advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Friday, October 28, 2016

surcharge has been levied under Section 5A of the said Act on the gross sales tax payable, without deducting the entry tax as required under Section 4 of the OET Act.= It is well settled that the objective of framing rules is to fill up the gaps in a statutory enactment so as to make the statutory provisions operative. Rules also clarify the provisions of an Act under which the same are framed. Section 4 of the OST Act is a charging Section attracting liability to pay Sales Tax “on sales and purchases effected”. Section 5 of the OST Act provides for rate of Sales Tax. Section 5A of the OST Act levies surcharge on the dealer which is nothing but an additional tax. Therefore, on a plain reading of the provisions under the OST Act as well as under the OET Act, a dealer is not entitled for reduction of the amount of entry tax from the amount of tax payable before the levy of surcharge under Section 5A of the OST Act. A harmonious reading of Rule 18 of the Rules as well as Sections 4, 5, 5-A of the OST Act reveals no conflict or inconsistency. The Rules are to be construed to have been made for furtherance of the cause for which the Statute is enacted and not for the purpose of bringing inconsistencies. 21) Section 5A of the OST Act is a self-contained provision and the surcharge, as already seen above, is leviable at the specified per centum of tax payable under the OST Act. Tax payable under the OST Act is independent of the provisions of OET Act. The assessment or quantification or computation of surcharge shall have to be made in accordance with the provisions of the OST Act. 22) Thus, on a conjoint reading of Section 5 of the OST Act, Section 4 of the OET Act and Rule 18 of the Rules, we are of the considered opinion that the amount of surcharge under Section 5A of the OST Act is to be levied before deducting the amount of entry tax paid by a dealer. 23) In view of the forgoing discussion, the impugned judgment and order dated 05.01.2007 passed by the High Court cannot be sustained and is liable to be set aside. In the result, all the appeals are allowed; however, the parties shall bear their own cost.

                                     REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

1                CIVIL APPEAL NOs. 5913-5920 OF 2008


Commissioner of Commercial Taxes & Ors.  .... Appellant(s)

            Versus

M/s Bajaj Auto Ltd. & Anr.                               .... Respondent(s)


                                    WITH

   CIVIL APPEAL NOs. 5921 OF 2008
















                               J U D G M E N T



R.K. Agrawal, J.


1)    Challenge in the above said appeals is to the legality of  the  common
judgment and order dated 05.01.2007 rendered by  a  Division  Bench  of  the
High Court of Orissa at Cuttack in Writ Petition (C) being No. 233  of  2002
and connected matters wherein the High Court allowed the petitions filed  by
the respondents herein.
2)    Civil Appeal No. 5913 of 2008 is being treated as  the  leading  case,
hence, the facts of the said appeal are given below:-
The respondents are engaged in the sale and purchase of Motor  Vehicles  and
are registered dealers under the Orissa Sales Tax Act, 1947 (in  short  ‘the
OST Act’) as well as under the Central Sales Tax Act.  The  respondents  had
been paying entry tax on the goods when they were bought into the  State  of
Orissa under Section 3(3) of the Orissa Entry Tax Act, 1999  (in short  ‘the
OET Act’).  However, they were paying surcharge on the balance amount  after
deduction of the entry tax paid on the motor vehicles.
The Finance Department, Government of Orissa, by  letter  dated  20.11.2001,
stated that the surcharge under the OST  Act  shall  be  calculated  on  the
payable amount of tax due on the taxable turnover (Section 5 &  5A)  instead
of on the reduced Sales Tax amount after setting off of entry tax.
On 30.03.2002, the Sales Tax Officer, Sambalpur-I Circle,  passed  an  order
under Section 12(4) of the  OST  Act  wherein  surcharge  was  levied  under
Section 5A of the OST Act on the gross sales tax payable by the  respondent-
Company.
Being aggrieved by the demand notice dated 30.03.2002 as well as the  letter
dated 20.11.2001 issued by the  Finance  Department  of  the  Government  of
Orissa, the respondent-Company filed a writ petition being No. 233  of  2002
along with a set of other writ petitions filed  by  the  respondents  herein
before the High Court of Orissa at Cuttack.
The Division Bench of the High Court, vide common judgment and  order  dated
05.01.2007, allowed the appeals filed by the respondents herein.
(f)   Being aggrieved by  the  judgment  and  order  dated  05.01.2007,  the
appellants have preferred these appeals before this Court by way of  special
leave.
3)    Learned senior counsel for the appellants have taken  the  stand  that
there is nothing in the  provisions  of  the  OET  Act  or  the  Rules  made
thereunder which would alter the mode of computation prescribed  in  Section
5A of the OST Act.  Section 4 of the OET Act provides for reduction  of  the
liability of a dealer under the Sales Tax Act to the  extent  of  entry  tax
paid under the OET Act.  This provision  only  appertains  to  reduction  of
entry tax.  It has nothing to do  with  the  computation  of  the  surcharge
under the OST Act.  In any event, in terms of Section  4  of  the  OET  Act,
reduction of entry tax paid by the dealers is from the liability  under  the
Sales Tax Act.  In substance, it means that the total  liability  under  the
Sales Tax Act having been determined would then be reduced by the extent  of
entry tax paid.
4)    Learned senior counsel further submitted that the  illustration  given
under Rule 18 of the Odisha Entry Tax Rule,  1999  (in  short  ‘the  Rules’)
neither curtails nor expands the ambit of the  provisions  of  the  Act  for
which he relied upon a decision of this Court in Shambhu Nath Mehra vs.  The
State of Ajmer AIR 1956 SC 404, wherein it was held as under:-

“11. We recognise that an illustration does not exhaust the full content  of
the section which it illustrates but equally  it  can  neither  curtail  nor
expand its ambit;….”


5)    Learned senior counsel further relied  upon  Lalit  Mohan  Pandey  vs.
Pooran Singh and Others (2004) 6 SCC  626, wherein this Court  has  held  as
under:-

“75. The illustration appended  to  the  Rules  does  not  envisage  such  a
situation. Illustrations although are of relevance and have  some  value  in
the construction of the text of  the  sections  but  they  cannot  have  the
effect of modifying the language of  the  statute  and  they  cannot  either
curtail or expand the ambit of the statute.”

6)    Learned  senior  counsel  further  submitted  that  the  levy  of  tax
includes surcharge for which he relied upon the following judgments of  this
Court in:-
(i)   In The Commissioner of Income Tax, Kerala vs.  K. Srinivasan (1972)  4
SCC 526, this Court has held as under:-

“10. The meaning of the word “surcharge”  as  given  in  the  Webster’s  New
International Dictionary includes among others “to charge (one) too much  or
in addition …” also “additional tax”.”

(ii)  In The Madurai District Central Co-operative Bank Ltd. vs. The Third
Income Tax Officer, Madurai (1975) 2 SCC 454, it was held as under:-

“18. In CIT Kerala v. K. Srinivasan on  which  the  appellant  relies,  this
Court has traced the history of the concept of “surcharge” in the  tax  laws
of our country. After considering the report  of  the  Committee  on  Indian
Constitutional Reforms, the provisions  of  the  Government  of  India  Act,
1935, the provisions of Articles 269, 270 and 271 of  the  Constitution  and
the various Finance Acts, this Court held, differing from  the  High  Court,
that the word “income  tax”  in  Section  2(2)  of  the  Finance  Act,  1964
includes surcharges and the additional surcharge.”


(iii) In M/s Hoechst Pharmaceuticals Ltd. and Others vs. State of Bihar  and
Others (1983) 4 SCC 45, it was held as under:-

“28. It cannot be doubted that a surcharge partakes of the nature  of  sales
tax and therefore it was within the competence of the State  legislature  to
enact sub-section (1) of Section 5 of the Act for  the  purpose  of  levying
surcharge on certain class of dealers in addition  to  the  tax  payable  by
them…..

79. ….A surcharge in its true nature and character is nothing but  a  higher
rate of tax to raise revenue for general purposes….”


(iv)  In M/s Ashok Service Centre and Others vs. State of  Orissa  (1983)  2
SCC 82, this Court has held as under:-

“17….The Act only levied some extra sales tax in addition to what  had  been
levied by the principal Act. The nature of the taxes levied  under  the  Act
and under the principal Act was the same and the legislature expressly  made
the provisions of the principal Act mutatis mutandis applicable to the  levy
under the Act…..”

(v)   In Sarojini Tea Co. (P) Ltd. vs. Collector  of  Dibrugarh,  Assam  and
Another (1992) 2 SCC 156,  it was held as under:-

“16. From the aforesaid decisions, it is amply  clear  that  the  expression
‘surcharge’ in the context of taxation means an additional imposition  which
results in  enhancement  of  the  tax  and  the  nature  of  the  additional
imposition is the same as the tax on which it is  imposed  as  surcharge.  A
surcharge on land revenue is an enhancement  of  the  land  revenue  to  the
extent of the imposition of surcharge. The nature of such imposition is  the
same viz., land revenue on which it is a surcharge.”


7)    On  the  other  hand,  learned  senior  counsel  for  the  respondents
submitted that in  view  of  the  clarification  issued  by  the  office  of
Commercial Tax through e-mail to one  of  the  dealers  in  motor  vehicles,
viz.,  TELCO,  Bhubaneswar,  the  appellants  were  stopped  from  demanding
surcharge on the entire amount of tax  payable  under  the  OST  Act  before
deducting the amount payable under the  OET  Act.   According  to  him,  the
clarification  issued  by  the   Commercial   Tax   Department   to   TELCO,
Bhubaneswar, was in accordance with the illustration appended to Rule 18  of
the Rules which did not take into  consideration  the  amount  of  surcharge
payable before deducting the entry tax paid while computing  the  amount  of
sales tax payable.  He, thus, submitted that the amount of surcharge  is  to
be levied only on the balance amount of sales tax payable on the sale  price
of the motor vehicle after deducting the entry tax paid.  According to  him,
if  two  constructions  are  possible  then  the  one  which  preserves  the
workability and efficacy has to be preferred for  which  he  relied  upon  a
decision of this Court in State  of  Tamil  Nadu  vs.  M.K.  Kandaswami  and
Others (1975) 4 SCC 745, wherein it has been held as under:-

“26. It may be remembered that Section 7-A is at once a charging as well  as
a remedial provision. Its  main  object  is  to  plug  leakage  and  prevent
evasion of tax. In interpreting  such  a  provision,  a  construction  which
would defeat its purpose and, in effect,  obliterate  it  from  the  statute
book, should be eschewed. If more than one construction  is  possible,  that
which preserves its workability, and efficacy is to be preferred to the  one
which would render it otiose or sterile. The view taken by  the  High  Court
is repugnant to this cardinal canon of interpretation.”

8)    Learned senior counsel also relied upon a decision of  this  Court  in
Associated Cement Companies Ltd. vs. State of Bihar and Others (2004) 7  SCC
642, wherein this Court has held that a dealer is entitled to  reduction  in
tax to the extent of tax paid under the Bihar Entry Tax  Act  while  working
out the tax payable by it under the Bihar Sales Tax Act.
9)    Heard learned counsel for the parties and perused the records.
10)   The sole question for consideration is whether the  ‘Surcharge’  under
Section 5A of the OST Act is to be computed on the  gross  amount  of  sales
tax or on the net amount of sales tax after  setting  of  or  deducting  the
amount of entry tax?
11)   Under Section 5 of the OST Act, Sales Tax is payable by  a  dealer  on
the taxable turnover at a prescribed rate. Under Section 5A, it is  provided
inter alia for payment of surcharge. Section 5A of the OST Act (as it  stood
at the relevant time) reads as under:

“5A Surcharge: (1)  Every  dealer  whose  gross  turnover  during  any  year
exceeds rupees ten lakhs shall, in addition to the tax payable by him  under
this Act, also pay a surcharge at the rate of ten per centum  of  the  total
amount of tax payable by him:…..”
12)   It would also be relevant to reproduce Section 4 of the  OET  Act  (as
it stood at the relevant time) which reads as under:-
“(4)  Reduction in Tax Liability:

(1) where an importer of motor vehicle liable to pay tax  under  sub-section
(3) of Section 3 being a Dealer in motor vehicles becomes liable to pay  tax
under the Sales Tax Act by virtue of sale of such motor  vehicles  then  his
liability under the Sales Tax Act shall be reduced  to  the  extent  of  tax
paid under this Act.

Explanation: For the purpose  of  this  sub  section  the  chassis  and  the
vehicle with body built on the chassis shall be treated as one and the  same
goods.

(2)   When an importer or manufacturer of goods  specified  in  Part-III  of
the schedule except  motor  vehicles  pays  tax  under  sub-section  (1)  of
section 3 or section 26 of this Act, being a Dealer under the Sales Tax  Act
becomes liable to pay tax under the said Act  by  virtue  of  Sale  of  such
goods, then his liability under the Sales Tax Act shall be  reduced  to  the
extent of tax paid under this Act.
(3)   The reduction in tax liability of an  importer  as  provided  in  sub-
section (1) or of an importer or manufacturer  as  provided  in  sub-section
(2) shall not be allowed, unless the entry tax paid and  tax  payable  under
the Sales Tax Act are shown separately in the  cash  memo  or  the  bill  or
invoice issued by him for  the  sale  by  virtue  of  which  such  liability
accrues.”

