Sunday, August 31, 2008



REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 819 OF 2008 (Arising out of SLP (Crl.) No.4794 of 2006) Kotikalapudi Subba Rao ..Appellant Versus State of A.P. & Anr. ..Respondents


1. Leave granted.

2. Challenge in this appeal is to the judgment of the Division Bench of the Andhra Pradesh High Court disposing of two criminal appeals i.e. Criminal Appeal Nos.1114 and 1118 of 2004. By the impugned judgment Criminal Appeal No.1114 of 2004 filed by Ganpathi Satya Prakash (A3) was allowed.

But Criminal Appeal No.1118 of 2004 filed by Kotikalapudi Suresh (A2) was allowed while the appeal filed by the present A1 was dismissed. It is to be noted that the present appellant and Kotikalapudi Suresh (A2) were found guilty under Section 302 of the Indian Penal Code, 1860 (in short `IPC') while Ganpathi Satya Prakash (A3) was found guilty for offence punishable under Section 302 read with Section 34 IPC. The present appellant was also found guilty for offence punishable under Section 307 IPC. Appellant was sentenced to undergo RI for life and to pay a fine of Rs.500/- for the first offence and RI for five years and fine of Rs.2000/- with default stipulation for the second offence.

3. Background facts in a nutshell are as follows:

2 Kancherlapalli Ravi Kiran (hereinafter referred to as the `deceased' ) was doing finance business. A1 borrowed an amount of Rs.30,000/- from the deceased and executed a promissory note scribed by Pasupuleti Chennakesavulu (P.

W.8) . On 5.5.2001 the deceased asked A1 to repay the said amount due to him. On denial of Al to repay the same, the deceased allegedly slapped Al and thereupon, Al threatened the deceased that he would see his end. On the next day i.e.

on 6.5.2001 at about 6.30 P.M. the deceased alongwith P.W. 1 came to old Bus Stand in Papatla on Suzuki Motorcycle. Then A 1 stopped the motorcycle and called deceased and P.W.1.

The deceased got down from the motorcycle and went to A1 and thereupon quarrel ensued. P.W.1 rushed towards A1 and noticed Al and A2 armed with knives and another person was also with them. P.W. 1 identified the other person as A3.

According to P.W. 1, Al and A2 attempted to attack the deceased with knives and therefore he went in rescue of him and thereupon A1 poked him with a knife on the right side of 3 abdomen, and A3 kicked him on his stomach and so he fell down. Later, A1 poked the deceased with knife on the left side of chest and ribs and A2 poked the deceased on the top of right side hip. In the meanwhile, P.W.2-Kokkirala Naga Satish reached the scene and raised cries. His cries drew the attention of the passers by and thereby the scene stormed with strong gathering. The accused took to his heels towards Bheemavaripalem Road, P.W.2 informed the incident to his father over phone. P.W.7-Kancherlapalli Kishore Kumar, a relative of P.W.2, reached the scene and shifted the deceased and P.W.1 to Government Hospital, Bapatla for treatment. The Doctor examined the deceased and declared him dead.

P.W.16-Dr.Y.Vaijayanthi, CAS, Government Hospital, Bapatla examined P.W.1 medically and found a clean cut stab injury of size 3 1/4 cm s long, 1 cm wide and 7 depth, 2.5 cms below and 8 cms right of umbilicus on abdomen. After giving first aid to P.W. 1, the doctor referred him to Government Hospital, Guntur, for further treatment. She issued Ex.P.12 certificate opining that the injuries received by P.W. 1 are grievous in 4 nature. Ex. P.19 is the wound certified issued by her. A requisition was sent to JFCM, Bapatla to record the dying declaration of P.W. 1. P.W. 12 - M.Babu Rao, JFCM, Bapatla received the requisition from the Government Hospital on 6.5.2001 at about 8.50 P.M. to record the dying declaration of P.W.1. He proceeded to Government Hospital, Bapatla, and commenced recording of the dying declaration of P. W .1 at 9 P.M. and concluded the same at 9.20 P.M. Ex.P.13 is the dying declaration recorded by him. P.W.14 M.Dayanandam, ASI of Bapatla Town Police Station received death intimation as well as intimation of the admission of P.W.1 in the hospital.

Ex. P.15 and P-16 are the intimations received by him. He rushed to Government Hospital, Bapatla, recorded the statement of P.W.1 and registered a case in Cr. No.50/2001 under Sections 307 and 302 r/w 34 IPC and issued Ex.P-17 FIR. P.W.15 received the copy of FIR and took up investigation. He examined P.W.1 and recorded his statement under Section 161 of the Code of Criminal Procedure, 1973 (in short `Cr.P.C'). He observed the scene on 3.5.2001 at about 3 5 A.M. and prepared Ex.P.6 scene of offence panchanama. He examined PWs.2, 6 and 7 and one Kancharlapalli Naresh at the Government Hospital, Papatla and recorded their statements. He conducted inquest on the dead body of the deceased on 7.5.2001 at 8 A.M. The opinion arrived by the panchas, on hearing the statements of the witnesses examined during the inquest, came to be incorporated at Col.

No. 15 of the Inquest Report. Ex.P.7 is the inquest report. P.W.

17 G. Penchalanaidu, Inspector of Police, Bapatla, took up investigation and effected arrest of Al and A2 and recovered Mos. l and 2 in pursuance of their disclosure statements.

Ex.P.8 and P.9 are the admissible portions in their confessional statements. He effected the arrest of A3 on 19.5.2001 at 10.30 A.M. at the footbridge of Railway Station, Bapatla and sent him for remand. On requisition, P.W. 13 conducted test identification parade on 16.6.2001. In the test identification parade P.Ws. 1 to 3 identified A1 to A3 as the assailants of the deceased. After completing investigation, a charge sheet came to be submitted before the II Additional 6 Munsif Magistrate, Bapatla. The learned Magistrate committed the case to the Sessions Division, Guntur as the offence u/s.302 and. 307 IPC are exclusively triable by the Court of Sessions. The learned Sessions Judge made over the same to II Additional Sessions Judge, Guntur for trial in accordance with law. The learned II Additional Sessions Judge, Guntur, on hearing the prosecution and the accused, framed the following charges:

1) Charge No.1: Against A1 for the offence u/s.307 IPC;

2) Charge No.2: Against A1 and A2 for the offence u / s.302 IPC;

3) Charge No.3: Against A3 for the offence u/s.302 r/w 34 IPC. He read over and explained the charges to the accused, for which the accused pleaded not guilty and claimed to be tried. To bring home the guilt of the accused for the offences with which they stood charged, the prosecution examined P.Ws.l to 17, marked Exs. P.1 to P.20 and exhibited Mos. 1 to 8. The learned Additional Sessions Judge, on appreciation of the evidence brought on record and on hearing the prosecution and the 7 accused, found the accused guilty for the offences with which they stood charged and convicted them accordingly and sentenced them.

4. 17 witnesses were examined to further the prosecution version. The accused persons pleaded innocence and false implication. PW1 was the injured complainant. PW2 was also an eye witness who removed the deceased to the hospital along with others. It was also stated that PW3 is an eye witness. PWs. 3, 4 and 5 were eye witnesses to the occurrence. The Trial Court placed reliance on the evidence of PWs. 1, 2 and 3 because PWs. 4 and 5 resiled from their statement during investigation. The Trial Court found the evidence of injured eye witness and two other witnesses to be credible and cogent and, therefore, recorded conviction and sentence as aforementioned.

5. Two criminal appeals were filed before the High Court by the accused persons.


6. The basic stand was that the evidence of the witnesses do not inspire confidence, more particularly, when PWs 4 and 5 do not support the prosecution. The High Court found that the case was established against the accused persons on the basis of evidence so far as the present appellant A1 is concerned, but found the evidence so far as the other accused persons are concerned. Accordingly, as noted above, the appeal filed by the appellant was dismissed.

7. In support of the appeal learned counsel for the appellant submitted that the Trial Court and the High Court should not have relied upon the evidence of PWs 1, 2 and 3.

It is also submitted that even if the prosecution version is accepted in its entirety, a case under Section 302 IPC is not made out because the occurrence took place in course of a sudden quarrel and Exception 4 to Section 300 is applicable.

The learned counsel for the State supported the judgment of the Trial Court and the High Court.


8. So far as the evidence of PWs. 1, 2 and 3 are concerned, learned counsel for the appellant was not able to point out any discrepancy or deficiency in their evidence to warrant rejection of their evidence. The Trial Court and the High Court have rightly relied upon their testimony.

9. The residual question is whether Section 302 IPC has application.

10. For bringing in operation of Exception 4 to Section 300 IPC, it has to be established that the act was committed without premeditation, in a sudden fight in the heat of passion upon a sudden quarrel without the offender having taken undue advantage and not having acted in a cruel or unusual manner.


11. The Fourth Exception of Section 300, IPC covers acts done in a sudden fight. The said exception deals with a case of prosecution not covered by the first exception, after which its place would have been more appropriate. The exception is founded upon the same principle, for in both there is absence of premeditation. But, while in the case of Exception 1 there is total deprivation of self-control, in case of Exception 4, there is only that heat of passion which clouds men's sober reasons and urges them to deeds which they would not otherwise do.

There is provocation in Exception 4 as in Exception 1; but the injury done is not the direct consequence of that provocation.

