BAI DOSABAI

MATHURDAS GOVINDDAS AND 0RS.

April 21, 1980

(R. S. SARKARIA AND 0. CHINNAPPA REDDY, JJ.]

English doctrine of conversi.on, applicability to Fndfan I.nw-Tran.~Jer o~ Property Act. Section 54, ndian Trust Act, p. 94, Specific Relief Act, 1963, Sections 12, 13, 16, 21-Urban Land (Ceiling and Regulation) Act, 1916 Sections 15 and 21, Bombay Tend11cy and Agricultural Lands Act, 11pplicability of,

The appellant Bai Dosabhai obtained two plot• of land in Survey Nos. 59 and 63 at Vastrapur from her father-in-law, Jehangirji~ by way of gift.

On: February 25, 1946, Dosabhai executed a deed styled "a deed of lease" in favour of Indu Prasad Dev Shankar Bhatt whose successors-in-interest are the respondents to this appeal. The vital terms of the lease were : The lessee was entitled to pun:hase the land at any time within seven years by paying the stipulated price of Rs. 1,29, 111-8-0 a fourth of which was paid in adV<lllCO.

Until the date of sale he was to pay certain stipulated rent. Two year's rent

was paid in advance but if the sale took place within two years of the deed, the lessor would not be obliged to return a proportionate part of the advance rent paid by him. If there was default in payment of rent and if _the default continued even after three months• notice had been given or if the lessor failed to pay the purchase price and get a sale deed executed in his favour, the lessor was entitled to call upon the lessee, by giving three month&' notice, to pay the purchase price and take a deed of sale in his favour. If the lessee failed to comply with the notice the lessor was entitled to take possession of the land alongwith the .structures thereon. After taking 'possession the lessor was bound to sell the same by public auction at the cost and risk of the lessee. If, at the auction, a price less than the stipulated price was fetched the lessee was bound to make good the deficiency to the lessor. If, the price realised was more, -the lessor was to pay the surplus to lessee. The amount of Rs. 32,277-14-0 paid by the lessee to the lessor as advance of one fourth of the consideration was to be given credit to the lessor.

Since the lessee, in spite of three notices dated October, 25, 1950, :March 1~ 1951 and June 19, 1952 issued by the lessor calling upon the lessee to pay the balance of price within three months , from the date of receipt of the notice, failing which a suit would be instituted to recover possession of the property and to sell it by public aution at the cost and risk of the lessee remained silent, the lessor, on November 21, 1952 filed a suit in the Court of the Civil Judge Senior Division Ahmedabad to recOver rent for the period from January 2J,

1950 to January 22, 1953 .and for possession as well as damages in lieu of rent from January 22, 1953 onwards. The present plaintiff, the successor-in-interest of the original lessee who was defendant No. 4 in the suit filed a written statement pleading that he was a tenant as defined by the Bombay Tenancy and Agriw!tural Lands Act 1948, that his possession could not be disturbed and that the Civil Court bad no jurisdiction to pass a decree ifor possession or for mesne profits,, This plea was based on the circumstance that an amendment

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OOSABAI V. MA THU RD AS 76-:l

which came into force on January 1, 1953 made the provisions of the Bombay Tenancy and Agricultural Lands Act, applicable to the suit lands. This Act, however ceased to be applicable to the suit lands on August 11, 1958, when the suit lands came to be included within the limits of the Ahmedabad Municipality. The suit filed by the lessor was decreed on December 30, 1955. In execution of the decree obtained by her, the lessor obtained posse_ssion of the lands on December 22, 1960.

Immediately on the lessor obtaining possession, the lessee on January, 16, 1961,. instituted the suit out of which the present appeal arose seeking (a) specific performance of the agreement dated February 25, 1940 by directing the lessor-defendant to execute a sale deed in his favour after receiving from him the balance of sale price of Rs. 96,833-10-0 and (b) in the alternative, to direct the defendant to sell the land by public auction to retain a sum of Rs. 96,833-10-0 out of the sale price and to pay the excess amount to the plaintiff. The first relief sought was subsequently given up. The lessor who had in the meanwhile entered into an agreement of sale in favour of Patel Singhvi & Co., filed a written statement contesting the suit on various grounds. The City Civil Court dismissed the suit on July 16, 1965, but on appeal by the plaintiff, the jlldgment of. the Trial Court was reversed and it was decreed that the suit land should be sold by public auction, or by private treaty if the parties so agreed, in one .lot or by consent of the parties in several lots within six months from the date of the decree. Out of the sale price fetched the defendant was first to reimburse herself to the extent o:t the balance of the original purchase price of Rs. 96,833-10-0 with interest at 9 per cent from January 23, 1953 and thereafter the remaining amount was to be equally divided between the plaintiff and the defendan~ If the price fetclied at the sale was less than Rs. %,833-10-0,

the defendant was to recover the deficit from the plaintiff. The decree in these terms was so granted by the High Court as it was th<>ught that both parties had coinmitted default and that the decree if granted in those terms would meet the ends of justice. On the basis of the English equitable doctrine of 'conversion' which they held applied in India also, the High Court took the view that the deed dated February 25, 1946 had created an equitable interest in the land in fav<>ur of the plaintiff. The High Court also expressed the view that neither the provisions of the Bombay Tenancy Agricultnral Lands Act nor the scheme made under the provisions of the Bombay Town Planning Act stood in the way of the plaintiff. The defendant preferred an appeal to the Supreme Court by special leave.

Dismissing the appeal with modifications in the decree the Court,

HELD : 1. The English doctrine of conversion of reality into personality cannot be bcxlily lifted from its native English soil and transplanted in statutebound Indian Law.

Many of the principles of English Equ.ity have taken sta G tutory form in India and have been incorporated in occasional provisions of various Indian Statutes such as the Indian Trusts Act, the specific Relief Act.

Transfer of Property Act etc., and where a question of interpretation of such Equity based statutory provisions arise, the Court will be well justified in seeking aid from the Equity source. [770 H, 771 A-Bl

The concept and creation of quality of ownership, legal and equitable, on the execution of an agreement to convey immovable property, as understood H in England is alien to Indian law which recognises one owner, i.e., the legal owner.

[771 B-C]

The ultimate paragraph of Section 54 ol Transfer of Property Act .expressly enunciates that a-contract for the sale of immovable property does not, of itself create any interest in or charge on such property. But the ultimate and pennlti mate paragraphs .of s. 40 of the Transfer of Property Act make it clear that such a contract creates an obligation annexed to the ownership of immovable 'property, not amounting to an interest in the property, but which obligation may be enfbrced against a transferee with notice of the contract or a gratuitous transferee of the property. Thus the Equitable 'ownership in property recognised by Equity in England is translated into Indian law as an obligation annexed to the ownership of_ property, not amounting to an interest in the property, but an obligation which may be enforced against a -transferee with notice or a gratnitons trallSlferee. [771 C.E]

The Indian Trust Act defines 'trust' and 'beneficial inter .. !' and section 94 finally lays down "In any case not coming within the scope of any of the preceeding sections, where there is no trust; but the person having posseSiSion of. property has not the whole beneficial interest therein, be must hold the pro perty for the benefit of the persons having such inter .. t or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands".

Section 12(a) of tho Specific Relief Act provides for enforcement of specific performance of contract, in the discretion of the Court, when the act agreed to be done is in tho performance wholly or partly of a trnsi. Section 16 of the Act prescribes part performance of the contract, when that part of a contract which taken by itself oan and ought to be specifically performed, stands on a separate and independent footing rfrom another contract. [771 F-H, 772 B-DJ

Ramboran Prasad v. Ram Mohit Hazra and Ors. [1967) I SCR 293, Narendas Karsondas v. S. A. Kamtam & Anr., [1977] 2 SCR 341; referred to.

2. In the instant case, as seen from the terms of the deed the right of the lessor basically is to get the full sale price of Rs. 1,29,111·8-0 either from the lessee or by selling the property by public auction if the lessee does not himoelf want to buy, the lessee however, making up any deficit.

The lessor is under an obligation to sell the land to the lessee if the latter so desires within a period of seven years and pays the purchaS'e price and, if he does not so desire, lb p , sell the land by public auction and to recoup the balance of the stipulated price.

The lessor is under an obligation to pay the excess price, if any, realized by the sale by public auction to tlte lessee. To sell the property by public auction is thus both a right and an obligation. The obligation of the lessee is to pay one fourth of the stipulated price in advance and to pay the balance if he desires to purchase the property or to pay the deficit if any, if the le11or

is obliged to sell the property consequent on his failure to purchase.

His right G

is to obtain a sale deed by paying the balance price or to get any excess amount realised at the public auction.

Whatever happens, he is not entitled to get a refund of the advance of one fourth of the purchase price paid by him, and whatever happens, the lessor is bound to sell the property either to the lessee or by publication. [772 E-H, 773 A]

The obligation of the lessor to sen the land by public auction and pay the excess price to the lessee is an obligation annexed to the ownership of the property, not amounting to an interest .in the property, it is an obligation in th~ nature of a trast, and, therefore, an obligation which may be specifically en.- forced.

[7/3 A-BJ

OOSABAI V. MATHURDAS 765

3. The contention that the plaintiff could be compensated in terms of money and therefore the contract should not be specifically enforced does not appear from the terms of the contract.

It is clear from the very nature and the terms of the contract and the facts and circumstances of the case that compensation or damages is not determinable. In fact the defendant, apart from not raising an appropriate plea, did not offer any evidence to prove what would be suitable compensation. (773 C-D]

4. The defendant did not commit 'any default in not paying the, balance of the purchase price and taking a sale deed in his own favour. The defendant had the option to purchase the property if he so desired, but he was under no obligation to do so.

