NATRAJ STUDIOS (P) LTD.

NAVRANG STUDIOS & ANR.

January 7, 1981

(R. S. PATHAK, 0. CmNNAPPA REDDY AND BAHARUL ISLAM;'JJ.]

Bonzbay Rents, Hotel and Lodging House Rates Control Act 1941-Sectioua 5 and SA and 28-Scope of-Exclusive jurisdiction to try suits under the Act given to Court of S1nall Causes-Parties, if could confer jurisdiction on a arbit~

r.ator by agreement.

1hc respondent granted to the appellant "leave and licence" for the use of their two studios, machinery, equipment and certain other materials: With effect from February 1, 1973 section 15A was inserted in the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 under which any person who was in occupation of any premises on February 1, 1973 as a licensee shall be deemed to have become on that date a tenant of the landlord in respect of the premises or part thereof in his occupation.

The 'leave and licence' agree ment was in force on that date.

In April, 1979 the respondent purporting to terminate the lave and licence' agreement called upon the appellant to hand over possession of the studio3 to the first respondent. Immediately thereafter the appellant filed a suit for a declaration that the appella.nt was a monthly tenant of the two studios and other structures covered by the agreement.

In August, 1979 the appellant filed an application under section 33 of the Arbitration Act for a declaration that the arbitration clause in the 'leave and licence' agreement was invalid and inoperative. The application was dismissed by a single Judge on the ground that he had no jurisdiction to determine the rights, if any, of the appellant as a tenant. A Division Bench of the liigh Court dismissed the appellant's appeal against the order of the single Judge en the ground that it was not maintainable under section 39 of the Arbitration Act.

Allowing the first respondent's application under section 8 of the Arbitration Act the High Court appointed the second respondent as the sole arbitrator.

Jn appeal against the dismissal of his suit and against the judgment of the High Court appointing the second respondent as sole arbitrator it was contended on behalf of the appellant that under tne 1947 Act the dispute between the parties could only be resolved by the Court of Small Causes and that the juris djction of every other Court including that of an arbitrator was excluded.

On behalf of the first respondent it was contended that the subject matter of 'leave and licence' agreement was not 'premises' within the meaning of that expression as defined in the 1947 Act but the business as such and therefore the provisions of the Act were not attracted.

... , ,,

NATRAJ STUDIOS V. NAVRANG STUDIOS 467

Allowing the appeai

IIELD : A building in which a person is licensed te run a. business is "premises" within the meaning of sections 5(8) and 5(8A), to which part II of the Act is made applicable by section 6(1) notwithstanding the fact that the build ing is not let as such. [474D]

If the definitions of "premises let or given on licence for business", "premises" and "licensee" are read together it will be clear that even a building so conshucted or designed as to be capable of being used for running a tcrtain business Only is "premises" within the meaning of section 5(8) and section 5 (SA) and does not cease to be premises merely because the building is capable of being used for the particular business only or merely because machinery or equipment must necessarily go alongwith the building if it is to be used for the business. If "premises" did not, by definition, include a build ing given on licence but meant only a building which was let, it could perhaps be argued that the expression 'premises' would not take within its stride a business let as a business, but the situation is changed by the inclusion of any building given on licence in the definition of "premises" a-nd by the deeming of a licensee as a tenant under section 15A of the Act. A licensee is not really a tenant but is a person deemed to be a tenant because of section 15A of the Act. [474 A-BJ

Uttamchand v. S. M. Lalwani A.l.R. 1965 S.C. 716 and Dwarka Prasad

v. Dwarka Das Saraf, [19761 I S.C.R. 277 held inapplicable.

The 1947 Act applies to a licence to use a building even if the building is to be used necessarily and simultaneously along with machinery and fixtures separately licensed to be used.

In such a situation there can be no question Eof the licence to use the machinery and the licence to use the building being dominant and subsidiary purposes of the agreement. [475 G]

The argument that the agreement was primarily a licence to t!_arry on the business of shooting films by using the machinery and equipments listed in the agreement and that the licence to use the building was only a subsidiary incident of the dominant purpose of the agreement is not valid. The two studios F given on licence would still be premises given on licence for business within the meaning of the Act so as to attract its protective provisions. [475 H]

The aggrement in the instant case is a composite agreement which gave "leave and licence" tc use tbc studios and other premises for producing films and to use the machinery and equipment for the same purpose. The liccnsors parted with possession of the studios and the machinery in favour of the licen sees.

Notwithstanding the fact that the agreement was a composite one and the two licences were to operate "simultaneously and together" there could be no gainsaying the fact that the studios and other premises were certainly given on licence for the business of producing films.

The parties themselves were cons cious that the licence granted by the licensor in favour of the licensee was in respect of the studios &nd other premises and that there was even a risk of the lic:ence being construed as a lease. They were, therefore, anxious to emphasise that what was granted was a licence and not a, lease. Both by reason of section.

