Bondar Singh and ors. Vs. Nihal Singh and ors. - Court Judgment

Excerpt:
- [k. subba rao, c.j.,; m. hidayatullah,; r.s. bachawat,; raghuvar dayal, jj.] the mysore health cess act 1962 provided in s. 3 for the levy and collection of a health cess at the rate of nine naye paise in the rupee, inter alia, on the items of the state revenue mentioned in schedule a. item 1 of schedule a mentioned duties of excise leviable by the state under any law for the time being in force in any area of the state on alcoholic liquors for human consumption (and opium etc.) manufactured or produced in the state and for countervailing duties levied on similar goods manufactured or produced elsewhere. the mysore excise act, 1901 empowered the state government to grant exclusive or other privilege of selling by retail any country liquor or intoxicating drugs to any person or persons on such conditions and for such period as it thought fit. according to s. 18 of the act the privilege of sale in a specified shop was to be disposed of periodically by public auction held by the excise authorities. as a result of such public auctions held subject to the terms and conditions notified by the state government the appellants were granted the exclusive privilege of selling country liquor in certain arrack shops, beer taverns and toddy shops in consideration of their agreeing to pay specified 'shop rent' thereon at the rate of nine naye paise in the rupee. the appellants challenged the levy of the health cess on the shop rent in writ petition before the high court and thereafter appealed to this court with the following contentions : (1) that the mysore legislature was not competent to enact the impugned act because no entry in list it or list iii authorities a tax on tax or a health-tax and that if the intention was to levy a surcharge on existing items of revenue the state legislature could have easily used the words 'surcharge' or 'additional revenue'. (2) even if the impugned tax was valid the act did not empower the levy of health cess on shop rent because shop 'rent was not an excise duty falling within schedule a -of the impugned act or entry 51 of list ii. held:per subba rao, c. j., sikri and dayal, jj. (i) by the impugned act the state legislature was levying a health cess on a number of items of state revenue or tax and it adopted the form of calling it a cess and prescribed the rate of nine naye paise in the rupee on the state revenue or tax. section 4 of the impugned act makes it quite clear that the cess is leviable and recoverable in the same manner as items of land revenue, state revenue or tax. in the context, the word on' in s. 3 does not indicate that the subject matter of taxation is land revenue or state revenue but that 9% of the land -revenue or state revenue is to be levied and collected, the subject matter remaining the same as in the law imposing land revenue or any duty or tax. if we read ss. 3 and 4 together the fact that the words 'surcharge' or 'additional duty' halve not been mentioned does not detract from the real substance of the legislation. accordingly the mysore legislature was competent to enact the law under the various entries of list ii which enable it to levy land revenue or the duties of excise or the other taxes mentioned in s. 3(iii) of the impugned act. [560 a-c] (ii) for a duty to be a duty of excise it must be shown that the duty has been levied on goods which have been produced or manufactured, the taxable event being production or manufacture of goods. however,, it is not easy to decide in a particular case whether the particular levy is a levy in respect of manufacture or production of goods. this question has to be decided on the facts of each case but in deciding it certain principles must be borne in mind. first, one of the essential characteristics of an excise duty is uniformity of incidence. secondly, the duty must be closely related to production or manufacture of goods. it does not matter if the levy is made not at the moment of production or manufacture but at a later stage. if a duty has been levied on an excisable article but this duty is collected from a retailer it does not necessarily cease to be an excise duty. thirdly, if a levy is made for the privilege of selling an excisable article and the excisable article has already borne the duty and the duty has been paid, there must be clear terms in the charging section to indicate that what is being levied for the purpose of the privilege of sale is in fact a duty of excise. [562 e-f; 563 h] there is no presumption that if no other taxable event has intervened, the levy must be treated to be connected with production or manufacture. the levy in the present case was a payment for the exclusive privilege of selling today from certain shops. the licencee paid what he considered to be equivalent to the value of the right. secondly, it had no close relation to the production or manufacture of toddy. thirdly, the only relation it had to the production or manufacture of toddy, was that it enabled the licencee to sell it. but he might sell little, less or more than he anticipated, depending on various factors. fourthly, toddy had already paid one excise duty in the form of tree tax., but he need not tap himself. fifthly, the duty was not uniform in incidence because the amount collected had no relation to the quantity or quality of the produce but had only relation to what the petitioner thought be could recoup by the sale of the excisable articles. what be recouped would depend upon the amount of sales and the conditions prevailing during the licensing year. sixthly, there were no express words showing that what was being realised by the appellants was an excise duty. seventhly the privilege of selling was auctioned well before the goods came into existence. [564 b-e] for the above reasons the duty was not an excise duty within the meaning of item (1) of schedule a of the health cess act or entry 