13)   Rule 18 of the Odisha Entry Tax Rule, 1999 is reproduced hereunder:

“18.  Set off of Entry Tax against Sales Tax: (1) When  the  importer  of  a
motor vehicle liable to pay tax under sub-section (2) of section 3  of  this
Act being a dealer in motor vehicles becomes liable to  pay  tax  under  the
Sales Tax Act by virtue of sale of such motor  vehicle,  his  tax  liability
under the Sales Tax Act shall be reduced to  the  extent  of  the  tax  paid
under these rules.

Illustration: Assuming Entry Tax Rate and Sales Tax Rate to be 10%

|1)   |Purchase Value of Motor Vehicle |      Rs.         |
|     |                                |2,00,000/-        |
|2)   |Entry Tax Payable @ 10%         |         Rs.      |
|     |                                |20,000/-          |
|     |Total:-                         |    Rs. 2,20,000/-|
|3)   |Sale Price of the Motor Vehicle |      Rs.         |
|     |                                |2,20,000/-        |
|4)   |(a) Sales Tax due @ 10%         |         Rs.      |
|     |                                |22,000/-          |
|     |Deduct Entry Tax paid           |         Rs.      |
|     |                                |20,000/-          |
|     |Sales Tax payable               |          Rs.     |
|     |                                |2,000/-           |
|     |Total:-                         |    Rs. 2,22,000/-|

Note: If the sales tax payable on such motor vehicle is less than the  entry
tax paid, then the sales tax payable will be nil.

(2)   When an importer of goods specified in Part III  of  the  Schedule  to
the Act other than motor vehicle, liable to pay tax under this Act  is  also
a dealer liable to pay tax under the Sales  Tax  Act,  then  the  Sales  Tax
payable on the sale of goods shall be reduced to the  extent  of  entry  tax
paid in the same manner as illustrated under the sub-rule(1).”

In view of the statutory provision contained in Rule 18 of  the  Rules,  the
tax payable under  the  said  Act  was  to  be  determined  after  deduction
therefrom the entry tax paid by a dealer importing vehicle  into  the  State
of Orissa.
14)   Since the determination of surcharge payable under  the  OET  Act  was
relatable  and/or  linked  to  the  tax  payable  under  the  OST   Act,   a
clarification was sought for by  one  of  the  dealers  in  motor  vehicles,
namely, TELCO which is similarly situated  as  the  Respondent  No.1-company
from the office of Commercial Tax, in view of  the  provision  contained  in
Rule 18 of the Rules, which is as under:-

“Surcharge is payable on the amount of tax that becomes payable by a  dealer
after set off of entry tax paid at the time of purchase of such goods.”


15)   In accordance with the clarification issued to TELCO, Bhubaneswar,  as
aforesaid, which was also circulated to other  dealers  of  motor  vehicles,
including the Respondent No.1-Company, surcharge  was  calculated  and  paid
which was quantified after deducting therefrom the amount of entry tax  paid
by the Respondent No.1-Company while importing  a  motor  vehicle  into  the
State of Orissa.
16)   On 20.11.2001, the Government of Orissa, in  the  Finance  Department,
wrote a letter to the Commissioner of Commercial Taxes, Orissa  relating  to
the computation of tax payable on the motor vehicle for the purpose of  levy
of surcharge on an interpretation of the provisions of the OET Act, the  OST
Act and the Rules which is as under:-

                            “GOVERNMENT OF ORISSA
                             FINANCE DEPARTMENT

      No.  CTB-23/2001. 55863/F
From:
      Shri K.C. Parija,
      Deputy Secretary to Government
To
      The Commissioner of Commercial Taxes,
      Orissa, Cuttack
Sub:  Computation of tax payable on Motor Vehicle for the purpose of levy
of surcharge.

Ref:  C.C.T.’s  letter No. 15264/CT, dt. 12.7.2000
      Bhubaneswar, the 19th November,  2001.

Sir,
      In inviting a reference to the aforesaid letter, I am directed to  say
that surcharge under Orissa Sales Tax Act, 1947, shall be calculated on  the
payable amount of tax due on the taxable turnover (Section 5 &  5A)  instead
of on the reduced Sales Tax amount after setting  off  of  entry  tax.   The
position may kindly be clarified to the Field Officers and  if  such  faulty
procedure of charging surcharge is adopted by any of  the  Circle  Officers,
same should be discontinued forthwith and  corrective  measure  as  per  the
provisions of the statue may be taken up to make good the loss.
      2.  It may further be noted that  the  illustration  in  rule  -18  of
Orissa Entry Tax Rule, 1999 or provision of  any  other  Finance  Department
notification have limited implication for that purpose only  and  they  have
no overriding effect on the statutory provisions of the OST Act.

                                        Yours faithfully

     Sd/-
                                        (K.C. Parija)
                    DEPUTY SECRETARY TO GOVERNMENT

OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES: ORISSA: CUTTACK
                                                             Dated: 20.11.01
Memo No.  24808/CT
                    III(I) 207/2000

      Copy forwarded to all ACCTs/All  CTOs/All  Addl.  CTOs  of  Assessment
Units for information and necessary  action.   The  CTOs  are  requested  to
circulate the  above clarification of Finance Deptt. to all the  Addl.  CTOs
of their respective circles.
Dd/-
                                            Addl. Commissioner of Commercial
                                                Taxes (Gen) Orissa, Cuttack”


 In the said letter, it was inter alia intimated  that  surcharge  shall  be
calculated on the  payable  amount  of  tax  due  on  the  taxable  turnover
(section 5 and 5A) instead of on the reduced sales tax amount after  setting
off of Entry Tax.
17)   On 30.03.2002, the Sales Tax Officer,  Sambalpur-I  Circle,  Sambalpur
passed an order under section 12(4) of the OST  Act  wherein  surcharge  has
been levied under Section 5A  of  the  said  Act  on  the  gross  sales  tax
payable, without deducting the entry tax as required under Section 4 of  the
OET Act.  As a  result  of  this,  excess  surcharge  to  the  tune  of  Rs.
21,25,117.37/- has been levied by the Sales Tax Officer.
18)   It is well settled that an illustration given  under  the  Rules  does
not exhaust the full  content  of  the  section  which  it  illustrates  but
equally it can neither curtails nor expands its ambit.   Further,  surcharge
is nothing but an additional tax and is payable on the sale of goods in  the
manner laid  down  for  levy  of  surcharge.   In  view  of  the  provisions
contained in the OET Act, a dealer is not  entitled  for  reduction  of  the
amount of entry tax from the amount  of  tax  payable  before  the  levy  of
surcharge under Section 5A of the OST Act.
19)   On a plain reading of the provisions of the OST Act  as  well  as  the
OET Act and the Rules, it can be  seen  that  Section  5A  of  the  OST  Act
creates a charge and imposes liability on every dealer under the OST Act  to
pay surcharge @ 10% on the amount of tax payable by him under the  OST  Act.
Section 4(1) of the OET Act, in the same way, prescribes  for  reduction  of
the tax amount payable by the dealer to the  extent  of  entry  tax  already
paid for the same article for which sales  tax  is  payable.   The  Section,
does not specifically contemplate anything, which would  indicate  that  the
provisions of the OET Act or the Rules have to be taken  into  consideration
while assessing the sales tax or  surcharge.   In  essence,  the  provisions
made in the Rules lay down the modality of ‘set off’.  It  is  important  to
mention here that OST Act was enacted in the year 1947 whereas OET  Act  was
enacted in 1999.  The provision of set off has been made in the OET Act  and
the Rules framed thereunder and not in the OST Act.  The heading of  Section
4 of the OET Act gives a broad idea regarding the provision of  set  off  by
way of “reduction in tax liability”.  Sub-Sections 1 and 2 of Section  4  of
the OET Act provide for reduction of liability under the OST Act.
20)   It is well settled that the objective of framing rules is to  fill  up
the gaps in a statutory enactment so as to  make  the  statutory  provisions
operative.  Rules also clarify the provisions of  an  Act  under  which  the
same are framed.  Section 4 of the OST Act is a charging Section  attracting
liability to pay Sales Tax “on sales and purchases effected”.  Section 5  of
the OST Act provides for rate of Sales Tax.   Section  5A  of  the  OST  Act
levies surcharge on the dealer which  is  nothing  but  an  additional  tax.
Therefore, on a plain reading of the provisions under the OST  Act  as  well
as under the OET Act, a dealer is not entitled for reduction of  the  amount
of entry tax from the amount of tax payable before  the  levy  of  surcharge
under Section 5A of the OST Act.  A harmonious reading of  Rule  18  of  the
Rules as well as Sections 4, 5, 5-A of the OST Act reveals  no  conflict  or
inconsistency.  The Rules  are  to  be  construed  to  have  been  made  for
furtherance of the cause for which the Statute is enacted and  not  for  the
purpose of bringing inconsistencies.
21)   Section 5A of the OST  Act  is  a  self-contained  provision  and  the
surcharge, as already seen above, is leviable at the  specified  per  centum
of tax payable under the  OST  Act.   Tax  payable  under  the  OST  Act  is
independent of the provisions of OET Act.  The assessment or  quantification
or computation of surcharge shall have to be made  in  accordance  with  the
provisions of the OST Act.

22)   Thus, on a conjoint reading of Section 5 of the OST Act, Section 4  of
the OET Act and Rule 18 of the Rules, we are of the considered opinion  that
the amount of surcharge under Section 5A of the OST  Act  is  to  be  levied
before deducting the amount of entry tax paid by a dealer.

23)   In view of the forgoing discussion, the impugned  judgment  and  order
dated 05.01.2007 passed by the High Court cannot be sustained and is  liable
to be set aside.  In the result, all the appeals are allowed;  however,  the
parties shall bear their own cost.

...…………….………………………J.
          (SHIVA KIRTI SINGH)










.…....…………………………………J.
   (R.K. AGRAWAL)

NEW DELHI;
OCTOBER 28, 2016.
-----------------------
18


“Indirect Taxation”=Section 3-B undoubtedly commences with a non-obstante clause, but the provision has to be read harmoniously with sub-section (6) to Section 4-B. Any other interpretation would make sub-section (6) a dead letter, for if we accept the plea of the Revenue whenever there is violation or failure to abide with the “intendment”, Section 3-B would be invoked and applied, not sub-section(6) to Section 4-B. Section 3-B would apply when a false and wrong certificate or declaration is made. Sub-section (6) on the other hand, deals with cases where the dealer is unable to comply with the intendment, i.e., for some reason he is unable to sell the goods within the State, export them or sell them in the course of inter-State trade or commerce. Intendment of the said nature has not been treated as false or wrong declaration as consequences have been prescribed in sub-section (6). It is essential to be stated that consistency and certainty in tax matters is necessary. In cases relating to “Indirect Taxation”, this principle is even more important. Clarity in this regard is a necessity and the interpretative vision should be same.

                                 REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL NO. 10430 OF 2016
                    (@ S.L.P. (Civil) No. 28962 of 2013)



Commissioner of Commercial Tax,   U.P.          …Appellant

                                   Versus

M/s Oswal Greentech Limited                        …Respondent



                               J U D G M E N T


Dipak Misra, J.