28 of the 1947 Act and by reason of the broader consideration of public policy

A the Court of Small Causes has and the arbitrator has not the jurisdiction to decide the question whether the rcspondent-1icensorlandlord is e-ntiiled to seek p05session of the two studios and other premises together with machinery and equipment from the appellant-licensee-tenant. [476 G-H]

Section 28(1) of the 1947 Act po.ritively confc-f8 jurisdiction on the Collrt of Small Causes to entertain and try any suit between, among others, a liccttsor

._II and a licensee relating to the recovery of licence fee and to decide any application made under the Act and negatively exclude8 the jurisdiction of ony other Court from entertaining any such suit, proceeding or application or dealing with such claim or question. [477 D-E]

The scheme of the 1947 Act shows that the conferment of exclusive jurisdiction on certain C-Ourts is pursuant to the social objective at which the legElat1on aims. Public policy requires that contracts to the contrary cannot be permitted. Therefore, public policy requires that the parties cannot. be permitted to contract out of the legislative mandate which require~ certain kinds of d; sputes to be settled by special C-Ourts constituted by the Act. [477 G]

Exclusive jurisdiction to entertain arul try certain suits, to decide certain <1pplications or to deal with cert.'"lin claims or questions given to the Court of Small Causes does not necessarily mean exclusive jurisdiction to decide jurlsdic~

tional facts also. Juri.., dictional facts have necess:)fl1y to be decided by the Court where the jurisdictional question falls to be decided and the question n1ay fall for decision before tJ1e Court of exclusive jurisdiction or before the C.ourt of ordinary jurisdiction. A suit by the landlord against the tenant for recovery of possession of his premises on grounds specified in the Rent Act \Vill have to be brought in the Court of Small Causes which has been n1ade the Court of exclusive jurisdiction. [478 A-CJ

In the instant case the relationship between the parties bcin~ that of licensor landlord and licenseetenant and the dispute bei\Veen then1 relating to the possession of the licensed-demised premises the Court of Small Causes alone has the jurisdiction and the 1\rhitrator has none to adjudicate upon the dispute bct\veen the parties.

Hablffal Bhurarnal & Anr. v. 1\rt111dra111 Sltivra111 & Ors. [19591 S.C.R. 367, Rniwda Topandm & Anr. '" M/1 Gorakhrnm Gukalcha11d [1964] 3 S.C.R. 214,

Vas1ulev Gopalkri'shna Tarnwekar v. The Board of Liquidators, Ilappy Ilomc

Coopraliic /lousing Socit'l)' [19641 3 S.C.R. 964 and Deccan Merchants Cooperatil•c Bank Ltd. v. Af js Dalichand Jugraj Jai11 & Ors. {19691 1 S.C.R. 887 referred to .

. 1G l'lu1dha Motor Tran.\porr Co. (P) Ltd., Deihl v. R. J\1. Chopra A.l.R. 1968 l)clhi 75, and Basanti Cotton Mills v. Dliingra Brothers, A.I.R. 1949 Cal. 684 apprcved.

The Court of SrnalJ Causes jg 11ot exercising jurisdiction over any arbitration prc.x:·:edings merely because the agreement beh\•een the parties contains &n arbitration clause and the Court is asked to stay a proceeding before itscl.f. The jurisdiction under section 34 of the Arbitration: Act may be exercised by the judicial authority before which tho procttdings are pending and not by the court

which has jurisdiction over the arbitration proceedings. This is clear from the

l 1 '

language of section 34 of the Arbitration Act.

An application under section 34 A is not an arbitration proceeding; nor is it aa application arising thereout. The bar under section 40 does not come in the way of the Court of Small Causes exercising jurisdiction under section 34 of the Arbitration Act to sta-y proceeding pending before it. [483 F-0]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1906-1907 B Of 1980.

Appeals by Special Leave from the Judgments and Orders dated 12-11-1979 and 29-2-1980 of the Bombay High Court in Arbitration Petition Nos. 94/79 and 9/80,

Soli J. Sorabji, Talat Ansari and A. N. Haksar for the Appellant.

P. R. Mridul, P. H. Parekh, Jushubhai and R. N. Karanjawala for the Respondents.

The Judgment of the Court was delivered by

CHINNAPPA REDDY, J.

The appellant Natraj Studies (P.) Ltd., and the first respondent Navrang Studios, a firm, entered into an agreement on March 28, 1970, by which the latter granted the former "leave and licence" for the use of their two studios and other premises described in list I annexed to the agreement and situated at 194 Kurla Road, Andheri Bombay, and the machineries, equipments, property. setting materials etc. mentioned in list No. 2 annexed to the agreement.

Though the agreement was initially for a period of 11 months it was extended from time to time. By an agreement dated November 5, 1972, the original agreement was extended for a period of eleven months from Janpary 1, 1973. The 'leave and licence' agreement was thus in force on February 1, 1973, with effect from which date S. 15A was inserted in the Bombay Rents, Hotel and Lodging Honse Rates Control Act, 1947, by an amendment (Maharashtra Act 17 of 1973). r-The effect of S. 15A was that any person who was in occupation of any premises o'n February 1, 1973 as a licencee was w...emed to have . become, on that date, for the purposes of the Act, a tenant of the landlord, in respect of the premises or part thereof in his occupation.

