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TMI Blog1971 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... .09 due to Government by Gengu Reddy. Gengu Reddy died in or about 1961, leaving behind his aforesaid sons as heirs. A notice was issued to the legal heirs for payment of the said arrears of their father. In spite of their contention that there was a partition in their family in 1950 and that they were not liable for any such arrears, the sugarcane crops raised by the plaintiff as lessee of Ramachandran and Krishnan on land belonging to Gengu Reddy were attached for recovery of the income-tax arrears. The plaintiff (lessee) filed an objection petition before the Tahsildar, Tiruppathur, stating that he was a lessee from Ramachandran and Krishnan (sons of Gengu Reddy), that the crops raised by him could not be attached for recovery of the income-tax arrears due by Gengu Reddy. The attached crops were on an extent of 3.16 acres in S. Nos. 385/2, 386/1, 387, 388 and 386/3 in Kurizalapattu, originally belonging to Gengu Reddy. The attachment was effected on January 25, 1962, and the crops were guarded by the Talayari or the village during which time there was a theft of part of the attached crop. On a report by the village munsif relating to the theft and under the direction of the Tahs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intiff was convicted for the offence by the trial Magistrate. The plaintiff and his brother, Chenraya, preferred a claim petition dated February 3, 1962, before the Sub-Collector, Tirupattur, for cancellation of the said attachment. The Sub-Collector dismissed the petition on July 19, 1962. The attachment thus duly effected was valid and binding on the plaintiff and on the heirs of Gengu Reddy. The defendant was not aware of the alleged, partition between Gengu Reddy and his sons. Even if such a partition had existed, it was created only nominally and collusively to defeat the claim of the income-tax department. The said lands belonged to the defaulting assessee on the date of the attachment. The heirs of Gengu Reddy are liable to pay the income-tax arrears as universal donees and representatives of the defaulter. The Tahsildar and the headman acted legally as public servants in due discharge of their official duty. There was reasonable and probable cause for launching the criminal case. There was no malice on their part. The income-tax authority and Chenraya are necessary parties to the suit and the suit is bad for non-joinder of parties. The plantiff, not having filed a suit to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for recovery of the value of the crop alleged to be stolen is maintainable : (2) The suit is not barred under section 59 of the Madras Revenue Recovery Act ; and (3) The certificate of the Collector (exhibit B-6) showing Gengu Reddy, who is dead, as the defaulter, does not entitle the Collector to proceed against the legal representatives of Gengu Reddy or the lessee from such legal representatives without the certificate being amended by the income-tax department. (4) The plaintiff is entitled to damages claimed. We shall now take up the first question. In order to appreciate the contention raised we have to recapitulate the English law on the matter and the background under which the constitutional provisions commencing from 1858 came to be enacted. In England at Common Law the immunity of the Crown from legal proceedings at the instance of a subject was based on two maxims : (a) The King by the writ cannot command himself, and (b) the King can do no wrong. The first maxim had its origin in the feudal system under which a Lord could not be sued in his own court where he tried his tenants and the second maxim meant that the King is not personally answerable to any earthly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight have had against the East India Company if the Government of India Act, 1858, and this Act had not been passed." The Government of India Act of 1935 in section 176(1) also reproduces the same provision with two modifications : (a) in respect of the Secretary of State, Federation of India and the provincial governments were made liable to be sued in like cases and the Secretary of State in Council might be sued under the provisions of the Acts ; (b) the liability of the Government is, therefore, subject to, any provision of any Act that liability based upon the federal legislature or the provincial legislature as the case, may be. Article 300(1) of the Constitution section 176(1) of, the 1935 Act are mutatis mutandis, substantially the same. Section 176(1) refers back to the legal position as it obtained before that Act was enacted, that is th say, as it emerged under section 32 of the Government of India Act, 1915. As compared to article 300 it will be seen that part (1) of the article corresponds to section 32(1) of the 1915 Government of India Act, and part (2) corresponds substantially to sub-section (2) therein, and part (3) of the article does not find a place in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to answer the question referred to them. The suit was to recover damages of Rs. 350 on account of the injury caused to the plaintiff's horse through the negligence of certain servants of the Government. The learned Chief Justice considered that though the reference to them was not specific, yet the question referred was "whether the Secretary