Comments on M.S.C - Op. C.G.M. Fed. Ltd. v. S.P. Khale, A.I.R. 1989 S.C 485

(Valsamma Paul, MA. LL.M., Applied Economics, University of Cochin)

The expression "unfair labour practice" has acquired a peculiar significance in industrial parlance. It is often used to mean such open or underhand means as are adopted both by the employers and workmen to cause annoyance, disturbance, damage or loss to each other [1]. The Allahabad High Court has laid down that any practice, which conflicts with the spirit and letter of Article 43 [2] of the constitution and other Articles declaring decent wages and living conditions for workmen [3] and which if allowed to become normal would lead to industrial strife should be condemned as unfair labour practice [4].

In order to foster proper industrial relations, it is essential to frustrate unfair labour practices and facilitate free growth of trade unionism. It is, therefore, important to write into the law provisions to prohibit and penalise unfair labour practices. Attempts in this respect were started as early as 1947, when the Trade Unions Act, 1926 [5] was amended by the Trade Unions Amendment Act 1947 [6]. Provision has been made enabling withdrawal of recognition of a registered trade union, when an unfair labour practice [7] is committed by the executive or members of a recognised trade union [8]. An unfair labour practice on the part of the employer [9] has been made an offence punishable with fine [10]. But although the Amendment Act was passed, it never came into force.

The Code of Discipline, 1958 [11] requires both employers and workers to give up unfair labour practices [12]. In February, 1968, the Government of Maharashtra set up a Committee on 'Unfair Labour Practices' [13]. In its unanimous report presented to the Maharashtra Government in July 1969, the Committee listed various acts of omission and commission, which constitute unfair labour practices [14]. The Industrial Relations Bill, 1978 [15], which was introduced in Parliament but could not be passed also contained a list of unfair labour practices' in the Fourth Schedule thereto [16].

After several fruitless attempts, the expression 'unfair labour practice' was accorded statutory recognition by the Industrial Disputes Amendment Act 1982 [17]. 'Unfair labour practice' is defined in the Act [18] as any of the practices specified in the Fifth Schedule to the Act. The unfair labour practices in the Fifth Schedule consist of two groups. Group I relates to unfair labour practices on the part of employers and trade unions of employers and Group II on the part of workmen and trade unions of workmen. Chapter V-C of the Act prohibits and penalises the commission of unfair labour practices [19].

The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 [20] is a pioneering state legislation in this respect. It provides for the recognition of trade unions for facilitating collective bargaining for certain undertakings and provides for the prevention [21] of certain unfair labour practices. Unfair labour practice is defined in the Act as any of the practices listed in Schedules II, III and IV [22]. Schedules II and III enumerate unfair labour practices on the part of employers and trade unions respectively. Schedule IV deals with general unfair labour practices on the part of the employers.

The question whether non-giving of permanent status to employees will amount to unfair labour practice falling under items 6 and 9 [23] of Schedule IV to the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 came up for consideration before the Supreme Court in the case under comment. The Maharashtra State Co-operative Marketing Federation was appointed the Chief Agent in the Cotton Monopoly Scheme by the Government of Maharashtra. In February, 1984, the Government separated the operation of the levy of cotton from other activities of the Marketing Federation and assigned them to another society, namely the Maharashtra State Co-operative Cotton Growers' Marketing Federation Ltd. The Government directed the Marketing Federation to terminate the services of the seasonal staff working under the Cotton Monopoly Scheme and transfer the services of the regular staff working in the Cotton Department of the Federation at Bombay and in the Mofussil areas to the new organisation.

There was an award by the Industrial Tribunal, declaring the seasonal staff as permanent employees. Yet the Marketing Federation and the Co-operative Society were reluctant to accord them permanent status. So they approached the Industrial Court, complaining of unfair labour practices [24] on the part of the Marketing Federation and the Society. S.5(d) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 requires the Industrial Court to decide complaints relating to unfair labour practices except unfair labour practices falling in item 1 of Schedule IV. The Industrial Court took the view that the complaint of the respondent is covered by item No.1 [25]. Hence it was beyond its jurisdiction to look into the same. Further, it could not find any unfair labour practices on the part of the Marketing Federation or the Co-operative Society. Above all, the complaint was barred by limitation, as it was filed after [26] 90 days from the date of accrual of the cause of action. Because of these reasons, the Industrial Court dismissed the complaint.

The respondents filed writ petitions before the High Court against the order of the Industrial Court. The High Court allowed the writ petitions and quashed the order of the Industrial Court. Thereupon, the matter was taken up in appeal to the Supreme Court.

The Supreme Court is quite convinced that there has been unfair labour practice on the part of the Marketing Federation and the Society, the appellant. The seniority list, prepared by the appellant for the year 1985-86, shows that most of the respondents have been in the employment of the Marketing Federation since 1972. The annual increment list shows that the respondents were given annual increment on November, 1985. Still, the respondents have been shown in the seniority list and also in the annual increment list as temporary employees. In view of the award of the Industrial Tribunal, the respondents should have been treated as permanent employees.

The Supreme Court does not find any justification for the finding of the Industrial Court that the complaint of the respondents does not come within the purview ofItemNos.6and 9 of Schedule IV [27]. No reason has been given by the Industrial Court why the complaints come within item No.1 of Schedule IV and as such cannot be decided by the Industrial Tribunal.

There is nothing to show when the respondents received the appointment letters. Hence, the Industrial Court was not at all justified in holding that the complaints filed by the respondents were barred by limitation. Even if the complaints were barred by limitation, the Industrial Court should have given an opportunity to the respondents for explaining the delay.

It is gratifying to note that the Supreme Court has, in this case, raised its eyebrows against one of the devilish unfair labour practices, resorted to by the employers who leave no stone unturned in swelling their profits at the expense of the workers. But one wonders whether this sort of raising the eyebrows of the Supreme Court only to the extent of stigmatizing non-giving of permanent status to employees as unfair labour practice without ordering the faulty employer to do the needful will be of any use in eradicating this unfair labour practice which is taking roots and eating into the vital of the sweating class like cancer. It would also have been a welcome measure, if the Court has directed the appellants to recompense adequately the misery caused to the respondents by their failure to give them permanent status for a very long time.

