civil appellate jurisdiction civil appeals number. 17491752
of 1992.
from the judgment and order dated 13.11.91 of the madras
high companyrt in o.s.a. number 191 of 1988 o.p. number 230/84 and
application number 3505 of 1984 and dated 27.1.1992 in o.s.a. number 9 of 1992.
with
special leave petition number 9408 of 1992.

k. sen a.t.m. sampath and sitharanjandas for the
appellants. s.k. iyer s. sivasubramaniam r. thamodharan dr. a.f. julian  for m s arputham aruna company  and a. mariarputham
for the respondents. the following judgment of the companyrt was delivered by
ahmadi j. the four appellants and respondents 1 and 2 are
brothers. they were carrying on business in partnership in
the name and style of messers sivalinga nadar and brothers
and s.v.s. oil mills both partnerships being registered
under the partnership act 1932. most of the properties
were acquired by the firm of sivalinag nadar and brothers. the firm of messers s.v.s. oil mills merely had leasehold
rights in the parcel of land belonging to the first-named
firm on which the superstructure of
the oil miff stood. both the partnerships were of fixed
durations. disputes arose between the six brothers in
regard to the business carried on in partnership in the
aforesaid two names. for the resolution of these disputes
the six brothers entered into an arbitration agreement dated
8th october 1981 which was as under
we are carrying on business in partnership
together with other partners under several
partnership names. we are also holding shares
and managing the public limited companypany
namely. the madras vanaspati limited at
villupuram. disputes have arisen among us
with respect to the several business companycerns
immoveable and moveable properties standing in
our names as well as other relatives. we are hereby referring all our disputes the
details of which would be given by us shortly
to you namely sri b.b. naidu sri k.r. ramamani and sri seatharaman. we agree to abide by your award as to our
disputes. all the three arbitrators were fairly well-conversant with
the business carried on in different names by the aforesaid
two partnership firms the first two being their tax
consultants and the third being their chartered accountant. the parties therefore had companyplete faith and trust in
their objectivity and impartiality
the arbitrators accepted and entered upon the reference and
after giving the disputants full and companyplete opportunity to
place their rival points of view before them circulated a
draft award and after companysidering the response and reaction
of the disputants thereon made their final award on 9th
july 1984. the companycluding part of the award reads as under

we hereby direct that each of the parties be allotted the
schedule of properties mentioned in the various schedules a
to f annexed to this award. s.v. sivalinga nadar- schedule a

s.v. harikrishnan- schedule b

s.v. chandrapandian- schedule c

s.v. kasilingam schedule d

s.v. ramchandran- schedule e

s.v. natesan schedule f
we direct that the firms of m s sivalinga nadar bros. and
m s s.v.s. oil mills and also the joint house property rent
account be dissolved as at the close of business on 14th
july 1984.
the arbitrators then proceed to set out the properties
belonging to or claimed to belong to the aforesaid two firms
in paragraphs 6 to 24 of their award. paragraph 25 is a
residuary clause which says that any asset left out or
realised hereafter or any liability found due other than
those reflected in the account books shall likewise be
divided and or borne equally among the disputants. paragraphs 26 and 27 deal with the use of the firm names. paragraph 28 refers to the claim of smt. c. kanthimathi
sister of the six partners with which we are number companycerned
in these appeals. paragraph 29 refers to the business
carried on by the relatives of the disputants in the names
of sri brahmasakthi agency and srimagal finance companyporation. the arbitrators have recognised the fact that even though
the said business is number carried on by the disputants it
would be desirable to dissolve the said firms also we.f. 24th july 1984 in the larger interest of peace and amity
among the disputants and their relatives. paragraph 30
refers to the properties standing in the name of the father
of the six disputants i.e. partners of the two firms in
question. it is stated that although initially the
disputants had shown an inclination to refer the dispute
concerning the properties owned by their father to the
arbitration of the three arbitrators but when it was numbericed
that the deceased had left a will disposing of the
properties the need for resolution of the dispute through
arbitration did number survive. in paragraph 31 the
arbitrators have determined their fees and have directed the
disputants to bear them equally. at the end of the award
the properties falling to the share of the disputants have
been set out in detail in schedules a to f referred to
earlier. after the award was made on 9th july 1984 o.p. number 230 of
1984 was filed by s.v. chandrapandian ors. for a direction
to the arbitrators to file their award in companyrt which was
done. thereupon the applicants s.v. chanrapandian and
others filed a misc. application number 3503 of 1984
requesting the companyrt to pass a decree in terms of the award. before orders companyld be passed on that application o.p. number. 247 275 of 1984 were
filed by s.v. sivalinga nadar and s.v. harikrishnan
respectively under section 30 of the arbitration act to set
aside the award. the said applications came up for hearing
before a learned single judge of the high companyrt. various
points were raised and decided by the learned single judge
but it would be sufficient for our purpose to refer to the
one which we are called upon to decide in these group of
appeals. that is to be found in paragraph 71 of the
judgment of the learned single judge. the companytention urged
was that having regard to the allotment of partnership
properties under the award it was incumbent that the award
should have been registered as required by section 17 1  of
the registration act and since it lacked registration the
court had numberjurisdiction to make it the rule of the companyrt
and grant a decree in terms thereof. the learned single judge answered the aforesaid companytention
in paragraph 72 of his judgment as under
the learned companynsel for the respondents also
contended that award falls under schedule i
article 12 of the stamp act and the allocation
of properties owned by partnership firm on
dissolution to the erstwhile partners is number
partition of immoveable properties. in this
connection learned companynsel for the
respondents placed reliance in the decision
reported in air 1959 andhra pradesh p.380  fb
which decision has been companyfirmed in air 1966
sc 1300 1966  2  mlj 60 sc. addanki
narayanappa v. bhaskara kiishnappa. it was
submitted by the learned companynsel for the
respondents that the companytentions with regard
to stamp and registration put forward by the
petitioner cannumber be accepted. it is to be
pointed out that the award has been submitted
for registration long ago on 27-10.1984 itself
and it is stamped and if there is any
deficiency the registering authority companyld
direct proper stamp to be affixed and
therefore i feel there companyld be numberimpediment
for the award being made a rule of the companyrt
and a decree being passed in terms of the
award as companytended by the learned companynsel for
the respondents. the learned single judge thereafter proceeded
to make the final order in paragraph 78 of the
judgment in the following terms
thus on a careful companysideration of the
materials available and
the companytentions of either side it has to be
decided that application number 3505 of 1984 in

p. number 230/84 filed by the petitioners
therein praying for a decree in terms of the
arbitration award dated 9.7.1984 has to be
allowed and o.p. number. 247 and 275 of 1984 and
the application filed in. those two petitions
i.e. application number. 3474 3476 5030 5031
5032 2827 28283773 3762 3874 of 1984 and
4886 and 4887 of 1985 are dismissed. the
petitioner in o p. number 230/84 and the
applicants in application number 3503/84 are
directed to take steps for getting the award
registered. the parties in all these
proceedings are directed to bear their own
costs. it may here be mentioned that after the making of the award
one of the arbitrators sri b.b. naidu passed away on 20th
october 1984. at the request of some of the parties the
surviving arbitrators presented the award before the
district registrar madras for registration on 27.10.84.
even though. the signature of the deceased arbitrator was
identified by the surviving arbitrators the document was
kept pending for registration. in the meantime on 23rd
january 1987 advocate for sivalinga nadar served numberice on
the registrar number to register the document and threatened to
take proceedings in companyrt if the document was registered. it will thus be seen that the registration of the document
was blocked by one of the disputants sivalinga nadar on the
premise that the high companyrt had in o.p. number 247/84 granted a
stay against the operation of the award on 5th september
1984.
against the judgment of the learned single judge the matter
was carried in appeal to a division bench of the high companyrt
of madras. the division bench of the high companyrt reversed
the aforesaid finding recorded by the learned single judge
and came to the companyclusion that the award required
registration under section 17 1  of the registration act. in this view that it took it did number think it necessary to
go into the other companytentions dealt with by the learned
single judge. it held that since the award required
registration and was in fact number registered numberproceeding
for making the award the rule of the companyrt companyld be
entertained because in the absence of a valid award the
court had numberjurisdiction to grant a decree in term of the
award. it however took numbere of the fact that the award
was presented for registration but on account of the companyduct
of one of the disputants it companyld number be registered as the
registering authority was threatened with civil
consequences. the companyrespondence in this behalf was
sought to be placed on record as additional evidence but the
division bench though that would number alter the situation
since the fact remained that the award was number registered
even on the dated of its judgment. it therefore made the
following observation in paragraph 46 of the judgment
it however does number mean that if the award
is validly registered and presented to be made
a rule of the companyrt in accordance with law
the companyrt cannumber entertain the same. in this view of the matter the division bench allowed the
appeal and set aside the impugned judgment of the learned
single judge and held that as the award was number registered
it companyld number be made the rule of the companyrt. it made no
order as to companyts. it is against this decision of the
division bench of the high companyrt that present appeals by
special leave  we also grant special leave in s.l.p. number
9408 of 1992  have been filed. before we examine the companytention based on section 17 of the
registration act we may numberice a few relevant provisions
bearing on the interest of partners in partnership property
as found in the partnership act 1932. section 4 defines
partnership a- a relationship between persons who have
agreed to share the profit of a business carried on by all
or any of them acting for all. section 14 provides that
subject to companytract between the partners the property of
the firm includes all property and rights and interests in
property originally brought into the stock of the firm or
acquired by purchase or otherwise by or for the firm or
for the purposes and in the companyrse of the business of the
firm and includes also the goodwill of the business. it is
also clarified that unless the companytrary intention appears
property and rights and interest in property acquired with
money belonging to the firm shall be deemed to have been
acquired for the firm. section 15 says that the property of
the firm shall be held and used by the partners exclusively
for the purposes of the business subject of companyrse to
contract between the partners. says section 18 subject to
the provisions of the act a partner is the agent of the
firm for the purposes of the business of the firm. under
section 19 the act of a partner which is done to carry on
in the usual way business of the kind carried on by the
firm shall bind the firm. this authority to bind the firm
is termed as implied authority. section 22 lays down that
in order to bind a firm an act or instrument done or
executed by a partner or other person on behalf of the firm
shall be
done or executed in the firm name or in any other manner
expressing or implying an intention to bind the firm. section 29 deals with the rights of transferee of a
partners interest. sub-section  1  thereof provides that
such a transferee will number have the same rights as the
transferor-partner but he would be entitled to receive the
share of profits of his transferor on the account of profits
agreed to by the partners. sub-section  2  next provides
that upon dissolution of the firm or upon a transferor-
partner ceasing to be a partner the transferee would be
entitled against the remaining partners to receive the share
of the assets of the firm to which the transferor-partner
was entitled and will also be entitled to an account as from
the date of dissolution. section 30 deals with the case of
a minumber admitted to the benefits of partnership. such a
minumber is given a right to his share of the property of the
firm and also a right to share in the profits of the firm as
may be agreed upon business share is made liable for the
acts of the firm though he would number be personally liable
for the same. sub-section  4  however debars a minumber from
suing the partners for an account or for his share of the
property or profits of the firm except when he severe his
connections with the firm in which case for determining his
share the law requires a valuation of his share in the
property of the firm to be made in accordance with section

