# RAJ A RAMESW ARA RAO v. COMMISSIONER OF INCOME-TAX, HYDERABAD

- **Citation:** [1964] 2 S.C.R. 847
- **Court:** Supreme Court of India
- **Decided:** 1963-04-04
- **Bench:** S. K. Das, A. K. Sarkar, K. N. Wanchoo, K. C. Das Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/raj-a-ramesw-ara-rao-v-commissioner-of-income-tax-hyderabad-2843
- **Pages:** 12

## Headnote

Income Tax-Interim maintenanoe allowances and commutation Bum-Distinctinn-lnterim maintenance allowances,
whether income or
capital-flyderabad (Abolition of Jagirs)
Regulation, 1358F-Hyderabad Jagirs (Commutation) Regulation, J359F-Income-tax Act, 1922 (11 of 1922).
·
The Hyderabad (Abolition of Jagirs) Regulation, l 358F,
which abolished Jagirs, provided by s. 14 that the amount
payable to the J agirdars under the Regulation "shall he deemed
to be interim maintenance allowances payable until such time
as the terms of the commutation
for thejagirs are determined." The Hyderabad .Jagirs (Commutation) Regulation,
1359F, bys. 3 laid down that commutation sum for a .Jagir
would be a certain multiple of its basic annual revenue and by
s. 6, tlut the commutation sum for each Jagir would be
distribut1ble between the Jagirdar and Hissedars in certain
proportions.
Sub-section (2) of s. 7 of the latter Regulation
stated that "payment to a Jagirdar ...... of. ..... the commutation sum of theJa~ir shall constitute the final commutation
as from the !st April 1950, of his rights in the Jagir and if
any· payment by way
of an interim maintenance allowance
under the said Regulation," that is, the Regulation of J3j8F.,
"is made in respect of a period ...•.. subsequent to the said
date, the, amount of such payment .... shalJ be recovered from
the recipient thereof by deduction from .... his share in the
commutation sum for the Jagir."
He"ld
that the interim maintenance allowances paid
under s. 14 of the earlier Regulation in respect of a period
prior to April I, .1950, were revenue receipts on which income.
tax can be imposed. They were intended to be quite distinct
from the con1mutation sum mentioned in it which sum was ad·
mittedly a capital receipt. The words "final commutation'' in
s. 7 (2) of the Latter Regulation did not show that the interim
allowances were part of the comrriutation sum and, therefore,
1963
April 4
1963
Raj• Ram~•tcara Rao
••
Conrmi :siontt of '!rt·
cornt-tax, /~.,tftrabad
Sarkar J.
848 SUPREME COURT REPORTS [1964] VOL.
of the nature of capitr.l receipts but they only meant that the
final commutation was the only commutation that thejagirdar
was to get in respect of his rights in thejagir .
The observation in Commissioner of Inland Revenue v,
Butterley
&
'Co. Ltd. that
such interim allowances were
sui generis and were neither income from property nor from
investment nor did it arise from the right to compensation but
arose from· the statute itself which directed it to be paid,
approved.
Shanmugha Raje.!Wara Sethupalhi v. Income-taz 0 fficer,
Karaikudi, [1962] 44 I. T. R. 853. Ccmmi.!•ionor of lnrome-taz
v. Shaw Wallace & Co. (1932) L. R. 59 I. A. 206 and Cammi8Bioner of Inland /levenut v. Butterley & Co. Ltd., (1956) 36
T. C. 411, rcfrrred to.
Crvn, APPEL!,ATE juRI8DICTIO!'<' : Civil Appeal
No. 420 of 1962.
Appeal from
the judgment and order dated
April 3, 1959 of the Andhra Pradesh High Court in
Writ Petition No. 17 of t 956 {Referred Case).
C. Krish1UJ Reddy, A. V. V. Nair and P. Ram
Rec'dy, for the appellant.
K. N. Raja;Jopal Snstri and R. N. Sachthey,
for the respondent.
l!J6:l.
April 4.
The Judgment of the Court
was delivered by
SARKAR .J.-The appellant was the proprietor
of the Wanaparthy Jagir in the former Indian State
of HyJerabad. Certain payments described as interim
maintenance allowances were mad'e to him under
the Hyderabad (Abolition of .Jagirs) Regulation
1 :158 F, hereafter called the Abolition Regulation.