      Leave granted.
2.    The respondent, a dealer registered under  Section  8-A  of  the  U.P.
Trade Tax Act, 1948 (for brevity, “the Act”), is a holder of  a  recognition
certificate as per provisions contained in Section  4-B  of  the  Act.   The
respondent used to make purchases of raw material at the  concessional  rate
of tax against Form III-B obtained by it from the office of  the  Trade  Tax
Officer. As per conditions prescribed under Section 4-B(2) of the  Act,  the
notified goods  manufactured  out  of  the  raw  material  produced  at  the
concessional rate of tax against Form III-B is required to be sold  by  such
manufacturer in the  State  or  in  the  course  of  inter-State  trade  and
commerce or in the course of export out of India.  It is  also  provided  in
the said Section that  if  a  recognition  certificate  holder  sells  goods
manufactured by it out of the raw material  purchased  at  the  concessional
rate of tax against Form III-B in a manner otherwise than  prescribed  under
Section 4-B(2), the said dealer shall be liable to  penal  action  equal  to
three times of the tax, thus saved by  the  said  dealer  on  purchase  made
against Form III-B.
3.    At the time of scrutiny, the  assessing  authority  noticed  that  the
respondent had made purchases of natural  gas  against  Form  III-B  at  the
concessional rate of tax, and after manufacture of the notified goods,  that
is, fertilizers, out of the said purchases of natural gas purchased  against
Form III-B, some of the finished goods were transferred  outside  the  State
of Uttar Pradesh.  The Revenue issued show cause notice  to  the  respondent
for the assessment  year  2005-06  and  after  considering  the  explanation
offered, imposed penalty of Rs.10,46.98,335/- vide order  dated  28.03.2009.
 Being aggrieved, the respondent preferred an appeal under Section 9 of  the
Act before the Joint  Commissioner  (Appeals)-1,  Commercial  Tax,  Bareilly
being Appeal No. 798 of 2009, and the appellate  authority  vide  its  order
dated 12.11.2009 dismissed  the  appeal  and  confirmed  the  order  of  the
assessing authority dated 28.03.2009 passed under Section 3-B of the Act.
4.    The dismissal of appeal constrained the respondent to  file  a  second
appeal (Appeal No. 237 of 2009) before the Tribunal, Trade  Tax,  U.P.  (for
short, “tribunal”).  Since there was difference of opinion in  the  Division
Bench of the tribunal,  the  case  was  referred  to  the  Chairman  of  the
tribunal who  nominated  another  Judicial  Member  for  his  opinion.   The
learned Judicial Member gave his opinion in favour  of  the  respondent.  On
the basis of the opinion expressed by the  nominated  Judicial  Member,  the
appeal stood allowed as a consequence of which the  order  imposing  penalty
was annulled.
5.    Being aggrieved by the order of the tribunal, the Revenue filed  Trade
Tax Revision No. 579 of 2011 under Section 11 of the  Act  before  the  High
Court.  The question of law that arose for  consideration  before  the  High
Court was as follows:-
“Whether under the facts and circumstances of the case, the  Commercial  Tax
Tribunal were legally justified in granting the  exemption  on  purchase  of
raw material against  Form  III-B  whereas  the  dealer  has  made  a  stock
transfer of finished goods which is not permissible under  law?”

6.    The learned Single Judge took note of the fact that the tribunal   had
relied on a Division Bench decision of the High Court in Camphor and  Allied
Products Ltd. v. State of U.P. & Ors.[1] and on that basis had come  to  the
conclusion that the assessee had purchased  the  material  and  used  it  in
manufacture and there was no  violation  of  Section  3-B  of  the  Act  and
accordingly concurred with the view of the tribunal as  a  result  of  which
the revision stood dismissed.
7.    We have heard Mr. Pawanshree Agrawal and  Mr.  Rajeev  Dubey,  learned
counsel for the appellant and Mr. Punit Dutt Tyagi for the respondent.
8.    It is profitable to refer to the findings recorded  by  the  assessing
officer.  It has been held by him that under Section 3-B and 4-B(2)  of  the
Act, the finished product manufactured from the raw material purchased at  a
concessional rate can only be sold in U.P. or in the course  of  inter-State
trade and commerce or can be exported out of country, but stock transfer  is
not permissible.   According  to  the  assessing  officer,  the  trader  had
purchased natural gas at a concessional rate against  Form  III-B  i.e.  20%
minus 15% = 5%, availing the benefit at the rate of 15% and  paying  tax  at
the rate of 5%.  The production of urea has been done by using  the  natural
gas obtained at a concessional rate and the manufactured product,  that  is,
urea has been sent by way of stock  transfer  outside  the  State  in  clear
violation of Section 3-B and 4-B(2) of the Act.  It has been further  opined
by him that the assessee had acted contrary  to  the  provision  of  law  by
purchasing raw material at a concessional rate and  thereafter  sending  the
finished goods as stock transfer outside  the  State  which  does  not  come
under the term ‘sale’ and no revenue is generated by the State.   Proceeding
further, the assessing officer has held thus:-
“The trader without acting under the provisions of the Section 3B and  4B(2)
of the Uttar Pradesh Trade Tax Act,  had  caused  loss  of  revenue  to  the
State.  The State had lost revenue at the rate of 15%  on  the  purchase  of
raw material used in the produced goods sent as stock transfer, which  could
have received had these were not purchased against  Form  3B.   Because  the
tax has been paid at the rate of 5% against form 3B.   Had  the  trader  not
declared false declaration against  Form  3B,  and  had  acted  as  per  the
provision of Section 4B(2), then the State Government could have got 20%  as
Tax and 1% as development tax totaling 21%.  The local purchase  of  natural
gas could have been made without form 3B.  But  the  trader  had  not  acted
under the provisions of Section 3B. The trader had not  also  acted  u/s  4B
(2) which he had declared to act when taking the forms 3B.  Hence,  the  raw
material  purchased  at  a  concessional   rate   were   utilized   in   the
manufacturing of the  notified  finished  product  (Urea),  but  instead  of
making any sale (within and outside the State) and without  exporting  those
outside the country, had made stock transfers, thereby had violated  Section
4B(2) of the Act.  By making false  declaration  u/s  3B  of  the  Act,  the
trader had only deposited tax on the  purchase  of  raw  material   (Natural
Gas) at the rate of 5% only and availed the benefit of 15%.   On  the  other
hand without taking any action u/s  4B  (2)  of  the  Act,  had  made  stock
transfer outside the State, as a result of which had saved tax @ 7.5%  apart
from the development tax on Urea.  As such the trader was able to evade  tax
@ 22.5% in an illegal manner and thereby had caused double loss  of  revenue
to the State.”

9.    The appellate authority, as the order  would  reflect,  has  expressed
the view that the assessee, after availing the benefit at  the  concessional
rate, has violated the provisions contained in Section 4B(2) of the Act  and
has been making stock transfers quite often.  The  appellate  authority  has
opined that the principle stated in the authorities in  Camphor  and  Allied
Products Ltd. (supra), Bareilly v.  State  of  U.P.[2],  CTT  v.  Manoharlal
Heeralal Pvt. Ltd.[3] are different and not applicable to the facts  of  the
case.
10.   The opinion of the tribunal, as  expressed  by  the  judicial  member,
which is the final view of the tribunal, is that the trader  was  authorized
to purchase  the  natural  gas  for  the  manufacture  of  urea  and  it  is
undisputed that it had  manufactured  urea  by  utilizing  the  natural  gas
purchased against the issue of Form III-B.  He has proceeded to  state  that
no action can be taken under Section 3-B on the  ground  that  the  products
utilizing the natural gas purchased against the issue  of  Form  III-B  were
sent through stock transfer without selling those directly, because  Section
4-B of the Act cannot be extended  to  determine  the  responsibility  under
Section 3-B.  The judicial member has arrived at the said conclusion on  the
foundation that Section 4-B has nothing to do with the  fact  that  how  the
notified goods are to be disposed of because the provision  of  Section  3-B
is not applicable in case the raw material is used  for  production  of  the
notified goods  mentioned  in  the  recognition  certificate.   The  learned
member has expressed the view that  the  decisions  in  Camphor  and  Allied
Products Ltd. (supra) and Bareilly (supra)  are  fully  applicable  and  the
case of the assessee is covered by the principles stated therein.   He  also
took note of the fact that the decisions  in  Camphor  and  Allied  Products
Ltd. (supra), Bareilly (supra) and Manoharlal  Heeralal   (supra)  have  not
been assailed before the Supreme Court  and,  therefore,  they  are  binding
precedents in the field.  Eventually, the learned member came to hold thus:-

“In the present case it is established that the trader had utilized  natural
gas purchased against the Form 3B in  the  production  of  the  ‘Urea’.   As
such, in my opinion, proceeding  u/s  3B  should  not  have  been  initiated
against the trader.  The order  which  has  been  passed  by  the  assessing
officer u/s 3B of the  Act  and  which  has  been  confirmed  by  the  first
appellate court, are not justified.”

11.   To appreciate the controversy in proper perspective and to  scrutinize
the analysis of the departmental authorities on one hand  and  the  tribunal
and the High Court on the other, it  is  necessary  to  scan  the  statutory
scheme and its real import.  Section 3-B of the Act reads as follows:-

"Section 3-B. Liability on issuing false  certificate,  etc.-Notwithstanding
anything to the contrary  contained  elsewhere  in  this  Act,  and  without
prejudice to the provisions of Sections 14 and 15-A, a person, who issues  a
false or wrong certificate or declaration, prescribed  under  any  provision
of this Act or the Rules framed thereunder, to another person by  reason  of
which a tax leviable under this Act on the transaction of purchase  or  sale
made with or by such other person ceases to be leviable or becomes  leviable
at a concessional rate, shall be  liable  to  pay  on  such  transaction  an
amount which would have been payable as tax on  such  transaction  had  such
certificate or declaration not been issued :


Provided that before taking  any  action  under  this  section,  the  person
concerned shall be given an opportunity of being heard.

Explanation.-Where a person issuing a certificate or  declaration  discloses
therein his intention to use the goods purchased by him for such purpose  as
will make the tax not leviable or leviable at a concessional rate  but  uses
the same  for  a  purpose  other  than  such  purpose,  the  certificate  or
declaration shall, for the purpose of this section, be deemed to be wrong."
                                                         [Emphasis supplied]

12.   Section 4-B(2) and 4-B(6)  of  the  Act  which  are  relevant  to  the
controversy at hand and further  on  which  the  Revenue  has  laid  immense
emphasis are extracted hereunder:-

“(2)  Where a dealer requires any goods, referred to in sub-section (1)  for
use in the manufacture by him, in the State of any  notified  goods,  or  in
the packing of such notified goods manufactured or  processed  by  him,  and
such notified goods are intended to be sold by him in the State  or  in  the
course of inter-State trade or commerce or in the course of  export  out  of
India, he may apply to the assessing authority in such form and  manner  and
within such period as may be prescribed, for  the  grant  of  a  recognition
certificate  in  respect  thereof,  and  if  the  applicant  satisfies  such
requirements including requirement of depositing late fee and conditions  as
may be prescribed, the assessing authority shall grant to him in respect  of
such goods a recognition certificate  in  such  form  and  subject  to  such
conditions, as may be prescribed.


Explanation.-For the purposes of this sub-section,-(a)  goods  required  for
use in the manufacture  shall  mean  raw  materials,  processing  materials,
machinery, plant, equipment, consumable stores,  spare  parts,  accessories,
components, sub-assemblies, fuels or lubricants ; and


(b)   ‘notified goods’ means such goods  as  may,  from  time  to  time,  be
notified by the State Government in that behalf.


                              xxxx        xxxxx


(6) Where a dealer in  whose  favour  a  recognition  certificate  has  been
granted under sub-section (2) has purchased any goods after payment  of  tax
at concessional rate under this section, or as  the  case  may  be,  without
payment of tax and the goods manufactured  out  of  such  raw  materials  or
processing materials or manufactured goods  after  being  packed  with  such
packing material are sold or disposed of otherwise than by way  of  sale  in
the State or in the course of  inter-State  trade  or  commerce  or  in  the
course of export out of the territory of India, such dealer shall be  liable
to pay an amount equal to the difference between the amount of  tax  on  the
sale or purchase of such goods payable under this section and the amount  of
tax calculated at the rate of four per cent, on  the  sale  or  purchase  of
such goods."