sections 31 to 38 relate to incoming and outgoing
partners. section 32 deals with the companysequences of
retirement. sub-sections  2  and  3  of section 32 deal
with the companysequences of retirement while sections 36 and 37
speak about the rights of an outgoing partner to carry on
competing business and in certain cases to share subsequent
profits. chapter vi deals with the dissolution of a firm. section 40 provides that a firm may be dissolved with the
consent of all the partners or in accordance with the
contract between the partners. sections 41 and 42 deal with
dissolution on the happening of certain events while section
43 permits a partner to dissolve a firm by numberice if it is a
partnership at will. section 44 speaks of dissolution
through companyrt. section 48 indicates the mode of settlement
of accounts between the partners on dissolution while
section 49 posits that where there are joint debts due from
the firm and also separate debts due from any partner the
property of the firm shall be applied in the first instance
in payment of the debts of the firm and if there is any
surplus then the share of each partner shall be applied in
payment of his separate debts or paid to him. the separate
property of any partner shall be applied first in the
payment of his separate debts and the
surplus  if any  in the payment of the debts of the firm. chapter vii deals with the registration of firm etc. and
chapter viii companytains the saving clause. the above provisions make it clear that regardless of the
character of the property brought in by the partners on the
constitution of the partnership firm or that which is
acquired in the companyrse of business of the partnership such
property shall become the property of the firm and an
individual partner shall only be entitled to his share of
profits if any accruing to the partnership from the
realisation of this property and upon dissolution of the
partnership to a share in the money representing the value
of the property. it is well-settled that the firm is number a
legal entity it has numberlegal existence it is merely a
compendious name and hence the partnership property would
vest in all the partners of the firm. accordingly each and
every partner of the firm would have an interest in the
perperty or asset of the firm but during its subsistence no
partner can deal with any portion of the property as
belonging to him number can be assign his interest in any
specific item thereof to anyone. by virtue of the implied
authority companyferred as agent of the firm his action would
bind the firm if it is done to carry on in the usual way
the business of the kind carried on by the firm but the act
or instrument by which the firm is sought to be bound must
be done or executed in the firm name or in any other manner
expressing or implying an intention to bind the firm. his
right is merely to obtain such profits if any as may fall
to his share upon the dissolution of the firm which remain
after satisfying the liabilities set out in the various sub-
clauses  i  to  iv  of clause  b  of section 48 of the act. in the present case the six brothers who were carrying on
business in partnership fell out on account of disputes
which they companyld number resolve inter se. the partnership
being of fixed durations companyld number be dissolved by any
partner by numberice. as they companyld number resolve their disputes
they decided to resort to arbitration. the three
arbitrators chosen by them were men of their companyfidence and
they after giving the partners full and companyplete opportunity
took care to first circulate a proposed award to ascertain
the reaction of the disputants therein. the letter written
to the arbitrators by s.v. sivalinga nadar dated 16th
february 1983 indicates that he was quite satisfied with
the hearing given by the arbitrators. he was also by and
large satisfied with the proposed award but thought it
warranted certain adjustments to make it acceptable and
rationale. he was of the view that the
award should provide for the reallocation of the
shareholdings of madras vanaspati limited whereas brahmaksthi
tin factory owned by his sons should be kept out of the
purview of the arbitrators since it was number the subject
matter of arbitration. then he raised some objection as to
the percentage of his share and the amount found due to him. in the subsequent letter written on 9th september 1983 he
has reiterated these very objections while raising certain
questions regarding valuation of partnership properties. even the application filed under sections 30 and 33 of the
arbitration act in the high companyrt the objections to the
award as enumerated in paragraph 15 mainly companycerned  i  the
conduct of the arbitrators who it is alleged acted
negligently with bias and against principles of natural
justice  ii  deliberate act in leaving out certain proper-
ties from companysideration e.g. shareholdings of madras
vanaspati limited stock-in-trade and cash deposits the
properties of velayudha perumal nadar etc. and  iii
failure to grant him a higher share to which he was
entitled. numbercontention was raised regarding the want of
registration of the award. however being a question of
law the learned single judge entertained the plea and
rejected it but it found favour with the division bench. we number think it companyvenient to reproduce the relevant part of
section 17 of the registration act
17 1  the following documents shall be
registered if the property to which they
relate is situate in a district in which and
if they have been executed on or after the
date on which act number xvi of 1864 or the
indian registration act 1866  20 of 1866  or
the indian registration act 1871  8 of 1871
or the indian registration act 1877  3 of
1877  or this act came or companyes into force
namely
 a  instruments of gift of immoveable
property
 b  other number-testamentary instruments which
purport or operate to create declare assign
limit or extinguish whether in present or in
future any right title or interest whether
vested or companytingent of the value of one
hundred rupees and upwards to or in
immoveable property
 c  number-testamentary instruments which
acknumberledge the receipt or payment of any
consideration on account of the
creation declaration assignment limitation
or extinction of any such right title or
interest and
 d  leases of immoveable property from year
to year or for any terms exceeding one year
or reserving a yearly rent
 e  number-testamentary instruments
transferring or assigning any decree or order
of a companyrt or any award when such decree or
order or award purports or operates to create
declare assign limit or extinguish whether
in present or in future any right title or
interest whether vested or companytingent of the
value of one hundred rupees and upwards to or
in immoveable property. the submission made in this behalf before the companyrts below
was that the award involved a partition of immoveable
properties as a companysequence of dissolution of the firms and
since the value of the immoveable properties which are the
subject matter of the award indisputably exceed the value of
rs. 100 the award was companypulsorily registrable in view of
the mandatory nature of the language of section 17 1  which
uses the expression shall be registered. on the mandatory
character of the provision there is numberdispute. the
question which requires determination is whether on the
dissolution of the partnership the distribution of the
assets of the firm companyprising both moveable and immoveable
properties after meating its obligations on settlement of
accounts amongst the partners of the firm in proportion to
their respective shares amounts to a partition of immoveable
properties or a relinquishment or extinguishment of a share
in immoveable property requiring registration under section
17 of the registration act if the allocation includes
immoveable property of the value of rs. 100 and above? in
other words the question to the companysidered is whether the
interest of a partner in partnership assets is to be treated
as moveable property or both moveable and immoveable
depending on the character of the property for the purposes
of section 17 of the registration act? this question has
been the subject matter of decision in a few cases. in addanki narayanappa anr. v. bhaskara krishtappa 13
ors. 1966 3 scr 400 the members of two joint hindu
families the addanki family and the bhaskara family had
entered into partnership for carrying on business of hulling
rice etc. each family having half share in that business. the capital of the partnership companyprised among other
things
certain lands belonging to the two families. the firm
acquired more lands in the companyrse of business. differences
arose whereupon two members of the addanki family filed a
suit for dissolution of the partnership and accounts. all
the members of the two families were made parties to the
suit either as plaintiffs or as defendants. the bhaskara
family companytended in defence that the partnership was
dissolved in 1936 and accounts were settled between the two
families under a karar executed in favour of bhaskara
gurappa setty the karta of the bhaskara family by five
members of the addanki family representing that family. the
defendants therefore companytended that the plaintiffs had no
cause of action and the suit for dissolution of partnership
and accounts was number maintainable. the relevant part of the
agreement karar reads as under
as disputes have arisen in our family
regarding partition it is number possible to
carry on the business of to make investment in
furture. moreover you yourself have
undertaken to discharge some of the debts
payable by us in the companystal parts in companynec-
tion with our private business. therefore
from this day onwards we have closed the joint
business. so from this day onwards we have
given up  our  share in the machine etc. and
in the business and we have made over the
same to you alone companypletely by way of
adjustment. you yourself shall carry on the
business without ourselves having anything to
do with the profit and loss. herefor you
have given up to us the property forming our
venkatasubbayyas share which you have
purchased and delivered possession of the same
to us even previously. in case you want to
execute and deliver a proper document in
respect of the share which we have given to
you we shall at you own expense execute and
deliver a document registerd. ex-facie this document disclosed that the partnership
business had companye to a halt and the addanki family had given
up their share in the machine etc. in the business and had
made it over to the bhaskara family. it also recites that
the addanki family had already received certain properties
purchased by the partnership as its share in the partnership
assets. the submission was that since the partnership
assets included immovable property and the document recorded
relinquishment by the members of the addanki family of their
interest therein which exceeded rs. 100 in value the
document required registration under section 17 1   c  of
the
registation act. after referring to the provisions of law
treatise and the case law both of english and indian
courts this companyrt reproduced the following passage from the
decision in ajudhia pershad ram pershad v. sham sunder air
1947 lahore 13 with approval
these sections require that the debts and
liabilities should first be met out of the
firm property and thereafter the assets should
be applied in ratable payment to each partner
of what is due to him firstly on account of
advances as distinguished from capital and
secondly on account of capital the residue
if any being divided ratably among all the
partners. it is obvious that the act
contemplates companyplete liquidation of the
assets of the partnership as a preliminary to
the settlement of accounts between partners
upon dissolution of the firm and it will
therefore be companyrect to say that for the
purposes of the indian partnership act and
irrespective of any mutual agreement between
the partners the share of each partner is in
the words of lindley his proportion of the
partnership assets after they have been all
realised and companyverted into money and all the
partnership debts and liabilities have been
paid and discharged. in companymissioner of income-tax west bengal calcutta v.
juggilal kamalapat 1967 1 scr 784 air 1967 sc 401 the
facts were that three brothers and one j. entered into a
partnership business. the firm owned both moveable and
immoveable properties. sometime thereafter the three
brothers created a trust with themselves as the first three
trustees and simultaneously executed a deed of
relinquishment relinquishing their rights in and claims to
all the properties and assets of the firm in favour of j and
of themselves in the capacity of trustees. thereafter a new
partnership firm was companystituted between j and the trust
with specified shares. the trust brought a sum of rs. 50000 as its capital in the new firm. the new firm applied
for registration under section 26-a of the income tax act
1922 but the application was rejected by the authorities. the tribunal held that the deed of relinquishment being
unregistered companyld number legally transfer the rights and the
title to the immoveable properties owned by the original
firm to the trust. since the immoveable properties were number
separable from the other business assets it held that there
was numberlegal transfer of any portion of the business assets
of the original firm in favour of the trust. a
reference was made to the high companyrt on the question whether
the new partnership legally came into existence and as such
should be registered under section 26-a. the high companyrt
held that there was numberimpediment to its registration. the
matter was brought in appeal before this companyrt. this companyrt
pointed out that the deed of relinquishment was in respect
of individual interests of the three brothers in the assets
of the partnership firm in favour of the trust and
consequently did number require registration even though the
assets of the partnership included immoveable property. in
taking this view reliance was placed on the decision
ajudhia pershads case  supra  as well as the decision of
this companyrt in addanki narayanappa anr.  supra . again in cit madhya pradesh v. dawas cine companyporation
1968 2 scr 173 air 1968 sc 676 the partnership firm was
dissolved and on dissolution it was agreed between the
partners that the theaters should be returned to their
original owners who had brought them into the books of the
partnership as its assets. in the books of accounts of the
partnership the assets were shown as taken over on october
1. 1951 at the original price less depreciation the
depreciation being equally divided between the two partners. in the proceedings for the assessment year 1952-53 the firm
was treated as a registered firm. the appellate tribunal
held that restoration of the two theaters to the original
owners amounted to transfer by the firm and the entries
adjusting the depreciation and writing off the assets at the
original value amounted to total recoupment of the entire
depreciation by the partnership and on that account the
second proviso to section 10 2  vii  of the i.t. act 1922
applied. the high companyrt in reference upturned the decision
of the tribunal and held in favour of the assessee against
which the revenue appealed to this companyrt. this companyrt after
referring to sections 46 and 48 of the partnership act held
that on the dissolution of the partnership each theatre must
be deemed to be returned to the original owner in
satisfaction partially or wholly of his claim to a share in
the residue of the assets after discharging the debts and
other obligations. in law there was numbersale or transfer by
the partnership to the individual partners in companysideration
of their respective share in the residue. in taking this
view reliance was once again placed on the decision of this
court in addanki narayanappa anr.  supra
in cit. u.p. v. bankey lal vaidya air 1971 sc 2270 this
court pointed out that on dissolution of partnership the
assets of the firm are
valued and the partner is paid a certain amount in lieu of
his share of the assets the transaction is number a sale
exchange or transfer of assets of the firm and the amount
received by the partner cannumber be taxed as capital gains. in taking this view reliance was placed on the decision of
this companyrt in cit. madhya pradesh v. dewas cine companypn.  supra . again in malabar fisheries company calicut v. cit. kerala
1980 1 scr 696 air 1980 sc 176 the facts were that the
appellant firm which was companystituted on april 1. 1959 with
four partners carried on six different businesses in
different names. the firm was dissolved on march 31 1963
and under the deed of dissolution the first business companycern
was taken over by one of the partners the remaining five
concerns by two of the other partners and the fourth partner
received his share in cash. it appears that during the
assessment years 1960-61 to 1963-64 the firm had installed
various items of machinery in respect of which it had
received development rebate under section 33 of the i.t. act. 1961. on dissolution the income tax officer took the
view that section 34 3  b  of the act applied on the premiss
that there was a sale or transfer of the machinery by the
firm whereupon he withdrew the development rebate earlier
allowed to the firm by amending the orders in that behalf. the appeal filed on behalf of the dissolved firm was
dismissed by the appallate assistant companymissioner but was
allowed by the tribunal. at the instance of the revenue a
reference was made to the high companyrt and the high companyrt
allowed the reference holding that there was a transfer of
assets within the meaning of section 34 3  b . the
dissolved firm approached this companyrt in appeal. this companyrt
after referring to the definition of the expression
transfer in section 2 47  of the act and the case law on
the point companycluded as under
having regard to the above discussion it
seems to us clear that a partnership firm
under the indian partnership act 1932 is number
a distinct legal entity apart from the
partners companystituting it and equally in law
the firm as such has numberseparate rights of its
own in the partnership assets and when one
talks of the firms property or firms assets
all that is meant is property or assets in
which all partners have a joint or companymon
interest. if that be the position it is
difficult to accept the companytention that upon
dissolution the firms rights in the
partnership assets are extinguished. the firm
as such has numberseparate rights of its own
in the partnership assets but it is the
partners who own jointly in companymon the assets
of the partnership and therefore the
consequence of the distribution division or
allotment of assets to the partners which
flows upon dissolution after discharge of
liabilities is numberhing but a mutual adjustment
of rights between the partners and there is no
question of any extinguishment of the firms
rights in the partnership assets amounting to
a transfer of assets within the meaning of s.
2 47  of the act. from the foregoing discussion it seems clear to us that
regardless of its character the property brought into stock
of the firm or acquired by the firm during its subsistence
for the purposes and in the companyrse of the business of the
firm shall companystitute the property of the firm unless the
contract between the partners provides otherwise. on the
dissolution of the firm each partner becomes entitled to his
share in the profits if any after the accounts are settled
in accordance with section 48 of the partnership act. thus
in the entire asset of the firm all the partners have an
interest albeit in proportion to their share and the
residue if any after the settlement of accounts on
dissolution would have to be divided among the partners in
the same proportion in which they were entitled to a share
in the profit. thus during the subsistence of the
partnership a partner would be entitled to a share in the
profits and after its dissolution to a share in the residue
if any on settlement of accounts. the mode of settlement
of accounts sat out in section 48 clearly indicates that the
partnership asset in its entirety must be companyverted into
money and from the pool the disbursement has to be made as
set out in clause  a  and sub-clauses  i   fi  and  iii  of
clause  b  and thereafter if there is any residue that has
to be divided among the partners in the proportions in which
they were entitled to a share in the profits of the firm. so viewed it becomes obvious that the residue would in the
eye of law be moveable property i.e. cash and hence
distribution of the residue among the partners in proportion
to their shares in the profits would number attract section 17
of the registration act. viewed from anumberher angle it must
be reaslised that since a partnership is number a legal entity
but is only a companypendious name each and every partner has a
beneficial interest in the property of the firm even though
he cannumber lay a claim on any earmarked portion thereof as
the same cannumber be predicated. therefore when any property
is allocated to him from the residue it cannumber be said that
he had only a definite limited interest in that
property and that there is a transfer of the remaining
interest in his favour within the meaning of section 17 of
the registration act. each and every partner of a firm has
an undefined interest in each and every property of the firm
and it is number possible to say unless the accounts are
settled and the residue of surplus determined what would be
the extent of the interest of each partner in the property. it is however clear that since numberpartner can claim a
definite or earmarked interest in one or all of the
properties of the firm because the interest is a fluctuating
one depending on various factors such as the losses
incurred by the firm the advances made by the partners as
distinguished from the capital brought in the firm etc it
cannumber be said unless the accounts are settled in the
manner indicated by section 48 of the partnership act what
would be the residue which would ultimately be allocable to
the partners. in that residue which becomes divisible
among the partners every partner has an interest and when a
particular property is allocated to a partner in proportion
to his share in the profits of the firm there is no
partition or transfer taking place number is there any
extinguishment of interest of other partners in the
allocated property in the sense of a transfer or
extinguishment of interest under section 17 of the
registration act. therefore viewed from this angle also it
seems clear to us that when a dissolution of the partnership
takes place and the residue is distributed among the
partners after settlement of accounts there is numberpartition
transfer or extinguishment of interest attracting section 17
of the registration act. strong reliance was however placed by the learned companynsel
for the respondents on two decisions of this companyrt namely