These payments were brought to tax under the
I ncome·tax Act, I fE~ as income.
The appellant
contended that they were capital and not liable to be
taxed.
He took various proceedings and eventually
2 s.c.R.. . SUPREME COURT REPORTS
0849
a case was stated to the High Court of Andhra Pradesh
for decision of the following question :
"Whether the interii;n maintenance allowances received by the assessee under
the
Hyderabad (Abolition of Jagirs) Regulation,
1358 Fasli, are income and therefore liable
to tax.

## Text

2 S.C.R.
SUPREME COURT REPORTS
847
RAJ A RAMESW ARA RAO
v.
COMMISSIONER OF INCOME-TAX,
HYDERABAD
(S. K. DAS, A. K. SARKAR, K. N. WANCHOO
and K. C. DAS GUPTA JJ.)
Income Tax-Interim maintenanoe allowances and commutation Bum-Distinctinn-lnterim maintenance allowances,
whether income or
capital-flyderabad (Abolition of Jagirs)
Regulation, 1358F-Hyderabad Jagirs (Commutation) Regulation, J359F-Income-tax Act, 1922 (11 of 1922).
·
The Hyderabad (Abolition of Jagirs) Regulation, l 358F,
which abolished Jagirs, provided by s. 14 that the amount
payable to the J agirdars under the Regulation "shall he deemed
to be interim maintenance allowances payable until such time
as the terms of the commutation
for thejagirs are determined." The Hyderabad .Jagirs (Commutation) Regulation,
1359F, bys. 3 laid down that commutation sum for a .Jagir
would be a certain multiple of its basic annual revenue and by
s. 6, tlut the commutation sum for each Jagir would be
distribut1ble between the Jagirdar and Hissedars in certain
proportions.
Sub-section (2) of s. 7 of the latter Regulation
stated that "payment to a Jagirdar ...... of. ..... the commutation sum of theJa~ir shall constitute the final commutation
as from the !st April 1950, of his rights in the Jagir and if
any· payment by way
of an interim maintenance allowance
under the said Regulation," that is, the Regulation of J3j8F.,
"is made in respect of a period ...•.. subsequent to the said
date, the, amount of such payment .... shalJ be recovered from
the recipient thereof by deduction from .... his share in the
commutation sum for the Jagir."
He"ld
that the interim maintenance allowances paid
under s. 14 of the earlier Regulation in respect of a period
prior to April I, .1950, were revenue receipts on which income.
tax can be imposed. They were intended to be quite distinct
from the con1mutation sum mentioned in it which sum was ad·
mittedly a capital receipt. The words "final commutation'' in
s. 7 (2) of the Latter Regulation did not show that the interim
allowances were part of the comrriutation sum and, therefore,
1963
April 4
1963
Raj• Ram~•tcara Rao
••
Conrmi :siontt of '!rt·
cornt-tax, /~.,tftrabad
Sarkar J.
848 SUPREME COURT REPORTS [1964] VOL.
of the nature of capitr.l receipts but they only meant that the
final commutation was the only commutation that thejagirdar
was to get in respect of his rights in thejagir .
The observation in Commissioner of Inland Revenue v,
Butterley
&
'Co. Ltd. that
such interim allowances were
sui generis and were neither income from property nor from
investment nor did it arise from the right to compensation but
arose from· the statute itself which directed it to be paid,
approved.
Shanmugha Raje.!Wara Sethupalhi v. Income-taz 0 fficer,
Karaikudi, [1962] 44 I. T. R. 853. Ccmmi.!•ionor of lnrome-taz
v. Shaw Wallace & Co. (1932) L. R. 59 I. A. 206 and Cammi8Bioner of Inland /levenut v. Butterley & Co. Ltd., (1956) 36
T. C. 411, rcfrrred to.
Crvn, APPEL!,ATE juRI8DICTIO!'<' : Civil Appeal
No. 420 of 1962.
Appeal from
the judgment and order dated
April 3, 1959 of the Andhra Pradesh High Court in
Writ Petition No. 17 of t 956 {Referred Case).
C. Krish1UJ Reddy, A. V. V. Nair and P. Ram
Rec'dy, for the appellant.
K. N. Raja;Jopal Snstri and R. N. Sachthey,
for the respondent.
l!J6:l.