13.   It is submitted by Mr. Agrawal,  learned  counsel  for  the  appellant
that recognition certificate is granted where a dealer uses the  goods  (raw
material) in the manufacture of notified goods by him in  the  State  or  in
the course of inter-State trade and commerce or  in  the  course  of  export
outside India and the fulfillment of aforesaid  two  conditions  is  a  pre-
requisite for claiming exemption, but in the  case  at  hand,  the  assessee
though has purchased the goods at concessional rate by furnishing Form  III-
B under Rule 25-B(1) has engaged itself in stock  transfer  and,  therefore,
the penal provisions gets fully attracted.  Relying on  sub-section  (6)  of
Section 4-B, it is urged by him as no differential tax has been paid by  the
assessee, certificate in Form III-B continues to  be  a  false  or  a  wrong
certificate as  regards  the  purchase  of  natural  gas  and  used  in  the
manufacture of urea, hence the penalty has been  correctly  levied.   It  is
his further submission that decision in Camphor  and  Allied  Products  Ltd.
(supra) is not applicable to the facts of the present case, for in the  said
case the camphor manufactured by the assessee  was  transferred  by  way  of
stock transfer outside the State of U.P. on which the differential  tax  was
paid in accordance with Section 4-B(6) of the Act, but in the present  case,
no differential tax has been paid by the respondent, and such  violation  as
a natural corollary leads to the inevitable conclusion that the  certificate
in Form III-B continues to be a false or wrong certificate.  Lastly,  it  is
contended by him  that  the  Division  Bench  of  the  High  Court  has  not
correctly laid down the law in Camphor  and  Allied  Products  Ltd.  (supra)
inasmuch as  it  has  confined  its  consideration  to  the  first  part  of
condition enshrined under  Section  4-B(2)  of  the  Act,  whether  the  raw
material has been used in the manufacture or not,  but  has  not  considered
the second part, that is, the goods had  been  sold  intra-State  or  inter-
State or exported out of India.
14.   Mr. Tyagi,  learned  counsel  for  the  assessee,  per  contra,  would
contend that the respondent-assessee is engaged in the manufacture and  sale
of fertilizer and as per the recognition  certificate,  it  is  entitled  to
procure natural gas at a concessional rate and the respondent  has  procured
natural gas from two sources (1) from GAIL at a  concessional  rate  against
Form III-B and (2) from outside the State  from  BPCL/GAIL  at  normal  tax.
Learned counsel would submit that the respondent has  disposed  of  urea  by
local sale and has also transferred the stock to various States  which  have
been pursuant to  and  in  compliance  of  Movement  Orders  issued  by  the
Government of India from time  to  time.   He  has  referred  to  directions
issued by the Ministry of  Chemicals  &  Fertilizers  under  the  Fertilizer
(Movement Control) Order, 1973.   It  is  urged  by  him  that  as  per  the
Fertilizer (Movement Control) Order, 1973 unless  the  Government  of  India
authorizes a manufacturer to make stock transfer of  a  particular  quantity
of urea in a particular month, no urea  can  be  transferred/sold  from  one
State to another.  Learned counsel would put  forth  that  the  State  never
disputed the  stock  transfers  made  under  Fertilizer  (Movement  Control)
Order, 1973.  Learned counsel would further propone that show  cause  notice
was issued under Section 3-B for alleged violation  of  Form  III-B  and  it
cannot change the foundation to raise a fresh plea under Section  4-B(6)  of
the Act.  It is further  urged  by  Mr.  Tyagi  that  the  pronouncement  in
Camphor and Allied Products Ltd.  (supra)  is  absolutely  correct  and,  in
fact, it has been holding the field for considerable length of time  as  far
as the State of U.P. is concerned.  To substantiate the contentions  he  has
raised, he has placed reliance on CCE v. Gas Authority of India Ltd.[4]  and
SACI  Allied  Products  Ltd.  v.  CCE,  Meerut[5].   Though  Mr.  Tyagi  has
contended with regard to limitation in exercise of  revisional  jurisdiction
and the bar on the part of revenue  to  accept  the  judgment  on  the  same
question in the case of one assessee and question  its  correctness  in  the
case of another assessee and in  support  of  the  same  has  cited  certain
authorities, we need not enter into the said arena, for what  we  are  going
to hold.
15.   In Camphor and Allied Products Ltd. (supra) the High Court  took  note
of the fact that the RFO and furnace oil was purchased  against  Form  III-B
and the same was  used  in  the  manufacture  of  camphor  and  other  goods
mentioned in the recognition certificate granted under Section  4-B  of  the
Act.   It took note of the two earlier decisions in  Commissioner  of  Trade
Tax v. Spox India and Allied Industries[6] and Arora Steel Udyog (P) Ltd.  v
Commissioner of Trade Tax, U.P.[7] and quoted  a  passage  from  the  latter
authority, which is to the following effect:-
"It is well-settled that proceedings under Section 3-B  shall  be  initiated
only when the assessee issues a false or wrong  certificate  or  declaration
provided under  any  of  the  provisions  under  the  Act  or  Rules  framed
thereunder. This view has been  constantly  taken  by  this  Court  in Sahni
Engineering Works v. Commissioner of Sales  Tax 1994  UPTC  70, Commissioner
of Sales Tax v. B.K. & Co. Engineering Works, Agra 1995  UPTC  502  and S.G.
Industries v. State of Uttar Pradesh [1998] 108 STC 328; 1997  UPTC  616  of
this Court. Therefore, unless it was shown that the  form  III-B  issued  by
the revisionist were false or wrong, or the declarations  made  therein  was
false or wrong, no proceedings under Section 3-B of the Act could have  been
initiated. It is also not the case of the department that the  assessee  did
not use the goods purchased by him  for  the  purpose  for  which  exemption
certificate was granted to him. Therefore, the assessee cannot be deemed  to
have issued a wrong certificate."

      It also took note of the decision relied upon by the Revenue  in  Puri
Industries v. Commissioner of Sales Tax[8], which took a different view  and
thereafter came to hold as follows:-
“28. The  petitioner  purchased  RFO/furnace  oil  against  form  III-B  for
manufacture  of  its  final  product,  namely,  camphor  and  other   allied
products. Section 3-B clearly shows that it is the user of the  goods  which
is relevant for the purpose for which form III-B was given and not  how  the
finished product or manufactured goods are sold. Admittedly form  III-B  was
issued for use in manufacture of  camphor  and  other  allied  products  and
RFO/furnace oil for which the recognition certificate was granted. Hence  in
our opinion the petitioner cannot be deemed to  have  issued  any  wrong  or
false certificate and tax cannot be  legally  charged  under Section  3-B of
the Act.

                                 xxxxx xxxxx

31. In the present case RFO and furnace oil have  admittedly  been  used  in
the manufacture  of  camphor  and  allied  products  for  which  recognition
certificate was granted. Hence it cannot be deemed that the  petitioner  has
issued any wrong or false certificate. It is evident  from  the  facts  that
the petitioner has not issued any wrong or false certificate or  declaration
in form III-B inasmuch as both RFO and furnace oil have been  used  for  the
same purpose,  namely,  in  the  process  of  manufacture  of  goods,  i.e.,
camphor, and another allied products.”

16.   We have already analysed the statutory scheme and what has been  dwelt
with by the High Court in Camphor and Allied Products Ltd. (supra) and  what
has been pressed into service by Mr. Tyagi.  Presently, text and context  in
detail.  Section  4-B(2)  is  applicable  to  the  dealer  who  manufactures
notified goods in the State or engaged in packaging of such  notified  goods
manufactured or processed  by  him.   The  said  dealer  can  apply  to  the
assessing authority in such form, manner and within the time prescribed  for
grant of the recognition certificate.  The  assessing  authority  can  grant
the recognition certificate to the dealer in respect of goods  used  in  the
manufacture of  the  notified  goods  or  packing  of  the  notified  Goods.
Explanation to the sub-section defines the  word  “Goods”  which  means  raw
materials, processing material, machinery, spare parts and also fuels.   The
expression “Notified Goods” means  such  goods  as  notified  by  the  State
government from time to time.
17.   Sub-section (2) to Section 4-B also requires that the  notified  goods
should be “intended” to be sold by the dealer within the  State  or  in  the
course of inter-State trade or commerce or in the course of exports  out  of
India.  The expression “intended” is significant and important.   It  refers
to the intention of the dealer after the goods are manufactured and  packed.
 The expression “in the course  inter-State  trade  or  commerce”  is  quite
broad and wide.  An issue  may  arise  as  to  whether  the  stock  transfer
outside the State in terms of directions issued by  the  Central  Government
can be considered as sale or transaction in the course of inter-State  trade
or commerce.  In the case at hand, we would not decide  the  said  issue  or
question, for it was not raised or argued before the authorities and can  be
examined in an appropriate case when raised and  considered.  Be  it  noted,
sub-section (6) is a specific provision which deals with  the  case  of  the
dealer who has been issued the recognition  certificate  and  has  purchased
goods without payment of tax or at concessional  rates,  but  has  sold  the
manufactured goods or packaged goods otherwise than by way of  sale  in  the
State, or in the course of inter-State trade or commerce or  export  out  of
India.  The  provision  specifically  deals  with  cases  where  the  dealer
manufactures  or  packs  the  notified  goods  and  has  taken  benefit   of
lower/concessional or nil rate of tax on the raw material but is  unable  to
fulfill the intendment, i.e., he has not been  able  to  sell  the  notified
goods by way of sale within the State or in course of inter-State  state  or
commerce or by way of export.  In such cases, the dealer is  liable  to  pay
the amount of difference on the amount of sale or purchase of such goods  on
which concession or nil rate of tax was paid on  account  of  issue  of  the
requirement certificate and the amount of tax calculated  @  4%.   The  sub-
section is a  particular  and  a  specific  section  which  deals  with  and
specifies the consequences when the dealer is  unable  to  meet  and  comply
with intendment.  The sub-section (6) would, thus, be applicable.

18.   Section 3-B undoubtedly commences with a non-obstante clause, but  the
provision has to be read harmoniously with sub-section (6) to  Section  4-B.
Any other interpretation would make sub-section (6) a dead  letter,  for  if
we accept the plea of the Revenue whenever there is violation or failure  to
abide with the “intendment”, Section 3-B would be invoked and  applied,  not
sub-section(6) to Section 4-B. Section 3-B would  apply  when  a  false  and
wrong certificate or declaration is made.   Sub-section  (6)  on  the  other
hand, deals with cases where  the  dealer  is  unable  to  comply  with  the
intendment, i.e., for some reason he is unable to sell the goods within  the
State, export them or sell them  in  the  course  of  inter-State  trade  or
commerce.  Intendment of the said nature has not been treated  as  false  or
wrong declaration as consequences have been prescribed in  sub-section  (6).
 It is essential to be stated that consistency and certainty in tax  matters
is necessary.  In cases relating to “Indirect Taxation”, this  principle  is
even more important.   Clarity  in  this  regard  is  a  necessity  and  the
interpretative vision should be same.

19.   In view of the aforesaid analysis, we find the view expressed  by  the
tribunal  which  has  been  concurred  by  the  High  Court  is   absolutely
defensible and does not warrant any interference.  Resultantly, the  appeal,
being devoid of merit, stands dismissed.    There shall be no  order  as  to
costs.

                                                       …….……….............J.
                             (DIPAK MISRA)



                                                              ….……………………..J.
                              (SHIVA KIRTI SINGH)
New Delhi,
October 28, 2016
-----------------------
[1]    (2005 ) 139 STC 380 (All)
[2]     2004 UPTC 331
[3]    2006 NTN, Vol. 29 page 223
[4]     2008 (232) ELT 7 (SC)
[5]     2005 (183) ELT 225 (SC)
[6]     1998 UPTC 631
[7]     1999 UPTC 277
[8]     1988 UPTC 1197


in Benson vs. State of Kerala – Criminal Appeal No.958 of 2016 (since disposed of on 03.10.2016) and the accompanying appeals, arising from the conviction of the appellant from his prosecution on the offences proved, this Court in the singular facts as involved and having regard to the duration of his incarceration and the remission earned by him, extended the benefit of such discretion and directed that the sentences awarded to him in those cases would run concurrently. It was noticeably recorded that the offences in the cases under scrutiny had been committed on the same day. The benefit of the discretion was accorded to the appellant therein referring as well to the observation in V.K. Bansal (supra) that it is difficult to lay down any straight jacket approach in the matter and that a direction that the subsequent sentence would run concurrently or not, would essentially depend on the nature of the offence or offences and the overall fact situation. Understandably, the appellant was required to serve the default sentence as awarded with the direction that if the fine imposed had not been deposited, the default sentence or sentences would run consecutively.

                                                                  REPORTABLE
                             IN THE SUPREME COURT OF INDIA
                              CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NOS.  988-989   OF 2016
                  [ARISING OUT OF S.L.P. (CRL.) NOS.6226-27 OF 2016)


SHYAM PAL                                     .…APPELLANT
                                      VERSUS

DAYAWATI BESOYA & ANR.              ....RESPONDENTS

                               J U D G M E N T

AMITAVA ROY, J.

      The instant appeals call in question  the  judgment  and  order  dated
08.02.2016 passed by the High Court of Delhi in Criminal  Revision  Petition
No.403 of 2015, sustaining the conviction of  the  appellant  under  Section
138 of the Negotiable Instruments Act, 1988 (hereafter referred  to  as  the
“Act”) as recorded by  the  Trial  Court  and  affirmed  in  appeal  by  the
District and Sessions Judge, Saket Court, New Delhi. The  High  Court  while
maintaining the substantive sentence of simple imprisonment  for  10  months
and fine of Rs.6,50,000/- as compensation as awarded  by  the  Trial  Court,
however  has  reduced  the  default  sentence   from   six   months   simple
imprisonment to that of three months. The order  dated  22.02.2016  rendered
by the High Court  declining  the  prayer  for  modification  of  the  above
decision by directing the  release  of  the  appellant,  he  having  already
served the sentence in  all  being  in  custody  from  25.02.2015  has  been
assailed in the present appeals as well.

(2)   We have heard Mr. Jayant K. Sud, learned counsel  for  the  appellant.
None appeared for the respondents.

(3)   The recorded facts divulge that the  respondent  No.1  had  filed  two
complaints, both under Section 138 of the Act against the appellant  in  the
Court of the Chief  Metropolitan  Magistrate  (South  East),  Patiala  House
Court, New Delhi which were registered as  C.C.  No.407  of  2011  and  C.C.
No.430 of 2011 alleging that on 31.07.2008 the  appellant  had  visited  the
residence of the complainant and had requested for a loan of  Rs.5  lacs  to
meet his personal needs which he promised to return on 13.11.2009. On  this,
as the complaint reads, the respondent/complainant  reminded  him  that  she
had already lent a sum of Rs.5 lacs to him on 01.05.2008 and  that  she  had
no funds to accede to his  request  for  the  second  installment.  However,
having regard to the friendly relations, the respondent/complainant  on  the
persuasion of the appellant, did advance a further amount of  Rs.5  lacs  to
him as loan on that date, by somehow arranging the same.

