M/S.Muthoot Leasing And Finance Ltd. ... vs The Commissioner Of Income Tax

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 10201-10202 OF 2010

M/S. MUTHOOT LEASING AND FINANCE LIMITED AND ANOTHER ..... APPELLANTS

VERSUS

COMMISSIONER OF INCOME TAX ..... RESPONDENT

WITH

CIVIL APPEAL NO. 10203 OF 2010

CIVIL APPEAL NO. 10204 OF 2010

CIVIL APPEAL NOS. 10205-10206 OF 2010

CIVIL APPEAL NO. 10207 OF 2010

CIVIL APPEAL NO. 4903 OF 2014

CIVIL APPEAL NO. 4904 OF 2014

CIVIL APPEAL NO. 4905 OF 2014

CIVIL APPEAL NO. 4906 OF 2014

CIVIL APPEAL NO. 4907 OF 2014

AND Signature Not Verified

Digitally signed by BABITA PANDEY CIVIL APPEAL NO(S). OF 2023 Date: 2023.01.03 16:58:24 IST Reason: (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 4441 OF 2011)

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 1 of 21 JUDGMENT SANJIV KHANNA, J.

Leave granted in Special Leave Petition (Civil) No. 4441 of

2011.

2. The common question which arises for consideration in this batch

of Civil Appeals is: whether the appellants – assessees are liable to

pay tax under the Interest-Tax Act, 19741 on the interest component

included in the hire-purchase instalments paid under the hire-

purchase agreement?

3. The facts, in brief, are that the appellants – assessees are non-

banking finance and leasing companies registered with the Reserve

Bank of India. Some of the appellants – assessees have been

reclassified as hire-purchase finance companies. It is not disputed

that the appellants – assessees are credit institutions within the

meaning of Section 2(5-A) of the Act, which reads as follows:

“(5-A) “credit institution” means,—

(i) a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in Section 51 of that Act);

(ii) a public financial institution as defined in Section 4-

A of the Companies Act, 1956 (1 of 1956);

1 For short, ‘the Act’.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 2 of 21

(iii) a State financial corporation established under Section 3 or Section 3-A or an institution notified under Section 46 of the State Financial Corporations Act, 1951 (63 of 1951), and

(iv) any other financial company;”

It is also imperative to mention Section 2(5-B) of the Act,

which defines a “financial company” and includes within its ambit

hire-purchase finance companies:

“(5-B) “financial company” means a company, other than a company referred to in sub-clause (i), (ii) or (iii) of clause (5-A), being—

(i) a hire-purchase finance company, that is to say, a company which carries on, as its principal business, hire-purchase transactions or the financing of such transactions;

xx xx xx"

4. The contention of the appellants – assessees is that under a hire-

purchase agreement, they hire out a vehicle to the customer and

receive hire-purchase instalments, and not interest on loans and

advances. As per the findings of fact recorded by the Income Tax

Appellate Tribunal2, the hirer has acknowledged that the appellants

– assessees are the owners of the vehicle. As per the hire-purchase

agreements, the hirer must pay rent to the owner during the hiring

as per the sums mentioned in the agreement on the dates

mentioned therein. Further, the hirer has to take proper care of the

2 For short, ‘ITAT’.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 3 of 21 vehicle and keep it in good condition. He has to also pay all rents,

rates, taxes and outgoings payable. The hirer must keep the vehicle

in his sole custody and possession at the address mentioned in the

agreement, or such other place as the owner has previously

consented to in writing. The owner or any person authorised by him

in writing is entitled to inspect the vehicle at all reasonable times

during the period of hire. The hirer may, at any time, determine the

hire-purchase agreement by delivering the vehicle at his own cost

to the owners. If the hirer fails to pay the hire instalments within the

stipulated time, becomes insolvent, pledges or sells, or attempts to

pledge or sell or otherwise alienate or transfer the vehicle, or does

or suffer any act or thing whereby, or in consequence of which, the

vehicle may be distrained, seized or taken into execution under

legal process, or breaks or fails to perform or observe any condition

as mentioned in the hire-purchase agreement, the owner is entitled

to forthwith determine the agreement and, thereupon, entitled to

enter the place where the vehicle is kept and seize, remove and

retake possession thereof. The owner is also entitled to sue for all

the instalments due, damages for breach of the agreement, and the

cost in retaking possession of the vehicle. The owners, if agreeable,

may permit the hirer to have the registration of the vehicle in his

own name, provided that the hirer shall transfer the registration in

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 4 of 21 the name of the owner whenever required to do so by the owner,

