CASE BRIEF: RAJARHAT WELFARE ASSOCIATION & ANR V. DLF COMMERCIAL COMPLEX LTD & ORS, CASE NO.10 OF 2011

FACTS:

  1. The Informant No.1 is a Society registered under the West Bengal Societies Registration Act, 1961 and is stated to be constituted for the amelioration of its members who are intending purchasers of commercial units different multi-storied projects in the Rajarhat area New Town, Kolkata. The informant No.2 is stated to be the President of the Informant Association.
  2. The Opposite Parties DLF Commercial Complexes Ltd. (‘the Opposite party No1) M/s DLF Retail Developers Limited (‘the Opposite Party No.2’) to be referred to as ‘DLF’ collectively herein after, are stated to be the largest developers of properties operating in India and whereas other opposite parties are related to DLF.
  3. In January 2008, the opposite party Nos. 1 and 2 issued an advertisement containing details of commercial/retail outlets to be constructed on the land measuring 3 acres (approx.) in Rajarhat, under the name and style ‘DLF Tower’. The opposite party No.1 held itself out as the authorized agent to receive bookings for the said project and it was accordingly opened around the year, 2008.
  4. Then the members of the informant association approached the opposite party Nos. 1 and 2 with the object of setting businesses in the proposed complex. During the course of the meeting with the opposite party Nos. 1 and 2 in their Office at New Delhi, the opposite Nos. 1 and 2 misrepresented some facts to the members of the informant association. Any person who desires to book an apartment is required to fill an application form accepting certain terms and conditions which were onerous and unilateral.
  5. It has been alleged that the intending purchasers were left with no discretion to negotiate and due to disparity in the bargaining were forced to accept the terms and conditions dictated by the opposite Nos. 1 and 2 accordingly they applied in the prescribed format. It has been further alleged, that DLF again abused its dominant position reiterated in the receipts that even the issuance of allotment letter does not entitle an allottee of a provisional or final allotment of the proposed property. It was stipulated in the receipt that terms and conditions stated in the application form shall govern the allottee and the company till such time a buyer agreement is executed.
  6. It has been alleged at even though 90% of the members of the informant association have made payments in excess of 35% of their cost within a period of four months from the of issuance of the allotment letter, no construction activity has started at the Site even alter a lapse of four months from the date of issuance of the allotment letter.
  7. It has been alleged that the opposite party Nos. 1 and 2 even purported to cancel the allotments made in favour of the members forfeiting 20% of the unit cost of each member under clause 11 of the application form taking advantage of their superior  position.
  8. It has been stated that in or about August, 2008 the members of the informant association received Commercial Buyer agreement from the company contradicting its earlier purported action to cancel the allotments.
  9. It has been alleged that even this Commercial Space Buyers Agreement is a standard printed form of the agreement leaving no space for negotiation with the members of the informant association. It stated that most all the members signed the said agreement on dotted lines to the it that they had already paid 35% of their project unit cost. It is further alleged that and except few members, other members have not received back copies of the agreements duly signed by the company.
  10. On these facts and allegations, the informants have  prayed to the Commission to initiate enquiry against  DLF for, inter alia,  abuse of dominant position; to direct the opposite parties to produce the relevant records involving the decision making process culminating into  the grant of sanction/approval of the building plans as well as the increase of building upto 12th floor, to pass order directing discontinuation of all the arbitrary clauses in the agreement forthwith; to pass  appropriate orders restraining the opposite parties from  arbitrary cancellation of allotment; to pass order  providing exit option to an allottee with full refund of  money paid along with interest @ 18% p.a. as well as  compensation; to direct the agreement to stand modified  to the extent and in the manner that clause 11 be  abolished specifically or as may be found appropriate; to  pass order imposing penalty on DLF; to pass order  awarding the cost and expenses in the favour of the  informant association and lastly to pass such other or  further orders as the Commission may deem fit and  proper in the facts and circumstances of the case.

ISSUES

The questions to be resolved to hold DLF censurable of conferring any demonstration which is in renunciation to Section 4 of the Competition Act, 2002 are as below :-

Whether DLF Is Dominant In The Above Relevant Market, In The Context Of Section 4 Read With Section 19(4) Of The Competition Act, 2002?  If yes, is there Any Abuse Of  Dominant Position In The Relevant Market?

REASONS GIVEN BY THE COMMISSION

The allegation made by the informant against DLF that there was abuse of  dominant position in the relevant market as it has imposed unfair conditions in the sale of commercial space in their project DLF Galleria located in the city of Kolkata. But the informant has miserably failed to provide any conclusive evidence that DLF enjoys dominant position in developing  commercial space in the metropolis of Kolkata. On the basis of the information available in public domain, is seen in Kolkata that many IT companies which has generated more  demand of commercial office and retail space. Many prominent companies like Godrej, Infinity, Unitech, Sapooji Pallonji and TCG Urban Infra Holding etc. are major developers of both  office and retail space in Kolkata besides number of local  developers who have been developing retail space for showrooms and other outlets. Going by the section 4 of the Act, the  expression “dominant position” means a position of strength,  enjoyed by an enterprise, in the relevant market, in India, which enables it to operate independently of competitive forces  prevailing in the relevant market; or affect its competitors or  consumers or the relevant market in its favour here DLF, being a new entrant in developing commercial space in Kolkata, is having only one property related to commercial retail  space which cannot be treated as a dominant enterprise which can operate independently of competitive forces prevailing in the relevant market or affect the competitors or the relevant market in its favour. As the factum of DLF enjoying a dominant position in developing commercial space in Kolkata has neither been established by the informant nor it has been substantiated from the information available in public domain no case of violation of section 4 of the Act  is made out against DLF. The Commission observed that neither the information has made any allegations in respect of contravention of section 3 and Section 4 the Act nor in the facts and circumstances of the case there appears to be any infringement of the provisions of that sections. In the light of the above analysis, Commission is of the view that no prima facie case is made out for making a  reference to the Director General for conduction investigation into the matter and proceedings are liable to be closed under section 26(2) of the Act.

CRITICAL ANALYSIS

Dominance is not considered bad per se but its abuse is. Abuse is stated to occur when an enterprise or a group of enterprises uses its dominant position in the relevant market in an exclusionary or/ and an exploitative manner.

In the above case the  allegation is not adequate in determining the Dominant Position as to establish the dominant position , the relevant market  of Rajarhat, New Town, Kolkata  is to be determined or the nearby areas  not reference to the  whole of  India. Competition  Act defines dominant position (dominance) in terms of a position of strength enjoyed by an enterprise, in the relevant market in India, which enables it to: an operate independently of the competitive forces prevailing in the relevant market; or an affect its competitors or consumers or the relevant market in its favor. It is the ability of the enterprise to behave or act Dominance has significance for competition only when the relevant market has been defined.