It is too much to expect that the industrial relations will improve overnight with the prohibition of unfair labour practices as contained in the Maharashtra Act. [28] More subtle ways will be invented by the parties to avoid the nuances of law. No law can become effective, unless it is properly barricaded by the Supreme Court, the supreme law pronouncer of the land. For maintaining good labour-management relations and thus making the nation tread the path of prosperity the judiciary must see that all the unfair labour practices which are now prohibited by law are uprooted by its effective and definite pronouncements. Otherwise laws like the Maharashtra Act will remain mere paper-tigers.

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Footnotes:

1 K.P. Chakravarti, Labour Management and Industrial Relations (1988), P.268.

2 Article 43 provides: "The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas".

3 See the Constitution of India, Articles 39 and 42.

4 Eveready Flash Light Co. v. Labour Court, Bareilly, AIR 1962 All. 497, P.500, per Dhavan J.

5 The Trade Unions Act, 1926 is an Act to provide for the registration of Trade Unions and in certain respects to define the law relating to registered Trade Unions.

6 Act No.45 of 1947

7 The Indian Trade Unions (Amendment) Act, 1947, S.28J.

8 Id., Section 28 G.

9 Id., Section 28 K.

10 Id., Section 32 A.

11 The Code of Discipline was approved by the All-India Organisation of Employers and Workmen at the 16th session of the Indian Labour Conference held at nainital in May 1958 - K.D. Srivastava, Commentaries on Industrial Disputes Act, 1947 (1985), P.963. Its object is to maintain discipline in Industry. To achieve this object, there has to be (i) a just recognition by employers and workers of the rights and responsibilities of either party and (ii) a proper and willing discharge by either party of its obligations consequent on such recognition - Report of the National Commission on Labour, 1969, P.A28.

12 Id, PP. 346, A28, A29.

13 The object of the Committee was to define activities which should be treated as unfair labour practices on the part of employers and workers and their organisations and to suggest action to be taken Report of the National Commission on Labour (1969), P.336.

14 Id., P.340.

15 Bill No.13 of 1978.

16 K.D. Srivasthava, Op. cit., P.962.

17 Act No.46 of 1982.

18 Section 2(ra)

19 Sections 25-T and 25-U

20 Act No.1 of 1972

21 Section 27

22 Section 26

23 Items 6 and 9 are as follows:-

'Item 6. To employ employees as "badlis", casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent employees'.

'Item 9. Failure to implement award, settlement or agreement'.

24 Vide items Nos.6 and 9 of Schedule IV to the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.

25 Item No.1 of Schedule IV to the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 reads:-

"To discharge or dismiss employees-

(a) by way of victimisation;

(b) not in good faith, but in the colourable exercise of the employer's rights;

(c) by falsely implicating an employee in a criminal case on false evidence or on concocted evidence;

(d) for patently false reasons;

(e) on untrue or trumped up allegations of absence without leave;

(f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;

(g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct or the past record of service of the employee, so as to amount to a shockingly disproportionate punishment".

26 S.28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.

27 Supra, note 23.

28 Supra, note 21.

Personality Disorders and Nullity of Marriage According to Church Jurisprudence

(Rev. Dr. Joseph Vadakumcheny, Presiding Judge, Archdiocesan Tribunal, Ernakulam)

The Ability to Assume the Marital Obligations

As in every contract, consent is the efficient cause of the marriage covenant, and the deficiency of this consent cannot be supplied by any human power other than the spouses themselves. In order for a marriage to be contracted validly, a psychologically valid consent, elicited in terms of due mental discretion alone, will not be enough. The spouses should also be in a position to decide upon or reach out the object of the marital consent, which points to the capacity of the contractants in respect of the very object of marriage, and this capacity is termed by jurisprudence as 'the ability to assume the marital obligations'.

Viewing marriage objectively, we can see that the object of the marriage covenant is the formation of a permanent family, which entails the mutual rights and obligations which level with the nature, purpose, and the essential characteristics or properties of marriage. Hence, the spouses, while entering marriage, should be endowed with the emotional maturity and 'the capacity to assume', whereby they can bind themselves in order to sustain, honour, and fulfil the essential obligations of marriage.

A person's inability to assume marital obligations can be said to be amounting to a consensual defect, only in the sense that a psychologically valid consent could be rendered inefficient with regard to the object in so far as the object of the marital consent would be far beyond the reach of the contracting person (subject) because of his/her 'personality make up' which impedes him/her from carrying out the obligations of married life.

Lack of due discretion necessarily implies inability to assume marital obligations, and not vice verse. For, the marital consent is of the present ('de praesenti') and the marital obligations which constitute the object of the marital consent are to be. under- taken here and now at the time of marriage, and hence the person who is bereft of the due discretionary power of the mind is also enept to assume the object of the marital consent.

On the other hand, a person because of some personality disorder, though not deprived of the due discretionary power at the time of marriage, can remain enept to sustain, honour, and fulfil the obligations of married life. In such a case the marriage can be declared null on the score of the 'inability to assume marital obligations' alone. That is why the present Rotal Jurisprudence recognises 'inability to assume marital obligations' as an autonomous ground of nullity as distinct from the 'lack of due discretion'.

Since marriage-consent is of the present and the marital obligations are to be assumed here and now at the time of the marriage, 'the inability to assume' of either contractant is to be assessed with respect to the time of marriage, so much so, it should exist at the time of marriage and not at a later period. An example will illustrate this: suppose that somebody has reached an agreement to buy a house, and unfortunately the said house was razed to the ground at the event of an earthquake or any other calamity, precisely before the registered deed of contract was executed; the buyer unaware of the incident executes the contract deed in respect of the house which was inexistent at the time of the purchase deed; since it was a contract regarding an inexistent thing, the said contract cannot be but invalid. In like manner the marriage contract would be invalid, were it to be effected when either of the spouses had not the ability to assume the obligations of marriage. The 'inability to assume' is also termed as incompetence.