In fact Exception 4 deals with cases in which notwithstanding that a blow may have been struck, or some provocation given in the origin of the dispute or in whatever way the quarrel may have originated, yet the subsequent conduct of both parties puts them in respect of guilt upon equal footing. A `sudden fight' implies mutual provocation and blows on each side. The homicide committed is then clearly not traceable to unilateral provocation, nor in such cases could the whole blame be 11 placed on one side. For if it were so, the Exception more appropriately applicable would be Exception 1. There is no previous deliberation or determination to fight. A fight suddenly takes place, for which both parties are more or less to be blamed. It may be that one of them starts it, but if the other had not aggravated it by his own conduct it would not have taken the serious turn it did. There is then mutual provocation and aggravation, and it is difficult to apportion the share of blame which attaches to each fighter. The help of Exception 4 can be invoked if death is caused (a) without premeditation, (b) in a sudden fight; (c) without the offender's having taken undue advantage or acted in a cruel or unusual manner; and (d) the fight must have been with the person killed. To bring a case within Exception 4, all the ingredients mentioned in it must be found. It is to be noted that the `fight' occurring in Exception 4 to Section 300, IPC is not defined in the IPC. It takes two to make a fight. Heat of passion requires that there must be no time for the passions to cool down and in this case, the parties have worked themselves into a fury on 12 account of the verbal altercation in the beginning. A fight is a combat between two and more persons whether with or without weapons. It is not possible to enunciate any general rule as to what shall be deemed to be a sudden quarrel. It is a question of fact and whether a quarrel is sudden or not must necessarily depend upon the proved facts of each case. For the application of Exception 4, it is not sufficient to show that there was a sudden quarrel and there was no premeditation.

It must further be shown that the offender has not taken undue advantage or acted in cruel or unusual manner. The expression `undue advantage' as used in the provision means `unfair advantage'.

12. The aforesaid aspects have been highlighted in Sridhar Bhuyan v. State of Orissa (JT 2004 (6) SC 299), Prakash Chand v. State of H.P. (JT 2004 (6) SC 302), Sachchey Lal Tiwari v. State of Uttar Pradesh (JT 2004 (8) SC 534), Sandhya Jadhav v. State of Maharashtra [2006(4) SCC 653] and Lachman Singh v. State of Haryana [2006 (10) SCC 524].


13. When the factual position is considered in the background of the legal principles set out above, the inevitable conclusion is that the appropriate conviction would be in terms of Section 304 Part I IPC and not Section 302 IPC. The conviction under Section 307 IPC does not suffer from any infirmity. The same is upheld. Custodial sentence of 10 years in respect of the offence punishable under Section 304 Part I IPC would suffice. Both the sentences shall run concurrently.

14. The appeal is allowed to the aforesaid extent.


(Dr. ARIJIT PASAYAT) ..........................................J.


S.B. Sinha & Mukundakam Sharma

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDCITION CIVIL APPEAL NO. 3323 OF 2008 (Arising out of SLP (C) No.11134 of 2006) Jaswant Singh Lamba ... Appellant Versus Haryana Agricultural University & Ors. ... Respondents

S.B. Sinha, J.

1. Leave granted.

2. Appellant herein is aggrieved by a judgment and order dated 19.7.2005 passed by the High Court of Punjab and Haryana, dismissing a review petition seeking review of the judgment dated on 23.11.1992.

2 The review of the said judgment was sought for by the appellant, inter alia, on the premise that the decision of the High Court, allowing a writ petition filed by respondent Nos.4 and 5 resulted in loss of his seniority.

Respondent Nos.4 and 5 were appointed as Sectional Officers on an ad hoc basis on or about 11.11.1982. Respondent No.4 was appointed on a temporary post on 27.9.1984, whereas the appellant was appointed on 5.10.1984. Respondent No.5 is said to have been appointed on a temporary post by an order dated 7.6.1985. In a seniority list published on 23.12.1987, their seniority was shown from the date of their regular appointment. The said respondents, however, contended that as they were appointed in terms of the recruitment rules against permanent vacancies, they had wrongly been appointed on an ad hoc basis on and from 11.11.1982.

Their representation that they were entitled to be appointed with effect from 11.11.1982 on a regular basis was rejected. They filed a writ petition before the High Court of Punjab and Haryana on 2.6.1990, praying, inter alia, for the following reliefs :

"(a) a writ in the nature of certiorari may kindly be issued in favour of the petitioners and against the respondents, quashing the impugned Annexure P/9.

(b) a writ in the nature of mandamus may kindly be issued in favour of the petitioners and respondents to grant benefit of ad hoc 3 services towards fixation of the seniority of the petitioners and to refix their seniority after counting their ad hoc service.

(c) a writ in the nature of mandamus may kindly be issued in favour of the petitioners and against the respondents, directing the respondents to fix pay of the petitioners after taking into consideration their ad hoc service towards grant of increments etc. and to release their arrears along with interest @ Rs.180 per annum."

3. The said writ petition was allowed by the High Court by an order dated 23.11.1992 directing that the said respondents shall be deemed to be in the service of the respondent on a regular basis from the date of their initial appointment, holding :

"After considering the entire matter, the contention of the learned counsel for the respondents deserves to be rejected.

Undisputedly, the petitioners were initially appointed after they had been selected by a Committee with effect from November 11, 1982 and they had been continuously working as such without any break till they were appointed on regular basis. Though the services of the petitioner No.1 stood terminated by serving him a notice dated November 11, 1983, yet he has not relieved and was allowed to continue on the post after he gave an undertaking that in case extension is not granted, he will not claim any salary etc.

Later on, he was granted extension of another six months by order dated December 2, 1983.

4 Therefore, there is no break in his service even till his regular appointment."

4. Allegedly, a seniority list was published on 18.4.1992 wherein the appellant was shown as senior to the respondent No.5 being at serial No.16 and respondent No.5 was shown as junior to him being placed at serial No.18. However, another seniority list was published on 20.5.2004 wherein they were shown as senior to the appellant. Appellant filed representations thereagainst, inter alia, on 29.5.2004 and 24.8.2004. The said representations were rejected by an order dated 1.1.2005, stating :

"It is intimated that your representation for fixing of seniority as Junior Engineer above Shri A.K.

Agarwal, J.E. has been considered and rejected in the light of the decision of the Hon'ble Pb. &

Haryana High Court in Civil Writ Petition No.9879 of 1990 dated 23.11.1992 on the basis of which Sh. A.K. Aggarwal has been treated to be joined on regular basis from the date of his joining on ad hoc basis.

This also disposes of your all representations on the above subject."

The review application was filed thereafter in January 2005.

Respondent No.4 was appointed on temporary post before appellant and was also shown senior to appellant in seniority lists dated 23.12.1987 5 and 18.4.1992. Thus, the appellant could have grievance only against Respondent No.5, if any, who was appointed on temporary post later to the appellant and was also shown junior in the abovementioned list.

5. Mr. Manu Mridul, learned counsel appearing on behalf of the appellant, would submit that the High Court committed a serious error in passing the impugned judgment insofar as it failed to take into consideration that the appellant being not aware of the result of the petition filed by respondent Nos.4 and 5 could not have moved the application for review and in that view of the matter the same should have been entertained. There having been no time prescribed for filing a review application, it was permissible in law for the appellant to file the same immediately after coming to know of the order, which has civil consequences.

6. Mr. Malhotra, learned counsel appearing on behalf of respondent No.4 and Mr. Das, learned counsel appearing on behalf of respondent No.5, on the other hand, took us through various documents to contend that the appellant had the knowledge about the judgment and order dated 23.11.1992.

7. The principal question which arises for consideration herein is as to whether in the peculiar facts and circumstances of this case, the appellant 6 can be said to have any locus standi to file the application for review of the said judgment dated 23.11.1992.

8. Respondent Nos.4 and 5 were appointed in 1982. Their services, however, were regularized on a later date. The question which arose for consideration before the High Court in the said writ application was as to whether the respondent-University was right in appointing them on an ad hoc basis although they were selected by a Select Committee constituted in terms of the rules.

No relief therein was claimed as against the appellant. The legality of the seniority list dated 18.4.1992 was not in question therein. Appellant was, thus, not a necessary party; no relief having been claimed against him.

Respondent-University was directed to consider their regular appointment with effect from 11.11.1982. The seniority list was required to be revised keeping in view the aforementioned directions of the High Court. A fresh seniority list was prepared pursuant to the said order. Publication of the seniority list was merely consequential to the order of the High Court.

9. Even otherwise, the order of the High Court appears to be known to the appellant herein.

7 By an order dated 13.5.1993, an office order was issued informing all concerned including the Chief Engineer that the respondent No 5 would be treated to have been appointed on a regular basis w.e.f. 11.11.1982. It is difficult to believe that the departments where only 18 Sectional Officers were working including Civil and Electrical Engineering Department, the appellant would not have the knowledge thereabout.

In the seniority list published on 14.5.1993, N.S. Yadav, respondent No.4, was shown at serial number 12; A.K. Aggarwal, respondent No.5, was shown at serial number 13 and the appellant was shown at serial number 17.

Therein the date of joining etc. had categorically been stated, from a perusal whereof it would be evident that whereas 12.11.1982 was shown to be the date of joining of the respondent Nos.4 and 5, so far as the appellant is concerned, his date of joining was shown as 3.10.1984.

10. Appellant and others filed a representation on 24.5.1993; paragraphs 2 and 3 whereof reads as under :

"It is further learnt that seniority list of Jr.

Engineers is being disturbed through various manipulations under the promotion quota. The Selection Committee has already met and submitted its recommendations. Under the garb of these recommendations, the administration is trying to accommodate out of turn Sh. N.S. Yadav, who is an AMIE holder and is junior to at least 11 Jr. Engineers. He is being considered for the above 8 promotion on the plea that a degree holder is required. Such an out of turn promotion is violative, as per statutory provision.

It will not be out of place to mention here that the Haryana Govt. does not consider AMIE equivalent to degree (BE) holder for design purpose as has been clarified in another case of the employee of the university. Moreover for promotion seniority is the only criteria and even for direct recruitment a person with AMIE is not eligible. Hence in view of the existing rules, for the promotion of Sh. N.S. Yadav would amount to violation of rules and open to legal litigation."