Now Relevant Market plays a vital role when dealing with unfair practises. The Relevant market involves the description of the context in which certain economically harmful conduct could take place. The process therefore, of defining a market and a relevant market, is of the first moment, meaning thereby that any assessment of the conduct of a market player can only follow and not precede the definition. The process begins by assuming provisionally that certain anti-competitive conduct exists in the market. It then proceeds to define through a series of questions, the boundaries of the smallest market in which such conduct could be sustained. After the contours of the smallest market are defined and drawn, the actual conduct in question is subjected to an analysis, to determine if it has or could have an anticompetitive effect.

The determination of ‘relevant market’ by the Competition Authority has to be done, having due regard to the ‘relevant product market’ and the ‘relevant geographic market’. In practice, defining a relevant market is sometimes only approximate. It is often difficult to predict the reactions of purchasers/consumers to a price increase. It is here that investigation becomes critical to the determination of the relevant market

A relevant market has therefore two fundamental dimensions, product and geographic. The product market describes the good or service. The geographic market describes the locations of the producers or sellers of the product or service. Relevant market is defined by consumer or purchaser preferences and actions.  For instance, if purchasers consider two goods to be close substitutes or readily interchangeable, those two goods are considered to be in the same relevant market

Relevant market is crucial in analyzing Dominance and offences of Abuse of Dominance. The new Indian competition law defines a dominant position as a position of strength, enjoyed by an enterprise in the relevant market, which enables it to operate independently of competitive forces prevailing in the relevant market or affect its competitors or consumers or the relevant market in its favour. The same Act describes, inter alia, abuse of dominance to occur when an enterprise uses its dominant position in one relevant market to enter into, or protect, other relevant market. For an enterprise to abuse a dominant position, it must hold a dominant position in a relevant market. The first step, therefore, in an evaluation of an enterprise’s actions is to define the relevant market[1].

Another factor for the determination of dominance is the dependence of consumers on the enterprise. Apart from OP 1, other large developers are competing with each other in the relevant market with projects of varying magnitudes and having comparable size and resources than that of the OP 1. Presence of such players with comparable projects in the relevant market indicates that the buyers have the option to choose from various developers in the relevant geographic market.[2]

In Belaire vs DLF case DLF’s ‘high end’ residential building in Gurgaon targets only specific consumers, according to their capacity to pay. On the issue of relevant geographic market, CCI stated that a decision to purchase a high end apartment in Gurgaon is not easily substitutable by a decision to purchase a similar apartment in any other geographical location. Further Gurgaon is known to posses certain unique geographical characteristics such as its proximity to Delhi, proximity to airports and a distinct brand image as a destination for upwardly mobile families. It was held that DLF had the highest market share (45%), vis-a-vis the market share of the nearest competitor (19%) which was more than twice of its competitor, leading to hardly any competitive constraints. Further, DLF had a clear early mover’s advantage and occupies a leadership position as real estate is a sector with natural entry barriers due to high cost of land and brand value of incumbent market leaders.[3]

Coming on this case here DLF being a new entrant in developing commercial space in Kolkata, is having only one property related to commercial retail space. In view of these factors the DLF cannot be treated as a dominant enterprise which can operate independently of competitive forces prevailing in the relevant market or affect the competitors or the relevant market in its favor to ensure that such enterprise does not abuse its dominant position. Furthermore constructing a building without clearance is illegal undoubtedly but it does not violate or  attract any provision of the Competition Act. Therefore CCI decision to close the case,  irrefutably seems to be justified.

CONCLUSION

Delineation of “Relevant Market” is central to effective enforcement of competition laws. For the Competition Authority, such description clarifies the space within which parties need to adjudicate on competition cases. It is indeed the first step in the analysis of conduct on the part of the market players concerned. Hence, based on the above analysis the commission order about the opposite parties remains legally sound, astute in observations as they do not enjoy dominance in the particular relevant market. The Informant had an option to purchase  commercial/ retail place from Unitech, Godrej Properties, Infinity or by any  Local Builder like Astra to carry out their businesses, as these all come under the jurisdiction of the relevant market, and are easily substitutable. Moreover in regard to the allegation of contraventions of provisions of the Competition Act, it is stated that remedy for these issues does not lie before the Commission and the Informant may approach the appropriate forum for that purpose.

[1] Dr. S CHAKRAVARTHY in his article on Relevant Market In Competition Case Analyses; visited on 10/8/2016

[2] Case. No. 69 of 2014 Mr. Gautam Dhawan v M/s. Parsvanath Hessa Developers Pvt. Ltd.

[3] http://circ.in/pdf/Case_Study_08.pdf; visited on 9/8/2016

Harsh Pandey, 5th Year, BA LLB(Hons.), School of Law, KIIT University

CASE BRIEF: MAHARASHTRA EKTA HAWKERS UNION AND ANOTHER V. MUNICIPAL CORPORATION, GREATER MUMBAI AND OTHERS…ON 9 SEPTEMBER 2013

This case doesn’t arise out of any particular incident or a single fact rather as a result of numerous incidents and circumstances where it had almost become impossible for hawkers/street vendors to peacefully continue with their medium of livelihood. They had always been subjected to rude treatments and unnecessary harassments on the part of the States’ machineries like local administration, Police etc. This is in the light of these circumstances that the matter in this case ultimately reached before the Supreme Court of India. This is to clarify, that this case was not the only case where the issues of unfair treatments and harassment of the hawkers/street vendors by the States’ agency had come to this Court or before other High Courts of the Country. On numerous occasions the Courts had got the opportunities to deal with these issues including Bombay Hawkers’ Union v. Bombay Municipal Corporation (1985) 3 SCC 528, Sodan Singh v. New Delhi Municipal Committee 1989, 4 SCC 155, Maharashtra Ekta Hawkers Union v. Municipal Corporation, Greater Mumbai (2004) 1 SCC 625, Maharashtra Ekta Hawkers Union v. Municipal Corporation, Greater Mumbai (2009) 17 SCC 151, Maharashtra Ekta Hawkers Union v. Municipal Corporation, Greater Mumbai (2009) 17 SCC 231 (this order was passed on 30.07.2004 but was printed in the journal only in 2009) and Gainda Ram v. Municipal Corporation of Delhi (2010) 10 SCC 715. But, in the words of the Supreme Court itself in this decision, “The situation has not changed in last four decades rather the problem has aggravated because of lackadaisical attitude of the administration at various levels and the legislative instruments made many decades ago have become totally ineffective”.

This judgment expressly clarifies who a street vendor or a hawker is and what do they do. It says that, “A Street vendor / hawker is a person who offers goods for sale to the public at large without having a permanent structure / place for his activities. Some street vendors / hawkers are stationary in the sense that they occupy space on the pavements or other public / private places while others are mobile in the sense that they move from place to place carrying their wares on push carts or in baskets on their heads.”

The facts of the case can easily be understood by going through the remarks made by this Court in this judgment itself where it said, “Unfortunately, the street vendors / hawkers have received raw treatment from the State apparatus before and even after the independence. They are a harassed lot and are constantly victimized by the officials of the local authorities, the police, etc., who regularly target them for extra income and treat them with extreme contempt. The goods and belongings of the street vendors / hawkers are thrown to the ground and destroyed at regular intervals if they are not able to meet the demands of the officials. Perhaps these minions in the administration have not understood meaning of the term “dignity” enshrined in the preamble of the Constitution. The constant threat faced by the street vendors / hawkers of losing their source of livelihood has forced them to seek intervention of the Courts across the country from time to time.”

