82 7

V. VENUGOPALA RAVI VARMA RAJAH

UNION OF INDIA & ANR.

February 26, 1969

[J. C. SHAH, V. RAMASWAMl AND A. N. GROVER, JJ.J

Expenditure Tax Act (29 of 1957), ' 3(1)-Applicable to Hindu f1u11ilies governed hy Mafumakkattayam [.aw hut not to. Mappilla fatnilies governed by the Marumakkattayam law-If violative of Ari. 14 Constitution of India, 1950.

The mcn1bcrs of a Hindu undivided family governed by the Al11ru11iakkattaya111 law, while 'remaining joint, had entered into an agreement for separate enjoyment of certain properties of the family by different members as permitted by their customary law.

For the assessment vear 1958-59 its karta, in the status of a Hindu undivided family, filed a return under the Expenditure-tax Act. 1957, of the expenditure incurred by him in respect of the property under his 'personal control and direct enjoyment'. l'hc Expenditure-tax Officer. added the expenditure incurred by the other n1cmbers of the family in 'respect of properties set apart for their use and enjoyment as the expenditure of the llindu undivided family under s. 3(1).

On the question, \Vhether s. 3 is violative of Art. 14 because, a Hindu undivided family governed by the Mcruninkkattayani law has to pay the tax at a higher rate by reason of -the unit of taxation under the section being the Hindu undivided family there is an amalgamation of the ex~ penditurc of all the members of the family, whe'reas, a Mappilla family may pay tax at a tower rate since the members of a Mappilla undivided family governed by the MarunU1kkattayan1 law arc Jiable to be taxed as 'individuals' under the section,

HELD : The equal protection clause of the Constitution allows a large play to legislative discretion in the matter of classification. The power to

cJac; sifv may be exercised so as to adjust the system of taxation in all prope'r and reasonable ways : the Legislature may select persons, properties, transactions and objects, and apply different methods and even rates of tax, if the Legislature does so reasonably and if the classification is rational.

A taxing statute may contravene Art. 14 if it seeks to impose on the sanie class of property,_ persons, transactions or occupations simi Iarly situate, an incidence of taxation which leads to obvious inequality. but, a taxing statute is not exposed to attack on the ground of disc'rimina tion merely because different rates of taxation are prescribed for differe1tt categories of persons, transactions. occupations or objects.

The courts \\ill not strike down an Act as denying the equal protection of laws me'rely because other objects ould have been, but are not, taxed by the Legislature. [832 H; 833 A-F] ·

Though the law applicable to Hindu undivided families govorned by the MarumakkattayGm law and to the Mappilla tarwad in North Malabar has the same characteristics in two respect"'. namely, (a) tracing descent through females: and (b) community of interest Rnd unity of posc; ession in respect of the family property, the laws applicable to them in other respects differ widely. Initially a common system of law relating to family property o'f the tarwad was applicable to Hindus and Mappillas governed

by the Maru1nakkattuya1n law, but since the enactment of the Madras Marumakkattayam Act (22 of 1933) and other enactments governing Hindus, and the Mappilla Marumakkattayam Act (17 of 1939) governing the Mappillas, there are few points of similarity in property matters in the tarwads. The application of the Islamic laws of marriage and inheritance to the Mappillas has led to greater cleavage.

The community of Mappillas governed by Marumakkattayam law is a small community, restricted only to the Northern area of Malabar district and is dwindling because of the impact of the Muslim law of inhe'ritance applicable to shares obtained on partition. Parliament has been accustomed t.o treating a Hindu undivided family as a unit of taxation and to enacting tax laws making a distinction between a Hindu undivided family consisting of Hindus and undivided families of Mappillas.

The long course of legislative history in matters of taxing income. wealth, gifts, capital gains and business profits indicates that the Legislature tegarded undivided Hindu families as a class to which the legislation may appropriately be applied.

Even though the basic scheme of a Hindu undivided family governed by lhe Mitakshara law is different from that of a family governed by the Maru111akkattayam law. a Hindu undivided family governed by the l'tlaru1nakkattaya1n law fails within he expression 'Hindu undivided family.

Therefore, Parliament. by making the Act applicable to Hindu families and not to Mappilla 'families governed by the Marurnakkattayam law, has not attempted any obvious inequaJity or made any discrimination violative of Art. 14. [832 B-C, G-H; 834 E-0; 835 A-0]

Raja Jagamwth Baksh Si111<h v. State of U.P., [1963] 1 S.C.R. 250, followed.

U.S. law refcr'rcd to.

CIVIL APPELLATE JuRJSDICTioN : Civil Appeals Nos. 2436

and 2437 of 1966.

Appeals by special leave from the judgment and order dated November 5, 1965 of the Kerala High Court in Writ Appeals Nos. 9 and 44 of 1964.

M. C. Chag/a, C. K. Vishwa Nath Aiyar and R. Gopalakrish-

11a11, for the appellant (in both the appeals).

D. Narsaraju, T. A. Ramachandran, and B. D. Sharma, for the respondents (in both the appeals).

The Judgment of the.Court was delivered by Shah, J. Rajah Padmanabha Ravi Varma was the karta of a Hindu undivided family governed by the Marumakkattayam G law. On his death in 1961 the appellant-his brother-became the karta of the family.

In 1909 the members of the family, while remaining joint, had entered into an arrangement for separate enjoyment of certain properties of the family by different members.

For the assessment year 1958-59 Rajah Padmanabha filed in the status of a Hindu undivided family, a return H under the Expenditure-tax Act of the taxable expenditure incurred by him in respect of the property under his "personal control and direct enjoyment". The Expenditure-tax Officer added thereto

VENUGOPAIA V. UNION (Shah, J,) 8 29

the expenditure incurred by the other members of the family i'1l respect of properties set apart for their use and enjoyment. The Expenditure-tax Officer also served a notice of assessment under s. 15(2) calling for a return of expenditure by the Hindu undivided family for the assessment year 1959-60.

The appellant thC1n 111nved petitions before the High Court of Kerala under Art. 226 of the Constitution for writs quashing the assessment and the 11·1tice of demand for the year 1958-59 and the notice calling for a return for the assessment year 1959- 60 contend-ng, inter alia, that he was not liable to be assessed to tax on expenditure incurred in respect of property not "under his personal control and direct enjoyment".

A single Judge of the High Court of Kerala upheld the contentiQn.

In appeal a Division Bench of the High Court set aside the order of the single Judge.

The appellant contc1ds that the Jaw which enables the Expenditure-tax Ofliccr to Jssess tax on the expenditure of all members of the Hincu ur 'ivided family governed by the Marumakkattayam law. discri•. iates, Q\n the ground of religion, between the Hindu undivled family and a Mappilla undivided family governed by the M urumakkattayam law resident in North Malabar.

Section 3 of the Expenditure-tax Act 29 of 1957 is the charging section : insofar as it is relevant it reads :

" (I) Subject to the other provisions contained in this Act, there shall be charged for every financial year, commencing on and from the first day of April, 1958, a tax (hereinafter referred to as expendituretax) at the rate or rates specified in the Schedule in respect of the expenditure incurred by any individual or H\ndu undivided family in the previous year :

Provided that

Under the charging section tax is imposed on individuals and Hindu undivided families.

An -undivided family which consists of Hindus alone may be treated as a unit of assessment : an undivided family whose members are not Hindus will be assessed to tax as an "individual".

Counsel for the appellant contends that whereas a Hindu family governed by the Marumakkattayam law is assessed to expenditure-tax on the total expenditure incurred by all the members of the undivided family, because the unit

ol taxation under s. 3 is the Hindu Ullldivided family, a Mappill~ undivided family governed by the Marumakkattayam law in

North Malabar is liable to be assessed to tax as an "individual", and on that account at a lower rate.

Marumakkattayam law applied originally by usage to a section of the Hindus inhabiting the South-Western coastal region in India. Some centuries ago a section of the Hindu inhabitants of North Malabar were converted en masse to Is/am, but they sti!J continued to remain 'governed by the Marumakkattayam law especially in matters of property relations among members of the family.

The law administered by the Courts to these communities is, subject to express statutory provisions, a body of customs and usages which have received judicial recognition.

The Mitakslzara law of joint family is founded upon agnatic relationship : the U; lldivided family is characterised by community of interest and unity of possession among persons descended from a common ancestor in the male line.

The principal incident of Marumakkattayam law is that it is matriarchate : members of the family constituting a Marumakkattayam tarwad are descemded through a common ancestress in the female line with equal rights in the property of the family.

Under the customary Marumak kattayam law no partition of the family estate may be made, but items of the family property may by agreement be separately enjoyed by the members. On death of the interest of a member devolved by survivorship.

Management of the family property remained in the hands of the eldest male member, and in the absense of a male member a female member. A tarwad may consist of two or more branches known as thavazhies; each tavazhi or branch consisting of one of the female members of the tarwad and her children and all her descendants in the female line.

Every tarwad consisted of a mother a, nd her children-male and female-living in commensality, with joint rights in property.

The District c.f Malabar formed part of the State of Madras till October 31. 1956.

The customary Marumakkattayam law applicable to Malabar was modified in certain respects from time to time by the Madras Legislature e.g. the Malabar Marriage Act 4 of 1896. the Malabar Wills Act 5 of 1898. But the law relating to property relations between the members of the tarwad remained in its customary fom1 till the fourth decade of this century.

Under the customary law partition of the property of the family could not be claimed by a, n. individual member or even by a thavazlzi. It was so laid down by a course of judicial decisions for over 75 years, and this rule was accepted iis settled Jaw ti!1 the Madras Legislature enacted the Madras Marumak kattayam Act, 22 of 1933 and the Mappilla Marumakkattayam Act 17 of 1939. the former applying to Hindus and the latter to Mappillas who are Muslims.