The Essential Rights and Obligations of Marriage

Traditionally the essential rights and obligations which constitute the object of the marriage-consent were limited to the exchange of the right to those acts necessary for procreation of progeny ('bonum prolis'), to a life-long marriage ('borumSacramenti'), and to fidelity in marriage ('bonum fidei').

Already in the Encyclical "Casti Connubi", Pope Pius XI had included among the essential marital obligations of spouses, "the generous giving of self and the life-long commitment of the person to the partner in marriage" (Preface).

The Pastoral Constitution of Vatican II, "Gaudium et Spes" (n. 48), while describing marriage as "an intimate partnership of life and love", and "as a mutual giving of two persons" has enlarged the extent of the rights and obligations of marriage also to "the community of life and love". The Council indeed speaks of a sane interpersonal relationship between the spouses about which St. Thomas Aquinas has already preluded (Suppl., q. 44, art -1).

The Jurisprudence of the S.R. Rota has taken proper account of the mind of the Vatican Council while judging the marriage -nullity cases. The Rotal Judge Serrano in a decision, dated 5 April 1973, states that as matrimonial consent is primarily and radically directed to the interpersonal relationship, the partner in marriage, who, because of his/her personality make-up, is simply unable to form an adult personal relationship, cannot contract a valid marriage (SRRD: Vol. LXV, p. 330-331, nn. 11,12).

The Communion of Life and Love

The revised legislation of the Church while defining marriage has incorporated the Conciliar concept and terminology on marriage: "The marriage covenant established by the Creator and ordered by His Laws, by which a man and a woman, by an irrevocable personal consent, establish between themselves a partnership of the whole life, is by its natural character ordered toward the good of the spouses and the procreation and education of the offspring" (CCEO, 776; CIC, Can. 1055). If the marriage is'a community of life and love', then the marriage-partners, must conscientiously give to each other the right to this community of life and love together. That means, a prospective spouse must be able to make a rudimentary assessment of the capacities of oneself and of the partner, and to decide freely that he/she wishes to establish a perpetual and exclusive community of life and love with the partner, a community that will involve-a life-time of fundamentally faithful caring and sharing (Lawrence G. Wrenn, Decisions, Washington, D.C., 1982, p. 160). This consideration opens the way to deal with easily those marriage cases in which one of spouses, because of some personality disorder, is unable to give the marriage partner this right to a community of life and Jove in marriage.

The communion of life stands out as the basic and overall marital obligation, and as such it comprises all other essential obligations which marriage entails. Hence the capacity to promote a mutually committed interpersonal relationship in view to fostering generously the community of conjugal life and love can be considered as an indispensable specific capacity the spouses should be endowed with.

In other words, the communion of life and love on the basis of an interpersonal relationship presupposes in the spouses a unique capacity coupled with that state of mind which is solicitous of promoting the well-being of the one by the other, of being a mutual aid in love and fidelity, of giving oneself and accepting the other as a distinct person, and of relating to each other in a meaningful manner of caring, sharing and supporting (The Code of Canon Law: A Text and Commentary, TPI, Bangalore, 1986, p. 777-778; SRRD: Coram Serrano, 9 July 1976: Monitor Ecclesiasticus, 102 (1977), p. 369Sq.)As the main radical capacity of those called to married life, it engenders all the rest of the subsidiary capacities which are necessary to guarantee and protect the three 'bona' of the marriage covenant, namely, the procreation and education of children, a life-long committed married life, and the marital fidelity. That means, the incapacity or inabilility on the part of either of the spouses to assume and fulfil any one of the essential obligations, whether it be relating to the 'bonum prolis', or 'bonum Sacramenti', or 'bonum fidei', or communion of life, is sure to render the marriage-consent defective on the part of its object.

Though it is difficult to determine the quantum of the marital obligation relating to communion of life and love, it is nevertheless possible to determine those obligations which would constitute a required minimum without which there could be no marriage at all. A true marriage certainly requires the ability to establish and maintain at least a minimum kind of common life, ie, a certain minimum capacity of the couple to share their lives together in more than a physical sense.

Adverse Impact of a Personality-Disorder on the Communion of Married Life

A person can be rendered incapable of true matrimonial consent on the score of 'inability to assume' by a phychic disorder. Excepting the qualified cases of Psychoses which necessarily impair the required discretionary power of the mind, there can be cases of psychopathis personalities which are personality disorders exhibiting a variety of abnormal behavioural patterns to the extent of causing harm either to oneself (Neuropaths) or to the society (Sociopaths). "The abnormal is but an exaggerated or unbalanced expression of the normal - mode of behaviour or of living which is logical although socially maladjusted outcome of the particular individual's original endowment" (Kolb, Modern Clinical Psychiatry, 9th ed., W.B. Saunder's Company, Philadelphia, London, Toronto, 1977, p. 119).

In the chapter dealing with the matrimonial consent, Canon Law rules: "Those, who, because of causes of a psychic nature, are unable to assume the essential obligations of marriage, are incapable of contracting marriage (CCEO, 818, n. 3; CIC, 1095,n.3).

It is to be noted that only personality disorders of psychic nature, which stem from the original endowment of the particular individual can bring about the inability which is our present consideration. Hence Vices which are acquired habits due to the malice of the will cannot give ground to a nullity case on the score of inability to assume.

Psychic anomalies like severe immaturity, Neurosis, Psychopathy, Borderline cases etc. could be pointed out as general causes of the psychic incompetence, and the

personality disorders like homosexuality, Nymphomania, Trans-sexualism etc. would be some of the particular causes for the said incompetence, deriving from any of the aforesaid general causes.

Although Modern Psychiatry distinguishes a variety of psychopathic personalities amounting to ten different kinds, all of them have certain common traits like immaturity, egocentrism, non-communication, propensity to tell lies, debility of the mind, inability to take a practical decision etc. (SRRD: Coram Raad, 13 Nov. 1979: Monitor Ecclesiasticus, 105 (1980), p. 33, n.6).