[773 D-FJ

5. U is true that the defendant ~!aimed the benefits given to a tenant under the Bombay Tenancy and Agricultural I.ands Act and resisted giving possession to the plaintiff. If under a bonafide mistaken belief that the statute had stepped in to give him higher rights than under the contract the defendant refused to deliver possession to the plaintiff until it was found by the Court that 1 he had no such higher rights the defendant cannot later be denied even the rights under the contract on the ground that he had claimed higher statutory rights. A person claiming the benefits of a beneficient social legislation should not be denied his contractnal rights, if he is found not to be entitled to the legislative benefits. [773 F-H]

6. Bombay Tenancy and Agricultural I.ands Act offered no impediment to the respondent-plaintiff's seeking to enforce the contract. The espondent/ plaintiff became entitled to demand that the property should be sold by public auction only when the appellant/defendant obtained possession. On the date when the appellant defendant obta.ined possession of the property the Act was not applicable to the lands. Similarly the Gujarat Vacant I.ands in Urban Areas (Prohibition of Alienations) Aci, 1972, was in force for a limited period of one year only. While it prohibited alienation of land during that period it did not render the contract, which was1 earlier in point of time incapabale of being per formed after the Act itself expired. (773 H, 774 A-CJ

7. It is true that Section .5(3) of the Urban Land (Ceiling and Regulation) Act 1976 prohibits every person holding vacant land in excess of the

ceiling limit before the commencement of the Act from transferring such F land or part thereof by way of sale, mortgage, $ift, lease or otherwise until he has furnished a statement as prescribed by the Act and a notification has been published after the prescribed procedure has been gone through, The Act catnc into force subsequent to the passing of the decree by the High Court.

While it is true that events and changes in t1te law occurring during thC pendency of an appeal require to be taken into consideration in order to do complete justice between parties and so that a futile decree may not G be passed. It is also right and necessary that the decree should be so moulded a8 to accord with the changed statutory situation. The right obtained by a party under a decree cannot be allowed , to be defeated by delay in the disposal of the appeal against the decree, if it is possible to save the decree. by moulding it to conform to the statutes subsequently coming into force. [774 C-F]

Pasupuleti Venkateswarlu v.

The Motor General Troders, AIR 1975 SC B 1409 Rltmeshwar and Ors. v. Jot Ram and Ors. (1976] 1 SCR 847; referred lo,

[In view of the provisions of sections 20 and 21 of the Urban Land .(Ceiling & Regulation) Act, 1976 the Court gave nocessary directions by way of , appointment of a Receiver to draw up a scheme to build residential flats for v<'eaker sections, and to take action to obtain exemption under section 20 and 21 of the Urban I.and (Ceiling and Regulation) Act.]

B CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1!47 of 1978.

and 915of1980.

Appeals by Special Leave from the Judgment and Order dated 19-9-1975 of the Gujarat High Court in FA No. 92/66.

S.B. Vakil and I.N. Shroff for the Appellant in C.A. 1!47/78.

V.M. Tarkirnde, P.H. Parekh and I. M. Nanavati for R.R. l in

C.A. 1!47/78.

S.K. Dho/kia for R.R. 2 & 3 in C.A. 1147/78.

P.H. Parekh for the Appellant in C.A. 915/80.

D The Judgment of the Court was delivered by

ClllNNAPPA REDDY, J. The appellant Bai Dosabai obtained two plots of land in Survey Nos. 59 and 63 of Vastrapur.from her fatherin-law, Jehangirji, by way of gift. On February 25, 1946, Dosabai executed a deed, styled "a deed of lease", in favo11r of Indu Prasad Dev Shanker Bhatt, whose successors in interest are the respondents to this appeal. The material terms of the deed were the following : The lease was to be for a period of seven 'years from January 23, 1946. As a tenant was already in actual possession of the land, the lessee in whose favour the deed was executed was given symbolic possession only. The stipulated rent was Rs. 4357-8-3 per year. Rent for two years was to be paid in advance.

In fact it had already been paid on January 23, 1946. The future rent was to be paid in advance every year. If the lessee failed to pay the rent the lessor was to demand the same by giving notice of three months. If the lessee continued to default despite the notice, the lessor was entitled to recover the rent with damages and costs.

The rent was to be a first charge on the land as well as the structures that might be constructed on the land, the lessee having been given the right to raise constructions on the land or to use it as an open land. On default of payment of rent even after three months' notice, it was provided by clause (4) of the deed that the lessor would be further entitled to take steps in the manner provided in clause }7 of the deed, which we shall presently extract. It. was also agreed that the lessor :nould sell the land to the lessee withi11the period specified in clause 15 of the deed, to which we shall efer

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DOSABAI v. 'MATHURDAS (Chinnappa Reddy, !.) 767

immediately, for a price of Rs. 1,29,111-8-0 out of which a sum of Rs. 32,227-14-0 being one-fourth of the amount was paid in .cash on the very date of the execution of the deed of lease. lt was .agreed that if the land was acquired under the provision of the

Land Acquisition Act, the lessee should take the entire amount of compensation and pay to the lessor an amount calculated at the irate of Rs. 3-8-0 per square yard whether such amount was more or less than the amount of compensation. Clause 15 provided that if at any time after two years and within seven years from the date -0f execution of the deed the lessee desired to purchase the land for the stipulated price of Rs. 1,29,111-8-0 (calculated at the rate of Rs. 3-8-0 per square yards), the lessor was bound to execute a deed of sale, in favour of the lessee or his nominees.

If the lessee, On calculation, was found to have over paid the rent upto the date -of sale he was to get credit for the same. If the lessee got the -deed of sale executed within two years, he would have no claim to _get credit for any part of the two years' rent paid in advance, the whole of which was to be retained by the lessor. Clause 17 of the <leed, the most important clause for our present purpose was as follows :

"(17). If the party of the second part fails to get the sale effected within the specified time, after paying the sale price agreed to by the parties of both the parts as mentioned in para 15 herein above, the party of the first parts -

shall after giving three months notice in writing be lawfully entitled to force the party of the second part to get the sale effected. If in spite of giving the notice, the party -0fthe second part fails to pay the balance of the consideration amount and get sale deed executed, the party of the first part

hall be entitled to take possession of the said land together with whatever structures the party of the second part may have constructed thereon. After taking such possession, the party of the first part shall be bound to sell the same by public auction at the cost and risk of the party of the second part. If, the amount realised at the public auction mentioned above, is less than the price of the land agreed to in this deed, the party of the first part shall be entitled to recover the deficiency from the second part, and if the amount realised is more, the party of the first part shall pay the surplus to the party of the second part. In this account Rs. 32,277-14-0 being the onefourth the consideration amount already paid shall be given credit for without interest by one part to other."

Thus, a conspectus of the relevant provisions of the deed reveals .certain vital terms which may be summarised thus : . The lessee was

. entitled to purchase the land at any time within seven years by paying the stipulated price, a fourth of which was paid in advance. I Until the date of sale he was to pay the rent but if the sale took place within two years of the deed, the lessor would not be obliged to return a proportionate part of the advance rent paid by him. If [there was default in payment of rent and if the default continued even after three months' notice had been given or if the lessor failed to pay the purchase price and get sale deed executed in his favour, the lessor was entitled to call upon the lessee, by giving three months' notice, to pay the purchase price and take a deed . of sale in his favour. If the lessee failed to comply with the notice the lessor was entitled to take possession of the land alongwith the structures thereon. After taking possession the lessor was bound to sell the same by public auction at the cost and risk of the lessee.

If, at the auction, a price less than the stipulated price was feWhed the lessee was bound to make good the deficiency to the lessor.

If the price realised was more, the lessor was to pay the surplus to the lessee. The amount of Rs. 32,277-14-0 paid by the lessee to the lessor as advance of one fourth of the consideration was to be given credit to the lessor .

. Three peculiar features of the agreement were : (I) Though the lessor was entitled to obtain possession of the land from the lessee on his committing_ default, she was not entitled to retain possession of the land but was under an obligation to sell the lands by public auction, (2) the lessor was to be entitled to the originally stipulated sale price of Rs. 1,29,111-8-0 neither more nor less, under any circumstances, and (3) the amount of Rs. 32,227-14-0 which was paid by way of advance of one fourth of the consideration was never to be forfeited. Nor was it to be refunded to the lessee. It was to be given credit to the lessee even if he had defaulted in any respect.

On October 25, 1950 the lessor gave a notice to the lessee (when we use the expression lessee hereafter we include the successors in interest of the original lessee also within that term) demanding payment of rent for the year 1950-51 which was payable in advance but wa~

in default. On March 7, 1951, the lessor gave a second notice to the lessee demanding payment of rent due for the years 1950-51, and 1951-52. The lessee was informed that if the rent demanded was not paid a suit would be instituted to recover possession of the property in terms of clauses 15 and 17 of the deed and the prperty woud be sold thereafter by public auction at the cost and risk of the Jessee. On June 19, 1952, the lessor issued a third notice to the lessee demanding payment of rent for the three years 1950-51, 1951-

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• DOSABAI v. MATHURDAS (Chinnappa Reddy, J.) 769

52 and 1952-53 and also callinon the lessee pay the balance, of price within three months from the date of receipt of the notice and get a deed of sale executed and registered in his favour. \The lessee was further informed that if he failed to do so, a suit would be instituted to recover possession of the property and to sell it by public auction at the cost and risk of the Jessee. Thereafter, on November 21, 1952, the lessor filed a suit in the Court of Small Causes at Ahmedabad to recover rent for the period from January 23,

1950 to January 22, 1953. The plaint was, however, returned for presentation to the proper Court and it was then filed in the Court of the Civil Judge, Senior Division, Ahmedabad. The lessor with the permission of the Court, amended the plaint so as to include a claim for possession as well as damages in lieu of rent from January 22, 1953 onwards. The present plaintiff, the successor-in-interest of the original lessee who was defendant No. 4 in the suit filed a written statement pleading that he was a tenant as defined by the Bombay Tenancy and Agricultural Lands Act 1948, that his possession could not be disturbed and that the Civil Court had no jurisdiction to pass a decree for possession or for mesne profits. This plea was based on the circumstance that an amendment which came into force on January I, 1953 made the provisions of the Bombay Tenancy and Agricultural Lands Act applicable to the suit lands. We may also mentiqn here that the Act ceased to be applicable to the suit lands on August 11, 1958, when the suit lands came to be included within the limits of the Ahmedabad Municipality.

