TaxTMI 
TaxTMI 
1988 (9) TMI 48
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....he benefit of hearing Dr. Y. S. Chitale, learned counsel appearing on behalf of the appellant, Dr. Baliram Waman Hiray, who, at one time, was the Health Minister of Maharashtra, and Shri A. S. Bobde, learned counsel appearing on behalf of the State Government, as to the purport and effect of the inclusive clause of sub-section (3) of section 195 of the Code which provides that in clause (b) of sub-section (1), the term "court" means a civil, revenue or criminal court, and includes a tribunal constituted by or under a Central, Provincial or State Act, if declared by that Act to be a court for the purposes of this section. 3. In Lalji Haridas v. State of Maharashtra [1964] 52 ITR 423, a Constitution Bench of this court, by a majority of 3: 2, held that the proceedings before an Income-tax Officer under section 37(4) of the Indian Income-tax Act, 1922, were judicial proceedings under section 193 of the Indian Penal Code and that such proceedings must be treated as proceedings in any court for the purposes of section 195(1)(b) of the Code. We thought that the controversy had been set at rest by the decision of the Constitution Bench in Lalji Haridas' case [1964] 52 ITR 423 (SC).....
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.... And whereas the Government of Maharashtra is of the opinion that it is necessary to appoint a Commission of Inquiry under the Commissions of Inquiry Act, 1952 (60 of 1952), for the purpose of making an inquiry into the causes and the circumstances leading to the aforesaid incidents of death at J. J. Hospital, Bombay, being definite matters of public importance, and for making a report thereon to the State Government : Now, therefore, in exercise of the powers conferred by section 3 and sub-section (1) of section 5 of the said Act and of all other powers enabling it in this behalf, the Government of Maharashtra hereby appoints a Commission of Inquiry consisting of Shri Justice B. Lentin, Judge of the High Court of Judicature at Bombay, to inquire into and report on the causes and circumstances leading to the occurrence of the said deaths in Neuro-Surgery, Neurology, Ophthalmology and Nephrology Departments of J. J. Hospital, Bombay, during January-February, 1986 ; and particularly-. . . The Government of Maharashtra hereby directs that having regard to the nature of inquiry to be made by the Commission and other (sic.) sub-section (4) and sub-section (5) of....
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....tate and had an unprecedented long time for as many as 15 years and other delinquent officers of the concerned departments holding them responsible for the deaths. The report indicted both the Health Ministers in no uncertain terms. But, we are not concerned with the follow up action that the Government has taken in bringing the guilty to book. The controversy before us is limited to the question whether the Commission was "court" for the purposes of section 195(1)(b) of the Code of Criminal Procedure, 1973. 7. On June 23, 1987, the Commission, by its order, directed its secretary to issue a show-cause notice to the appellant as to why he should not be prosecuted for the offence of giving false evidence on oath under section 193 of the Indian Penal Code, 1860, read with section 340 of the Code of Criminal Procedure, 1973, the relevant portion whereof reads: "AND WHEREAS you are summoned by the Commission under section 4 of the Commissions of Inquiry Act, 1952, to give evidence before it and you did give evidence before it on 22nd April, 1987, 23rd April, 1987, 24th April, 1987, 27th April, 1987, 28th April, 1987, 29th April, 1987, 4th May, 1987, 5th May, 1987, 8th June,....
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.... contentions and held that the case was a fit one where, in the interests "of justice, it was expedient to prosecute the appellant. Any other course would, in its words, "bring the sanctity of oath and administration of justice into ridicule and contempt". The Commission observed that the appellant was not an illiterate or a semi-literate person who could plead confusion of mind in the witness-box, and indeed, he does not. By profession, he was a medical practitioner but he played a prominent part in public life and for several years he held various portfolios as Cabinet Minister in the Government of Maharashtra, including Health. According to the Commission, he was by far the most intelligent and shrewd witness who had given evidence before it. Unlike the other witnesses, he never recanted, in an attempt to deliberately distort the truth. It went on to observe that, normally, witnesses are not allowed to be represented by counsel. However, in a departure from normal practice, the Commission allowed this latitude to the appellant, so that justice should not only be done but should be seen to be done to him and he had a counsel of his choice. Accordingly, the Commission directed its....