It is characteristic of the psychopathic personalities that, while their mental faculties remain intact and unimpaired, they are prone to be unsteady and their fluctuating suggestibility and affectivity are wont to produce a certain immaturity which renders them incapacable of having control and evaluative insight into life whereby the sufficient freedom of choice would be lacking in them. The immature personality is exemplified by a lack of psychic maturity, dependency, incapacity of accepting responsibility etc.

In the case of psychopathy or personality disorders, it is not easy to determine practically whether the disorder has reached such a stage at the time of marriage as to render the contract incapable of assuming marital obligations. There is no favour of presumption on the part of law in such cases. Only the existence of a very serious and aggrevating circumstance in connection with the marriage would give grounds to absolute incompetence of the contractant. It is in this sense that Canon law speaks of the 'inability to assume'.

Some Ecclesiastical Tribunals, especially of the United States, seem to consider also relative incompetence termed as 'psychological or radical incompatibility' (mutual inability to fulfil the obligations of marriage) as giving grounds for nullity of marriage on the score of inability to assume'. This relative incapacity, accordingly, is any psychological incompatibility tantamount to a personality disorder which renders one incapable of fulfilling the obligations of marriage only with a particular person.

Whatever be the terminology adopted in order to designate this relative incapacity, as a matter of fact, this cannot be an acceptable criterion at all to decide upon the nullity of a given marriage. For, we cannot speak of any true moral impotence or incompetence which is shared half and half mutually by both the spouses. The invalidating psychic anomaly should exist in an aggrevating degree in either or in both the spouses. In either case it can be only an absolute incompetence. The relative incompetency can bring about only difficulties in a given marriage and not any invalidating circumstance.

We should bear in mind that there is adequate distinction between impossibility and difficulty. So too there is distinction between inability and incompatibility. Cases of inability result in impossibility, while the cases of incompatibility bring about difficulties only which could be surmounted by the intervention of good will and efforts for adaptation and adjustment on either side. Lack of this good will and efforts at the opportune time during the course of joint married life cannot argue apt all for the nullity of as marriage on the score of inability to assume and fulfil the obligations of marriage. Hence the incompetence in order to be invalidating the marriage consent, should have already existed as a serious personality disorder which had irremediably rendered either of the contractants really incapable of assuming the essential obligations of marriage at the time of contracting the marriage.

Reflections on Leelamma v. Dilip kumar-1992 (1) KLT 651

(By Fr. Joseph Vadakkumcherry, Archdiocesan Tribunal, Ernakulam)

It was a moment of exultation for the Church in Kerala when the High Court of Kerala delivered its judgment in Leelamma v. Dilip Kumar on February 24,1992.

The facts of the case can be summarised as follows:--

The petitioner in this case was a Syrian Catholic wife and the husband, the respondent, was an Ezhava by birth. Concealing the fact of Ms being an Ezhava, be pretended to be a Syrian Catholic, and obtained the consent of the petitioner tor marriage. Thereafter, presenting himself as the son of Syrian Catholic parents, k& received baptism from a Catholic priest, before the marriage actually took place. The petitioner, wife, therefore, prayed for a declaration of nullity of the said marriage under S.19of the Indian Divorce Act on the ground of "Fraud".

The Hon'ble High Court after referring to the Canon Law for the first time has laid down in categorical terms that the personal law applicable to Latin and Syrian Catholics is their respective Code of Canon Law, and declared the said marriage null and void on the ground that misrepresentation regarding religion or community is "fraud" and that it has vitiated the consent of the petitioner in this case.

Though there were decisions of various High Courts in India and that of the Supreme Court on this point, they were not understood in their proper perspective when this Hon'ble High Court dealt with Kurian v. Alphonsa (1986 KLT 731) and Jose v. Alice (1988 (2) KLT 890). There the Court proceeded on a basic assumption that there was conflict between Canon Law and Civil Law. In fact, that was not the case at all.

Canon Law always respected the Civil Law. Further Canon Law provides for adjudication of civil effects of marriage by a civil court (see Canons 1059,1062. and 1672 of the Code of Canon Law, 1983, of the Latin Church, and Canons 780 and 1358 of the Code of Oriental Canon Law, 1990).

The 1988 and 1988. cases in the Civil Court could have been resolved without entering into any adverse finding on the proceedings under the Canon Law, as those cases were concerned only with the question of the civil effects of marriage, like maintenance. In my opinion those decisions did not advance the development of that branch of civil law on marriage and divorce, rather, only hindered its growth.

It is interesting to note that the constitutional provisions under Art.44 for the ena - tment of a Uniform Civil Code remains a dead letter and the Muslims are allowed to be governed by their personal law. Yet, when it comes to the Christians, they ought to be the only "Indians" in India. For example, the Indian Divorce Act of 1869, and the Indian Succession Act of 1925, are by their title meant to be for Indians, but for all practical purposes, they are applicable only to the Christians in India.

Therefore, when the Muslims and other communities are governed by their personal laws, there should be no reason why those Indian Christians belonging to the Catholic denomination be discriminated in that matter, especially, when they have their respective Code of Canon Law as their personal law. In fact, the Latin and the Oriental Codes of Canon Law are well developed and refined systems of law and in no way inferior to any other legal system for that matter, but can only claim superiority on the score of the timely revision and updating and especially when the Civil Law remains unamended even after a century.

Under the circumstances, the recent judgment of the High Court of Kerala assumes special significance. The High Court in this case has held in categorical terms, after referring to and relying on the decision in Lakshmi Sanyal v. S.K. Dhar (AIR 1972 SC 2667), that Canon Law governs the members of the Syrian Catholic Community.

In fact the Supreme Court in the aforesaid case had already held that "The question of capacity to marriage and impediments in the way of marriage, would have to be resolved by referring to their personal law. That, for the purpose of deciding the validity of the marriage would be the law of the Roman Catholic Church, namely, the Canon Law of that Church."