There were however significant differences between the two Act~. Under Act 22 of 1933 only

a tarwad could claim partition ( s. 3 8) (by the Madras Marumakkattayam (AmendmMt) Act 26 of 1958 enacted by the Ker-dla Legislature the right to claim partition was also granted to individual members); property obtained by partition was held with incidents of tarwad property [s. 38 (2) ]; and the Karnavan was not required to maintain an inventory of the property, but had to mai.ntain a true and correct account of the income and expenditure :if the tarwad.

By the Madras Act 17 of 1939 any member o: a Mappilla tanvad could claim partition ( ss. I 3 & 14); succession to prope, ty obtained by partition was governed by Islamic law ( s. 18) ; the Karnavan was required to maintain an inventory of family property (s. 3); any member of the family could apply to the Court for an order directing the Karfl(lvan to give inspection of accounts or inventory [s. 5(2)]; surplus income had to be invested by the Karna van ( s. 7) ; and the Kamavan could be removed by a suit ( s. 11).

These and other statutory modifications were applicable only to the Malabar area which was originally part of the State of Madras and not to the State of Travancore-Cochin as it existed before the States R.eorganization Act, 1956. Ther.e were several legislative measures in the States of Travancore and Cochin before those States merged with the Indian Union, and in the State of Travancore-Cochin after merger and in the State of Kerala, making changes in the customary Marumakkattayam law: these were the Cochin Makkathayam Thiyya Act 17 of 1115 (M.E.); Cochin Marumakkattayam Act 13 of 1095 (M.E.). Cochin Nair Act 13 of 1095 (M.E.) and Act 29 of 1113 (M.E.); Cochin Paliam Tarwad Act 8 of 1097

(M.E.); Cochin Thiyya Act 8 of 1107 (M.E.); Travancore Nanjinad Vellala Regulation 6 of 1101 (M.E.); Travancore Nayar Regulation I of 1088 (M.E.) and II of 1100 (M.E.); Travaocore Wills Act 6 of 1074 (M.E.). It is sufficient to observe that by these statutes significant changes were made in the customary laws governing the family and property relations between the members governed by the Marumakkattayam law.

The Hindu Succ.:ssion Act 30 of 1956 also made inroads upon the customary law. Sectio.n 3 (h) defined the expression "Marumakkattayam law", and by s. 7 it was pcovided that if a Hindu to whom the Marumakkattayam or Nambudri law would have applied, if the Hindu Succession Act had not been passed. dies, his or her interest in the property of a tanvad, tavazhi or il/om shall devolve by testamentary or intestate succession, not according to the Marumakkatta, vam law or the Nambudri law, but under the Hindu Succession Act. By s. 17 of the Act ss.8, 10, 15 and 23 apply to persons governed by the Marumakkattavam law snbject to certain modifications.

The Hindu Adoptions and Maintenance Act 78 of 1956 and the Hindu Marriage Act 23 of 1955 also apply to Hindus governed by the Marumakkattayam law and modify the law relating to family relations.

Initially a common system of law relating to family property of the tarwad was applicable 1.0 Hindus and Mapillas governed by the Marumakkattayam law.

Since the enactment of Madras Act 22 of 1933 and the other Acts governing the Hindus, and Act 17 of 1939 governing the Mappillas, points of similarity even in property relations in the tarwads have considerably narrowed.

Application of the Islamic laws of marriage and inheritance to the Mappillas led to greater cleavage. If a member of a Mappilla Marumakkattayam family married a person not governed by the Marumakkattayam Jaw, the property of the person governed by the Marumakkattayam law apparently devolved according to that system of law, whereas the property of the person governed by the Islamic law devolved according to Islamic rules of succession.

The result was th?t whereas the interest of a Mappilla governed by the Marumakkattayam law devolved by survivorship, his separate property desceinded by inheritance in accordance with the Islamic law. Hindus governed by the Marumakkattayam law,. since the enactment of the Hindu Succession Act remained members of the undivided family, but on death the interest devolved by the rules prescribed by the Hindu Succession Act.

In a Hindu tanvad governed by the Marumakkattayam Jaw the descent is matriarclrate and all members male and female have equal shares in the property of the tarwad. Though not a family governed by the M itakshara law, it is still a Hindu undivided family within the meaning of the Expenditure-tax Act. The property relations between members of a Mappilla Marumakkattayam tarwad governed by the matriarchate with equal shares for males and females were in certain respects, already stated, different from the relations between members of a Hindu joint family governed by the Marumakkattayam law.

The community of Mappillas governed by the Marumakkattaya!!' law is, compared to the Hindus, a small community restricted only to the northern area f the Mafabar District. It is again a dwindling community because of the impact of the Jaw of inheritance applicable to share obtained on partition.

Jt is in the light of these special characteristics that the plea of discrimination must be considered.

Equal protection clause of the Constitution does not enjoin equal protection of the laws as abstract propositions.

Laws being the expression of legislative will intended to solve specific

.I.I

problems or to achieve _defini_te objectives by Sj)t:Cc reedies, absolute equality or uniformity of treatment is nnposs1ble of achievement. Again tax laws are aimed at dealing with complex problems of infinite variety necessitating_ adjustmet of . several disparate elements. The c;,::ourts accordmgly admit, subiect to adherence to the fundamental principles of the doctrine of equality, a larger play to legislative _discretion in the ID:atter of classification.

The power to c!ass1iy may be exercised so as to adjust the system of taxation in all proper and reasonable ways : the Legislature may select persons, properties, transactions and objects, and apply different methods and even rates of tax, if the Legislature does so reasonably.

Protection of the equality clause does not predicate a mathematically precise or logically complete or symmetrical classification : it is not a condition of the guarantee of equal protection that all transactions, properties, objects or persons of the same genus must be affected by it or •none at all. If the classification is rational, the Legislature is free to choose objects of taxation, impose different rates, exempt classes of property from taxation, subject different classes of property to tax in different ways and adopt different modes of assessment. A taxing statute may contravene Art. 14 of the Constitution if it seeks to impose on the same clas, of property, persons, transactions or occupations similarly situate. incidence of taxation, which leads to obvious inequality. A taxing statute is not, therefore, exposed to attack on the ground of discrimination merely because different rates of taxation are prescribed for different categories of persons, transactions, occupations or objects.

It is for the Legislature to determine the objects on which tax shall be levied, and the rates thereof.

The Courts will not strike down an Act as denyijllg the equal protection of Jaws merely because other objects could have been, but are not, taxed by the Legislature : Raja Jagannath Baksh Singh v. State of Uttar Pradesh and Another('). The same rule has been accepted by the Courts in America.

Willis in his ConstitutiQ!lal Law of the United States has stated at p. 587 :

"A state does not have to tax everything in order to tax something. It is allowed to pick and choose districts, objects, persons, methods, and even rates for taxation if it does so reasonably."

As stated in Weaver's Constitutional Law Art. 275 at p. 405 :

"The Fourteenth Amendmemt was not designed to prevent a state from establishing a system of taxation or from effecting a change in its system in all proper

(I) [19631 I S.C.R. 220.

and reasonable ways, nor to require the states to adopt an ironclad rule of equality to prevent the classification of property for purposes of taxation or the impositioo of different rates upon different classes."

Weaver again says at p. 397 :

"Class legislation is that which makes an improper discrimination by conferring particular privileges upon a class of pe.rsons, arbitrarily selected from a large number of persons, all of whom stand in the same relation to the privilege granted and between whom and the persons not so favoured no reasonable distinction or substantial difference can be found justifying the inclusion o~ one and the exclusion of the other from such privilege ...... A classification must not be arbitrary, artificial or evasive and there must be a reasonable, natural and substantial distinction in the nature of the class or classes upon which the Jaw operates.

In respect to such distinction, a legislative body has a wide discretiO\'l and an Act will not be held invalid unless the classification is clearly unreasonable and arbitrary."

It is unnecessary to multiply citations.

The Parliament has declared for the purpose of the Expenditure-tax Act an undivided family of Hindus as a unit of taxation and imposed tax at the rates prescribed. To fall within the description the unit must'be an undivided family of Hindus. Within the expression "Hindu undivided family" will fall an undivided family of Hindus governed by the Marumakkattayam law. Even though the basic scheme of a Hindu undivided family governed by the Mitakshara law and the Marwnakkattayam law is different in two important respects, l'iz. the descent is through females and childrci.'l both males and females have equal rights to pro perty-these families are still Hindu undivided families.

The law applicable to Hi.ndu undivided family governed by the Mammakkattayam Jaw. and to the Mappilla tanmd in North Malabar has the same cha:acteristics in two principal rc>pects-

(a) descent is traced through fem1les: anJ (b) there is community of interest and unity of possession i.11 respect of the family property. But the Jaws applicahle to those families in other re<- pects widely differ.

The Mappilla families governed by the Mmwnakkattayam law reside in a small part of the country and fonn !lUmerically a small community. The Parliament has again ben accustomed

VENJJGOPALA V. UNION (Shah, J.) 8 35

in enact4ng tax laws to make a distinction between a Hindu Undivided Family consisting of Hindus and undivided families of Mappmas.

By the taxing Acts the Parliament could have treated MappiJJa tarwads as units of taxation. But the mere fact that the Jaw could have been extended to another class of persons who have certain characteristics similar to a section of the Hindus but have not been so included is not a ground for striking down the Jaw. In treating a Hindu Undivided Family as a unit of taxation under the Expenditure-tax Act and not a Non-Hindu Undivided Family the Parliament has not attempted an "obvious inequality".

Under the taxing Acts the scheme of treating a Hindu Undivided Family has been adopted for a Jong time, e.g., the Indian Income-tax Act IX of 1869, Indian Income-tax Act IX of 1870, Indian Income-tax Act XII of 1871, Act VIII of 1872, Act JI of 1886, Act Vll of 1918, Act XI of 1922. Act 43 of 1961 have treated a Hindu Undivided Family as a distinct taxable entity.