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.... of this section. 10. We may then set out the relevant provisions of the Commissions of Inquiry Act, 1952. The relevant provision contained in sub-section (1) of section 3 provides as follows : "3. Appointment of Commission.-(1) The appropriate Government may, if it is of opinion that it is necessary so to do, and shall, if resolution in this behalf is passed by the House of the People or, as the case may be, the Legislative Assembly of the State, by notification in the Official Gazette, appoint a Commission of Inquiry for the purpose of making an inquiry into any definite matter of public importance and performing such functions and within such time as may be specified in the notification, and the Commission so appointed shall make the inquiry and perform the functions accordingly." Section 4 vests in the Commission the powers of a civil court while trying a suit under the Code of Civil Procedure and reads as follows : "4. Powers of Commission. -The Commission shall have the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908, in respect of the following matters, namely : (a) summoning and enforcing the attendance of....
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....nquiry appointed by the State Government under sub-section (1) of section 3 of the Act read with section 5 is merely a fact-finding body appointed by the Government for the "information of its mind", and the mere fact that the procedure adopted is of a legal character and that it has the power to administer an oath will not impart to it the status of a court and, therefore, is not a "court" for the purposes of section 195(1)(b) of the Code. He submits that it is well-settled that a Commission of Inquiry has not the attributes of a court inasmuch as there is no lis before it and that it has no powers of adjudication of rights. He further points out that the language of section 6 of the Act is plain enough to show that no statement by a person before a Commission of Inquiry "can subject him to, or be used against him" in any civil or criminal proceedings, except in a prosecution for giving false evidence before the Commission. The question before the court, learned counsel contends, is not whether the appellant can be prosecuted for perjury for giving false evidence which is an offence punishable under section 195(1)(b) or for the offence of intentional insult to the Commission punis....
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....held that proceedings before an Income-tax Officer under section 37 of the Indian Income-tax Act, 1922, while exercising his powers under sub-sections (1), (2) and (3) thereof, were judicial proceedings for the purposes of sections 193, 196 and 228 of the Indian Penal Code, and, therefore, must be treated as proceedings in any "court" for the purposes of section 195(1)(b) of the Code, although the Act had not expressly said so. Learned counsel points out that the definition of "court" in section 195(2), as originally enacted, used the word "means" instead of the word "includes" which, later, was substituted by the Criminal Procedure Code (Amendment) Act, 1973. This gave rise to a controversy whether Tribunals or officers acting in judicial capacity or exercising quasijudicial functions should be regarded as courts for the purposes of section 195(1)(b). The substitution of the word "includes" for the word "means" in the definition, if anything, added to the difficulties of this complex issue. It necessarily gave rise to the question as to what else, besides civil, revenue and criminal courts, was covered by the generic term "court". 14. Learned counsel drew our attention to the d....
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....y section 195(3), it is urged that a Tribunal constituted by or under a Central, Provincial or State Act can be deemed to be a "court" only if it is declared to be so by that Act for the purposes of section 195. According to learned counsel, it is now a familiar feature of recent Acts to insert a specific provision deeming a Tribunal to be a court and wherever such a provision is not there, the court cannot deem a Tribunal to be a court. According to him, it is no more a question of interpretation but one of express enactment. He, accordingly, contends that the majority decision in Lalji Haridas' case [1964] 52 ITR 423 (SC), no longer holds the field. There appears to be considerable force in the argument. 16. Pursuing the same line of thought, i.e., that there is a change of law brought about by sub-section (3) of section 195 of the Code, learned counsel contends that Parliament had to step in and expressly amend section 136 of the Income-tax Act, 1961, to put the matter beyond controversy. Section 136 of Income-tax Act, 1961, as originally enacted provided by legal fiction that "any proceeding under this Act before an income-tax authority shall be deemed to be a judicial p....
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.... Criminal Procedure, 1973. This amendment is intended to secure that prosecution proceedings for offences under the relevant provisions of the Indian Penal Code may be launched on the complaint of the concerned income-tax authority. The proposed amendment will take effect from 1st April, 1974, that is, the date from which the Code of Criminal Procedure, 1973, came into force." 17. According to Dr. Chitale, this was nothing but "legislative declaration of the law", contrary to the law declared by this court in Lalji Haridas' case [1964] 52 ITR 423, which is permissible under article 141 of the Constitution. While learned counsel accepts that under article 141, the law declared by the Supreme Court is binding on all courts in India, in other words, the law declared by the Supreme Court is made the law of the land, there is nothing to prevent the Legislature from bringing about a change in the law. Finally, learned counsel also drew our attention to the existing legislative practice where certain enactments constituting a tribunal contain a provision that the tribunal shall be deemed to be a court for the purposes of section 195(2) of the Code. Learned counsel referred us to se....