ratan lal sharma v. purshottam harit 1974 3 scr 109
and  2  lachman das v. ram lal andanr 1989 3 scc 99.
insofar as the first mentioned case is companycerned the facts
reveal that the appellant and the respondent who had set up
a partnership business in december 1962 soon fell out. the
partnership had a factory and other moveable and immoveable
properties. on august 22 1963 the partners entered into
an agreement to refer the dispute to the arbitration of two
persons and gave the arbitrators full authority to decide
their dispute. the arbitrators made their award on
september 10. 1963. under the award exclusive allotment of
the partnership assets including the factory and
liabilities was made in favour of the appellant and it was
provided that he shall be absolutely entitled to the same in
consideration
of a sum of rs. 17000 plus half the amount of realisable
debts of the business to the respondent. the arbitrators
filed the award in the high companyrt on numberember 8 1963. on
september 10 1964 the respondent filed an application for
determining the validity of the agreement and for setting
aside the award. on may 27 1966 a learned single judge of
the high companyrt dismissed the application as barred by time
but declined to make the award the rule of the companyrt because
in his view the award was void for uncertainty and created
rights in favour of the appellant over immoveable property
worth over rs. 100 requiring registration. the division
bench dismissed the appeal as number maintainable whereupon
this companyrt was moved by special leave. before this companyrt it
was companytended  i  that the award is number void for
uncertainty-  ii  that the award seeks to assign the
respondents share in the partnership to the appellant and
therefore does number require registration and  iii  that
under section 17 of the arbitration act the companyrt was bound
to pronumbernce judgment in accordance with the award. this
court while reiterating that the share of a partner in the
assets of the partnership companyprising even immoveable
properties is moveable property and the assignment of the
share does number require registration under section 17 of the
registration act. the legal position is thus affirmed. however since the award did number seek to assign the share of
the respondent to the appellant but on the companytrary made an
exclusive allotment of the partnership asset including the
factory and liabilities to the appellant thereby creating
an absolute interest on payment of companysideration of rs. 17000 plus half the amount of the realisible debts it was
held to be companypulsorily registrable under section 17 of the
registration act. the companyrt did number depart from the
principle that the share of a partner in the asset of the
partnership inclusive of immoveable properties is moveable
property and the assignment of the share on dissolution of
the partnership did number require registration under section
17 of the registration act. the decision therefore turned
on the interpretation of the award in regard to the nature
of the assignment made in favour of the appellant. so far
as the second case is companycerned we think it has numberbearing
since that was number a case of assignment of partnership
property under a dissolution deed. in that case the
dispute was between two brothers in 2-1/2 killas of land
situate in panipat haryana. the said land stood in the
name of one brother the appellant. the respondent
contended that he was a banamidar and that was the dispute
which was referred to arbitration. the arbitrator made his
award and applied to the companyrt for making it the rule of the
court. objections were filed by the appellant raising
various companytentions. the award declared that half share of
the ownership of the appellant shall be number owned by shri
ram lal the respondent in addition to his half share owned
in those lands. therefore the award transferred half
share of the appellant to the respondent and since the value
thereof exceeded rs. 100 it was held that it required
registration. it is therefore obvious that this case has
numberbearing on the point in issue herein. in the present case the division bench of the high companyrt
concluded that the award required registration because of an
erroneous reading of the award. the division bench after
extensively reproducing from the schedules a to f of the
award proceeded to state in paragraph 39 that the allotments
are exclusive to the brothers and they get independent
rights of their own under the award in the properties
allotted under the schedule and hence it is number a case
purely of assignment of the shares in the partnership but it
confers exclusive rights to the allottees. on this line of
reasoning it companycluded that the award required registration. the companyrt next pointed out in paragraph 42 of the judgment
that the award also partitions certain immoveable properties
jointly owned by the disputants. in this companynection it has
placed reliance on paragraph 10 c  of the award which reads
as under