On April 28, 1979, the first respondent purported to terminate the 'leave and licence' agreement and called upon the appellrnt to hand over JXMISession of the Studios to the first respondent.

Immediately, on May 8, 1979, the appellant filed Declaratory Suit Nd. 2326 of 1979 in the Court of Small Causes, Bombay, praying for a declaration that the plaintiff-appellant was a monthly tenant of the two studios and all other structures and open land covered by the agreement and for fixation of standard rent and other reliefs.

A. written statement was filed by the first respondent contesting the suit. Pending disposal of

14-57 SCI/81 '

the suit an interim order was made provisionally fixing the rent as Rs. 11500 per month.

On August 4, 1979, the appellant filed 11n application under S. 33 of the Arbitration Act in the Bombay High Court for a declaration that the arbitration clause in the 'leave and licence' agreement was invalid, inoperative etc. The application was dismissed by the High Court on November 12, 1979, by a learned single Judge on the ground that, he had no jurisdiction to detennine the alleged rights if any of the appellant as a tenant. On January 21, 1980, the first respondent filed an application under s.8 of the Arbitration Act praying !hat the second respondent might be appointed as the sole arbitrator to decide the disputes and differences between the parties under the 'leave and licence' agreement dated March 28, 1970.

On February 29, 1980, the High Court allowed the application of the first respondent and appointed the second respondent as the sole arbitrator. A day earlier that is, on February 28, 1980, an appeal filed by the appellant against the judgment and order daled Novem~ ber 12, 1979 of the learned single Judge was dismissed by a Division Bench of the High Court on the ground that it was not maintainable under S.39 of the Arbitration Ac!.

The present two Civil Appeals have been filed by the appellant against the orders of the High Conrt dated November 12, 1979, and February 29, 1980.

Shri Soli Sorabji and Shri Talat Ansari learned counsel for the appellant submitted that the essence of the dispute between the parties was the right to the possession of the two Studios, that after the 1973 Amendment to the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the status of the appellant was at least that of a 'deemed tenant', that under !he scheme of the Bombay Rent, Hotel & Lodging Honse Rates Control Act, 194 7, the dispute between the parties could only be resolved by the Court of Small Causes and

that every other Court's jurisdiction including that of an arbitrator was excluded. Shri Mridual, learned counsel for the first respondent, argued that the subject matter of the 'leave and licence' agreement was not 'premises' within the meaning of that expression as defined in the Bombay Act but the business as such and, therefore, the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act were not attracted at all.

For a clear appreciation of the rival submissions, the relevant provisions of the Bombay Rent, Hotel & Lodging House Rates Control Act, 1947, may first be set out.

Section 5 ( 4A) defines a licensee as follows:

"(4A) 'licensee', in respect of any premises or any part thereof, means the person who is in occupation of the pre-

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.i:;,

'\I

mises or such part, as the case may be, under a subsisting agreement for licence given for a licence fee or charge; and

includes any person in such occupation of any premises or part thereof in a building vesting in or leased to a cooperative housing society registered or deemed to be registered under the Maharashtra Co-operative Societies Act, 1960; but does not include a paying guest, a member of a family residing together, a person in the service er employment of the licensor, or a person conducting a running business belonging to the licensor, or a person having any aceo=odation in a hotel, lodging house, hostel, guest house, club, nursing home, hospital sanatorium, qharmashala, home for widows, orphans or like premises, marriage or public hall or like premises, or in a place of amusement or entertainment or like institution, or in any premise$ belonging to or held by any employee or his spouse who on account of the exigencies of service or provision of a residence attached to his or her post or office is temporarily not occupying the premises, provided that he or she charges licence fee or charge for such premises of the employee or spouse not exceeding the standard rent and permitted increases for such premises, and any additional sum for services supplied with such premises, or a person having accommodation in any premises or part thereof for conducting a canteen, creche, dispensary or other services as amenities by any undertaking or institution; and the expressions 'licence', 'licensor' and 'premises given on licence' shall be construed accordingly";

'Jl'

Section 5(8) defines premises as follows:

~"-(8) 'premises' means-

(a) any land not being used for agricultural purposes,

(b) any building or part of a building let or given on licence separately (other than a farm building) including-

(i) the garden, grounds, garages and out-houses, if any, G appurtenant to such building or part of a building,

(ii) any furniture supplied by the landlord for use in such building or part of a building,

(iii) any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof, H

but dees not include a room or other accommodation in a hotel or lodging house."

A Section 5 (SA) is as follows:

"(SA) 'premises Jet or given on licence for business' includes, and shall be deemed always to have included, premises Jet or given on licence for the purpose of practising any profession or carrying on any occupation therein";

Section 5 ( 11) defines tenant as follows:-

"tenant" means any person by whom or on whose account rent is payable for any premises and includes- (a) xxx xxx xxx _,

(aa)· xxx

(b) xxx

xxx

xxx

xxx

xxx

(bb) such licensees as are deemed to be tenants for the purposes of this Act by Section 15A.

