# Hotel Taj Ganges and another v. State of U.P. and others

- **Citation:** (2003) 1 ILRA 194
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2002-08-08
- **Case number:** Civil Misc. Writ Petition (Tax) No. 287 of 1998
- **Bench:** M. Katju, Prakash Krishna
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/hotel-taj-ganges-and-another-v-state-of-u-p-and-others-39956
- **Pages:** 8

## Headnote

U.P. Entertainment and Betting Tax Act
1979 as Amended by U.P. Act No. 15 of
2001-
Section
3
(7)-
Leavy
of
entertainment tax- Hotel providing
facilities to its customers by providing
telephone and Television set in each
room with facilities of cable channel -
whether is the owner of the Hotel liable
to pay separate cable operation charges
held- No- the management not charging
separate fee, nor it is necessary that
every consumer regularly watching the
television.

Held- Para 12 and 14

We
may
now
examine
the
above
provisions which we have quoted. The
word 'entertainment' means exhibition,
performance, etc. to which persons are
admitted
for
payment.
Hence
the
definition of entertainment itself means
that to be entertainment under the Act
persons
have
to
be
admitted
for
payment. As stated in the petition, the
cable or video service to the petitioner
hotel's room is not made for any
http://www.allahabadhighcourt.nic.in
1All] Hotel Taj Ganges and another V. State of U.P. and others 195
payment. There is no separate charge for
the same. Even if one does not see the
programme on T.V. it will make no
difference because the tariff of the hotel
room will remain the same. Hence it
cannot be said that the cable/video
service which the petition is providing to
its
customers
is
entertainment
as
defined under the Act. It may be noted in
this connection that it is only for cabaret
and floor show that entertainment tax
has to be paid even if there is no
separate charge for the same, vide
Section 3 (6) of the Act.

(B) Constitution of India- Article 265-
Hotel Management- having own cable
net work- providing cable facilities to its
customers for attracting them whether is
such customer within the meaning of
subscriber
?
held-
No'
levy
of
entertainment tax prior to 5.3.01 is
violative
of
Article
265
of
the
Constitution of India.

The charging provision in the Act is
Section 3 which levies a tax on payments
for admission to entertainment . Since in
our view there is no payment for
admission hence obviously no tax can be
imposed
under
the
Act
on
the
petitioner's cable/video service.

## Text

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194 INDIAN LAW REPORTS ALLAHABAD SERIES [2003
to the Central Government through letter
dated 8.8.2002. The State Government
examined the representation on 9.8.2002.
The Special Secretary examined it on
12.8.2002. Secretary examined it on
12.8.2002 and submitted to the higher
authorities and after due consideration the
said representation was finally rejected by
the State Government on 12.8.2002. The
counter affidavit of Sri Ramesh Kumar on
behalf of the Union of India shows that
the representation of the petitioner dated
5.8.2002 alongwith parawise comments of
the detaining authority was received by
the Central Government on 7.8.2002. The
representation was immediately processed
for
consideration
and
the
District
Magistrate asked to send parawise report
through Crash wireless message dated
9.8.2002. The report was received on
12.8.2002.
The
representation
was
processed for consideration and was put
up before the Director Ministry of Home
on 13.8.2002 and he along forwarded to
the Union Home Minister on 4.8.2002.
The Union Home Minster considered and
rejected the same on 14..8.2002.

29. In this way the authorities
concerned had decided the representation
without any delay and there is explanation
for each day. As the District Magistrate,
detaining
authority
decided
the
representation of the petitioner on next
day, State Government decided it on
12.8.2002 and the Central Government on
14.8.2002. Thus, there is no delay.

30. In view of our above discussions
and observations on the points raised by
the learned counsel for the petitioner we
find that there is no force in the petition
and the same is liable to be dismissed.

31. The petition is hereby dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD MARCH 7, 2003

BEFORE
THE HON'BLE M. KATJU, J.
THE HON'BLE PRAKASH KRISHNA, J.

Civil Misc. Writ Petition (Tax) No. 287 of
1998

Hotel Taj Ganges, and another

 ...Petitioner
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioners:
Sri Mool Behari Saxena

Counsel for the Respondents:
S.C.