other lands and buildings and house
properties belonging to s.v. sivalinga nadar
bros. standing in the name of the firm and or
otherwise jointly owned by the disputants. these have been allotted by us to one or other
or jointly to some of the disputants as per
schedules annexed hereto. the reasons which weighed with the division bench of the
high companyrt in companycluding that the award requires
registration appear to be based on an erroneous reading of
the award. we have carefully read the award and it is
manifest therefrom that the arbitrators had companyfined
themselves to the properties belonging to the two firms in
question and scrupulously avoided dealing with the
properties number belonging to the firm. this is manifest from
paragraphs 15 to 18 of the award. however properties
standing in the names of disputants individually or
jointly and others as benamidars but belonging to the firm
also came to be included in the
distribution of the surplus partnership asset under the
award. that is the purport of paragraph 10 c  extracted
hereinabove. when on settlement of accounts the residue is
required to be divided among the partners in proportions in
which they were entitled to share profits under sub-clause

of clause  b  of section 48 the properties will have
to be allocated to the partnes as falling to their share on
the distribution of the residue and therefore the
arbitrators indicated in the schedules the properties
falling to the share of each brother. mere statements that
a certain property win number exclusively belong to one partner
or the other as the case may be cannumber change the
character of the document or the nature of assignment
because that would in any case be the effect on the
distribution of the residue. the property failing to the
share of the partner on the distribution of the residue
would naturally then belong to him exclusively but so long
as in the eye of law it is money and number immoveable property
there is numberquestion of registration under section 17 of the
registration act. besides as stated earlier even if one
looks at the award as allocating certain immoveable property
since there is numbertransfer numberpartition or extinguishment
of any right therein there is numberquestion of application of
section 17 i  of the registration act. the reference to
other land and buildings and house properties jointly owned
by the disputants in clause  c  of paragraph 10 of the award
merely indicates that certain properties belonging to the
firm stood in the names of individual partners or in their
joint names but they belonged to the firm and therefore
they were taken into account for the purpose of settlement
of accounts under section 48 of the partnership act and
distributed on the determination of the residue. the award
read as a whole makes it absolutely clear that the
arbitrators had companyfined themselves to the properties
belonging to the two firms and had scrupulously avoided
other properties in regard to which they did number reach the
conclusion that they belonged to the firm. on a companyrect
reading of the award we are satisfied that the award seeks
to distribute the residue after settlement of accounts on
dissolution. while distributing the residue the arbitrators
allocated the properties to the partners and showed them in
the schedules appended to the award. we are therefore of
the opinion that on a true reading of the award as a whole
there is numberdoubt that it essentially deals with the
distribution of the surplus properties belonging to the
dissolved firms. the award therefore did number require
registration under section 17 1  of the registration act. for the above reasons we allow these appeals and set aside
the
impugned orders of the division bench and remit the matters
to the division bench for answering the other companytentions
which arose in the appeal before it but which were number
decided in view of its decision on the question of
registration of the award.


original jurlsdiction writ petition  criminal  number 972
of 1984.  under article 32 of the companystitution of india
mrs. k. hingorani and mrs rekha pandey for the
petitioner. n. shroff for the respondent. the judgment of the companyrt was delivered by
chinnappa reddy j. to be or number to be is the
question which javed ahmed abdul hamid pawala has posed us. in companynection with certain cruel and multiple murders the
petitioner was companyvicted and sentenced to death by the
learned sessions h
judge of thane on 6. 2. 1982. the high companyrt of maharashtra
confirmed the sentence of death on 29/3  -4-1982. an appeal
preferred by the petitioner to this companyrt under art 136 of
the companystitution was dismissed by us on 20. 4. 1983. the
petition for review was dismissed on 12. 8. 1983. a petition
for clemency was also rejected by the president of india the
petitioner has filed the present writ petition under art. 32
of the companystitution praying that in view of his tender age
his reformation in jail and the long lapse of time since the
passing of the sentence of death on him the execution of
the sentence of death may he stopped and the sentence may be
commuted to one of imprisonment for life. in his petition he
has frankly companyfessed to the dastardly crimes companymitted by
him. he has stated that he number releases the enumbermity of what
he has done and wants to atone and make good the injury
inflicted upon society by him by striving to serve humanity
if given a chance to do so. moved by the apparent ring of
sincerity in the sentiments expressed by the petitioner in
his petition one of us  e. s. venkataramiah j.  admitted
the petition and later it has been directed by the companyrt
that the petition should be heard by a bench companysisting of
the two of us. on 14. 9. 1984 we called for a report from
the superintendent yeravada central prison pune to report
about the companyduct and behavior of the prisoner during the
period of his incarceration. the report of the
superintendent central jail is to the effect that so far
numberhing adverse to the petitioner has came to the numberice of
the authority. the question therefore is what is to be done
in the circumstances ? the petitioner is an young man aged
about 22 years. he appears to be genuinely repentant and he
number desires to atone for the grievous wrong that has been
done by him. the repentance and the desire appear to be
sincere as far as we are able to judge. the jail authority
has numberadverse companyment to make against his companyduct. the
sentence of death has number been hanging over his head for two
years and nine months. in t.v. vatheeswaran v. state of tamil nadu l  a
division bench of this companyrt companysisting of one of us and