11. The subject matter of the grievances was as to why respondent No.4 who was placed at serial No.12 should be considered for the promotional scale despite he being junior to eleven persons. Evidently, the seniority list was known to them. Only grievance raised therein as to whether degree of AMIE, held by him should be considered to be equivalent to the BE degree.

Respondent No. 4, in his counter affidavit, categorically stated that the order of the High Court dated 23.11.1992 was brought to the knowledge of everybody including the appellants stating :

"The said fact of the respondent Nos.4 and 5 having been accorded seniority over and above the petitioner was again brought to the knowledge of the petitioner and other officers when the said respondents were granted promotional scales vide order dated 27.01.1996 issued by the respondent No.1 herein. The said order dated 27.01.1996 9 issued by the respondent No.1 is also placed on record by the respondent No.5 as Annexure R- 5/13."

12. It is also not in dispute that respondent No.4 was granted the promotional scale.

Thus, only because a seniority list was again published in the year 2004 and the appellant filed representations thereagainst, the same by itself could not be a ground for unsettling a settled position.

13. Even otherwise, the application for review at the instance of the appellant was not maintainable. The order dated 23.11.1992 became final and binding as against the University. The University accepted the said judgment. No appeal was preferred thereagainst. Appellant and others who claimed themselves to be seniors to respondent Nos. 4 and 5 could have preferred a Letters Patent Appeal before the Division Bench of the High Court, but they chose not to do so for a long time.

14. Appellant could not be permitted to contend in the review application that respondent Nos.4 and 5, in fact, had rightly been appointed on an ad hoc basis, as he was not a necessary party in the writ petition filed by the said respondents.


15. Mr. Mridul has relied upon a decision of this Court in J. Jose Dhanapaul v. S. Thomas & Ors. [(1996) 3 SCC 587]. We fail to understand as to how the said decision is applicable. In that case, without impleading Thomas as a party, his appointment was annulled. It was in that context, the court opined that he was a necessary party.

R. Sulochana Devi v. D.M. Sujatha & Ors. [(2005) 9 SCC 335] whereupon again reliance has been placed was a case where inter se seniority was in question. The seniority list was prepared without giving an opportunity of hearing to the affected employees. There was no dispute that the appellant therein was senior to the first respondent and was entitled to hold the pot of Principal of the college. The power of RJD to review was in question. Such a question does not arise herein.

16. Appellant was also not a proper party in the writ petition filed by respondent Nos.4 and 5. Seniority, as is well known, is not a fundamental right. It is merely a civil right.

17. For the reasons aforementioned, the High Court, in our opinion, was right in concluding that the review application was not maintainable. The appeal, therefore, is dismissed. There shall be no order as to costs.


11 [S.B. Sinha] ................................J.

[Mukundakam Sharma] New Delhi;




1. With the leave of the Court the Revenue has filed the present appeal, against the judgment and order dated 27th November, 2001 of the High Court of Kerala in ITA No.

105/1999, rejecting the appeal filed by the appellant under Section 260 of the Income Tax Act, 1961 (for short "the Act").

2. The respondent-assessee (for short "the assessee") is a film producer. In his income tax return for the assessment year 1992-93, the assessee claimed the benefit of carry forward of Rs.39,43,830/- as amortization expenses. The Assessing Officer allowed the claim of amortization. On appeal, the Commissioner of Income Tax, in exercise of his jurisdiction under Section 263 of the Act, set aside the assessment and directed the Assessing Officer to withdraw the benefit of carry forward granted to the Assessee on the ground that, as the provisions of Section 80 of the Act are applicable, the benefit of carry forward of the expenses was not admissible to the assessee as the assessee had failed to file the income tax return in accordance with Section 139(3) of the Act. Appeal filed against the aforesaid order before the Income Tax Appellate Tribunal (for short "the Tribunal") was dismissed.

3. Thereafter, the Assessing Officer implemented the directions issued by the Commissioner of Income Tax by passing a fresh order under Section 143(3) withdrawing the benefit of carry forward of amortization expenses granted to the assessee. The assessee being aggrieved filed an appeal before the CIT (Appeals). CIT (Appeals) accepted the appeal. It was found that the computation of the amortization expenses to be carried forward, as shown by the assessee, was not correct. The assessee had claimed amortization expenses in respect of the two films, namely, (i) Ex Kannikcodi and (ii) Santhwanam. It appears that in the first film the assessee incurred heavy loss and to make up that loss the assessee ventured to produce the second film. Rule 9A of the Income Tax Rules (for short "the Rules") provides for deduction in respect of the expenditure incurred on production of feature films.

Having found that the computation of amortization expenses to be carried forward as shown by the assessee was not correct, CIT (Appeals) gave directions to the Assessing Officer to obtain separate accounts in respect of the different films produced by the assessee and determine the claim of the amortization in accordance with rule 9A of the Rules. It was clarified that in case there was loss in respect of the old film on such computation, that would have to be subject to the provisions of Sections 139(3) and 80 of the Act. In other words, it was held that in respect of old films if there was loss, the same would be eligible for carrying forward only if the return of income was filed within the statutory period. In regard to the second film, it was held that the amortization allowance for the next year was not subject to the provisions of Section 80 and Section 139(3) of the Act. It was the finding of the appellate authority that the amortization expenses relating to the second year would have to be allowed separately while computing the income for the next year and not at the time of computation of the income for the current year.

Being aggrieved against the order passed by the CIT (Appeals), Revenue filed an appeal before the Tribunal, which was dismissed with certain clarifications.

4. The revenue thereafter filed an appeal under Section 260 of the Act in the High Court. The High Court framed the following substantial question of law in the said appeal for its consideration:

"Whether on the facts and in the circumstances of the case the amortization loss computed under Rule 9A is subject to or not subject to the provisions of section 80 and section 139 of the Income Tax Act?"

5. Making a distinction between the carrying forward of the business loss, as provided under Section 80 of the Act, and carrying forward of the expenditure over the income for the relevant assessment year in which the film was not exhibited for more than 180 days as provided under rule 9A(3) of the Rules, it was held that the present case would be governed by the provisions of Rule 9A(3) of the Rules and not by Section 80 of the Act. It was found that the second film produced by the assessee was not exhibited for 180 days during the previous year, therefore the assessee was entitled to carry forward the business expenditure over the next assessment year.

6. Section 80 finds its place in Chapter VI dealing with Aggregation of Income and Set off by carry forward of loss which, prevalent during at the relevant assessment year, read as under:


Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub- section (3) of section 139, shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A."

7. Section 80 at the relevant time provided that no loss which has not been determined in pursuance of a return filed under sub-section (3) of Section 139, can be carried forward and set off under sub-section (1) of Section 72 or sub-section (2) of section 73 or sub-section (1) or sub- section (3) of Section 74 or sub-section (3) of Section 74A.

8. Evidently, Chapter VI deals with carry forward of business losses.

9. Rule 9A of the Rules, which deals with deduction of expenditure on production of feature films (which is a special provision) at the relevant time, read as under:

"9A. Deduction in respect of expenditure on production of feature films.

(1) In computing the profits and gains of the business of production of feature films carried on by a person (the person carrying on such business hereafter in this rule referred to as film producer), the deduction in respect of the cost of production of a feature film certified for release by the Board of Film Censors in a previous year shall be allowed in accordance with the provisions of sub-rule (2) to sub-rule (4), Explanation : In this rule,-- (i) "Board of Film Censors" means the Board of Film Censors constituted under the Cinematograph Act, 1952 (37 of 1952);

(ii) "cost of production", in relation to a feature film, means the expenditure incurred on the production of the film, not being- (a) the expenditure incurred for the preparation of the positive prints of the film; and (b) the expenditure incurred in connection with the advertisement of the film after it is certified for release by the Board of Film Censors:

Provided that the cost of production of a feature film, shall be reduced by the subsidy received by the film producer under any scheme framed by the Government, where such amount of subsidy has not been included in computing the total income of the assessee for any assessment year.

(2) Where a feature film is certified for release by the Board of Film Censors in any previous year and in such previous year,-- (a) the film producer sells all rights of exhibition of the film, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year; or (b) the film producer-- (i) himself exhibits the film on a commercial basis in all or some of the areas; or (ii) sells the rights of exhibition of the film in respect of some of the areas; or (iii) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas, and the film is released for exhibition on a commercial basis at least one hundred and eighty days before the end of such previous year, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year.

(3) Where a feature film is certified for release by the Board of Film Censors in any previous year and in such previous year, the film producer (a) himself exhibits the film on a commercial basis in all or some of the areas; or (b) sells the rights of exhibition of the film in respect of some of the areas; or (c) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas, and the film is not released for exhibition on a commercial basis at least one hundred and eighty days before the end of such previous year, the cost of production of the film in so far as it does not exceed the amount realised by the film producer by exhibiting the film on a commercial basis or the amount for which the rights of exhibition are sold or, as the case may be, the aggregate of the amounts realised by the film producer by exhibiting the film and by the sale of the rights of exhibition, shall be allowed as a deduction in computing the profits and gains of such previous year; and the balance, if any, shall be carried forward to the next following previous year and allowed as a deduction in that year.

(4) .."

10. Counsel for the parties have been heard.

11. It is not disputed before us that a film is a capital asset in the hands of a film producer and the subsidy given by the State Government to a film producer is a capital receipt. Section 80 falls under Chapter VI, which deals with aggregation of income and set off or carry forward of loss.

12. Rule 9A provides for deduction of expenditure incurred on production of feature films. Rule 9A would appropriately be applicable to the present case, as the respondent is doing the business of producing feature films. The deduction for expenditure incurred on production of feature films is appropriately governed by rule 9A of the Rules.

13. The rule, as it now stands, provides that in such cases, deduction of the cost of production of the film is to be allowed to the extent of the amount realized during the number of days of commercial exhibition in that year and the balance has to be allowed in the next year. Rule 9A(2) provides that where a feature film is certified by the Board of Film Censors for release in any previous year, and in that previous year the film is released for exhibition for at least 180 days, before the end of that previous year, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year. Rule 9A(3) provides that where the film is not released for exhibition for 180 days in the previous year, deduction of the cost of production is to be allowed to the extent of the amount realized during the period of commercial exhibition in that year and the balance shall be allowed in the next year.

