendered inoperative; rather it survives for resolution of disputes arising "in respect of" or "with regard to" or "under" the contract. This is in line with the earlier decisions of this Court, particularly as laid down in Kishori Lal Gupta & Bros.

19. In the instant case, clause 22 of the hire purchase agreement that provides for arbitration has been couched in widest possible terms as can well be imagined. It embraces all disputes, differences, claims and questions between the parties arising out of the said agreement or in any way relating thereto. The hire purchase agreement having been admittedly entered into between the parties and the disputes and differences have since arisen between them, we hold, as it must be, that the arbitration clause 22 survives for the purpose of their resolution although the contract has come to an end on account of its termination.

20. The next question, an incidental one, that arises for consideration is whether the trial court must refer the parties to arbitration under Section 8 of the Act, 1996.

21. Section 8 reads thus:

"8. Power to refer parties to arbitration where there is an arbitration agreement.--(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section(1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."

22. An analysis of Section 8 would show that for its applicability, the following conditions must be satisfied: (a) that there exists an arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof.

23. Section 8 is in the form of legislative command to the court and once the pre-requisite conditions as aforestated are satisfied, the court must refer the parties to arbitration. As a matter of fact, on fulfillment of conditions of Section 8, no option is left to the court and the court has to refer the parties to arbitration.

24. There is nothing on record that the pre-requisite conditions of Section 8 are not fully satisfied in the present case. The trial court, in the circumstances, ought to have referred the parties to arbitration as per arbitration clause 22.

25. In the result, appeal must succeed and is allowed. The impugned order dated April 30, 2007 passed by the High Court affirming the order dated December 4, 2006 passed by the First Additional Senior Civil Judge, Vijayawada is set aside. I.A.No.490/2006 in O.S.No.19/2006 is restored to the file of the First Additional Senior Civil Judge, Vijayawada for passing an appropriate order in the light of the observations made hereinabove. Since the respondent has not chosen to appear, no order as to costs.

Ashok Singh Versus State of U.P.

Indian Penal Code, 1860 — Section 302/34 — punishment of murder with common intention — three accused persons charged for the murder of the deceased — trial Court relying on the statements of PW3 & PW4 convicted all the accused and sentenced them to undergo imprisonment for life — High Court granted the benefit of doubt to two accused while dismissing the appeal of appellant — relevancy to the statements of PW3 & PW4 — ocular evidence fully borne out by the medical evidence — appeal dismissed — confirmed the judgement of the High Court.


Supreme Court of India

Criminal Appeal no.640 of 2005

Judge(s): Harjit Singh Bedi,J.M. Panchal

Date of Judgment: 18 September, 2009

ASHOK SINGH

Versus

STATE OF U.P.


JUDGMENT

HARJIT SINGH BEDI, J.

1. This appeal by way of special leave arises out of the following facts:

2. At about 7 a.m. on the 11th July 1977 deceased Chhota Singh was on his way from his residential house to the nearby Devi Ji Mandir for the purpose of supervising the repairs of the chabutra of the temple. The four accused, namely Ashok Singh, Shiv Raj, Shyam Saran Singh and Sheo Narayan were hiding near the flour mill, all armed with guns. Shiv Raj and Sheo Narayan gave a lalkara that Chhota Singh be killed and on this call Ashok Singh and Shyam Saran Singh fired at him on which he fell down at a short distance from his residential house and succumbed to his injury. The incident was witnessed amongst others by Rameshwar Singh (PW3) son of the deceased and Durjan (PW4). After the assailants left the scene, Chhota Singh was shifted from the place where he lay dead. Rameshwar Singh (PW3) rushed to the Police Station and lodged a report with Police Station Hasan Ganj at 9.30 a.m. whereafter Ram Prakash Shukla Sub-Inspector (PW5) reached the spot at 2.45 p.m. and started with the investigation. He found the dead body lying in front of his residential house and after recording the inquest report dispatched the dead body for the post-mortem. The post- mortem examination was conducted by Dr. A. Akram on 12th October 1977 which revealed two ante mortem external injuries, one being a gun shot wound from which a pellet was also recovered. On the completion of the investigation, the accused was charged for an offence punishable under Section 302/34 of the IPC. The trial court relying on the statements of Rameshwar Singh (PW3) and Durjan (PW4) convicted all the accused and sentenced them to undergo imprisonment for life. The matter was thereafter taken in appeal before the High Court. The High Court repelled the submissions of the appellant's counsel that the FIR had been inordinarily delayed, that the incident had not taken place at the time and place suggested by the prosecution and that the deceased had, in fact, been murdered in the early hours of the morning when he had gone to ease himself. The High Court observed that it was true (as it had been admitted by Rameshwar Singh (PW3) himself) that there were two rival groups in the village and one of the groups was headed by his father whereas some of the accused belonged to the opposite party and that Ashok Singh appellant and he were on inimical terms and, therefore, it appeared that Rameshwar Singh was an interested witness. The court, however, further opined that Durjan was a completely independent witness whose evidence inspired confidence. The court also observed that though two shots were alleged to have been fired at the deceased, one by Ashok Singh and the other by Shyam Saran Singh the argument of the learned counsel for the appellant, that there was apparent discordance between the ocular and the medical evidence was not sustainable more particularly as both shots had been fired simultaneously, and it would have been impossible for any witness to have given a categorical statement as to which of the two shots had hit the deceased. The court, further, opined that though Rameshwar Singh and Durjan had both stated that Shiv Raj and Sheo Narayan had been armed with a gun but it was conceded on all sides that they had not used their weapons and all that they have done was to have shouted to their companions to kill Chhota Singh, and that it appeared from the statement of Rameshwar Singh (PW3) that he had, in fact, not seen these two actually exhorting the other accused to commit the crime. The court accordingly granted the benefit of doubt to Shiv Raj and Sheo Narayan appellants therein while dismissing the appeal of Ashok Singh and Shyam Saran Singh. These two are before us in appeal by way of Special Leave Petition.

3. We have heard the learned counsel for the parties and gone through the record. We find no reason to disbelieve Rameshwar Singh (PW3) supported fully as he is by the statement of Durjan (PW4) who is a truly independent witness. An attempt by the defence to show that he was indebted to Chhota Singh for some favour earlier in point of time has not been substantiated on record. We also find that the ocular evidence is fully borne out by the medical evidence as Dr. A. Akram had recovered a pellet from the dead body at the time of the post-mortem examination.

4. Mr. Luthra, the learned counsel for the appellants has submitted that as only one entry wound had been detected on the dead body from two shots, the prosecution story suffered from a serious flaw. It is true that two shots were alleged to have been fired at the deceased whereas only one wound entry on the head by a fire arm had been detected at the time of post-mortem. We are of the opinion, however, that it would be impossible for any witness in a case of simultaneous firing of two or more shots to give a categorical statement as to which of the two shots had hit the victim. We also see from the evidence of ASI-Ram Prakash Shukla (PW5) that two spent cartridge cases had been picked up from the place of incident meaning thereby that both Ashok Singh and Shyam Saran Singh had fired a shot each at the deceased. We also believe that if two different types of weapons had been used it would have been open to the defence to argue that in the light of the fact that a shot gun pellet had been recovered from the dead body, the other weapon had not been used, which factor undoubtedly could cause some speculation about the prosecution's case. Admittedly, this is not the situation before us, as both the appellants had been armed with shot guns. We, therefore, confirm the judgment of the High court. The appeal is dismissed.

Ram Sukh Versus Dinesh Aggarwal

Representation of the People Act, 1951 — section 100(1)(d)(iv) and 83(1)(a) — grounds for declaring election to be void and contents of the election petition — respondent 1 declared elected to the State Legislative Assembly — appellant challenged the election on ground that the returning officer failed to circulate the attested signatures of his election agent to various polling stations — HC concluded that the concise statement of the appellant about material facts completely lacked and mandatory requirement of an affidavit in support of the allegations of corrupt practices not complied with — whether the election petitioner set out "material facts" in his petition? — No — whether the alleged omission on the part of the Returning Officer ipso facto "materially affected" the election result? — No — election petitioner not averred specifically in what manner the result of the election was materially affected due to the omission on the part of the Returning Officer — no interference in the orders of the HC — appeal dismissed with no cost.