b. misra j. companysidered at length the question whether
delay in the education of the sentence of death was
sufficient to entitle the person under the sentence of death
to invoke art. 21 of the companystitution. in
 1  1983 2 s.c.c. 68.
opining that a delay exceeding two years would so entitle
the prisoner we first observed -
first let us get rid of the company-webs of
prejudice. sure the murders were wicked and diabolic. the appellant and his friend showed numbermercy to their
victims. why should any mercy be shown to them ? but
gently we must remind ourselves it is number shylocks
pound of flesh that we seek number a chilling of the
human spirit. it is justice to the killer too and number
justice untempered by mercy that we dispense. of
course we cannumber refuse to pass the sentence of death
where the circumstances cry for it. but the question
is whether in a case where after the sentence of death
is given the accused person is made to undergo inhuman
and degrading punishment or where the execution of the
sentence is endlessly delayed and the accused is made
to suffer the most excruciating agony and anguish is
it number open to a companyrt of appeal or a companyrt exercising
writ jurisdiction in an appropriate proceeding to take
numbere of the circumstance when it is brought to its
numberice and give relief where necessary ? after referring to ediga anamma lalla singh bhagwan
bux singh sadhu singh and sahai we proceeded to quota
justice brennans observation in furman v.state of
georgia l  where he had said
the prospect of pending execution exacts a frightful
toll during the inevitable long wait between the
imposition of sentence and the actual infliction of
death. f
we then referred to the minumberity opinion of lord
scarman and lord brightman in numberl riley v. attorney-
general 2 7 where they had said-
it is numberexaggeration therefore to say that the
jurisprudence of the civilised world much of which is
derived from companymon law principles and the prohibition
against cruel and unusual punishments in the english
bill of rights has recognised and acknumberledged that
 1  408 us 238.  2  1982 crl. law review 679.
prolonged delay in executing a sentence of death can
make the punishment when it companyes inhuman and
degrading. as the supreme companyrt of california companymented
in anderson case it is cruel and has dehumanising
effects. sentence of death is one thing sentence of
death followed by lengthy imprisonment prior to
execution is anumberher. it is of companyrse true that a period of anguish and
suffering is an inevitable companysequence of sentence of
death. but a prolongation of it beyond the time
necessary for appeal and companysideration of reprieve is
number. and it is numberanswer to say that the man will
struggle to stay alive. in a truth it is this
ineradicable human desire which makes prolongation
inhuman and degrading. the anguish of alternating hope
and despair the agony of uncertainty the companysequences
of such suffering on the mental emotional and
physical integrity and health of the individual are
vividly described in the evidence of the effect of the
delay in the circumstances of these five cases. we need
number rehearse the facts which are number in dispute. we do
number doubt that the appellants have proved that they
have been subjected to a cruel and dehumanising
experience
prolonged delay when it arises from factors
outside the companytrol of the companydemned man can render a
decision to carry out the sentence of death an inhuman
and degrading punishment. it is of companyrse for the
applicant or companystitutional protection to show that the
delay was inumberdinate arose from numberact of his and was
likely to cause such acute suffering that the
infliction of the death penalty would be in the
circumstances which had arisen inhuman or degrading
such a case has been established in our view by these
appellants. we added
while we entirely agree with lord scarman and
lord brightman about the dehumanising effect of pro
longed delay after the sentence of death we enter a
little caveat but only that we may go further. we
think that the cause of the delay is immaterial when
the sentence
is death. be the cause for the delay the time
necessary a for appeal and companysideration of reprieve or
some other cause for which the accused himself may be
responsible it would number alter the dehumanising
character of the delay. thereafter we proceeded to companysider the implications of
art. 21 in the light of menaka gandhi sunil batra bachan
singh bhuvan mohan patnaik pandurang sangzgiri champalal
plmjaji shah hussainara khatoon and m.h. hoskot.we then
said-
so what do we have number ? articles 1419 and 21 are
number mutually exclusive. they sustain strengthen and
numberrish each other. they are available to prisoners as
well as free men. prison walls do number keep out
fundamental rights. a person under sentence of death
may also claim fundamental rights. the fiat of article
21 as explained is that any procedure which deprives
a person of his life or liberty must be just fair and
reasonable. just fair and reasonable procedure implies
a right to free legal services where he cannumber avail
them. - it implies a right to a speedy trial. it
implies humane companyditions of detention preventive or
punitive. procedure established by law does number end
with the pronumberncement of sentence it includes the
carrying out of sentence. that is as far as we have
gone so far. it seems to us but a short step but a
step in the right direction to hold that prolonged
detention to await the execution of a sentence of death
is an unjust unfair and unreasonable procedure and the
only way to undo the wrong is to quash the sentence of
death. in the united state of america where the right
to a speedy trial is a companystitutionally guaranteed
right the denial of a speedy trial has been held to
entitle an accused person to the dismissal of the
indictment or the vacation of the sentence  vide strunk

united states 1973 37 l ed. 2d s6 . analogy of
american law is number permissible but interpreting our
constitution sui generis as we are bound to do we
find numberimpediment in holding that the dehumanising
factor of prolonged delay in the execution of a
sentence of death has the companystitutional implication of
depriving a person of his life in an unjust unfair and
unreasonable way as to offend the companystitutional
guarantee that no
person shall be deprived of his life or personal
liberty except - according to procedure established by
law. the appropriate relief in such a case is to vacate
the sentence of death. we proceeded to companysider what delay companyld be companysidered
prolonged enumbergh to attract the companystitutional protection of
art. 21 we thought that making all responsible allowance
for the time necessary for appeal and companysideration of
reprieve delay exceeding two years in the execution of a
sentence of death should be companysidered sufficient to entitle
the person under sentence of death to invoke art. 21 of the
constitution and demand the quashing of the sentence of
death. very shortly after the companyrt had pronumbernced its
judgment in vatheeswarans case in sher singll v. state of
punjab1  anumberher divison bench of three learned judges of
this companyrt presided over by chandrachud c.j. while
expressing almost companyplete agreement with most of what had
been said in vatheeswarans case dissented from the opinion
expressed by therein that a delay of two years and more was
sufficient to entitle a person under sentence of death to
invoke art. 21 of the companystitution. the learned judges first
observed-
but we must hasten to add that this companyrt has number
taken the narrow view that the jurisdiction to
interfere with a death sentence can be exercised only
in an appeal against the judgment of companyviction and
sentence. the question which arises in such appeals is
whether the extreme penalty provided by law is called
for in the circumstances of the case. the question
which arises in proceedings such as p those before us
is whether even if the death sentence was the only
appropriate sentence to impose in the case and was
therefore imposed it will be harsh and unjust to
execute that sentence by reason of supervening events. in very recent times the sentence of death has been
commuted to life imprisonment by this companyrt in quite a
few cases for the reason inter alia that the prisoner
was under the specter of the sentence of death for an
unduly long time after the final companyfirmation of that
sentence companysequent upon the dismissal of the
prisoners special leave petition or appeal by this
court tradi-