U.P. Entertainment and Betting Tax Act
1979 as Amended by U.P. Act No. 15 of
2001-
Section
3
(7)-
Leavy
of
entertainment tax- Hotel providing
facilities to its customers by providing
telephone and Television set in each
room with facilities of cable channel -
whether is the owner of the Hotel liable
to pay separate cable operation charges
held- No- the management not charging
separate fee, nor it is necessary that
every consumer regularly watching the
television.

Held- Para 12 and 14

We
may
now
examine
the
above
provisions which we have quoted. The
word 'entertainment' means exhibition,
performance, etc. to which persons are
admitted
for
payment.
Hence
the
definition of entertainment itself means
that to be entertainment under the Act
persons
have
to
be
admitted
for
payment. As stated in the petition, the
cable or video service to the petitioner
hotel's room is not made for any
http://www.allahabadhighcourt.nic.in
1All] Hotel Taj Ganges and another V. State of U.P. and others 195
payment. There is no separate charge for
the same. Even if one does not see the
programme on T.V. it will make no
difference because the tariff of the hotel
room will remain the same. Hence it
cannot be said that the cable/video
service which the petition is providing to
its
customers
is
entertainment
as
defined under the Act. It may be noted in
this connection that it is only for cabaret
and floor show that entertainment tax
has to be paid even if there is no
separate charge for the same, vide
Section 3 (6) of the Act.

(B) Constitution of India- Article 265-
Hotel Management- having own cable
net work- providing cable facilities to its
customers for attracting them whether is
such customer within the meaning of
subscriber
?
held-
No'
levy
of
entertainment tax prior to 5.3.01 is
violative
of
Article
265
of
the
Constitution of India.

The charging provision in the Act is
Section 3 which levies a tax on payments
for admission to entertainment . Since in
our view there is no payment for
admission hence obviously no tax can be
imposed
under
the
Act
on
the
petitioner's cable/video service.

(Delivered by Hon'ble M. Katju, J.)

1. This writ petition no. 287 (Tax) of
1998 has been filed for a writ of certiorari
to quash the impugned order of the
Assistant
Entertainment
Tax
Commissioner, Varanasi dated 24.9.1993
and 27.12.1993 Annexure 3 and 4 to the
writ petition no. 287 (Tax) of 1998. Writ
petition no. 361 (Tax) of 1998 has been
filed for quashing the orders dated
17.8.1998, 23.6.1998 and 27.4.1998 and
for refund of the amount said to be
illegally realized from the petitioner. Writ
Petition No. 1056 of 1994 has been filed
for quashing the orders dated 13.12.1993
and 6.1.1994. The petitioners have also
prayed for a mandamus directing the
respondents not to levy any entertainment
tax on the petitioner on its providing dish
antenna services to its room in its hotels
and to refund the amount said to be
illegally realized by the respondents.

Heard learned counsel for the parties.

2. The petitioners are 5 Star
government
approved
hotels
which
provide boarding and lodging facilities to
its customers. The petitioners are part of a
chain of hotels managed by the Taj Group
of hotels having its hotels at various
centers in the country and abroad. In its
hotels the petitioner have a huge multi
storied building having shopping arcade,
swimming pool, lavish lawn, badminton
court, tennis court, jogging area, peacock
garden etc. apart from other facilities e.g.
conference hall, huge lobby, travel desk
computer, in house bank, money changing
facilities , post office etc. The petitioners
also have restaurant, coffee shop, bar
licence, 24 hours room service etc.

3. In paragraph 6 of writ petition no.
287 of 1998 it is stated that to provide
comforts
and
efficient
service,
the
petitioner's room are equipped with
modern and international standard gadgets
having different channel music system,
T.V. set etc. The petitioner has stated in
paragraph 12 (a) of the writ petition that
the petitioner does not charge any amount
for admission for entertainment except the
fixed tariff for the rooms from its
customers. The entertainment is part of
the service rendered by the petitioner for
which a fixed tariff is charged. It is
alleged that it is difficult and impossible
for the petitioner to calculate the payment
towards the entertainment through the
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196 INDIAN LAW REPORTS ALLAHABAD SERIES [2003
T.V. on the rooms. The occupancy in the
hotel is not 100% every day and
sometimes the occupancy is up to 50%
and sometimes as low as 10%.