Similarly under the Wealth-tax Act 27 of 1957 and the Gift-tax Act 18 of 1958, the Hindu Undivided Family is made a unit of taxation. Under the Business Profits Tax Act 21 of 1947 and the Excess Profits Tax Act, 1940 also the Hindu Undivided Family was made " unit of taxation. For the purposes of these Acts Mappilla tarwads governed by the Marumakkattayam law have been regarded as individuals.

This Jong course of legislative history in matters of taxing income. wealth, gifts, capital gains and business profits ckarly indicates that the legislature regarded undivided families of Hindus as a class to whiCh the legislation may appropriately .be applied. An intention to effectively administer the taxing Acts and not to discriminate on the ground of religion may be attributed to the Legislature.

The Parliament in the present case having made the Expenditure-tax Act applicable to Hindus governed by the law of the joint family, but not including Mappilla families who are governed by the Mappilla Marumakkattayam Act has not made ailly discrimination and the charging section is not liable to be struck <lown on the ground that the Mappilla family may have to pay tax at a lower rate, whereas a Hindu Undivided Family, by reason of the amalgamation of the expenditure of all the members of the family. may have to pay tax at a higher rate.

The appeal> fail and are dismissed with costs.

One hearing

fe. '

V.P.S.

A /ll'ea/s dismincd.

L 11 S1p Cl/69--4

7

V. VENUGOPALA RAVI VARMA RAJAH

UNION OF INDIA & ANR

February 26, 1969

C. SHAH

A. N. GROVER, JJ

Expenditure Tax Act

Constitution of India

Expenditure-tax Act

s. 3(1)

s. 3

Art. 14

Art. 14

Malabar district

Parliament

Art. 14

[1963] 1 S.C.R. 250

M. C. Chag

C. K. Vishwa Nath Aiyar

R. Gopalakrish-

D. Narsaraju

T. A. Ramachandran

B. D. Sharma

Shah

Rajah Padmanabha

Expenditure-tax Act

s. 15(2)

High Court of Kerala

Art. 226

Section 3

Expenditure-tax Act

s. 3

India

North Malabar

State of Madras

October 31. 1956

Madras Legislature

s. 3

s. 38

s. 18

s. 3

s. 5(2)

s. 7

s. 11

Malabar

State of Travancore-Cochin

Travancore

Cochin

Travancore-Cochin

Kerala

Cochin Marumakkattayam Act

Cochin Nair Act

Cochin Paliam Tarwad Act

Cochin Thiyya Act

Travancore Nanjinad Vellala Regulation

Travancore Nayar Regulation

Travaocore Wills Act

s. 7

Hindu Succession Act

Hindu Succession Act

s. 17

ss.8, 10, 15 and 23

Hindu Adoptions and Maintenance Act

Hindu Marriage Act

Since the enactment of Madras Act

Hindu Succession Act

Hindu Succession Act

Mafabar District

Art. 14

America

Willis

United States

Weaver

Art. 275

Expenditure-tax Act

Expenditure-tax Act

Income-tax Act

Indian Income-tax Act

Indian Income-tax Act

Similarly under the Wealth-tax Act

Gift-tax Act

Excess Profits Tax Act, 1940

Expenditure-tax Act


JINDAS OIL MILL & ORS.

GODHRA ELECTRICITY CO. LTD.

February 26, 1969

[S, M. SIKRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.] B

Electricity Supply Act, 1948, s. 51(2)(c)-Rates of supply licensus fixed by Government on recommendation of rating comn1it/lee-Act amenlled in 1956 s. 57(A)(l)(e) of amended Act read with amended Schedule VJ-Licensee's power under amended Act to en/lance rates of supply- Rates "fixed under original Act whether can be enhanced by licensee unilatera/1)-Vested righ! whether afj.cted-App/icability of General Clauses Act, 1897, s. 6. c

The respondent helO a licence for the supply of Electricity under the Indian Electricity Act, 1910 in the Godhra area of undivided Bombay.

On the creation of the State of Gujarat the area went to that State. The Electricity (Supply) Act came into force in 1948 and under it the conditions in Schedule VI thereof were deemed to be incorpo'rated ill; the licence of every licensee.

Under s. 57(2)(c) of the Act the Government could fix the rates for supply of electricity and under cl. I of the Schedule VI D a I icensee could reduce the rates for keeping the profit at a reasonable level. A lictnsee bad no power to enhance the rate&. except by requesting the Government to fix ne1rv rates on the recommendation of a fresh rating committee.

In 1952 the Government fixed certain rates on the recommendations of a rating committee. In 1956 the Supply Act of 1948 wao

amended. By s. 57A( I )(e) of the amended Act the rates fixed by the Government under s. 57(A) (l)(d) on the recommendation of a rating E committee we're to enure for a maximum of three years.

Under cl. I of the amended Schedule VI the licensee shall so adjust his charges for the sale of electricity whether by enhancing dr reducing them that hii clear profit in any year of acdount shall not as far as possible exceed the amount of reasonable return.

In 1963 the respondent enhanced the rates of supply without having them fixed by the Government on the recommendations of a rating committee.

The appellants who were consumers df electricity in the Godhra area filed suits seeking to restrain the respon- F dent from enforcing the enhanced charges.

The suits were decreed by the trial court and the decrees were confirmed by the first appellate court and in second appeal by a single Judge.

In Letters Patent appeal ho..,- ever the High Court held that under the Supply Act as amended in 1956 the re•pondent had a unilateral right to enhance the charges subje(\t to the conditions prescribed in Schedule VI of the Act.

The appellants came to this Court contending that they had a vested right in the rates; fixed by Government in 1952, that under the amended Act the respondent did G not have a unilateral right to enhance those rates, and that the amended provi5ions not being retrospective nor inconsistent with the old provisions the charges fixed by the Government in 1952 must in view of s, 6 of the General Clauses Act, 1897 continue to be in operation.

HELD : The law declared by the Amending Act does not affect any

riht or privilege, accrued under the repea1ed provision. It merely prescnbes as to what can or should be done in the future.

Therefore there H is no basis for saying that it affects vested rights. [847 F]

For finding out the power of the licensee to alter the ch"!ges one has to look at the terms of the license in the light of the law as 1t stands, the

JINDAS OIL MILL v. GODHRA ELFCT. co. (Hegde, J.)

pa•t history of that law being wholly irrelevant. If the tellII& of the licence, including the deemed term! permit him to unilaterally alter the charges then he has that right. Jn the pr•e"nt case looking at tbooe term!, the respondent was certainly within itll rigms in enhancing the chargeo as

admittedly it had followed the procedure pre.\Cribed by law. [847 F-GJ

The contention that there w.. no inconsistency between the present •cheme relating to the enhanceme.nt of cilarges viso{;-v/s the scheme provided under the Supply Act prior to its amendment in 1956 could not be accepted. The two schemes are rubstantially different. Under the former scheme once the Govemment fixed the charges the licensee could not enhance them but at present at the end of the period fixed in the Government order the licensee has a unilateral right to enhance the qbargea in accordance with the conditions pre!Cribed in Schedule VI. Therefore in view of ' 57 the provisions contained in that Schedule have an over'ridini: effect. [847 H-848 A]

The intention of the legislature beinr c"ar and unambiguous there was no need to call into aid any rule of statutory construction or any lepl presumption.

Further, there was no reason why those who obtained licences prior to the amendment of the Supply Act in 1956 should be in a more disadvantageous position than those who got their licenceo thceafter.

Correspondingly there wao no reason why those who are eerved by licencees who obtained their licences prior to the amendment of the

pply Act in 1956 should be plac.d m a better position than thooc !!Orved by licensees who obtained their licence. thereafter. [847 CJ

Section 57(A)(l)(e) was intended to meet the qbanging economic oircumstances. The pur(lO'e behind the new provisions appears to be to permit the licencees to adjuot their charges to get reasonable profitll. But at the same time a machinery ha, been provided to see whether any exce.s charges haYe been levied and if levied get the •ame refunded lo the consumen.[847 El

In view of the above comiderations and findin!I" the appeals muet fail.

Statt of Punjab v. Mohar Singh, [19SS) S.C.R. 893 and Du, C/uJlld

v. Statt of U.P. & Ors. [1959) 2 Supp. S.C.R. 8, distinguished

Amalgamated Electricity Co. Lli. v. N. S. Bhathtna .t Anr. !1964] 7 S.C.R. 503, applied.

CML APPELLATE Jfilm>ICTJON: Civil Appeals Nos. 15 and 16 of 1969.

Appeals from the judgment and order dated December 3 1968 of the Gujarat High Court in Letters Patent Appeals Nos. 43 and 42 of 1966 respectively.

M. C. Chagla, P. C. Bhartari, P. N. Tiwari and J. B. Dtldachanji, for the appellants (in both the appeals).

I. N. Shroff, for the respondent (in both the appeals).

The Judgment of the Court was delivered by Hegde, J. Common questions of law arise for decision in these appeals, by cei:ificate. The suits fro~ which these appeals arise have been considered together and decided by common judgmems

both in the High Court as well as in the courts below. It is convemient to do so in this Court as well.

The smls in questions are representative suits. The plaintiffsappellants who are consumers of electricity in the Godhra area sued the respondent-company on behalf of all the consumers in that area ; ecking to restrain the respondent from enforcing the enhanced charges sought to be collected from the consumers of power used for lights and fans as well as of motive power.

The facts leading to these appeals may now be stated.