especially when the hirer commits breach of any of the conditions

of the agreement, due to which the owners are obliged to seize the

vehicle.

5. On these facts, the ITAT accepted the plea of the appellants –

assessees that they are not liable to pay interest tax on the interest

component imbedded in the hire-purchase instalment. The ITAT

referred to Circular No. 760 dated 13th January 1998 issued by the

Central Board of Direct Taxes3 and observed that the hire-purchase

agreement is a composite transaction, and has elements of

bailment and sale. Relying on the terms and conditions of the hire-

purchase agreement noted above, the ITAT held that hire-purchase

agreements are distinguishable from loans and advances. The hire

instalments are something different and more, and not the interest

on loans and advances that is chargeable to interest tax.

6. The ITAT had also relied on the provisions of The Hire-Purchase

Act, 1972, which, in our opinion, is palpably wrong as the said

enactment was never enforced and was subsequently repealed

vide the Hire-Purchase (Repeal) Act, 2005.

3 For short, ‘CBDT’.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 5 of 21

7. The High Court of Kerala in the case of The Commissioner of

Income Tax, Cochin v. M/s. Muthoot Leasing & Finance

Limited4 by the impugned judgment dated 10th March 2008 set

aside and reversed the finding of the ITAT, observing that the hire-

purchase instalment includes “finance charges”, which is nothing

but interest, and therefore, interest tax is leviable on the interest

component. The transaction, though styled as a hire-purchase

agreement, the High Court held, is in fact a finance agreement for

purchase of a vehicle. The hirer, as a borrower, had been charged

a flat rate of interest. The hirer, on payment of instalments, had the

option to purchase the vehicle for one rupee, which was an empty

formality, because the vehicle was already registered in his name.

As per Section 51 of the Motor Vehicles Act, 19885, the registering

authority is required to enter the details of the hire-purchase

agreement in the certificate of registration. The respondent –

assessee therein had the license to repossess the vehicle on

default, but to get ownership they had to apply for change in name

under the provisions of the MV Act. Reliance placed by the

appellant – assessee on Circular No. 760 dated 13th January 1998

issued by the CBDT was rejected, observing that the CBDT had

4 ITA No. 269 of 2002. 5 For short, the ‘MV Act’.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 6 of 21 earlier issued Circular No. 738 dated 25th March 1996 clarifying that

the interest recovered under the hire-purchase agreement falls

under Section 2(7) of the Act. For arriving at the conclusion,

reliance was placed on the decision of this Court in Sundaram

Finance Limited v. State of Kerala and Another6, a decision

which we will subsequently examine.

8. The High Court of Delhi in Commissioner of Interest Tax v. M/s

G.E. Capital Transportation7, decided on 1st September 2006,

has taken a different view, observing that the assessees therein

having not earned any interest on loan or advance, no component

of the hire-purchase instalment paid by the customer/hirer towards

the hire is chargeable to interest tax under the Act. At this stage, it

may be relevant to state that the special leave petition preferred by

the Commissioner of Income Tax, New Delhi against the decision

of the Delhi High Court in a connected matter, in the case of

Commissioner of income Tax, New Delhi v. M/s G.E. Capital

Services India8, was dismissed by this Court on 16th May 2008.

The dismissal being in limine and at the admission stage, would not

constitute a binding precedent under Article 141 of the Constitution

of India.