14. Admittedly, in the present case, the second film namely, "Santhwanam" had not been exhibited for more than 180 days in the previous your. While computing the income or loss for the relevant assessment year 1992-93, the assessing officer had to take into account the number of days on which the film was commercially exhibited and then allow the deduction for cost of production of the film to the extent of the collections made during the period of exhibition only. The balance cost of production will be amortized under Rule 9A(2) and then that will be allowed as deduction for the next year. It is not a business loss. That if a film is not released for exhibition on a commercial basis at least 180 days before the end of such previous year, the cost of production of the film insofar as it does not exceed the amount realized by the film producer by exhibiting the film on a commercial basis, is to be allowed as a deduction in computing the profits and gains of such previous year and the balance, if any, is to be carried forward to the next following previous year and allowed as a deduction in that year. Admittedly, in the present case, as stated above, second film "Santhwanam" was not exhibited for a period of 180 days in the previous year, and, had not covered the cost of production of the film, the assessee was entitled to carry forward the balance of the cost of production to the next following previous year and claim deduction of the same in that year.

15. For the reasons stated above, we do not find any merit in the present appeal and dismiss the same leaving the parties to bear their own costs.




1. These appeals by special leave arise out of the following facts:

2. In the Undergraduate 4 years B. Tech. Cost-Sharing Engineering Course of eight semesters started in the year 1995 by the appellant university, 10% seats were reserved for Non- Resident Indian Students (hereinafter called "NRI students").

As per the prospectus such students were required to make a deposit of US $5000 at the time of their admission towards 'development charges' and to pay in addition a fee of Rs.20,000/- per semester whereas all the other categories of students were required to pay a uniform fee of Rs.20,000/- per semester. From the academic year 1996-97, however, the University increased the fee for NRI students to US $4000 per annum whereas the other students continued to pay fee at the rate of Rs.20,000 per semester. This practice was continued for three admission years, i.e. 1996-97, 1997-98 and 1998-99, but from the year 1999-2000 the provisions made in the year 1995- 96 i.e. confining the payment of fee to a one time payment US $5,000 and Rs.20,000/-per semester were restored. The respondents herein who had been admitted to the course in question during the years 1997-98 and 1998-99 filed representations claiming that they had been adversely treated by the appellant University and that they were entitled to claim parity vis-`-vis the fee structure for NRI students as from the years 1999-2000 onwards. As the representations bore no result, 34 of the 56 NRI students who had been admitted to the course during the two years, filed two writ petitions before the Kerala High Court. On notice, a counter affidavit was filed by the Registrar on behalf of the appellant University pointing out that the NRI students had not been admitted to the course on the basis of merit and that the B. Tech. programme conducted at the Centre was a self-financing and unaided one being run exclusively with funds collected by way of fees. The fact as to the increase and the changes made from time to time in the fee structure were broadly admitted but it was pleaded that the Syndicate of the University had reduced the fee for the batch entering the course for the year 1999-2000 before the admission process had commenced and that the writ petitioners could not claim an automatic reduction in the fee and it was essential that the fee structure designed for a particular batch should be allowed to continue as to make a change midway would lead to a complete break down of the finances of the University. The Division Bench of the High Court observed that two questions arose for consideration:

(1) Is the action of the University in charging fee at different rates from the students on the basis of the batches in which they were admitted arbitrary and unfair ? (2) Are the petitioners estopped from challenging the impugned action? and then went on to examine each point under specific heads.

While dealing with the question No.1, the Court observed that there appeared to be no rationale for subjecting the writ petitioners to a higher rate of fee than the rate fixed in the years 1995-96 and 1999-2000 onwards more particularly as in the written statement filed on behalf of the University no basis for a differential treatment had been disclosed and the averment that a reduction in the fee would lead to financial stress in the conduct of the courses had not been substantiated by facts and figures. The Court also observed that even assuming that the university had the right to fix the rate of fee, a duty was still cast on it to act fairly, and being a statutory body, its decision was to be based on reasonable facts and if a classification between the different categories of students was pleaded, it must satisfy the test of having a rational basis.

3. On question No.2, the Court held that though the University had issued a prospectus disclosing the fee structure, it would not bind the respondents even on the principle of estoppel, as estoppel was a principle of equity and as it appeared that the fundamental right of the writ petitioner under Article 14 of the Constitution had been violated, the same could not be waived even by their own action. The ultimate direction was accordingly rendered on 2nd April 2003 as under:

"In view of the above, the writ petitions are allowed. The University is directed to refund the extra fee charged from the petitioners. It may be noticed in this connection that initially the levy of an additional fee had been stayed by this Court. However, on a subsequent date, the order of stay was vacated. At that time an undertaking was given by the University that in case the writ petition is allowed, the disputed amount of fee shall be refunded. The University shall do so within two weeks from the date of receipt of a certified copy of this order. In case of failure to refund within the time as aforesaid, it shall be liable to pay the amount along with interest at the rate of 10% from the date of deposit till the date of refund. The University is also directed to declare the result of the petitioners forthwith."

4. It is against this judgment and order of the Division Bench that the present appeals have been filed by way of Special Leave. This matter first came up for hearing on 9th May 2003 on which date leave was granted and pending proceedings the order for refund was stayed. We have also been told that this Court had directed the respondent students as an interim measure to pay the entire fee as per the fee structure under which they had been admitted and it is the conceded position that all the students have in fact deposited the amounts in question.

5. Mr. T.L.V.Iyer, the learned senior counsel appearing for the University has seriously controverted the conclusions of the High Court and has pointed out that it was open to a self financing institution to fix its own fees and interference in this exercise by the Court was not called for. He has submitted that there was adequate material on record to show that the University was in need of funds as the course set up was a new one and the necessary infrastructure and facilities had yet to be developed which justified a substantial fee on those who could best afford it. The learned counsel has placed reliance for this submission on T.M.A.Pai Foundation vs. State of Karnataka (2002) 8 SCC 481, Islamic Academy of Education & Anr. vs.

State of Karnataka & Ors. (2003) 6 SCC 697, P.A.Inamdar &

Ors. vs. State of Maharashtra & Ors. (2005) 6 SCC 537. On the second question, posed by the High Court, Mr. Iyer has submitted that it would be a very dangerous doctrine to lay down, that a student having accepted admission under a particular fee structure could turn around and say at a later stage that the fee which was called upon to pay was excessive and that he was liable to pay such fee which was leviable on students admitted in subsequent years. It has been highlighted and in this situation that there would be complete uncertaintly in the quantum of funds available and that it would be well nigh impossible for any educational institution to chalk out its own parameters for development. It has finally been submitted that having taken admissions under a certain fee regime the NRI students were estopped from challenging the same in Court. In support of this argument, the learned counsel has relied upon Om Prakash Shukla vs. Akhilesh Kr.Shukla &

Ors. (1986) Supp. SCC 285 and Standard Chartered Bank vs.

Andhra Bank Financial Services Ltd. & Ors. (2006) 6 SCC 94.

6. Mr. Rao, the learned senior counsel for the respondents has, however, supported the judgment of the Division Bench and has submitted that though the right of the University to fix a fee was undeniable, but the quantum was required to be reasonable and also supported by relevant material to justify the levy. He has pointed out the stand of the university had been a vacillating one, as before the High Court the plea taken was that the funds available from the NRI students were required for infrastructure development whereas a complete somersault had been made in the affidavit filed in this Court by pleading that it had been observed, that during the admissions made in the year 1997-98 and 1998-99 meritorious NRI students had not sought admission on account of the high fee and it was in that eventuality that the University had decided to re-introduce the fee structure for the year 1995-96, so as to attract NRI students from a wider base. It has been submitted by Mr. Rao that the quantum of the fees and the manner of its imposition suggested that the fees was, in fact, a capitation fee, the levy of which was completely barred by several judgments of this Court and in this connection has placed reliance on T.M.A.Pai Foundation & Ors. (supra). It has been pleaded that as per the budget estimates shown in the affidavit filed by the university in this Court ( from the year 1996-97 to 1999- 2000) it was clear that there were substantial reserves with the University during the years 1997-98 (academic years) which did not warrant an increase in the fee. It has finally been argued that in the light of the judgments aforequoted, the fee structure for the year 1995-96, and 1996-97 had been determined by a committee and as such any deviation therefrom by the University was unjustified. For this pleading on facts Mr. Rao has referred us to Civil Appeal No. 6143/2003.

7. At the very outset, it must be observed that the dispute pertains only to two years and as of today there appears to be no difficulty, as the fee structure is now devised by committees set up under the orders of the Supreme Court in the aftermath of the judgment in T.M.A.Pai's case (supra). We are also of the opinion that the matter relating to the fixation of a fee is a part of the administration of an educational institution and it would impose a heavy onus on such an institution to be called upon to justify the levy of a fee with mathematical precision.

The Supreme Court has laid down several broad principles with regard to the fixation of fees and as of today, those principles are being adopted by the committees set up for the purpose. It must be understood at the outset that an educational institution chalks out its own programme year wise on the basis of the projected receipts and expenditure and for the court to interfere in this purely administrative matter would be impinging excessively on this right. From this, however, it should not be understood that the educational institution has a carte blanche to fix any fee that it likes but substantial autonomy must be left to it. Mr. Rao has very candidly admitted that it was undoubtedly open to an educational institution to fix its fee but subject to certain broad principles.