ISSUE OF LAW

The issue of law involved in this case and almost in all other cases dealing with the plight of the hawkers / street vendors, did include the followings:

  1. Whether hawking / Street vending is a fundamental right within the meaning of Article 19(1) (g) of the Constitution of India? In the case of an affirmative answer, is it subject to the reasonable restriction under the provision of Article 19(6) of the Constitution?
  2. Whether hawking / Street vending is a fundamental right within the meaning of Article 21 of the Constitution of India?

The Supreme Court in its judgment referred to a number of precedents including ‘Saghir Ahmad v. State of Uttar Pradesh AIR 1954 SC 728, Bombay Hawkers’ Union v. Bombay Municipal Corporation (1985) 3 SCC 528 etc. and observed that:

The right to carry on trade or business mentioned in Article 19(1) (g) of the Constitution, on street pavements, if properly regulated cannot be de denied on the ground that the streets are meant exclusively for passing or re-passing and for no other use. Proper regulation is, however, a necessary condition as otherwise the very object of laying out roads-to facilitate traffic-may be defeated. The right is subject to reasonable restrictions under clause (6) or Article 19. If the matter is examined in its light it will appear that the principle stated in Saghir Ahmed Case (1955) 1 SCR 707: AIR 1954 SC 728 in connection with transport business applies to the hawker’s case also.

In Maharashtra Ekta Hawkers Union v. Municipal Corporation, Greater Mumbai decided on 09.12.2003, a two judge bench referred to the judgments in Olga Tellis vs. Bombay Municipal Corporation (1985) 3 SCC 545, Sodan Singh vs. New Delhi  Municipal Committee, the recommendations made by the Committee constituted pursuant to an earlier judgment and observed:

The above authorities make it clear that the hawkers have a right under Article 19(1) (g) of the Constitution of India. This right, however, is subject to reasonable restrictions under Article 19(6). Thus, hawking may not be permitted where, e.g. due to narrowness of road, free flow of traffic or movement of pedestrians is hindered or where for security reasons an area is required to be kept free or near hospitals, places of worship etc. There is no fundamental right under Article 21 to carry on any hawking business. There is also no right to do hawking at any particular place. The authorities also recognize the fact that if properly regulated the small traders can considerably add to the convenience and comfort of the general public, by making available ordinary articles of everyday use for a comparatively lesser price. The scheme must keep in mind the above principles.

RELIEF SOUGHT

The Supreme Court comprising of two-judge bench while re-examining these issues in Maharashtra Ekta Hawkers Union v. Municipal Corporation, Greater Mumbai (2009) 17 SCC 251, took cognizance of ‘National Policy on Urban Street Vendors, 2004’ and apart from observing certain facts, “restrained all other Courts from interpreting its orders or passing any order touching upon the subject-matter dealt with by this Court. Simultaneously, hearing of writ petitions pending before all the High Courts was stayed and it was ordained that if any clarification / modification is required then the same must be obtained from this Court. Shri Prashant Bhushan appearing on behalf of some of the street vendors / hawkers produced Twenty Third Report of the Standing Committee on Urban Development (2012-13) prepared in the context of the Street vendors (Protection of Livelihood and regulation of Street vending) Bill, 2012 and submitted that till Parliament enacts appropriate legislation for protecting the rights of the urban street vendors / hawkers, the Court may ordain implementation of the 2009 policy, with liberty to the parties to approach appropriate judicial forums for redressal of their grievance. They and learned counsel representing the municipal bodies / authorities, residents and others lamented that due to the restrictions imposed by this Court, no other Court is entertaining the grievance made by the street vendors / hawkers on the one hand and the residents of various colonies and other people on the other hand and this is the reason why dozens of interlocutory applications are being filed in this Court every year in the decided matters. They suggested that the embargo placed by this Court on the entertaining of writ petitions, etc., by the High Courts should be lifted and a direction be given that till the enactment of appropriate legislation by Parliament or any other competent legislature, the 2009 Policy should be implemented throughout the country. Shri Shyam Divan, learned senior counsel, extensively referred to some of the precedents and submitted that the Bombay High Court should be directed to specifically deal with the issue related to establishment of hawking and non-hawking zones so that the residents may not be adversely affected due to un-regulated street vending and hawking activities in different parts of the city of Mumbai. The other counsels representing street vendors / hawkers emphasized that this Court should direct the municipal authorities to accommodate all the street vendors / hawkers and stop their harassment, exploitation and victimization by the State agencies. Shri Prashant Bhushan emphasized that despite the directions given by this Court from time to time, including the interim order passed in relation to the street vendors / hawkers in Delhi, the concerned authorities are not allowing them to conduct their activities. He further argued that the street vendors / hawkers should be allowed to operate in accordance with the provisions of 2009 Policy and the concerned authorities should ensure that everybody is given licence for carrying out his / her activity. Learned counsel for the parties also suggested that the decision(s) of the Town Vending Committees should be published on regular intervals in print and electronic media and the internet and the High Courts should be asked to monitor implementation of various provisions of the 2009 Policy.

DECISION OF THE COURT

The Court after considering all the submissions made before it, ruled, as follow:

We have considered the respective arguments / submissions. Learned counsel for the parties are ad–idem that the orders passed by this Court from time to time have not solved the problems of the street vendors / hawkers and the residents of the cities of Delhi and Mumbai and almost every year they have been seeking intervention of this Court by filing interlocutory applications. The experience has, however, shown that it is virtually impossible for this Court to monitor day to day implementation of the provisions of different enactments and the directions contained in the judgments noted hereinabove. Therefore, it will be appropriate to lift the embargo placed on the entertaining of matters by the High Courts and we order accordingly. Paragraph 45 of the judgment reported in (2009) 17 SCC 151 shall stand modified and the street vendors / hawkers, the residents and others adversely affected by street vending / hawking shall henceforth be entitled to invoke the jurisdiction of the concerned High Courts for redressal of their grievance.”

The Court, further held that:

In Gainda Ram’s case (paragraph 78), this Court had directed that appropriate Government should enact a law on or before 30th June, 2011. Once the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2012 becomes law, the livelihood of millions would be saved and they will get protection against constant harassment and victimization which has so far been an order of the day. However, till the needful is done, it will be apposite for the Court to step in and direct that the 2009 Policy, should be implemented throughout the country.

REASONS FOR DECISION:

The reasons for the above decision of the Supreme Court was straightforward and clear. The Court decided to lift the embargo earlier placed by it in the case of Maharashtra Ekta Hawkers Union v. Municipal Corporation, Greater Mumbai (2009) 17 SCC 251, where it had ‘restrained all other Courts from interpreting its orders or passing any order touching upon the subject-matter dealt with by this Court’ because in the language of the Court itself, it was virtually impossible for the Court to monitor day to day implementation of the provisions of different enactments and the directions contained in the judgments noted hereinabove.