Supreme Court of India

CIVIL APPEAL NO.6128 of 2008

Judge(s): D.K. JAIN,H.L. DATTU

Date of Judgment: 18 September, 2009

RAM SUKH

Versus

DINESH AGGARWAL


JUDGMENT

D.K. JAIN, J.:

1. This appeal under Section 116A of the Representation of the People Act, 1951 (for short the `Act') is directed against the judgment and order dated 15th January, 2008, rendered by the High Court of Uttaranchal at Nainital in Writ Petition No.03 of 2007 (M/S). By the impugned order, the High Court, upholding the preliminary objection raised by the first respondent, has dismissed the election petition mainly on the ground that it did not comply with the mandatory requirement of furnishing material facts so as to disclose cause of action and was not supported by an affidavit in the prescribed form.

2. Election to the State Legislative Assembly of Uttaranchal (now Uttarakhand) was held on 21st February, 2007. The results were declared on 27th February, 2007. The first respondent, who had contested the election as an Indian National Congress candidate, was declared elected. The appellant (hereinafter referred to as the `election petitioner') having lost the election, as a candidate of the Nationalist Congress Party, challenged the election of the first respondent by filing an election petition under Section 80 read with Section 100(1)(b) and (d) of the Act. The election of the returned candidate was challenged mainly on the grounds:

(i) that the election petitioner having submitted 2 sets of the requisite Form-8 (Praroop-8) in respect of his election agent Manbir Singh Dagur before the Returning Officer, who having obtained the signatures of the election petitioner as also of the polling/election agent in proforma (Anulagnak-22), deliberately did not send the signed Anulagnak-22 of the election petitioner to different polling stations, with the result that his polling agent was not permitted by the polling officer to act as such on the date of polls;

(ii) that the Returning Officer deliberately delayed the distribution of Anulagnak-22 at various polling stations and on account of inaction on his part, election petitioner's supporters got confused and either did not vote or voted in favour of the first respondent, an Indian National Congress candidate;

(iii) that the first respondent put pressure on the election petitioner to withdraw from the contest and on his refusal to do so, a rumour was spread by the first respondent that the election petitioner had withdrawn from the election fray and thus the first respondent used corrupt practice;

(iv) that the first respondent got a fabricated 'Fatva' from Devband circulated among the Muslim voters asking them to cast votes in his favour and thus the Muslim voters were unduly influenced by the issuance of the aforesaid religious Fatva - a corrupt practice;

(v) that the Polling Officers at various polling stations did not seal Electronic Voting Machines in presence of the election agent of the election petitioner and other candidates and further before the commencement of counting the Returning Officer did not get the seal of strong room certified from any of the polling agents; and

(vi) that the Electronic Voting Machines of various polling stations were either changed or were used after the polling time was over, showing misuse of the official machinery in support of the first respondent and, thus, putting a question mark on the fairness of the election.

3. The first respondent on being served with notice, instead of filing a written statement, filed an application under Order VI Rules 16 and 17 and Order VII Rule 11 of the Code of Civil Procedure, 1908 (in short `the Code') read with Section 86 of the Act raising a preliminary objection to the maintainability of the petition, inter-alia, on the ground that the petition was lacking in material facts and particulars and was also defective for want of requisite affidavit in support of allegations of corrupt practice and that since it did not disclose any cause of action, it deserved to be dismissed at the threshold. It was pleaded that on account of failure on the part of the election petitioner to file an affidavit in support of his allegations, the entire election petition was liable to be dismissed and allegations of corrupt practices made in paragraphs 14, 17, 19, 20 and 21 as well as grounds D and E of the election petition were liable to be struck off.

4. On consideration of the rival stands, the High Court came to the conclusion that the allegations of corrupt practices are entirely superfluous in nature; the concise statement of material facts is completely lacking and mandatory requirement of an affidavit in support of the allegations of corrupt practices was also not complied with. Relying on the decision of this Court in Ravinder Singh Vs. Janmeja Singh & Ors.1, the High Court 1 2000 (8) SCC 191 came to the conclusion that non-filing of affidavit in support of the allegation of corrupt practices, is an incurable and fatal defect and, therefore, the election petition was liable to be rejected on that ground as well. Aggrieved, the election petitioner is before us in this appeal.

5. In spite of service, the first respondent - the elected candidate has not entered appearance. Therefore, we heard learned counsel appearing on behalf of the election petitioner.

6. It was submitted by learned counsel for the election petitioner that the High Court has committed an error of law as well as of procedure in entertaining first respondent's application and dismissing the election petition at the threshold. It was contended that the question whether "material facts", as contemplated in Section 83 of the Act, had been stated or not, cannot be decided without providing an opportunity to the election petitioner to prove his case upon trial. Learned counsel argued that if an election petition is rejected at the threshold on account of non-compliance with Section 83 of the Act, it would amount to reading into Section 86 an additional ground for dismissal of the election petition which cannot be permitted in law. Relying on the Handbook for Returning Officers issued by the Election Commission of India for the guidance of the Returning Officers in the conduct of elections, learned counsel submitted that the instructions so issued are binding on the Returning Officers and, therefore, having obtained the specimen signatures of the appellant and his election agent, it was obligatory on the part of the Returning Officer to circulate these specimen signatures to all the Presiding Officers in the prescribed performa in terms of Para 12 of Chapter VII of the said Handbook. It was contended that this omission on the part of the Returning Officer had materially affected the election result. However, the learned counsel fairly conceded that since the election petitioner did not file the affidavit as required under proviso to sub-section (1) of Section 83 of the Act, he was not pressing the ground pertaining to corrupt practice. Therefore, the issue surviving for consideration is only in relation to alleged violation of Section 100(1)(d)(iv) of the Act.

7. Before examining the merits of the issues raised on behalf of the election petitioner with reference to the relevant statutory provisions, it would be appropriate to bear in mind the observations of this Court in Jagan Nath Vs. Jaswant Singh and Ors.2. Speaking for the Constitution Bench, Mehr Chand Mahajan, C.J., had said that the statutory requirement of election law must be strictly observed and that the election contest is not an action at law or a suit in equity, but is purely statutory proceeding unknown to the common law and that Court possesses no common law power. It is also well settled that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law. Nevertheless, it is also to be borne in mind that one of the essentials of the election law is to safeguard the purity of the election process and, therefore, the courts must zealously ensure that people do not get elected by flagrant breaches of that law or by indulging in corrupt practices, as enumerated in the Act.

8. In this backdrop, we may now turn to the procedural provisions in the Act insofar as they are relevant for our purpose:- 2 [1954] S.C.R. 892 "81. Presentation of petitions.--(1) An election petition calling in question any election may be presented on one or more of the grounds specified in sub-section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty-five days from, but not earlier than the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two dates.

Explanation.--In this sub-section, "elector" means a person who was entitled to vote at the election to which the election petition relates, whether he has voted at such election or not.

***** (3) Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.

83. Contents of petition.--(1) An election petition--

(a) shall contain a concise statement of the material facts on which the petitioner relies;

(b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and

(c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908) for the verification of pleadings:

Provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof.

(2) Any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition.

86. Trial of election petitions.--(1) The High Court shall dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117.

Explanation.--An order of the High Court dismissing an election petition under this sub-section shall be deemed to be an order made under clause (a) of section 98.

(2) As soon as may be after an election petition has been presented to the High Court, it shall be referred to the Judge or one of the Judges who has or have been assigned by the Chief Justice for the trial of election petitions under sub-section (2) of section 80A.

(3) Where more election petitions than one are presented to the High Court in respect of the same election, all of them shall be referred for trial to the same Judge who may, in his discretion, try them separately or in one or more groups.

(4) Any candidate not already a respondent shall, upon application made by him to the High Court within fourteen days from the date of commencement of the trial and subject to any order as to security for costs which may be made by the High Court, be entitled to be joined as a respondent.

Explanation.--For the purposes of this sub-section and of section 97, the trial of a petition shall be deemed to commence on the date fixed for the respondents to appear before the High Court and answer the claim or claims made in the petition.