(4)   According to the respondent/complainant in connection with  the  loans
advanced, the appellant had issued two cheques bearing Nos.97357  and  97358
for Rs.5 lacs each and drawn on State Bank  of  Bikaner  and  Jaipur,  Arnar
Colony, New Delhi. Both these cheques  when  presented  at  the  appropriate
time, were dishonored with the  remarks  “funds  insufficient”.  Thereafter,
the respondent/complainant issued legal  notices  and  as  the  same  though
served, remained unresponded, complaints were filed.

(5)   As eventually the arguments  in  the  present  appeals  have  centered
around the sentence alone, we do not wish to burden  the  present  rendering
with avoidable facts.

(6)    The  Trial  Court  after  a  full  dress  adjudication,  in  the  two
proceedings, returned a finding that the signatures on the cheques were  not
disputed by the appellant and indeed were issued  in  discharge  of  legally
recoverable debts subsisting against  him  and  acting  on  the  presumption
available under Section 139 of the Act convicted him of  the  offence  under
Section 138 of the Act. Consequently, he  was  awarded  simple  imprisonment
for 10 months and fine of Rs.6,50,000/- as compensation in both  the  cases.
In case of default of payment of compensation, the appellant was ordered  to
suffer simple  imprisonment  of  six  months  in  each  case.  This  was  by
judgments and orders dated 21.01.2014.

(7)   The appellant having unsuccessfully appealed  against  his  conviction
and sentence before District and Sessions Judge (South East),  Saket  Court,
New Delhi, in both the cases, approached the High Court in revision.

(8)   To reiterate, the appellant preferred two  revision  petitions  before
the High Court corresponding to his convictions in the two complaint  cases,
being Criminal Revision Petition No.403 of 2015 (pertaining to  the  present
appeals) and Criminal Revision Petition No.404 of 2015. By  separate  orders
dated 08.02.2016,   both  these  revision  petitions  were  disposed  of  by
maintaining the conviction but moderating the default sentence  from  simple
imprisonment of six months to that of three months. In  both  the  petitions
as well, by separate orders dated 22.02.2016, the  High  Court  declined  to
release the appellant by acting on his plea that  he  meanwhile  had  served
the substantive as well as  default  sentence,  if  construed  to  have  run
concurrently. It is a matter of record,  that  the  special  leave  petition
filed against the orders dated 08.02.2016 and  22.02.2016  rendered  by  the
High Court in Criminal Revision Petition  No.404  of  2015  has  since  been
dismissed by this Court and, therefore, the conviction and sentence  awarded
to the appellant in the corresponding complaint case has attained finality.

(9)   The learned counsel for the appellant  has  urged  that  as  both  the
complaints  filed  by  the  respondents  have  arisen  out   of   successive
transactions in a series  between  the  same  parties  and  had  been  tried
together on the basis of same set of evidence, the sentences  awarded  ought
to run concurrently, the High Court had failed to appreciate  the  same.  It
has been submitted that the appellant is in custody since 25.02.2015 and  if
the two substantive sentences are construed  to  run  concurrently,  he  has
served not only the substantive sentences but also the sentence  in  default
of fine as  on  date.  That  the  appellant  comes  from  a  poor  financial
background, as well as is the sole bread earner of the family  and  that  if
the  two  sentences  are  to  run  consecutively,  he  would  suffer   grave
injustice, has been emphasized. No argument, noticeably has  been  advanced,
as abandoned before the High Court as well, impeaching the conviction.

(10)  We have extended our required consideration  to  few  facts   and  the
submissions made.

The materials on record leave no manner of doubt that the  complaints  filed
by the respondents stem from two identical  transactions  between  the  same
parties whereunder the respondent had advanced loan of  Rs.5  lacs  each  to
the appellant on two different dates against which  the  latter  had  issued
cheques to discharge his debt and that the cheques had been dishonored.  The
facts  pleaded  and  proved  do  unassailably  demonstrate  that  the  loans
advanced had been in the course of a  series  of  transactions  between  the
same parties on same terms and conditions. Significantly in both the  cases,
following the conviction of the appellant under Section 138 of the Act,  the
same sentences as well have been awarded.  There  is  thus  an  overwhelming
identicalness in  the  features  of  both  the  cases  permitting,  the  two
transactions, though undertaken at different points of time,  to  be  deemed
as  a  singular  transaction  or  two  segments  of  one  transaction.  This
deduction understandably is in the singular facts of the case.

(11)   The  Custody  Certificate  dated  06.05.2016  issued  by  the  Deputy
Superintendent of Prison, Central Jail No.5, Tihar, New  Delhi  appended  to
the appeal petition mentions that the appellant on being  convicted  in  the
complaint cases referred to hereinabove under Section  138  of  the  Act  is
serving out the sentences awarded and that the period of his custody  is  as
hereunder:

(1)   25.02.2015 to 13.12.2015 (As convict in CC No.430/11)

(2)   14.12.2015 till date i.e. 06.05.2016 (As convict in CC No.407/11)

That meanwhile the appellant had been on  interim  bail  for  10  days  from
05.10.2015 to 14.10.2015 as granted by the High Court has also been stated.

(12)  The law on the orientation of two sentences  awarded  to  an  offender
following his conviction successively, to  define  the  cumulative  duration
thereof is envisaged in Section 427 of the Code of Criminal Procedure,  1973
(for short “Code”) in following terms:

“427. Sentence on offender already sentenced  for  another  offence.  -  (1)
When a person already undergoing a sentence of imprisonment is sentenced  on
a subsequent conviction to  imprisonment  or  imprisonment  for  life,  such
imprisonment or imprisonment for life shall commence at  the  expiration  of
the imprisonment to which he  has  been  previously  sentenced,  unless  the
Court directs that the subsequent sentence shall run concurrently with  such
previous sentence:

Provided that where a person who has been sentenced to  imprisonment  by  an
order under section  122  in  default  of  furnishing  security  is,  whilst
undergoing  such  sentence,  sentenced  to  imprisonment  for   an   offence
committed prior to the making of  such  order,  the  latter  sentence  shall
commence immediately.


(2)   When a person already undergoing a sentence of imprisonment  for  life
is sentenced on a subsequent  conviction  to  imprisonment  for  a  term  or
imprisonment for life, the subsequent sentence shall run  concurrently  with
such previous sentence.”



(13)  Though this provision has fallen for scrutiny of  this  Court  umpteen
times, we can profitably refer to one of the recent pronouncements  in  V.K.
Bansal vs. State of Haryana and Another  (2013) 7 SCC 211 where it was  held
that though it is manifest from Section  427(1),  that  the  Court  has  the
power and discretion to issue a direction that a subsequent  sentence  shall
run concurrently with the previous sentences, the very nature of  the  power
so conferred, predicates that the discretion, would  have  to  be  exercised
along judicial lines or not in a  mechanical  or  pedantic  manner.  It  was
underlined that there is no cut and dried formula for the Court  to  follow,
in the exercise of such power and that the justifiability  or  otherwise  of
the same, would depend on the nature of the offence  or  offences  committed
and the attendant facts and circumstances. It was however  postulated,  that
the legal position favours the exercise of the discretion to the benefit  of
the  prisoners  in  cases  where  the  prosecution  is  based  on  a  single
transaction, no matter even if  different  complaints  in  relation  thereto
might have been filed. The caveat as well was that such a concession  cannot
be extended to transactions which are  distinctly  different,  separate  and
independent of each other and amongst others where the parties are  not  the
same.

(14)  The imperative essentiality of a single transaction  as  the  decisive
factor to enable  the  Court  to  direct  the  subsequent  sentence  to  run
concurrently with the previous one was thus underscored.  It  was  expounded
as well that the direction for  concurrent  running  of  sentence  would  be
limited to the substantive sentence alone.

(15)  In a more recent decision of this Court in Benson vs. State of  Kerala
– Criminal Appeal No.958 of 2016 (since disposed of  on 03.10.2016) and  the
accompanying appeals, arising from the conviction of the appellant from  his
prosecution on the offences proved, this Court  in  the  singular  facts  as
involved and having regard to the duration  of  his  incarceration  and  the
remission earned by  him,  extended  the  benefit  of  such  discretion  and
directed that the  sentences  awarded  to  him  in  those  cases  would  run
concurrently. It was noticeably recorded that  the  offences  in  the  cases
under scrutiny had been committed on  the  same  day.  The  benefit  of  the
discretion was accorded to the appellant therein referring as  well  to  the
observation in V.K. Bansal (supra) that it is  difficult  to  lay  down  any
straight jacket approach in  the  matter  and  that  a  direction  that  the
subsequent sentence would run concurrently or not, would essentially  depend
on the nature of the offence or offences and  the  overall  fact  situation.
Understandably, the appellant was required to serve the default sentence  as
awarded with the direction that if the fine imposed had not been  deposited,
the default sentence or sentences would run consecutively.

(16)  Reverting to the facts as obtained in the present appeal,  we  are  of
the comprehension, on an appreciation thereof as well  as  the  duration  of
the appellant's custody, as is evidenced by the certificate to that  effect,
that the appellant is entitled to the benefit of  the  discretion  contained
in Section 427 of the Code. In arriving  at  this  conclusion  we  have,  as
required, reflected on the nature of the transactions  between  the  parties
thereto, the offences involved, the sentences  awarded  and  the  period  of
detention of the appellant as on date.

(17)  It is thus ordered that the substantive sentences of 10 months  simple
imprisonment awarded to the appellant in the two  complaint  cases  referred
to hereinabove would run concurrently. Needless to say, the appellant  would
have to serve the default sentences, if the fine by way of compensation,  as
imposed, has not been paid by him. The appeals  are  thus  allowed  to  this
extent. The appellant would be entitled to all  consequential  reliefs  with
regard to his release from  custody  as  available  in  law  based  on  this
determination.





                       …...........................................J.
                              (DIPAK MISRA)



…...........................................J.
                             (AMITAVA ROY)
NEW DELHI;
OCTOBER 28, 2016.

This Court in Hari Shanker Jain v. Sonia Gandhi, 2001 (8) SCC 233 at page 244 upheld the decision of a Full Bench of the Rajasthan High Court wherein it was decided that the jurisdiction of the High Court to try an election petition is not by way of constituting a special jurisdiction and conferring it upon the High Court. It is an extension of the original jurisdiction of the High Court to hear and decide the election disputes. It is clear from the above judgments of this Court that the inherent power of the High Court is not taken away when the election disputes are adjudicated. Section 53 (2) is a power conferred on the Returning Officer to declare a candidate elected when the number of candidates is equal to the number of seats to be filled. The power of the High Court is not fettered by Section 53 (2). The High Court has taken into consideration an anomalous situation that would arise by a candidate belonging to one party being declared elected after having crossed the floor. We are in agreement with the High Court and we do not intend to interfere with the discretion exercised by the High Court.

                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL No. 2649 of 2016


SRI MAIREMBAM PRITHVIRAJ @ PRITHVIRAJ SINGH


                                                           .... Appellant(s)
                                   Versus

SHRI PUKHREM SHARATCHANDRA SINGH

                                                             ….Respondent(s)

                                    With

                        CIVIL APPEAL No. 2829 of 2016


PUKHREM SHARATCHANDRA SINGH

                                                           .... Appellant(s)
                                   Versus

SRI MAIREMBAM PRITHVIRAJ @ PRITHVIRAJ SINGH
                                                             ….Respondent(s)


                               J U D G M E N T


L. NAGESWARA RAO, J.

CIVIL APPEAL No. 2649 of 2016
      The Appellant has filed this appeal aggrieved by the judgment  of  the
High Court of Manipur at  Imphal  by  which  his  election  to  the  Manipur
Legislative Assembly from Moirang  Assembly  constituency  was  declared  as
void.
A Notification was issued for  election  to  the  10th  Manipur  Legislative
Assembly  on  04.01.2012.   The  Appellant  belonging  to  the   Nationalist
Congress Party (NCP) and the Respondent who  was  sponsored  by  the  Indian
National Congress (INC) filed their nominations within the time  prescribed.
 There was no other nomination  filed.    The  Respondent  objected  to  the
nomination of the Appellant at the time of scrutiny on  the  ground  that  a
false declaration relating to educational  qualification  was  made  by  the
Appellant.   The  Returning  Officer  directed  the  Appellant   to   submit
documents in proof of his  educational  qualification  as  declared  in  the
affidavit filed under  Form  26.    The  Appellant  failed  to  produce  any
document to prove his  educational  qualification  in  spite  of  which  the
Returning Officer accepted the nomination of  the  Appellant.  Polling  took
place on 28.01.2012 and the counting of votes was held on  06.03.2012.   The
result was declared on the same day.  The  Appellant  secured  14,521  votes
and the  Respondent  secured  13,363  votes.   The  Appellant  was  declared
elected as MLA, Moirang Constituency.