4. In paragraph 14 of the writ
petition it is alleged that to provide
maximum comfort to its customers and to
give all the facilities available in the 5 star
hotel the petitioner has also made
arrangement for dish antenna in its hotel
premises through which a customer living
in a room may enjoy any of the
programmes such as Zee T.V. Star T.V.
B.B.C., Doordarshan etc. It is not possible
to ascertain and calculate which of the
rooms occupied by the customers availed
the service of these channels of T.V. In
paragraph 15 of the writ petition it is
alleged that being a 5 Star hotel, in order
to keep its goodwill and to compete with
other hotels, it has to provide modern
facilities
which
are
internationally
recognized and provided in other hotels in
the world. The guests staying in the rooms
pay irrespective of the fact whether they
avail these facilities in the rooms, and the
management does not charge any extra
amount against this facilities available in
the room. Being a 5 Star hotel the
petitioner has to provide these facilities
otherwise the classification committee
constituted by the Tourism Department of
the Government would be compelled to
degrade the petitioners hotel from 5 Star
hotel to a lower Star category hotel.

In paragraph 17 of the writ petition it
is stated that the petitioner was surprised
to receive the letter dated 24.9.1993 of the
Assistant
Entertainment
Tax
Commissioner, Varanasi stating that the
petitioner was providing entertainment
through dish antenna to its customers in
the rooms between the period 1.4.1992 to
24.9.1993 and it was liable to pay 30%
entertainment tax in pursuance of the
government notification dated 13.4.1989
is Annexure 3 to the writ petition. In
paragraph 17 (b) of the writ petition it is
stated
that
cable
operation
is
a
commercial
business
enterprise
of
entertainment through cable T.V. which
also includes one channel of video film
for which an exclusive fee is charged and
is basically run for profit. On the other
hand, the petitioner's hotel does not show
one additional video channel for film and
showing of foreign programmes through
satellite is one of the main facilities
provided to guests staying in the hotel for
which there is no distinct charge. It is
alleged in paragraph 17 (d) of the writ
petition that the demand of entertainment
tax worked out is irrational, arbitrary as
the entertainment tax is levied at 30% of
the payment received for admission to the
programmes. In the case of the petitioner
no amount is received towards the
entertainment or as an admission to watch
T.V. programmes through dish antenna. It
is providing dish antenna service to the
room in the hotel which is a private place
and it could not be termed to be a public
place. It is alleged in paragraph 17 (J) of
the writ petition that providing satellite
service through dish antenna to its
customers staying in the rooms in the
hotel is clearly different from providing
cable service an video shows in public
places,
vehicles
or
hotels.
In
this
connection
the
petitioner
met
the
Assistant
Entertainment
Tax
Commissioner and placed the full facts
and requested that the entertainment tax
may not be demanded from it for
providing dish antenna service to its
rooms as this is not entertainment within
the meaning of Section 2 (g) of the U.P.
Entertainment
&
Betting
Act
1979
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1All] Hotel Taj Ganges and another V. State of U.P. and others 197
(hereinafter referred to as the Act).
However, the said authority vide letter
dated 27.12.1993 directed the petitioner to
pay Rs.79380/- within three days failing
which the amount will be realized as
arrears of land revenue vide Annexure -4
to the writ petition. In paragraph 39 it is
stated that it is always open to the guests
occupying the rooms to switch on the
T.V. or not, and it is purely in their
discretion. In paragraph 40 of the writ
petition it is stated that many of foreign
tourists do not understand English, what
to say of Hindi. The programme is either
in English or Hindi. Aggrieved this writ
petition has been filed.