(5) The High Court may, upon such terms as to costs and otherwise as it may deem fit, allow the particulars of any corrupt practice alleged in the petition to be amended or amplified in such manner as may in its opinion be necessary for ensuring a fair and effective trial of the petition, but shall not allow any amendment of the petition which will have the effect of introducing particulars of a corrupt practice not previously alleged in the petition.

(6) The trial of an election petition shall, so far as is practicable consistently with the interests of justice in respect of the trial, be continued from day to day until its conclusion, unless the High Court finds the adjournment of the trial beyond the following day to be necessary for reasons to be recorded.

(7) Every election petition shall be tried as expeditiously as possible and endeavour shall be made to conclude the trial within six months from the date on which the election petition is presented to the High Court for trial.

87. Procedure before the High Court.--(1) Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the High Court, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908 (5 of 1908) to the trial of suits:

Provided that the High Court shall have the discretion to refuse, for reasons to be recorded in writing, to examine any witness or witnesses if it is of the opinion that the evidence of such witness or witnesses is not material for the decision of the petition or that the party tendering such witness or witnesses is doing so on frivolous grounds or with a view to delay the proceedings.

(2) The provisions of the Indian Evidence Act, 1872 (1 of 1972), shall, subject to the provisions of this Act, be deemed to apply in all respects to the trial of an election petition."

9. From the afore-quoted provisions, it would appear that Section 81 enables a petitioner to call in question any election on one or more of the grounds specified in sub-section (1) of Section 100 of the Act. Section 83, the pivotal provision for the present case, requires that: (a) the election petition must contain a concise statement of "material facts" on which petitioner relies and (b) he should also set forth "full particulars" of any corrupt practices which the petitioner alleges. Proviso to clause (c) of sub-section (1) of Section 83 also provides that where the petitioner alleges any corrupt practice, the election petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof. It is plain that the requirement of disclosure of "material facts" and "full particulars" as stipulated in the Section is mandatory. Section 86 mandates that where the election petition does not comply with the provisions of Section 81 or Section 82 or Section 117 of the Act, the High Court should dismiss the election petition. Section 87 which lays down the procedure required to be followed by the High Court while trying an election petition, requires that every election petition shall be tried, as nearly as may be, in accordance with the procedure applicable under the Code to the trial of the suits, subject of course to the provisions of the Act and of any requirement made thereunder.

10. It is evident that controversy in this appeal lies in a narrow compass. It revolves around the ambit of Section 83 of the Act. The point for consideration is whether the election petition lacked "material facts" required to be stated in the election petition in terms of Section 83(1) of the Act and if so, could it be dismissed summarily without trial?

11. As already noted, it is mandatory that all "material facts" are set out in an election petition and it is also trite that if material facts are not stated in the petition, the same is liable to be dismissed on that ground alone. Therefore, the question is as to whether the election petitioner had set out "material facts" in his petition?

12. The phrase "material facts" has neither been defined in the Act nor in the Code and, therefore, it has been understood by the courts in general terms to mean the entire bundle of facts which would constitute a complete cause of action. In other words, "material facts" are facts upon which the plaintiff's cause of action or defendant's defence depends. (See: Mahadeorao Sukaji Shivankar Vs. Ramaratan Bapu & Ors.3). Broadly speaking, all primary or basic facts which are necessary either to prove the cause of action by the plaintiff or defence by the defendant are "material facts". Material 3 (2004) 7 SCC 181 facts are facts which, if established, would give the petitioner the relief asked for. But again, what could be said to be material facts would depend upon the facts of each case and no rule of universal application can be laid down.

13. The requirement in an election petition as to the statement of material facts and the consequences of lack of such disclosure with reference to Sections 81, 83 and 86 of the Act came up for consideration before a three-Judge Bench of this Court in Samant N. Balkrishna & Anr. Vs. George Fernandez & Ors4. Speaking for the three-Judge Bench, M. Hidayatullah, C.J., inter-alia, laid down that: (i) Section 83 of the Act is mandatory and requires first a concise statement of material facts and then the fullest possible particulars; (ii) omission of even a single material fact leads to an incomplete cause of action and statement of claim becomes bad; (iii) the function of particulars is to present in full a picture of the cause of action and to make the opposite party understand the case he will have to meet; (iv) material facts and particulars are distinct matters - material facts will mention statements of fact and particulars will set out the names of persons with date, time and place and (v) in stating the material facts it will not 4 (1969) 3 SCC 238 do merely to quote the words of the Section because then the efficacy of the material facts will be lost.

14. At this juncture, in order to appreciate the real object and purport of the phrase "material facts", particularly with reference to election law, it would be appropriate to notice distinction between the phrases "material facts" as appearing in clause (a) and "particulars" as appearing in clause (b) of sub-section (1) of Section 83. As stated above, "material facts" are primary or basic facts which have to be pleaded by the petitioner to prove his cause of action and by the defendant to prove his defence. "Particulars", on the other hand, are details in support of the material facts, pleaded by the parties. They amplify, refine and embellish material facts by giving distinctive touch to the basic contours of a picture already drawn so as to make it full, more clear and more informative. Unlike "material facts" which provide the basic foundation on which the entire edifice of the election petition is built, "particulars" are to be stated to ensure that opposite party is not taken by surprise.

15. The distinction between "material facts" and "particulars" and their requirement in an election petition was succinctly brought out by this Court in Virender Nath Gautam Vs. Satpal Singh & Ors.5, wherein C.K. Thakker, J., stated thus: (SCC p.631, para 50)

"50. There is distinction between facta probanda (the facts required to be proved i.e. material facts) and facta probantia (the facts by means of which they are proved i.e. particulars or evidence). It is settled law that pleadings must contain only facta probanda and not facta probantia. The material facts on which the party relies for his claim are called facta probanda and they must be stated in the pleadings. But the facts or facts by means of which facta probanda (material facts) are proved and which are in the nature of facta probantia (particulars or evidence) need not be set out in the pleadings. They are not facts in issue, but only relevant facts required to be proved at the trial in order to establish the fact in issue."

16. Now, before examining the rival submissions in the light of the afore- stated legal position, it would be expedient to deal with another submission of learned counsel for the appellant that the High Court should not have exercised its power either under Order VI Rule 16 or Order VII Rule 11 of the Code to reject the election petition at the threshold. The argument is two-fold viz. (i) that even if the election petition was liable to be dismissed ultimately, it should have been dismissed only after affording an opportunity to the election petitioner to adduce evidence in support of his allegation in the petition and (ii) since Section 83 does not find a place in Section 86 of the Act, 5 (2007) 3 SCC 617 rejection of petition at the threshold would amount to reading into sub- section (1) of Section 86 an additional ground.

17. In our opinion, both the contentions are misconceived and untenable. Undoubtedly, by virtue of Section 87 of the Act, the provisions of the Code apply to the trial of an election petition and, therefore, in the absence of anything to the contrary in the Act, the court trying an election petition can act in exercise of its power under the Code, including Order VI Rule 16 and Order VII Rule 11 of the Code. The object of both the provisions is to ensure that meaningless litigation, which is otherwise bound to prove abortive, should not be permitted to occupy the judicial time of the courts. If that is so in matters pertaining to ordinary civil litigation, it must apply with greater vigour in election matters where the pendency of an election petition is likely to inhibit the elected representative of the people in the discharge of his public duties for which the Electorate have reposed confidence in him. The submission, therefore, must fail. Coming to the second limb of the argument viz., absence of Section 83 in Section 86 of the Act, which specifically provides for dismissal of an election petition which does not comply with certain provisions of the Act, in our view, the issue is no longer res-integra. A similar plea was negatived by a three-Judge Bench of this Court in Hardwari Lal Vs. Kanwal Singh6, wherein speaking for the Bench, A.N. Ray, J. (as His Lordship then was) said: (SCC p.221, para 23)

"23. Counsel on behalf of the respondent submitted that an election petition could not be dismissed by reason of want of material facts because Section 86 of the Act conferred power on the High Court to dismiss the election petition which did not comply with the provisions of Section 81, or Section 82 or Section 117 of the Act. It was emphasised that Section 83 did not find place in Section 86. Under Section 87 of the Act every election petition shall be tried by the High Court as nearly as may be in accordance with the procedure applicable under the Code of Civil Procedure, 1908, to the trial of suits. A suit which does not furnish cause of action can be dismissed."