( c) xxx xxx x:xx

. We may add here that the definition of landlord in S.5(3) was suitably amended in 1973 so as to include 'in respect of a licensee deemed to be a tenant by S.15A' 'the licensor who has given such licence'.

Sec. 6(1) provides:

"(1) In areas specified in Schedule I, this part shall apply to premises let or given on licence for residence, education, business, trade or storage."

Sec. 15A which deems certain licensees in occupation of premises on 1.2.1973 as tenants says: ~

"15A. (1) Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any contract, where any person is on the 1st day of February, 1973 in occupation of any premises, or aoy part thereof which is not less than a room, as a licensee he shall on that date be deemed to have become, for the purposes of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his occupation.

(2) The provisions of sub-section (1) shall not affecf

.. _,_,,.,,.~ ..• - __ ,___.

in any manner the operation of sub-section ( 1) of cection

15 after the date aforesaid."

Sec. 28 (1) which prescribes and prohibits the jurisdiction of certain Courts says;

"28(1) Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction,

(a) in Greater Bombay, the Court of Small Causes, Bombay,

(aa) in any area for which, a Court of Small Causes is established under the Provincial Small Cause Courts Act, 1887, such Court and

(b) elsewhere, the Court of the Civil Judge (Junior Division) having jurisdiction in the area in which the premises are situate or, if there is no such Civil Judge, the Court of the Civil Judge (Senior Division) having ordinary

jurisdiction,

shall have jurisdiction to entertain and try any suit or proceeding between a land-lord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this Part apply or between a licensor

and a licensee relating to the recovery of the licence fee or charge and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions and subject to the provisions of sub-section (2), no other court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question."

Sec. 6( 1) which occurs in Part II of the Act makes the provisions

::f Part II applicable to "premises let or given on licence for business"

also. Sec. 5 (SA) expands the meaning of the expression "premises

let or given on licence for business" so as to include premises let or given on licence for the purpose of practising any profession or carrying on any occupation therein.

Sec. 5 ( 8) defines "premises" among other things, as any building or part of a building let or given on licence separately', including, among other things, 'any fitting/I affixed to such building or part of a building for the more beneficial enjoyment thereof. Sec. 5(4A), while defining licensee as the person who is in occupation of the premises or any part thereof under a subsisting agreement for a licence, excludes a person conducting a running business belonging to the licensor. If the definitions of "premises let or given on licence for business", "premises" and

"licensee" are read together it will at once become clear that even a building so constructed or designed as to be capable of being used for running a certain business only is "premises" within the meaning of Sec. 5(8) and Sec. 5(8A) and does not cease to be premises merely because the building is capable of being used for the particular business only or merely because machinery or equipment must necessarily go alongwith the building if it is to be used for the business.

H "premises" did not, by definition include a building given on licence but meant only a building which was let, it could perhaps be argued with great force that the expression premises would not take within its stride a business let as a business, but the situation is changeg;,- by the inclusion of auy building given ou licence in the definition of~

"premises", and by the deeming of a licensee as a tenant up.der S. 15A of the Act. A licensee is not really a tenant but is a person deemed to be a tenant because of Sec. 15A of the Act. A building in which a person is licensed to run a business is "premises" within the meaning of S. 5 (8) and 5 (SA), to which Part II of the Act is made applicable by S. 6(1) notwithstanding the fact that the building is not let as such.

Shri Mridul relied upon Uttamchand v. S. M. Laiwani(I) and Dwarka Prasad v. Dwarka Das Saraf(') in support of his contention that having regard to the definition of "premise!" the licensee of a business or industry which is carried on in a building cannot be considered to be the licensee of the premises as such, independently of the business, so as to be deemed to be a tenant entitled to the protection of the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. In Uttamchand v. S. M. Lalwani (supra) the facts were that Dal Mill Building with fixed machinery and other accessories was the subject matter of a lease. The object was to use the building as a Dal Mill. The question arose whether the subject matter of the lease was 'accommodation' within the meaning of S. 3 (A) of t~ Madhya Pradesh Accommodation Control Act which defined 'accom- , modation' as meaning, among other things, any building or part of a building and including any fittings affixed to uch building or part of a building for the more beneficial enjoyment thereof.

This Court held that in construing the lease it was necessary to determine the dominant intention of the parties. It was found that the dominant intention of the parties was that the building should be used as a Dal Mill It was not a case where the subject matter of the lease was the building and alongwith the leased building, incidentally, passed the fixtures of the machinery in regard to the mill. In truth the Mill was the subject matter of the lease and it was because the Mill was intended to be let

(1) AIR 1965 SC 716.

(2) [1976] 1 SCR 277.

> No\TRAJ STUDIOS v. NAVRANG STUDIOS (Chinnappa Reddy, !.) 475

out that the building had inevitably to be let out alongwith the mill.

On that finding it was held that the lease was of the mill and not of the building and therefore, there was no lease of any 'accommodation'.