April 4.
The Judgment of the Court
was delivered by
SARKAR .J.-The appellant was the proprietor
of the Wanaparthy Jagir in the former Indian State
of HyJerabad. Certain payments described as interim
maintenance allowances were mad'e to him under
the Hyderabad (Abolition of .Jagirs) Regulation
1 :158 F, hereafter called the Abolition Regulation.
These payments were brought to tax under the
I ncome·tax Act, I fE~ as income.
The appellant
contended that they were capital and not liable to be
taxed.
He took various proceedings and eventually
2 s.c.R.. . SUPREME COURT REPORTS
0849
a case was stated to the High Court of Andhra Pradesh
for decision of the following question :
"Whether the interii;n maintenance allowances received by the assessee under
the
Hyderabad (Abolition of Jagirs) Regulation,
1358 Fasli, are income and therefore liable
to tax."
The qu'estion was answered against the appellant .by
the High Court and hence this appeal.
The point at issue is whether these payments
constituted capital or income. The answer to this
question will have to be found in the Abolition
Rugulation under which the payments were made
and another Regulation called the Hyderabed Jagirs
(Commutation) Regulation, 1359F (hereafter called
the Commutation Regulation) which was intended to
be supplementary to the earlier Regulation. The
material provisions of these Regulations may, therefore, be referred to at once.
We shall first take up the Abolition Regula·
tion. Under s. 6 of this Regulation, the Jagirs
were included in "Diwani" (Government) as from
the "appointed day" to be fixed under s. 5 and
thereupon the powers, rights and liabilities of the
J agirdars in relation to the J agirs ceased to be
exercisable by or against them. Section 3 provided
for the appointment of an officer called the J agir
Administrator. Section 8 provided for payment to
Govemmen t of a specified percentage of the gross
revenue, which for practical purposes may be taken
to be the total realisation or income of the Jagir, fer
meeting the administration expenses. Section 13
required a separate account in respect of each Jagir
to be kept by the J agir Administrator. Section 1 O
provided for payment to the J agirdar out of the
income of the Jagir of ·a sum equivalent to half of
1963
Raja Rameswara R«o
v.
Commissioner of In·
Ct11f'le·lax, Hyderatad
Sarkar J,
I
1963
Roja Romuwar• Rao
v.
Commission.1r oj In·
rom1·IOJt, ff.Jlkrabad
Sa1*4r J,
850 SUPREME COURT REPORTS [1964] vot.
what he was getting before the comme11cement of
the Regulation, as remuneration for managing the
Jagir and for distribution of a like sum among tlic
Hissedars (sharers in the J agir income with the .J agirdar) in a certain proportion. Section 11 provided
that the net income of the J agir calculated in the
manner prescribed, would be distributed between
the J agirdar and Hissedars in the proportion in which
they were entitled to the income under the law in
force before the commencement of the Regulation.
Section 14 provided that the amounts payable to
Jagirdars under Regulation ."shall be deemed to be
interim maintenance allowances payable until such
time as the terms for the commutation of J agirs are
determined." These are the interim maintenance
allowances with regard to which the question has
arisen in th is case.
We turn now to the Commutation Regulation.
Section 3 of this Regulation provided that the com·
mutation sum for a Jagir would be a certain multiple of its basic annual revenue, the method of calculation of which was laid down in s. 4. Section 5
stated that the commutation sum for every J agir
would be determined by the J agir Administrator.
Section 6 said
that the commutation sum for
each Jagir would be distributable
between the
Jagirdar and Hissedars in like· proportion as the
income was distributable between them under s. 11
of the Abolition Regulation subject to certain deductions to which it is unnecessary to refer.
It is not in dispute that as a result of the
Re~ulations the appellant's rights in his Jagir were
extmguished. The appellant contends that he was
divested of the J agir as from the "appointed day"
fixed under s. 5 which was, it is said, September 15,
1949. It appears that a: somewhat different view
was taken in Shanmugha RajeB'IL'ara Sethupathi v.
Inrome·lax Offiar, Karaikwli ('). We do not think
(I) [19~2) ff LT,R, 85S,
-
-
.·-
-
2 S.C.R.
SUPREME COUR t RE:i>OR TS 851
it necessary in the present case to fix the precise
point of time when the J agir was taken away from
the appellant and we will proceed on the basis that
the appellant's contention is the correct one.