On November 19, 1922, the then Government of Bombay granted a licence under the Indian Eleclricity Act, 1910 to a concern called Lady Sulochna Chinubhai & Co. authorising it to generate and supply electricity to the consumers in Godhra area. Clause 10 of the licence prescribed the maximum charges that the licensee could levy for the power supplied. The respondent is the successor of the said licensee. After the Electricity (Supply) Act, 1948 (to be hereinafter referred to as the Supply Act) came into force, a rating committee was constituted under s. 57(2) of the Supply Act at the request of the respondent on January !9, 1950.

On the recommendation of that committee, the Government fixed wirh effect from February I, 1952, the following charges for the power supplied : '

(i) 0-7-9 pies per unit for th~ electricity supplied for lights and fans with a minimum of Rs, 3/- per month per installation and

(ii1 for motive power at 4 annas per unit with a minimum of Rs, 4-8-0 per month per installation,

The Supply Act was amended in 1956, The respondent incre."Lsed

the charges for motive power from January 1, 1963 to 35 NP, per unit with a minimum of Rs, 7 /- per month for every installation, On June 22, 1963, the rates for lights and fans were increased with effect from July I, 1963 to 70 NP. per unit with a minimum of Rs, 5/- per month for every installation, The contention of the appellants is that the respondent was not competent to enhance the charges in question without the matter having been considered by a rating committee, Their suits to restrain the respondent from levying the proposed increased charges were decreased by the trial court Those decrees were affirmed by the first appellate court as well as by a single judge of the Gujarat High Court in second appeals but the appetlate bench of the Gujarat High Court reversed those decrees and dismissed the suits holding that under the Supply Act' as amended-in 1956 the respondent has a unilateral right to enhance the charges subject to the conditions prescribed in the VI ScheduJe to that Act It is

j A

as agail15t those decisions these appeals have been brought. Civil Appeal No. 15 of 1969 relates to the enhancement of charges for

electricity power for lights and fans and Civil Appeal No. 16 of 1969 relates to the enhancement of charges for the motive power.

The only question that arises for decision in these appeals is whether under the provisions of the Supply Act as amended in 1956, the respondent was competent to unilaterally enhance the charges.

In thee appeals we are not concerned with the provisions of the Electricity Act, 1910. There is no disp11te as regards the charges fixed by the Government with effect from February 1, 1952, under s. 57(2)(c) of the Supply Act on the basis of the r!'COlllmendation made by the rating committee. The appellants admit their liability to pay enhanced charges that may be fixed by the Government on the basis of any recommendation by a freshly appointed rating committee.

They merely challenge the respondent's right to unilaterally enhance the charges.

According to the appellants they have a vested right to be governed by the charges fixed in 1952 until the same is revised by the Government on the basis of the recommendation of a rating committee.

It was urged on their behalf that the amendments made in 1956 do not affect the charges fixed in 1952 and they continue to rule till altered by the Government in accordance with law. The respondent repudiates those contentions.

It denies that the appellants have any vested right in the charges fixed.

It was urged on its behalf that the amendments made to the Supply Act in 1956 have substantially altered the scheme as regards levying charges; it is now open to a licensee to alter the charges fixed by the Govermnent unilaterally subject to the conditions prescribed in s. 57(A) and in Sch. VI of the Supply Act. We may mention at this stage that even according to the appellants the charges that may be fixed by the Government now on the basis of the recommenation of a rating co.mmittee can be unilaterally altered by the licensee after the penod fixed in the Government order in accordance with cl. {e) of s. 57(A){l), expires.

In on; ier t~ ctecide the point in controversy, we have to take mto cons1derallon t; he relevan! provi.sions of the Supply Act as it stands now and as 1! stood pnor to tis amendment in 1956. For the s.e of convenience we shall set out side by side the relevant proV1S10ns.

The Supply Act u ii llood before 1956.

S, 57. Llcenaces charges to consumen.

The Supply Act as amended in 1956

S. 57. The Provisions of tho Slxtlt Schedule and the Seventh Scbodul<>

(I) The provisions of the Sixth

Schedule and the Table •Ppended to the Seventh Schodule shall be deemed to be incorporated in the licence of evtrf licensee, not being a local authority, from the dale of the commencement of the lcense-e's next mcceeding year of account. and from such date the licensee shall comply therewith accordingly and any provisions of such licence or ot the Indian Electricity Act, 1910 (LX of 1910), or any other law, agreement or inatrurnent applicable to the licengee iall, in relation to the licensee, be void and of no effect in so far as they are

inconsistent with the provisions of thiS section and the said Schedule and Table.

(2) Where the provisions of the

Sixth Schedule and the Table appended to the Seventh Schedule are under sub-section ( 1) deemed to be incorporated in the licence of any licensee. 1he following provisions shall ilavc effect in relation to the said licensee, namely :-

(a) The Board or where no

Board is constituted under this Act, the Provincial Government, may, if it iS satisfied that the liceneee bas failed to comply with any provisions of the Sixth Schedule and shall when requested so to do by the licensee. constitute a rating com mittee to examine the licensee's charges for the supply of electricity and to recommend thereon to the Provincial Government;

Prol'ided t.'iat no rating com .. mittee shall be constituted in respect of a licensee within three

shall be deemed to be incorporated in the licence of every licensee. not being a local authority :-

( •) in the case of a licence granted

beore the commencement of. this Ac~ from the date of the commencement of the Jicea. .. see's next succeeding year of account; and

( b) in the case of a Ucencee graated after the commencemeat of this Act, from tho date Ill the commencement of suJ)l'ly, and as from the said date, the licensee shall comply with tho provisions of the said Schedules accordingly, and aay provisions of the Indiaa Electricity Ac~ 1910, and tbe the licence granted to hi• thereunder and of any other Jaw, agreement or instrumCllt applicable to the licensee Shill, in relation to the licensee, be void and of no effect in so far

as they are inconsistent with the provisions of section S7 A and the said Schedules.

S. 57(A) (!): wh•retheprovisions of the Sixth Schedale and the Seventh Schedule are under section S7 deemed to be incorporated in the licence of any licensee, the following

provision~ shall have effect in relation to. the said licenaec namely:- (•) the Board or where no Board is constituted under this Act. the State Government-

(i) may, if satisfied that tbe

licensee has failed to comply with any of the provisions of the Sixth Schedule, and

(ii) shali when so requoated

by the liceruec in writing conttitute a rating committee to examine the licensee's charges for the supply of electricity and

years trom the date on which such a committee has reported in respect of that licensee, unless the Provincial Government declares that in its opinion circumstances bavo arisen readoring the orders passed on the recommendation of the previ, om: rating committee unfair to the licensee or any of his

consumers.

( b) The rating committee shall

after giving the licensee a reasonable opportunity of being heard and after taking into consideration the efficiency of operation and management and the potentialities of his undertaking report to the Provincial Government making recommendations (and giving reasons therefore) regarding the charges for electricity which the licencee may make to any clas~ or classes

ot consumers so however that the recommendations arc not likely to prevent Lie licensee from earning clear profits sufficient when taken with the sums available in the Tariffs and Dividends Control Reserve to afford him a reasonable return during his next succeeding three year!: of account if the potentialities of the undertaking of the 1icensee, with efficient operation and management, so perm.it.

(c) Within one month after the receipt of the report under clause (b) the Provincial Government shall cause the repart to be published in

tho official Gazette. and may at the same time make an order in accordance therewith fixing the licenee's charges for the supply

to make reeommenda. tions in that behalf to the State Government :

Provided that where it is pro pooed to constitute a rating com

mittee under this section on account of. the failure of the licensee to coinply with any provisions of the Sixth Schedule. such committee shall not be constituted unlei:s the licensee has been given a notice

in writing of thirty clear days (which period. if the circumstances so warrant may be extended from time to time) to show cauSe against the action proposed to be taken :

Provided further that no such rating committee shall be constitu. ted if the alleged failure of the Iicen*e to comply with any pro-. visions of the Sixth Schedule raises any dispute or difference as to the interpretation of the said provisions or any matter arising therefrom and such difference or dispute has been referred by the licensee to the arbitration of the Authority under paragraph XVI of that Schedule before the notice referred to in the preceding proviso was given or i~ so referred within the period of the said notice :

Provided further that no rating committee shall be constituted in respect of a licensee within three years from the date on which such a committee has reported in res))Cct of that licensee. unless the State Government declares that in its opinion circum!.1ances have arisen rendering the orders passed on the recommendations of the previouo; rating committee unfair to the licensee or any of the consumers :

( b) a rating committee under clause (a) shall,- J i) where such committee is to he constituted under sub clause (i) of that clause. be constituted not later than three months after the

of electricity with effect from such date, not earlier than two months after the date of publication of the report, as may be fi'(>ecified in the order; and the licensee shall forthwith . give effect to such order :

Provided that nothing in this clause shall be deemed to prevent a licensee from reducing at any time any charges. so fixed.

THE SIXTH SCHEDULE

1. The Licensee shall so adjust his rates for the &"ale of' electricity by periodical revision that his clear profit in any year shall not as far as possible exceed the amount of reasonable return :

Provided that the licensee shall not be considered to have failed so to adjust his rates if the clear profit in any year of account has not exceeded the a1nount of tbe reasonable return by more than thirty per centum of the amount of the reasonable return.

II. (I) If the clear profit of a licensee in any year of account is in excess of the amount of reasonable return one-third of such excess. not exceeding 7 1/2 per cent of the amount of reasonable return shall b; e at the disposal of the undertaking.