18. The issue was again dealt with by this Court in Azhar Hussain Vs. Rajiv Gandhi7. Referring to earlier pronouncements of this Court in Samant N. Balkrishna (supra) and Udhav Singh Vs. Madhav Rao Scindia8 wherein it was observed that the omission of a single material fact would lead to incomplete cause of action and that an election petition without the material facts is not an election petition at all, the Bench held that all the facts which are essential to clothe the petition with complete cause of action must be pleaded and omission of even a single material fact would amount to disobedience of the 6 (1972) 1 SCC 214 7 1986 (Supp) SCC 315 8 (1977) 1 SCC 511 mandate of Section 83(1)(a) of the Act and an election petition can be and must be dismissed if it suffers from any such vice.

19. We may now advert to the facts at hand to examine whether the election petition suffered from the vice of non-disclosure of material facts as stipulated in Section 83(1)(a) of the Act. As already stated the case of the election petitioner is confined to the alleged violation of Section 100(1)(d)(iv). For the sake of ready reference, the said provision is extracted below:

"100. Grounds for declaring election to be void.--(1) Subject to the provisions of sub-section (2) if the High Court is of opinion--

***** (d) that the result of the election, in so far as it concerns a returned candidate, has been materially affected

-- ***** (iv) by any non--compliance with the provisions of the Constitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void."

20. It is plain that in order to get an election declared as void under the said provision, the election petitioner must aver that on account of non-compliance with the provisions of the Constitution or of this Act or of any rules or orders made under the Act, the result of the election, insofar as it concerned the returned candidate, was materially affected. As already stated, in the present case, the allegation of the election petitioner is that the Returning Officer failed to circulate the attested signatures of his election agent to various polling stations and, therefore, failed to comply with para 12 of Chapter VII of the Handbook for Returning Officers. The pleadings in the election petition, in relation to grounds (i) and (ii), extracted in para 2 above, were as under:

"11. That due to aforesaid inaction of the Returning Officer the polling agent of the petitioner was not permitted to function till 3.00 P.M. by which time more than 80% polling was over. This inaction on the part of Returning Officer materially affected the election as almost all other polling agents of the petitioner working in other polling stations got confused and supporters of the petitioner either returned back or voted for congress candidate.

12. That the Returning Officer was duty bound to send required Praroop of the petitioner and his agent's signature one day before the day of election which he did not do. Due to his inaction of the Returning Officer the election of 13 Laxman Chowk Legislative Assembly Constituency was materially affected."

21. There is no quarrel with the proposition that the instructions contained in the Handbook for the Returning Officers are issued by the Election Commission in exercise of its statutory functions and are, therefore, binding on the Returning Officers. They are obliged to follow them in letter and spirit. But the question for consideration is whether the afore-extracted paragraphs of the election petition disclose material facts so as to constitute a complete cause of action. In other words, the question is whether the alleged omission on the part of the Returning Officer ipso facto "materially affected" the election result. It goes without saying that the averments in the said two paragraphs are to be read in conjunction with the preceding paragraphs in the election petition. What is stated in the preceding paragraphs, as can be noticed from grounds (i) and (ii) reproduced above, is that by the time specimen signature of the polling agent were circulated 80% of the polling was over and because of the absence of the polling agent the voters got confused and voted in favour of the first respondent. In our opinion, to say the least, the pleading is vague and does not spell out as to how the election results were materially affected because of these two factors. These facts fall short of being "material facts" as contemplated in Section 83(1)(a) of the Act to constitute a complete cause of action in relation to allegation under Section 100(1)(d)(iv) of the Act. It is not the case of the election petitioner that in the absence of his election agent there was some malpractice at the polling stations during the polling. It needs little reiteration that for purpose of Section 100(1)(d)(iv), it was necessary for the election petitioner to aver specifically in what manner the result of the election insofar as it concerned the first respondent, was materially affected due to the said omission on the part of the Returning Officer. Unfortunately, such averment is missing in the election petition. In our judgment, therefore, the Election Tribunal/High Court was justified in coming to the conclusion that statement of material facts in the election petition was completely lacking and the petition was liable to be rejected at the threshold on that ground. We have, therefore, no hesitation in upholding the view taken by the High Court.

22. Consequently, this appeal, being devoid of any merit, fails and is dismissed accordingly. Since the first respondent remained unrepresented, there will be no order as to costs.

Saturday, September 26, 2009

Anar Devi and Ors Versus Parmeshwari Devi and Ors

Subject
Hindu Succession Act, 1956: S.6, Explanation 1-Devolution of interest in coparcenary property-Father and his adopted son constituting Mitakshara coparcenary-Father having two daughters also-On the death of father, daughters claiming 2/3 share in property-Held, in view of s.6 and Explanation 1 thereto, notional partition of the suit properties between father and his adopted son has to be assumed immediately before the death of the father and that being so his undivided interest in suit property, which was half, devolved on his death upon his three children, i.e. the adopted son and the two daughters in equal proportion-Adopted son would get half of the entire property which right he acquired on the date of adoption and one third of the remaining half which devolved upon him by succession-Thus, each of the two daughters was entitled to one-sixth share in the property and the remaining properties would go to the adopted son-Hindu Law-Mitakshara coparcenary-Devolution of interest-Interpretation of statutes-Statutory fiction-Interpretation of.

State of Bombay v. Pandurang Vinayak Chaphalkar & Ors., [1953] 4 SCR 773 and Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum, AIR (1978) SC 1239, relied on.

East End Dwelling Co. Ltd. v. Finsbury Borough Council, (1952) Appeal Cases 109, referred to.

Mulla, Principles on Hindu Law, referred to.

Citation: 2006 AIR 3332, 2006(6   )Suppl.SCR370 , 2006(8   )SCC656 , 2006(9   )SCALE509 , 2006(12  )JT288
Judgement

CASE NO.:
Appeal (civil)  4171 of 2006

PETITIONER:
Anar Devi and Ors

RESPONDENT:
Parmeshwari Devi and Ors

DATE OF JUDGMENT: 18/09/2006

BENCH:
B.N. AGRAWAL & P.P. NAOLEKAR

JUDGMENT:
JUDGMENT
O R D E R

(ARISING OUT OF S.L.P. (C) NO. 15677 OF 2004)
WITH
CIVIL APPEAL NO. 4172 OF 2006
(ARISING OUT OF S.L.P. (C) NO. 19015 OF 2004)

C.A. No. 4171 of 2006 @ S.L.P. (C) No. 15677of 2004:
    Heard learned counsel for the parties.
    Leave granted.
    A suit was filed before the Sub-Divisional Officer by the respondents for
partition of suit properties claiming two-third share therein. In the plaint, it was
plaintiffs' clear-cut case that the partition suit was filed for partition of notional share of
Nagar Mal. Undisputedly, the suit properties were ancestral one in the hands of Nagar
Mal, who adopted one Nemi Chand as his son, and after adoption both of them
constituted a Mitakshara coparcenary under Hindu Law. Further it was undisputed
that Nagar Mal died  in the year 1989 intestate in the state of jointness with his
adopted son leaving behind him, his adopted son Nemi Chand and the plaintiffs, who
were his two daughters.
The trial court by misconstruing the provisions of law, passed an ex-parte 
decree for partition of one-third share of each one of the plaintiffs instead of one-sixth
share. Against the decree of trial Court, when the matter was taken in appeal, the
appellate authority reversed the same after recording a finding that the property was
ancestral one, but remitted the matter as the decree was passed ex-parte. Against the
order of remand, the matter was taken to the Board of Revenue, which reversed the
order of remand and restored the decree passed by trial Court after recording a
finding that each of the plaintiffs was entitled to one-third share in the suit properties.
The said judgment has been confirmed in  writ by a learned single Judge of the High
Court and the same has been upheld in appeal by the Division Bench. Hence, this
appeal by special leave.
In order to appreciate the point involved in the present case it would be useful
to refer to the provisions of Section 6 of the Hindu Succession Act, 1956 (in short "the
Act"), as it stood prior to its amendment by Hindu Succession (Amendment) Act,
2005, and the same run thus:
"S. 6 - Devolution of interest in coparcenary property  When a
male Hindu dies after the commencement of this Act, having at the
time of his death an interest in a Mitakshara coparcenary property,
his interest in the property shall devolve by survivorship upon the
surviving members of the coparcenary and not in accordance with
this Act:

Provided that, if the deceased had left surviving him a
female relative specified in Class I of the Schedule or a male
relative, specified in that class who claims, through such female
relative, the interest of the deceased in Mitakshara coparcenary
property shall devolve by testamentary or intestate succession, as
the case may be, under this Act and not by survivorship.