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....by enacting sub-sections (4) and (5) of section 5. The contentions advanced on behalf of the appellant were, it is said, the submissions made before the court in Lalji Haridas' case [1964] 52 ITR 423 (SC), and the court has dealt with the question whether there was a distinction between a case where a statute constituting a Tribunal provides that the Tribunal shall be deemed to be a court for the purposes of section 195(1)(b) and a case where a statute does not expressly say so. The majority, on a construction of the various provisions of the Act, expressed the considered view that the absence of such a provision makes no difference. It was further not open for us to say that the decision in Lalji Haridas' case [1964] 52 ITR 423 (SC), was no longer binding on us merely by the enactment of sub-section (3) of section 195 of the Code. 19. The learned Advocate-General then read out the provisions of section 195(1)(b) of the Code of Criminal Procedure, 1898, and of the present Code, as well as the interpretation clause in sub-section (3) of section 195 of the present Code, and the analogous provision in sub-section (2)of section 195 of the old Code, to impress upon us that th....
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....ng, like in subsection (5) of section 5 of the Commissions of Inquiry Act here. Our attention was drawn to the following observations of Gajendragadkar C. J., speaking for the majority, in Lalji Haridas' case [1964] 52 ITR 423 (SC), as to the purport and effect of section 37 of the Indian Income-tax Act, at pp. 709-710 of [1964] 6 SCR (at page 430 of 52 ITR) "The expression 'judicial proceeding' is not defined in the Indian Penal Code, but we have the definition of the said expression under section 4(m) of the Criminal Procedure Code. Section 4(m) provides that 'judicial proceeding' includes any proceeding in the course of which evidence is or may be legally taken on oath. The expression 'court' is not defined either by the Criminal Procedure Code or the Indian Penal Code, though 'court of justice' is defined by section 20 of the latter Code as denoting a judge who is empowered by law to act judicially alone, or a body of judges which is empowered by law to act judicially as a body, when such judge or body of judges is acting judicially. Section 3 of the Evidence Act defines a 'court' as including all judges and magistrates and a....
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.... High Court should be upheld though for different reasons. Section 37(4) of the Act makes the proceedings before the Income-tax Officer judicial proceedings under section 193 of the Indian Penal Code, and these judicial proceedings must be treated as proceedings in any court for the purpose of section 195(1)(b), Criminal Procedure Code. That, we think, would really carry out the intention of the Legislature in enacting section 37(4) of the Act." Incidentally, the learned Advocate-General also drew our attention to the following observations at p. 706 of [1964] 6 SCR (at page 427 of 52 ITR), where the majority was dealing with section 195(2) of the old Code saying that it was not necessary to deal with the effect of that provision because, they did not propose to base their decision on the ground that the Income tax Officer was a revenue court under that sub-section, and added : "The only point of interest to which we may incidentally refer is that this sub-section gives an inclusive, though not an exhaustive, definition and takes within its purview not only civil and criminal courts, but also revenue courts, while excluding a Registrar or Sub-Registrar under the Indian ....
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....his powers, functions and duties, shall be deemed to be a civil court within the meaning of sections 480 and 482 of the Code of Criminal Procedure, 1898. Sections 345 and 346 of the Code of Criminal Procedure, 1973, correspond to sections 480 and 482 of the Criminal Procedure Code, 1898. As a corollary, it would follow that the Rent Control Officer shall be deemed to be a civil court within the meaning of sections 345 and 346 of the Criminal Procedure Code, 1973, and in view of sub-section (2) of section 34 of the Rent Act, shall be a civil court for the purpose of section 193, Indian Penal Code. Section 195(3), Criminal Procedure Code, provides that the expression 'court' in section 195(1)(b)(i) will include a Tribunal constituted by or under a Central, Provincial or State Act if declared by that Act to be court for the purposes of the section. Section 195(1)(b)(i) provides precondition for taking cognizance of an offence under section 193, Indian Penal Code, viz., a complaint in writing of the court. In view of the specific provision made in sub-section (2) of section 34 of the Rent Act that for the purposes of sections 345 and 346, Criminal Procedure Code, the Rent Contr....
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....nacts that the Commissioner appointed under the Workmen's Compensation Act shall be deemed to be a civil court for all purposes of section 195 of the Code, and by section 18 of the Payment of Wages Act, that the authority appointed under the Act shall be deemed to be a court for the purposes of section 195 of the Code. The phraseology may differ but the learned Advocate-General contends, the method is the same. He also referred to sub-section (4) of section 108 of the Customs Act, 1962, which provision is in pari materia with sub-section (5) of section 5 of the Commissions of Inquiry Act, and enacts that every proceeding before a Customs Officer shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code. It would be seen that the underlying theme of all these submissions of the learned Advocate-General is one of placing emphasis on sub-section (4) of section 5 of the Commissions of Inquiry Act which provides that a Commission of Inquiry shall be deemed to be a court. He contends that the legal fiction must be given its full effect and, therefore, the Commission must be treated to be a civil court for "all purposes". And in th....