5. A counter affidavit has been filed
in writ petition no. 361 of 1998 and we
have perused the same. In paragraph 5 of
the same it is stated that providing
entertainment to the customers by the
petitioner is entertainment as defined in
Section 2 (g) of the Act. The respondents
have relied on several decisions of this
Court in various writ petitions referred to
in paragraphs 7, 8 and 44 of the counter
affidavit. We have carefully perused the
decisions in the aforesaid cases. The facts
of the present case are totally different
from the facts of writ petition (tax) no.
1353 of 1993 Universal Communication
System vs. State of U.P. connected with
Writ petition no. 831 of 1994 Suneel
Kumar Agarwal vs. District Magistrate,
Writ petition no. 823 of 1994 M/s Osho
Resorts vs. District Magistrate and Writ
petition no. 823 of 1994 Sudheer Kumar
Gupta vs. District Magistrate which were
all decided by a Division Bench of this
court by judgment dated 26.5.1995. The
facts of those cases were totally different
from the facts of the present case. Those
writ petitions were filed by cable
operators who had challenged the demand
of entertainment tax under the U.P.
Entertainment and Betting Tax Act, 1979
as amended. The petitioner is not a cable
T.V. operator and hence the aforesaid
decisions have nothing to do with the
facts of the present case.

6. It is not disputed that the
petitioner does not charge any extra and
separate amount from its customers for
providing T.V. service in the rooms to
enable them to view different channels.
This is also evident from the room
brochure and tariff, vide Annexures 1, and
2 to the writ petition no. 2870 of 1992.
The petitioner does not take service of
any cable operator nor pays any amount
to them for enabling its customers to view
films through cable operators. Whatever
is available through the dish antenna
installed by the petitioner in its hotel
premises
are
only
viewed
by
the
customers on T.V. sets in their rooms
without paying any extra amount.

7. It may be mentioned that the
cable operators business is a commercial
business
enterprise
of
entertainment
through cable T.V. which operates for
profit motive for providing this service.
The petitioner does not charge any extra
amount for such entertainment and its
does not show any additional video
channels for films. The customers can see
only the programmes which come through
the
dish
antenna
installed
in
the
petitioners'
premises
which
comes
through satellite and the petitioner does
not charge any extra amount for this.

8. To appreciate the submissions
made in this case we may refer to certain
relevant provisions of the Act.
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198 INDIAN LAW REPORTS ALLAHABAD SERIES [2003
Section 2 (g) of the Act defines
entertainment as follows :

"entertainment
includes
any
exhibition,
performance,
amusement,
game, sport or race (including horse
race) to which persons are admitted for
payment and in the case of cinematograph
exinition, includes exhibition or news-
reels,
documentaries,
cartoons,
advertisement shorts or slides, whether
before or during the exhibition of a
feature film or separately."
Section 2 (1) states:

"Payment for admission' includes-
(i) any payment for seats or other
accommodation in any form in a place of
entertainment.
(ii) Any payment for a programme or
synopsis of an entertainment,
(iii) Any payment made for the loan or
use of any instrument or contrivance
which enables a person to get normal or
better view or hearing or enjoyment of the
entertainment, which without the aid of
such instrument or contrivance such
person would not get,
(iv) Any payment, by whatever name
called for any purpose whatsoever,
connected with an entertainment, which a
person is required to make in any form as
a condition of attending or continuing to
attend
the
entertainment,
either
in
addition to the payment, if any admission
to the entertainment or without any such
payment for admission,
(v) Any payment made by a person, who
having been admitted to one part of a
place of entertainment is subsequently
admitted to another part thereof, for
admission to which a payment involving
tax or more tax is required."

Section 3 (1) states:
"Subject to the provisions of this Act,
there shall be levied and paid on all
payments
for
admission
to
any
entertainment,
other
than
an
entertainment to which Section 4 applies,
an entertainment tax at such rate not
exceeding ( one hundred and fifty percent)
of each such payments as the State
Government may from time to time notify
in this behalf, and the tax shall be
collected by the proprietor from the
person making the payment for admission
and paid to the Government in the
manner prescribed."

Section 3 (6) states :

"What in a hotel or a restaurant,
entertainment by way of cabaret or floor
show (by whatever name called but
excluding a mere band in attendance or
recorded music) is provided along with
any meal or refreshment with a view to
attracting customers, whether or not
payment
for
admission
is
charged
distinctly for such entertainment, twenty
percent of the amount payment by the
customer for such meal or refreshment or
the amount charged distinctly for such
entertainment, whichever is higher shall
be deemed to be the payment for
admission to such entertainment and the
tax shall be levied and paid accordingly. "

9. The Act was amended by the U.P.
Entertainment and Betting Tax ( Second
Amendment) Act, 1995 ( U.P. Act 28 of
1995). We may refer to the relevant
provisions of this Amending Act.