Explanation 1.  For the purposes of this section, the
interest of a Hindu Mitakshara coparcener shall be deemed to be
the share in the property that would have been allotted to him if a
partition of the property had taken place immediately before his
death, irrespective of whether he was entitled to claim partition or
not.

Explanation 2.  Nothing contained in the proviso to this
section shall be construed as enabling a person who has
separated himself from the coparcenary before the death of the
deceased or any of his heirs to claim on intestacy a share in the
interest referred to therein."

Reference in this connection may be made to a passage from the most
authoritative Treatise of Mulla, Principles on Hindu Law, Seventeenth Edition, page
250 wherein while interpreting Explanation I to Section 6 of the Act, the learned author
stated that "Explanation I defines the expression 'the interest of the deceased in
Mitakshara coparcenary property' and incorporates into the subject the concept of a
notional partition. It is essential to note that this notional partition is for the purpose of
enabling succession to and computation of an interest, which was otherwise liable to
devolve by survivorship and for the ascertainment of the shares in that interest of the
relatives mentioned in Class I of the Schedule. Subject to such carving out of the
interest of the deceased coparcener the other incidents of the coparcenary are left
undisturbed and the coparcenary can continue without disruption. A statutory fiction
which treats an imaginary state of affairs as real requires that the consequences and
incidents of the putative state of affairs must flow from or accompany it as if the
putative state of affairs had in fact existed and effect must be given to the inevitable
corollaries of that state of affairs."
The learned author further stated that "the operation of the notional partition
and its inevitable corollaries and incidents is to be only for the purposes of this section
namely, devolution of interest of the deceased in coparcenary property and would not
bring about total disruption of the coparcenary as if there had in fact been a regular
partition and severance of status among all the surviving coparceners."
According to the learned author, at page 253, the undivided interest "of the
deceased coparcener for the purpose of giving effect to the rule laid down in the
proviso, as already pointed out, is to be ascertained on the footing of a notional
partition as of the date of his death. The determination of that share must depend on
the number of persons who would have been entitled to a share in the coparcenary
property if a partition had in fact taken place immediately before his death and such
person would have to be ascertained according to the law of joint family and partition.
The rules of Hindu law on the subject in force at the time of the death of the
coparcener must, therefore, govern the question of ascertainment of the persons who
would have been entitled to a share on the notional partition."
In the case of State of Bombay  vs. Pandurang Vinayak Chaphalkar &
Others; 1953 (4) SCR 773,  this Court,  after referring to, with  approval,  the oft-
quoted  dictum of Lord Asquith in East End Dwelling Co. Ltd. vs. Finsbury Borough
Council (1952) Appeal Cases 109, has laid down the manner in which statutory
fiction shall be construed and at pages 778 and 779 observed thus:-
    "When a statute enacts that something shall be deemed to have
been done, which in fact and truth was not done, the court is
entitled and bound to ascertain for what purposes and between
what persons the statutory fiction is to be resorted to and full effect
must be given to the statutory fiction and it should be carried to its
logical conclusion. [Vide Lord Justice James in Ex parte Walton : In
re Levy [17 Ch. D. 746, at p. 756]]. If the purpose of the statutory
fiction mentioned in section 15 is kept in view, then it follows that
the purpose of that fiction would be completely defeated if the
notification was construed in the literal manner in which it has been
construed by the High Court. In East End Dwellings Co. Ltd. v.
Finsbury Borough Council [[1952] A.C. 109], Lord Asquith while
dealing with the provisions of the Town and County Planning Act,
1947, made reference to the same principle and observed as
follows :-
"If you are bidden to treat an imaginary state of affairs
as real, you must surely, unless prohibited from doing
so, also imagine as real the consequences and
incidents which, if the putative state of affairs had in
fact existed, must inevitably have flowed from or
accompanied it. ....The statute says that you must
imagine a certain state of affairs; it does not say that
having done so, you must cause or permit your
imagination to boggle when it comes to the inevitable
corollaries of that state of affairs."
The corollary thus of declaring the provisions of section 25 of the
Bombay General Clauses Act applicable to the repeal of the
ordinance and of deeming that ordinance an enactment is that
wherever the word "ordinance" occurs in the notification, that word
has to be read as an enactment."

In the case of Gurupad Khandappa Magdum vs. Hirabai Khandappa
Magdum, AIR 1978 SC 1239 at page 1243 it has been laid down by this Court as
under:
"What is therefore required to be assumed is that a partition had in
fact taken place between the deceased and his coparceners
immediately before his death. That assumption, once made, is
irrevocable. In other words, the assumption having been made
once for the purpose of ascertaining the shares of the deceased in
the coparcenary property, one cannot go back on that assumption
and ascertain the share of the heirs without reference to it. The
assumption which the statute requires to be made that a partition
had in fact taken place must permeate the entire process of
ascertainment of the ultimate share of the heirs, through all its
stages All the consequences which flow from a real partition
have to be logically worked out, which means that the share of the
heirs must be ascertained on the basis that they had separated
from one another and had received a share in the partition which
had taken place during the lifetime of the deceased."

Thus we hold that according to Section 6 of the Act when a coparcener dies
leaving behind any female relative specified in Class I of the Schedule to the Act or
male relative specified in that class claiming through such female relative, his
undivided interest in the Mitakshara coparcenary property would not devolve upon the
surviving coparcener, by survivorship but upon his heirs by intestate succession.
Explanation 1 to Section 6 of the Act provides a mechanism under which undivided
interest of a deceased coparcener can be ascertained and, i.e., that the interest of a
Hindu Mitakshara coparcener shall be deemed to be the share in the property that
would have been allotted to him if a partition of the property had taken place
immediately before his death, irrespective of whether he was entitled to claim partition
or not. It means for the purposes of finding out undivided interest of a deceased
coparcener, a notional partition has to be assumed immediately before his death and
the same shall devolve upon his heirs by succession which would obviously include
the surviving coparcener who, apart from the devolution of the undivided interest of
the deceased upon him by succession, would also be entitled to claim his undivided
interest in the coparcenary property which he could have got in notional partition.
In the case on hand, notional partition  of the suit properties between Nagarmal
and his adopted son Nemi Chand has to be assumed immediately before the death of
Nagarmal and that being so Nagar Mal's undivided interest in the suit property, which
was half, devolved on his death upon his three children, i.e.,  the adopted son Nemi
Chand and the two daughters who are plaintiffs in equal proportion.  Nemi Chand, the
adopted son, would get half of the entire property which right he acquired  on the date
of adoption and  one third  of the remaining half which devolved upon him  by
succession as stated above. This being the position, each of the two plaintiffs was not
entitled to one-third share in the suit property, but one-sixth  and the remaining
properties would go to the adopted son, Nemi Chand.
    Undisputedly, the suit properties in the hands of Nagar Mal were ancestral one
in which his son Nemi Chand got interest equal to Nagar Mal after his adoption and
from the date of adoption, a coparcenary was constituted between the father and the
adopted son. Upon the death of Nagar Mal, the property being ancestral, the half 
undivided interest of Nagar Mal therein  devolved by rule of succession upon his three
heirs, including Nemi Chand. This being the position each of the daughters would be
entitled to one-sixth share in the suit properties and the remaining would go to the
heirs of Nemi Chand, since deceased.
    Accordingly, the appeal is allowed, impugned judgments are set aside and suit
for partition is decreed to the extent of one-sixth share of each of the two plaintiffs and 
the defendants, i.e., heirs of  Nemi Chand shall be entitled to the remaining suit
properties. Let a preliminary decree be, accordingly, drawn up and steps for
preparation of final decree be taken by appointment of a pleader commissioner.
No costs.
C.A. No. 4172 of 2006 @ S.L.P. (C) No. 19015 of 2004:
    Heard learned counsel for the parties.
    Leave granted.
    In view of the order in C.A. No. 4171 of 2006 above,  the appeal is allowed, the
impugned judgment is set aside and writ petition filed before the High Court is
dismissed.
    No costs.