51 of list 11 of the constitution. the state of mysore had therefore no authority to levy and collect health cess on shop rent. [567 g-h] per bachawat j (concurring) : a charge for licence to sell an excisable article may be a fee or a tax. if it is a tax, it can satisfy the test of a duty of excise when it is so connected with the manufacture or production of an article as to be in effect a tax on the manufacture or production. otherwise such a tax does not fall within the classification of a duty of excise. in the present case the shop rent was not connected with the production or manufacture of arrack, beer or toddy and was therefore not a duty of excise. the state legislature was not competent to make a law levying a surcharge on the shop rent under entry 5 1, list h. [584 c- f] per hidayatullah, j. (dissenting) : the persons who bid at these auctions were themselves the producers or manufacturers. they bid for the exclusive privilege or selling which in so far as government was concerned was a means of collecting the anticipated excise duty at one go from a producer or manufacturer before the goods became a part of the general stock of goods in the country. in other words the person who was charged was the producer or manufacturer and the duty was levied from him before he could sell or obtain liquor which had not borne excise duty so far. the duty was therefore clearly a duty of excise whether the matter was considered in the light of economic theory, legislative practice or judicial authority. [572 d- e] case law considered. - however, legal position is clear law that a document like the sale deed in the present case, even though not admissible in evidence, can be looked into for collateral purposes. there is other reliable evidence on record which establishes that the plaintiffs have been in continuous possession of the land in question. was given on 6.8.1962 6. it appears that having failed to obtain possession of the suit land through lawful means, the defendants tried to dispossess the plaintiffs forcibly which led to the present suit being filed on 15.4.1972. the claim of the defendants regarding taking possession of suit land from plaintiffs in 1957-58 having been found to be false, it follows that the defendants never came into possession of the suit land. the defendants were asserting their title to the land since 1956. they had however failed to get possession of the suit land. the plea of adverse possession raised by the plaintiff is thus clearly established. the mother of the defendants was alive at the relevant time and her evidence on this point would have been the best evidence. the best evidence in relation to the plea of shikmi, though available, was kept away from the court.arun kumar, j.1. this appeal is directed against the judgment and decree dated 16th november, 1998 passed by the indore bench of the high court of madhya pradesh. as a result of the decision of the high court the suit filed by the plaintiffs/respondent was decreed. the plaintiffs had filed a suit for declaration that they had become owners of the lands in suit by adverse possession and for injunction to restrain the defendants from interfering with the plaintiffs' possession of the suit lands. the trial court had decreed the suit, however, the appeal filed by the defendants against the trial court judgment was allowed by the additional district judge, dhar, m.p. and the suit was ordered to be dismissed. further an appeal filed by the plaintiffs against the said judgment of the additional district judge was allowed by the high court and the suit was finally decreed.2. briefly the facts are that the plaintiffs (respondent herein) claim title to the land in suit on the basis of the plea that they had become its owners by adverse possession. the land was owned by one fakir chand predecessor in interest of the appellants herein (defendants in the suit). fakir chand sold the land to tola singh, predecessor in interest of the plaintiffs by an unstamped and unregistered sale deed dated 9.5.1931. the plaintiffs claim to have entered into possession of the land on the basis of the said sale deed and they claim to be continuously in possession since then. the defendants tried to dispossess the plaintiffs which led to the present suit being filed by them on 15.4.1972. in the written statement filed by the defendants they denied the sale of land by their father fakir chand to tola singh. they denied possession of the plaintiffs of the suit land. they also took the plea that the alleged deed was false, fictitious and without consideration. according to the defendants, their father was in possession of the lands till his death. after the death of their father, their mother had given possession of the land to tola singh for purpose of cultivation in order to earn some money for supporting her family. according to the defendants they had taken back possession of the land from tola singh in the year 1957-58. they also pleaded that after the death of fakir chand, the land had been mutated in their names in the revenue records to the knowledge of the plaintiffs. the plea of adverse possession was denied by stating that actually the defendants were in possession of the land and there was no question of adverse possession of the land by the plaintiffs qua the suit land.3. the main question for consideration in the present suit is as to whether the plaintiffs were in hostile continuous possession of the suit lands by virtue of which they had perfected their title to the land by adverse possession. both parties claim to be in possession of the suit land. while considering the above question, the court will also have to look into the plea raised by the learned counsel for the appellants/defendants that the plaintiffs had come in possession of the suit land for a brief period after the death of fakir chand, father of the defendant as 'shikmi' that is sub-tenants. the plea of sub-tenancy was as