6 AIR 1966 SC 1178.

7 ITA No. 1275 of 2006. 8 SLP(C) No. 14202 of 2008. Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 7 of 21

9. Section 2(7) of the Act, post amendment with effect from 1st October

1991, reads as under:

“(7) “interest” means interest on loans and advances made in India and includes—

(a) commitment charges on unutilised portion of any credit sanctioned for being availed of in India; and

(b) discount on promissory notes and bills of exchange drawn or made in India,

but does not include—

(i) interest referred to in sub-section (1-B) of Section 42 of the Reserve Bank of India Act, 1934 (2 of 1934);

(ii) discount on treasury bills;”

10. There are two direct decisions of this Court interpreting Section 2(7)

of the Act vide Commissioner of Income Tax, Kanpur v. Sahara

India Savings and Investment Corporation Limited9; and State

Bank of Patiala Through General Manager v. Commissioner of

Income Tax, Patiala10, which are relevant, and thus, we would

refer to them in some detail.

11. In Sahara India Savings and Investment Corporation Limited

(supra), this Court noticed that prior to 1st October 1991, the word

“interest” in Section 2(7) was defined so as to include any amount

9 (2009) 17 SCC 43.

10 (2015) 15 SCC 483.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 8 of 21 chargeable to income tax under the head “Interest on Securities”.

Post the amendment, the words “amount chargeable to income tax

… under the head ‘Interest on Securities’” stood deleted. The Act,

this Court held, had been enacted with twofold purposes, namely,

as an anti-inflationary measure and for revenue collection. With this

objective in mind, the court proceeded to examine and interpret

Section 2(7) of the Act to hold that the expression “interest” must

be given a restrictive meaning as interest on “loans and advances,

including commitment charges, discount on promissory notes and

bills of exchange, but not to include interest referred to in Section

42(1-B) of the Reserve Bank of India Act, 1934 as well as discount

on treasury bills”. Section 2(7) defines taxable interest in the first

part and confines the interest only to loans and advances, and in

the second part includes, by specific mandate, commitment

charges and discounts on promissory notes and bills of exchange.

Interpreting the provision in this manner, it was held that the

legislature, in its wisdom, had extended the meaning of the word

“interest” in the second part to two items, namely, commitment

charges and discounts on promissory notes and bills of exchange.

In the said case, the respondent – assessee had made investments

in bonds and debentures. It was held that interest on these bonds

and debentures bought by the respondent – assessee therein, as

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 9 of 21 and by way of “investment”, is not taxable as interest under Section

2(7) of the Act as they do not qualify and could not be treated as

“interest on loans and advances”.

12. In State Bank of Patiala Through General Manager (supra), this

Court had examined the cleavage of opinion between different High

Courts on whether the fixed percentage charge leviable on default

in payment of discounted bills of exchange should be treated as

interest within the meaning of Section 2(7) of the Act. The amount

credited on this account had been booked by the appellant Bank

therein in its interest account. Agreeing with the assessee therein,

this Court observed that the definition of ‘interest’ in the Act is a

narrow one, and is exhaustive as it is a “means and includes”

definition. The reasoning of the Karnataka High Court in State

Bank of Mysore v. Commissioner of I.T., Karnataka-I,

Bangalore11 that discounting of a bill is a form of advance or loan

and hence, compensation paid on delayed payment of money due

thereon is interest on loans and advances, was overruled as

overlooking the limited coverage in Section 2(7) of the Act. There is

a distinction between loans and advances, and discounted bills of

exchange drawn or made in India. If discounted bills of exchange

11 (1989) 175 ITR 607.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 10 of 21 were also to be treated as loans and advances made in India, there

would be no need to extend the definition of “interest” to include

discount on bills of exchange. This Court, accordingly, agreed with

the views expressed by some other High Courts, including Madras

High Court in Commissioner of Income Tax v. Cholamandalam

Investment and Finance Co. Ltd.12, that the character of an

overdue bill is not synonymous with the loans and advances and,

therefore, it will not fall within the ambit and scope of interest under

part one of Section 2(7) of the Act. It was observed that the right to

charge for overdue interest by the assessee Banks therein did not

arise on account of any delay in repayment of any loan or advance,

but arose on account of default in the payment of amounts due

under a discounted bill of exchange. A subject can be brought to

tax only by a clear statutory provision in that behalf. Interest is

chargeable to tax under the Act only if it arises “directly” from a loan

or advance and not otherwise. Accordingly, interest payable “on” a

discounted bill of exchange cannot be equated with interest payable

“on” a loan or advance.