•
As we have earlier said, the real point for ·
decision is whether the payments were of income
nature or of the nature of capital. If they were
made as compensation · for the deprivation of the
Jagir, they would undoubtedly be capital. It may
be stated that it is common case of the parties that"
the commutation sum payable under the Commutation Regulation was paid as such compensation.
The first thing that we wish to observe is that
the two Regulations made a clear distinction between
the interim maintenance allowances and the commutation sum. The allowances were paid under
the Abolition Regulation which said nothing about
the right to the payment of the commutation sum;
that right was created only by the . Commutation
Regulation. The allowances were measured as a
fraction of the current income while the commutation was a multiple of annual revenue.
The
allowances were recurring payments for. a certain
time while the Commutation sum was a fixed sum
payable at once or by instalments. Then we find
that under s. 14. of the Abolition Regulation the
interim maintenance
allowances were "payable
until such time as the terms for the commutation of
Jagirs are determined". In other words, after the
terms for commutation are determined, the interim
maintenance allowances are to cease to be payable.
It follows that when compensation begins to be paid,
the payments of the maintenance allowances have
to stop.
Lastly, we find this distinction empha~ised in
sub-sec- (2) of s. 7 of the Commutation Regulation.
That provision is in these terms :
1963
Rafa Rame.swara Rao
v.
Commissioner oj Income-tax, HJderabad
Sark•r J.
IJOJ
Rtja Rtmtt1wara Rao
v.
Commis,iot11r of 111·
com1'UJt, HJitrabaJ
Sm/tar J,
852 SUPREME COUI_lT REPORTS [1!)64] VOL.
"The payment to a Jagirdar or Hissedar
of his appropriate share in the commutation
sum of the Jagir shall constitute the final
•
commutation as from April I, 1950, of his
rights in the J agir and if any payment by way
of an interim maintenance allowance under
the said Regulation is made in respect of a
period the whole or part of which is subsequent
to the said date, the amount of such payment
or, as the case may be, the appropriate pro·
portion of such amount shall be recovered
from the recipient thereof by deduction from
the first payment made to him on account of
his share in the commutation sum for the Jagir".
The words "said Regulation" in this sub-section
refer to the Abolition Regulation.
It seems to us that though' somewhat cumbcrously
worded, the intention behind the sub-section is not
many serious doubt. Its object was to provide that
the date of determination of the terms of commutation mentioned in s. 14 of the Abolitio.n Regulation ·
would be April I, 1950 and no interim maintenance
allowances would be paid ill respect of any period
after that date but thereafter only commutation
sum would be paid. Now this commutation sum is
the sum determined as provided in ss. 3 and 4 of
the Commutation Regulation. The interim maintenance allowances are no part of the commutation
sum so determined. Furthermore, the sub-section
expressly provides that if any interim maintenance
allowance is paid in respect of a period subsequent
to April l, 1950, that payment is to be recovered
out of the commutation sum payable under this
Regulation. Quite clearly, therefore, only what. was
paid in respect of the period prior to April l, 1950
was to be interim maintenance allowance, and what
was thereafter paid was towards the commutation
sum.
-
2 s.a.R.
SUPRENIE COURT REPORTS
853
It was contended on behalf of the appellant
that the words "final commutation" in the subsection showed that the interim maintenance allowances were also part of the commutation sum.
It seems to us impossible to accept this contention
for that would make the two the same, which, as we
have shown earlier, they could not be.
"Final
commutation" meant the only commutation that the
J agirdar was to get in respect of his rights in the
Jagir, that is to say, he was to get no other commutation. In fact, as already stated, if any interim maintenance allowance was paid after the commutation
became payable, that was to be recovered from and
not added to the commutation.
We have earlier said that it is not in dispute
that the commutation sum was paid as compensation
for the loss of the Jagir and was, therefore, capital
which was not liable to be taxed. We thus find
that the Regulations make a clear distinction between
the commutation sum or compensation and the
interim maintenance allowances'.
These allowances
were obviously· not intended to be compensation.
The question then arises, if these allowances
were not paid as compensation for the loss of the J agir
and were not of the nature of capital as such, what
was their nature ? We think that if we have regard
to the provisions of the Regulations under which
they were paid, as we must, there is no doubt that
they were of the nature of income. No doubt they
were not income
of any of the kinds that are
commonly found, but are, as Lord Radcliffe said in
a case to which we shall later refer, sui generis. We
proceed now to discuss why we think they were
income.