such not raised in the written statement nor any issue was framed by the trial court in this connection. no particulars of alleged sub-lease were given. not even date of creation of alleged sub-lease was stated. the defendants have tried to build an argument based on plea of sub tenancy (shikmi) at appellate stage. in support of this plea they rely on certain entries in the revenue records. since this plea pre-supposes possession of the plaintiffs, the defendants took the stand that they had taken back the possession of the land from the defendants.4. before we proceed further it is necessary to notice a preliminary argument raised by the learned counsel for the appellants. it was contended that the question of possession is a question of fact and the high court while exercising power under section 100 of the code of civil procedure, had no jurisdiction to upset the findings on this question recorded by the lower appellate court. an appeal under section 100 c.p.c. can be entertained by the high court only on a substantial question of law. there can be no quarrel with this legal proposition. the scope of powers of high court under section 100 c.p.c. is a matter of settled law. the learned counsel for the appellant cited several judgments in support of his contention. we do not consider it necessary to discuss these decisions because so far as the question of powers of high courts under section 100 c.p.c. is concerned, it needs no discussion. if the findings of the subordinate courts on facts are contrary to evidence on record and are perverse, such finding can be set aside by the high court in appeal under section 100 c.p.c. a high court cannot shut its eyes to perverse findings of the courts below. in the present case the findings of fact arrived at by the lower appellate court were contrary to evidence on record and, therefore, perverse and the high court was fully justified in setting aside the same resulting in the appeal being allowed and suit being decreed.5. the main question as we have already noted is the question of continuous possession of the plaintiffs over the suit lands. the sale deed dated 9.5.1931 by fakir chand, father of the defendants in favour of tola singh, the predecessor interest of the plaintiff, is an admitted document in the sense its execution is not in dispute. the only defence set up against said document is that it is unstamped and unregistered and therefore it cannot convey title to the land in favour of plaintiffs. under the law a sale deed is required to be properly stamped and registered before it can convey title to the vendee. however, legal position is clear law that a document like the sale deed in the present case, even though not admissible in evidence, can be looked into for collateral purposes. in the present case the collateral purpose to be seen is the nature of possession of the plaintiffs over the suit land. the sale deed in question at least shows that initial possession of the plaintiffs over the suit land was not illegal or unauthorized. it is significant to note that the sale deed is dated 9.5.1931 and fakir chand died somewhere in the year 1949-50. during his lifetime fakir chand never disputed plaintiffs' title or possession of the suit land. there is other reliable evidence on record which establishes that the plaintiffs have been in continuous possession of the land in question. there is a notice dated 16.4.1956 exhibit p.6. the notice was issued on behalf of the defendants and is addressed to the predecessor interest of the plaintiffs. by the notice the defendants called upon the plaintiffs to hand over possession of the suit land to them. according to the notice, the plaintiffs were trespassers on the suit land and were liable to hand over its possession to the defendants. this notice is an admission on the part of the defendants that the plaintiffs were in possession of the suit land at least on the date of the notice i.e. 16th april, 1956. the notice was followed by an application dated 8th may, 1956 (exhibit p.3) filed by the defendants under section 58 of the madhya bharat land revenue and tenancy act, 1950 before the revenue authorities. in the said application the defendants admit that the land in question was in possession of the plaintiffs since the lifetime of their father. it is further admitted that the land was being cultivated by the plaintiffs. it was prayed in the said application that the plaintiffs be declared trespassers over the suit land and possession of the land be given to the defendants. in their reply to the application, the present plaintiffs denied the allegation that they were trespassers on the suit land, they refer to the sale deed of 9.5.1931 by fakir chand in favour of their predecessor. thus the plaintiff were all along asserting that they were in possession of the land in their own right. the tehsildar vide his order dated 3rd october, 1959 dismissed the said application of the defendants. he relied on an admission on the part of the poonam chand, eldest son of fakir chand that the present plaintiffs were in possession for the last 26-27 years. relying on the said statement the revenue authorities held that since possession of the present plaintiffs was continuing for last 25-27 years they could not be dispossessed from the suit land. the application of the defendants was dismissed. the defendant filed an appeal against the said order which was also dismissed on 6.8.1962. a copy of the order of the tehsildar is exhibit p.8 while a copy of the order of the appellate authority i.e. s.d.o. is exhibit p.9. these judgments of the revenue authorities establish that at least till 1962 the plaintiffs were in possession of the suit land. they also totally nullify the assertion of the defendants in their written statement in the present suit that they had taken possession of the suit land in 1957-58. if they had taken possession of the suit land in 1957-58 why were they pursing the matter