Inspite of this decision of the Supreme Court in 1972, it was unfortunate that this could not be highlighted before the High Court of Kerala in 1986 and 1988. It is in this context that the present decision comes as a much awaited remarkable and appreciable judgment, which is rendered by Hon'ble Justice Chettur Sankaran Nair, for removing the confusion over the matter for the last few years, in the minds of the Bench and the Bar in Kerala. It is given to understand that Advocate Sebastian Champappilly M.A., LL.M., who is a scholar in the field, used his expertise to serve the Catholic Community through this case.

Search and Seizure under the Income Tax Act Popularly Known as 'Income Tax Raid'

(R. Krishna Iyer, Chartered Accountant)

Introduction

For long the Law Enforcement Authorities have used the power of search as a potent instrument to trace culprits, to unearth evidence of indictable acts. It has originally confined to stolen goods, its usefulness forced its recognition, now extended to the Income-tax Laws also. The Criminal Procedure Code 1973 has detailed provision in this behalf. Such powers of search are now extended to civil enactments relates to taxes, duties etc. The persons against whom such searches are instituted are broadly classified as economic offenders, It is viewed that economic offences against the State, deserve to be punished severely, intention is to dissuade them on committing such offences for his private gain at the cost of the Nation and to its detriment. After the introduction of this provision 'search' and 'seizure' have become very common and now it is known as 'Income-tax Raid'.

The expression 'Search' means taking possession of the records for the purpose of inspection. 'Seizure' means that the authority could take into possession the records and take them outside the possession of the assessee.

Objects

The object of this provision is prevention of evasion of tax. This is to unearth the hidden or undisclosed income or property and bring it to assessment. It is not merely to get information of the undisclosed income but also to seize the money bullion etc., representing the undisclosed income and to retain them for purposes of proper realisation of taxes, penalty etc.

The scope of S.132 of the Act is limited to articles and things mentioned in (a), (b) or (c). The Section does not include within its ambit immovable properties because the location of an immovable property is known and no search need to be made for it. Where the precise location of the article or thing is not known and where it will not be ordinarily yielded over by the person having possession of it and in such circumstances a search must be made for it.

The Hon'ble High Court of Kerala in a recent decision held that the department has no authority as per S.132 to seize the immovable properties and therefore the High Court set aside the action of the Income-tax Department to seize the immovable properties.

The Authorities prescribed under the Act for Search and Seizure.

There are two Officers at two different stages who have to apply their minds under the scheme.

(1) Director General or Chief Commissioner or Commissioner may authorise any Deputy Director, Assistant Commissioner or Income-tax Officer and they will issues a warrant of authorization for a search. These authorised officers have to direct another set of authorities to carry out the operations.

(2) The authorities not below the rank of an Income-tax Officer, who carried out the actual search and seizure operations.

Conditions for Issue of Order

If the Authorised Officer has reason to believe that;

(a) a person summoned to produce accounts etc. fails to do so or

(b) such person is not likely to produce the accounts; or

(c) a person is in possession of money, bullion, jewellery etc. which he has not disclosed or not likely to disclose as his income.

There is a distinction between clause (a) and (b). Under Clause (a) the particulars of the specific documents, books of accounts etc. which are required to be produced should be specified, whereas under Clause (b) it is not necessary to specify the documents in the warrant of authorization.

A 'reasonable belief’ is a pre-condition to be satisfied. This Section does not permit indiscriminate search and seizure. The 'belief of the Authorizing Officer must be honest and based on cogent material. By exercise of this power, a serious invasion is made upon the rights, privacy and freedom of the taxpayer, the power must be exercised strictly in accordance with the law and only for the purpose for which the law authorizes it to be exercised. Sri. N.A. Palkhiwala opines that this Section "confers dangerously wide powers of search and seizure on the authorities without any external check or safeguard for the citizens".

If the conditions are not satisfied, the search becomes illegal. If the Commissioner does not have information about the particular individual, then search authorization would be illegal. If an assessee has been regularly producing his books of accounts and if they are accepted, it would be unjustified to issue a Search warrant, unless there is information that he has been keeping secret account books also.

'Reason to believe' is a cardinal requirement for initiating a search. 'Reason' means cause or justification, the word 'believe' means to accept as proof or to have faith in it. The Supreme Court observed that the reason must be held in good faith and should not be a mere pretence.

Merely because an assessee has utilised his undisclosed income in constructing a spacious building, his premises cannot be subjected to search. It has been observed by the Supreme Court, that if a search warrant is challenged the burden lies on the Commissioner who has issued the warrant to satisfy the Court that he had taken action on proper and relevant material.

Powers of the Inspecting Officers

The Inspecting Officers before making Search has to call upon two or more respectable inhabitants of the locality to witness the search. The Search is to be made in the presence of said witnesses and a list of all things searched to be taken and signed by such witnesses. The authorised Officer can enter and search any building where he has reason to suspect that such books of accounts, other documents, money etc. are kept and he can even break open the lock of any door or locker, if the keys are not available, he can also seize the books of accounts and other valuables.

He has also the power of prohibiting a person from parting with the assets and books of accounts during the course of search. This power is called a 'freezing order' or 'attachment'. This power is used when the seizure of the said articles have become impracticable. The bank accounts can also be attached by this provision. The Court held that they can be included under valuable things. Even though the fixed deposit receipt itself is not an asset, still there can be a valid order against the Fixed Deposits. The Kerala High Court has also held that it is not practicable to seize the Fixed Deposit, therefore attachment is permissable. This Order can be issued by the Authorised Officer alone and that too during the course of Search. The prohibitory order issued to bank lockers without knowing the content or without making enquiry are bad in law.

A prohibitory order cannot be applied in case of godown or stock-in-trade without making a detailed verification, which would only reveal the unaccounted stock representing the undisclosed income.

The books of accounts and documents can be subject to prohibitary order if it is not practicable to seize them, but such books of accounts or documents would not have been produced by issuing notices or their usefulness to any proceedings.