These allowances, we notice, were treated by
· the Regulations as something other than the compen-
~ation for the loss of the Jagir. They were, therefore!
/963
Raja Romeswara R•o
v.
Commissioner of In•
&ome-tax, Hyd,rab1
Sarkar /,
1963
R•ja RarntswartJ Rao
••
CommiHi?rur of 111·
a11ru·tax, lly1uahad
S•rkar J.
854 SUPREME COURT REPORTS [1964] VOL.
not treated
as
capital as representing compensation for the Jagir. If they were not capital for the
reason that they were not compensation for the loss
of the J agi.r, we find no ground on. which we can
say they were capital. It would follow that they
must be income and taxable as such. They were
certainly not windfall for a right to them was created
by the Abolition Regulation, a right which under
s. 21 could be enforced in a civil court.
Then we
find that these allowances were payable with a
regularity and were of a recurring nature, both of
which are recognised as characteristic of income :
see· the Cornmissioncr of lnmme-tax v. Shaw Wallace
& Go. (1).
Next, we observe that the Regulation
advisedly called
the payments "maintenance allowances," a nomenclature peculiarly suited to payments of the nature of income.
Lastly, it may be
pointed out that the payments were made for the
interim period between the time when the income
of the .Jagir began to be collected by the Government through the J agir Administrator and April I,
1950, when the compensation for the loss of the
Jagir first
became payable.
The payments were,
therefore, by way of compensation for the loss of
income in the interim period. In the words of
Jenkins L. J. as will appear later, they were "income-compensation"
and therefore of the income
nature.
\'Ve think for
all these reasons the
interim
maintenance allowances were taxable income. If a
source had to be found for them, the Regulation
had to be held to be the source.
A case very near to the one in hand and a case
that throws a great deal of light on the problem that
faces us in the Commissioner of Infonrl Revenue v.
JJutterley Go. Ltd. ('). We think a detailed refer-
, ence to it can be very profitably made. That case
was
concerned with the English
Coal
Industry
OHl932) L,R, 591.A, 206.
(2) t 1956) St T,O, ~II.
....
2 S.C.R.
SUPREME COURT REPORTS
855
Nationalisation Act, 1946, which nationalised the
collieries and divested all owners of them and the
businesses
concerning them. Under this Act and
the Coal Industry (No. 2) Act, 1949, the assessee
company became entitled to compensation for the
assets transferred to the Government and to certain
payments called "revenue payments" and "interim
iacome" for the period between what was called the
primary vesting date and the date on which compensation for the assets taken away was fully satisfied.
The question was with regard to these payments.
The assessee company had contended in the beginning that the payments were not of income nature
at all. In the Court of appeal however that contention was abandoned and it was conceded that the
payments were of income nature. The only dispute
was whether they were income .chargeable to profits
tax ·as profits of a trade or busin€ss carried on by
the assessee company. The decision was that the
payments were not income or profit of any trade or
business.
We will first read from a part of the judgment
of Jenkins L. J. in the Court of Appeal. He said
(p. 437), "The Act of 1946 studiously avoids describing the interim income as interest on or income
of the compensation." Then the learned Lord
Justice pointed out that the payments were to be
calculated by reference to the past earning of the
concern and bore no relation at all to the amount of
the.compensation and proceeded to observe, (p. 438),
"I find it difficult to hold that the interim income
payable under these Acts, defined and measured in
the way it is, can properly be described as income
of the compensation; and there is, I think, much to
•
be said for the view that, albeit itself in the
nature of income, it is not income, . of the compensation
but· rather
income-compensation, if
I may use that expression, that is to say, a series
of periodical payments an independent right . to
1963
Raja Rameswara Ra•
v.
Commissiondr of lncome·lax, HyoerabU
Sarkar J.
190
Raja R"11tstb•r• R•o
..
C1mmissi11111 •f1n·
,.,,,,.tu, Hyitrciad
Sark•r I.