of State was liable for the damages occasioned by the negligence of the servants in the service of the Government assuming them to have been guilty of such negligence as would have rendered an ordinary employer liable." The learned Advocate-General who appeared for the Government acquiesced in the above view and the case was argued on that basis. The learned Chief Justice, after referring to the constitutional provisions, observed that in England the Crown-cannot be made liable for such damages either by a petition of right or in any other manner. In determining the question whether the East India Company could, under the circumstances, have been liable to an action, the general principles applicable to Sovereigns and States and the reasoning deduced from the maxims of the English law that the King can do no wrong would have no force. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the East India Company before the expiry of the term for no fault of the lessee and another person was inducted as the lessee and the East India Company pleaded that the removal of the old lessee and substitution of another lessee is an incident to the character as a sovereign power. The Master of the Rolls (Lord Kenyon) said : "I admit that no suit will lie in this court against a sovereign power for anything done in that capacity, but I do not think the East India Company is within the rule. They have rights as a sovereign power ; they have also duties and obligations as individuals." The learned Chief Justice referred to a number of decisions all of which dealt with acts of State, for example (Political treaty between a foreign State and East India Company, seizure of property, etc.). Therefore, what the learned Chief Justice had in mind when he referred to sovereign powers were functions like acts of State and not any act which the Government could as a private individual have done. It is not every act of the Government that can be protected but only acts which are done in exercise of their sovereign powers. Out of the aforesaid judgment of the Supreme Court of Calcutta t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the exercise of its sovereign powers. It is said that the act of requisition cannot be done by a private individual, but it can only be done by an authority which is exercising a sovereign power. Now, it is to be noted that Peacock, Chief Justice, made it clear in his judgment that the East India Company was not a sovereign body and it did not have any attributes of sovereignty. If the learned Chief Justice was referring to sovereign acts as, acts of State, then with very great respect the observations are correct and must be accepted. An act of State is different fundamentally from an act of a sovereign authority. An act of State operates extraterritorially. Its legal title is not any municipal law but the over-riding sovereignty of the State. It does not deal with the subjects of the State but deals with aliens or foreigners who cannot seek the protection of the municipal law. It is difficult to conceive of an act of State as between a sovereign and his subjects. If the Government justifies its act under colour of title and that title arises from a municipal law, that act can never be an act of State. Its legality and validity must be tested by the municipal law and in munic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en driven back from the repair shop to the Collector's office met with an accident and the question arose whether the driver of the vehicle while returning back four the workshop, was doing any act in connection with the exercise of sovereign power of the State. Their Lordships held that the State is liable for the damages occasioned and that no protection could be claimed by the State. Sinha C.J. discussed the decision in P & O. case, in full and held that the head-note in the Peninsular and Oriental Steam Navigation Company's case correctly brought out the decision. Their Lordships held : "In India, ever since the time of the East India Company the sovereign has been held liable to be sued in tort or in contract, and the common law immunity never operated in India. Now that we have, by our Constitution, established a republican form of Government, and one of the objectives is to establish socialistic State, with its varied industrial and other activities, employing a large army of servants, there is no justification, in principle or in public interest, that the State should not be held liable vicariously for the tortious act of its servant." The reasons given for governmental i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Navigation Company's case, in so far as it related to the distinction drawn therein between the tortious acts committed by public servants in course of the sovereign powers and tortious acts committed by them in respect of non-governmental functions. In other words, Gajendragadkar C.J. adopted the reasoning in the second part of the judgment of Peninsular and Oriental Steam Navigation Company's case, while referring to the decision in Vidhyawati's case. Thus, we have two decisions of the Supreme Court, namely, Vidhyawati's case, and Kasturi Lal's case, decided by the two Benches of equal strength, both relying on the decision of Sir Barnes Peacock in Peninsular and Oriental Navigation Company's case, taking contrary views. In the normal circumstances, we ought to follow the latest decision of the Supreme