To continue the narration, the suit filed by the lessor for possession was decreed on December 30, 1955. It must be mentioned here that the lessee himself had filed a suit for possession against the tenant who was ih actual occupation of the lands and obtained possession from him on April 30, 1955. The lessee filed an appeal to the- High Court of Bombay which wttS dismissed on March 19, 1958 and a further appeal to the Supreme Court which was also dismissed on March 8, 1965.

In execution of the decree obtained by her, the lessor obtained possession of the lands on December 22, 1960. Immediately on the lessor obtaining possession, the lessee, on January 16, 1961, instituted the suit out of which the present appeal arises seeking (a) specific performance of the agreement dated February 25, 1946 by directing the lessor-defendant to execute a sale deed in his favour after receiving from the plaintiff the balance of sale price of Rs. 96,833-10-0, and, (b) in the alternative, to direct the defendant to sell the land by public auction to retain a sum of Rs. 96,833-10-0 out of the sale price and to pay the excess amount to the plaintiff. The first

relief sought was subsequently given up. The lessor who had in the meanwhile entered into an agreement of sale in favour of Patel Singhvi & Co. filed a written statement contesting the uit on various grounds. The City Civil Court dismissed the suit on July 16, 1965, but on appeal by the plaintiff, the judgment of the Trial Court was reversed and it was decreed that the suit land should be sold by public auction, or by private treaty if the parties so agreed, in one lot or by consent of the parties in several lots within six months from the date of the decree. Out of the sale price fetched the defendant was first to reimburse herself to the extent of the balance of the original purchase price of Rs. 96,833-1-0-0 with interest at 9 percent from January 23, 1953 and thereafter the remaining amount was to be eGually divided between the plaintiff and the defendant. If the price fetched at the sale was less than Rs. 96,833-10-0, the defel'\dant was to recover the deficit from.the plaintiff. The decree in these terms was so granted by the High Court as it was thought that both parties had committed default and that the decree if granted in those terms would meet the ends of justice. On the basis of the English equitable doctrine of 'conversion' which they held applied in India also, the High Court took the view that the deed dated February 25, 1946 had created an equitable interest in the land in favour of the plaintiff. The High Court also expressed the view that neither the provisions of the Bombay Tenancy Agricultural Lands Act nor the scheme made under the provisions of the Bombay Town Planning Act stood in the way of the plaintiff. The defendant has preferred this appeal by special leave of this Court.

Shri Vakil learned counsel for the appellant raised several contentions befote us. He contended that the English Equitable doctrine of conversion of reality into personalty had no application in India. He submitted that the plaintilhvas disentitled to specific performance of any term of agreement as he Jiad done eyery thing that was posse to prevent the defendant from obtaining possession of the lands thereby clearly indicating that he had resiled from and was not ready and willing to perform his part of the agreement. It was further argued t.hat the provisions of the Bombay Tenancy and Agricultural Lands Act, 1948, and the provisions of the Gujarat Vacant Lands in Urban areas (Prohibition of Alienations) Act, 1972, and the Urban Land (Ceiling and Regulation) Act, 1976, were a bar to the sale by public auction of the lands by defendant. ti We do not wish to go in any detail into the question whether .the English Equitable doctrine of conversion of reality into personalty is applicable in India. However, we do wish to say that the English

OOSABAI v. MATHURDAS (Chinnappa Reddy, J.) 7 71

doctrine of conversion of reality into personalty cannot be bodily lifted from its native English soil and transplanted in statutebound Indian law. But, we have to notice that many of the principles of English Equity have taken statutory form in India and have been incorporated in occasional provisions of various Indian statutes such as the Indian Trusts Act, the Specific Relief Act, Transfer of Property Act etc. and where a question of interpretation of such Equity based statutory provisions arises we will be well justified in seeking aid from the Equity source. The concept and creation of duality of ownership, legal and equitable, on the execution of an agreement to convey immoveable property, as understood in England is alien to Indian Law which recognises one owner i.e. the legal owner : vide, Ramboran Prasad v.

Ram Mohit Hazra & Ors.(1) and Narandas Karsondas v. S. A. Kamtam & Anr.(2). The ultimate paragraph of s. 54 of the Transfer of Property Act, expressly enunciates that a contract for the sale of immoveable property does not, of itself, create any interest in or charge on such property. But the ultimate and penultimate paragraphs of s. 40 of the Transfer of Property Act make it clear that such a contract creates an obligation annexed to the ownership of immoveable property, not amounting to an interest in the property, but which obligation may be enforced against a. transferee with notice of the contract or a gratuitous transferee of the property. Thus the Equitable ownership in property recognised by Equity in England is translated. into Indian law as an obligation annexed to the ownership of property, not amounting to an interest in the property, but an obligation which may be enforced against a transferee with notice or a gratuitous transferee.

Ifwe now turn to the Indian Trusts Act, we find "trust" defined as

"an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by .the owner, or declared and accepted by him, for the benefit of another, or of another and the owner'',

and "beneficial interest" defined as the interest of the beneficiary against the trustee as owner of the trust-property. Chapter TX of the Trusts Act enumerates. in section after section cases where obligations in the nature of trust are created. S. 94 finally provides :

"94. In any case not coming within the scope of any of the preceding sections, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons

(I) [1967] I S.C.R. 293

(2) [1977] 2 S.C.R. 341.

having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands".

We may now examine some of the provisions of the Specific Relief Act, 1877, which though repealed and replaced by Act 47 of 1963. is the statute with which we are concerned. ''Trust" was defined in Section 3 of the 1877 Act as having "the same meaning as in Section 3 of the Indian Trusts_Act" and as "including an obligation in the nature ofa trust within the meaning of Chapter IX of that Act". Sectionl2( a} of the Act of 1877 provided, "Except as otherwise provided in this Act, specific performance of contract may, in the discretion of the Court, be enforced when the act agreed to be done is in the performance wholly or partly of a trust". The other clauses of Section 12 and Sections 13 to 18 enumerated the other contracts which might be specifically enforced. S. 21 specified when contracts were not specifically enforceable.

S. 16 is of some relevance. It said :

"when part of a contract which, taken by itself can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part''.

We may now consider the deed dated February 25, 1946 the important and relevant terms of which we have either summarised or extracted[earlier. We have also pointedly mentioned some pecnliar features of the deed. From the terms 9f the deed we gather that the right of the lessor, basically is to get the full sale price of Rs. 1,29,111-8-0 either from the lessee or by selling the property by pnblic auction if the lessee does not himself want to buy, the lessee however, making up 'any deficit. The lessor is under an obligation to sell the land to the lessee if the latter so desires within a period of seven years ancl pays the purchase price and, if he does not so desire, to sell the land by public auction and to recoup the balance of the stipulated price. The lessor is under an obligation to pay the excess price, if any, realised by the sale by public auction to the lessee. To sell, the property by public auction is thus both a right and an obligation. The obligation of the

lesee is to pay one fourth of the stipulated price in advance and to pay the balance if he desires to purchase the property or to pay the deficit, if any, if the lessor is obliged to sell the property consequent on his failure to purchase. His right is to obtain a sale deed by paying the balance price or lo get any excess amount realised at the public auction.

Whatever happens, he is not entitled to get a refund of the advance of one-fourth of the purchase price paid by him, and whatever happens,

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OOSABAI v. MATHURDAS (Chinnappa Reddy, J.) 773

the lessor is bound to sell the property either to the lessee or by public A auction.

We do not have any doubt, on a consideration of the terms of the deed and the relevant statutory provisions earlier referred, thatthe ob

ligation of the lessor to sell the land by public auction and pay the excess price to the lessee is an obligation annexed to the ownership of the property, not amounting to an interest in the property, that it is an obligation in the nature of a trust, and, therefore an obligation which may be pecifically enforced.

It was contended that the plaintiff could be compensated in terms of money and therefore, the contract should not be specifically enforced.

It is obvious from the very nature and the terms uf the contract and the facts and circumstances of the case that compensation or damages is not determinable. In fact the defendant, apart from not raising an appropriate plea, did not offer any evidence to prove what would be suitable compensation.

It was argued thatfthe defendant had throughout committed'default first by not paying the balance of the purchase price and taking the sale deed in his favour and next by resisting delivery of possession to the plaintiff. It was submitted that the defendant was thus never ready and willing to perform his obligation under the contract. We find no force in these submissions. As already observed by us the defendant had the option to purchase the property if he so desired but he was under no obligation to do so. The contract itself provided for the eventuality of the defendant ultimately not desiring to purchase the property himself. It cannot, therefore, be said that the defendant committed any default in not paying the balance of the purchase price and taking a deed of sale in his own favour. Regarding resistance to delivery of possession, it is true that he claimed the benefits given to a tenant under the Bombay Tenancy and Agricultural Land Act and resisted giving possession to the plaintiff. If under a bonafide mistaken belief that the statute had stepped in to give him higher rights than under the contract the defendant refused to deliver possession to the plaintiff until it was found by the Court that he had no such higher rights, the defendant cannot later be denied even the rights under the contract on the ground that he had claimed higher statutory rights.