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.... creation of a Tribunal for investigation of claims or entrusted with certain adjudicatory functions. It would, therefore, appear that Parliament, in its wisdom, wherever it thought it fit, has inserted a special provision for deeming a Tribunal to be a court for the purposes of section 195(1)(b) but has left the other enactments like the Commissions of Inquiry Act untouched although sub-section (3) of section 195 has been on the statute book for the last over 14 years. This lends support to the submission of Dr. Chitale that it is no more a question of interpretation but one of express enactment. 24. The crucial question that falls to be determined in this appeal is whether sub-section (3) of section 195 has brought about a change in the law and, therefore, the majority decision in Lalji Haridas' case [1964] 52 ITR 423 (SC), no longer holds the field as submitted by Dr. Chitale, appearing on behalf of the appellant, or was merely declaratory of the law as declared by the court in Lalji Haridas' case [1964] 52 ITR 423 (SC), as argued by the learned Advocate-General, and, therefore, the decision in Lalji Haridas' case [1964] 52 ITR 423 (SC), is still good law. It cann....
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....sidered : (1) What was the common law before the making of the Act, (2) What was the mischief and defect for which the common law did not provide, (3) What remedy Parliament hath resolved and appointed to cure the disease of the commonwealth and (4) The true reason of the remedy. And then the office of all the judges is always to make such construction as shall suppress the mischief and advance the remedy, and to suppress subtle inventions and evasions for the continuance of the mischief and pro privato commodo, and to add force and life to the cure and remedy according to the true intent of the makers of the Act pro bono publico. " These rules are still in full force and effect, with the addition that regard must now be had not only to the existing law but also to the prior legislation and to the judicial interpretation thereof. This court applied the rule enunciated in Heydon's case [1984] 3 Co Rep. 7a, and in Bengal Immunity Co. Ltd. v. State of Bihar [1955] 2 SCR 603 in the construction of article 286 of the Constitution. After referring to the state of law prevailing in the then provinces prior to the Constitution as also to the chaos and confusion that was brought abou....
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....fter taking into account these factors, the learned judge went on to say (at p. 629) : "It is clear that the evil which was sought to be remedied was the one resulting from the widespread practice of husbands entering into nominal partnerships with their wives and fathers admitting their minor children to the benefits of the partnerships of which they were members. This evil was sought to be remedied by the enactment of section 16(3) in the Act. " There is no need to burden the judgment with numerous citations. Following the rule in Heydon's case [1584] 3 Co Rep 7a, it appears to us that to construe sub-section (3) of section 195 of the Code, it is not only legitimate but highly convenient to refer both to the former Code and the state of uncertainty brought about due to conflict of views between different High Courts, and to the present Code which seeks to provide the remedy. It was to cure this mischief that Parliament brought in sub-section (3) of section 195 of the Code to put an end to the controversy. 27. Law must be definite and certain. If any of the features of the law can usefully be regarded as normative, it is such basic postulates as the requirement ....
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....y have to be regarded as judicial proceedings for the purposes of sections 193 and 228 of the Indian Penal Code. It is contended that the word "deemed" is, however, sometimes used by the Legislature in order to remove any doubt in the matter. He drew our attention to the following observations of Lord Radcliffe in St. Aubyn v. Attorney-General [1952] AC 15 (at page 498 of [1951] 2 All ER) : ". . . The word 'deemed' is used a great deal in modern legislation. Sometimes it is used to impose for the purposes of a statute an artificial construction of a word or phrase that would not otherwise prevail. Sometimes it is used to put beyond doubt a particular construction that might otherwise be uncertain. Sometimes it is used to give a comprehensive description that includes what is obvious, what is uncertain and what is, in the ordinary sense impossible." 29. The main thrust of the argument of the learned Advocate-General that a Commission of Inquiry should be regarded as a court for the purposes of section 195(1)(b) stems from a wrong hypothesis that sub-section (4) of section 5 of the Act is in two parts. He contends for the purpose of his submission that sub-section....