before the revenue authority till 1962 when the appeal was contested before the s.d.o. and the decision of the s.d.o. was given on 6.8.19626. it appears that having failed to obtain possession of the suit land through lawful means, the defendants tried to dispossess the plaintiffs forcibly which led to the present suit being filed on 15.4.1972. the claim of the defendants regarding taking possession of suit land from plaintiffs in 1957-58 having been found to be false, it follows that the defendants never came into possession of the suit land. another significant conclusion which follows from these facts is that the defendants started asserting their title to the suit land since at least 1956 when they issued the notice exhibit p.6 while the plaintiffs have been denying their title to the suit land and were setting up their own title to the same. this lands support to the plea of adverse possession set up by the plaintiffs. it will be seen from this clear and clinching evidence on record that the plaintiffs were in continuous and uninterrupted possession of the suit land since 1931 and they had been setting up a hostile title thereto as against the defendants. the defendants were asserting their title to the land since 1956. they had however failed to get possession of the suit land. the plea of adverse possession raised by the plaintiff is thus clearly established.7. as regards the plea of sub tenancy (shikmi) argued on behalf of the defendants by their learned counsel, first we may note that this plea was never taken in the written statement the way it has been put forth now. the written statement is totally vague and lacking in material particulars on this aspect. there is nothing to support this plea except some alleged revenue entries. it is settled law that in the absence of a plea no amount of evidence led in relation thereto can be looked into. therefore, in the absence of a clear plea regarding sub tenancy (shikmi) the defendants cannot be allowed to build up a case of sub tenancy (shikmi). had the defendants taken such a plea it would have found place as an issue in the suit. we have perused the issues framed in the suit. there is no issue on the point.8. the alleged revenue entries relied upon by defendants do not support the plea of the defendants that the plaintiffs' possession of the land was as shikmi tenants. a significant point which militates against the argument that the plaintiffs were shikmi tenants on the suit land is that the mother of the defendants is said to have inducted the plaintiffs as sub-tenants. the mother of the defendants was alive at the relevant time and her evidence on this point would have been the best evidence. she could have been produced in evidence in support of this plea. the defendants, rather than producing her in evidence, created a drama by moving an application for examining their mother as a witness on commission. the trial court passed an order appointing a commissioner to record her evidence on commission. however, when the commissioner went to record the evidence of the mother, it was represented to him that she was totally deaf and dumb and therefore, the commissioner returned without recording her statement. the plaintiffs thereafter moved an application that the mother of the defendants was completely hale and hearty and in order to avoid her being cross-examined by the counsel for the plaintiffs she was purposely not produced as a witness. apart from this, even puran chand, the eldest brother of the defendants was not examined as a witness. the defendants were said to be very young at the time of death of their father. punam chand is the eldest son of fakir chand. he was also kept away from the court in these proceedings even though he was arrayed as a defendant in the suit. the written statement filed by the defendants was a joint written statement by all the defendants except punam chand. punam chand did not file a written statement. the best evidence in relation to the plea of shikmi, though available, was kept away from the court. it follows from the above that the argument that the plaintiffs were shikmi tenants in the suit land is wholly devoid of any merit. the same has therefore to be rejected.9. regarding the plea of the defendants that they had taken possession of the land in suit from the plaintiffs somewhere in the year 1957 the high court has aptly remarked that the defendants were required 'to open their mouth before the revenue authorities if not in 1957 at least in the year 1962 to show to the revenue authorities that they had obtained possession.' the high court has further found after scrutinizing the record that the defendants did not care to file even a single revenue entry for the period between 1956 and 1962 that they had been recorded in possession of the suit lands. therefore, the high court concluded that the finding recorded by the lower appellate court was based on surmises and conjecture and was contrary to the evidence on record and the law. the high court came to a definite finding that tola singh predecessor in interest of the plaintiffs came in possession of the suit land in the year 1931 and continued to be in possession thereof till the date the present suit was filed in 1972.10. the defendants have tried to take advantage of the fact that a receiver had been appointed with respect to the suit land in proceedings under section 145 of the code of criminal procedure. according to the defendants the possession of the receiver was on their behalf. this is not correct. the plaintiffs had become bhoomiswami with respect to the suit land prior to the appointment of the receiver. therefore, receiver's possession could not be said to be on behalf of the defendants.11. the result of the above discussion is that there is no merit in this appeal. the stand taken by the defendants/appellants is totally untenable. the appeal is dismissed leaving the parties to bear their respective costs.