We do not subscribe to the proposition that a person claiming the benefits of a beneficient social legislation should be denied his contractual rights if he is found not to be entitled to the legislativebenefits.

It was said that the contract became void so soon as the Bombay Tenancy and Agricultural Lands Act, became applicable to the suit

lands and that it could not be revived after the act ceased to apply to the suit lands. We do not see any force in this submission either. The plaintiff-respondent became entitled to demand that the property should be sold by public auction only when the defendant-appellant obtained possession and since on the date when the defendant obtained possession of the property the Act was not applicable to the lands in question, we see no impediment in the plaintiff seeking to enforce the contract. Similarly the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienations) Act, 1972, was in force forja limited period.of one year only. While it prohibited alienation of land during that period it did not render the contract which was earlier in point of time void so as to render it incapable of being performed after the Act itself expired.

Shri Vakil finally submitted that the contract had become impossible of performance as a result of the enactment of the Urban Land (Ceiling & Regulation) Act 1976. It is true that s. 5(3) of the Act prohibits every person holding vacant land in excess of the ceiling limit before the commencement of the Act from transferring such land or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement as prescribed by the Act and a 'notification has been published after the prescribed procedure has been gone through. The Act came into force subsequent to the passing of the decree by the High Court. The <iiiestion for our consideration is what is the effect of the Urban Land (Ceiling & Regulation) Act, 1976 on the decree passed by the High Court. While it is true that events and changes in the law occurring during the pendency of an appeal require to be taken into consideration in ordeT to do complete justice between parties and so that a futile decree may not be passed. It is also right and necessary that the decree should be so moulded as to accord with the changed statutory situation. The right obtained by a party under a decree cannot be allowed to be defeated by delay in the disposal of the appeal against the decree, if it is possible to save the decree by moulding it to conform to the statutes subsequently coming into force. Thtcse propositions emerge from the decisions of the Court in Pasupu'eti Venkateswarlu v. The Motor & General Traders,(1) and Rameshwar & Ors: v.

Jot Ram & Or.v.(2). The question, therefore, is how the decree passed by the High Court can be saved and given effect.

S. 21 of the Urban Land (Ceiling & Regulation) Act, 1976, prcvid<S that where a p<lrnn holds any vacant land in excess of the ceiling limit and web pl1 son declares within the precribed time and in the, prescrib<d manner before the competent authority that the land is to' be utilised for the con-

(!) A. I. R. 1975 S. C. 1409.

(2) [1976] l S.C.R. 847.

. .. .. "

DOSABAI v. MATHURDAS (Chinnappa Reddy, J.) 775

struetion of dwelling units, for the accommodation of the weaker section of the society in accordance with any scheme approved by the specified authority, then the competent authority may after due enquiry declare such land not to be excess land and permit such person to continue to hold the land for the said purpose subject to the prescribed terms and conditions. The Government of Gujarat by various orders has prescribed the terms and conditions subject to which exemption will be granted under s. 21. The last circular dated October 25, 1979 of the Government also specifies that the value of the land for the purpose of s. 21 and the scheme should not exceed Rs. 50 per square meter. The last date for submitting a scheme under the rules made by the Government of Gujarat was January 31, 1980. Realising tha< all would be lost and none would be the gainer if no scheme was submitted before January 31, 1980, the respondent filed Civil Miscellaneous Petition No. 183 of 1980 for the appointment of a Receiver of the suit land "with power to apply for seeking exemption from the operation of the said Act under section 20 and/or 21 of the Act, by taking help of an organiser and/or builder to build residential premises for weaker sections of the Society, and/or by joining with the Co-operative Society m applying for an exemption under the said Act, and in the process after getting necessary permission, allow buildings to be built, and then permission to sell the tenements, so built either collectively and/or Individually and/or to a cooperative Scciety and in the process realize price of suit land at a price not lesser then Rs. 50/- per meter and to invest the same when realized at prevailing Bank rate, in Fixed Deposit, in a Nationalised Bank". By our order dated January 18, 1980, we appointed Shri R. L. Dave, Additional Registrar of the Gujarat High Court as Receiver and charged him with the duly of submitting a building scheme and other necessary documents to the Competent authority under s. 21 of the Urban Land (Ceiling and Regulation) Act, before January 31, 1980. He was directed to do so in consultation with the parties or their counsel. The order was made without prejudice to the application said to have been made by the appellant under s. 20 of the Act. As directed by us the Receiver submitted a scheme to the Competent authority. He also entered into an agreement with a builder as the scheme would not be otherwise received by the Compe

tent authority. Various objections have been filed before us by the defendant and some. other parties. We do not desire to adjudicate upon the objections raised by the plaintiff and other parties. We, however, affirm the action taken by the Receiver in submitting a scheme to the Competent authority. Allfurther directions in this matter may be obtained from the Trial Court to whom all the relevant records will be forwarded.

We think that the decree of the High Court s'hould be

modified in the following manner in order to bring it in conformity with the provisipns of the Urban Land (Ceiling and Regulation) Act, 1976.

In the place of the direction to the lessor to sell the land by public auction or by private treaty and to reimburse himself from the sale price the sum of Rs. 96833-10-0 with interest at 9 per cent from!January 23, 1953 and the balance to be equally divided between the lessor and the lessee, a direction will issue for the appointment of a Receiver to take all necessary steps to seek exemption from the operation of the Act, under s. 20 and/or s. 21 of the Act by taking the help of an organiser and/or builder to build residential premises for weaker section of the Society, and/or by joining with the co-operative Society in applying for an exemption under the said Act and in .the process after getting necessary Pfrmission, allow buildings to be built, and then permission to sell the tenements, so built either collectively and/or individually and/or to a Cooperative Society and in the process realize price of suit land at a price not lesser than Rs. 50 per meter and to invest the same when realised at prevailing Bank rate, in fixed Deposit, in a Nationalised Bank. The Receiver appointed by us in C.M.P. No. 183 of 1980 will continue to act as Receiver under the decree. Out of the sum realised after deducting the expenses involved, a sum of Rs. 96833-10-0 together with interest at 9 percent per annum from January 23, 1953 upto the date of payment, will be paid in the first instance to the defendant and the balance will be divided equally between the plaintiff and; the defendant. If the amount realised by the Receiver after deducting . the' expenses fall short of sum of Rs. 96833-10-0 with interest at 9 per cent . per annum from January 23, 1953, the plaintiff shall make good the. amount to the defendant. The appeal is dismissed but the decree is modified as indicated above.

'I .

Special Leave Petition No. 4023 of 1980 filed by the defendant is allowed, leave granted and the appeal disposed of in the same terms as Civil Appeal No. 1147 of 1978. Delay condoned. There will be no order regarding costs in both the Appeals.

S.R.

Appeal dismiued.

BAI DOSABAI

MATHURDAS GOVINDDAS AND 0RS

R. S. SARKARIA

0. CHINNAPPA REDDY, JJ.

Section 54

Specific Relief Act, 1963

Sections 12, 13, 16, 21

Sections 15 and 21

Agricultural Lands Act

Bai Dosabhai

February 25, 1946

Dosabhai

Indu Prasad Dev Shankar Bhatt

November 21, 1952

January 2J,

1950

January 22, 1953

Lands Act 1948

January 1, 1953

4 in the suit filed a written statement pleading that he was a tenant as defined by the Bombay Tenancy and Agriw!tural Lands Act 1948, that his possession could not be disturbed and that the Civil Court bad no jurisdiction to pass a decree ifor possession or for mesne profits,, This plea was based on the circumstance that an amendment
t' ..

i i

OOSABAI V. MA THU RD AS 76-:l

which came into force on January 1, 1953 made the provisions of the Bombay Tenancy and Agricultural Lands Act, applicable to the suit lands.

August 11, 1958

Ahmedabad Municipality

December 30, 1955

December 22, 1960

January, 16, 1961

Patel Singhvi & Co.

July 16, 1965

January 23, 1953

India

Supreme Court

Indian Trusts Act

specific Relief Act

Transfer of Property Act

England

Section 54

Transfer of Property Act

s. 40

Transfer of Property Act

section 94

Section 12(a)

Specific Relief Act

Section 16

[1977] 2 SCR 341

Bombay Tenancy

(1976] 1 SCR 847

sections 20 and 21

section 20 and 21

S.B. Vakil

I.N. Shroff

V.M. Tarkirnde

P.H. Parekh

I. M. Nanavati

S.K. Dho

ClllNNAPPA REDDY

Bai Dosabai

Dosabai

Indu Prasad Dev Shanker Bhatt

January 23, 1946

clause 15

Clause 15

Clause 17

October 25, 1950

March 7, 1951

June 19, 1952

Court of Small Causes at Ahmedabad

January 23,

1950

January I, 1953

April 30, 1955

High Court of Bombay

March 19, 1958

March 8, 1965

January 16, 1961

Vakil

Indian Trusts Act

Specific Relief Act

Transfer of Property Act

s. 54

Transfer of Property Act

s. 40

Transfer of Property Act

Ifwe now turn to the Indian Trusts Act

Chapter TX of the Trusts Act

S. 94

[1977] 2 S.C.R. 341

Section 3

Section 3

Chapter IX of that Act

Section 12

Sections 13 to 18

S. 21

S. 16

Chinnappa Reddy

s. 5(3)

S. 21

Government of Gujarat

s. 21

October 25, 1979

s. 21

January 31, 1980

section 20

January 18, 1980

R. L. Dave

Gujarat High Court

s. 21

s. 20

s. 20

s. 21


-~ ..