Of the balance of the excess. one half r,'hall be appropriated to a reserve which shall be called the Tariffs and Dividends Control Reserve and the remaining half shall either be distributed in the form of a proportionabte rebate on the amounts coHected from the sale of electricity and meter rentals or carried forward in the accounts of the licensee for distribution to the consumer!t in future, in

expiry of the notice referred to in the first proviso to

tha~ clause :

tii) where such committee is to be constituted at the request of the licensee, be constituted within three months of the date of such request;

(c) a rating committee shall, after giving the licensee a reasonable opportunity of being heard and after taking into con!tideration the efficiency of operation and management and the potentialities of his undertaking, report to the State Government within three months from the date of its constitution, making recommendations wit!l reasons therefor, regarding the charges for electricity which the licensee may make to any class or classes of conr,'umers so, however. that the recommen. dations are not likely to pre. vent the licensee from earning clear profit, sufficient when taken with the sums available in the Tariffs and Dividends Control Reserve to afford him a reasonable return as define; d in the Sth Schedule during his next succeeding three years of account:

Provided that the State Govern~ rnent may, if it o deems neceary, extend the said period of three months by a further period not exceeding three monthS' within which the report of the rating committee may be submitted to it;

(d) within one month after the receipt of the report under clause (c), the State Government shall cause the report to be published in the Official Gazette, and may at the same time make an order in accord .. ance therewith fixine; the licensee's charges for tbc

JINDAS OIL MILL v. GODHRA ELECT. co. (Hegdc, /.) 843

such manner as the Provincial Government may direct

(2) The Tariffs and Dividends Control Reserve shall be available for disposal by the licensee only to the extent by which the clear profit is less than the reasonable return in any year of account.

( 3) On the purchage of the undertaking under the terms of its licence any balance remaining in the Tariff:t and Dividends Control Reserve shall be handed over to the purchaser and maintained as such Tariffs and Dividends Control Reserve.

supply of electricity with

ffect from such date, not earlier than two months or later than three months, after the date of publication of the report as may be specified in the order and the licensee shall forthwith give effect to such order;

( e} the charges for the supply of electricity fixed under clause ( d) shall be in operation for such period not exceeding three years as the State Oov~ ernment may specify in the order :

Provided that nothing 1n this clause shall be deemed to prevent a licensee from reducing at any time any charges 00 fixed.

THE SIXTH SCHEDULE

I. Notwithstanding anything con~ tained in the Indian Electricity Act. 1910 except sub-aection (2) of section 9 of 1910, 22A. and the provisions in the licence of a licensee. the licensee shall so adjust his (charges) for the sale of electricity whether by enw hancing or reducing them that his clear profit in any year or account shall not, as far as possible, exceed the amount of reasonable return :

Provided that such (charges) snau not be enhanced more thaa once in any year of account :

Provided further that the licensee

shall not be deemed to have failed so to adjust his (charges) if the clear profit in any year or account has not exceeded the amount of reasonable return by (twenty) per centum of the amount of reasonable return ~

Provided further that the licmlset

'1lall not enhance the ( charces) for the supply of electricity nntil after the expiry of a notice in wtiting of not 1.,. than sixty

SUPIU!MB COURT IU!PORTS

[J 969] 3 S.C.R.

clear days of his intention to so enhanc:e the (charges) given by him to the State Government and and to the Board :

Provided further th at i( the

(charges) of supply fixed m pursuance of the recommendations of a rating committee. constituted under sec. S7 A are lower than those notified by the licensee under and in accordance with the preceding proviso, the licensee

shall refund to the consumers the excess amount recovered by him from them :

Provided aJso that nothing in this C Schedule shall be deemed to prevent a licensee from levying. with the previous approval of the State Govt. minimum charges for supply of electricity t'or any purpose.

IA. The notice referred to in the third proviso to paragraph I shall D be accompanied by such financial and technical data in rupport of the proposed enhancement of charges as the State Government_ may, by general _or special order, specify,

II. (!) If the clear profit of a licensee in any year of E account is in excess of the amount of reasonable return. one-third of such excess, not exceeding (five per cent) of the amount of reasonable return, shall be at the dh;- posal of the undertaking, Of the balance of the exccis, one-half shall be appro- F priated to a resrve which shall be called the Tariffs and Dividends Control Reserve and the remaining half shall either be distributed in the form of a proportional rebate on the amounts collected from the G sale of electricity and meter rentals or carried forward in the accounts of the licensee for digtribution to the consumers in future, in such manner as the State Government may direct.

(2) The Tariffs and Dividends H Contrdt Reserve shall be available for disposal by the 1iccnsee only to the

xtent hy which the clear

.!)

F '

profit is less than the reasonable return in any year of account.

(3) On the purcha~ of the undertaking under the terms of its licence any balance remaining in the Tariffs and Dividends Control Roserve shall be handed over to tho purchaser and maintained aa such Tariffs and Dividends Control Reserve: Provided that where the undertaking is purcbasod bY the Board or the State Government the amount of the Reserve may be ded\lcted from the prico payable to the licensee.

From an examination of these provisions it would be seen that under the Supply Act prior to its amendment in 1956, the charges fixed by tile Govt. under s. 57(2)(c) remained in force unless reduced by the licensee in the meantime till the same were altered by a subsequent order made by the Govt. after getting a fresh recommendation from the rating committee but under the law as it now stands the rate fixed by the Government under s. 57 (A)(l)(d) would be in operation only for such period not exceeding three years as the State Govt. may specify in the order. Thereafter it can be enhanced by the licensee in accordance with the provisions contained in Sch. VI. It was urged on behalf of the appellants that the present s. 57(A(l )(e) can only govern the charges fixed under s. 57(A)(l)(d) and it has not impact on an order made under the old s. 57(2)(c). According to the appellants the charges so fixed can only be modifi,, d by the Government aftec getting a report from the rating committee.

Mr. Chagla, learned Counsel for the appellants contended that the consumers who get power from the respondent have a vested right in the charges fixed in 1952 and that vested right cannot be considered to have been taken away by the provisions of the Amending Act.

He argued that the provisions of the Amending Act are not retrospective in character nor is there any inconsistency between those provisions and the present provisions as the two operate on different fields; hence in view of s. 6 of the General Clauses Act,

1897, we must hold that the charges fixed by the Government in 1952 continue to be in operation. In this connection he relied on certain observations made by this Court in Stare nf Punjab v. illohar Singh(') and Deep Chand v. State of U.P. & Ors.( 2 ). On the other hand it was contended hy the learned Counsel for the respondent that the rights and liabilities of the respondents at present are exclusively regulated by the provisions of the Supply

(I) [195'] S.C.R. 89.1.

(2) [1950] c S•mr. S C.R. ~.

Act as it stands now; the terms of licence as they originally stood or as they stood on the coming into force of the Supply Act in 1948 are of no consequence now; they cannot be looked into for finding out the rights or duties of the licensee as at present; for that purpo; e we must look into those terms as modified by the provisions of the Supply Act as it is now. It was also urged on its behalf that there is no 4uestion of vested rights in these cases; herein we are only concerned with the procednre to be adopted in modifying the charges fixed in 1952.

In Mohar Singh's case(') this Court laid down that the provisions of s. 6 ( c), ( d) and ( e) of the General Clauses Act, 1897 relating to the consequences of the repeal of a law are applicable not only when an Act or Regulation is repealed simpliciter but also to a case of repeal and simultaneous enactment re-enacting all the provisions of the repealed law.

In the course of its judgment this Court observed that when the repeal is followed by a fresh legislation on the same subject, the Court has undoubtedly to look into the provisions of the new Act but that only for the purpose of determining whether they indicate a different intention.

The line of inquiry would be, not whether the new Act keeps alive the old rights and liabilities but whether it manifests any intention to destroy them.

In Deep Chand's case(') this Court was considerin7 the effect of repugnancy between a State Act and a Central Act.

The observations made in that context, we think, have no bearing on the point in issue in this case. It is true that when an existing Statute or Regulation is repealed and the same is replaced by fresh Statute or Regulation unless the new Statute or Regulation specifically or by necessary implication affects rights created under the old law those rights must be held to continue in force even after the new Statute or Regulation comes into force.

But in the cases before us there is no question of affecting any vested right.

There is no dispute that the charges fixed can be altered.

The controversy relates to the procedure to be adopted in altering them.

That controversy does not touch any vested right.

The procedure in question must necessarily be regulated by the law in force at the time of the alteration of the charges.

Section 57 of the Supply Act as it stands now lays down that the provisions of Sch. VI shall be deemed to be incorporated in the licence of every licensee not being a local authority, in the case of a licence granted before the commencement of the Act from the date of the commencement of the licensee's next succeeding year of account Admittedly the licence with which we are concerned in these cases was granted even before the Supply Act was enacted.

Therefore quite clearly the licence in. question is governed by the present s. 57. Hence we haveto read into that licence the provisions contained in Sch. VI. If any of the earlier

(I) [19551 S.C.R. 893.

(2) [1959] 2 Supp. S.C.R. 8.

provisions in the licence either as they stood when the licence was originally granted or as they stood modified as per the provisions of the Supply Act prior to its amendment in 1956 are inconsistent with the provisions of Sch. VI or s. 57(A) as they are now they must be held to be void and of no effect. In other words we must read into the licence the provisions of Sch. VI and strike out therefrom such terms as are inconsistent with those provisions and thereafter give effect to Ihe same.

For determining the rights and duties of the licensee as at present we have only to look into the terms of the licence as modified by Sch. VI. We cannot go behind them.

That much is clear from the language of the Supply Act. The intention of the legislature is clear and unambiguous. Therefore there is no need to call into aid any rule of statutory construction or any legal presumption.

Further no reason was advanced before us, nor can we conceive of any why those who obtained licenses prior to the amendment of Supply Act in 1956 should be in a more disadvantageous position than those who got their licenses thereafter.

Correspondingly we fail to see why those who are served by licensees who obtained their licences prior to the amendment of the Supply Act in 1956 should be placed in a better position than those served by licensees who obtained their licenses thereafter.

After all, every law has some reason behind it.

Section 57(A)(2)(e) was intended to meet the changing economic circumstances.