13. The decision in State Bank of Patiala Through General Manager

(supra) also draws distinction between the broad definition of the

expression “interest” in the Income Tax Act, 1961 vide Section

12 (2008) 296 ITR 601.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 11 of 21 2(28-A), to observe that the expression used under the Act, that is

the Interest-Tax Act, 1974, is much narrower and restricted. Under

the Income Tax Act, 1961, interest can be payable in any manner

whatsoever. Secondly, the expression “in respect of” includes

interest arising even indirectly out of a money transaction, unlike

the word “on” contained in Section 2(7) of the Act, which connotes

a direct arising of payment of interest out of a loan or advance.

Thirdly, “any moneys borrowed” must be contrasted with “loan or

advances”. The former expression would include moneys borrowed

by means other than by way of loans or advances. Thus, the Act,

unlike the Income Tax Act, 1961, is focused on a very narrow

taxable event which does not include within its ken interest payable

on default in payment of amounts due under a discounted bill of

exchange.

14. A hire-purchase agreement has two elements – an element of

bailment and an element of sale. The element of sale fructifies

when the option to purchase is exercised by the intending

purchaser after fulfilling the terms of the agreement. Till then, the

goods are given on hire. One can argue that in a hire-purchase, an

element of interest is inbuilt, but what is payable is the hire amount

and not interest per se. The hirer has an option to return the vehicle

or the goods taken on hire. It is not a simple transaction of giving a

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 12 of 21 loan or advance on which interest is payable. The transaction(s) in

commercial and legal sense are far more complex with

corresponding rights of the parties. Even if the hirer is recorded as

the owner of the vehicle under Section 51 of the MV Act, the name

of the appellant – assessee is also recorded in the registration

book, which is in recognition of the hire-purchase agreement. The

registered owner under the MV Act may be liable in case of

accidents/traffic challans, etc. But this, in no way, dilutes the right

of the appellants – assessees in respect of the title of the property,

that is, the vehicle. Any transfer or sale made by the hirer or any

violation of the hire-purchase agreement can lead to civil as well as

criminal consequences. Given the dictum and ratio in Sahara India

Savings and Investment Corporation Limited (supra) and State

Bank of Patiala Through General Manager (supra), the view

taken by the High Court of Delhi in M/s G.E. Capital

Transportation13 (supra), as followed by the High Court of Delhi in

Commissioner of Interest Tax v. M/S G.E. Capital

Transportation14, is correct and the view taken by the High court

of Kerala in the impugned judgment is not in consonance with the

above decisions of this court.

13 ITA 1275 of 2006.

14 ITA 1280 of 2006.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 13 of 21

15. However, the learned counsel for the Revenue has relied on

Sundaram Finance Limited (supra), which decision had also been

relied upon by the High Court of Kerala in the impugned judgment.

The submission is that there is a conflict in the ratios. Before we

consider the ratio of the judgment in Sundaram Finance Limited

(supra), we would refer to the decision of the Constitution Bench of

this Court in K.L. Johar and Co. (In Both Appeals) v. Deputy

Commercial Tax Officer, Coimbatore III (In Both Appeals)15. In

the decision, this Court had referred to the concept of hire-purchase

in the context of sales tax liability under the Madras General Sales

Tax Act, 1939, to observe that the hirer can exercise the option of

purchase only when he fulfils the terms of the agreement, and till

then there is no sale at all. The argument, which was accepted by

the High Court of Madras, that because in most cases such option

is exercised by the hirer, the tax was leviable immediately, was

flawed, as the taxable event had not taken place. In the said case

also, one of the contentions raised was that only one rupee had to

be paid as the price for the transfer of the vehicle since the entire

amount was paid as hire. This contention was not accepted, for it

overlooked the essence of the hire-purchase agreement, which was

that the hire includes not only what would be payable really as hire

15 AIR 1965 SC 1082.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 14 of 21 but also that a part of it was towards the price. These observations