K.DHEENADHAYALAN

STATE OF TAMIL NADU AND ANR.

April 22, 1980

[R. S. SARKAR!A AND R. S. PATIIAK, JJ.J

Seniority List-Fresh lnter-se seniority list drawn as per the principles indicated by the liigh Court and according to the soecial Rules for Tamil Nadu

Commercial Taxes Service-Petitioner not a party before the Iligh Court's proceedings-Whether directions would bind the petitioner-The power of the High Court to fill up the lacuna in an order assailed.

Under the Special Rules of the Tamil Nadu Commercial Taxes Service, recruitment to the junior most post, Joint Commercial Tax Officer is made by direct recn1itn1ent and recruitment by transfer from Deputy Conlffiercial Tax Officers in the State Commercial Taxes Subordinate Services in the proportion

I : 2.

The higher posts are filled by promotion from officers in the category of posts immediately below.

Under Rule 2 (b) all promotions are to be made on the grounds of merit and ability, seriiority being considered \Vhere merit and ability are equal.

Rule 5(c) provides that every person appointed as a Joint Commercial Tax Officer must be on probation for at least two years on duty; in the case of direct recruitment the probationary period con1n1ences from the date on which the officer complet~ his training and; in the case of recruitment by trnru; fer it commences from the date the officer }oins duty. Under rule 7(b), the periOO of training of a direct recruit does not count towards probation.

The petitioner was recruited to the Cadre of Joint Co1nrnercial Tax Officer as a direct recruit in 1966 and WM posted for training which he joined on 6th June 1966; he comrnenced his period of probation on 18th August 1967. On

16th August 1972, the petitioner was promoted to the post of Commercial Tax Officer and on 14th January 1976 he was promoted as Assistant Commisioner. The second respondent joined the post of Joit commercia1 Tax (Jfficer ns a promotee on 25th .January 1967 and comn1enccd his probation from that date.

He was promoted as Conunercial 'fax Officer on 17th December 1972 and as Assistant Commissioner on 26th AuguM: 1976 .

Jn the combined inter-~ seniority list issued in G.0.Ms. No. 4103 dated 9th July 1973, herein the petitioner and the second respondent were shown in the 1966 list at serial numbers 43 and 52 respectively. The validity of the combined int&-se seniority list was challenged in two writ petitions Nos. 2016

and 2017 of 1972 filed by certam other officers in respect of the ranking from serial numbers 51 to serial number 78.

The petitioner was not a party to the writ petition. The writ petition wa' allowed by the Madras High Court. The High Court took note of the fact that no rules had been framed indicating how the inter-se seniority between the direct recruits and the transferee recruits had to be fixed and therefore directed a fresh determination of the inter-se seniority on the basis of three principles: (i) Each year should be taken as a unit for fixing the inter-se seniority; (ii) Persons not actually appoiNed in the year 1966 should not be included in the 1966 year's list l l-463 SCI/80

and their seniority should be determined with reference to the date of tloeir joining as Joint Commercial Tax Officers; and (iii) The date on which an officer commences probation is the proper criterion for fixing the in1er-se seniority.

In the new combined interse seniority list, so prepared and issued by the Government in their order No. G.O. Ms. No. 2228 dated 27th December 1977, both the second respondent and the petitioner were shown at serial number 48 and serial No. 49 respectively in the 1967 List.

The petitioner, apprehending that the seniority assigned to him in the second combined interse seniority list of Joint Commercial Tax Officers would prejudice him in the promotions to be made to the category of Deputy Commissioners has challenged the validity of that seniority list.

Dismissing the petition, the Court

HEW : I. Where the rules are specifically sileat there is no doubt that the Government is entitled to make an order filling up any lacuna or uncovered gap in the rules. There is good reason in the principle followed in this case that seniority should be based on th.e length of effective service. 'The date .of confirmation in a post then loses its relevance.

[781 F-G]

2. The principle that officers whose effective entry into the service pertains to a particular year should be regarded as a unit in themselves for futiag tlleir

interse seniority is valid.

Correctly, threfore, the petitioner and tho secoru1 respondent have been placed in the 1967 List. Since the Special Ru!~ do not contemplate any credit being given for the period of training undergone by a direct recruit and the probationary period commences only the training ends, the year of appointment is of little moment. [781 B-C. o:BJ

3. The principles propowided by the High Court are principles of gene.-al application and drawn from the rules governing the service and the conCepto;; . implied therein. They are not principles applicable peculiarly olily to the parties to the v.1rit petitions.

They are principles which could legitimately fonn the basis of a combined inter se seniority list in respect of Joint Celnn1ercial Tax Officers.

The places assigned to the petitioner and the second respondent duly represent their relative seniority. The second seniority list was prepared after issuing notice to all including the petitioner and prepared after considering objections raised. [782 A-CJ

• ORIGINAL JURISDICTIO'l : Writ Petition No. 461 of 1979.

(Under Article 32 of the Constitution)

Dr. Y. S. Chitale, R. Mohan, P. N. Ramalingam and A. T. M.

Sampath for the Petitioner.

A. V. Rang am for the Respondent.

The Judgment of the Cca; rt was delivered by

PATHAK, J.-The Tamil Nadu Commercial Taxes Service consists ff of a hierarchy of posts. At the base lies the post of Joint Commercial Tax Officer, above it is the post of Commercial Tax Officer, then of As11istant-Commissioner, thereafter of Deputy Commissioner and

' .....

ii!

" I"

~ .

~ i·

_.._

finally there is the post of Selection Grade Deputy Commissioner.

The service is governed by the Special Rules for the Tamil Nadu Commercial Taxes Service (the "Special Rules"). Recruitment to the junior most post, the Joint Commrcial Tax Officer, is made by (i) -direct recruitment and (ii) recruitment by transfer from Deputy Commercial Tax Officers in the State Commercial Taxes Subordinate Service. Permanent vacancies in the posts of Joint Commercial Tax Officer are filled by direct recruitment and by "transfer" recruitment in the proportion I : 2. The higher posts are filled by promotion from officers in the category of posts immediately below. Under rule :C(b) -of the Special Rules all promotions are to be made on the grounds of merit and ability, seniority being considered only where merit and ability are equal. Rule 5(c) provides that every person appointed as a Joint Commercial Tax Officer must be on probation for at least two years on duty; in the case of direct recruitment the probationary period commences from the date on which the Officer completes his training, and in the case of recruitment by transfer it commences from the date the officer joins duty. Under rule 7(b) the period of training of a direct recruit does_ not count towards probation.

The petitioner was recruited to the cadre of Joint Comn1ercja} Tax 'Officers as a direct recrnit in 1966, and was posted for training which he joined on 6th June, 1966; thereafter he completed the probationary period of two years. On 16th August, 1972 the petitioner was promoted to the post of Commercial Tax Officer. The second respondent was promoted as Commercial Tax Officer on 17th December, 1972.

Promotion to the next higher category of posts, the Assistant Commissioners, followed. The petitioner was promoted as Assistant Commissioner on 14th January, 1976 while the seeond respondent was promoted on 26th August, 1976.

Meanwhile, by G. 0. Ms. No. 4103 dated 9th July, 1973 the GoverR• ment passed an order notifying the combinedfinter-se seniority list of directly recruited Joint Commercial Tax Officers during the years 1964 to 1967 and the transferee Joint Commercial Tax Officers recruited during the years 1964 and 1966 on the basis of the principles set forth in that order. The seniority list reflected the cyclical order based on rule 2(c) of the Special Rules, that is to say, (i) direct recruit (ii) transferee recruit (iii) transferee recruit. The petitioner was shown in the

"1966 list" at serial No. 43 of the overall seniority list and 18th August,

1967 was shown as the date of commencement of his probation. The second respondent was also shown in the 1966 list, at serial No. 52 with 25th January, 1967 as the date of commencement of his probation.

The validity of the combined inter-se seniority list was challenged by two writ petitions, Writ Petitions Nos. 2016 and 2017 of 1972 filed by certain other officers in respect of the ranking from serial number 51 to serial Number 78. The petitioner was not a party to the writ peti tions. The writ petitions were allowed by the Madras High Court by its judgment dated 16th September, 1975. The High Court took note of the fact that no rules had been framed indicating how the inter-se seniority between the direct recruits and the transferee recruits had to be fixed. The High Court quashed the seniority list and directed a fresh determination of the interse seniority on the basis of three principles :

C I. Each year should be taken as a.unit for fixing the interse

seniority.

2. Persons not actually appointed in the year 1966 should not be included in the 1966 year's list and their seniority should be determined with reference to the date of their joining as Joint Commercial Tax Officers; and

3. The date on which an officer commences probation is the proper criterion for fixing the interse seniority.

Taking those principles into account, the Government then prepared a fresh combined interse seniority list and published it by an order set forth in 0.0. No. 2228 dated 27th December, 1977. The second respondent was now shown at serial number 48 and the petitioner was shown at serial number 49 in the 1967 list.

The petitioner, apprehensive that the seniority assigned to him in the second combined inter-se seniority list of Joint Commercial Tax Officers would prejudice him in the promotions to be made to the .ate gory of Deputy Commissioners, has challenged the validity of that seniority list.

The petitioner contends that the High Court has no power to lay down the principles for determining inter-se seniority between direct G recruits and transferee recruits and, in any event, his seniority cannot be determined on the basis of the principles laid down by the High Court inasmuch as he was not a party to the writ petitions. The petitioner also takes exception to the statement contained in paragraph 16 of the State Government's counter affidavit to the effect that the seniority of a Government Officer in the lower category is also the basis H for assigning seniority in the higher category. Great emphasis has been laid by the petitioner on the circumstance that he joined as Joint Commercial Tax Officer earlier than the second respondent.