The Respondent challenged  the  election  of  the  Appellant  by  filing  an
election petition in the Guwahati High Court seeking a declaration that  the
Appellant’s election was null  and  void,  that  the  Respondent  should  be
declared as duly elected and that a criminal proceeding should  be  directed
to be initiated against the Appellant under Section 125-A  and  127  of  the
Representation of the People Act, 1951  (hereinafter  referred  to  as  ‘the
Act’).  Apart from the ground of  improper  acceptance  of  nomination,  the
Respondent also alleged corrupt practices against the Appellant.

The Appellant denied the allegation of false declaration.  According to  the
Appellant, the declaration made by him that he  passed  Master  of  Business
Administration (MBA) in 2004 from Mysore University was  a  clerical  error.
The Respondent abandoned the  allegation  of  corrupt  practices  and  other
electoral malpractices during the trial of  the  election  petition  in  the
High Court.      The High Court framed six issues which are as follows:

“Whether the Returning Officer of 27th Moirang  AC  has  illegally  accepted
the nomination paper of the respondent or not?
Whether the election of the respondent had been materially affected  by  the
acceptance of the nomination paper of the respondent by  the  R.O.  of  27th
Moirang A/C or not?
Whether the respondent had filed false affidavit in respect of  the  highest
education qualification in the Form, in which the respondent  had  mentioned
“MBA Mysore University” or whether it was merely a clerical error?
Whether the petition lacks material facts or not?
Whether the election petition is liable to be dismissed for not putting  the
words “attested to be true copy of the petition” on each and every  page  of
the petition by the petitioner himself or not; or  on  any  of  the  defects
raised by the respondent in his written statement?
Whether the petitioner is  entitled  to  the  relief  claimed  in  the  writ
petition?”

Issue No.  5  pertains  to  attestation  of  the  petition  not  being  made
properly.  The objection raised by the Appellant to the  maintainability  of
the election petition was that only the front page of the election  petition
had the words “Attested to be true copy.”   Issue  No.  5  was  answered  in
favour of the Respondent. The High Court  considered  the  main  controversy
pertaining to the  filing  of  false  affidavit  regarding  the  educational
qualification by the Appellant in a detailed manner.    There  is  no  doubt
that the Appellant filed Form 26  in  which  he  mentioned  his  educational
qualification  as  MBA  from  Mysore  University  in  2004.   After  careful
consideration of the material on record and various judgments cited  by  the
parties,  the  High  Court  concluded  that  the  declaration  made  by  the
Appellant in Form 26 about his educational qualification as MBA from  Mysore
University was false.   The plea of the Appellant that the  defect  in  Form
26 was due to  a  clerical  error  was  rejected.   The  contention  of  the
Appellant  that  providing   wrong   information   about   the   educational
qualification was not a defect of substantial character was  also  rejected.
The Appellant contended that the Respondent failed to plead and  prove  that
the result was ‘materially affected’ as required under Section 100  (1)  (d)
of the Act.  The High Court did  not  accept  the  said  contention  on  the
ground that there were only two candidates in the fray in which case it  was
not necessary  to  prove  that  the  result  of  election  of  the  returned
candidate was materially affected.  The High Court further  held  if  it  is
found that the Appellant’s nomination was improperly  accepted,  the  result
of his election stood automatically affected materially.    The  High  Court
on the basis of the above reasons declared the election of the Appellant  as
void.  The Appellant has filed this appeal challenging the same.

We have heard Mr. V. Giri, learned Senior Counsel for the Appellant and  Ms.
Meenakshi Arora, learned Senior  Counsel  for  the  Respondent.    Mr.  Giri
submitted that the declaration pertaining to the  educational  qualification
of the Appellant was merely a clerical error  and  cannot  be  termed  as  a
false  declaration.   In  any  event,   the   declaration   of   educational
qualification is not a defect of substantial nature warranting rejection  of
his nomination.   Mr. Giri also submitted that  the  election  petition  was
filed under Section 100 (1) (d) (i) and (iv) of the Act.    He  stated  that
there is neither pleading nor  proof  in  the  election  petition  that  the
improper acceptance of the Appellant’s nomination  had  materially  affected
the result.  According to Mr. Giri, the Appellant’s election cannot  be  set
aside on the ground of improper acceptance of  his  nomination  without  the
requirement of Section  100  (1)  (d)  of  the  Act  being  satisfied.    He
referred to Durai Muthuswami v. N. Nachiappan and Ors. reported in 1973  (2)
SCC 45 and submitted that the said judgment  should  be  restricted  to  the
facts of that case.  He also attempted to distinguish the said  judgment  as
not applicable to the facts of this case by submitting that it  was  a  case
of disqualification under Section 9-A of  the  Act.   He  further  submitted
that the said case was one filed under Section 100 (1) (a) of  the  Act.  He
contended that there is no need for pleading or proving that the result  was
materially affected if the election is challenged under Section 100 (1)  (a)
to (c) whereas it is compulsory in a petition filed under  Section  100  (1)
(d).

Ms. Meenakshi Arora, learned Senior  Counsel,  argued  that  the  Respondent
pleaded in the election  petition  that  the  result  of  the  election  was
materially affected by the improper acceptance  of  the  nomination  of  the
Appellant.  She took us through the pleadings and evidence,  both  oral  and
documentary, to contend that the declaration  of  educational  qualification
by  the  Appellant  was  not  a  mistake.    She  submitted  that  the  same
declaration was made by the Appellant even when  he  contested  the  earlier
election to the Legislative Assembly in  2008.   She  also  highlighted  the
contradictory stands relating to the declaration  taken  by  the  Appellant.
She submitted that it was not necessary to  show  that  the  result  of  the
election was  materially  affected  when  there  were  only  two  contesting
candidates for one seat.   She relied upon the judgment in Durai  Muthuswami
(supra) which according to her, was approved in Jagjit Singh v.  Dharam  Pal
Singh, reported in 1995 Supp (1) SCC 422.   She further  relied  upon  Union
of India v. Association for Democratic Reforms, reported  in  2002  (5)  SCC
294,  People’s Union for Civil Liberties (PUCL) v. Union of India,  reported
in 2003 (4)  SCC  399,  Kisan  Shankar  Kathore  v.  Arun  Dattatray  Sawant
reported in 2014 (14) SCC 162 and Resurgence India  v.  Election  Commission
of India and  Anr.  reported  in  2014  (14)  SCC  189  in  support  of  her
submission  that  a  voter  has  a  right  to  know  about  the  educational
qualification of the  candidate  and  any  false  or  mis-declaration  would
result in rejection of the nomination of the candidate. Ms. Meenakshi  Arora
also cited Hari Krishna Lal v. Babu Lal Marandi reported  in  2003  (8)  SCC
613 to contend that  the  false  declaration  relating  to  the  educational
qualification of a candidate is a defect of substantial character.

Two issues fall for our consideration in this appeal which are:
Whether a false declaration relating to the educational qualification  is  a
defect of substantial character warranting rejection of a nomination?
Whether it is necessary to plead and prove that the  result  was  materially
affected when the nomination of the returned candidate  was  found  to  have
been improperly  accepted,  moreso,  when  there  are  only  two  candidates
contesting the election?
  Chapter I of Part V of the Act deals with the  nomination  of  candidates.
Section 33 of the Act provides for  presentation  of  nomination  paper  and
requirements of a valid nomination.  A  nomination  paper  complete  in  the
prescribed  form,  signed  by  a  candidate  and  by  an  elector   of   the
constituency as proposer  should  be  delivered  to  the  Returning  Officer
within the prescribed period.   Section 33-A which was inserted  by  Act  72
of 2002 with effect from 24.08.2002 contemplates that  a  candidate  has  to
provide additional information, apart from the information provided  by  him
under Section 33 (1).  The information mentioned in Section 33-A relates  to
the criminal antecedents of a candidate.  Section 36 deals with scrutiny  of
nomination.  Section 36(4) which is relevant for adjudication of  this  case
is as follows:
“36. Scrutiny of nomination. – (4) The Returning Officer  shall  not  reject
any nomination paper on  the  ground  of  any  defect  which  is  not  of  a
substantial character.”

Rule 4 (A) of the Conduct of Election Rules, 1961 which  was  inserted  with
effect from 03.09.2002 reads as under:
 “[4A. Form of affidavit to be filed at the time  of  delivering  nomination
paper.—The candidate or his proposer, as the case  may  be,  shall,  at  the
time of delivering to the  returning  officer  the  nomination  paper  under
subsection (1) of section 33 of the Act, also deliver to  him  an  affidavit
sworn by the candidate before a Magistrate of the first class  or  a  Notary
in Form 26.]”

A candidate has to file an affidavit along  with  his  nomination  paper  as
prescribed in  Form  26  in  which  one  of  the  columns  pertains  to  the
educational qualification.  Grounds for declaring the election  to  be  void
are provided in Section 100 of the Act which is as under:
“100. Grounds for declaring election to be void.—
 [(1) Subject to the provisions of sub-section (2) if 3 [the High Court]  is
of opinion—
(a) that  on  the  date  of  his  election  a  returned  candidate  was  not
qualified, or was disqualified, to be chosen to  fill  the  seat  under  the
Constitution or this Act 9 [or the  Government  of  Union  Territories  Act,
1963 (20 of 1963)]; or
(b) that any corrupt practice has been committed by a returned candidate  or
his election agent or by any other person with the  consent  of  a  returned
candidate or his election agent; or
(c) that any nomination has been improperly rejected; or
(d) that the result of the election, in so far as  it  concerns  a  returned
candidate, has been materially affected—
(i) by the improper acceptance or any nomination, or
(ii) by any corrupt practice committed in  the  interests  of  the  returned
candidate 1 [by an agent other than his election agent], or
(iii) by the improper reception, refusal or rejection of  any  vote  or  the
reception of any vote which is void, or
(iv) by any non—compliance with the provisions of  the  Constitution  or  of
this Act or of any rules or orders made under this Act,
[the High Court] shall declare the election of the returned candidate to  be
void.]
[(2)] If in the opinion of 2 [the High  Court],  a  returned  candidate  has
been guilty by an agent, other than  his  election  agent,  of  any  corrupt
practice 4 *** but 2 [the High Court] is satisfied—
(a)   that no such corrupt practice was committed at  the  election  by  the
candidate or his  election  agent,  and  every  such  corrupt  practice  was
committed contrary to the orders,  and  5  [without  the  consent],  of  the
candidate or his election agent;
6 * * * * *
 (c)  that the candidate and his election agent took  all  reasonable  means
for preventing the commission of corrupt 7 *** practices  at  the  election;
and
(d)   that in all other respects the election was free from  any  corrupt  7
*** practice on the part of the candidate or any of his agents,
then 2 [the High Court]  may  decide  that  the  election  of  the  returned
candidate is not void.”

Section 125-A  prescribes  penalty  for  filing  false  affidavit  which  is
reproduced as under:
“[125A. Penalty for filing false affidavit, etc.—
A candidate who himself or through his proposer, with intent to  be  elected
in an election,—
fails to furnish information relating to sub-section (1) of section 33A;  or

give false information which he knows or has reason to believe to be  false;
or
conceals any information, in  his  nomination  paper  delivered  under  sub-
section (1) of section 33 or in  his  affidavit  which  is  required  to  be
delivered under sub-section (2) of section 33A, as the case may  be,  shall,
notwithstanding anything contained in any other law for the  time  being  in
force, be punishable with imprisonment for a term which may  extend  to  six
months, or with fine, or with both.]”

Sir Winston Churchill underlining the importance of a voter in a  democratic
form of Government stated as follows:
      “At the bottom of all tributes paid to  democracy  is      the  little
man, walking into a little booth, with a little    pencil, making  a  little
cross on a little bit of paper — no     amount  of  rhetoric  or  voluminous
discussion can    possibly  diminish  the  overwhelming  importance  of  the
point.”

In Union of India v. Association for Democratic Reforms (supra)  this  Court
held that the voter  has  a  fundamental  right  to  information  about  the
contesting candidates.   The voter has  the  choice  to  decide  whether  he
should cast a vote in favour of a person involved in a criminal  case.    He
also has a right to decide whether holding of an  educational  qualification
or holding of  property  is  relevant  for  electing  a  person  to  be  his
representative.  Pursuant to the judgment in Union of India  v.  Association
for  Democratic  Reforms  (supra)  Section  33-A   was   inserted   in   the
Representation  of  the  People  Act  providing  for  right  to   additional
information by an Ordinance.   The  challenge  to  the  said  Ordinance  was
dealt with by this Court in People’s Union for  Civil  Liberties  (PUCL)  v.
Union of India (supra) in which it was held as follows:
“78. What emerges from the above discussion can be summarised thus:

(D) The contention that as there is no specific fundamental right  conferred
on a voter  by  any  statutory  provision  to  know  the  antecedents  of  a
candidate, the directions given by this  Court  are  against  the  statutory
provisions is, on the face of it, without  any  substance.  In  an  election
petition challenging the validity of an election of a particular  candidate,
the statutory provisions would govern  respective  rights  of  the  parties.
However, voters' fundamental right to know the antecedents  of  a  candidate
is independent of statutory rights under the election law. A voter is  first
citizen of this country and  apart  from  statutory  rights,  he  is  having
fundamental rights conferred by the Constitution. Members  of  a  democratic
society should be sufficiently informed so that they may  cast  their  votes
intelligently in favour of persons who are to govern  them.  Right  to  vote
would be meaningless  unless  the  citizens  are  well  informed  about  the
antecedents of a candidate. There can  be  little  doubt  that  exposure  to
public gaze and  scrutiny  is  one  of  the  surest  means  to  cleanse  our
democratic governing system and to have competent legislatures.”