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....ld that the proceedings before an Income-tax Officer under section 37(4) of the Indian Income-tax Act, 1922, were judicial proceedings under section 193 of the Indian Penal Code and that such proceedings must be treated as proceedings in any court for the purposes of section 195(1)(b) of the Code. It must be remembered that the decision in Lalji Haridas' case [1964] 52 ITR 423 (SC) was rendered prior to the enactment of sub-section (3) of section 195 of the present Code. The court was, therefore, concerned with the definition of the term "court" under section 195(2) of the earlier Code which was an inclusive one. There being no express provision akin to section 40 of the Indian Railways Act, section 23 of the Workmen's Compensation Act or section 18 of the Payment of Wages Act, the matter was one of construction. The question, therefore, whether an Income-tax Officer was a court for the purposes of section 195(1)(b) was more a question of interpretation than one of express enactment after the amendment of section 136 of the Income-tax Act, 1961, by section 28 of the Finance Act, 1985. The decision of the majority in Lalji Haridas' case [1964] 52 ITR 423 (SC) is now only....
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....inition of a District Magistrate in section 3(c) and that of the prescribed authority under section 3(e) or the provision for an appeal under section 18 of the Act, he has referred to the authority as the Rent Control Officer which expression is not used in the Act. Presumably, when the learned judge described the Rent Control Officer at p. 471 of the Report as a civil court, he meant that the authorities designated under the Act were "civil courts". In any event, considering the nature of functions to be performed under the U. P. Rent Act, the authorities designated would be civil courts. In contrast, a Commission of Inquiry constituted under the Commissions of Inquiry Act is neither a civil court nor a criminal court or a court, properly so called, in the strict sense of the term. 32. In view of the change in law, we fail to appreciate the contention of the learned Advocate-General, without meaning any disrespect, that the principles laid down by the majority in Lalji Haridas' case [1964] 52 ITR 423 (SC) that on a combined reading of sub-sections (4) and (5) of section 5 of the Commissions of Inquiry Act read in the context of sub-section (4), an Income-tax Officer must st....
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....urts in England and Australia as to what are the essential characteristics of a court as distinguished from Tribunals exercising quasi-judicial functions. 34. About a decade later in Jagannath Prasad v. State of Uttar Pradesh [1963] 2 SCR 850, this court, following its earlier decision in Ujjam Bai v. State of Uttar Pradesh [1963] 1 SCR 778, held that no doubt a Sales Tax Officer appointed under the U. P. Sales Tax Act, 1948, is an instrumentality of the State employed for the purposes of assessment and collection of taxes and merely because he has, in the discharge of his duties, to perform certain quasi-judicial functions, i.e., has certain powers which are similar to the powers exercised by courts, still, he is not a court as understood in section 195 of the Code. The court relied upon the decision of the Judicial Committee of the Privy Council in Shell Co. of Australia [1931] AC 275, for the view that a Sales Tax Officer was not a court in the strict sense of that term. It referred with approval to the following observations of Lord Sankey L. C., where he enumerated some negative propositions to contra-distinguish a Tribunal from a court (at p. 420 of AIR 1963 SC) : ....
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....ould have been completed after the words 'civil court' and what follows it would have been the subject of a separate sub-section or sentence. It is, therefore, clear that under the Commissions of Inquiry Act, 1952, the Commission is fictionally a civil court only for the purpose of the contempts punishable under sections 175, 178, 179, 180 and 228 of the Indian Penal Code, 1860, subject to the condition that it has not the right itself to punish the contemners, a right which other courts possess under section 480 of the Code of Criminal Procedure, 1898. Similarly, it follows that the fiction relating to the proceedings before the Commission is confined to offences that are punishable under sections 193 and 228 of the Indian Penal Code, 1860, referred to in sub-section (5) of the Act, and does not extend beyond this limit." The learned judge then dealt with a Commission of Inquiry constituted under the Commissions of Inquiry Act and held that the Commission has not the attributes of a court. In repelling the contention that the function of the Commission being of an advisory nature it was akin to the Judicial Committee of the Privy Council which only advised His Majesty a....
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....t the Commission was not a court. The term 'court' has not been defined in the Contempt of Courts Act, 1952. Its definition in the Indian Evidence Act, 1872, is not exhaustive and is intended only for purposes of the Act. The Contempt of Courts Act, 1952, however, does contemplate a 'court of justice' which, as defined in section 20, Penal Code, 1860, denotes 'a judge who is empowered by law to act judicially'. The word 'judge' is defined in section 19 as denoting every person 'Who is empowered by law to give, in any legal proceeding, civil or criminal, a definitive judgment, or a judgment which, if not appealed against, would be definitive, or a judgment which, if confirmed by some other authority, would be definitive . .' The minimum test of a 'court of justice', in the above definition, is, therefore, the legal power to give a judgment which, if confirmed by some other authority, would be definitive. Such is the case with the Commission appointed under the Public Servants (Inquiries) Act, 1850, whose recommendations constitute a definitive judgment when confirmed by the Government. This, however, is not the case with a ....