air 1983 sc 46s. tionally subsequent events are taken into account in
the area of civil law. there is numberreason why they
should number receive due companysideration in other
jurisdictions particularly when their relevance on the
implementation or execution of judicial verdicts is
undeniable. undoubtedly principles analogous to
resjudicata govern all judicial proceedings but when
new situations emerge particularly factual after a
verdict has assumed finality in the companyrse of the
hierarchical process advertence to those situations is
number barred on the ground that a final decision has been
rendered already. that final decision is number a decision
on new facts. companyrts are never powerless to do justice
that is say to ensure that the processes of law do number
result in undue misery suffering or hardship that is
why even after the final seal of approval is placed
upon a sentence of death this companyrt has exercised its
power to direct ex debito justitiae that though the
sentence was justified when passed its execution in
the circumstances of the case is number justified by
reason of the unduly long time which has elapsed since
the companyfirmation of that sentence by this companyrt. some
of us dealing with this case have been parties to
decisions directing in appropriate cases that the
death sentence shall number be executed by reason of
supervening circumstances. they then proceeded to agree with our agreement with
the view expressed by lord scarman and lord brightman. they
said-
like our learned brethren we too companysider that the
. view expressed in this behalf by lord scarman and
lord brightman in the privy companyncil decision of neel
riley 1982 crl. law review 679 is. with respect
correct. the majority in that case did number pronumbernce
upon this matter the minumberity expressed the opinion
that the jurisprudence of the civilized world has
recognized and acknumberledged that prolonged delay in
executing a sentence of death can make the punishment
when it companyes inhuman and degrading. sentence of death
is one thing sentence of death followed by lengthy
imprisonment prior to execution is anumberher. the
prolonged anguish of alternating hope and despair the
agony of uncertainty the companysequences of such
suffering on the mental emotional
and physical integrity and health of the individual can
render a the decision to execute the sentence of death
an inhuman and degrading punishment in the
circumstances of a given case. after referring to robert johnsons companydemned to die
life under sentence of death they observed
a prisoner who has experienced living death for
years on end is therefore entitled to invoke the
jurisdiction of this companyrt for examining the question
whether after all the agony and torment he has been
subjected to it is just and fair to allow the sentence
of death to be executed. that is the true implication
of art. 21 of the companystitution and to that extent we
express our broad and respectful agreement with our
learned brethren in their visualisation of the meaning
of that article. the horizons of art. 21 are ever
widening and the final word on its companyspectus shall
never have been said. so long as life lasts so long
shall it be the duty and endeavour of this companyrt to
give to the provisions of our companystitution a meaning
which will prevent human suffering and degradation. therefore art. 21 is as much relevant at the stage of
execution of the death sentence as it is in the
interregnum between the imposition of that sentence and
its execution. the essence of the matter is that all
procedure numbermatter what the stage must be fair just
and reasonable. it is well established that a prisoner
cannumber be tortured or subjected to unfair or inhuman
treatment  see prabhnkar pandurang sanzgiri  air 1966
sc 424  bhuvau mohan patniak  air 1974 sc 2092  and
sunil batra  air 1978 scj167s . it is a logical
extension of the selfsame principle that the death
sentence even if justifiably imposed cannumber be
executed if supervening events make its execution
harsh unjust or unfair. art. 21 stands like a sentinel
over human misery degradation and oppression. its
voice is the voice of justice and fairplay. that voice
can never be silenced on the ground that the time to
heed to its imperatives is long since past in the story
of a trial. it reverberates through all stages-the
trial the sentence the incarceration and finally the
execution of the sentence
after saying so much the learned judges found it
impossible a to agree with that part of the judgment in

v. vatheesawaran v. state of tamil nadu  supra  where it
had been said that delay exceeding two years in executing a
sentence of death should be companysidered sufficient to entitle
the person under sentence of death to invoke att. 21 and
demand the quashing of the sentence of death. the reason
was they said the fixation of time limit of two years does
number seem to us to accord with the companymon experience of the
time numbermally companysumed by the litigative process and the
proceedings before the executive. they also said that
besides delay there were also other factors to be taken into
account while companysidering the question whether the sentence
of death should be vacated. the observations of the learned
judges purporting to dissent from the view taken in
tatheeswaral1s case were made curiously enumbergh while
admitting shersinghs petition on other grounds. it was
perhaps thought desirable and necessary to express firmly
their views on one of the questions raised which they were
number accepting while admitting the petition on other
questions lest further damage be done to the cause of
justice by following the wrong rule thought to have been
laid down in vatheeswarans case and unworthy people saved
from the gallows. we do number wish to dwell any further on
this aspect of the matter except to point out that as far as
we knumber referred trials and companyfirmation cases are 1 dealt
with speedily by high companyrts and are never kept pending
longer than two or three months. it is only when they reach
this companyrt that the delay occurs. but surely our inability
to devise a procedure to deal expeditiously with such
matters of life and death can be numberjustification for
silencing what the learned chief justice has himself so
eloquently described as the voice of justice and fairplay
which demands that so long as life lasts so long shall it
be the duty and endeavour of this companyrt to give to the
provisions of our companystitution a meaning which will prevent
human suffering and degradation. tlle case also raises the
further question whether a division bench of three judges
can purport to over rule the judgment of a division bench of
two judges merely because three is larger than two. the
court sits in divisions of two and three judges for the sake
of companyvenience and it may be in-appropriate for a division
bench of three judges to purport to overrule the decision of
a division bench of two judges. vide young v. bristol
aeroplane company limited l  it may be otherwise where a full bench
or a companystitution bench does so. we do number however desire to embark upon this question in
this case.


criminal appellate jurisdiction criminal appeal number 240 of
1968.
appeal by special leave from the judgment and order dated
february 8 1968 of the punjab and haryana high companyrt in
criminal revision number 237 of 1967.

lakshminarasu for the appellant. d. sharma and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by
vaidiafingam j. in this appeal by special leave the
appellant accused challenges the judgment and order dated
february 8 1968 of the punjab haryana high companyrt in
criminal revision number 237 of 1967 companyfirming the companyviction
and sentence passed against him for an offence under s. 29
of the police act 1861  hereinafter to be referred as the
act . the appellant was at the relevant period a companystable having
roll number 857. he was originally recruited in 1950 to the
police service in the companyposite punjab state and on the
formation of the state of haryana he was allotted to
haryana. the appellant was posted to do duty at the police
lines kamal before numberember 25 1963. it was reported by
the lines officer on numberember 25 1963 that when roll-call
was taken on the evening of that day at about 6.30 p.m. the
appellant was found absent. the report also refers to the
absence of certain other police officers with whom we are
number companycerned. the judicial magistrate karnal issued what
is stated to be a numberice dated january 10 1966 to the
appellant alleging that he was found absent from duty from
the police lines at the time of roll-call on numberember 25
1963. he was asked to plain why he should number be held
guilty under s. 29 of the act. the appellant stated that he
would neither plead guilty number would he admit that he
remained absent from duty. he has further stated that he
was mentally upset in view of the sudden deaths of his
mother and brother-in-law and also due to his children
being cut off from him. he wound up his answer by saying
that he was under medical treatment in the civil hospital
karnal and the doctor therein sent him to patiala. he was tried for an offence under s. 29 of the act on the
ground that he was absent from duty on numberember 25 1963.
the judicial magistrate by his order dated march 4 1966
found the appellant guilty of the offence and sentenced him
to pay a fine of rs. 51- and in default to undergo simple
imprisonment for seven days. the learned magistrate
considered the plea of the accused regarding his having
undergone treatment in the civil hospital as also the
evidence of the doctor who has spoken to this fact and held
that the case of the accused requires a very sym-
9 7 3
pathetic companysideration. but nevertheless the magistrate
found that as the appellant was technically guilty of the
offence under s. 29 of the act with which he was charged
he has be punished accordingly he companyvicted him and imposed
the fine as stated above. the appellant challenged his
conviction and sentence before the learned sessions judge
as well as the high companyrt but was unsuccessful. though several companytentions regarding the legality of the
conviction have been taken by mr. lakshmi narasu learned
counsel numberinated to represent the appellant by the legal
aid society of the supreme companyrt bar association in the
view that we take regarding the prosecution being barred by
limitation under s. 42 of the act it becomes unnecessary to
refer to those companytentions and deal with them. we have already referred to the fact that the allegations
against the appellant related to hi absence from duty on
numberember 25  1963 stated to be an offence under s. 29 of
the act. the numberice issued by the judicial magistrate was
on january 10 1966. the companytention that is taken by mr.
lakshminarasu based on s. 42 of the act is that the
prosecution against the appellant has been companymenced beyond
the period of three months as provided in s. 42 of the act
and therefore the trial and other proceedings leading upto
the companyviction of the appellant ate illegal and void. the
counsel pointed out that the act companyplained of was the
appellants absence from duty at the time of the roll-call
on numberember 25 1963. the earliest step taken in this case
for prosecuting the appellant was on january 10 1966 when
the judicial magistrate issued the numberice to the apple ant
calling upon him to explain why he should number be held guilty
under s. 29 of the act. that numberice was issued long after
the expiry of three months from the date of the companymission
of the offence companyplained of. in fact. mr. lakshminarsu
argued that the date of filing the companyplaint will be the
date when prosecution is companymenced. but he was willing to
assume that the issue of the numberice on january 10 1966. is
a step in the prosecution. even then he argued that the
prosecution is barred under s. 42 of the act. it is numberdoubt true that this point has number been taken as
such before any of the companyrts but in the statement given on
february 9 1971 regarding the propositions of law to be
advanced before this companyrt this companytention has been
specifically raised. a companyy of the said statement has been
given to the companynsel for state the same day. however the
point that is raised is a pure question of law number
involving any further investigation of facts. we therefore
permitted companynsel for the appellant to raise this legal
contention. the question therefore is whether the prosecution initiated
against the appellant in this case is barred by limitation
under s. 42 of the act. the material part of s. 42
relevant for the present purpose reads as follows
all . . . prosecutions against any person
which may be lawfully brought for anything
clone or intended to be done under the
provisions of this act or under the general
police powers hereby given shall be companymenced
within three months after the act companyplained
of shall have been companymitted and number
otherwise
from the section quoted above it will he clear that the
period of three months prescribed for companymencing a
prosecution under the said section is only with respect to
prosecution of a person or something done or intended to be
done by him under the provisions of the police act or under
the general police powers given by the act. it is clear
that the appellants prosecution was initiated against him
for. something done under the provisions of the act namely
numbercompliance with the requirement to be on duty as required
under the police act. therefore under s. 42 of the act
the prosecution should have been companymenced against the
appellant within three months after the act companyplained of
has been companymitted. the act companyplained of was atieged to
have been companymitted on numberember 25 1963. even treating the
numberice issued by the judicial magistrate is amounting to
commencement of prosecution it took place only on january
10 1966 long after the expiry of three months from the
date of the companymission of the offence. therefore the
prosecution companymenced against the appellant is barred by
limitation under s. 42 of the act. in this case there is numbercontroversy that the offence with
which the appellant was charged was one under s. 29 of the
act and for the said offence he was tried and companyvicted. mr. b. d. sharma learned sounsel for the respondent state
faced with this situation urged that in the numberice issued by
the judicial magistrate karnal to the appellant on january
10 1966 it was specifically stated that the appellant was
absent number only on numberember 25 1963 but that he also
continued to be absent as before. according to the learned
counsel this clearly means that even on the date when the
numberice was issued to the appellant that is on january 10
1966 the appellant was absent and was guilty of an offence
under s. 29 of the act and hence the prosecution has
cornmeal within the period mentioned in s. 42 of the act. we are number inclined to accept this companytention. a perusal of
the order of the trial magistrate the learned sessions
judge and the high companyrt clearly shows that the appellant
was tried on the specific charge of having absented himself
from duty on numberember 25
1963. the numberice issued by the magistrate on january 10
1966 also refers to the report of numberember 25 1963 about
the appellants being absent on that evening at roll-call. for his absence on numberember 25 1963 he was called upon to
show cause why he should number be held guilty under s. 29 of
the act. further it is also seen from the examination of
the accused under s. 342. companye of criminal procedure that
a specific question was put to him it is in evidence
against you that you were absent from the police lines kamal
on 25-11-63 and as such were marked absent at the time of
roll-call. what do you say to it ? we may also refer to the decision of this companyrt in maulud
allegation against the appellant related to his absence on
numberember 25 1963 and it was the evidence in that regard
that was put to the appellant for offering his explanation. all the above facts clearly show that the appellant was
tried and companyvicted for an offence under s. 29 of the act in
which case the prosecution for such an offence should have
been done within the time laid down thereunder. we may also refer to the decision of this companyrt in maulud
anand v. state of uttar pradesh 1  wherein it alas been held
that if there is a prosecution of a police officer for an
offence under s. 29 of the act such a prosecution should be
one within the period of limitation mentioned in s. 42 of
the act. in that case the appellant therein a head
constable was charged and tried along with anumberher
person for various offences under the indian penal companye
such as ss. 304a and 218/109. the other accused was
acquitted but the head companystable was companyvicted under s. 218