Sheela Devi and Ors. Versus Lal Chand and Anr.

HELD:1.1. Section 6 of the Hindu Succession Act would clearly show that where the deceased had left him surviving a female relative specified in class I of the Schedule, his interest in the Mitakshara coparcenary property shall devolve by intestate succession and not by survivorship. [879-g-h]

1.2. The principle of law applicable in this case is that so long a property remains in the hands of a single person, the same was to be treated as his separate property and thus, he would be entitled to dispose of the coparcenary property as the same were his separate property, but, if a son is subsequently born to him or adopted by him, the alienation whether it is by way of sale, mortgage or gift, will nevertheless stand, for a son cannot object to alienations so made by his father before he was born or begotten. [880-b-c]

C. Krishna Prasad v. C.I.T., Bangalore, [1975] 1 SCC 160, relied on.

Chatturbhooj v. Dharamsi, 9B, 438; Lal Bahadur v. Kanhaia Lal, 34 I.A. 65: 29A. 244: 4 A.L.J. 227: 9 Bom. L.R.: 597: 11 C.W.N. 417: 17 M.L.J. 228; Visalatchi v. Annasamy, 5 M.H.C.R. 150: Adurmoni v. Chowdhry, 3 C.1 and Allah Diyo v. Soha, (1942) A.L.J. 443: 1942 A. 331 - referred to.

Hindu Law Principles & Precedents, 8th Edn. (1987) by N.R. Raghavachariar, referred to.

1.3. Although in 1927 `B' had no son and the property at his hands became a separate property, in view of the well-settled principles of Hindu Law, as soon as a son was born to him the concept of the property being a coparcenary property in terms of Mitakashara School of Hindu Law revived.
[881-g]

M.T. Pankajammal & Anr. v. M.T. Parthasarthy Aiyangar, AIR 33 (1946) Madras 99; Muttayan Chettiar v. Sangili Vira Pandia Chinnatambiar, [LRI.A. Vol. IX Page 128]; Pratap Narain v. Commissioner of Income-Tax, U.P., [63 ITR 505] and Commissioner of Wealth Tax, Kanpur and Ors. v. Chander Sen and Ors., [1986] 3 SCC 567, referred to.

Law of Joint Family System, Debts, Gifts, Maintenance, Damdupat, Benami Transaction and Pre-emption, First Edition 1993 by Dr. Paras Diwan and Hindu Law & Usage, 14th Edition by Mayne, referred to.

2. In the instant case, the succession having opened in 1989, evidently, the provisions of Amendment Act, 2005 would have no application. Sub-section (1) of Section 6 of the Act governs the law relating to succession on the death of a coparcener in the event the heirs are only male descendants. But, proviso appended to sub-section (1) of Section 6 of the Act creates an exception to the general rules. It was, therefore, obligatory on the part of the Plaintiffs-Respondents to show that apart from eldest son of `B', his younger son will also derive the benefit thereof. So far as the second son is concerned, no evidence has been brought on records to show that he was born prior to coming into force of the Hindu Succession Act. Thus, it was the half share in the property of `B' which would devolve upon all his heirs and legal representatives as at least one of his sons was born prior to coming into force of the Act. Except to the aforementioned extent, the Courts below are correct in applying the provisions of Section 6 of the Act and holding that Section 8 thereof will have no application. [885-c-d-e-f]

Commissioner of Income Tax v. P.L. Karuppan Chettiar, [1993] Supp. 1 SCC 580; Additional Commissioner of Income Tax v. M. Karthikeyan, [1994] Supp. 2 SCC 112 and Daya Singh (Dead) through L.Rs. and Anr. v. Dhan Kaur, [1974] 1 SCC 700, referred to.   

Nidesh Gupta, Vinod Shukla and S. Janani for the Appellants.

Manoj Swarup for the Respondents.

Subject: Hindu Law:

Hindu Succession Act, 1956; Ss. 6 and 8:

Intestate succession-Property in dispute owned by a person belonging to Mitakshara coparcenary-The owner died after 1956 Act came into force leaving behind two sons and three daughters-In terms of Revenue records, each child was entitled to 1/5th share in the property-Challenged by the sons-Decreed by trial Court-Appeal against dismissed by first appellate Court-Second appeal dismissed by the High Court-On appeal, Held: In terms of Section 6 of the Act, if a person died leaving behind surviving female members specified in Class I of the Schedule his interest in Mitakshra Coparcenary property shall devolve upon heirs by intestate succession and not by survivorship-So long as the property remains in the hands of a single person, the property could be disposed of by him-But once a son is born, he would acquire interest in the co-parcenary property-Since the succession in the present case having opened in 1989 after the death of the owner/father of the parties in dispute, provision of Amendment Act, 2005 not attracted-Section 6 of the Act governs the law relating to succession on the death of a coparcener in the event the heirs are only male descendants but proviso to Section 6(1) creates an exception to the general rules-Though first son was a co-parcener but no evidence furnished by them to show that second son of the deceased was also born prior to coming into force of the 1956 Act-Hence, it was the half share in the property of the deceased which would devolve upon all his heirs in terms of the provisions of the Act-Decree modified accordingly.

One `B', owner of the property in dispute, died in the year 1989 leaving behind two sons (Plaintiffs-Respondents) and three daughters (Appellants). One of his sons was born in the year 1938 whereas other son was born in the year 1956. The names of the parties were shown in the revenue records having 1/5th share each in the property, which was challenged by plaintiffs-respondents, sons of `B'. The trial Court decreed the suit holding that `B' and his sons constituted a joint Hindu family and 1/5th share in the property was their separate property and 4/5th share was ancestral property of `B' qua plaintiffs. The decree was affirmed by the appellate Court. Appeal filed by appellants/daughters of `B' was dismissed by the High Court holding that the nature of the property must be recorded as Hindu Coparcenary and ancestral property, it was stated that the law applicable before the Act came into force would govern the rights of the parties. Hence the present appeal.

Appellants-daughters of the deceased `B' contended that the High Court committed a manifest error in arriving at the findings, in total disregard of the provisions of the Hindu Succession Act, 1956; that keeping in view the fact that the succession opened only in the year 1989 when `B' died, the question of applying the law as was obtaining prior to coming into force of the Act did not arise; and that the provisions contained in Section 8 of the Act are clear and explicit and in that view of the matter the succession of the parties would be governed in terms of the Schedule appended thereto.
Respondents submitted that having regard to the provisions contained in Section 6 of the Act, the concept of Mitakshara coparcenary having been saved, the parties would be governed thereby.

Citation:, 2006(6   )Suppl.SCR874 , 2006(8   )SCC581 , 2006(10  )SCALE75  , 2006(12  )JT610
Judgement
CASE NO.:
Appeal (civil)  4326 of 2006

PETITIONER:
Sheela Devi and Ors.

RESPONDENT:
Lal Chand and Anr.

DATE OF JUDGMENT: 29/09/2006

BENCH:
S.B. Sinha & Dalveer Bhandari

JUDGMENT:
JUDGMENT

S.B. SINHA. J.

Leave granted.

Interpretation of some of the provisions of The Hindu Succession Act, 1956
(for short "the Act") and, in particular, Sections 6 and 8 thereof arises
for consideration in this appeal which arises out of a judgment and order
dated 10th October, 2005 passed by the High Court of Punjab and Haryana in
RSA No. 1627 of 1994 dismissing an appeal from a judgment and order dated
23rd May, 1994 passed by the Additional District Judge, Patiala affirming a
judgment and decree dated 17th May, 1990 passed by the Subordinate Judge
1st Class Samana decreeing the suit filed by the plaintiffs-respondents
herein.

The relationship between the parties is not in dispute. Tulsi Ram was the
owner of the property. He died in the year 1889 leaving behind five sons,
viz., Waliati, Babu Ram, Charanji Lal, Hukam Chand and Uggar Sain. The
aforementioned five sons of Tulsi Ram were members of a Mitakshara
Coparcenary. We are concerned with the estate of one of the sons of Tulsi
Ram, viz., Babu Ram, whose children are parties before us. It is not in
dispute that Uggar Sain died issueless in 1931. The names of all the
brothers were mutated in the year 1927 in respect of the properties left by
Tulsi Ram. Babu Ram thed in the year 1989 leaving behind two sons, viz.,
Lal Chand and Sohan Lal (Plaintiffs-Respondents) and three daughters
(Appellants herein). Lal Chand was born in 1938 whereas Sohan Lal was born
in 1956.