,
856 SUPRENIE COURT'REPORTS [1964] VOL.
which is conferred by the Act by way of compe11sation for the loss of income sustained in respect of
the period between the primary vesting date and
the ascertainment and satisfaction of the compensation." We think
these
observations
can
be
applied in all their force to the payments with
which the present case is concerned. Here also
the interim payments had no relation
to
the
commutation sum,
that is, compensation for the
loss of the J agir. It is clear that Jen kins L. J. was
treating the payment as a species of income and we
also think that the payments in the present case
cannot be treated otherwise.
There are some observations in speech of Lord
Radcliffe when he dealt with this case on appeal
to the House of Lords which we think may be
usefully quoted here.
He observed, (p. 449-50),
"The Coal Industry Nationalisation Act,
1946,
legislated for a revolution in tlie coal industry of this
country .................. These
interim income payments which are now in question are the product
of that disturbance and adjustment, and it docs not
seem to me at all surprising that they cannot well
be related to any of those other kinds of receipt
which normally come into the accounts of a company
. conducting a trade or business.
They are sui gerieris
and it would, I think, lead to confusion if they were
described in any terms except those which arc
strictly applicable to their own special circumstances.
Thus, they were paid because the nationalisation
Statute decreed that they should be paid. They
would not have been payable to the Respondents
if they had not been conducting a colliery business
at the vesting date, and in that sense, of course,
they were paid to and received by the Responde11ts
for no other reason than that they had been owners
of colliery assets and had been in the colliery trade.
Equally of course, the interim income payments
that the Respondents got · were fixed either as a
2 S.C.R.
SUPRENIE COURT REPORTS
857
proportion of the profits which they had been earning
in the colliery trade before the date of vesting or by
a computation of interest at varying rates upon sums
received from time to time by way of capital
compensation. But, when all that is said, the-fact
remains that the only identifiable origin of the
payments was the Statute whiBh authorised them
and at the same time defined their terms and methods
of computing. It is natural enough that moneys
paid in this way, described by their instrument
of creation as 'interim income', should be regarded
as inherently of an income nature when the question
arises of subjecting them to any tax that bears upon
income as a chargeable S\lbject.
But I do not think
that in any proper use of the words can they be said
' to arise from a source of income, in the sense that
income or profits-for the moment I am not concerned with any difference between the two termscan be said to ari>e from a trade or a business or an
investment or some other piece of property that
admits of use or enjoyments.'·' He also observed,
( 451-52), "I have already explained why they were
not income from investments.
By a similar process
of reasoning they were not, in my view, income
from property. It does not clear up the matter to
say that the right to compensation-and, for that
matter, the right to interim income-was a chose in
action. The interim income payments did not arise
from the right to compensation· as income arises
from income-producing property. They arose from
the Statute itself which decreed that they were to
be paid."
·
We venture to think that the observations that
we have read from the English case in the preceding
paragraphs give the correct picture of the nature of
the payments. It was found unarguable that the
int~rim payments under the English Acts were not
of income nature. The payments with which we
11re co11cerned were made 11nder statutory provisions
196J
Raja Ram1swara Rao
••
. Commissillnar Qf [n.
CMfll•tCX, ff,ft.rBbad
Sarkar J,
1963
Raja Ramtswara Rao
v.
COmmi1sioll4r of In•
c1Jmt·l•x1 llyderabad
. SMkar J,
81i8
SUPREME COURT REPORTS [1964] VOL;
completely parimateria with those under consideration in the English casr. . We, therefore, hold that
the interim payments to the appellant were income
and liable to tax.
It appears that there were in this case four
payments totalling Rs. 1,47,857-4-0 of which the
first was made on January 2:3, 1950 and the other
three on April 10, 1950, July 3, 1950 and August 3,
1950, respectively.
It does not appear to have been
found whether the last three payments, which it will
be noticed had been made after April l, 1950, were
in respect of the commutation sum or interim
maintenance.
It was for that
reason
that the
Tribunal directed the Income-tax officer concerned
to institute an.enquiry as to the nature of these three
payments.
Apparently, the High Court approved
of that order.
We also take the same view.
We
think that the question was
answered correctly by
the High Court by saying that the interim mainten·
ance allowance received by the assessee which do
not form part of the commutation amount are income
and arc liable to be taxed and that the payments
made subsequent to April l, 1950, towards commu·
tation amount are not income and not liable to be
taxed.
The result is that this appeal fails and is
accordingly dismissed with costs.
A ppe.al dismissed.