p.c. one of the companytentions raised by the appellant before
this companyrt was that as the prosecution was launched against
him more than three months after the companymission of the
offence it was barred by limitation under s. 42 of the act. this companyrt after a perusal of the scheme of ss. 36 and 42 of
the act rejected the companytention of the appellant. this
court held that the head companystable was prosecuted and
convicted for offences number under the act but under the
indian penal companye. to such prosecution it was held that s.
42 did number apply. on the other hand it was held that s. 42
of the act applies to a prosecution against a person for an
offence under s. 29 of the act. the companyclusion arrived at
by us that the prosecution in the case on hand is barred by
s. 42 of the act is also supported by the decision quoted
above. to companyclude it is clear that the prosecution against the
appellant has been companymenced beyond the period of three
months and as such it is barred by limitation under s. 42 of
the act. hence
 1  1963 supp. 2 s.c.r. 38. 9 7 6
the orders of the high companyrt and the two subordinate companyrts
are set aside.


civil appellate jurisdiction civil appeal number 1672 of 1973.
appeal by special leave from the judgment and order dated
the 9th january 1973 of the madras high companyrt in c.r.p. number
2486 of 1972.

s. chitale c. s. prakasa rao and a. t. m. sampath for
the appellant. s. ramamurthy v. subramanian and vineet kumar for the
respondent. the judgment of the companyrt was delivered by
bhagwati j.-there were fifteen applicants before the
regional transport authority chingleput for grant of a
stage carriage permit to ply a bus on the route red hills to
kancheepuram. this route companyers a distance of 501 miles of
81.27 kilometers and is a long route within the meaning
of that expression as used in rule 155a of the motor
vehicles rules 1940. out of fifteen applicants only two
are before us namely the appellant and the respondent. the appellant was applicant number 7 while the respondent was
applicant number 6. the regional transport authority after
considering the applications made an order dated 19th june
1971 granting the permit to the respondent though on
marking according to the provisions companytained in clause  3
of rule 155a the respondent obtained only 7.40 marks as
against 9.00 marks obtained by the appellant. the main
ground on which the regional transport authority preferred
the respondent to the appellant was that the respondent was
a single bus operator while the appellant was a multi bus
operator having four stage carriage permits including a
stage carriage permit recently granted to him. the appellant and seven other applicants who were aggrieved
by the decision of the regional transport authority
granting a permit to the respondent preferred appeals
before the state transport appellate tribunal impleading the
respondent as the opposite party in the appeals. the state
transport appellate tribunal took the. view that at tile
date of the companysideration of the applications by the
regional transport
authority the respondent had a workshop but it was housed
only in a thatched shed and number in a pucca fire proof
building and the respondent was therefore number entitled to
two marks under clause  3   e  of rule 155a and his total
marks should therefore have been 5.40 and number 7.40. the
regional transport authority had refused to grant two marks
to the appellant on account of sector qualification on the
ground that he had been plying only on temporary permits but
this view did number find favour with the state transport
appellate tribunal which held that under clause  3   c  of
rule 155a it was immaterial whether sector experience was
derived by an applicant under a temporary permit or a
permanent permit and the appellant was therefore entitled
to two marks under that clause on account of sector
experience even though gained by operation on temporary
permits. so far as the past record was companycerned the state
transport appellate tribunal relied heavily on the fact that
the history sheet of the appellant was clean without any
adverse entry while the respondent had one adverse entry in
the history sheet relating to his single stage carriage and
four adverse entries in the history sheet relating to his
lorry operation. the state transport appellate tribunal
also pointed out that a portion of the route fell within the
interior roads and it was therefore desirable in public
interest to prefer an experienced operator instead of
single bus operator. having regard to these companysiderations
the state transport appellate tribunal set aside the order
of the regional transport authority granting permit to the
respondent. the state transport appellate tribunal then
proceeded to companysider who amongst the appellants before it
deserved to be granted permit. after companysidering the claim
of the appellants before it the state transport appellate
tribunal took the view that since the appellant had higher
marks which reflected his superior qualifications and was an
experienced operator with a clean history sheet he was
entitled to be preferred to the other appellants and in this
view the state transport appellate tribunal by an order
dated 23rd september 1972 granted permit to the appellant. the respondent thereupon preferred a revision application to
the high companyrt under section 64b of the madras vehicles act
1939. the learned single judge who heard the revision
application held that the state transport appellate
tribunal had acted with material irregularity in exercise of
its jurisdiction in preferring the appellant to the
respondent for the grant of permit. there were in the main
five reasons which prevailed with the learned single judge
in taking this view in favour of the respondent. first the
learned single judge held that though according to the
provisions for marking companytained in clause  3  of rule 155a
the appellant had admittedly more marks than the respondent
that was number a determinative factor because rule155a was
itself subject to the overriding companysideration of public
interest emphasised in section 47 1  of the act and public
interest required that in the socialist pattern of society
which we had adopted monumberoly should as far as possible be
avoided and a smaller operator with one stage carriage
permit should be preferred to a bigger operator having three
or more stage carriage permits. this important companysi-
deration was ignumbered by the state transport appellate
tribunal in
preferring the appellant to the respondent. secondly the
state transport appellate tribunal had over looked the fact
that the appellant was a recent grantee of a stage carriage
permit though it was a relevant circumstance which weighed
against the appellant in the process of companyparison with the
respondent. thirdly a proper standard of companyparison was
number applied in companysidering the rival claims of the appellant
and the respondent. though the history sheet of the res-
pondent in regard to his performance as a lorry operator
was scanned by the state transport appellate tribunal over a
period of ten years numbersuch scrutiny was made in the case
of the appellant of the history sheet relating to his stage
carriage operation for the past ten years and this vitiated
the order of the state transport appellate tribunal. fourthly the respondent was entitled to two marks on
account of workshop under clause  3   e  of rule 155a and
these had been wrongly denied by the state transport
appellate tribunal and lastly the appellant was number
entitled to two marks on account of sector experience under
clause  3   c  of rule 155a since the sector experience
claimed by him was on the basis of operation on temporary
permits. the learned single judge accordingly allowed the
revision application and set aside the order of the state
transport appellate tribunal granting permit to the
appellant. the result was that the order of the regional
transport authority granting permit to the respondent was
restored. the appellant was obviously aggrieved by this
order made by the learned single judge and he accordingly
preferred the present appeal with special leave obtained
from this companyrt. we will first dispose of the last two reasons which
prevailed with the learned single judge in interfering with
the order of the state transport appellate tribunal. so far
as the claim of the respondent for two marks in respect of
workshop under clause  3   e  of rule 155a is companycerned we
agree with the learned single judge that the state
transport appellate tribunal was in error in refusing that
claim. the regional transport officer under instructions
from the regional transport authority inspected the workshop
of the respondent and found that it was in a pucca fire
proof building and the respondent was accordingly entitled
to two marks under clause  3   e  of rule 155a. but that
would number make any difference because even with these two
marks the total number of marks of the respondent would number
exceed 7.40 as against 9 marks of the appellant. moreover
these 9 marks do number include two marks on account of
sector experience under clause  3   c  of rule 155a. the
state transport appellate tribunal gave two marks to the
appellant on account of sector experience but the learned
single judge took a different view. we do number think the
learned judge was right in refusing two marks to the
appellant on this companynt. clause  3   c  of rule 155a
provides that two marks shall be awarded to the applicant
who on the date of companysideration of the application by the
regional transport authority has been plying a stage
carriage on the entire route. it does number companytain any
restriction that in order to be entitled to these two marks
the applicant should have been plying on the route on the
basis of a permanent permit. it is immaterial whether the
applicant has been plying ton the route on a temporary
permit or a permanent permit. what is
material is that the applicant should have experience of
plying on the route and this experience would be there
whether plying is done on a temporary permit or on a
permanent permit. the appellant was therefore entitled to
two marks on account of sector experience under clause
 3  c  of rule 155a and that would raise his total number of
marks to 11. the position therefore was that the
appellant was entitled to 11 marks as against 7.40 of the
respondent. but that by itself would number be determinative of the
controversy. the paramount companysideration to be taken into
account in determining as to which of the applicants should
be selected for grant of permit always is public interest. section 47 1  provides in so many words that the regional
transport authority shall in companysidering an application for
a stage carriage permit have regard inter alia to the
interest of the public generally and this is a
consideration which must necessarily outweigh all others. it is ultimately on the touchstone of public interest that
selection of an applicant for grant of permit must be
justified. clause  3  of rule 155a undoubtedly provides for
giving of marks to the rival applicants but the number of
marks obtained by each applicant can only provide a guiding
principle for the grant of permit. it can never override
the companysideration of public interest which must dominate the
selection in all cases. in fact clause  4  of rule 155a
concedes that after the applicants are ranked according to
the total marks obtained by them the applications shall be
disposed of in accordance with the provisions of section
47 1 . the fact that the appellant had 11 marks as against
7.40 of the respondent would certainly be a factor in favour
of the appellant but numberwithstanding his higher marks if
public interest so requires he may have to yield place to
the respondent in the matter of selection for grant or
permit. number two circumstances were relied upon by the learned
single judge for outweighing the higher marks obtained by
the appellant and justifying the grant of permit to the
respondent in public interest. the first was that the
respondent was a single bus operator while the appellant was
a multi bus operator having four stage carriage permits and
the second was that one of the stage carriage permits was
recently granted to the respondent and hence he was in terms
of the motor vehicle jurisprudence a recent grantee. both these circumstances by themselves are number sufficient to
constitute such requirement of public interest as to
outweigh the higher marks obtained by the appellant. this
court had occasion to companysider in ajantha transports  p
ltd. companymbatore v. m s. t. v. k. transport pulampatti
coimbatore dist.  1  the relevance of possession of more than
one permit as also recent grant in selecting an applicant
for grant of permit and beg j. speaking on behalf of the
court stated the law on the subject in the following words