We have accordingly gone through the affidavits filed by the appellant University and they reveal that the University had set up the new course in the year 1995-96 for which funds were required for infrastructure development, the development of a faculty, which would mean making provision for adequate salary for the teaching and supporting staff so as to attract the best minds. It has also been emphasized in the second affidavit that the fees had been first increased and subsequently reduced as experience had shown that the amount of US $ 5000 per year was excessive and left out consideration a large number of NRI students who could not afford the fee and in order to make the course available to a larger segment amongst this category, the fee had been reduced. We are of the opinion that no contradiction or fault can be found with the University in taking these two stances in the two affidavits as they supplement each other and make out a justification for the initial increase in the fee and subsequent downward revision.

8. We have also gone through the judgments cited by the learned counsel. In T.M.A.Pai case (supra) several questions as to the rights of minority institutions to manage their own affairs were taken up one of the significant questions being the right to determine and levy fee. Question 5(c) and its answer are reproduced below:

Q.5(c) Whether the statutory provisions which regulate the facets of administration like control over educational agencies, control over governing bodies, conditions of affiliation including recognition/ withdrawal thereof, and appointment of staff, employees, teachers and principles including their service conditions an regulation of fees, etc. would interfere with the right of administration of minorities? A. So far as the statutory provisions regulating the facets of administration are concerned, in case of an unaided minority educational institution, the regulatory measure of control should be minimal and the conditions of recognition as well as the conditions of affiliation to a university or board have to be complied with, but in the matter of day-to-day management, like the appointment of staff, teaching and non-teaching, and administrative control over them, the management should have the freedom and there should not be any external controlling agency. However, a rational procedure for the selection of teaching staff and for taking disciplinary action has to be evolved by the management itself.

For redressing the grievances of employees of aided and unaided institutions who are subjected to punishment or termination from service, a mechanism will have to be evolved, and in our opinion, appropriate tribunals could be constituted, and till then, such tribunals could be presided over by a judicial officer of the rank of District Judge.

The State or other controlling authorities, however, can always prescribe the minimum qualification, experience and other conditions bearing on the merit of an individual for being appointed as a teacher or a principal of any educational institution.

Regulations can be framed governing service conditions for teaching and other staff for whom aid is provided by the State, without interfering with the overall administrative control of the management over the staff.

Fees to be charged by unaided institutions cannot be regulated but no institution should charge capitation fee."

9. It was further held that though no capitation fee or profiteering was permissible but "reasonable surplus to cost (sic) expansion and augmentation( sic) facilities do not, however, amount to profiteering". This judgment came up for consideration in the Islamic Academy case (supra) primarily at the instance of unaided professional educational institutions, both minority and non-minority. Several questions were posed before the Court and question No.1 was whether the educational institutions were entitled to fix their own fee structure. This question was answered as under:

"So far as the first question is concerned, in our view the majority judgment is very clear. There can be no fixing of a rigid fee structure by the Government. Each institute must have the freedom to fix its own fee structure taking into consideration the need to generate funds to run the institution and to provide facilities necessary for the benefit of the students. They must also be able to generate surplus which must be used for the betterment and growth of that educational institution. In paragraph 56 of the judgment it has been categorically laid down that the decision on the fees to be charged must necessarily be left to the private educational institutions that do not seek and which are not dependent upon any funds from the Government.

Each institute will be entitled to have its own fee structure. The fee structure for each institute must be fixed keeping in mind the infrastructure and facilities available, the investments made, salaries paid to the teachers and staff, future plans for expansion and/or betterment of the institution etc. Of course there can be no profiteering and capitation fees cannot be charged. It thus needs to be emphasized that as per the majority judgment imparting of education is essentially charitable in nature. Thus the surplus/profit that can be generated must be only for the benefit/use of that educational institution. Profits/surplus cannot be diverted for any other use or purpose and cannot be used for personal gain or for any other business or enterprise."

10. It was as a consequence of the directions issued in this case that a committee headed by a retired Judge was set up in each State to examine the fee structure which would be applicable both to aided and non-aided educational institutions with a further direction that the recommendations made by the committee were to remain binding for 3 years. Both the aforesaid judgments came up for consideration in P.A.Inamdar's case (supra) and it was observed that though a limited number of seats not exceeding 15% may be made available to NRIs depending upon the discretion of the management, two essential conditions were to be kept in mind; (1) the seats would be utilized for the benefit of bonafide NRIs and their children or wards and that within this quota merit would not be given a complete go-by and (2) further that the amount of money "in whatever form collected by such NRIs, should be utilized for the benefiting students such as from economically weaker sections of the society, whom, on well-defined criteria, the educational institution may admit on subsidized payment of fee."

11. A reading of the aforesaid judgments would reveal that the broad principle is that an educational institution must be left to its own devices in the matter of fixation of fee though profiteering or the imposition of capitation fee is to be ruled out and that some amount towards surplus funds available to an institution must be permitted and visualized but it has also been laid down by inference that if the broad principles with regard to fixation of fee are adopted, an educational institution cannot be called upon to explain the receipts and the expenses as before a Chartered Accountant. We find that the observations of the Division Bench of the High Court that no rational basis for the fixation of a higher fee for two years had been furnished, lays down an onus on the educational institution, which would be difficult for it to discharge with accuracy. It bears repetition that the University had set up the self-financing B.Tech. Course in the year 1995 and no grant in aid was available during this period or later and it had to make arrangements for its own funds. We have also examined the budget estimates, receipts and expenditure from the year 1996- 97 to 1999-2000. We do find that there is a surplus in the hands of institution but in the facts that a new course was being initiated which would require huge investments, the surplus was not unconscionable so as to require interference.

Moreover, the University had made its budget estimates keeping in view the proposed receipts and if the fee levied by it and accepted by the students was permitted to be cut down mid term on the premise that the University had not been able to explain each and every item to justify the levy, it would perhaps be impossible for it to function effectively.

12. We are also of the opinion that it would be well nigh impossible for an educational institution to have an effective administration and to maintain high educational standards, if a downward revision during the pendency of a course would be automatically made applicable to students admitted earlier under a different fee structure. A periodic revision is also visualized in the directions of the Supreme Court in Islamic Academy's case (supra) wherein it has been provided that the fee structure fixed by a committee headed by a retired Judge would be operable for 3 years. In the present case, we find that the NRI students took admission on certain specific conditions and the University has a right to insist that those conditions are observed. To our mind, therefore, it would not be open to the students to contend that notwithstanding that they had been admitted on a certain fee structure they were entitled to claim as a matter of right, a reduction in fee to bring them at par with students admitted later under a lower fee structure. The argument of estoppel in such a case would, thus, be available to an educational institution. The High Court was influenced by the fact that estoppel was a plea in equity and as the right of the NRI students under Article 14 appeared to have been violated, this plea was not available to the University. We do not agree with this submission for several reasons, firstly the NRI students have not been granted admission on their over all merit but on the basis of the 10% reservation in their favour and as such any claim based on equity would be suspect and secondly each set of admissions made year wise cannot be said to over lap the admissions made earlier or later. We have also considered Mr. Rao's submission that the fee had the trappings of a capitation fee. We find no merit in this assertion, as the fee is being levied year wise for the course. We have also gone through the judgments cited by Mr. Iyer. To our mind, they are not applicable to the facts of this case.

13. Mr. Rao has finally submitted that as the fee for the years 1995-96 and 1996-97 had been fixed by a committee set up under the directions of the Supreme Court it was not open to the Syndicate to suggest a higher fee thereafter. We find, however, that there seems to be a misconception as to the facts as it is the specific case of the University that the fee had been fixed by the Syndicate under Section 18 of the Cochin University of Science and Technology Act, 1976 and not by any committee.

14. We therefore, find that the judgment of the Division Bench of the High Court cannot be sustained. We accordingly set it aside and allow the appeals with no order as to costs.


S.B. Sinha & Lokeshwar Singh Panta

REPORTABLE CIVIL APPEAL NO. 3325 OF 2008 (Arising out of SLP (C) No.7452 of 2006) S.B. Sinha, J.

1. Leave granted.

2. This appeal is directed against the orders dated 24.10.2005 and dated 1.12.2005 passed by the High Court of Kanataka at Bangalore whereby and whereunder delay of 2487 days in filing the appeal has been condoned and the said appeal has been allowed.

3. The basic fact of the matter is not in dispute.

The brother of Madwaramanachar, father of the appellant, was admitted to S.D.S. TB Hospital at Bangalore. All the articles from the body of his brother were removed by the father of the appellant. After his death, the father of the appellant requested the hospital authorities to hand over the obsquecies seized wherefor a written request was made on 9.6.1981.

The Superintendent of the said hospital passed an order that the articles kept by the father of the appellants must be delivered back to the hospital authorities for being kept in a safe custody so as to enable them to deliver the same to the persons entitled therefor. Delivery of the articles was insisted before handing over the dead body. The said articles were handed over to the hospital authorities wherefor an acknowledgment was issued.

4. An application for grant of succession certificate was filed by the father of the appellants on 24.8.1981. In the said proceedings, one Gowramma, wife of the deceased, was impleaded as a party. She expired during the pendency of the said proceedings. She, allegedly left behind one S. Basavarajappa, who is said to be her adopted son. By an order dated 5.7.1991, succession certificate was granted in favour of the appellant in respect of the following :


Amount in vijay Bank Togarsi S.B. Account No.309 with interest Rs.5-00 2.

Amount in Syndicate Bank, Shimoga S.B. Account No.27717 Ledger Folio No.30 with interest Rs.318-65 3.

Amount in syndicate Bank, Shimoga Koppa, S.B. Account No.7/89 folio 4289/17 with interest Rs.19379-59 Gold Articles belonging to deceased in deposit in the Hospital at Bangalore.