In our opinion, the ptinciples which the Hiljh Court culled out as the basis for determining the inter-se seniority of !oint Commercial Tax Officers are in the main drawn from the rules governing the service.

The petitioner cannot claim thaffor'the'purposeof seniority has service must be considered with reference to the date on which he commenced the period of training. The special Rules require that a direct recruit must undergo a period of training. They also provide that he must pass through a period' of probation. Thty further declare t:hat the period of training will not count as a period spent on probation and that the probationary period commences only when the training ends . That being so, the relevant date for considering the petitioner's seniority is 18th August, 1967. The rules do not contemplate any credit being given for the period of training undergone by a direct recruit and, therefore, the fact that he was appointed in 1966 is of little moment.

The second respondent joined the post of Joint Commercial Tax Officer as a transferee recruit and therefore the date of commencement of his probation was 25th January, 1967. Clearly, he entered service effectively from an earlier date than the petitioner.

Now having regard to the circumstance that the cadre of Joint Commercial Tax Officers is drawn both from direct recruits and transferee recruits, it is necessary to have a single combimd intcr-se seniority list. There can be no quarrel with the principle that officers whose effective entry into the service pertains to a particular year should be regarded as a unit in themselves for fixing their inter-se seniority.

Correctly, therefore, the petitioner and the second respondent have been placed in the 1967 list. We have already observed that the effective date on which. a direct recruit joins as a Joint Commercial Tax Officer is the date on which he commences his probation. In the determination of inter-se seniority, the High Court has followed the provision in the Special Rules that the posts of Joint Commerci2J Tax Officers are to be filled in the proportion of I : 2 between direct recruits and transferee recruits. The cyclical order in which the vacancies will be filled on that basis are provided by the order of the Government published in G.0. Ms. No. 4103 dated 9th July, 1973. Where the rules are specifically silent there is no doubt that the Government is entitled to make an order filling up"any lacuna or uncovered gap in the rules. It may also be observed that there is good reason in the principle followed in this case that seniority should be based on the length of effective service. The date of confirmation in a post then loses its relevance.

In regard to the contention of the petitioner that he was not a party to the writ petitions decided by the High Court and that, therefore, the

SUPRE'.\IE COURT REPORTS [1980] 3 s.c.R.

principles laid down in the High Court judgment should not be applied to him, we think the submission to be without force. The principles propounded by the High Court are principles of general application and drawn from the rules governing the service and the concepts implied therein. They are not principles applicable peculiarly only to the parties to the writ petitions. Indeed, we find no fault with the terms in which the principles have been enunciated. They are principles which could legitimately form the basis of a combined inter-se seniority list in respect of Joint Commercial Tax Officers. Having due regard to the considerations mentioned above, we are of opinion that the places assigned in the second seniority list to the petitioner and the second respondent truly represent their relative seniority.

We may also observe that the second seniority list was prepared after issuing notice to the petitioner and affording him an opportunity to be heard in the matter. It was after all the objections had been considered that the list was finally drawn up. As regards the point whether the seniority of the petitioner in the category of posts higher D than the category of Joint Commercial Tax Officers should be determined on the basis of his seniority as Joint Commercial Tax Officer, that is a question which does not arise presently. No combined interse seniority list in respect of the cadre of Assistant Commissioners or of higher posts appears to have been drawn up. There is no material before us to show that it has and, if it has, what is the position of se- E niority assigned to the petitioner therein. In the circumstances we think it premature to express any opinion on this point.

The second seniority list was prepared on 27th December, 1977.

The writ petition was filed in this Court in May, 1979. The gross delay, plainly apparent, would constitute another ground for denying relief to the petitioner. But as, in onr judgment, the petitioner fails h '..,,_,... on the merits we need not go further into the question of lac es. __,,

The petition fails and is dismissed, but in the circumstances there is no order as to costs.

S.R.

Petition dismissed

K.DHEENADHAYALAN

STATE OF TAMIL NADU AND ANR

April 22, 1980

Madras High Court

Article 32

Y. S. Chitale

R. Mohan

N. Ramalingam

A. T. M.

Sampath

A. V. Rang

PATHAK

6th June, 1966

16th August, 1972

26th August, 1976

9th July, 1973

16th September, 1975

27th December, 1977

18th August, 1967


.. J.-

STATE OF WEST BENGAL AND ANR.

SURENDRA NATH BHATTACHARYA AND ANR.

April 24, 1980

[S. MURTAZA FAZAL ALI AND P. S. KAILASAM, JJ.]

Land Acquisition Act, 1894 as amended by Act 31 of 1962, Section 40(aa)-lnterpre'ilation of Section 40(aa) Gnd also Section 7 of the Amending Act of 1962-Acquisition of land for company engaged in industry or werk which is for public purpose is valid and does not offend Article 14 of the Constitution-Section 44B of the Act is prospective and does not relate to Qcquisitiol'I.

Respondent 2 known as Calcutta Mineral Supply Company having its office at 31, Jack.son Lane, Calcutta was carrying on the businesa of manufacturl.Oi sodium silicate, plaster of paris etc., which were formerly imported on a very large scale from foreign countries. The manufactured goods of the Company

are widely used all over India saving considerable foreign exchange which otherwise would have had to be spent in importing these materials. With a view tO extend its business and i\(lprove the standard of its manufacture but

tor waat of space for big underground storage tanks, the Company was handi""J>ped, the Company applied to the Collector for acquiring for public purpoee, the lands in dispute which were contiguous to the lands on which the existing factory of the company stood was best suited.

Consequent to the application :.in agreement was executed between the Government and the Compaliy on the 29th of November 1954.

On December 9, 1954, a notification under section 6 of the Land Acquisition Act, 1894 was published and the first respondent filed his objection which was rejected and was foJJowed by a otification under section 9 of the Act.

After, the land acquisition proceedings were complete a writ petition was filed by the first respondent before tlte High Court on January 14, 1957 which was dismissed by a single Judge of the High Court and therefore the first respondent filed an "Ppeal to the Division Bench of tlte High Court on

Felml&"y 21, 1957. While the appeal was pending before the High Court tlte Collector made an Award dated 14-10-1957 and after taking possession from the owners of the land, delivered the same to the company-respondent No. 2 on October 22. 1957. The first respondent filed an application for permission to urge additional grounds before the High Court which was permitted and ultimately the Division Bench of the High Court by the order under appeal allowed the appeal and quashed the Land acquisition proceedings taken under the Act.

Hence, this appeal before this Court after getting a certilieate from the High Court.

Allowing the appeal by certificate. tlte Court

HEW: I. Analysing tlte ratio of the decision of this Court in (Second) H R. Li Arora v. State of U.P., [1964] 6 S.C.R. and followed in Himalayan 1'iles & Marbles v. Francis Victor Continho (dead) by I.rs .. [1980] 3 S.C.R. 235,

SUPREME COURT REPORTS [19 80] 3 S.C.lt.

A the following conditions must be satisfied before an acquisition made prior

to July 20, 1962 could be said to be constitutionally valid-

(a) that the acquisition bad taken place before July 20, 1962, the date 'vhen the Amending Act came into force;

(b) that the said acquisition should have been fully compleled in that property said to have been acquired had vested absolutely in the Government;

( c) that the acquisition was made for purposes mentioned in clause

( aa) of the amended clause added to s. 40;

(d) that if these conditions were satisfied, then any acquisitioo proceeding, order, agreement or action in connection with much acquisition would be deemed to have. been valid as if the arnooded provisions were in force at the time when the acquisition was made.

[788 E-0]

Tl>o facts of the present case squarely fall within the ambit of the cooditions laid down by section 7 of the Amending Act and hence the cballenge on the ground of the constitutional validity of the acquisition must neceeuri- D ly fail.

Tl>o proceedings for acquisition were started long before July 20, 1962 that is, as early as December 9, 1?54 when notification under section 6 of the Act was issued. After inviting objections an Award was made by the Collector on October 14, 1957 and after the property in dispute fully

rested in the Government, the Collector then delivered the same to the Company-respondent 2 on October 22, 1957. [789 A-BJ

'.E Himalayan Tiles and Mmbles v. Francis Victor Countinho (dead) by I.rs .. [1980] 3 SCR 235; applied.

2. To hold that section 40(aa) of the Act also requires proof of public purpose in the restricted iense in that it must be for the general good of the people at large, then the very object sought to be achieved bY the amendment would be completely frustrated and the provisions of Secti01t 7. would become otiose. [789 D-FJ .

3. The words "public purpose" are not to be interpreted in a restrictive -.... ~

sense but take colour from thei nature of the industry itse1f, the uticles it _. manufactures and the benefit to the people that it subscrves. The land should be acquired for building or work. which would serve the J'Ublic

purpo~ of th~ Company and not public purpose as it is generally understood.

[791 C-D]

In the instant case the articles produced by the Company are vsed for the benefit of the people and as it saves a lot of foreign exchange, it is unmistakably for the general good of the country particularly frooi the economic point of view. The obje.ct of the Company in extending its operations by enlarging the area of its prcxluction was for the public pu.rpciee of the Company. Taking an overall picture of the nature of the prooucts of tbe company, its various activities, the general public good that it seeks to achieve and the great benefit that the people derive, the acquisition was for a public purpose. [791 C-FJ · ·

'lllEST BENGAL v. s. N. BHATTACHARY.A (Fazal Ali, J.) 785

4. Section 44B of lhe Land Acquisition Act is purely prospective in A character and has absolutely no application to acquisition proceedings taken before July 20, 1962, tho date when the amendment was enacted. [791 FG]

5. Section 40(aa) of the Act does not violate Article 14 of the Constitution, by permitting acquisition of land for a Company but not for an individual or a private Company through these persons may also be engaged in an industry which was for a public purpose. [792 A-BJ B

P. GirdhoJ'aJ1 Prasad Missair and Anr. v. State of Bihar and Anr., Al.R. 1968 Pat 77; Chhotubhat Babarbhai Patel v.

State of Gujarat and Anr., 1.L.R. Gujarat 1964 p. 472; approved. ·

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 140 of 1969.