10. By Section 2 (6) of this Act the
following clauses have been inserted in
Section 2 of the original Act :
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1All] Hotel Taj Ganges and another V. State of U.P. and others 199
"(ee), 'cable service' means the
transmission by cables of programmes
including re-transmission by cable of any
broadcast television signals.'
(eee), 'cables television network'
means any system consisting of set of
closed transmission paths and associated
signal
generation,
control
and
distribution
equipment,
designed
to
provide cable service for reception by
multiple subscribers.'

By the same Amendment of 1995
after Section 4 B of the principal Act the
following section has been inserted.

"4-C, Tax on cable service (1) The
proprietor of a cable television network
providing cable service shall be liable to
pay entertainment tax at such rate not
exceeding two hundred rupees for every
subscriber for every month, as the State
Government may, from time to time, notify
in this behalf,

Provided that the proprietor of a
cable television network shall not be
liable to pay entertainment tax in respect
of a subscriber which is a hotel.'

11. The original Act was again
amended by UP Act 15 of 2001. The
statement of Object and Reasons of this
2001 Amendment Act states :

"There was no specific provision in
the said Act for levy and payment of tax
on entertainments provided through cable
service. It was therefore decided to amend
the said Act mainly to provide for

(1) the definition of the term 'cable
operator' and extending the meanings
of words and expressions assigned to
such in the Cable Television Network
(Regulation) Act, 1995 as were used
in the Act but are not defined therein
(2) imposition of tax on the proprietor of
a hotel who provides cable service to
the hotel through his own cable
television network.'

Section 2 (a) of this 2001 Amendment
Act inserted clause (ee) after clause (e)
which reads:

"cable operator' means any person
who provides cable service through a
cable television network or otherwise
controls or is
responsible for the
management and operation of cable
television network and includes the
proprietor of a hotel who provides cable
service in the hotel through his own cable
television network."

Section 3 of the Amendment Act inserted
clause (7) after Section (6) which reads:

"(7) Where in a hotel, entertainment
by way of cable service is provided in
rooms or other places, the entertainment
so provided in each room or other place
shall be deemed to be a separate
entertainment and the subscription for
admission to each such entertainment
shall be deemed to be equal to the amount
or subscription charged from a subscriber
in the vicinity of the hotel by the cable
operator providing cable service in the
hotel and the tax shall be levied and paid
on the basis of such subscription:

"Provided that where the cable
operator himself is the proprietor of the
hotel, the subscription for admission to
each such entertainment shall be deemed
to be equal to the amount of subscription
charged from a subscriber in the vicinity
of the hotel by any other cable operator."
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200 INDIAN LAW REPORTS ALLAHABAD SERIES [2003
12. We may now examine the above
provisions which we have quoted. The
word 'entertainment' means exhibition,
performance, etc. to which persons are
admitted
for
payment.
Hence
the
definition of entertainment itself means
that to be entertainment under the Act
persons have to be admitted for payment.
As stated in the petition, the cable or
video service to the petitioner hotel's
room is not made for any payment. There
is no separate charge for the same. Even if
one does not see the programme on T.V.
it will make no difference because the
tariff of the hotel room will remain the
same. Hence it cannot be said that the
cable/video service which the petitioner is
providing
to
its
customers
is
entertainment as defined under the Act. It
may be noted in this connection that it is
only for cabaret and floor show that
entertainment tax has to be paid even if
there is no separate charge for the same,
vide Section 3 (6) of the Act.

13.

The
word
'payment
for
admission' has been defined in Section 2
(1) which we have quoted above. The
video/cable service provided by the
petitioner is not provided by payment for
admission.

14. The charging provision in the
Act is Section 3 which levies a tax on
payments for admission to entertainment.
Since in our view there is no payment for
admission hence obviously no tax can be
imposed under the Act on the petitioner's
cable/video service.