Dwarka Prasad v. Dwarka Das Saraf (Supra) was a case of a composite lease of a Cinema theatre consisting of the building for which the rent was Rs. 400/- per month and the projector, fittings, fans and other fixtures for which the rent was Rs. 1000 per month. Tue question arose whether there was a lease of 'accommodation' as defined by Sec. 2(a) of the Uttar Pradesh (Temporary) Control of

Rent and Eviction Act, 1947. Accommodation was there defined as meaning residential and non-residential accommodation in any building or part of a Building including any fi\tings, affixed to such building or part of the building for the more beneficial enjoyment thereof. This Court held that where the lease was composite and had a plurality of purposes, the decisive test was the dominant purpose of the demise.

Applying the test it was found that the real ubject of the lease was the cinema apparatus and fittings including, 'subsidiarily and i11cidentally', the building. It will be seen that in both the eases there was no question of a licence, nor any question of a licensee being deemed to be a tenant. The question concerned a lease and the question was

whether what was demised was a business or a building as such.

If what was intended to be demised was a bmincss, the Act would not apply. If what was intended to be demised was a building the Act would apply.

The test of dominant intentiou was applied and it was found in each of the cases that the lease was of a business and not of 'accommodation'.

The question in the present case is entirely different and is one of construction of the provisions of the Bombay Rent, Hotel & Lodging Honse Rates (Control) Act, 1947, which deem a licensee to be a __ tenant and, by definition, include a building or a part of a building given on licence within the meaning of the expression "premises",

and, expressly make the Act applicable to "premises" given on licence for business.

We are of the view that the Bombay Rent, Hotel & Lodging House Rates (Control) Act, 1947, r.pplies to a licence to use a building even if the building is to be used necessarily and simul

taneously along with machinery and fixtures separately lieenced to be used.

In such a situation there can be no question of the licence to use the machinery etc. and the licence to use the building being dominant and subsidiary purposes of the agreement as suggested by Shri Mridul in his argument. The submission of Shri Mridul that the agreement was primarily a licence to carry on the business of shooting films by using the machinery and equipments listed in the agreement and that the licence to use the building was only subsidiary incident

of the dominant purpose of the agreement does not appeal to us.

On the construction placed by us upon the provisions of the Bombay Rent, Hotel & Lodging House Rates (Control) Act, 1947, the two studios given on licence would still be premises given on licence for busi:J.ess within the meaning of the Act so as to attract its protective provisions.

At this juncture we may refer to the terms of the agreement. The agreement provided for ( 1) "leave and licence in respect of studios Nos. 2 and 3 duly sound proofed and electrified and other premises more particularly described in list No. 1 hereto annexed situated at 194 Kurla Road, Andheri, Bombay, on a monthly compensation of Rs. 25Q including sound proofing and electrification" and (2) "leave and licence in respect of the machineries, lights, equipments, setting and property materials etc. mentioned in list No. 2 hereto annexed on a monthly compensation of Rs. 7500". The two licences, it was stipulated, were to be "in force and operation simultaneously and together" and "not subject to divisibility". The licensees were entitled to carry on their work of producing motion picture films in the studios and the machineries and other equipments were to be used for that purpose only.

The licensees were also entitled to permit the use of the studios and other premises, machineries and other articles temporarily, by others, whomsoever they liked during the subsistence of the licences for the purpose of producing motion pictures only. Property tax and other taxes were to be borne and paid by the licensors while the licensees were required to pay for the consumption of electricity and water. During the subsistence of the licences the licensees were not to part with the possession of the studios and other premises, machineries and equipments.

The Studios and other premises, machineries and. equipments were to be used by the licensees in a prudent manner. The agreement further stipulated that no tenancy rights . were to be understood as having been created by the licensors in favour of the licensees. The interest created was that of lice11Bees only. The licensees were to carry on their business of motion picture films' production in the licensed premises under the name and style of Natraj Studios (P) Ltd. The agreement is thus seen to be a composite agreement which gave 'leave and licence' (1) to use the studios and other premises for producing films and (2) to use the machinery and equipment for the same purpose. The licensors parted with possession of the Studios and the machinery in favour of the licensees. Notwithstanding the fact that the agreement was a composite one and the two licences were to operate 'simultaneously and together', there could be no gainsaying the fact that the Studios and other premises were

certainly given on licence for the business of producing films.

The

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parties themselves were conscious that the licence granted by the licensor in favour of the licensee was in respect of the Studios and other premises and that there was even a risk thelicence being construed as a lease.

So they were anxious, at that stage. to emphasise that what was granted as a licence and not a lease. That was obviously to circumvent the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 194.7.

It was apparently thought that the sophisticated description of the transaction as a 'licence' instead of a lease would take it out of the clutches of the Bombay Rent, Hotel a'Ud Lodging ? House Rates Control Act. It was precisely the type of agreement that forced the hand of the legislature to intervene and amend the Act by introducing S. 15 A by which such licensees were deemed to be tenants of the landlord.