are relevant in the context of the present case as they refer to and

explain the true nature of hire in hire-purchase agreements, albeit

in the context of the sales tax enactment. However, this court also

observed that even in the absence of legislative guidance, the sales

tax authorities may split the hire into two parts. This decision was

followed in the case of Sundaram Finance Limited (supra) with

the majority judgment authored by J.C. Shah, J. observing that the

decision of the Constitution Bench in K.L. Johar and Co. (supra)

dealt with the agreements where the financier has paid the balance

amount to the erstwhile owner of the goods and thereupon obtained

the hire-purchase agreement from the customer, under which the

customer becomes the owner of the goods on payment of all the

instalments of the stipulated hire and exercising his option to

purchase the goods on payment of a nominal price. In another form

of hire-purchase transactions, goods are purchased by the

customer who, in consideration of executing a hire-purchase

agreement and allied documents, remains in possession of the

goods, subject to the liability to pay the amount paid by the financier

on behalf of the customer to the owner or the dealer. The financier

obtains the hire-purchase agreement which gives him a license to

seize the goods in the event of failure by the customer to abide by

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 15 of 21 the conditions of the hire-purchase agreement. The true effect of a

transaction may be determined from the terms of the agreement

considered in light of the surrounding circumstances. In some

cases, the real bargain would be a loan on the security of the goods.

If there is a bona fide and completed sale of goods, evidenced by

documents, anterior to and independent of a subsequent and

distinct hiring to the vendor, the transaction may not be regarded

as a loan transaction, even though the reason why it was entered

into was to raise money. Recording the aforesaid, the appeal of the

assessee in Sundaram Finance Limited (supra) was allowed by

the majority observing that they were carrying on business of

financiers and not dealing with motor vehicles. The motor vehicle

purchased by the customer was registered in his name and

remained, at all material times, so registered in his name. The sale

letter was a formal document which was not made effective by

registering the vehicle in the name of the assessee and even the

insurance of the motor vehicle had to be effected as if the customer

was the owner.

16. Before we examine the reasoning and context in which the

elucidation was made, we would like to refer to two circulars issued

by the CBDT. The CBDT had, vide Circular No. 738 dated 25th

March 1996, opined that hire-purchase transactions are generally

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 16 of 21 in the nature of finance transactions entered into by the companies

engaged in the business of financing, and finance charges accruing

or arising to hire-purchase finance companies are in the nature of

interest as defined in Section 2(7) of the Act and hence, chargeable

to interest tax. However, in the subsequent Circular No. 760 dated

13th January 1998, the CBDT observed that they considered the

issue and were advised that in case of transactions which are, in

substance, in the nature of hire-purchase, the receipts of hire

charges would not be in the nature of interest. In transactions which

are, in substance, in the nature of financing transactions, the hire

charges should be treated as interest, subject to interest tax. To

determine the distinction between the two transactions, the

assessing officers were required to consider the issue on merits

taking, inter alia, into account – (i) the terms of the agreement; (ii)

the nature of the arrangement between the supplier of the asset,

the hire-purchase company and the end user of the asset; and (iii)

the intention of the parties which manifests itself in the fixation of

the initial payment, the method of determination of hire-purchase

price etc. However, when the hire-purchase company pays the

price or a substantial part thereof on behalf of such hirer who is the

real purchaser but does not pay the full price, then such agreement

is in the nature of a security for re-payment of the loan and is

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 17 of 21 essentially a loan transaction. Reference was made to the judgment

in the case of Sundaram Finance Limited (supra).