15. As regards the 1995 amendment,
that in our opinion relates to tax on
proprietors of a cable television network.
This obviously relates to the persons who
run the cable operator business. The
petitioner does not run any business of a
cable television network. It is only
providing the cable/video service from its
own dish antenna. A careful reading of
Section 4 -C as inserted by the 1995
amendment shows that the tax is payable
for every subscriber.

16. The word 'subscriber' is defined
in Section 2(d) of the 1995 amendment to
mean:

"'Subscriber' means a person who
receives the signals of cable television
network at a place indicated by him to the
proprietor of the cable television network,
without further transmitting it to any
other person."

17. The definition of subscriber
indicates that a subscriber is a person who
receives the signals of a cable television
network at a place indicated by him to the
proprietor of the cable television network.
In our opinion the petitioner's customers
cannot be called subscribers because they
do not indicate to any proprietor of any
cable television network any place for
receiving signals of a cable television
network.

18. In fact the legislature itself
realized that the service of the kind
rendered by the petitioner's hotel is not
covered by the Act even after its
amendment in 1995, and hence further
amendment was made in the Act by U.P.
Act No. 15 of 2001 which came into force
from 5.3.2001 vide Section 1 (2) of the
Amending Act. Hence it is only after
5.3.2001 that the petitioner had to pay
entertainment tax and not for the period
before 5.3.2001.
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1All] Chairman, Aligarh Gramin Bank V. Sri Lattoori Singh 201
19. The statement of objects and
reasons of the Amending Act of 2001
clearly indicate that since there were no
specific provisions in the Act for levy and
payment of tax on entertainment by hotel
owners who provided cable service
through their own T.V. set hence this
Amendment had to be introduced before
any such tax could be levied.

20. A perusal of the above
amendment
shows
that
now
the
legislature has clearly provided that even
hotels which provide their own cable
television
network
have
to
pay
entertainment tax. Thus it is clear that the
petitioner was not liable to pay such tax
prior to 5.3.2001, and hence levy and
realization of the tax prior to this date was
violative
of
Article
265
of
the
Constitution.

21. In the result these writ petitions
are allowed. The impugned orders are
quashed. The respondents are directed to
refund the amounts they have illegally
collected as entertainment tax from the
petitioners for the period prior to 5.3.2001
within two months of production of copy
of this order before the respondent no. 3.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD MARCH 10, 2003.

BEFORE
THE HON'BLE S.P. SRIVASTAVA, A.C.J.
THE HON'BLE ASHOK BHUSHAN, J.

Special Appeal No. 49 of 2003

Chairman, Aligarh Gramin Bank

...Appellant
Versus
Sri Lattoori Singh
...Opposite Party

Counsel for the Appellant:
Sri S.N. Verma
Sri Yashwant Verma

Counsel for the Opposite Party:
Sri I.M. Tripathi

Aligarh
Gramin
Bank
(Officers
and
Employees) Service Regulations 2000-
Regulation 43- Prior permission to take
service of legal practitioner - No prayer
made by the delinquented employee-
except to appoint his next friend Mr. R.P.
Singh, the officer of Central Bank of
India- whether an officer outside from
the Bank can be appointed as next friend
of the delinquent employee. Held- 'No'
unless rules so provides- question for
appointment of legal practitioner left
open for the delinquent employee.

Held- Para 33

Defence
representative
from
Central
Bank of India and direction to that effect
by the learned single Judge cannot be
sustained and is hereby set aside.
However,
it
is
observed
that
the
respondent (writ petitioner) is entitled
to have a defence representative from
Aligarh Gramin Bank as permitted by the
Enquiry Officer or he may pray for
assistance
by
legal
practitioner
in
accordance
with
Regulation
4
as
observed above.
Case law discussed:
2001 (9) SCC 540
2003 (1) AWC-70
AIR 1972 SC 2178
AIR 1983 SC 454

(Delivered by Hon'ble Ashok Bhushan, J.)

1. We have heard Sri S.N. Verma,
Senior Advocate assisted by Sri Yaswant
Verma for the appellant and Sri I.M.
Tripathi, Advocate for the respondent.

2. This Special Appeal has been
filed
by
the
appellant
against
the