We may now proceed to consider the submission that the Court of Small Causes alone has exclusive jurisdiction to resolve the dispute

between the parties. S. 28 ( 1) of the Bombay Rent Act, positively confers jurisdiction on the Court of Small Causes to entertain and try any suit or proceeding between a landlord and tenant relating to the recovery of rent or possession of any premises or between a licensor and a licerlsee relating to the recovery of licence fee or charge and to decide any application made under the Act and to deal with any claim or question arising out of the Act or any of its provisions, and negatively it excludes the jurisdiction of any other Court from entertaining any such suit, proceeding or application or dealing with such claim or question.

The Bombay Rent Act is a welfare legislation aimed at the definite social objective of protection of tenants against harassment !ly landlords in various ways.

It is a matter of public policy.

The scheme of the Act shows that the conferment of exclusive jurisdiction on certain Courts is pursuant to the social objective at which the legislation aims.

Public policy requires that contracts to the contrary which nullify the rights conferred on tenants by the Act cannot be permitted.

Therefore, public policy requires that parties cannot also be permitted to contract out of the legislative mandate which requires certain kind of disputes to be settled by special courts constituted by the Act. It follows that arbitration agreements between parties whose rights are regulated by the Bombay Rent Act cannot be recognised by a Court of law .

Thus exclusive jurisdiction is given to the Court of Small Causes and jurisdiction is denied to other Courts (I) to entertain and try

any suit or proceeding between a landlord and a tenant relating to recovery of rent or possession of any premises, (2) to try any suit or proceeding between a licensor and a licensee relating to the recovery of licence fee or charge, ( 3) to decide any application made under the Act and, ( 4) to deal witb any claim .or question arising out of the Act or any of its provisions.

Exclusive jurisdiction to entertain and try certain suits, to decide certain appliC'ations or to deal with certain claims or questions does not necessarily mean exclusive jurisdiction to decide jurisdictional facts also.

Jurisdictional facts have necessarily to be decided by the Court where the jurisdictional question falls to be decided, and the question may fall for decision before the Court of exclusive jurisdiction or before the Court or ordinary jurisdiction.

A person claiming to be a landlord may sue his alleged tenant for possession of a building on grounds specified in the Rent Act. Such a suit will have to be brought in the Court of Small Causes, which has been made the Court of exclusive jurisdiction. In such a suit, the defendant may deny the tenancy but the denial by the defendant will not oust the jurisdiction of Court of Small Causes. If ultimately the Court finds that the defeudant is not a tenant the suit will fail for that reason. If the suit is instituted in the ordinary Civil Court instead of the Court of Small Causes the plaint will have to be returned irrespective of the plea of the defendant. Conversely a person claiming to be the owner of a building and alleging the defendant to be a trespasser will have to institute .the suit, on the plaint allegations, in the ordinary Civil Court only.

In such a suit the defendant may raise the plea that he is a tenant and not a trespasser.

The defendant's plea will not straightaway oust the jurisdiction of the ordinary Civil Court but if ultimately the plea of the defendant is accepted the suit must fail on that ground. So the question whether there is relationship of landlord !!.Ild tenant between the parties or such other jurisdictional questions may- have to be determined by the Court where it falls for determinationbe it the Court of Small Causes or the ordinary Civil Court. If the jurisdictional question is decided in favour of the Court of exclusive jurisdiction the suit or proceeding before the ordinary Civil Court must cease to the extent its jurisdiction is ousted.

In Babula/ Bhaurama/ & Anr. v. Nandram Shivram & Ors.,(I) it was held that S.28 of the Bombay Rents, Hotel and Lodging House

Rates Control Act, 1947, excluded the jurisdiction of the City Civil Court from entertaining a suit for a declaration that one of the plain- .

tiffs was the tenant of the defendant-landlord and the other plaintiffs

(I) [1959] SCR 367

...

....,, ,

were his sub-tenants and that they were entitled to be protected from eviction, under the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The argument that S.28 applied only to suits where the relationship of landlord and tenant was admitted was repelled with the observation that the suit did not cease to be a suit between a landlord and a tenant merely because the defendants denied the claim of the plaintiffs. It was said:

"On a proper interpretation of the provisions of S.28 of the suit contemplated in that section is not only a suit between a landlord and a tenant in which that relationship is admitted but also a suit in which it is claimed that the relatioushJt> of a landlord and a tenant within the meaning of the Act subsists between the parties.

The Courts which have jurisdiction to entertain and try such a suit are the Courts specified in S.28 and no other".

In Raizada Topandas & Anr. v. M/s. Gorakhram Gokalchand(') the plaintiff instituted a suit in the City Civil Court, Bombay, against the defendant for a declaration that the plainiff was in lawful possession of a shop and for an injunction restraining the defendants from entering the shop. The plaintiff alleged that the defendant Vl'as licensee for a definite term of years and that the period of licence stipulated under the agreement had expired (The suit was instituted before S.15A was introduced into the Act by the 1973 amendment). The defendant's plea was that there was a relationship of landlord and tenant between the parties and that the Court of Small Causes alone had jurisdiction to try the suit and not the City Civil Court. It was held by this Court that since the plaintiff did not admit the relationship of landlord and tenant between him and the defendant, the defendant could not, by his plea force the plaintiff to go to a forum where, on his own averments, he could not go.