It is relevant to mention that the Election Commission  of  India  issued  a
press note on 28.06.2002 in which there was a reference to the  judgment  of
this Court in Union of India v. Association for Democratic Reforms in  which
it was held that information on five aspects  has  to  be  provided  to  the
voter.  One of the five aspects pertains to  the  educational  qualification
of the candidates.  An order was issued by the Election Commission of  India
on 28.06.2002 directing that full and complete information relating  to  the
five aspects which were mentioned in  the  judgment  has  to  be  furnished.
Providing incomplete information or suppression of material  information  on
any of the five aspects was  to  be  treated  as  a  defect  of  substantial
character by the Returning Officers.

In Resurgence India v. Election Commission of India and  Anr.  (supra)  this
Court held that every candidate is  obligated  to  file  an  affidavit  with
relevant information with regard to their criminal antecedents,  assets  and
liabilities and educational  qualification.   The  fundamental  right  under
Article 19 (1) (a) of the voter was reiterated in the said judgment  and  it
was held that filing of affidavit with blank particulars  would  render  the
affidavit as nugatory.  In Kisan Shankar Kathore v.  Arun  Dattatray  Sawant
reported in 2014 (14) SCC page 162 this Court considered the question as  to
whether  it  was  incumbent  upon  the  Appellant  to  have   disclose   the
information  sought  for  in  the  nomination  form  and  whether  the  non-
disclosure thereof render the nomination invalid  and  void.   It  was  held
that  non-furnishing  of  the   required   information   would   amount   to
suppression/non-disclosure.

It is clear from the law laid down by this Court as stated above that  every
voter has a fundamental right to know about  the  educational  qualification
of a candidate.   It is also clear from the provisions  of  the  Act,  Rules
and Form 26 that there is a duty cast on  the  candidates  to  give  correct
information about their educational qualifications.  It is  not  in  dispute
that the Appellant did not study MBA in the Mysore University.   It  is  the
case of the Appellant that reference to MBA from  Mysore  University  was  a
clerical error.  It was contended by the Appellant that  he  always  thought
of  doing  MBA  by  correspondence  course  from  Mysore  University.   But,
actually he did not do the course.  The question which has to be decided  is
whether the declaration given by him in Form 26 would amount to a defect  of
substantial nature warranting rejection of his nomination.   Section 36  (4)
of  the  Act  mandates  that  the  Returning  Officer  shall  not  reject  a
nomination paper on the ground of any defect which is not of  a  substantial
character.  The declaration made by the Appellant in Form 26, filed in  2012
is not a clerical error  as  contended  by  him.   The  Appellant  contested
election to the same constituency in 2008 and in the affidavit filed by  him
in Form 26 he declared that he passed MBA from Mysore  University  in  2004.
In the  affidavit  filed  by  him  in  this  election  petition  by  way  of
examination-in-chief, the Appellant stated that  his  nomination  paper  and
the enclosed affidavit were  prepared  and  filed  by  his  counsel  Chakpam
Bimolchandra Singh on the instructions of his agent  Ph.  Shamu  Singh.   He
also stated that his counsel filled the  prescribed  affidavit  in  his  own
hand-writing.  The Appellant  also  stated  that  he  signed  the  affidavit
without reading the contents and he came to know about the error  only  when
the Respondent raised  his  objection  to  the  nomination.   The  Appellant
further stated that he was working in Projeon, Infosys Company and IBM  till
2007 and because of his job many local friends and elders  thought  that  he
was an MBA degree-holder.  His election  agent  also  thought  that  he  was
holding an MBA degree due  to  which  he  instructed  the  Advocate  Chakpam
Bimolchandra Singh to fill up column 9 of the affidavit by stating that  the
Appellant  is  an  MBA  degree-holder.    In  his   cross-examination,   the
Appellant gave evasive replies to the questions relating to his  educational
qualification.   He  stated  that  he  does  not  remember  whether  he  had
undergone MBA from Mysore University and he does  not  remember  whether  he
possesses MBA degree.  Chakpam Bimolchandra Singh who was examined  as  DW-3
in his cross-examination denied having filled up the  entries  in  Form  26.
He stated that he entered the educational qualifications  of  the  Appellant
on the basis of instructions given by the election  agent  Shamu  Singh.  He
also stated that he was not present before the Oath  Commissioner  when  the
Appellant signed the affidavit.

The contention of  the  Appellant  that  the  declaration  relating  to  his
educational qualification in the affidavit is a  clerical  error  cannot  be
accepted.   It is not an error committed once.  Since  2008,  the  Appellant
was making the statement  that  he  has  an  MBA  degree.   The  information
provided by him in the affidavit filed in Form 26 would amount  to  a  false
declaration.  The said false declaration cannot  be  said  to  be  a  defect
which is not substantial.  He was given  an  opportunity  by  the  Returning
Officer to produce the relevant document in support of his declaration.   At
least at that point of time he should have informed  the  Returning  Officer
that an error crept into the declaration.  He  did  not  do  so.  The  false
declaration relating to his educational qualification cannot  be  stated  to
be not of a substantial character.  It is no more  res  integra  that  every
candidate has to disclose his  educational  qualification  to  subserve  the
right to  information  of  the  voter.   Having  made  a  false  declaration
relating  to  his  educational  qualification,  the  Appellant   cannot   be
permitted  to  contend  that  the  declaration  is  not  of  a   substantial
character.  For the reasons stated supra, we uphold  the  findings  recorded
by the High Court that the false declaration  relating  to  the  educational
qualification made by the Appellant is substantial in nature.

Having answered the first question against the Appellant, we proceed now  to
deal with  the  next  point.    Section  100  (1)  (a)  to  (c)  deals  with
disqualification, corrupt practices and improper  rejection  of  nominations
respectively which are grounds for setting aside  the  election.   The  sine
qua non for setting aside an election under Section 100 (1) (d) is that  the
result of the election, in so far as it concerns a returned  candidate,  has
been materially  affected.  The  contention  of  Mr.  Giri,  learned  Senior
Counsel for the Appellant is that even if it is held that the nomination  of
the appellant was improperly accepted, his election cannot be set  aside  in
the absence of  any  pleading  or  proof  that  the  result  was  materially
affected by the improper acceptance of  the  nomination.    He  relied  upon
Magani Lal Mandal v. Bishnu Deo Bhandari, reported in 2012 (3) SCC page  314
to contend that every defect  cannot  be  a  ground  for  setting  aside  an
election under Section 100  (1)  (d)  without  further  proof  that  it  had
materially affected the result of the returned candidate.  He also  referred
to Shambhu Prasad Sharma v. Charandas Mahant and Ors. reported in 2012  (11)
SCC page 390 in which it was held as follows:

“20. Coming to the allegation that other candidates had also  not  submitted
affidavits in proper format, rendering the acceptance  of  their  nomination
papers improper, we need to point out that the  appellant  was  required  to
not only allege material facts relevant to  such  improper  acceptance,  but
further assert  that  the  election  of  the  returned  candidate  had  been
materially affected by such acceptance. There is no such  assertion  in  the
election petition. Mere improper acceptance assuming that any such  improper
acceptance was supported by assertion of material facts  by  the  appellant-
petitioner, would not disclose a cause of action to call for  trial  of  the
election petition on merit unless the same is  alleged  to  have  materially
affected the result of the returned candidate.”

There is no dispute that an election cannot be set aside on  the  ground  of
improper acceptance of any nomination without a pleading and proof that  the
result of the returned candidate was materially affected.  The point  to  be
considered is whether the law as laid down by this  Court  relating  to  the
pleading and proof of the fact of  the  result  of  the  returned  candidate
being materially affected applies to a case  where  the  nomination  of  the
returned  candidate  is  declared  to  have  been  improperly  accepted.   A
situation similar to the facts of this case arose for consideration of  this
Court in Durai Muthuswami’s case.  It is necessary to deal  with  this  case
in detail as the Counsel for the Appellant submitted that the said  judgment
is not applicable to the facts of the present case and that finding  in  the
said case have to be treated as obiter.

The facts,  in  brief,  of  the  case  of  Durai  Muthuswami  are  that  the
Petitioner in the election petition contested in the election to  the  Tamil
Nadu Legislative Assembly from  Sankarapuram  constituency.   He  challenged
the election of the First Respondent on the grounds of  improper  acceptance
of nomination of the returned candidate,  rejection  of  101  postal  ballot
papers, ineligible persons permitted to vote, voting in  the  name  of  dead
persons and double voting. The High Court dismissed  the  election  petition
by holding that the Petitioner failed to allege and prove  that  the  result
of the election was materially affected by the improper  acceptance  of  the
nomination of the First Respondent as required by Section  100  (1)  (d)  of
the Act. The Civil Appeal filed by the Petitioner  therein  was  allowed  by
this Court in Durai Muthuswami (supra) in which it was held as follows:
 “3. Before dealing with the question whether the learned  Judge  was  right
in holding  that  he  could  not  go  into  the  question  whether  the  1st
respondent's nomination has been improperly accepted because  there  was  no
allegation in the election petition that the election  had  been  materially
affected as a result of such improper  acceptance,  we  may  look  into  the
relevant provisions of law. Under Section 81 of the  Representation  of  the
People Act, 1951 an election petition calling in question any  election  may
be presented on one or more of the grounds specified in sub-section  (1)  of
Section 100 and Section 101. It is not necessary to refer  to  the  rest  of
the section. Under Section 83(1) (a), insofar as it  is  necessary  for  the
purpose  of  this  case,  an  election  petition  shall  contain  a  concise
statement of the material  facts  on  which  the  petitioner  relies.  Under
Section 100(1) if the High Court is of opinion—
(a) that  on  the  date  of  his  election  a  returned  candidate  was  not
qualified, or was disqualified, to be chosen to  fill  the  seat  under  the
Constitution or this Act ….
(b)-(c) * * *
(d) that the result of the election,  insofar  as  it  concerns  a  returned
candidate, has been materially affected—
(i) by the improper acceptance of any nomination, or
(ii)-(iii) * * *
the High Court shall declare the election of the returned  candidate  to  be
void. Therefore, what Section 100 requires is that the High Court before  it
declares the election of a returned candidate is void should be  of  opinion
that the result of the election insofar as it concerns a returned  candidate
has been materially affected by the improper acceptance of  any  nomination.
Under Section 83 all that was necessary  was  a  concise  statement  of  the
material facts on which the petitioner relies. That the  appellant  in  this
case has done. He has also stated that the election is void because  of  the
improper acceptance of the 1st respondent's nomination and the  facts  given
showed that the 1st respondent was suffering from a  disqualification  which
will  fall  under  Section  9-A.  That  was  why  it  was  called   improper
acceptance. We do not consider that in the circumstances  of  this  case  it
was necessary for the petitioner to  have  also  further  alleged  that  the
result of the election insofar as it concerns  the  returned  candidate  has
been materially affected by the improper acceptance of the 1st  respondent's
nomination.  That  is  the  obvious  conclusion  to  be   drawn   from   the
circumstances of this case. There was only one seat to be filled  and  there
were only  two  contesting  candidates.  If  the  allegation  that  the  1st
respondent's  nomination  has  been  improperly  accepted  is  accepted  the
conclusion that would follow is that the appellant would have  been  elected
as he was the only candidate validly nominated. There can be, therefore,  no
dispute that the result of the election insofar as it concerns the  returned
candidate has been materially affected by the  improper  acceptance  of  his
nomination because but for such improper acceptance he would not  have  been
able to stand for the election or be declared to be elected. The  petitioner
had also alleged  that  the  election  was  void  because  of  the  improper
acceptance of the 1st respondent's nomination. In the case of election to  a
single-member constituency if there are more than  two  candidates  and  the
nomination of one of the defeated candidates had  been  improperly  accepted
the question might arise as to whether the result of  the  election  of  the
returned candidate had been materially affected by such improper  reception.
In such a case the question would arise as to what would  have  happened  to
the votes which had been cast in favour  of  the  defeated  candidate  whose
nomination had been improperly accepted if it  had  not  been  accepted.  In
that case it would be necessary for the person challenging the election  not
merely to allege but also to prove that the result of the election had  been
materially affected by the improper acceptance  of  the  nomination  of  the
other defeated candidate. Unless he succeeds in proving that  if  the  votes
cast in favour  of  the  candidate  whose  nomination  had  been  improperly
accepted would have gone in the petitioner's favour and he would have got  a
majority he cannot succeed in his election  petition.  Section  100(1)(d)(i)
deals with such a contingency. It is not intended to  provide  a  convenient
technical plea in a case like this where there can  be  no  dispute  at  all
about the election being  materially  affected  by  the  acceptance  of  the
improper nomination. “Materially affected” is not a formula that has got  to
be specified but it is an essential  requirement  that  is  contemplated  in
this section. Law does not contemplate a mere repetition of a  formula.  The
learned Judge has failed to notice  the  distinction  between  a  ground  on
which an election can be declared to be void and the  allegations  that  are
necessary in  an  election  petition  in  respect  of  such  a  ground.  The
petitioner had stated the ground on  which  the  1st  respondent's  election
should be declared to be void. He had  also  given  the  material  facts  as
required under Section 83(1)(a). We are,  therefore,  of  opinion  that  the
learned Judge erred in holding that it was not competent for him to go  into
the question whether the 1st respondent's  nomination  had  been  improperly
accepted.” (Underlining ours)