Gram Mgs One Sudarshan ring 11 - 700 One Ring with red Stones  5 - 300 One Finb sing shigd stones  6 - 600 One Bar 46 - 800 39 - 450 Cash 160 - 00

5. Despite production of the said succession certificate, the hospital authorities did not return the said articles and documents to the appellant's father, whereupon a suit in the court of Additional City Civil Judge, Bangalore seeking a direction to the hospital authorities-defendants to hand over the articles to the appellants or in alternative pay the value thereof which was assessed at Rs.45,000/- was filed

6. No notice under Section 80 of the Code of Civil Procedure, however, was served upon the State. An application under sub-section (2) of Section 80 of the Code was filed which is said to have been allowed.

Before the learned Trial Judge, no written statement was filed by the State. It was decreed ex parte on decree was passed on 31.10.1997.

7. An execution case was filed in the year 2003 for execution of the said decree. Upon receipt of the summons from the executing court, a first appeal was preferred by the State of Karnataka. As indicated hereinbefore, the same was barred by 2487 days.

An application for condonation of delay was filed in the said appeal being IA No.1 of 2005 which, by reason of a judgment dated 24.10.2005 was allowed. The High Court by reason of its judgment dated 1.12.2005 pointed out various deficiencies in the said decree and opined that the judgment and decree passed by the learned Trial Judge was not sustainable in law, stating :

(i) No urgency was shown for filing the suit in terms of sub-section (2) of Section 80 of the Code of Civil Procedure;

(ii) Smt. Gowramma was a necessary party in the suit; and (iii) The value of the articles was not mentioned in the succession certificate. There was nothing to show that the plaintiff was the only heir of the deceased.

It was directed :

"The appeal is allowed an the impugned judgment and decree dated 31.10.1997 made in O.S.

No.3830/1994 on the file of II Additional City Civil Judge at Bangalore City, is set aside and the matter is remitted back to the Trial Court, with a direction to the parties to appear before the Trial Court for further proceedings on 23.12.2005, without notice. Further, the Trial Court is directed to afford an opportunity to the defendants to file the written statement within 30 days from 23.12.205 and dispose of the suit in accordance with law."

8. Ms. Kiran Suri, learned counsel appearing on behalf of the appellant, would submit that the High Court committed a serious error in condoing the delay of 2487 days in preferring the appeal by the State. It was furthermore urged that the appellant has failed to prove any cause far less any sufficient cause therefor. The learned counsel contended that the High Court should not have remitted the matter back to the trial court keeping in view the fact that the short question which arose for its consideration was as to whether the hospital authorities having asked the appellants' father to obtain a succession certificate was bound to return the articles to him him on production thereof.

9. Mr. Hegde, learned counsel appearing on behalf of the respondents, however, supported the impugned judgment.

10. One Gowramma, as noticed hereinbefore, was impleaded as a party in the proceedings for grant of succession certificate. She claimed herself to be the wife of the deceased. Appellant knew that the hospital authorities had handed over the documents and goods to her. She was, therefore, a necessary party. As she expired during the pendency of the proceedings, her heirs and legal representatives should have been impleaded as parties in the said proceedings.

The decree might have been passed ex parte but when the same has been brought to the notice of this Court, in our opinion, in exercise of our discretionary jurisdiction under Article 136 of the Constitution of India, we should not interfere therein.

It is now a well settled principle of law that this Court would not exercise its extraordinary jurisdiction only because it is lawful to do so. (See M/s. Tanna & Modi v. C.I.T. Mumbai XXV & Ors. [2007 (8) SCALE 511] This Court has the power to pass necessary orders for doing complete justice to the parties. The High Court, in our opinion, has rightly held that in the aforementioned situation, Gowramma was a necessary party.

A succession certificate is granted for a limited purpose. A Court granting a succession certificate does not decide the question of title. A nominee or holder of succession certificate has a duty to hand over the property to the person who has a legal title thereto.

By obtaining a succession certificate alone, a person does not become the owner of the property.

11. In Vidhyadhari & Ors. v. Sukhrana Bai & Ors. [(2008) 2 SCC 238], this Court held :

"14. Therefore, though we agree with the High Court that Sukhrana Bai was the only legitimate wife yet, we would choose to grant the certificate in favour of Vidhyadhari who was his nominee and the mother of his four children. However, we must balance the equities as Sukhrana Bai is also one of the legal heirs and besides the four children she would have the equal share in Sheetaldeen's estate which would be 1/5th. To balance the equities, we would, therefore, choose to grant succession certificate to Vidhyadhari but with a rider that she would protect the 1/5th share of Sukhrana Bai in Sheetaldeen's properties and would hand over the same to her. As the nominee she would hold the 1/5th share of Sukhrana Bai in trust and would be responsible to pay the same to Sukhrana Bai. We direct that for this purpose she would give a security in the trial court to the satisfaction of the trial court."

(Emphasis added) 12. It may be true that there was enormous delay in filing the appeal.

Ordinarily, this Court would not have condoned the said delay in filing the appeal but in this case, the First Appeal filed by the State has also been allowed by the High Court.

Keeping in view the nature of the order passed by the High Court, we are of the opinion that it is not a fit case where we should interfere with the judgment of the High Court dated 24.10.2005 which will have the effect of setting aside its order dated 1.12.2005 also. We, however, are of the opinion that the State must pay a sum of Rs.10,000/- by way of costs to the appellant. We further direct that Basavarajappa should be impleaded as a party in the suit. It will also be open to the appellant to pray for such other relief or reliefs in the suit as she may be advised in the matter.

13. The appeal is dismissed with the aforementioned directions. In the facts and circumstances of the case, however, there shall be no order as to costs.


H. K. Sema & Markandey Katju


1. This appeal by special leave has been filed against the impugned judgment of a Division Bench of the Kerala High Court dated 25.6.2001 passed in MFA No. 1080 of 1998-B.

2. Heard learned counsel for the parties and perused the record.

3. The facts of the case are that a claim petition was filed before the Railway Claims Tribunal, Ernakulam Bench (hereinafter referred to as the 'Tribunal') by the husband, mother and minor son of one Smt. Abja who died on 23.5.1996 in a train accident at Varkala Railway station. The Claims Tribunal disallowed the claim, but the appeal against the said decision was allowed by the Kerala High Court by the impugned judgment dated 25.6.2001 and compensation of Rs. 2 lacs with interest @ 12% from the date of the petition till the date of payment was granted. Aggrieved, this appeal has been filed by the appellant.

4. There is no dispute that Smt. Abja was a bona fide passenger holding a second class season ticket and an identity card issued by the Southern Railway. As per the forensic report the cause of death was due to multiple injuries due to the accident. The deceased fell on to the railway track and was run over by train No.6349 Parasuram Express.

5. The Tribunal found that Smt. Abja was a bona fide passenger traveling by the train.

6. Before the Tribunal PW-2, K. Rajan, deposed that while he was at Varkala railway station he found one passenger falling from the Parasuram Express and that the train had stopped. He further stated in his evidence that he went to the north side of the platform and saw the injured lying on the platform. He further stated that the person falling down was the lady who died on the spot. He also stated that the deceased fell down from the compartment of the train when the train was moving.

7. The Tribunal strangely enough held that PW-2 was an interested witness because if he was present on the spot he would have definitely helped the Station Master in removing the dead body from the railway track.

Further, the police would have definitely recorded his evidence. For this reason, the Tribunal disbelieved the evidence of PW-2. We are, however, of the opinion that there was no good reason to disbelieve PW-2 because there is nothing to show that he had any motive to give false evidence, or that he was an interested witness. Further, his evidence could not have been discarded merely because he did not go to the spot and help removing the dead body from the railway track. Moreover, merely because the police did not record his statement does not mean that he was not present or gave false evidence. It is common knowledge that in our country often there is a large crowd on railway platforms, and it is simply not possible for the police to take the statement of everyone there.

8. However, the evidence of DW-1, D. Sajjan, who was the Station Master at the railway station corroborates the evidence of PW-2. DW-1 had deposed that he saw one girl running towards the train and trying to enter the train and she fell down. He has further stated that the deceased Abja had attempted to board the train and fell down from the running train. For this reason, the Tribunal held that this was not an 'untoward incident' within the meaning of the expression in Section 123(c) of the Railways Act, 1989 as it was not an accidental falling of a passenger from a train carrying passengers.

9. In appeal, the Kerala High Court was of the view that the deceased sustained injuries, even according to the respondents, in her anxiety to get into the train which was moving. Hence, the High Court held that the deceased came within the expression 'accidental falling of a passenger from a train carrying passengers' which is an 'untoward incident', as defined in Section 123(c) of the Railways Act, 1989.

10. We are of the opinion that it will not legally make any difference whether the deceased was actually inside the train when she fell down or whether she was only trying to get into the train when she fell down. In our opinion in either case it amounts to an 'accidental falling of a passenger from a train carrying passengers'. Hence, it is an 'untoward incident' as defined in Section 123(c) of the Railways Act.

11. No doubt, it is possible that two interpretations can be given to the expression 'accidental falling of a passenger from a train carrying passengers', the first being that it only applies when a person has actually got inside the train and thereafter falls down from the train, while the second being that it includes a situation where a person is trying to board the train and falls down while trying to do so. Since the provision for compensation in the Railways Act is a beneficial piece of legislation, in our opinion, it should receive a liberal and wider interpretation and not a narrow and technical one. Hence in our opinion the latter of the abovementioned two interpretations i.e. the one which advances the object of the statute and serves its purpose should be preferred vide Kunal Singh vs. Union of India (2003) 4 SCC 524(para 9), B. D. Shetty vs. CEAT Ltd. (2002) 1 SCC 193 (para 12), Transport Corporation of India vs. ESI Corporation (2000) 1 SCC 332 etc.

12. It is well settled that if the words used in a beneficial or welfare statute are capable of two constructions, the one which is more in consonance with the object of the Act and for the benefit of the person for whom the Act was made should be preferred. In other words, beneficial or welfare statutes should be given a liberal and not literal or strict interpretation vide Alembic Chemical Works Co. Ltd. vs. The Workmen AIR 1961 SC 647( para 7), Jeewanlal Ltd. vs. Appellate Authority AIR 1984 SC 1842 (para 11), Lalappa Lingappa and others vs. Laxmi Vishnu Textile Mills Ltd. AIR 1981 SC 852 (para 13), S. M. Nilajkar vs. Telecom Distt. Manager (2003) 4 SCC 27(para 12) etc.