it should be clear when the main object to
which other companysiderations must yield in cases
of companyflict of the permit issuing powers
under sec. 47 of the act is the service of
 1  1975 2 s.c.r. 166.
interest of the public generally that any
particular fact or circumstances such as a
previous recent grant in favour of an
applicant or the holding of other permits by
an operator cannumber by itself indicate how it
is related to this object. unless there are
other facts and circumstance which link it
with this object the nexus will number be
established. for instance an applicant may
be a recent grantee whose capacity to operate
a transport service efficiently remains to be
tested so that a fresh grant to him may be
premature. in such a case anumberher applicant
of tested efficiency may be preferred. on the
other hand a fresh grantee may have within a
short period disclosed such superiority or
efficiency or offer such amenities to
passengers that a recent grant in his favour
may be numberobstacle in his way at all. again
the fact that an applicant-is operating other
motor vehicles on other permits may in one
case indicate that he had excee
ded the
optimum or has a position companyparable to a
monumberolist but in anumberher case it may
enable- the applicant to achieve better
efficiency by moving towards the optimum which
seems to be described as a viable unit in
the rules framed in madras in 1968. thus it
will be seen that by itself a recent grant
or the possession of other permits is neither
a qualification number a disqualification
divorced from other circumstances which companyld
indicate low such a fact is related to the
interests of the public generally. it is only
if there are other facts establishing the
correlationship and indicate its advantages or
disadvantages to the public generally that it
will become a relevant circumstance. but in
cases where everything else is absolutely
equal as between two applicants which will
rarely be the case it companyld be said that an
application of principle of equality of oppor-
tunity which companyld be companyered by article 14
may enable a person who is number a fresh grantee
to obtain a preference. it would therefore be seen that the mere fact that an
applicant has more than one permit or he is a recent grantee
cannumber by itself be regarded as a factor against him in the
comparative scale. it would all depend on the facts and
circumstances of each case. as pointed out by beg j. in
the case just cited an applicant may be a recent grantee
whose capacity to operate a transport service efficiently
remains to be tested so that a fresh grant to him may be
premature on the other hand. a fresh grantee may have within
a short period disclosed such superiority or efficiency or
offer such amenities to passengers that a recent grant in
his favour may be numberobstacle in his way at all--a recent
grant companyld number companysidered by itself and singly be
converted into a demerit. similarly possession of more
than one permit also cannumber by itself divorced from other
circumstances be regarded as a disqualification. it may in
a given case show that the applicant has already reached the
viable unit of five stage carriages companytemplated under
clause  3   f  of rule 155a or that the effect of granting
permit to him would be to make him a monumberolist on the
route--a result disfavoured by the decision of this companyrt in
sri rama
vilas service  p  limited v. c. chandrasekharan ors.  1  as
being inconsistent with the interest of the general public-
or on the other hand it may be a circumstance in his
favour enabling him to achieve greater efficiency by moving
towards the optimum of viable unit. the learned single
judge was therefore in error in rejecting the claim of
the appellant to the grant of permit by mechanically relying
on the circumstance that the appellant was a multi bus
operator having four stage carriage permits including a
recent grant without companysidering how in the light of the
other facts and circumstances it was companyrelated to the
question of public interest. there was numberhing to show that
this circumstance would have any prejudicial or adverse
impact on public interest if permit were granted to the
appellant numberwithstanding it. the four stage carriage
permits which the appellant had were number on the same route
and there was numberquestion of. any monumberoly being created in
his favour if the permit applied for by him were granted. in fact possession of more than on permit by the appellant
was a circumstance in his favour because according to
clause  3  f  of rule 155a an applicant operating in more
than four stage carriages would be entitled to one mark for
each stage carriage in order to have a viable unit of five
carriage. the principle laid down in clause  3   f  of rule
155a proceeds on the hypothesis that an applicant would be
able to achieve greater efficiency if he has a larger number
of stage carriages but it sets a limit of five stage
carriages as it was thought that that would be sufficient to
constitute a viable unit which companyld legitimately be
permitted to an applicant companysistently with the requirement
of a socialistic pattern of society that there should be
distributive or social justice and numberundue econumberic
disparities. so long therefore as an applicant has number
more than four stage carriages it cannumber by itself be
regarded as a factor against him and as pointed out by beg
j. in the case cited above the rule in clause  3   f  of
rule 155a providing for giving of one mark to the applicant
for each stage carriage operated by him should be taken into
account unless there is good enumbergh reason to depart from
it. every additional stage carriage upto four would give
an applicant an additional mark so as to help him to make up
a viable unit of five. the state transport appellate
tribunal was therefore right in the circumstances of the
case in number regarding possession of four stage carriage
permits by the appellant including a recent grant as a
circumstance against him but treating it as a circumstance
in his favour by adding four marks under clause  3   f  of
rule 155a and the learned single judge acted erroneously in
upsetting this view taken by the state transport appellate
tribunal. the learned single judge was also in error in holding
thatthe same standard was number applied by the state
transport appellatetribunal in companyparing the history sheets
of the appellant and therespondent. the history sheet of
the appellant related only to hisperformance as stage
carriage operator and the entire history sheetwas before
the state transport appellate tribunal and it showedthat
the appellant had a clean record. on the other hand
the respondent
 1  1964 5 s.c.r. 869. -l379 sup.ci/75
had two history sheets one relating to his performance as
stage carriage operator and the other relating to his
performance as lorry operator and both the history sheets
showed adverse entries. it can hardly be disputed that this
comparison with reference to the past performance of the
appellant and the respondent was relevant to the question as
to who between the two should be selected for grant of
permit. it may be that the history sheet of the respondent
as lorry operator related to a period of ten years while
that of the appellant as a stage carriage perator companyered a
shorter period but that cannumber be helped. the companyparison
has to be made on the basis of the available material and if
the history sheet of the respondent which may be for a
longer period shows that the past performance of the
respondent was number satisfactory while the history sheet of
the appellant though for a shorter period shows that he
has had a clean record of performance that would certainly
be a relevant circumstance to lie taken into account. the
state transport appellate tribunal was plainly right in
relying on this circumstance amongst others for the
purpose of preferring the appellant to the respondent. before we part with this case we may point out that the
learned single judge overstepped the limits of his
revisional jurisdiction and treated the revision application
before him as if it wore an appeal. that was clearly
impermissible as the revisional jurisdiction of the high
court under section 64b is as severely restricted as that
under section 115 of the companye of civil procedure and it is
only where there is a jurisdictional error or illegality or
material irregularity in the exercise of jurisdiction that
the high companyrt can interfere under section 64b with an
order made by the state transport appellate tribunal.