The purpose behind the new provisions appears to be to permit the licensees to so adjust their charges as to get reasonable profits. But at the same time a machinery has been provided to see whether any excess charges have been levied and if levied, get the same refunded to the con- :; umers.

The law declared by the Amending Act does not affect any right or privilege, accrued under the repealed provision. It merely prescribes as to what could or should be done in future.

Therefore there is no basis for saying that it affects vested rights.

For finding but the power of the licensee to alter the charges one

as to look to the terms of the licence in the light of the law as 1t stands, the past history of that law being wholly irrelevant. If the trrns of the licence, including the deemed terms permit him to umlaterally alter the charges then he has that right. If we

merey look at those terms, as we think we ought to, then there is no dispute that the respondent was within its rights in enhancing the charges as admittedly it has followed the procedure prescribed by law. We also do not agree with Mr. Chagla in his contention that there is no inconsistency between the present scheme relating to the enhancement of charges vis-a.vis the scheme provided under the Supply Act prior to its amendment in 1956. The two schemes are substantially different. Under the fonner scheme once the Government fixes the charges the licensee cannot alter

it but at present at the end of the period fixed in the Government order the licensee has a unilateral right to enhance the charge,, in

accordance with the conditions prescribed in the VI Schedule.

Therefore in view of s. 57 the provisions contained in that schedule. have an over-riding effect.

In Amalgamated Electricity Co., Ltd. v. N. S. Bhathena mid Anr. (') this Court was called upon to consider the scape of s. 57 (A) and the Sch. VI as it stands now. Therein the ontro versy was whether the appellant therein was entitled to levy charges more than the maximum charges prescribed in its licence issued in 1932. It may be noted that in that case the notice of enhancement of the charges was given on September 25, 1958.

This Court held that the maximum stipulated in the licence no longer governed the right of the licensee to enham; e the charg~; his rights were exclusively governed by the provisions contained in paragraph I of Sch. VI of the Supply Act. It is true that in that case this Court was considering the right of the licensee under the Supply Act vis-a-vis his right under the licence granted under the Indian Electricity Act, 1910 but th.at difference is not material. What this Court in fact considered was the right of the

license under the existing Jaw to enhance the charges. Dealing with the scope ot paragraph I of Sch. VI, Ayyangar, J. who spoke for the majority observed thus :

"Para I of Sch. VI both as it originally stood. and as amended, as seen already, empowered the licensee

"to adjust his rates, so that his clear' profit in any year shall not, as far as possible, exceed the amount of reasonable return". We shall reserve for later consideration the meaning 'of the expression "so adjust his rates".

But one thing is clear and that is that the adjustment is unilateral and that the licensee has a statutory right to adjust his rates provided he conforms to the requirements of that paragraph viz .• the rate charged does not yield a profit exceeding the amount of reasonable return.

The conclusion is therefore irresistible that the maxima prescribed by the State Government which bound the licensee under the Electricity Act of 1910 no longer limited the amount which a licensee could charge after the Supply Act, 1948 came into force since the "clear profit" and "reasonable return" which determined the rate to be charged was to be compul!:d on the basis of very different criteria and factors than what obtained under the Electricity Act." For the reasons above, these appeals fail and they are dismissed with costs.

One hearing fee.

G.C.

Appeals dismissd.

(I) [1964) 7 S.C.R. 503.

F ...

JINDAS OIL MILL & ORS

GODHRA ELECTRICITY CO. LTD

February 26, 1969

M. SIKRI

R. S. BACHAWAT

K. S. HEGDE, JJ.

Electricity Supply Act, 1948

s. 51(2)(c)

s. 57(A)(l)(e)

Schedule V

General Clauses Act, 1897

s. 6

Schedule VI

s. 57(2)(c)

Schedule VI

s. 57A( I )(e)

s. 57(A)

Schedule VI

Godhra

Schedule VI of the Act

General Clauses Act, 1897

Schedule VI

Section 57(A)(l)(e)

1964] 7 S.C.R. 503

M. C. Chagla

P. C. Bhartari

P. N. Tiwari

J. B. Dtldachanji

I. N. Shroff

Hegde

November 19, 1922

Sulochna Chinubhai & Co.

Clause 10

s. 57(2)

January !9, 1950

July I, 1963

Gujarat High Court

February 1, 1952

s. 57(2)(c)

s. 57(A)

VI of the Supply Act

s. 57(A)

S. 57

Sixth

Schedule

Indian Electricity Act, 1910

Sixth Schedule

Seventh Schedule

Sixth Schedule

S. 57(A)

Seventh Schedule

Sixth Schedule

Sixth Schedule

Sixth Schedule

Electricity Act

section 9

s. 57(2)(c)

s. 57

s. 57(A(l )(e)

s. 57(A)(l)(d)

s. 57(2)(c)

Chagla

s. 6

General Clauses Act

Mohar Singh

s. 6

General Clauses Act, 1897

Deep Chand

State Act and a Central Act

Section 57

s. 57

s. 57(A)

Section 57(A)(2)(e)

s. 57

s. 57

September 25, 1958

VI of the Supply Act

Electricity Act

Ayyangar

Electricity Act

Supply Act, 1948

Electricity Act

[1964) 7 S.C.R. 503


STATE OF PUNJAB & ORS.

M/S. CHANDU LAL KISHORI LAL & ORS. ETC,

February 27, 1969

[M. HIDAYATULLAH, C.J., V. RAMASWAMI AND G. K. MITTEll, JJ.J

Punjab Sal" Tax Act (Punj. 46 of 1948), s. 5(2)(a)(vi)-Deduction of Jale price of cotton seeds from purchase turnover if permissible.

. The respondent a dealer purchased unginned cotton and after ginnmg the cotton and removing the seeds sold the ginned cotton to customers outside the State.

The respondent paid purchase tax on the purchase turnover. In respect of cotton seeds sold by it to registered dealers

the respondent claimed deduction from the purchase turnover under s'. 5(2) (a) (vi) of the Punjab Sales Tax Act, 1948. But the as"""ing autho,

rity did not allow the deduction holding that the goods sold viz .. cotton seeds were not the goods in respect of whitjb purchase tax had been levied as the unginned cotton underwent a manufacturing process and the goods produced were different from those purchased.

The respondent filed a writ petition in the High Court, which was allowed and the State's Letters Patent Appeal was dismissed.

Allowing the State's appeal, this Court;

HELD: The respondent was not entitled to deduction under s. 5(2)

(a) (vi) of tlle Act in respect of cotton seeds sold by it to registered dca1ers.

"Declared goods" in s. 14 of the Central Sales Tax Act 1956 are individually specified undc'r separate items. "Cotton ginned or unginned" is treated as a single commodity under one item of declared goods.

It is evident that cotton ginned or unginned being treated as a single commodity and as a single spes of declared goods cannot be aubject under

' 15(a) of the Central Sales Tax Act to a tax exceeding two per cent of the sale or purchase price thereof or at more than one state. But so far as cotton seeds are concerned it cannot be held that the sale of cotton seeds mu•! be treated as a sale of declared goods for the purpose of s.

l S (a) or (b) of the Central Sales Tax Act, 1956. Cotton in ita unginoed

tate contaim cotton seeds, but it is by a manufacturing process that the cotton and the seed are separated and it i• not correct to oav that the seed so separated is cotton itself or part of the cotton. They are two distinct commercial good• though before the manufacturing process the seeds mi£ht have been a part of the cotton itself. [853 E]

Pott/ Cotton Company Private Ltd. v. State of Punjab & Ors., 15 S.T.C. 865, disapproved.

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 2516 to 2519 of 1966.

Appeals from the onlers dated February 10, 1965, March 31, 1965 and March 19, 1965 of the Punjab High Court i!J Letters.

Patent Appeals Nos. 38, 36, 100 and 74 of 1965, respectively and Civil Appeals Nos. 806 and 807 of 1967.

Appeals from the judgments and. orders dated September 28.

A 1964 of the Punjab High Court in Civil Writ Nos. 2159 and 2309 of 1963.

V. D. Molzajan and R. N. Saclzthey, for the appellants (in all the appeals).

Harder Singh, for the respondents (in C.As. Nos. 2517 "1!ri 2519 of 1966) and for the respondents (in C.As. Nos. 806 and 807 of 1967).

Civil Appeal No. 2518 of 1966

The Judgment of the Court was delivered by

Ramaswami, J.

In this case the respondent is a partnership firm carrying on the business of buying and selling cotton and also of ginning and pressing cotton at Barnala. The respondent purchased unginned cotton and after ginning the cotton by a mechanical process and removing the seeds sold the ginned cotton to customers outside the State.

For th~ period from 1st April, 1961 to 31st March, 1962 the respondent paid purchase tax on the purchase turnover. In respect of cotton seeds sold by it to registered dealers, the respondent claimed deduction from the purchase turnover under s. 5(2)(a)(vi) of the Punjab Sales Tax Act, 1948 (Act No. 46 of 1948). But the assessing authority did not allow the deduction holding that the goods sold viz., cotton seeds were not the goods in respect of which purchase tax had been levied. In other words, the assessing authority took the stand that the unginned cotton underwent a manufacturing process and the goods produced were different from those purchased. So the respondent firm was assessed to pay a tax of Rs. 16,452 by the oq:ler of the assessing authority dated 11th September, 1963. The respondent firm thereafter filed a writ petition No. 1917 of 1963 in the Punjab High Court for quashing the assessment.

The writ petition was allowed by the High Court which quashed the assessment and . directed the assessing authority to re-detennine the tax in the light of its judgment. Jn allowing the writ petition of the respondent the High Court followed its previous decision in Patel Cotton Company Private Ltd. v. State of Punjab & Ors.( 1 ). The appellants preferred a Letters Patent Appeal which was dismissed. The present appeal is brought by certificate from the judgment of the

Punjab High Court dated 31st March. 1965.