The Examination on an oath during the course of Search and Seizure

The Inspecting Officer is empowered to examine any person on oath who is found to be in possession or control of books, valuables etc. This power is not for the purpose of general investigation of the assessee but for the limited purpose of seeking an explanation or information in respect of the documents, articles or things found during the search. The questions have to be relating to documents, jewellery, money etc., found in possession of searched party. Those questions regarding past events, example, expenses on marriage in the family, cost of construction of building etc., are not legally permissible at this stage. Any statement made by such person may there after be used as evidence in any proceedings under the Act.

Among other things, penalties are impossible for concealment of income. If the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income, he will be liable to pay penalty u/S.271(l)(c) of the Income-tax Act. Certain explanations have been added in the said section by which the assessee would be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income in certain circumstances.

Circumstances:

1. In a case, a search is conducted, it is found that the assessee is the owner of the money, jewellery or other valuable articles. The assessee claims that such assets have been acquired by him, by utilising his Income but from undisclosed Income. The due date of filing the Return is over and the search is conducted after that date, the assessee has not filed his Return. In this case the assessee has concealed his Income as per the explanation and penalty will be attracted.

Example:

(a) Date of search                                                                     10-6-1990

(b) Previous year ending                                                          31-3-1989

(c)  Due date of filing Return                                                    31-8-1989

(d) It is assumed that he has not filed the Return till              10-6-1990

2. In another case the Return has been submitted, but such income has not been declared. In the earlier example, the Return has been not furnished even though it was due and in the later case the Return is furnished but such Income has not been included. Before the date of search the assessee has filed his Return and the Income for this acquisition of them not included. Penalty for concealment is attracted.

In all the above circumstances even if the assessee declares such Income in any return after the date of search, for the purpose of penalty u/s.271(l)(c) he would be deemed to have concealed the particulars of Income or furnished inaccurate particulars of such Income.

Therefore the position is by furnishing the Income in the Return alone he cannot escape from penalty, probably the presumption is that he would not have declared the said Income, but for the search and therefore a specific explanation is added in the section for imposing penalty.

There is an exception to this explanation. In the above cases, if such Income is recorded before the date of search in the books of accounts, if any, maintained by him and if such Income is disclosed before the Commissioner of Income tax, he will not be liable for penalty.

The object of the said exception is not clear. Once the Income is disclosed to the Commissioner before the date of search, the valuable things become a disclosed property not out of undisclosed Income as mentioned earlier elsewhere. The very object of S.132 itself is to unearth hidden or undisclosed Income. By making a disclosure to the Income tax Commissioner before the date of search it can be said that it is not out of disclosed income. The first part of the explanation of the section relates to disclosure of Income in the Return filed after the date of search irrespective of whether the Return is due or not. In other words the assessee is not entitled for the waiver of penalty by furnishing in the return the items found out in search, if they are undisclosed, would be liable for penalty.

But the assessee is entitled for the benefit of waiver of penalty if he makes a disclosure at the time of search by a statement to the Inspecting Officer. Before the Inspecting Officer he should specify the manner in which such Income has been derived and he should pay the tax together with interest, and then he is entitled for the waiver of penalty. But again there is one condition. The year of acquisition of his Income should relate to the year which the Return is not due as per the Act.

Example:  1) Search is conducted on 10-6-1990

                    2) Previous year 31-3-1990

                    3) The due date of filing the Return 31-8-1990

In the above case, if the assets are acquired out of the Income of the previous year ending 31-3-1990, he can get the benefit of waiver of penalty by making a statement before the Income-tax Officer. In this case even if the asset is acquired out of income after 1-4-1990, he can claim the benefit. But if the search is conducted say on 10-9-1990, and if the asset is acquired out of the income of the previous year ending on 31-3-1990, even though he has not furnished the return, he cannot claim the benefit, since the due date of filing the return for 31-3-1990 is already over. In short the benefit of waiver of penalty can be availed only when the return is not due and not on the basis of not filing the return. Therefore the condition for claiming the benefit of waiver of penalty u/s. 271(1) (c) are:

1. The assessee should make a statement at the time of search before the Inspecting Officer.

2. He should specify the manner in which it is acquired.

3. He should pay the tax with interest.

4. The return of that income should not be due to be filed.

In short, wherever the return is already furnished or where ever the return are over due the benefit for waiver of penalty cannot be availed by making a statement at the time of search before the Inspecting Officer.

Summary Statement

Any money, Jewellery or other valuable articles 'when seized, the Assessing Officer shall make a summary assessment on the undisclosed income in a summary manner to the best of his judgment on the basis of such materials as are available with them. The Assessee should be given a reasonable opportunity before making such a summary assessment. The order should be made within 120 days of the search. The Assessing Officer should obtain the prior approval of the Deputy Commissioner of Income tax. The Assessing Officer will calculate the amount of tax on the income estimated and also the Interest payable and the amount of penalty to be imposed. He should also specify the amount required to satisfy any existing liability under other tax laws. He may return the amount in his custody to meet those liabilities and release the balance.

This is only a Summary Assessment and it is not necessary that in the final assessment the same Income is assessed and the matter can be reviewed in Regular Assessment. However, the person can apply to the Commissioner of Income tax regarding the order made by the Income tax Officer requesting for appropriate relief in the matter. The object of providing this remedy is to prevent abuse in the power of retention of assets by high and excessive estimates arrived at by the Income tax Officer. But normally the authorities are taking a view that this is only a provisional order for the purpose of retention of assets and much relief is not granted on the petitions.

The books of accounts or other documents seized can be retained by the authorised Officer, upto 180 days. Thereafter, they can be further retained with the approval of the Commissioner of Income tax. However the books of accounts and other documents cannot be retained for a period exceeding 30 days after the proceedings in respect of the year for which the books of accounts are relevant and completed. Where the authorised officer has no jurisdiction over the person whose premises are searched, and the books of accounts or other assets seized shall be handed over to the Income tax Officer having jurisdiction over such person within a period 15 days. Where the authorised Officer has reason to suspect that the person concerned has hidden any books of accounts, other documents, money or other valuable articles he has the power to search and also to seize them. If the location of the property is known, there is no need to conduct a search and to seize the property also. It does not include the immovable properties. The Kerala High Court had occasion to consider this issue and set aside the order of seizure of immovable properties including the prohibitory order. Title Deeds of immovable properties are valuable documents, and can be retained.