The second reason for directing the 2009 Policy to be implemented, was mainly because of the legal and statutory vacuum created by the legislators. Despite the Supreme Court’s suggestions  to the Government to enact a law on the issue on or before 30th June, 2011, the Government failed to do so, which led the Supreme Court to place some temporary legal structures in the form of the 2009 Policy to occupy the legal vacuum till a proper statutory structure is put in place by the legislators.

Rohit Kumar, 5th Year, BA LLB(Hons.), School of Law, KIIT University

CASE BRIEF: UNION OF INDIA (UOI) AND ORS. V. DHARAMENDRA TEXTILE PROCESSORS AND ORS., (2008) 13 SCC 369

The case were referred to the Full Bench by a Division Bench after doubting the correctness of the view expressed in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai[1], which was contrary to the dictum laid down in Chairman, SEBI v. Shriram Mutual Fund and another[2]. The revenue contended that Section 11 AC of the Central Excise Act, 1944 (Central Act 1 of 1944)  should be read as penalty for statutory offence and the authority imposing penalty has no discretion in the matter of imposition of penalty and in such cases the adjudicating authority was duty bound to impose penalty equal to the duties so determined. On the other hand, the Respondents contended that Section 11 AC should be construed in such a manner that some amount of discretion should be read into the Section, so as to give effect to the statutory intention.

Issue

  1. The question considered by a Full Bench of the Hon’ble Supreme Court was as to whether Section 11 AC of the Central Excise Act, 1944, inserted by the Finance Act, 1996, with the intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is scope for levying penalty below the prescribed minimum.
  2. Whether the absence of specific reference to mens rea, in the said section, is a case of casus omissus?

Judgement

The Full Bench of the Hon’ble Supreme Court after considering the relevant statutory provisions as well as the conflicting decision and the various precedents on the principle of casus omissus held that since the language of the statute is clear it has to be interpreted strictly and that the adjudicating authority has no discretion to levy duty less than what is legally and statutorily leviable. The Full Bench held that Dilip Shroff’s case[3] was not correctly decided and that Chairman, SEBI’s case[4] had analysed the legal position in the correct perspective. Directing the cases to be decided in the light of the findings of the Full Bench.

Reasoning

It is a well-settled principle in law that the court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. Similar is the position for conditions stipulated in advertisements.

Words and phrases are symbols that stimulate mental references to referents. The object of interpreting a statute is to ascertain the intention of the legislature enacting it.[5] The intention of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. As a consequence, a construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As observed in Crawford v. Spooner[6], the courts cannot aid the legislature’s defective phrasing of an Act, they cannot add or mend, and by construction make up deficiencies which are left there.[7]

It is contrary to all rules of construction to read words into an Act unless it is absolutely necessary to do so.[8] Rules of interpretation do not permit the courts to do so, unless the provision as it stands is meaningless or of doubtful meaning. The courts are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself.[9] While interpreting a provision the court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary.[10] The legislative casus omissus cannot be supplied by judicial interpretative process.

Two principles of construction–one relating to casus omissus and the other in regard to reading the statute as a whole, appear to be well-settled. Under the first principle a casus omissus cannot be supplied by the court except in the case of clear necessity and when reason for it is found in the four comers of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if–literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the legislature. Where to apply words literally would “defeat the obvious intention of the legislation and produce a wholly unreasonable result”[11], we must “do some violence to the words” and so achieve that obvious intention and produce a rational construction[12].

A casus omissus ought not to be created by interpretation, save in some case of strong necessity. Where, however, a casus omissus does really occur, either through the inadvertence of the legislature, or on the principle quod enim semel aut bis existit praeter sunt legislators, the rule is that the particular case, thus left unprovided for, must be disposed of according to the law as it existed before such statute – casus omissus et oblivioni datus dispositioni communis juris relinquitur.[13]

Ratio Decidendi

“Levy of penalty under Section 11AC of Central Excise Act, 1944 is a mandatory penalty and legislative casus omissus cannot be supplied by judicial interpretative process.”

Analysis

On casus omissus itself, Indian law is difficult to ascertain, as there are parallel lines of authority. In a 1952 decision[14] the Supreme Court followed Lord Simonds’[15] approach that the power will not be exercised when the alteration proposed is “far-reaching”, or when the legislation in question requires strict construction as a matter of law. Several other cases support this view[16]. On the other hand, the Court in Dadi Jagannatha[17] (overruling Nirmala Industries) and SR Bommai cautiously took the opposite view. However, the most authoritative precedent in support of the broader conception of casus omissus, OS Singh[18] is somewhat unpersuasive, as it appears to have misread certain cases that it relies on for its conclusion. These lines of authority cannot be easily reconciled, and if the Supreme Court is to resolve the matter, it is likely to consider the matter afresh.

One recent development that is of great interest in this context is a decision of Justice Katju in Rajbir Singh Dalal v. Chauhari Devi Lal University[19]. In this decision, Justice Katju has continued his strong criticism of the use of traditional principles of statutory interpretation. He has suggested that casus omissus, known as “adhyahara” in the Mimamsa school of interpretation permits courts to add words to a legal text. The Court has further observed that this is “superior to Maxwell’s principles in this respect” since Maxwell “does not go into any further detail and does not mention sub-categories coming under the general category of casus omissus”. This decision may require reconsideration, and in any event has to be read in light of the current case we discussed, the judgment that reaffirms the narrow view of casus omissus. It is perhaps time for the Supreme Court to settle the exact scope of the doctrine.

Conclusion

The opinion of the Indian courts, it is said, has been to allow reading of words into the statue but only when the situation is dire and the words are so vague and ambiguous that literally there is a need for the courts to make sense of the statute.

The Supreme Court in a leading case has also been of the view that a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself.[20]

But the court should not so interpret a statute as to create a casus omissus when there is really none.[21]

As observed by a constitution bench, “when the words of a law extend not to an inconvenience rarely happening, but due to those which often happen, it is good reason not to strain the words further than they reach, by saying it is casus omissus, and that the law intended quae frequentius accidunt.”[22] “But,” on the other hand, “it is no reason, when the words of a law do enough extend to an inconvenience seldom happening, that they should not extend to it as well as if it happened more frequently, because it happens but seldom.”[23]

[1] [2007 (8) SCALE 304]

[2] [(2006) 5 S.C.C. 361].

[3] [2007 (8) SCALE 304]

[4] [(2006) 5 S.C.C. 361]

[5] Institute of Chartered Accountants of India v. Price Waterhouse 1977 6 SCC 312.