The Court, however, did not say that the defence could never be considered to decide the question of jurisdiction. It would be the duty of the Court to consider the defence at some stage, and come to a conclusion, if the facts warrant whether the plaintiff's denial of the relationship of landlord and tenant was a mere camouflage and whether on the facts there was a relationship of landlord and tenant between the parties which precluded the Court from trying the suit any further.

In Vasudev Gopa/krishna Tamwekar v. The Board of Liquidators, Happy Home Cooperative Housing Society, (2) there was a dispute O

(1) £1964]3 SCR 214.

(2) [1964] 3 SCR 964 .

~ -~1*~'~"··------·--,,~.,, --

A between a House Building Cooperative Society and one of its members. The question arose whether the relationship between the Society and the member was that of a landlord and a tenant. The dispute was referred to a Committee of Arbitrators under the Bombay Cooperative Societies Act and an award was made. When the award was sought to be executed it was claimed that it was without jurisdio- B tion as the question whether the relationship between the parties was that of landlord and tenant could only be determined by the Court of Small Causes under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and not by any other authority. The Court found that if the jurisdiction of the Arbitrators was to be excluded, c

the proceedings before the Arbitrators must be between landlord and tenant and must relate to the recovery of rent or possession of a premises. Where the person invoking the jurisdiction of the Court did not set up a claim that the opposite party was a tenant or a landlord, the defendant was not entitled to displace the jurisdiction of the ordinary Court by alleging the relationship of landlord and tenant between them. It was held that the jurisdiction was not ousted as soon as the contesting party raised a plea about the relationship of a landlord and a tenant.

The Court, however, did not go further and say that the ordinary Court's jurisdiction would not be ousted even if the Court came to the conclusion that the relationship between the parties was of a landlord and a tenant. The Court, however, found as a fact that there was no relationship of landlord and tenant between the parties.

In Deccan Merchants Cooperative Bank Ltd. v. Mls. Dalichand Jugraj Jain & Ors.(I), the conflict was between the jurisdiction of the Registrar of Cooperative Societies under the Maharashtra Cooperative Societies Act and the jurisdiction of the Court of Small Causes under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The Court held that whether or not the Registrar of Cooperative Societies was a 'Court' whose jurisdiction was ousted under

S.28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the jurisdiction of the Registrar was surely ousted on broader considerations of public policy.

The Court pointed out that the Rent Act had a specific social objective in view and for the achievement of that objective it was necessary that the Court set up under the Rent Act alone should deal with a dispute between a landlord and a tenant and that in accordance with the provision~ of the Rent Act. Necessarily, the jurisdiction of the Registrar was ousted.

The Court said (at pp. 901, 902);

B "The scheme of the various Rent Acts and the public policy underlying them are clear; the policy is to give pro-

(!) [1969] 1 SCR 887

"" - I

tection to the tenants. Various powers have been conferred on the authorities under the Rent Acts to grant protection to the tenants against ejectment and other reliefs claimed by the landlords . . . . . . . . . . . . If the matter is heard by the Registrar, none of these provisions would apply. We can hardly imagine that it was the intention of the legislature to deprive tenants in buildings owned by cooperative societies of the benefits given by the Rent Act. It seems to us that the Act was passed, in the main, to shorten litigation, lessen its costs and to provide a summary procedure for the determination of the disputes relating to the internal managemont of the societies. But under the Rent Act a different social objective is intended to be achieved and for achieving that social objective it is necessary that a dispu_te between the landlord and the tenant should be dealt with by the Courts set up under the Rent Act and in accordance with the special provisions of the Rent Act. This social objective does not impinge on the objective underlying the Act. It seems to us that the two acts can be harmonised best by holding that in matters covered by the Rent Act, its provisions, rather than the provisions of the Act, should apply.

In Govindram Salamatrai Bachani v.

Dharampal Amarnath Puri,(') a Division Bench of the Bombay High Court consisting of Choagla C.J. and Bhagwati J. considered whether the question as to whether the defendant was a tenant or a licensee was a question which arose out of the Act or any of its provisions (the case was decided lon6 before the 1973 amendment).

Chagla, C.J., observed that the question was a jurisdictional _ question and had nothing to do with the Act or any of its provisions.

Whether a person was a tenant or a licensee or a trespasser was a question which was not let: to the exclusive determination of the Special Court set up under the Rent Control Act but the question whether a person was entitled to the benefits of any of the provisions of the Act was a question which could only be decided and determined by Special Court. It was observed by Bhagwati J. (at p. 391-392) :

-'There was no bar to the High Court entertaining a suit for ejectment of a licensee as such or a trespasser as such. It would be_ determined by a perusal of the plaint which was filed in the High Court as to whether such a suit was capable of being entertained by the High Court.

Once it was a suit which could be entertained by the High --- (!) (Lil) 1951 Bomb1y Law Reporter p, 386 @391-392.