A finding of fact has been arrived at that the parties are governed by the
Mitakshara School of Hindu Law. The sons of Tulsi Ram were, thus,
coparceners. Upon the death of Tulsi Ram, Babu Ram inherited 1/5th share in
the property. However, on the death of Uggar Sain, 1/20th share of Tulsi
Ram's property was also devolved on him. Indisputably, the names of the
parties were shown in the revenue records having l/5th share each. The said
order of the revenue authorities came to be challenged by plaintiffs-
respondents herein, inter alia, on the premise that defendants had not
acquired any right, title and interest in the property.

The learned Trial Judge in his judgment recorded the following:

    "9. As a result keeping in view the evidence on record I hold that
    the plaintiffs and Babu Ram had constituted a Joint Hindu Family
    and out of the land in suit 1/5th share was separate property of
    Babu Ram and 4/5th share was ancestral property in the hands of
    Babu Ram qua the plaintiffs. The issue is decided accordingly."

The suit of the plaintiffs was decreed on the basis thereof. The Appellate
Court also affirmed the decree passed by the learned Trial Judge. `On a
Second Appeal having been filed by Appellants herein, according to the High
Court, the only question which required determination was as to whether the
provisions of Section 8 of the Act would apply to the facts of the present
case or the law as applicable prior to the enforcement of the 1956 Act
would apply. The High Court opined that for the purpose of determination of
the said question it was necessary to determine the nature of the property.
Having held that the nature of the property must be recorded as Hindu
Coparcenary and ancestral property, it was stated that the law applicable
before the Act came into force would govern the rights of the parties and
not the provisions of the Act.

Mr. Nidesh Gupta, learned counsel appearing on behalf of Appellants
submitted that the High Court committed a manifest error in arriving at the
aforementioned findings in total disregard of the provisions of the 1956
Act. The learned counsel would contend that keeping in view the fact that
the succession opened only in the year 1989 when Babu Ram died, the
question of applying the law as was obtaining prior to coming into force of
the Act did not arise. It was urged that the provisions contained in
Section 8 of the Act are clear and explicit and in that view of the matter
the succession of the parties would be governed in terms of the Schedule
appended thereto.

Mr. Manoj Swarup, learned counsel appearing on behalf of Respondents,
however, would submit that having regard to the provisions contained in
Section 6 of the Act, the concept of Mitakshara coparcenary having been
saved, the parties would be governed thereby.

The Act was enacted to amend and codify the law relating to intestate
succession amongst Hindus. Section 4 of the Act provides for an overriding
effect of the Act. Sub-section (2) of Section 4 of the Act reads as under:

"For the removal of doubts it is hereby declared that nothing contained in
this Act shall be deemed to affect the provisions of any law for the time
being in force providing for the prevention of fragmentation of
agricultural holdings or for the fixation of ceilings or for the devolution
of tenancy rights in respect of such holdings."

Section 6 of the Act deals with devolution of interest in coparcenary
property and is in the following terms:

"6. Devolution of interest in coparcenary property. -When a male Hindu dies
after the commencement of this Act, having at the time of his death an
interest in a Mitakshara coparcenary property, his interest in the property
shall devolve by survivorship upon the surviving members of coparcenary and
not in accordance with this Act:

    Provided that, if the deceased had left him surviving a female
    relative specified in class I of the Schedule or a male relative
    specified in that class who claims through such female relative,
    the interest of the deceased in the Mitakshara coparcenary property
    shall devolve by testamentary or intestate succession, as the case
    may be, under this Act and not by survivorship.

    Explanation 1.- For the purposes of this section, the interest of a
    Hindu Mitakshara coparcener shall be deemed to be the share in the
    property that would have been allotted to him if a partition of the
    property had taken place immediately before his death, irrespective
    of whether he was entitled to claim partition or not.

    Explanation 2- Nothing contained in the proviso to this section
    shall be construed as enabling a person who has separated himself
    from the coparcenary before the death of the deceased or any of his
    heirs to claim on intestacy a share in the interest referred to
    therein."

A bare perusal of the said provisions would clearly show that where the
deceased had left him surviving a female relative specified in class I of
the Schedule, his interest in the Mitakshara coparcenary property shall
devolve by intestate succession and not by survivorship.

We have noticed hereinbefore that a finding of fact has been arrived at
that the properties in the hands of Babu Lal and his brothers were joint
family property.

The principle of law applicable in this case is that so long a property
remains in the hands of a single person, the same was to be treated as a
separate property and thus, would be entitled to dispose of the coparcenary
property as the same were his separate property, but, if a son is
subsequently born to him or adopted by him, the alienation whether it is by
way of sale, mortgage or gift, will nevertheless stand, for a son cannot
object to alienations so made by his father before he was born or begotten.
(See Krishna Prasad v. C.LT, Bangalore, [1975] 1 SCC 160. But once a son is
born, it becomes a coparcenary property and he would acquire an interest
therein.

In N.R. Raghavachariar's Hindu Law Principles & Precedents, 8th Edn. 1987,
Section 244, it is stated :

"....Besides, it is absolutely immaterial whether the sons were born to the
inheritor before or after the inheritance fell in. But if the property is
inherited from a paternal ancestor beyond the third degree then the
property is not ancestral as against the inheritor's sons, and the
inheritor has absolute powers of disposal over it. So also, if the
inheritor has neither a son, son's son nor son's son's son, the property is
absolute in the inheritor's hands even though he may have other relations,
for instance, a great-great-grandson or a paternal uncle, in the case of
inheritance from father [Janki v. Nand Ram, 11 A. 194]. But property which
comes to an inheritor from one of his three immediate paternal ancestors as
absolute property owing to the absence of sons, grandsons or great-
grandsons, becomes ancestral property with the birth of any of them, though
an - alienation made by the inheritor before such birth, cannot be
impeached. The character of ancestral property is not taken away by there
being a partition of the property in the family of the inheritor, and
though a share of ancestral property allotted to a coparcener on partition
will be his separate property as regards others [Bejai Bahadur v.
Bhupindar, 17A. 456: 22 1A. 139 (P.C.) it will be ancestral property as
against the allottee's sons, grandsons, and great-grandsons whether born
before or after the partition. [Chatturbhooj v. Dharamsi, 9B. 438; Lal
Bahadur v. Kanhaia Lal, 34 IA. 65: 29 A. 244: 4 A.LJ. 227: 9 Bom. L.R.:
597: 11 C.W.N. 417: 17 M.LJ. 228; Visalatchi v. Annasamy, 5 M.H.C.R. 150:
Adurmoni v. Chowdhry, 3 C.I; Allah Diyo v. Soha, 1942 A.L.J. 443: 1942 A.
331."

In Law of Joint Family System, Debts, Gifts, Maintenance, Damdupat, Benami
Transaction and Pre-emption, First Edition 1993, by Dr. Paras Diwan, at
page 51, it is stated :

"....They take an interest in it by birth, whether they are in existence at
the time of partition or are born subsequently. Such share, however, is
ancestral property only as regards his male issues. As regards other
relations, it is a separate property, and if the coparcener dies without
leaving male issues, it passes to his heirs by succession. A person who for
the time being is the sole surviving coparcener is entitled to dispose of
the coparcenary property as if it were his separate property. He may sell
or mortgage the property without legal necessity or he may make a gift of
it. If a son is subsequently born to him or adopted by him, the alienation,
whether it is by way of sale, mortgage or gift, will nevertheless stand,
for a son cannot object to alienations made by his father before he was
born or begotten."

In M.T. Pankaiammal & Anr. v. M.T. Parthasarthv Aiyangar, AIR (33) 1946
Madras 99, it was held :

"........If it were necessary I would on the circumstances above adverted
be prepared to hold that there was no intention on the part of the
executant that the son to be adopted had to share the property with any son
that may be born to him subsequently. But as I have already held on a
construction of the settlement deed, the plaintiff became entitled to the
property only on the death of his father and as an adopted son, according
to Hindu Law, he had to share it along with the after born brother and his
step-mother."