It is necessary at this stage to set out the relevant provisions of the Punjab Sales Tax Act. 1948 (Act No. 46 of 1948) (hereinafter called the Act). Section 2(ff) omitting immaterial portions defines 'purchase' thus :-

0) 15 S.T.C. 865.

" 'Purchase' with all its grammatical or cognate expressions means the acquisition of_ goods specified in Schedule C .......... "

Schedule C Entry ( 1) and Entry ( 3) read thus :

" ( 1 ) Cotton, that is to say, all kinds of cotton (indigenous or imported) in its unmanufactured state whether gined or unginned, baled, pressed or otherwise, but not including cotton waste".

"(3) Oil seeds, that is to say, seeds yieldmg nonvolatile oils used for human consumption or in industry, or in the manufacture of varnishes, soaps and the like or in lubrication and volatile oils used chiefly in medicines, perfumes, cosmatics and the like".

Section 5 ( 2 )(a)( vi) of the Act is to the following effect :

"5(2). In this Act the expression "taxable turnover" means that part of dealer's gross turnover during any period which remains after deducting therefrom

(a) his turnover during that period on

(vi) the purchase of goods which are sold not later than >Six months after the close of the year, to a Registered Dealer, or in the course of inter-State trade or commerce, or in the course of export out of the country".

Secti~ 2(c) of the Central Sales Tax Act, 1956 (Act No. 74 of 1956) defines 'declared goods' to mean goods declared under section 14 to be of special importance in inter-State trade or commerce.

Under section 14 of this Act certain goods were declared to be of special importance in inter-State trade or commerce and they included cotton, that is to say all kinds of cotton (indigenous or imported) in its unmanufactured state, whether or unginned, baled, processed or otherwise, but not includmg cotton waste. Section 15 of the-Central Sales Tax Act 1956 has been amended from time to time. Originally section 1'5 read as follows:-

" 15, Restrictions and conditions in regard to tax on sales or purchases of declared goods : Notwithstanding anything contained in the sales tax law of any State, the tax payable by any dealer under that law in respect H o~ ai:tY . sales or purchases of declared goods made by him ms.1de the State shall not exceed two per cent of the sale pnce theteof, and such tax shall not be levied at more than one stage in a State"'. 11 Sup. C.I./69-5

This section was amended by the Central Sales Tax (Amendment) Act (No. 16 of 1957) and again by Central Act No. 31 of 1958 and the amended section reads as follows :-

"15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State : Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely :

(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed two per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage;

(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State".

On behalf of the appellants the argument was stressed that ginning process was a manufacturing process, and ginned cotton and cotton seeds were different commercial commodities and the respondent was not entitled to the exemption under s. 5(2)(a)

(vi) of the Act. It was said that unginned cotton was transformed into two distinct commercial commodities and there was no substantial identity between unginned cotton and ginned cotton or cotton seeds. It was argued that the ginning process required complicated machinery of manufacture. Reference was made in this connection to the mechanical aspect of the ginning process described in Encyclopaedia Britannica, Vol. 6 :-

"Hand separation of lint and seed was replaced rapidly by use of saw-type gins n the United States after the inventions of Eli Whitney in 1794 and of Hokden Holmes in 1796. Whitney's gin was improved upon by Holmes who substituted toothed saws for the hooked cylinder and flat metal ribs for the slotted bar used by Whitney.

The saws, metal ribs and doffing brush in these early models persist in modern gins, with no basic change in ginning principle having been made, although some moucrn gins , uhstituk an air hlast for the doffing brushes.

G •

Additional gin ffiachinery, has been developed . to keep pace with chainges in harvesting practices which have resulted in a trend from careful hand picking to rougher hand and machine harvesting. These developments include seed-cotton driers, seed-cotton cleaners, burr extractors, greenboll traps and magnetic devices for removing metal. Line cleaners, designed to remove trash from lint after it had been removed from the seed, were added to modem gins in the late 1940s and 1950s.

Improvement in grade, which resulted in a higher price for the lint, was, W some cases, offset by th~ loss in weight.

Gin installations include presses for baling the lint and equipment for moving the seed away from the gin stands. While some of the seed is saved for planting purposes, most of it moves directly to an oil mill for processing"(') .

In our opi, n:ion, the appellants are right in their contention that the ginning process is a manufacturing process. But the question presented for determination in the present case is somewhat diffe rent viz., whether the respondent is entitled to the exemption

er s. 5(2)(a)(vi) of the Act in the context and setting of the language of sections 14 and 15 of the Central Sales Tax Act,

1956. "Declared goods" in section 14 of the Central Sales Tax Act, 1956 are individually specified under separate items. "Cotton ginned or unginned" is treated as a single commodity under o; ie item of declared goods.

It is evident that cotton ginned or unginned being treated as a single commodity and as a siingle species of declared goods cannot be subject under s. 15(a) of the Central Sales Tax Act to a tax exceeding two per cent of the sale or pur chase price thereof or at more than one stage. But so far as cotton seeds are concerned, it is difficult to accept the contention that the sale of cotton seeds must be treated as a sale of declared goods for the purpose of s. 15(a) or (b) of the Central Sales Tax Act,

1956. It is true that cotton in its unginned state contains cotton seeds. But it is by a manufacturing process that the cotton and the seed are separated alJd it is not correct to say that the seeds so separated is cotton itself or part of the cotton.

They are two distinct commercial goods though before the manufacturing pro cess the seeds might have been a part of the cotton itself. There is hence no warrant for the contention that cotton seed is not different from cotton. It follows that the res!l<¥ldent is not enti tied to deduct the sale price of the cotton seeds from the purchase turnover under s. 5(2)(a)(vi) of the Act. In our opinion, the assessing authority was right in holding that the respondent was not. entitled to deduction in respect of cotto.n seeds sold by it to registered dealers. It is conceded that the assessing authority had

(1) Encyclopaedia Britannica, Vo!. 6, page 614.

SUPREME C:lURT REPORTS [1969] 3 s.c.R.

already granted deduction under s. 5 (2) (a)(vi) so far as ginned A cotton is concerned.

For these reasons we hold that the judgment of the Punjab High Court dated 31st March, 1965 imJ Letters Patent Appeal No.

100 of 1965 should be set aside and the writ petition No. 1917 of 1963 filed by the respondent should be dismissed. The appeal is accordingly allowed with costs.

Civil Appeals Nos. 2516-2517 & 2519 of 1966 and Civil Appeals Nos. 806 and 801 of 1967

The question of Jaw arising in these appeals has been the subject matter of consideration in Civil Appeal No. 2518 of 1966.

For the reasons given in that judgmetnt we hold that these appeals also should be allowed and the judgments of the Punjab High Court should be set aside and the writ petitions filed by the respondents in each case should be dismissed.

These appeals are accordingly allowed with costs.

There will be one hearing fee for these appeals and for Civil Appeal No. 2518 of 1966.

Y.P.

Appeals allowed.

STATE OF PUNJAB & ORS

M/S. CHANDU LAL KISHORI LAL & ORS. ETC

February 27, 1969

M. HIDAYATULLAH, C.J.

V. RAMASWAMI

s. 5(2)(a)(vi)

Punjab Sales Tax Act, 1948

s. 5(2)

s. 14

Central Sales Tax Act 1956

Central Sales Tax Act

Central Sales Tax Act, 1956

V. D. Molzajan

R. N. Saclzthey

Harder Singh

Ramaswami

Barnala

1st April, 1961

31st March, 1962

s. 5(2)(a)(vi)

Punjab Sales Tax Act, 1948

11th September, 1963

Punjab High Court

31st March. 1965

Section 2(ff)

Schedule C

Schedule C

Section 5

Central Sales Tax Act, 1956

section 14

section 14

Section 15

Central Sales Tax Act 1956

section 1

Central Sales Tax (Amendment) Act

s. 5(2)(a)

United States

Eli Whitney

Hokden Holmes

Whitney

Holmes

s. 5(2)(a)(vi)

sections 14 and 15

Central Sales Tax Act

section 14

Central Sales Tax Act, 1956

s. 15(a)

Central Sales Tax Act

s. 15(a)

Central Sales Tax Act

s. 5(2)(a)(vi)

s. 5


A JAi NARAIN

KISHEN CHAND

February 27, 1969

[M, H!DAYATULLAH, C.J., V. RAMASWAMI AND G. K. MITTER, JJ.]

Delhi Rent Control Act 1958, s. 57(1), first provicope of.

The respondent lanO!ord filed a suit for eviction against the appellant under section 13(l)(k) of the Delhi and Ajmer Rent Control Act, !9j2, on the ground that the appellant had c, itused damage to the premises. The trial court ordered ejecl!nent in February, 1959, and the appellate auth<>- rity dismissed an appeal in November, 1959.

The Delhi Rent Control Act 1958 came into force in February, 1959. In a revision application before the High Court, the appellant invoked the provisions of the 1958 Act and relied upon section 14(1) (j) read with s. 57 of the new Act.

The High Coun, acting under section 14 (1 )(j) and sub.,.ection ( 10) of the same section gave the appellant the alternative to pay compensation for the damages caused. The landlord then filed an application for review of the High Court order pointing out that the new Act was not applicable to the c:jase in view of the first proviso of section 57 ( 2) . The High Coun granted the review and reversed its earlier orders.

In appeal to this Court it was contended on behalf of the appellant that by virtue of the first proviso of section 57(2) the High Court was bound to have regard to the provisions of the 1958 Act even in proceedings pending and governed by the 1952 Act.

HELD : Dismissing the appeal,

The language of the first proviso to section 57(2) clearly shows that the proviso applies to those cases only in which ection 54 cannot be made applicable. The area in the present case is admittedly subjected to the Slum Areas (Improvement and Clearance) Act 1956, which is one of the. enactments mentioned in s. 54. Accordingly the terms of the proviso would have no application in this case. [857 G; 859 BJ

The High Coun had rightly held that the phrase "to which section 54 does not apply", _goyerns the word "premises" and is not connected with the words 'in any such suit or proceedings".