17. As noticed above, this judgment in Sundaram Finance Limited

(supra) relates to the true nature of hire in hire-purchase

agreements as in the context of the sales tax enactment. In the

present case, however, we are dealing with and interpreting Section

2(7) of the Act, which has been interpreted in two decisions, that is,

in the case of Sahara India Savings and Investment Corporation

Limited (supra) and State Bank of Patiala Through General

Manager (supra), which have given a very limited and restricted

meaning to Section 2(7) of the Act as interest directly arising “on”

loans and advances, and not any other interest, be it interest

earned on investment or interest payable on delayed payment of

the discounted bill of exchange.

18. Taxation depends upon the language of the charging section and

what is brought to tax within the four corners of the charging section.

Therefore, one should be careful and cautious when applying the

ratio of judgments relating to one tax enactment as a precedent in

a case relating to another tax enactment. This rule of caution is

important and should not be overlooked, more so when the

language of the enactment and the object and purpose of the

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 18 of 21 enactment are different. This ratio is somewhat expressed by this

Court in Association of Leasing and Financial Service

Companies v. Union of India and Others16, wherein in the context

of levy of service tax by Section 65(105)(zm) read with section

65(12) of the Finance Act, 1994, as amended, banking and financial

services were brought to tax. In the context of the said enactment,

this Court deemed it appropriate to distinguish between financial

lease and operating lease and held that the services rendered in

the former case would be taxable, whereas the latter would fall out

of the tax net. In this context, it was observed that non-banking

financial companies are essentially loan companies, but they could,

in addition thereto, be in the business of equipment leasing, hire-

purchase finance and investment. In case of bailment termed as

“hire”, the bailee receives both possession of the chattel and the

right to use it in return for remuneration. On the other hand,

equipment leasing is long-term financing which helps the borrower

to raise funds without outright payment in the first instance. Here,

the “interest” element cannot be compared to consideration for

lease/hire, which is in the nature of remuneration (consideration) for

hire.

16 (2011) 2 SCC 352.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 19 of 21

19. Findings of fact generally recorded by the ITAT are treated as

conclusive. The High Court can interfere with the findings of fact

while deciding a substantial question of law when the findings are

not supported by the material on record, so as to be treated as

perverse.17 For this, however, the High Court must frame a

separate substantial question of law and only then interfere with the

findings of fact by the ITAT, while applying the strict parameters. In

the present case, the High Court did not frame a specific substantial

question of law and thus, the interference with the findings of fact is

unwarranted. This is not to say that the tax authorities are not

entitled to examine the surrounding facts and circumstances to

ascertain the true character and nature of the transaction,

regardless of the nomenclature given by the parties.

20. Given the aforesaid legal position, we may have even remanded

the matter to the assessing officer for fresh adjudication and to re-

examine all the transactions in light of the aforesaid ratio and

reasoning, keeping in mind the dictum laid in Sahara India Savings

and Investment Corporation Limited (supra) and State Bank of

Patiala Through General Manager (supra) to rule out cases where

camouflage or subterfuge has been adopted to avoid payment of

17 See Karnataka Board of Wakf v. Anjuman-E-Ismail Madris-Un-Niswan, (1999) 6 SCC 343; and C.

Doddanarayana Reddy (Dead) By Legal Representatives and Others v. C. Jayarama Reddy (Dead) By Legal Representatives and Others, (2020) 4 SCC 659.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 20 of 21 interest tax. This would have entailed not only looking at the

documents but also several other factors, which would have meant

getting information and ascertainment of facts in detail from the

assessee and the hirer. However, at this distinct point of time, we

do not think that it would be appropriate to pass an order of remand.

It is to be also noted that the Act has ceased to operate with effect

from 31st March 2000.

21. Recording the aforesaid, we allow the present appeals and set

aside the impugned judgments. The additions made by the

assessing officer are set aside and the orders passed by the ITAT

deleting the additions in the case of the appellant – M/s. Muthoot

Leasing and Finance Limited and other cases are upheld. In the

facts of the present case, there would be no order as to costs.

......................................J. (SANJIV KHANNA)

......................................J. (M.M. SUNDRESH) NEW DELHI;

JANUARY 03, 2023.

Civil Appeal Nos.10201-10202 of 2010 & Ors. Page 21 of 21