The Assets retained may be applied to the existing liability or the liability in respect of the regular or re-assessments. If the money has been seized and retained such money may be applied for the above purpose. If the money seized is not sufficient, the other assets can be sold. If any assets or proceeds remain in excess of the liabilities they shall be forthwith be paid to the person. The Department is also liable to pay interest on the surplus at 15 1/2%. This interest is to be payable after six months from the date of the provisional order to the date of regular-re-assessment.

Conclusion

A recent decision of the Hon'ble High Court of Delhi on this issue is very important. Failure to return an Income on the contention that the same was not taxable would not be a ground for issuing an authorization for search. The Department has jurisdiction to invoke the provision in an effect to tax the same. Failure to disclose immovable properties in the return cannot be a ground for conducting a search. The Department was under a belief that the assessee was liable to tax, cannot be a ground for a search. The issue of an authorization to conduct a search can be only on certain conditions. A search which was conducted was a serious invasion into the privacy of a citizen. The Department has power of recording the statement of a person. The authorization only enables the Officer of the Department to conduct search and seizure. They have the power to enforce the presence of a person for the purpose of examining him on an oath. In that case, the assessee requested to permit to attend to his work in the High Court. This permission was not granted. The Act does not give any power to the Income tax Department to arrest an individual. The movement of a person against whom search is ordered cannot be restricted. The Court held that by refusing to give permission to the assessee to attend to his work in effect, amounted to his confinement, which is not permissible in law.

Polygamy in Islam : Misrepresented and ill Judged

(M. Fazlul Haq, Advocate, Varkala)

Dr. W.F. Menski was written an elaborate reply (“Comparative legal training in action: a reluctant defence of Polygamy”, 1990 (1) KLR J.p.50-69) to Mr. Mustafa Ali Khan on his essay, “Islami Polygamy - a blessing in disguise” (1989 (1) KLT J. p.47-58).

In a discussion on the subject: "Polygamy in Islam", two points crop up for consideration:

(1) What are the injunctions of Islam?

(2) What is the relevancy of those injunctions in the modern World?

On the first point, as observed by the Allahabad High Court (D.B.) in a recent decision, the Qur'anic injunctions are clear, but misrepresented and ill-judged by laymen outside the religion of Islam.

The Court held: "..............................It is a dangerous game to tear tenats from another persons' religion out of their context for one's personal advantage. Polygamy under Islam was always an exception, and never a generality. Then Polygamy went and goes with the obligation of equality, equity, Justice to be discharged or dispensed amongst more than one wife. The Koran speaks of conscience as an obligation on the husband before taking two, or three or four wives. It speaks of equality of love amongst wives, and equality which is within the sole perception of the woman not the male. It is a hard discipline of the Islamic religion which requires perfection as any wife in a polygamous marriage can as of right speak out in a case of in equal treatment, and make matters difficult for a husband. Thus, a polygamous marriage, under Islam, is exception with a mathematical justice of equality amongst the wives - the woman is the Keeper of conscience. The husband only discharges it with an effort which borders on justice. The scales are with all the wives. If one complains of in-equality no one can question her. Such is the discipline of the Koran...............The concept of marriage and Polygamy under Islam and as is referred to in the Koran is clear, but misrepresented and ill-judged by laymen outside this religion.............................": (See Chandrapal and others v. Keshav Deo and others, 1990 (1) Civil Law, J. 790).

In the above case, a Hindu husband who was prosecuted for bigamy challenged the prosecution by a petition under Articles 226 and 227 of the Constitution of India, contending that S.17 of the Hindu Marriage Act, 1955, is ultravires of the equality clause under the Constitution because if he were a Muslim he would get away with it and cannot be prosecuted under S.494, 1.P.C.) and consequently the petitioner contended that even S.494,1.P.C. is ultravires. Dismissing the petition the Court further held:"......................The petitioner's contention that S.17 of the Hindu Marriage Act, 1955 or S.494 of the Indian Penal Code, 1860, are ultravires as they offend his liberty as he understands it, under Article 21 of the Constitution of India is a myth of his own making and an immorality engineered by him and it effects neither religion to which he belongs nor any concept of marriage under Islam......................"

Only a layman can say that a Muslim has a right to have four wives; It may also be noted that no marriage, polygamous or otherwise be solemnized without the free consent of the woman. So, even if a man proposes to contract a polygamous marriage, if no woman is willing, his wish will remain as a mere dream. So, it is respectfully submitted that there is no reason why Dr. Menski and the like-minded scholars should shed crocodile-tears for the women in the name of Polygamy.

Let us now, come to the Qur'anic injunctions on the point:-

"In the name of the Merciful and compassionate God;

(1) O Ye folk! fear your lord, who created you from one soul, and created there from its mate, and diffused from them twain many men and women. And fear God, in whose name Ye beg of one another, and the Wombs; verily, God over you doth watch;

(2) And give unto the orphans their property, and give them not the vile in exchange for the good, and devour not their property to your own property; verily that were a great sin. But if you fear that Ye cannot do justice between Orphans, then marry what seems good to you of women, by twos, or threes, or fours;

(3) If you fear that Ye cannot be equitable then only one..................That keeps you nearer to not being partial;

(4) And give women their dowries freely;

(5) Ye are not able, it may be, to act equitably to your Wives, even though Ye covet it; do not however be quite partial, and leave one as it were in suspense.................": (E.H. Palmer: "The Qur'an", the Chapter of Women (IV) 1-4,125-130).

The Qur'an, thus, permits Polygamy as a part of religious duty to do justice between orphans; not as a sexual variety entertainment. Dr. Menski's comment on the subject is only superficial and biased; and the learned author has not attempted to study the Qur'anic Law on the point; at any rate, his article is silent on that aspect, presumably with ulterior motives.