[858A-B]

CIVIL APPELLATE JURISDICTION : Civil Appeal No 389 of G 1966. .

Appeal by special leave from the judgment and order dated arch 25, 1964 of the Punjab High Court Circuit Bench at Delhi m Review Application No. 23-D of 1963'.

C. B. Agarwa/a, Uma Mehta, M. L. Kapur and K. K. Sinha, H for the appellant.

II( fl C. Misr", Hishamber [al and H. K. Puri, for the respon- (lent.

The Judgment of the Court was delivered by Hidayatullah, C.J., This is appeal by a tenant who had rented a shop No. 2687 in Kinari Bazar, Delhi from the respondent on Rs. 13.50 P per month. In those premises he was selling Usha sewing machines and fans. It appears that the level of te shop was too high from the road and his clients were troubled m going to his shop and so he lowered the level and thereby altered the premises to suit his convenience.

The landlord thereupon filed a suit against him for his eviction under s. 13(1)(k) of the Delhi and Ajmer Rent Control Act 1952. The suit was filed on November 13, 1957. The trial court ordered on February 19, 1959 ejectment and payment of Rs. 145/- as arrears of rent. An appeal against the order of the trial court was dismissed by the appellate authority on November 16, 1959.

A revision application was then filed by the tenant on March 25, 1960. During the course of that revision he invoked the provisions of the Delhi Rent Control Act, 1956 which had come into force on February 9, 1959 and relied upon s. 14 (1) (j) of the new Act read withs. 57.

Previously he had not relied upon the new Act although the Act had been in force during the pendency of the previous proceedings. The High Court acting under s. 14(1)(j) and sub-s. (10) of the same section, gave him the alternative of paying compensation in the sum of Rs. 500 which it appears that the landlord hi.mself had assessed as the damages caused by the act of the tenant. The landlord later filed an application for review of the order and pointed out that the new Act was not applicable to the case in view of the first proviso of s. 57 sub. s. (2). The High Court thereupon granted the review and reversed its earlier order and ordered the eviction of the tenant.

In this appeal it is contended that the High Court was in error in passing the order on review and that the previous order was the correct order in the light of the provisions of the Act of

1958. We have therefore to consider which of the two orders of the High Court is the correct order and whether the review was properly granted or not.

As is very frequent in our country, Rent Control Acts are changed from time to time causing numerous difficulties in their interpretation and application. Here too, we have a succession of Acts which were passed, to say nothing of the amendments which were made in the body of each of the Acts as they came.

We are concerned first with the Act of 1952, namely. The Delhi a11d Ajmer Rent Control Act, 1952.

Section 13(1)(k) of that Act gave a right to the landlord to evict a tenant who, whether before or after the commencement of the Act had caused or permitted to be caused substantial damage to the premises, or notwithstanding previous notice. had used or dealt with the premises

JAi NARAIN v. KISHEN CHAND (Hidayatu/lalr, C.J.) 8 57

in a manner contrary to any condition imposed on the landlord by the Government or the Delhi Improvement Trust while giving him a lease of the land on which the premises were situated. We are not concerned with the latter part but with the first part where the tenant before or after the commencement of the Act had caused or permitted to be caused substantial damage to the premises. Whether the lowering of the floor was causing substantial damage to the premises is a question into which we need not go, because the concurrent finding of the courts of fact is that it did so.

This question was not raised before us.

Therefore, if s. 13 (l)(k) of the Delhi and Ajmer Rent Control Act, 1952 applied, the eviction of the tenant was the proper order to make in view of the finding .that he had caused substantial damage to the premises. However, the matter comes to the Court because of the passing of the Delhi Rent Control Act, 1958 which came into force on February 9, 1959. Section 57(1) of that Act provided that the Delhi an&! Ajmer Rent Control Act, 1952 in so far as it was applicable to the Uniop. Territory of Delhi, was being repealed. While repealing it, a special saving was however made, by sub-s. (2) of the same section in favour of all suits and other proceedings which were then pending under the repealed Act and it was provided that those suits and proceedings should be cO.ntinued and disposed of in accordance with the provisions of the Act as if that Act had continued to be in force and the new Act had not been passed. This would have really been a very proper provision to make to separate the operation of the two Acts but the Legislature went still further and added two provisos.

We are ccmcerned only with the first of the two provisos on which much dispute has arisen in this case. That proviso reads as follows:

"Pro_vided that in any such suit or proceeding for the fixatmn of standard rent or for the eviction of a tenant from any premises to which section 54 does not apply, the court or other authority shall have regard to the provisions of this Act :"

This proviso contains a proviso within itself which excepts the case. of preises to which s. 54 of the Act does not apply. That sectmn proVIdes as follows :

"Nothing in this Act shall affect the provisions of the Administration of Evacuee Property Act, 1950, or the Slum Aras (Improvement and Clearance) Act, 1956 or the Delhi Tenants (Temporary Protection) Act 1956." '

The ffect. of the proviso which we have quoted above is variously

dscnbed by counsel on opposite sides. According to Mr. C. B.

Agarwala who argued for the tenant, the ords "to w_hich section 54 does not apply" govern the words ' any such smt or proceeding" and not the words "any premises".

The High Court in the order passed on review was of the opinion that these words governed the words "any premises". In our opinion, this is the correct view to take of the matter. ·

To begin with, it must be noticed that the proviso speaks of two things, namely, tlie fixation of standard rent and the eviction of a tenant from any premises. The wocds "from any premises" cannot be connected with the phrase "for the fixation of standard rent'', because then the preposition would have been "of any premises" or "for any premises" and , not "from any premises." This means that the first phrase has to be read as complete in itself beginning from the words "for the fixation" and ending with the words, "standard rent". The second phrase then reads

"or for the eviction of a tenant from any premises".

The words "from any premises" go very clearly with the words "eviction of a tenant" and not with the words "any suit or proceeding".

The question then arises, where does the phrase "to which s. 54 does not apply" connect itself ?

According to Mr. Agarwala that phrase must be connected with the words "in any such s.uit or proceeding".

Since the suits contain two kinds of matters, namely, fixation of standard rent and eviction of a tenant from any premises, we have to turn to the provisions of the statutes to which s. 54 refers, namely, the Administration of Evacuee Property Act, 1950, the Slum Areas (Improvement and Clearance) Act, 1956 and the Delhi Tenants (Temporary Protection) Act,

1956. The first two do not deal at all with the fixation of fair rent and the third speaks of fair rent, but it does not provide for its fixation. It would be pointless to use the language 'any suit or proceeding to which s. 54 does not apply' in relation to fixation of standard rent. It follows therefore that the phrase "to which s. 54 does not apply" really governs 'premises'.

Read in that way, all the three Acts fall in lin_e, because they provide for premises and not for fixation of standard rent. The Administration of Evacuee Property Act. 1950, the Slum Areas (Improvement and Clearance) Act, 1956 and the Delhi '.fenants (Temporary Protection) Act, 1956 all deal with premises and property and therefore the phrase "to which section 54 does not apply" is connected with the words "premises".

That is the view which the High Court has taken and we think rightly. The proviso did not apply and the matter had to be governed by the old Delhi and Ajmer Rent Control Act, 1952 which had repealed.

It was contended before us that this legislation was intended to soften action against tenants still further and that the policy

JAi NARAIN v. K!SHEN CHAND (Hidayatullah, C.J.) 8 59

A of the law had been to give more and more protecti~ to the tenants and we must therefore read the statute in consonance with that policy.

ThiS would be an argument to consider if the language of the statute was not quite clear.

But the language is clear enough to show that the proviso applies only to those cases in which s. 54 cannot be made applicable. It is admitted before R us that thiS area is subjected to the Slum Areas (Improvement and Clearance) Act, 1956. If that is so, then, on the terms of the proviso on which much reliance is placed by Mr. Agarwala, the provisions of the Delhi Rent Control Act, 1958 cannot be taken into consideration. They are to be taken into consideration only in those cases to which the Acts mentioned in s. 54 do not apply, that is to say, in respect of premises not governed by those statutes.

Since this shop iS governed by one of the statutes, the J:li'oviSo has no application. The High Court's' view was therefore right. In the circumstances, the appeal fails and will be dismissed with costs.

R.K.P.S.

Appeal dismissed.

A JAi NARAIN

KISHEN CHAND

February 27, 1969

V. RAMASWAMI

G. K. MITTER, JJ.

Delhi Rent Control Act 1958

s. 57(1)

section 13(l)(k)

Delhi and Ajmer Rent Control Act

Delhi Rent Control Act 1958

section 14(1)

s. 57

section 14

section 57

section 57(2)

section 57(2)

s. 54

section 54

CIVIL APPELLATE JURISDICTION

C. B. Agarwa

Uma Mehta

M. L. Kapur

K. K. Sinha

H. K. Puri

Hidayatullah

Delhi

s. 13(1)(k)

Delhi and Ajmer Rent Control Act 1952

November 13, 1957

February 19, 1959

November 16, 1959

March 25, 1960

February 9, 1959

s. 14

s. 14(1)(j)

s. 57

Rent Control Act

Ajmer Rent Control Act, 1952

Section 13(1)(k)

Delhi Improvement Trust

s. 13

Delhi and Ajmer Rent Control Act, 1952

Section 57(1)

Ajmer Rent Control Act, 1952

section 54

s. 54

C. B.

Agarwala

section 54

s. 54

Agarwala

s. 54

s. 54

s. 54

section 54

Delhi and Ajmer Rent Control Act, 1952

s. 54

Delhi Rent Control Act, 1958

s. 54