[6] (1846) 6 MOO PC1

[7] State of Gujarat v. Dilipbhai Nathjibhai Patel, [1998]2SCR56

[8] Stock v. Frank Jones (Tipton) Ltd 1978 (1) ALL ER 948

[9] Per Lord Loreburn, L.C. in Vickers Sons

[10] CST v. Popular Trading Co., 2000(117)ELT531(SC)

[11] L.J. in Artemiou v. Procopiou (1965) 3 ALL ER 539 All ER p. 544 I

[12] Lord Reid in Luke v. IRC (1963) AC 557

[13] Buller, J. in Jones v. Smart 1785 (1) TR 44:99 ER 963 ER p. 967

[14] Hira Devi v. District Board, Shahjahanapur, [1952] 1 SCR 122

[15] Inco Europe v. First Choice Distribution, [2000] 2 All ER 109

[16] P.K. Unni v. Nirmala Industries, (1990) 2 SCC 378; Baliram Waman Hiray v. Justice B. Lentin, (1988) 4 SCC 419.

[17] Dadi Jagannadham v. Jammulu, (2001) 7 SCC 71)

[18] OS Singh v. Union of India, (1996) 7 SCC 37)

[19] (2008) 9 SCC 284

[20] Commissioner of Sales Tax, M.P. v. Popular Trading Company, Ujjain 2000 (5) SCC 511.

[21] Karnataka State v. Union of India, AIR 1978 SC 68, p 107; CIT v. National Taj Traders, AIR 1980 SC 485, p. 489; Union of India v. Ranjit Kumar (2003) 6 SCC 516

[22] Laws are adapted to those cases which most frequently occur.

[23] Fenton v. Hampton (1858) XI Moore, P.C. 347, referred in Maulavi Hussein Haji Abraham v. State Of Gujarat, AIR 2004 SC 3946; Sangeeta Singh v. Union Of India, (2005) 7 SCC 484.

Amit Kumar Modi, 5th Year, BBA LLB(Hons.), School of Law, KIIT University

CASE BRIEF: KALYAN CHANDRA SARKAR ETC. V. RAJESH RANJAN @ PAPPU YADAV AND ANR.; 2007 AIR 451; 2006 (9) SUPPL SCR 40; 2007 (1) SCC 70; 2006 (11 ) SCALE 551.

FACTS OF THE CASE:

  1. These are two criminal appeals challenging an order dated 21-9-2004 made by the High Court of Judicature at Patna in Criminal Miscellaneous No. 9220 of 2004 which was an application filed by respondent No. 1 (hereinafter referred to as the respondent) seeking the grant of bail in Sessions Trial No. 976 of 1999 pending before the CBI court at Patna.
  2. Deceased Ajit Sarkar (hereinafter referred to as A.S) was then a MLA from Purnia constituency in the State of Bihar. It is the prosecution’s case that there was enmity between the respondent and the said A.S because of their political differences.
  3. It is on the 14th of January, 1998 A.S was returning in his official car with three others after attending a Panchayat, when some of the accused (not including the respondent) followed the car of A.S on two motor bicycles and attacked A.S and his companions with sophisticated weapons consequent to which A.S and his companions Asfaq Alam, Hamender Sharma died and one Ramesh Oraon was seriously injured.
  4. In the said case the said respondent is charged for offences punishable under Sections 302 read with 34, 307 read with 34, 120B, 302/307 IPC and Section 27 of the Arms Act.

During the course of investigation CBI found that in view of the political rivalry between the deceased and the respondent, the latter entered into a criminal conspiracy with the other co-accused to eliminate A.S and pursuant to the said conspiracy, on 12-6-1998 the respondent herein held a meeting with the co-accused Harish Chaudhary and others in Siliguri.

ISSUES OF THE CASE:

  1. Whether the High Court was totally in error in allowing the bail application of the respondent by the impugned order?
  2. Can the bail application made by the respondent be dismissed?

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RELEVANT PROVISION OF THIS CASE:

  1. In this case the respondent applied for bail 9 times and every single time he was let go on bail he was found guilty or witness tampering or other like offences which broke his bail bond every single time and yet even after the Supreme Court disposed his 8th Bail application on finding Art.21 not infringing his right to personal liberty as he was clearly hindering the process of investigation, the High Court of Patna yet still let him Scott free after he re-applied for a bail application.
  2. As per S.437(3)(c) which states “that such person shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the court or to any police officer or tamper with the evidence” The last part of this sub-section i.e. “tamper with the evidence” is very crucial in our case as we have seen that in every single instance he was let go on bail he committed one or the other like offences which hindered with the process of investigation and broke his bail.
  3. Supreme Court observed that though an accused had a right to make successive applications for grant of bail the court entertaining such subsequent bail applications has duty to consider the reasons and grounds on which the earlier bail applications were rejected and in such cases the court also has a duty to record what are the fresh grounds which persuaded it to take a view different from the one taken in the earlier applications. The Supreme Court in that order also found fault with the High Court for not recording any fresh grounds while granting bail and so as per S.437 (4) which states,“an officer or a court releasing any person on bail under Sub-section (1), or Sub-section (2), shall record in writing his or its reason for doing so”. the Supreme Court was correct in its decision in rejecting the bail application by the respondent.
  1. After the Supreme Court has dismissed the 8th Bail application of the respondent, 11 days later, the 9th Bail application was filed by the Respondent and the High Court of Patna allowed the Bail application to pass through. In relation to this contention the Supreme Court also emphasized in the said order that ignoring the earlier orders of the superior court is violative of the principle of binding nature of the judgments of the superior court rendered in a lis between the same parties, and noted that such approach of the High Court of Patna in effect amounts to ignoring or overruling and thus rendering ineffective the principles enunciated in the earlier orders especially by the superior courts.

HELD:

  1. None of the decisions relied upon by the Respondent can be said to have laid down any absolute and unconditional rule about when bail should be granted by the Court and when it should not. It all depends on the facts and circumstances of each case and it cannot be said there is any absolute rule that because a long period of imprisonment has expired bail must necessarily be granted.
  2. While it is true that Article 21 is of great importance because it enshrines the fundamental right to individual liberty, but at the same time a balance has to be struck between the right to individual liberty and the interest of society. No right can be absolute, and reasonable restrictions can be placed on them. While it is true that one of the considerations in deciding whether to grant bail to an respondent or not is whether he has been in jail for a long time, the Court has also to take into consideration other facts and circumstances, such as the interest of the society.
  3. The conduct of the respondent, as noted by this Court in another case of his where he sought bail, is also such that this Court is not inclined to exercise its discretion under Article 136 for granting bail to the respondent.
  4. It is made clear that no further application for bail will be considered in this case by any Court, as already a large number of bail applications have been rejected earlier, both by the High Court and this Court.
  5. However the Trial Court is directed to ensure that the defense witnesses are examined on a day-to-day basis in accordance with a fixed time schedule so that the trial is completed as expeditiously as possible and the judgment is delivered soon thereafter.