Court. But, we find that the decision in Vidhyawati's case has been referred to with approval by a Full Bench of nine judges in the Superintendent and Remembrancer of Legal Affairs, West Bengal v. Corporation of Calcutta. In the later judgment of the Supreme Court in State of Gujarat v. Memon Mahomed Haji Hasam, the conflicts between the above decisions were noticed. But, the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who was put in charge happened to be a Government servant who was negligent in the discharge of his duties and a prosecution at his instance was thrown out and the present suit is filed for damages for malicious prosecution which will undoubtedly lie. We are not, however, saying that the suit should be decreed. We find support for our conclusion from the view of Shri H. M. Seervai in his book on Constitutional Law of India, at page 816, where the learned author states as follows : "Again the observation in the judgment that the distinction made in the P. & O. case between the trading and sovereign functions of the company had been consistently followed is clearly wrong and is made per curiam. Thirdly, the judgment is self contradictory. Gajendragadkar C.J., rightly observed that in England the immunity of the Crown from liability for tort was based on the maxim that the King can do no wrong, but the P. & O. case had in terms said that in determining the liability of the East India Company that maxim had no force. It is submitted that the judgment in Kasturi Lal's case is that whereas under the law, as rightly declared in Vidhyawati's case a citizen would have complete reme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Limitation Act and not 6 months from the date of the distraint of the plaintiff's crop under section 59 of the Revenue Recovery Act. In Saminatha Aiyar v. Govindasami Padayachi, section 59 of the Act was held to have applied to the sale for arrears of revenue, which are illegal as contravening section 2 of the Regulation X of 1831 which prohibit the sale of estates of minors inherited by them for arrears of revenue accruing during the minority. In the present case the sale has not been held and the objection was taken, when notice demanding payment was issued to the defaulter's sons, that they were not defaulters and therefore section 59 of the Madras Revenue Recovery Act has no application. Our attention was drawn by the standing counsel for income-tax to section 67 of the Indian Income-tax Act, 1922, and the learned standing counsel contended that no suit could be brought in any civil court to set aside or modify an assessment made under this Act. Section 67 is inapplicable, as no suit was filed to set aside or modify the assessment. The next contention of the learned standing counsel for income-tax is that, on the forwarding of a certificate issued by the Income-tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stood only in the name of the defaulter and without an amendment of the certificate, the revenue authorities cannot proceed to realise the amount due by the defaulter. The contention on behalf of the revenue is that there is no need to amend the certificate issued by the Collector under section 46(2) and that the correspondence for recovery were legally continued by the Tahsildar against the properties of the deceased defaulter. The learned counsel referred us to section 24B of the Income-tax Act, 1922. Section 24B was inserted in 1932. Prior to that, the Act contained no procedure for assessment of the income of a deceased person. In the present case on the date of the assessment order the defaulter, Gengu Reddy, was alive. When the certificate under section 46(2) was issued, the defaulter was alive and only in the process of recovering the tax the defaulter died. The question raised is whether without an amendment of the certificate issued under section 46(2), recovery proceedings could be proceeded with. Section 24B(1) makes an assessee immortal and provides that where a person dies, his executor, administrator or other legal representatives shall be liable to pay out of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmine the tax payable by him on the basis of such assessment. In other words, it is within the contemplation of the first part of sub-section (3) that the assessment is made on the estate of the deceased and it is only for the purpose of representation, the procedure in the second part of sub-section (3) has been prescribed and that if the procedure prescribed therein has already been followed, it is not contemplated by sub-section (3) that it should be reiterated in the presence of the legal representative. Where the procedure has already been followed, all that remains to be done is to bring the legal representative on record and proceed with the assessment proceedings fro the point at which they were left at the death of the deceased assessee. On this view there is a continuity in the assessment proceedings from the standpoint of the estate of the deceased. The liability as contemplated by sub-section (1) is after all on the estate though the legal representative is made liable, his liability being limite to the extent of the estate and the taxes assessed or to be assessed. On these premises, learned counsel almost suggests without stating so that the estate of the deceased shou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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