13. In Hindustan Lever Ltd. vs. Ashok Vishnu Kate and others 1995(6) SCC 326 (vide para 42) this Court observed:

"In this connection, we may usefully turn to the decision of this Court in Workmen vs. American Express International Banking Corporation wherein Chinnappa Reddy, J. in para 4 of the Report has made the following observations:

The principles of statutory construction are well settled. Words occurring in statutes of liberal import such as social welfare legislation and human rights' legislation are not to be put in Procrustean beds or shrunk to Lilliputian dimensions. In construing these legislations the imposture of literal construction must be avoided and the prodigality of its misapplication must be recognized and reduced. Judges ought to be more concerned with the 'colour', the 'content' and the 'context' of such statutes (we have borrowed the words from Lord Wilberforce's opinion in Prenn v. Simmonds). In the same opinion Lord Wilberforce pointed out that law is not to be left behind in some island of literal interpretation but is to enquire beyond the language, unisolated from the matrix of facts in which they are set; the law is not to be interpreted purely on internal linguistic considerations.

In one of the cases cited before us, that is, Surender Kumar Verma v. Central Govt. Industrial Tribunal-cum- Labour Court we had occasion to say:

"Semantic luxuries are misplaced in the interpretation of 'bread and butter' statutes. Welfare statutes must, of necessity, receive a broad interpretation.

Where legislation is designed to give relief against certain kinds of mischief, the Court is not to make inroads by making etymological excursions."

Francis Bennion in his Statutory Interpretation Second Edn., has dealt with the Functional Construction Rule in Part XV of his book. The nature of purposive construction is dealt with in Part XX at p. 659 thus:

"A purposive construction of an enactment is one which gives effect to the legislative purpose by- (a) following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose (in this Code called a purposive-and-literal construction), or (b) applying a strained meaning where the literal meaning is not in accordance with the legislative purpose (in the Code called a purposive and strained construction)."

At p. 661 of the same book, the author has considered the topic of "Purposive Construction" in contrast with literal construction. The learned author has observed as under:

"Contrast with literal construction - Although the term 'purposive construction' is not new, its entry into fashion betokens a swing by the appellate courts away from literal construction.

Lord Diplock said in 1975: 'If one looks back to the actual decisions of the [House of Lords] on questions of statutory construction over the last 30 years one cannot fail to be struck by the evidence of a trend away from the purely literal towards the purposive construction of statutory provisions'. The matter was summed up by Lord Diplock in this way - ...I am not reluctant to adopt a purposive construction where to apply the literal meaning of the legislative language used would lead to results which would clearly defeat the purposes of the Act. But in doing so the task on which a court of justice is engaged remains one of construction, even where this involves reading into the Act words which are not expressly included in it."

(emphasis supplied)

14. In our opinion, if we adopt a restrictive meaning to the expression 'accidental falling of a passenger from a train carrying passengers' in Section 123(c) of the Railways Act, we will be depriving a large number of railway passengers from getting compensation in railway accidents. It is well known that in our country there are crores of people who travel by railway trains since everybody cannot afford traveling by air or in a private car. By giving a restrictive and narrow meaning to the expression we will be depriving a large number of victims of train accidents (particularly poor and middle class people) from getting compensation under the Railways Act. Hence, in our opinion, the expression 'accidental falling of a passenger from a train carrying passengers' includes accidents when a bona fide passenger i.e. a passenger traveling with a valid ticket or pass is trying to enter into a railway train and falls down during the process. In other words, a purposive, and not literal, interpretation should be given to the expression.

15. Section 2 (29) of the Railways Act defines 'passenger' to mean a person traveling with a valid pass or ticket. Section 123(c) of the Railways Act defines 'untoward incident' to include the accidental falling of any passenger from a train carrying passengers. Section 124A of the Railways Act with which we are concerned states :

"124A. Compensation on account of untoward incident. - When in the course of working a railway an untoward incident occurs, then whether or not there has been any wrongful act, neglect or default on the part of the railway administration such as would entitle a passenger who has been injured or the dependant of a passenger who has been killed to maintain an action and recover damages in respect thereof, the railway administration shall, notwithstanding anything contained in any other law, be liable to pay compensation to such extent as may be prescribed and to that extent only for loss occasioned by the death of, or injury to, a passenger as a result of such untoward incident:

Provided that no compensation shall be payable under this section by the railway administration if the passenger dies or suffers injury due to - (a) suicide or attempted suicide by him;

(b) self-inflicted injury;

(c) his own criminal act;

(d) any act committed by him in a state of intoxication or insanity;

(e) any natural cause or disease or medical or surgical treatment unless such treatment becomes necessary due to injury caused by the said untoward incident.

Explanation - For the purposes of this section, "passenger" includes - (i) a railway servant on duty; and (ii) a person who has purchased a valid ticket for traveling by a train carrying passengers, on any date or a valid platform ticket and becomes a victim of an untoward incident".

(emphasis supplied)

16. The accident in which Smt. Abja died is clearly not covered by the proviso to 124A. The accident did not occur because of any of the reasons mentioned in clauses (a) to (e) of the proviso to Section 124A. Hence, in our opinion, the present case is clearly covered by the main body of Section 124A of the Railways Act, and not its proviso.

17. Section 124A lays down strict liability or no fault liability in case of railway accidents. Hence, if a case comes within the purview of Section 124A it is wholly irrelevant as to who was at fault.

18. The theory of strict liability for hazardous activities can be said to have originated from the historic judgment of Blackburn, J. of the British High Court in Rylands v. Fletcher 1866 LRI Ex 265.

19. Before this decision the accepted legal position in England was that fault, whether by an intentional act or negligence, was the basis of all liability (see Salmond on 'Tort', 6th Edn p.12) and this principle was in consonance with the then prevailing Laissez Faire Theory.

20. With the advance of industrialization the Laissez Faire Theory was gradually replaced by the theory of the Welfare State, and in legal parlance there was a corresponding shift from positivism to sociological jurisprudence.

21. It was realized that there are certain activities in industrial society which though lawful are so fraught with possibility of harm to others that the law has to treat them as allowable only on the term of insuring the public against injury irrespective of who was at fault. The principle of strict liability (also called no fault liability) was thus evolved, which was an exception to the general principle in the law of torts that there is no liability without fault, (vide American Jurisprudence, 2nd Edn Vol 74 p. 632). As stated above, the origin of this concept of liability without fault can be traced back to Blackburn, J's historic decision in Rylands vs. Fletcher (supra).

22. The facts in that case were that the defendant, who owned a mill, constructed a reservoir to supply water to the mill. This reservoir was constructed over old coal mines, and the mill owner had no reason to suspect that these old diggings led to an operating colliery. The water in the reservoir ran down the old shafts and flooded the colliery. Blackburn J. held the mill owner to be liable, on the principle that "The person who for his own purposes brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape". On appeal this principle of liability without fault was affirmed by the House of Lords (per Cairns, J.) but restricted to non- natural users vide (1868) LR 3 HL 330.

23. Rylands vs. Fletcher (supra) in fact created a new legal principle (the principle of strict liability in the case of hazardous activities), though professing to be based on analogies drawn from existing law. The judgment is noteworthy because it is an outstanding example of a creative generalization. As Wigmore writes, this epoch making judgment owes much of its strength to 'the broad scope of the principle announced, the strength of conviction of its expounder, and the clarity of his exposition'.

24. Strict liability focuses on the nature of the defendants' activity rather than, as in negligence, the way in which it is carried on (vide 'Torts by Michael Jones, 4th Edn. p. 247). There are many activities which are so hazardous that they may constitute a danger to the person or property of another. The principle of strict liability states that the undertakers of these activities have to compensate for the damage caused by them irrespective of any fault on their part. As Fleming says "permission to conduct such activity is in effect made conditional on its absorbing the cost of the accidents it causes, as an appropriate item of its overheads" (see Fleming on 'Torts' 6th Edn p. 302).

25. Thus in cases where the principle of strict liability applies, the defendant has to pay damages for injury caused to the plaintiff, even though the defendant may not have been at any fault.

26. The basis of the doctrine of strict liability is two fold (i) The people who engage in particularly hazardous activities should bear the burden of the risk of damage that their activities generate and (ii) it operates as a loss distribution mechanism, the person who does such hazardous activity (usually a corporation) being in the best position to spread the loss via insurance and higher prices for its products (vide 'Torts' by Michael Jones 4th Edn p. 267).

27. As pointed out by Clerk and Lindsell (see 'Torts', 14th Edn) "The fault principle has shortcomings. The very idea suggests that compensation is a form of punishment for wrong doing, which not only has the tendency to make tort overlap with criminal law, but also and more regrettably, implies that a wrongdoer should only be answerable to the extent of his fault. This is unjust when a wholly innocent victim sustains catastrophic harm through some trivial fault, and is left virtually without compensation".

28. Many jurists applaud liability without fault as a method for imposing losses on superior risk bearers. Their argument is that one who should know that his activity, even though carefully prosecuted, may harm others, and should treat this harm as a cost of his activity. This cost item will influence pricing, and will be passed on to consumers spread so widely that no one will be seriously effected (vide Article by Prof. Clarence Morris entitled 'Hazardous Enterprises and Risk Bearing Capacity' published in Yale Law Journal, 1952 p. 1172).