-Tushar Jalan, 5th Year, BBA LL.B(Hons.), School of Law, KIIT University

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CASE BRIEF: SURJIT LAL CHHABDA V. C.I.T., 1976 AIR 109

FACTS:

The appellant Surjit Lal was the owner of an immovable property called “Kathoke Lodge”. He used to derive rent income from the said property in addition to deriving income under other heads. In 1956, he made a declaration throwing the said property into the family hotchpotch. The  family consisted of himself, his wife and an unmarried daughter. The appellant contended before the Income Tax Officer that the rent income derived from the said property should be assessed in the  status of a Hindu Undivided Family. The Income Tax Officer held: 1. In the absence of a nucleus of joint family property there was nothing with which the appellant could mingle his separate property. 2. There could not be a Hindu Undivided family without there being Undivided family property. An appeal filed before the Appellate Assistant Commissioner was dismissed but on the following grounds: (1) After the declaration the  appellant was dealing with  the income of the property in the same way as before and,  therefore, the declaration was not acted upon. (2)  Even assuming  that the property was  thrown into the common stock and was therefore joint family  property,   the income  from that property could still be taxed in the appellant’s hands  as he was the  sole male member of the family. The  matter was further taken to the Income Tax Appellate Tribunal  by the  appellant. The Tribunal accepted the declaration as genuine and differed from the A.A.C. that it was not acted  upon. The  Tribunal however, held that though the appellant had invested his separate property with the character  of joint family property,  he being a sole surviving coparcener continued to have the same absolute and unrestricted  interest in  the  property  as before and, therefore, in  law, the property had  to be  treated as his separate property. Thereafter the Tribunal referred the question of law to the High  Court. Before   the High  Court it was contended by the appellant  that it is open to a male member of a joint Hindu Family to convert his self-acquire property into joint family property by throwing  it into the common hotchpotch, and that  it was  not necessary that there  should  be  an ancestral nucleus or that there should be more than one male in the joint family.  On the  other  hand,  the  department contended that it was contrary to  the basic concept of a Hindu undivided family that a single male along with females could form  a joint  Hindu family  and that it was necessary for the formation of a joint Hindu family that there should be more than one  male entitled  to claim  partition of the joint family property. The High  Court did not go into the larger question and assumed for  the purpose  of argument that there need not be more than  one male  member for forming a joint Hindu family as a  taxable unit.  The High  Court  held  that  since the assessee  had no son,  there was no undivided  family. According to  the High Court, the case of the appellant fell within the ratio  laid  down by  the  Privy Council  in Kalyanji’s case and that  since under the personal law, the right to  the income remained as it was before the appellant made the  declaration, the  income from Kathoke  Lodge was liable to be assessed as the appellant’s individual income. An appeal was filed to the Apex Court by special leave.

ISSUES:

Whether, on the facts and in the circumstances of the case, the income from property known as ‘Kathoke Lodge’ was to be assessed separately as the income of the Hindu undivided family of which the assessee was karta?

JUDGEMENT:

Even  in the  absence of  an antecedent  history of jointness, the appellant could constitute  a joint  Hindu Family with  his wife  and unmarried daughter. True that the appellant could not constitute  a Coparcenary with his wife and unmarried  daughter but under the Income Tax Act a Hindu undivided family, not a Coparcenary is taxable unit. A Hindu Coparcenary is a much narrower body than the joint family. Since the personal law of the appellant regards him as the owner of  Kathoke lodge and the income there from as his income  even after the property  was  thrown  into the family hotchpotch, the income would be chargeable to income tax as his individual income and  not that of the family. Hence, the appeal was dismissed.

REASONING BEHIND THE JUDGEMENT:

There are two classes of cases each requiring a different approach. In cases where the property belongs to a subsisting undivided family, the property does not cease to have that character merely because the family is represented by a sole surviving coparcener who possesses rights which an owner of  property may possess, or  for that matter even if the family  for the  time being consists only of widows of deceased coparceners.  In cases where the  property did not belong to a subsisting  undivided  family, whether any property has acquired the character  of joint  family property  has  acquired the character of  joint family  property  in  the  hands  of  an assessee depends  on the  composition of the family. A joint Hindu family can consist of a man, his wife and daughter but the mere  existence of a wife or daughter will not justify the assessment of income  from the joint family property in the status  of the  head as  a manager of the joint family.

Once it is realised that there are two distinct classes of cases which  require a different approach there would be no difficulty  in understanding the implications of the apparently conflicting tests evolved as guides for deciding the two classes of cases. Kathoke Lodge was not an asset of a pre-existing joint family.  It became  an item  of  joint family property for the first time when the appellant threw what was his separate property into the family hotchpotch. The appellant  had no  son. His wife and unmarried daughter were entitled to be maintained by him from out of the income of Kathoke  Lodge while it was his separate property. Their rights in that property are not enlarged for the reason that the property  was thrown  into the  family  hotchpotch. Not being coparceners  of the  appellant, they  have neither  a right by  birth in  the property  nor the  right  to  demand partition nor  indeed the  right to  restrain the  appellant from alienating the property for any purpose whatsoever. The property which the appellant  has put into the common stock may change  its legal  incidence on  the birth of a son but until that  event happens, the property in the eyes of Hindu Law is really his.  He can  deal with it as  a full owner, unrestrained by considerations of legal necessity or benefit of the estate. He may sell it mortgage it or make a gift of it. Even  a son born or  adopted after the alienation shall have to take the family hotchpotch as he finds it.

CRITICAL ANALYSIS:

The  joint family  with all  its  incidents,  is  a creature of  law and  cannot be created by  act of  parties except to  the extent  to which a stranger may be affiliated to the family by  adoption. The appellant, however, was not by contract seeking to introduce in his family. Strangers are not bound to  the family  by the  tie of  a sapindaship. That it does not  take more  than one  male to form a joint  Hindu family with females, is well established. The  cases of Kalyanji[1] furnish a near parallel to the present case. Though the property in  their hands was assumed to be ancestral, income which Kanji and Sewdas received from it was treated as their separate property,  as neither of them had a son who could take interest  in the  ancestral property by birth. Applying that analogy,  even if Kathoke lodge were to be an ancestral asset, its  income would  still have  to be  treated as the appellant’s separate  property as  he had  no son  who could take interest  in that property  by  birth.  The  ratio  of Kalyanji‘s case would, therefore, apply to the instant case. The reason  why the  case of  Kanji and Sewdas furnished  a close parallel is the very reason for which their cases were held by this  Court  to  be  distinguishable  from  Lakshmi Narain’s case[2]. In Lakshmi  Narain’s case  the property was ancestral in  the hands of the father, the son had acquired an interest  by birth  therein there  was a subsisting Hindu Undivided family during the lifetime of the father and since that family  did not  come to  an end  on the  death of the father, the  Bombay High  Court rightly held that the income continued to  be the  income of the joint  family  and was liable to  be taxed  as such. The property of a joint family does not  cease to  belong to  the family merely because the family is  represented by  a single coparcener who possesses rights which an owner of property may possess. Hence, the Judgement given by the apex court is correct. But, after the 2005 amendment, Lakshmi Narain’s reasoning fits the case in better way since, daughter is a coparcener in Hindu Joint Family. Hence, the property of Kathoke Lodge was liable to be taxed as Hindu Undivided Family Property.