It is clear from the above judgment that there is a difference  between  the
improper acceptance  of  a  nomination  of  a  returned  candidate  and  the
improper acceptance of nomination of any other candidate.  There is  also  a
difference between cases where there are only two  candidates  in  the  fray
and a situation where there are more  than  two  candidates  contesting  the
election.  If  the  nomination  of  a  candidate  other  than  the  returned
candidate is found to have been improperly accepted, it  is  essential  that
the election Petitioner has to plead and prove  that  the  votes  polled  in
favour of such candidate would have been  polled  in  his  favour.   On  the
other hand, if the improper acceptance of  nomination  is  of  the  returned
candidate, there is no  necessity  of  proof  that  the  election  has  been
materially affected as the returned candidate would not have  been  able  to
contest the election if  his  nomination  was  not  accepted.    It  is  not
necessary for the Respondent to prove that result of the election in so  far
as it concerns the returned candidate has been materially  affected  by  the
improper acceptance of his nomination as  there  were  only  two  candidates
contesting the election and if the Appellant’s  nomination  is  declared  to
have been improperly accepted, his election  would  have  to  be  set  aside
without any further enquiry and the only  candidate  left  in  the  fray  is
entitled to be declared elected.   The  judgment  of  this  Court  in  Durai
Muthuswami (supra)  was referred to in Jagjit Singh  v.  Dharam  Pal  Singh,
1995 Supp (1) SCC 422 page 429 in which it was held as follows:

“21. The trial Judge has held  that  since  there  is  no  averment  in  the
petition that  the  result  of  the  election  was  materially  affected  by
improper rejection or acceptance of votes, it is devoid of cause of  action.
We are unable to agree that the absence of such an averment in the facts  of
this case is fatal. As pointed out by this Court, there may be  cases  where
the obvious conclusion to be  drawn  from  the  circumstances  is  that  the
result of the  election  has  been  materially  affected  and  that  Section
100(1)(d) of the Act is not intended to provide a convenient technical  plea
in a case where there can be no dispute at  all  about  the  result  of  the
election being materially affected by  the  alleged  infirmity.  (See: Durai
Muthuswami v. N. Nachiappan [(1973) 2 SCC 45 : (1974) 1 SCR 40]  .)  In  the
present case, the appellant in the election petition has stated that he  has
lost by a margin of 80  votes  only.  From  the  various  averments  in  the
election petition it was evident that the  number  of  valid  votes  of  the
appellant which are alleged to have been improperly rejected  is  much  more
than 80. From the averments contained in the election petition  it  is  thus
obvious if the appellant succeeds in establishing his case  as  set  out  in
the election petition the result of this election, insofar  as  it  concerns
the returned candidate, would be materially affected.”

It was held by this Court in Vashist Narain Sharma v. Dev Chandra,  reported
in 1955 (1) SCR 509 as under:
“9. The learned counsel for the respondents  concedes  that  the  burden  of
proving  that  the  improper  acceptance  of  a  nomination  has  materially
affected the result of the election lies upon the petitioner but  he  argues
that the question can arise in one of three ways:
(1) where  the  candidate  whose  nomination  was  improperly  accepted  had
secured less votes than the difference between the  returned  candidate  and
the candidate securing the next highest number of votes,
(2) where the person referred to above secured more votes, and
(3) where the person whose nomination has been improperly  accepted  is  the
returned candidate himself.
It is agreed that in the first case  the  result  of  the  election  is  not
materially affected because if all the wasted votes are added to  the  votes
of the candidate securing the highest votes, it will make no  difference  to
the result and the returned candidate will retain the  seat.  In  the  other
two cases it is contended that the result is materially affected. So far  as
the third case is concerned it may be readily conceded that  such  would  be
the conclusion. But we are not prepared to hold that the mere fact that  the
wasted votes are greater than the  margin  of  votes  between  the  returned
candidate and the candidate securing the next highest number of  votes  must
lead to the necessary inference that the result of  the  election  has  been
materially affected. That is a matter which has to be proved  and  the  onus
of proving it lies upon the petitioner. It will not do merely  to  say  that
all or a majority of the wasted votes might have gone to  the  next  highest
candidate. The casting of votes at an election depends  upon  a  variety  of
factors and it is not possible for any one to predicate how  many  or  which
proportion of the votes will go to one  or  the  other  of  the  candidates.
While it  must  be  recognised  that  the  petitioner  in  such  a  case  is
confronted with a difficult situation, it is not possible to relieve him  of
the duty imposed upon him by Section 100(1)(c)  and  hold  without  evidence
that the duty has been discharged. Should  the  petitioner  fail  to  adduce
satisfactory evidence to enable the Court to find  in  his  favour  on  this
point, the inevitable result would be that the Tribunal would not  interfere
in his favour and would allow the election to stand.” (Underlining ours).

This Court in Kisan Shankar Kathore v. Arun Dattatray Sawant  (supra)  dealt
with a situation similar to that of this case.  In that case,  the  election
of the returned candidate was successfully challenged on the ground of  non-
disclosure of material  information.   The  appeal  filed  by  the  returned
candidate was dismissed by this Court by observing as follows:
“Once it is found that it was a case of improper acceptance,  as  there  was
misinformation or suppression of material information, one  can  state  that
question of rejection in such a case was only  deferred  to  a  later  date.
When  the  Court  gives  such  a  finding,  which  would  have  resulted  in
rejection, the effect would be  same,  namely,  such  a  candidate  was  not
entitled to contest and the election is void.”


Mere finding that there has been an improper acceptance  of  the  nomination
is not sufficient for a declaration that the election is void under  Section
100 (1) (d).  There has to be further pleading and proof that the result  of
the election of the  returned  candidate  was  materially  affected.    But,
there would be no necessity of any proof in the event of the  nomination  of
a returned candidate being declared  as  having  been  improperly  accepted,
especially in a case where there are only two candidates in  the  fray.   If
the returned candidate’s nomination is  declared  to  have  been  improperly
accepted it would mean that he could not have  contested  the  election  and
that the result of the election of the  returned  candidate  was  materially
affected need not be proved further.   We  do  not  find  substance  in  the
submission of Mr. Giri that the judgment in Durai Muthuswami (supra) is  not
applicable to the facts of this case. The submission that  Durai  Muthuswami
is a case of disqualification under Section 9-A of the Act and,  so,  it  is
not applicable to the facts of this case is also  not  correct.   As  stated
supra, the election petition in that case was rejected on the ground of non-
compliance of Section 100 (1) (d).  The said judgment  squarely  applies  to
this case on all fours.  We also do not find force in  the  submission  that
the Act has to be  strictly  construed  and  that  the  election  cannot  be
declared to be void under Section 100 (1) (d)  without  pleading  and  proof
that the result of the  election  was  materially  affected.   There  is  no
requirement to prove that  the  result  of  the  election  of  the  returned
candidate is materially affected once his nomination  is  declared  to  have
been improperly accepted.

For the aforementioned reasons, the Civil Appeal is dismissed.  No costs.

Civil Appeal No. 2829 of 2016

  This  appeal  is  filed  by  the  Petitioner  in  the  election   petition
challenging that part of the judgment dated 29.02.2016  of  the  High  Court
Manipur at Imphal, by which the relief that he  should  be  declared  to  be
elected was rejected. The Appellant contested the election  as  a  candidate
of the Nationalist Congress Party (NCP).  Respondent No.1  was  declared  to
have been elected on 28.01.2012.  The election of the First  Respondent  was
set aside  by  the  High  Court  in  the  election  petition  filed  by  the
Appellant.  The Appellant also  sought  for  a  relief  that  he  should  be
declared to have been elected.  Such relief was rejected by the High  Court.
 Hence, this appeal.

After the result of the election was declared on 28.01.2012,  the  Appellant
resigned from NCP and joined Bhartiya Janta  Party  (BJP).   To  a  question
posed by the Court during the  recording  of  his  evidence,  the  Appellant
stated that he tendered resignation from NCP in the  latter  part  of  2013,
that he joined BJP and he continued to be a member of the BJP.  In  January,
2016, the Appellant filed an  application  for  amendment  to  the  election
petition.  He intended to insert  additional  submissions  relating  to  his
expulsion from NCP on 23.12.2013 and the representation made by him  to  the
President NCP Manipur to cancel the expulsion  order.   He  also  wanted  to
bring on record the fact that his enrolment to the  membership  of  BJP  was
rejected on 18.01.2016.  He further  stated  in  the  application  that  the
order of expulsion by the NCP was revoked by an order dated 21.01.2016.

The  arguments  in  the  election  petition  filed  by  the  Appellant  were
concluded on 25.02.2016.  The High Court recorded a finding in the  impugned
judgment that all the pending miscellaneous applications  were  disposed  of
with the consent  of  both  sides  and  the  election  petition  was  to  be
adjudicated  on  the  basis  of  existing  material  on  record.    As   the
miscellaneous application filed by the Appellant  was  not  considered,  the
High Court decided the matter on the basis of the material on  record  which
clearly showed that the Appellant resigned from NCP and joined  BJP.   After
a careful consideration of the material on record, the  High  Court  refused
to grant the declaration as sought by the Appellant.  The  High  Court  held
that having joined BJP, the Appellant was not entitled for a declaration  as
he contested the election  in  2012  on  behalf  of  NCP.   The  High  Court
highlighted the fact that the Appellant will be an MLA belonging to BJP,  if
declared elected after having contested the election on behalf of  the  NCP.
Taking into account the spirit of law as expressed in  paragraph  no.  2  of
the 10th Schedule of the Constitution of India the High Court did not  grant
the relief sought by the Appellant that he should be declared elected.

Ms. Meenakshi Arora, learned Senior  Counsel  appearing  for  the  Appellant
submitted that the 10th Schedule to the Constitution is  not  applicable  to
adjudication of an election petition.   She relied upon Section  53  (2)  of
the Act to contend that the Appellant should be declared as duly elected  as
he was the  only  person  remaining  in  the  fray  after  the  election  of
respondent/returned candidate was declared void.   Section 101  of  the  Act
provides for declaration of the Petitioner to have been duly elected if  the
High Court is of the opinion that the Petitioner received  majority  of  the
valid votes.

According to Section 80 (A) of  the  Act,  the  High  Court  will  have  the
jurisdiction to try an election petition.  It is well settled law  that  the
High Court hearing an election petition is not an ‘authority’  and  that  it
remains the High Court while trying an  election  petition  under  the  Act.
(See T. Deen Dayal v. High Court of A.P., 1997  (7)  SCC  535 at  page  540.
This Court in Hari Shanker Jain v. Sonia Gandhi, 2001 (8)  SCC  233 at  page
244 upheld the decision of a Full Bench of the Rajasthan High Court  wherein
it was decided that the jurisdiction of the High Court to  try  an  election
petition  is  not  by  way  of  constituting  a  special  jurisdiction   and
conferring it upon the High Court.  It  is  an  extension  of  the  original
jurisdiction of the High Court to hear and  decide  the  election  disputes.
It is clear from the above judgments of this Court that the  inherent  power
of the High  Court  is  not  taken  away  when  the  election  disputes  are
adjudicated.   Section 53 (2) is a power conferred on the Returning  Officer
to declare a candidate elected when the number of  candidates  is  equal  to
the number of seats to be filled.  The  power  of  the  High  Court  is  not
fettered by Section 53 (2).  The High Court has taken into consideration  an
anomalous situation that would arise by a candidate belonging to  one  party
being declared elected after having crossed the floor.  We are in  agreement
with the High Court and we do not intend to interfere  with  the  discretion
exercised by the High Court.

For the aforesaid reasons, the Civil Appeal is dismissed.  No  order  as  to
costs.

                      .…............................J.
                 [ANIL R. DAVE]


                                          ................................J.
                             [L. NAGESWARA RAO]

New Delhi,
October 28, 2016