29. The rule in Rylands vs. Fletcher (supra) was subsequently interpreted to cover a variety of things likely to do mischief on escape, irrespective of whether they were dangerous per se e.g. water, electricity, explosions, oil, noxious fumes, colliery spoil, poisonous vegetation, a flagpole, etc (see 'Winfield and Jolowicz on 'Tort", 13th Edn p 425) vide National Telephone Co. vs. Baker (1893) 2 Ch 186, Eastern and South African Telegraph Co. Ltd. vs. Cape Town Tramways Co. Ltd. (1902) AC 381, Hillier vs.

Air Ministry (1962) CLY 2084, etc. In America the rule was adapted and expressed in the following words " one who carried on an ultra hazardous activity is liable to another whose person, land or chattels the actor should recognize as likely to be harmed by the unpreventable miscarriage of the activity for harm resulting thereto from that which makes the activity ultra hazardous, although the utmost care is exercised to prevent the harm" (vide Restatement of the Law of Torts, vol 3, p. 41).

30. Rylands vs. Fletcher (supra) gave English Law one of its most creative generalizations which, for a long time, looked destined to have a successful future. Yet, after a welcome start given to it by Victorian Judges the rule was progressively emasculated, until subsequently it almost became obsolete in England. According to Dias and Markesins (see 'Tort Law' 2nd Edn p. 355) one reason for this may well be that as a generalization justifying a shift from fault to strict liability it may have come prematurely.

The 19th Century had not yet fully got over laissez faire, and it was only in the 20th Century that the concepts of social justice and social security, as integral parts of the general theory of the Welfare State, were firmly established.

31. As already mentioned above, the rule of strict liability laid down by Blackburn J. in Rylands vs. Fletcher (supra) was restricted in appeal by Lord Cairns to non-natural users, the word 'natural' meaning 'that which exists in or by nature, and is not artificial', and that was the sense in which it was used by Lord Cairns. However, later it acquired an entirely different meaning i.e. that which is ordinary and usual, even though it may be artificial' vide Rickards vs. Lothian (1913) AC 263 followed in Read vs.

Lyons (1947) AC 156. Thus the expression 'non-natural' was later interpreted to mean 'abnormal', and since in an industrial society industries can certainly not be called 'abnormal' the rule in Rylands vs. Fletcher (supra) was totally emasculated in these subsequent rulings. Such an interpretation, as Prof. Newark writes, 'would have surprised Lord Cairns and astounded Blackburn, J' (see article entitled 'Non-natural User and Rylands vs. Fletcher,' published in Modern Law Review, 1961 vol 24, p 557).

32. In Read vs. Lyons (1947) AC 156) which was a case of injury due to a shell explosion in an ammunitions factory, Lord Macmillan while rejecting the claim of the plaintiff made further restrictions to the rule in Rylands vs.

Fletcher (supra) by holding that the rule "derives from a conception of mutual duties of neighbouring landowners", and was therefore inapplicable to personal injuries. He also held that to make the defendant liable there should be escape from a place under the defendant's control and occupation to a place outside his occupation, and since the plaintiff was within the premises at the time of the accident the injury was not due to escape therefrom. In this way Read vs. Lyons (supra) destroyed the very spirit of the decision in Rylands vs. Fletcher (supra) by restricting its principle to the facts of that particular case, instead of seeing its underlying juristic philosophy.

33. Apart from the above, some other exceptions carved out to the rule in Rylands vs. Fletcher (supra) are (a) consent of the plaintiff; (b) common benefit; (c) Act of stranger; (d) Act of God; (e) Statutory authority; (f) default of plaintiff etc.

34. In Dunne vs. North Western Gas Boards (1964) 2 QB 806 Sellers L.J. asserted that the defendant's liability in Rylands vs. Fletcher (1868) LR 3 HC 330 "could simply have been placed on the defendants' failure of duty to take reasonable care", and it seems a logical inference from this that the Court of Appeals considered the rule to have no useful function in modern times. As Winfield remarks, the rule in Rylands vs. Fletcher (supra), by reason of its many limitations and exceptions, today seldom forms the basis of a successful claim in the Courts (see Winfield and Jolowicz on Tort, 13th Edn p. 442), and it seems that the rule "has hardly been taken seriously by modern English Courts", vide Att. Gen. vs. Geothermal Produce (N.Z.) Ltd., (1987) 2 NZ1R 348.

35. As Winfield remarks, because of the various limitations and exceptions to the rule "we have virtually reached the position where a defendant will not be considered liable when he would not be liable according to the ordinary principles of negligence" (see Winfield on Tort, 13th Edn p. 443).

36. This repudiation of the principle in Rylands vs. Fletcher (supra) is contrary to the modern judicial philosophy of social justice. The injustice may clearly be illustrated by the case of Pearson vs. North Western Gas Board (1968) 2 All ER 669. In that case the plaintiff was seriously injured and her husband was killed by an explosion of gas, which also destroyed their home. Her action in Court failed, in view of the decision in Dunne vs.

North Western Gas Board (1964) 2 QB 806. Thus the decline of the rule in Rylands vs. Fletcher (supra) left the individual injured by the activities of industrial society virtually without adequate protection.

37. However, we are now witnessing a swing once again in favour of the principle of strict liability. The Bhopal Gas Tragedy, the Chernobyl nuclear disaster, the crude oil spill in 1988 on to the Alaska coast line from the oil tanker Exxon Valdez, and other similar incidents have shocked the conscience of people all over the world and have aroused thinkers to the dangers in industrial and other activities, in modern society.

38. In England, the Pearson Committee recommended the introduction of strict liability in a number of circumstances (though none of these recommendations have so far been implemented, with the exception of that related to defective products).

39. In India the landmark Constitution Bench decision of the Supreme Court in M.C. Mehta vs. Union of India AIR 1987 SC 1086 has gone much further than Rylands vs. Fletcher (supra) in imposing strict liability. The Court observed "if the enterprise is permitted to carry on any hazardous or inherently dangerous activity for its profit the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activity as an appropriate item of its overheads". The Court also observed that this strict liability is not subject to any of the exceptions to the rule in Rylands vs.

Fletcher (supra).

40. The decision in M.C. Mehta's case (supra) related to a concern working for private profit. However, in our opinion the same principle will also apply to statutory authorities (like the railways), public corporations or local bodies which may be social utility undertakings not working for private profit.

41. It is true that attempts to apply the principle of Rylands vs. Fletcher (supra) against public bodies have not on the whole succeeded vide Administrative Law by P.P. Craig, 2nd Edn. p. 446, mainly because of the idea that a body which acts not for its own profit but for the benefit of the community should not be liable. However, in our opinion, this idea is based on a misconception. Strict liability has no element of moral censure. It is because such public bodies benefit the community that it is unfair to leave the result of a non-negligent accident to lie fortuitously on a particular individual rather than to spread it among the community generally.

42. In America the U.S. Supreme Court in Lairds vs. Nelms (1972) 406 US 797, following its earlier decision in Dalehite vs. U.S. (1953) 346 US 15, held that the U.S. was not liable for damages from supersonic booms caused by military planes as no negligence was shown. Schwartz regards this decision as unfortunate (see Schwartz ' Administrative Law', 1984).

However, as regards private enterprises the American Courts award huge damages (often running into millions of dollars) for accidents due to hazardous activities or substances.

43. In France, the liability of the State is without fault, and the principle of strict liability applies (see C.J. Hanson "Government Liability in Tort in the English and French Legal Systems")

44. In India, Article 38(1) of the Constitution states "the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life".

45. Thus, it is the duty of the State under our Constitution to function as a Welfare State, and look after the welfare of all its citizens.

46. In various social welfare statutes the principle of strict liability has been provided to give insurance to people against death and injuries, irrespective of fault.

47. Thus, Section 3 of the Workmen's Compensation Act 1923 provides for compensation for injuries arising out of and in the course of employment, and this compensation is not for negligence on the part of the employer but is a sort of insurance to workmen against certain risks of accidents.

48. Similarly, Section 124A of the Railways Act 1989, Sections 140 and 163A of the Motor Vehicles Act, 1988, the Public Liability Insurance Act, 1991 etc. incorporate the principle of strict liability.

49. However, apart from the principle of strict liability in Section 124A of the Railways Act and other statutes, we can and should develop the law of strict liability de hors statutory provisions in view of the Constitution Bench decision of this Court in M.C. Mehta's case (supra). In our opinion, we have to develop new principles for fixing liability in cases like the present one.

50. It is recognized that the Law of Torts is not stagnant but is growing.

As stated by the American Restatement of Torts, Art 1; vide D. L. Lloyd:


"The entire history of the development of the tort law shows a continuous tendency, which is naturally not uniform in all common law countries, to recognize as worthy of legal protection, interests which were previously not protected at all or were infrequently protected and it is unlikely that this tendency has ceased or is going to cease in future."

51. There are dicta both ancient and modern that the known categories of tort are not closed, and that novelty of a claim is not an absolute defence.

Thus, in Jay Laxmi Salt works (P) Ltd. vs. The State of Gujarat. JT 1994 (3) SC 492 (vide para 7), the Supreme Court observed:

"Law of torts being a developing law its frontiers are incapable of being strictly barricaded".

52. In Ashby vs. White (1703) 2 Ld. Raym 938, it was observed (vide Pratt C.J.):

"Torts are infinitely various, not limited or confined".

53. In Donoghue vs. Stevenson (1932) AC 562 (619) (HL), it was observed by the House of Lords (per Macmillan, L.J.):

"The conception of legal responsibility may develop in adaptation to altering social conditions and standards. The criterion of judgment must adjust and adapt itself to the changing circumstances of life."

54. The above view was followed in Rookes vs. Barnard (1964) AC 1129 (1169) (HL) and Home Officer vs. Dorset Yacht Co. Ltd (1970) 2 All ER 294 (HL).

55. In view of the above, we are of the opinion that the submission of learned counsel for the appellant there was no fault on the part of the Railways, or that there was contributory negligence, is based on a total misconception and hence has to be rejected.

56. Thus, there is no force in this appeal which is accordingly dismissed.

There shall be no order as to costs.