Let me quote Moulana Muhammad Ali regarding the scope of the above verses; ".....................The care of the orphan was one of the earliest injunctions that Islam gave, and the prophet had always shown a deep anxiety for the welfare of the poor and the orphans.............This Chapter was revealed to guide the Muslims under the conditions which followed the battle of Uhud...................Now, in the battle 70 men. Out of 700 Muslims had been slain, and this decimation had largely decreased....................... Thus, many orphans would be left in the charge of widows, who would find it difficult to procure the necessary means of support..........................We are told that if they could not do justice to the orphans, they might marry the widows whose children would thus become their own children; and as the number of women was now much greater than the number of men, they were permitted to marry even two or three or four women. It would thus be clear that the permission to have more wives than one was given under the peculiar circumstances of the Muslim Society; and the prophet's action in marrying widows, as well as the example of many of his companions corroborates this statement. Marriage with orphan girls is also sanctioned in this passage for there were the same difficulties in the case of orphan girls as in the case of widows...................". ("The Holy - Qur'an", p. 187).

It has been rightly held that polygamy is encouraged or permitted by Islam as an exception and not as a rule. Islam has its own conception of marriage; and does not permit extra-marital relations, which have become the very foundation of what is called the western culture; aptly described as bourgeois, way of life by communists. For example,

"Manifesto of the Communist Party" says:--

"Our bourgeois, not content with having the wives and daughters of their proletarians at their disposal, not to speak of common prostitutes, take the greatest pleasure in seducing each other's wives. Bourgeois marriage is in reality a system of wives in common................": (K. Mark and F. Engels, p.88,1955 Edition).

Dr. Menski's comment contains contractory and mutually destructive arguments. While pointing out that Polygamy is only one possible way to alleviate particular social problem and is a useful legal remedy in certain difficult social situations, and that a qualified permission for Polygamous arrangements of any combination seems a reasonable way forward for modern India, the learned author contradicts himself by saying that allowing Polygamy is nothing but a clever device to legitimise sexual relations that may otherwise be illicit. He also states that a female student declared herself ready to accept polygamy provided polyandry was legally recognized. We find in this a plea in disguise for legalization of extra marital sexual relations which have demoralized the western social life. If the western minded people, who are described as bourgeois, by Marx and Engels, want such a legislation to legalize their present immoral life, which is immersed in the "Pleasure in seducing each other's wives", let them have it. It appears that the "qualified permission" which Dr. Menski has in his mind may be the above condition of his female student. On the matters of this kind the Qur'an urges the Muslims to say; "Ye have your religion, and I have my religion". (Chapter 109).

The question is whether Dr. Menski admits that Mr. Khan has correctly cited in his essay the Islamic law on the subject. If so, his criticism will be a fruitless exercise so far as the Muslims are concerned who will ignore it as anti-Islamic.

Here, it may be remembered that prostitution, the greatest evil of civilization which is a real canker, with its concomitant increase of bastardity is practically unknown to Countries where polygamy is allowed as a remedial measure: (Moulana Muhammad Ali, ibid; p. 188)

As a matter of fact, in India, the Muslim community is not confronted with any serious problem arising out of or connected with Polygamous marriages.

As held by the Allahabad High Court (ibid., p. 795): "........................As social conditions in the nation and through out the world continue to change, the reality of life is that even without a code on personal law of Muslims in so far as the Marriage is concerned, Polygamy is going in to oblivion. Education, changing patterns of the family structure, the structure of a family in the context of reality of the world, and economic necessities are on their own precipitating a situation where monogomy is becoming the reality though the religion permits a Muslim with such sanction of conscience to venture in to Polygamy. But, the code upon which Polygamy rests in Islam is strict and difficult to keep. Let no man misunderstand another's religion". (See also "Islamic Law in Modern India", by Indian Law Institute, 1972 Edition p.154).

But, prostitution and extra-marital relations create grave danger to social life in India too because of the influence of the bourgeois' way of life or the western culture. The West is now, punished by God through the fatal disease: AIDS for their promiscous sexual life. "This (the Qur'an) is a guidance, and those who misbelieve in the signs of their Lord, to them is torment of a grievous plague": (Chapter, 45,12).

The problem of prostitution has now, come up for consideration before the Supreme Court of India, in G. Jain v. Union of India, AIR 1990 SC 292. In this case, an application under Art.32 of the Constitution was filed asking for direction to the Union of India and others for making provision of separate hostels for children of prostitutes. The Court observed: "..................Legislation has been brought to control prostitution. Prostitution has, however, been on the increase and what was once restricted to certain areas of human habitation has now spread in to several localities. The problem has, therefore, become one of serious nature and requires considerable and effective attention......."

The court, therefore, constituted a committee to examine the material aspects of the problem and submit a report containing recommendations to the court. How did these women become prostitutes? Who are responsible for the same? Can it be said that Polygamy has produced prostitution? What are the remedial measures to be taken for rehabilitation of prostitutes and their children? Ail these aspects require investigation and serious thoughts.

Though Marx and Engels have visualized that abolition of the present system of production must bring it with it the abolition of the community of women springing from that system, i.e., of prostitution both public and private (ibid.,p.89), it is not clear whether in countries under the rule of Communism this has been achieved.

Dr. Menski says that in several European Countries, esp. Germany, millions of women did not become Polygamous but remained unmarried because of unavailability of men in their age groups. This has become socially acceptable and has caused no noticeable adverse moral effects, and the facts are that many women in those countries, and else where, have become self supporting.

But, if these women, who have become self supporting and at the same time remain un-married, are leading a chaste life also, that is well and good. How many of them lead a chaste life is a matter which is to be enquired into.

However, when the orphans or widows including the prostitutes and their children cannot otherwise be protected or rehabilitated, Polygamous marriages should be encouraged as a remedial measure. Thus, the Islamic Law on Polygamy holds considerable importance in the modern times, too.