[1] Kalyanji Vithaldas v. Commissioner of Income-tax,  75 I.T.R. 458

[2] Commissioner of Income-tax, Bombay v. Gomedalli Lakshminarayan (3 I.T.R. 367)

CASE BRIEF: NARAYAN GANESH DASTANE V. SUCHETA NARAYAN DASTANE, 1975 AIR 1534

FACTS:

The appellant, Dr. Narayan Ganesh Dastane, passed his M.Sc. in Agriculture from the Poona University. He was sent by the Government of India to Australia  in the Colombo Plan Scheme. He obtained his Doctorate in Irrigation Research from an Australia University and returned to India in April, 1955. He worked for about 3 years  as an Agricultural Research Officer and in October, 1958 he left Poona to take charge of a new post as an Assistant professor of Agronomy in the post graduate school, Pusa Institute, Delhi. At present he is said to be working on a foreign assignment. his father was a solicitor-cum-lawyer in Poona.

The respondent, Sucheta, comes from Nagpur but she spent her formative years mostly in Delhi. Her father was transferred to Delhi in 1949 as an Under Secretary in the Commerce of Ministry of the Government of India and she came to Delhi to the rest of the family.. She passed her B.Sc. from the Delhi University in 1954 and spent a year in Japan where her father was attached to the Indian Embassy. After the rift in her marital relations, she obtained a Master’s Degree in Social Work. She has done a field work in Marriage Conciliation and Juvenile Delinquency. She is at present working in the Commerce and Industry Ministry, Delhi.

In April, 1956 her parents arranged her marriage with the appellant. But before finalising the proposal, her father, B R Abhyankar- wrote two letters to the appellant’s father saying in the first of these that the “respondent had a little misfortune before going to Japan in that she had a bad attack of sunstroke which affected her mental condition for sometime.” In the second letter which followed at an interval of two days, “cerebral malaria” was mentioned as an additional reason for her mental affectation. The letters state that after a course of treatment at the Yeravada Mental Hospital, she was cured: “you find her as she is today.” The respondent’s father  asked to the appellant’s father to discuss the matter if necessary, with the doctors of Mental Hospital. The letter was written avowedly in order that the appellant and his people “should not be in the dark about an important episode” in the life of the respondent, which “fortunately, had ended happily”.

Dr. Desmukh confirmed what was stated in the letters and being content with the assurance, the appellant and his father made no enquiries with the Yervada Mental hospita. The marriage was performed at Poona on May 13, 1956. The appellant was then 27 and the the respondent was the 21 years of age.

They lived at Arbhavi in District Belgaum from June to October, 1956. On November 1, 1956 the appellant was transferred to Poona where the two lived together till 1958. During this period a girl named Shubha was born to them on March, 1957. The respondent delivered in Delhi where her parents lived and returned to Poona in June, 1957 after an absence , normal on such occasions,  of about 5 months in October, 1958 and the appellant took a job in the Pusa Institute of Delhi, on March 21, 1959 the second daughter Vibha was born. the respondent delivered at Poona where the appellant’s parents lived  and returned to Delhi in August, 1959. Her parents were living  at this time Djakarta, Indonesia.

In January, 1961 the respondent went to Poona to attend the marriage of appellant’s brother, a doctor by profession, who has been given in adoption in Lohokare family. A fortnight after the marriage  the appellant got the respondent examined by Dr. Seth a Psychiatrist in charge of Yervada Hospital. Dr. Seth wanted adequate data to make diagnosis and suggested that he would like to have a few sittings with the respondent. For reasons good or bad, the respondent was averse to submit herself to that kind of scrutiny. There was no consultation thereafter with Dr. Seth. According to the Appellant, she had promised to see Mr. Seth but she denies the fact that she had made that kind of promise. She believed that the appellant was building up a case that she was of unsound mind and she was being lured to walk into the trap. February, 1961 was the last that they lived together. But on the day of Parting she was three months in the family way. The third child named Pratibha was born when they were in marital crisis.

On March 11, 1961 the appellant returned to Delhi all alone. Two days later the respondent followed him but she went straight to her parents’ house in Delhi. (On the 15th, the appellant wrote a letter to the Police asking for protection as he feared danger to his life from the respondent’s parents and relatives. On the 19th, the respondent saw the appellant but that only gave to the parties one more chance to give vent to mutual dislike and distrust. After a brief meeting, she left the broken home for good. On the 20th, the appellant once again wrote to the Police renewing his request for protection.

On March 23, 1961 the respondent wrote to the appellant complaining against his `conduct and asking for money for the maintenance of herself and the daughters. On May 19, 1961 the respondent wrote a letter to the Secretary, Ministry of Food and Agriculture, saying that the appellant had \deserted–her, that he had treated her with extreme cruelty and asking that the Government should make separate provision for her maintenance. n March 25, her statement was recorded maintenance. an Assistant Superintendent of Pace, in which she alleged desertion and ill-treatment by the appellant. Further statements were recorded by the Police and the Food Ministry also followed up respondent’s letter of May 19 but ultimately nothing came out of these complaints and cross-complaints.

As stated earlier, the third daughter, Pratibha, was born on August 19, 1961. On November 3, 1961 the appellant wrote to respondent’s father complaining of respondent’s conduct and expressing regret that not even a proper invitation was issued to him when the naming ceremony of the child was performed. On December 15, 1961 the appellant wrote to respondent’s father stating that he had decided to go to the Court for seeking separation from the respondent. The proceedings out of which this appeal arises were instituted on February 19, 1962.

The parties are Hindus but the Court does not propose, as is commonly done and as has been done in this case, to describe the respondent as a “Hindu wife” in contrast to non-Hindu wives as if women professing this or that particular religion are exclusively privileged in the matter of good sense, loyalty and conjugal kindness. Nor shall the Court refer to the appellant as a “Hindu husband” as if that species unfailingly projects the image of tyrant husbands. The Court proposes to consider the evidence on its merits, remembering of course the peculiar habits, ideas, susceptibilities and expectations of persons belonging to the strata of society to which these two belong. All circumstances which constitute the occasion or setting for the conduct complained of have relevance but the Court think that no assumption can be made that respondent is the oppressed and appellant the oppressor. The evidence in any case ought to bear a secular examination.

ISSUES:

Whether the Burden of Proof of Cruelty lies on the petitioner or not?

ARGUMENTS:

The appellant asked for annulment of his marriage by a decree of nullity under Section 12(1)(c) of ‘The Hindu Marriage Act’, 25 of 1955 on the ground that his consent to the marriage was obtained by fraud. Alternatively, he asked for divorce under Section 13(1)(iii) on the ground that the respondent was incurably of unsound mind for a continuous period of not less than three years immediately preceding the presentation of the petition. Alternatively, the appellant asked for judicial separation under Section 10(1)(b) on the ground that the respondent had t  her. treated him with such cruelty as to cause a reasonable apprehension  in his mind that it would be harmful or injurious for him to live with her.

The appellant alleged that prior to the marriage, the respondent was treated for sunstroke and the cerebral malaria. The Trial Court rejected this contention. It also rejected the contention that the respondent was of unsound mind. It, however, held that the respondent was guilty of cruelty and on that ground it passed a decree for judicial separation.