From the Judgment and Order dated 3-5-1966 of the Calcutta High Court in F.M.A. No. 71/57.

P. K. Chatterjee & Rathin Dass for the Appellant.

V. S. Desai, S. C. Majumdar and Miss Kirobi Banerjee for Respondent No. I.

P. K. Mukherji for Respondent No. 2.

The Judgment of the Court was delivered by

FAZAL Au, J.-This appeal is directed against a judgment dated B May 3, 1966 of the Calcutta High Court quashing the acquisition proceedings taken as also the notifications made by the State of West Bengal under the provisions of the Land Acquisition Act, 1894 (hereinafter referred to as the 'Act') in respect of the lands in dispute which comprised 73 acres in village Kanpura, P.S. Dum Dum.

Although the case had a rather chf'quered career and was preceded by a full-fledged litigation starting from the trial court and ending with the High Court regarding the question of title, we are not, however, concerned with the past history in view of the short point on the basis of which the appeal was decided by the Division Bench of the High Court. The case of the Government was that on December 16, 1949, respondent No. 2 known as Calcutta Mineral Supply Company having its office at 31, Jackson Lane, Calcutta, appli£d to the Collector for acquiring the land in question in order to extend its business. The company was carrying on the business of manufacturing sodium silicate, plaster of Paris, etc., which were form£rly imported on a very large scale from foreign countries. The manufactured goods of the Company are widely used all over India saving considerable foreign .exchange which otherwise would have had to he spent in impcrting

these materials. The company pleaded that it wanted to extenci its business and improve the standards of its manufacture but for want of space for big underground storage tanks, the company was seriously handicapped. The company, therefore, prayed that the lands in dispute which were contiguous to the lands on which the existing factory

of the company stood was best suited for this purpose and hence tile Collector was requested to acquire the lands for public purpose.

Consequent to the application, an agreement was executed between the Government and the company on the 29th of November 1954. On December 9, 1954, a notification under s. 6 of the Act was published and the first respondent filed his objection which was rejected and was followed by a notification under s. 9 of the Act. After the land acquisition proceedings were complete a writ petitiol) was filed by the first'respondent before the High Court on January 14, 1957 which was dismissed by a single Judge ou the High Court and therefore the first respondent filed an appeal to the Division Bench of the High Court on February 21, 1957. While the appeal was pending before the High Court the Collector made an Award dated 14-10-1957 and after taking possession from the owners of the land, delivered the same to the company-respondent No. 2 on October 23, 1957. The first respondent "filed an application for permission to urge additional grounds before the High Court which was permitted and ultimately the Divisioa Bench of the High Court by the Order under appeal allowed the appeal and quashed the land acquisition proceedings taken under the Act.

Hence, this appeal before this Court after getting a certificate from the High Court.

The only point that has been canvassed before us by counsel for the parties is as to whether or not the acquisition of the land in dispute was valid in law. The appellant contended that in view of the amertdment of section 40 by Act. No. 31 of 1962, acquisition ofland for the purpose of the company was validated and all acquisitions made before the amendment were validated retrospectively provided certain conditions laid down under s. 7 of the Amending Act were fulfilled.

We might mention here that prioF to the amendment, this Court in R. L. Arora v. State of U.P. (1) had held that any acquisition under the Act for purposes of a Private Company would not be a public purpose and would, therefore, be void. It was on the basis of this decision, which is usually known as the 'first Arora case', that the first respondent filed a petition in the High Court for quashing the land acquisition proceedings. The legislature, however, intervened by the Amending Act, as mentioned aforesaid, and removed the basis of the judgment of

(1) [1962] Supp. 2 S.C.R. 149.

• I ~

this Court by adding clause (aa) to s. 40 of the Act so as to validate all A acquisitions of private lands for purposes of a private company provided the conditions laid down in s. 7 were fulfilled. This amendment was also challenged before this Court in what is known as the 'second Arora case' (2) where this Court by majority of 4 : I held that the Amending Act was valid and that under s. 40(aa) an acquisition could be made even for a private company if it was engaged in an industry which was for a public purpose. We are not concerned with the other amendments made which do not apply to the facts of the present case .

The High Court undoubetdly referred to the "first Arora case" as also to the "second Arora case" but, with due respect, we might

obsel'Ve that the High Court relied mainly on the observations made in the "first Arora case" and has not correctly interpreted the later decision of this Court and the effect of the amendment which completely superseded the ''first Arora case". The argument of the learned Gounsel before us centered round the interpretation of s. 40(aa) as amended by the amendment as also s. 7 of the Amending Act. In order to understand the scope of the argument it may be necessary to extract both s. 40(aa) and s. 7 of the Amending Act, which run thus :

.. 7. Validation of certain acquisitions.-Notwithstanding any judgment, decree or order of any court, every acquisition of land for a company made or purporting to have been made under Part VII of the principal Act before the 20th day of July 1962, shall, in so far as such acquisition is not for any of the purpose• mentioned in clause (a) or clause (b) of sub-section (I) of section 40 of the principal Act, be deemed to have been made for the purpose mentioned in clause (aa) of the said sub-section, and accordingly every such acquisition and any proceeding, order, agreement or action in connection with such acquisition shall be, and shall be deemed always to have been, as valid as if the provisions of sections 40 and 41 of the principal Act, as amended by this Act, were in force at all material times when such acquisition was made or proceeding was held or order was made or agreement was entered into or action was taken.

Explanation-In this section "Company" has the same meaning as in clause (e) of section 3 of the principal Act, as amended by this Act."

"40(aa) that such acquisition is needed for the construction of wme building or work for a Company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose;"

(2) ·[1964] 6 S.C.R 784.

.A In this connection, this Court observed as follows:-

"Therefore before s. 7 can validate an acquisition made before July 20, 1962, it must first be shown that the acquisition is complete and the land acquired has vested in Government.

This means that the land acquired has vested in Government eitherunders.16ors.17(1)oftheAct. Thuss. ?of the Amendment Act validates such acquisitions in which property has vested absolutely in Government either under s.16 ors. 17(1). Secondly's. 7 of the Amendment Act provides that where acquisition hasbeenmadeforacompanybefore July 20, 1962 or purported to have been made under cl. (a) or cl. (b)ofs. 40(l)and those clauses do not apply in view of the interpretation put thereon in R. L. Arora's case (1962 Supp. 2 SCR 149), it shall be deemed that the acquisition was for the purpose mentioned in cl. (aa) as inserted in s. 40(1) of the Act by the Amenment.

Act. Thirdly, s. 7 of the Amendment Act provides that every

such acquisition and auy prodeeding, order, agreement or action in connection with such acquisition shall be, and shall be deemed always to have been, as valid as if the provisions of ss. 40 and 41 of the Act as amended by the Amendment act were in force at all material times when any action was taken for such acquisition. Finally, this validity is given to such acquisitions and to all actions taken in connection therewith notwithstanding any judgment, decree or order of any court".

Thus, analysing the ratio or the "second Arora case",' the: following conditions must be satisfied before an acquisition made prior to July 20, 1962 could be said to be constitutionally valid-

( a) that the acquisition had taken place before July 20;

1962, the date when the Amending Act came into force;

(b) that the said acquisition should have been fully completed in that the property said to have been acquired had:vesteq absolutely in the Government;

(c) that the acquisition was made for purposes mentioned in G clause (aa) of the amended clause added to s. 40;

(d) that if these conditions were staisfied, then any acquisition proceeding, order, agreement or action in connection with such acquisition would be deemed to have been valid as if the amended provisions were in force at the time when the acquisition was made.

On this aspect of the matter, the view taken by this Court in the "second Arora case" was followed in a recent decision of this Court in

WEST BENGAL '" s. N •. BHATTACBARYA (Fazal Ali, /.) 7 89

Himalayan Tiles and Marbles v. Francis Victor Coutinho (dead) by A.

Lrs (I). In the instant case, it is not disputed that the proceedings for acquisition were started long before July 20, 1962, that is to say, as early as December 9, 1954 when notification under s. 6 of the Act was issued.

Secondly, it is also not disputed that after inviting objections, etc., an Award was made by the Collector on October 14, 1957 and after the property in dispute fully vested in the Government, the Collector

B . then delivered the same to the company-respondent No. 2 on October

23, 1957. For these reasons, the facts of the present case squarely fall within the ambit of the conditions laid down by s. 7 of the Amending Act and hence the challenge on the ground of the constitutional validity of the acquisition must necessarily fail.

Mr. V. S. Desai, appearing for respondent No. I, however, submitted that s. 7 itself wa.s violative of Art. 31(2) of the Constitution.

It is not neceS>ary to examine this argument in detail because a similar argument was urged in the "second Arora case" (supra) and rejected.