Although in 1927 Babu Ram had no son and the property at his hands became a
separate property. But, in view of the well-settled principles of Hindu
Law, as soon as a son was born to him the concept of the property being a
coparcenary property in terms of Mitakshara School of Hindu Law revived.
The law in this behalf has succinctly been stated in Mayne's Hindu Law &
Usage, 14th edition, at pages 627-628 and 641, in the following terms:

"Where ancestral property has been divided between several joint owners,
there can be no doubt that if any of them have male issue living at the
time of the partition, the share which falls to him will continue to be
ancestral property in his hands, as regards has male issue, for their
rights had already attached upon it, and the partition only cuts off the
claims of the dividing members. The father and his male issue still remain
joint. The same rule would apply even where the partition had been made
before the birth of male issue or before a son is adopted, for the share
which is taken at a partition, by one of the coparceners is taken by him as
representing his branch. It was held by the Andhra Pradesh High Court that
where a father divided the family property between him and his sons, the
share obtained by him was his self-acquired property which he could
bequeath to his wife.."

"Coparceners may hold property separately - An examination into the
property of the joint family would not be complete without pointing out
what property may be held by the individual members as their separate
property. All property which is not held in coparcenary is separate
property and Hindu law recognizes separate property of individual members
of a coparcenary as well as of separated members. (l) Property which comes
to a man as obstructed heritage (Saprati bandhadaya) is his separate
property. It is not self-acquired property within the meaning of Hindu law,
though in their incidents, there may be no difference between the two
species.

(See also Muttavan Chettiar v. Sangili Vira Pandia Chinnatambiar, [LR LA.
Vol. DC Page 128].}

The question again came up for consideration before a Division Bench of the
Allahabad High Court in Pratap Narain v. Commissioner of Income-Tax, U.P.,
[63 ITR 505] wherein Pathak, J. (as His Lordship then was) opined:

"It seems to us that it is now well settled, that when Hindu undivided
family property is partitioned between the members of a Hindu undivided
family, and a share is obtained on such partition by a coparcener, it is
ancestral property as regards his male issue. They take an interest in it
by birth, whether they are in existence at the time of partition or are
born subsequently. We are of the opinion that it is not correct to say that
the share of the property, upon partition, constitutes the separate
property of the coparcener and that it is only subsequently when a son is
born that the property becomes ancestral property or Hindu undivided family
property: The birth of the son does not alter the nature of the property.
The property all along continues to be coparcenary property. But upon the
birth of a son all the rights which belong to a coparcener belong to that
son, and the enlarged rights hitherto enjoyed by the sole coparcener are
now abridged within their normal compass."

We may, however, notice that the same learned Judge in Commissioner of
Wealth Tax, Kanpur and Ors. v. Chander Sen and Ors., [1986] 3 SCC 567, in a
case where father and his son constituted a HUF and had been carrying on
business in a partnership firm, stated the law in the following terms:

    "We have noted the divergent views expressed on this aspect by the
    Allahabad High Court, Full Bench of the Madras High Court, Madhya
    Pradesh and Andhra Pradesh High Courts on one side and the Gujarat
    High Court on the other.

    It is necessary to bear in mind the preamble to the Hindu
    Succession Act, 1956. The preamble states that it was an Act to
    amend and codify the law relating to intestate succession among
    Hindus.

    In view of the preamble to the Act i.e. that to modify where
    necessary and to codify the law, in our opinion it is not possible
    when Schedule indicates heirs in Class I and only includes son and
    does not include son's son but does include son of a predeceased
    son, to say that when son inherits the property in the situation
    contemplated by Section 8 he takes it as karta of his own undivided
    family. The Gujarat High Court's view noted above, if accepted,
    would mean that though the son of a predeceased son and not the son
    of a son who is intended to be excluded under Section 8 to inherit,
    the latter would by applying the old Hindu law get a right by birth
    of the said property contrary to the scheme outlined in Section 8.
    Furthermore as noted by the Andhra Pradesh High Court that the Act
    makes it clear by Section 4 that one should look to the Act in case
    of doubt and not to the preexisting Hindu law. It would be
    difficult to hold today the property which devolved on a Hindu
    under Section 8 of the Hindu Succession Act would be HUF in his
    hand vis-a-vis his own son; that would amount to creating two
    classes among the heirs mentioned in Class I, the male heirs in
    whose hands it will be joint Hindu family property and vis-a-vis
    son and female heirs with respect to whom no such concept could be
    applied or contemplated. It may be mentioned that heirs in Class I
    of Schedule under Section 8 of the Act included widow, mother,
    daughter of predeceased son etc."

In paragraph 15, however, the law was stated as under:

    "It is clear that under the Hindu law, the moment a son is born, he
    gets a share in the father's property and becomes part of the
    coparcenary. His right accrues to him not on the death of the
    father or inheritance from the father but with the very fact of his
    birth. Normally, therefore whenever the father gets a property from
    whatever source from the grandfather or from any other source, be
    it separated property or not, his son should have a share in that
    and it will become part of the joint Hindu family of his son and
    grandson and other members who form joint Hindu family with him.
    But the question is: is the position affected by Section 8 of the
    Hindu Succession Act, 1956 and if so, how? The basic argument is
    that Section 8 indicates the heirs in respect of certain property
    and Class I of the heirs includes the son but not the grandson. It
    includes, however, the son of the predeceased son. It is this
    position which has mainly induced the Allahabad High Court in the
    two judgments, we have noticed, to take the view that the income
    from the assets inherited by son from his father from whom he has
    separated by partition can be assessed as income of the son
    individually. Under Section 8 of the Hindu Succession Act, 1956 the
    property of the father who dies intestate devolves on his son in
    his individual capacity and not as karta of his own family. On the
    other hand, the Gujarat High Court has taken the contrary view."

The said decision has been followed by this Court in Commissioner of Income
Tax v. P.L. Karuppan Chettiar, [1993] Supp 1 SCC 580 and Additional
Commissioner of Income Tax v. M. Karthikeyan, [1994] Supp 2 SCC 112.

In Eramma v. Veerupana and Ors., AIR (1966) SC 1879, this Court observed:

    "It is clear from the express language of the section that it
    applies only to coparcenary property of the male Hindu holder who
    dies after the commencement of the Act. It is manifest that the
    language of Section 8 must be construed in the context of Section 6
    of the Act. We accordingly hold that the provisions of Section 8 of
    the Hindu Succession Act are not retrospective in operation and
    where a male Hindu died before the Act came into force i.e. where
    succession opened before the Act, Section 8 of the Act will have no
    application."

(See also Daya Singh (Dead) Through L.Rs. and Anr. v. Dhan Kaur [1974] 1
SCC 700.)

The Act indisputably would prevail over the old Hindu Law. We may notice
that the Parliament, with a view to confer right upon the female heirs,
even in relation to the joint family property, enacted Hindu Succession
Act, 2005. Such a provision was enacted as far back in 1987 by the State of
Andhra Pradesh. The succession having opened in 1989, evidently, the
provisions of Amendment Act, 2005 would have no application. Sub-section
(1) of Section 6 of the Act governs the law relating to succession on the
death of a coparcener in the event the heirs are only male descendants.
But, proviso appended to Sub-section (1) of Section 6 of the Act creates an
exception. First son of Babu Lal, viz., Lal Chand, was, thus, a coparcener.
Section 6 is exception to the general rules. It was, therefore, obligatory
on the part of the Plaintiffs-Respondents to show that apart from Lal
Chand, Sohan Lal will also derive the benefit thereof. So far as the Second
son Sohan Lal is concerned, no evidence has been brought on records to show
that he was born prior to coming into force of Hindu Succession Act, 1956.

Thus, it was the half share in the property of Babu Ram, which would
devolve upon all his heirs and legal representatives as at least one of his
sons was born prior to coming into force of the Act.

Except to the aforementioned extent; in our opinion, the courts below are
correct in applying the provisions of Section 6 of the Act and holding that
Section 8 thereof will have no application. The appeal is allowed in part
and to the aforementioned extent. The decree would be modified accordingly.
No costs.