Both sides went in appeal to the District Court which dismissed the appellant’s appeal and allowed the respondent’s, with the result that the petition filed by the appellant stood wholly dismissed.

The appellant then filed Second Appeal No. 480 of 1968 in the Bombay High Court. A learned Single Judge of that court dismissed that appeal by a judgment dated February 24, 1969. This Court granted to the appellant special leave to appeal, limited to the question of judicial separation on the ground of cruelty. The Court is thus not concerned with the question whether the appellant’s consent to the marriage was obtained by fraud or whether the respondent had been of unsound mind for the requisite period preceding the presentation of the petition. The decision of the High Court on those questions must be treated as final and cannot be re-opened.

In this appeal by special leave, against the judgment rendered by the High Court in Second appeal, The Court would not have normally permitted the parties to take us through the evidence in the case. Sitting in Second Appeal, it was not open to the High Court itself to re-appreciate evidence. Section 100 of the Code of Civil Procedure restricts the jurisdiction of the High Court in Second Appeal to questions of law or to substantial errors or defects in the procedure which may possibly have produced error or defect in the decision of the case upon the merits. tit he High Court came to the conclusion that both the courts below had “failed apply the correct principles of law in determining the issue of cruelty.” Accordingly, the High Court proceeded to consider the evidence for itself and came to the conclusion independently that the appellant had failed to establish that the respondent had treated him with cruelty A careful consideration of the evidence by the High Court ought to be enough assurance that the finding of fact is correct and it is not customary for this Court in appeals under Article 136 of the Constitution to go into minute details of evidence and weigh them one against the other, as if for the first time. Disconcertingly, this normal process is beset with practical difficulties.

In judging of the conduct of the respondent, the High Court assumed that the words of abuse or insult used by the respondent “could not have been addressed in vacuum. Every abuse, insult, remark or retort must have been probably in exchange for remarks and rebukes from the husband………. a court is bound to consider the probabilities and infer, as I have done, that they must have been in the context of the abuses, insults, rebukes and remarks made by the husband and without evidence on the record with respect to the conduct of the husband in response to which the wife behaved in a particular way on each occasion, it is difficult, if not impossible to draw inferences against the wife.”

The Court finds this approach difficult to accept Under Section 103 of the Code of Civil Procedure, the High Court may, if the evidence on the record is sufficient, determine any issue of fact necessary for the disposal of the appeal which has not been determined by the lower appellate court or which has been wrongly determined by such court by reason of any illegality omission, error or defect such as is referred to in sub-section (1) of Section 100. But, if the High Court takes upon itself the duty, to determine an issue of fact its power to appreciate evidence would be subject to the same restraining conditions to which the power of any court of facts is ordinarily subject. The limits of that power are not wider for the reason that the evidence is being appreciated by the High Court and not by the District Court. While appreciating evidence, inferences may and have to be drawn but courts of facts have to remind themselves of the line that divides an inference from guesswork. If it is proved as the High Court thought it was, that the respondent had uttered words of abuse and as the High Court was entitled to infer that she had acted in retaliation, provided of course there was evidence, direct or circumstantial to justify such an inference. But the High Court itself felt that there was no evidence on the record with regard to the conduct of the husband in response to which the wife could be said to have behaved in the particular manner. The High Court reacted to this situation by saying that since there was no evidence regarding the conduct of the husband, “it is difficult, if not impossible, to draw inferences against the wife.” If there was no evidence that the husband had provoked the wife’s utterances, no inference could be drawn against the husband. There was no question of drawing any inferences against the wife because, according to the High Court, it was established on the evidence that she had uttered the particular words of abuse and insult.

The approach of the High Court was thus erroneous and its findings are vitiated as was held. The Supreme Court would have normally remanded the matter to the High Court for a fresh consideration of the evidence but this proceeding had been pending for 13 years and the Supreme Court thought that rather than delay the decision any further, the Supreme Court should undertake for ourselves the task which the High Court thought it should undertake under Section 103 of the Code. That made it necessary to consider the evidence m the case.

But before doing so, it is necessary to clear the ground of certain misconceptions, especially as they would appear to have influenced the judgment of the High Court. First, as to the nature of burden of proof which rests on a petitioner in a matrimonial petition under the Act. Doubtless, the burden must lie on the petitioner to establish his or her case for, ordinarily, the burden lies on the party which affirms a fact, not on the party which denies it. This principle accords with commonsense as it is so much easier to prove a positive than a negative. The petitioner must therefore prove that the respondent has treated him with cruelty within the meaning of Section 10(1)(b) of the Act. But does the law require, as the High Court has held, that the petitioner must prove his case beyond a reasonable doubt? In other words, though the burden lies on the petitioner to establish the charge of cruelty. what is the standard of proof to be applied in order to judge whether the burden has been discharged?

ORDER:

The normal rule which governs civil proceedings is that a fact can be said to be established if it is proved by preponderance of probabilities. This is for the reason that under the Evidence Act, Section 3, a tact is said to be proved when the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstance. of the particular case. to act upon the supposition that it exists. The belief regarding the existence of a fact may thus be founded on a balance of probabilities. A prudent man faced with conflicting probabilities concerning a tact situation will act on the supposition  that the tact exists, if on weighing the various probabilities he finds that the preponderance is in favour of the existence of the particular fact. As a prudent man, so the court applies this test for finding whether a fact in issue can be said to be proved. The first step in this of process is to fix the probabilities, the second to weigh them, though the two may often intermingle. The impossible is weeded out at the first stage, the improbable at the second. Within the wide range cut probabilities the court has often a difficult choice to make but it is this choice which ultimately determines where the preponderance of probabilities lies. Important issues like those which affect the status of parties demand a closer scrutiny than those like the loan on a promissory note: “the nature and gravity of an issue necessarily determines the manner of attaining reasonable satisfaction of the truth of the issue”[1] or as said by Lord Denning, -the degree of probability depends on the subject-matter. In proportion as the offence is grave, so ought the proof to be clear.[2] But whether the issue is one of cruelty or of a loan on a pro-note, the test to apply is whether on a preponderance of probabilities the relevant fact proved. in civil cases this, normally, is the standard of proof to apply for finding whether the burden of proof is discharged.

Proof beyond reasonable doubt is proof by a higher standard which generally governs criminal trials or trials involving inquiry into rues of a quasi-criminal nature. A criminal trial involves the liberty of the subject which may not be taken away on a mere preponderance of probabilities. If the probabilities are so nicely balanced that a reasonable, not a vacillating, mind cannot find where the preponderance lies, a doubt arises regarding the existence of the fact to be proved and the benefit of such reasonable doubt to the accused. It is wrong to import such considerations in trials of a purely civil nature. The burden must lie on the petitioner to establish his case. The burden lies on party who affirms it not vice versa.

[1] Wright v. Wright, (1948) 77 CLR 191 (210)

[2] Blyth v. Blyth. 1966 1 All ER 524 (536).