It was then contended that even if we assume that s. 7 validated D' the present land acquisition proceedings, the conditions prescribed in clause (aa) of s. 40 were not fulfilled in this case inasmuch as the acquisition could not be said to be for a public purpose. It was submitted by the counsel for respondent No. I that as the company was a private one and there is nothing to show that there was any direct connection or close nexus between the articles produced by the company and the general good of the public, it could not be said that the acquisition was made for a company which was engaged in an industry which was for a public purpose. This argument, in our opinion, is based on a misconception of the concept of the Amending Act and the introduction of clauses (aa) to s. 40. If we are persuaded to hold that s. 40 (aa) also requires proof of a public purpose in the restricted sense, in that it must be for the general good of the people at large, then the very object sought to be achieved by the amendment would be completely frustrated and the provisions of s. 7 would become otiose. A similar argument was advanced in the "second Arora case" (supra) and was fully considered by this Court which observed as follows :-·

"Jn approaching the question of construction of this clause, it cannot be forgotten that the amendment was made in consequence of the decision of this Court in R. L. Arora' s case (1962 Supp. 2 SCR 149) and the intention of Parliament was to fill the lacuna, which, according to that decision, existed in the Act in the

matter of acquisitions for a company .... Further, a literal H interpretation is not always the only interpretation of a provision

(!) [19801 3 S.C.R.235.

in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used in a provision of the statute.

• • •

Therefore, we have to see whether the provision in cl. (aa) bears another construction also in the setting in which it appears and in the circumstances in which it was put on the statute book and also in view of the language used in the clause. The circumstances in which the amendment came to be made have already been mentioned by us and the intention of Parliament clearly was to fill up the lacuna in the Act.which became evident on the decision of this Court in R. L. Arora's case (!962 Supp. 2 SCR 149) ...... It was only for such a company that land was to be acquired compulsorily and the acquisition was for the construction of some .building or work for such a company, i.e., a company engaged or about to be engaged in some industry or work which is for a public purpose. In this setting it seems to ns reasonable to hold that the intention of Parliament could only have been that land should be acquired for such building or work for a company as would subserve the public purpose of the company; it could not have been intended, considering the setting in which cl. (aa) was introduced, that land could be acquired for a building or work which would not subserve the public purpose of the company .... Further, acquisition is for the construction of some building or work for a company and the nature of that company is that it is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose. When therefore the building or work is for such a company it seems to us that it is reasonable to hold that the nature of the building or work to be constructed takes colour from the nature of the company for which it is to be constructed. We are therefore of opinion that the literal and mechanical construction for which the petitioner contends is neither the only nor the true construction of cl. (aa) and that when cl. (aa) provides for acquisition of land needed for construction of some building or work it implicitly intends that the building or work which is to be constructed must be such as to subserve the public purpose of the industry or work in which the company is engaged or is about to be engaged.

In short, the words "building or work" used in cl. (aa) take their colour from the adjectival clause which governs the company

for which the building or work is being constructed .... It is only in these cases where the company is engaged in an industry or work of that kind and where the building or work is also constructed for a purpose of that kind, which is a public purpose, that acquisition can be made under cl. (aa). As we read the clause we are of opinion that the public purpose of the company for which acquisition is to be made cannot be divorced from the purpose of the building or work and it is not open for such a company to acquire land under cl. (aa) for a building or work which will not subserve the public purpose of the company."

.(Emphasis ours)

The effect of the observations made above leads to the irresistible .conclusion that the words 'public purpose' are not to be interpreted in a restricted sense but take colour from the nature of the industry itself, the articles that it manufactures and the benefit to the people that it subserves. This Court clearly indicated that the land should be acquired for building or work which would serve the public purpose of the company and not public purpose as it is generally understood.

In the instant case, we have also set out the nature of the products of the company and have stressed the fact that the articles produced by the company are used for the benefit of the people and as it saves lot of foreign exchange, it is unmistakably for the general good of the country particularly from the economic point of view. In these circumstances, it cannot be said that the object of the company in extending its operations by enlarging the area of its production was not for the public purpose of the company. Taking an overall picture of the nature of the products of the company, its various activities, the general public gpod that it seeks to achieve and the great benefit that the people derive, it cannot be said that the acquisition, in the present case, was not for a public purpose. According to the test laid down by this Court it is sufficient if it is shown that the building sought to be built or the work undertaken subserves the public purpose of the company which is completely fulfilled in this case. The High Court seems'to have been impressed by the argument advanced before it that the land acquisition proceedings in the instant case are hit by s. 44B of the Act.

The High Court, however, has failed to consider that s. 44B is purely prospective in character and has absolutely no application to acquisition proceedings taken before July 20, 1962, the date when the amendment was enacted.

The High Court also seems to have accepted the argument of the H first respondent that s. 40(aa) violates Art. 14 of the Constitution inasmuch as it permits acquisition of laud for a company but

not for an individual or a private company though these persons may also be engaged in an industry which was for a public purpose. This J. argument was repelled by this Court and it was held that s. 40(aa) r-- was not violative of Art. 14. In this connection, this Court observed as follows :-

"Therefore a distinction in the matter of acquisition of land between public companies and Government companies on the one hand and private individuals and private companies on the other is in our opinion justified, considering the object behind cl. (aa) as introduced into the Act. The contention under this head must therefore also fail."

C Some of the High Courts also have takeu a similar view which has found favour with!us in view of the second Arora case, referred to above.

In the case of P. Girdharan Prasad Missir and Anr. v. State of Bihar & Anr. (1) a Division Bench of the Patna High Court while dealing with this question observed as follows :-

D "Thirdly, it was urged that the acquisition was not for a public purpose but merely for the purpose of helping a person (here the company) to make profits. This argument, however, is no longer available. It is well knewn that sugar industry is one of the importam industries of India engaged in the production of an essential commodity, and the fostering of the growth of that E industry is undoubtedly for a public purpose. A company engaged in the manufacture of sugar would, therefore, come within the scope of clause (a) of sub-section (!) of section 40 of the Act."

A Division Bench of the Gujarat High Court in Chhotubhai Babarbhai Patel v. State of Gujarat and Anr. (2) while construing the second Arora case referred to above clearly held that s. 40(aa) contemplated that the building or work which the company intended to construct was to subserve the public purpose of the industry or work for which it was being constructed. In that case also, the company concerned was manufacturing caustic soda, dyes, chemicals, colours and drugs (caustic soda is one of the products of the company in the instant case also). Dwelling on the importance of the public purpose of the industry concerned in that case, Shela!, C. J., observed as follows:-

"Taking all these factors into consideration, it is not possible to deny that the industry in which the second; respondent company H is already engaged and is about to be engaged in, and for the

(I) A.I. R. 1968 Patna 77.

(2) I. L. R. Gujarat 1964, 472 .

-~- •

buildings or works for which the lands .in question are being~~ A acquired is such that it will promote public purpose and will be in the interest of the public."

We find ourselves in complete agreemenf with the aforesaid observations of the learned Chief Justice.

Finally, even in the second Arora case, it would appear that the company in question was engaged in the production of textile machinery and its parts which were for the use of the general public. This was held by this Court to be a definite public purpose behind the acquisition. In this connection, this Court observed as follows :-

"We are concerned here with acquisition for a public purpose, which is undisputed. This is not a case of a house of one person being requisitioned for another; this is a case of constructing some work which will be useful to the public and will subserve the public purpose of the production of textile machinery and its parts for the use of the general public. In the circumstances we are of opinion that there being a definite public purpose behind the acquisition in the present case, the acquisition would be justified under the Act irrespective of the intention of the previous owner of the land to use it for son1e other public purpose."

The industrial venture in which respondent No. 2 was engaged was undoubtedly of much greater use than a company producing textile machinery because apart from being useful to the people at large and producing chemicals it has also resulted in saving lot of foreign exchange and thus improving the economy of our country so as to be an efficient instrument of economic benefit. We are satisfied that all the conditions of s. 7 of the Amending Act as also that of s. 40(aa) have been fulfilled in the instant case and the High Court was wrong in law in quashing the said proceedings. The appeal is accordingly allowed, the judgment of the High Court is quashed and the Award of the Collector as also the proceedings before the Award are restored.

In the circumstances of the case, the appellant will be entitled to costs in this Court against respondent No. 1.

S. R.

Appeal allowed.

l2-463SC!.80

STATE OF WEST BENGAL AND ANR

SURENDRA NATH BHATTACHARYA AND ANR

April 24, 1980

S. MURTAZA FAZAL ALI

P. S. KAILASAM, JJ.

Land Acquisition Act, 1894

Section 40(aa)

Section 40(aa)

Section 7

Article 14

Section 44B

Calcutta

India

29th of November 1954

December 9, 1954

section 6

Land Acquisition Act, 1894

section 9

January 14, 1957

October 22. 1957

[1980] 3 S.C.R. 235

July 20, 1962

s. 40

section 7

December 9, 1?54

section 6

October 14, 1957

October 22, 1957

[1980] 3 SCR 235

section 40(aa)

Fazal Ali

Section 44B

Land Acquisition Act

Section 40(aa)

Article 14

P. K. Chatterjee

Rathin Dass

V. S. Desai

S. C. Majumdar

Kirobi Banerjee

P. K. Mukherji

FAZAL Au

State of West Bengal

Kanpura

P.S. Dum Dum

December 16, 1949

Paris

s. 6

s. 9

February 21, 1957

October 23, 1957

section 40

s. 7

s. 40

s. 7

s. 40(aa)

s. 40(aa)

s. 7

s. 40(aa)

s. 7

Part VII of the principal Act

20th day of July 1962

section 40

sections 40 and 41

section 3

[1964] 6 S.C.R 784

s. 7

s. 7

R. L. Arora

s. 40(1)

s. 7

ss. 40 and 41

s. 40

s. 6

October

23, 1957

s. 7

V. S. Desai

s. 7

Art. 31(2)

s. 7

s. 40

s. 40

s. 40

s. 7

Parliament

s. 44B

s. 44B

s. 40(aa)

Art. 14

s. 40(aa)

Art. 14

Patna High Court

section 40

Gujarat High Court

s. 40(aa)

Shela

s. 7

s. 40(aa)