. F

Court, there was no question of its not being entertained by it. It would only be when the defendant filed a written statement and claimed the protection of the Rent Act that the question would arise to be determined by the High Comt whether the relationship between the plaintiff and the defendant in the particular case before it was that as between landlord and tenant. If it came to the conclusion that it was not so, it would continue to have the jurisdiction to try the suit and would be able to try the suit on the merits to jts logical conclusion.

If, on the other hand, the High Court came to the conclusion that the relationship between the plaintiff and the defendant was as between landlord and tenant it would cease to have jurisdiction on that determination and the suit would be liable to be transferred to the Small Causes Court which, under s. 28 of Bombay Act LVII of 1947, would be the only Court to have jurisdiction to try the suits as between landlords and tenants falling within the purview of s. 28".

In Sabavva Kam Hanmappa Simpiger v. Basappa Andaneppa Chiniwar, ( 1) the question directly arose, as in the present case, whether s. :\8 of the Bombay Rents, Hotel & Lodging House Rates Cemtrol Act, 194 7, excluded reference to arbitration of a dispute relating to recovery of rent or possession of premises. It was held by a Division Bench of the Bombay High Court that the expression Court occurring in • s.28 of the Bombay Rents, Hotel and Lodging House Rates Control Act 1947 included an arbitrator and therefore, the jurisdiction of the Arbitrator to make an award in respect of any dispute of the nature mentioned in s. 28 was excluded .

In the light of the foregoing discussion and the authority of the precedents, we hold that both by reason of S.28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and by reason of the broader considerations of public policy mentioned by us earlier and also in Deccan Merchants Cooperative Bank Ltd. v.

M/s. Dalichand Jugraf Jain & Ors. (supra), the Court of Small Causes has and the Arbitrator has not the jurisdiction to decide the question whether the respondent-licensor-landlord is entitled to seek possession of the two studios and other premises together with machinery and equipment from the appellant-licensee-tenant.

That this is the real dispute between the parties is abundantly clear from the petition filed by the respondents in the High Court of Bombay, under S. 8 of the Arbitration Act seeking a reference to Arbitration.

(1) (1955) LVII Bombay Law Reporter P. 261

.. ' -

The petition refers to the notices exchanged by the parties, the respondent calling upon the appellant to hand over possession of the studios to him and the appellant claiming to be a tenant or protected licensee in respect of the studios.

The relationship between the parties being that of licensor-landlord and licensee-tenant and the dispute between them relating to the possession of the licensed--demised premises, there is no help from the conclusion that the Court of Small Causes alone has the jurisdiction and the Arbitrator has none to adjudicate upon the dispute between the parties.

Learned counsel for the appellant further argued that the rest pondent had filed a written statement in the suit instituted by the

appellant in the Court of Small Causes and was therefore, precluded from seeking a reference to Arbitration.

On the other hand it was submitted by the learned counsel for the respondmt that S. 40 of the Arbitration Act prevented the Sma~ Cause Court from exercising any jurisdiction over arbitration proceedings. It wa~ also urged that the questions at issue in the Court of Small Giuses and before the arbitrator were not identical.

The suit was properly instituted in the Court of Small Causes and if the respondent wanted to rely upon the arbitration clause an application under s. 34 of the Arbitration Act should have been made to the Court of Small Causes before the written statement was filed.

That was not done. It was said' that the Court of Small Causes would have no jurisdiction to stay the proceedings under s. 34 of the Act as it was precluded from exercising any jurisdiction over arbitration proceedings under s.40.

There is no substance in this argu ment.

S. 40 of the Arbitration Act declares that a Small Cause Court shall have no jurisdiction over any arbitration proceeding or ,,,,-UVer any application arising thereout.

We do not see how it can b(l ... said that the Court of Small Causes is exercising jurisdiction ove~

any arbitration proceedings merely because the agreement between the parties contains an arbitration clause and the Court is asked to stay a proceeding before itself.

The jurisdiction under s. 34 may be exercised by the judicial authority before which the proceedings

are pending and not by the Court which has jurisdiction over the arbitration proceedings.

This is clear from the language of s. 34 of the Arbitration Act.

An application under s. 34 is not an arbitratian. proceeding; nor is it an application arising thereout. The bar under s. 40 does not come in the way of the Court of Small Causeil exercising jurisdiction under s. 34 of the Arbitration Act to stay a proceeding pending before it. If authority is necessary for this

A proposition it may be found in Chadha Motor Transport Co. (P) Ltd. Delhi v. R. N. Chopra(I) and Basanti Cotton Mills v.

Dhingra Brothers.(') The submission that there is no identity of dispute is also without substance. As already pointed out by us the dispute is between the licensor-landlord and licensee-tenant about the right to possess two studios and other premises. The identity of the dispute is clear from a perusal of the pleadings in the suit in the Coil.rt of Small Causes and the petition for reference to Arbitration filed in the High Court.

In the result both the appeals are allowed with costs. The arbitration clM!se in the agreement dated March 28, 1970 is declared to ..

C be inoperative. The application for reference to Arbitration is dismissed.

P.B.R.

(I) AIR 1968 Delhi 75

(2) AIR 1949 Cal. 684

Appeals allowed. '

... ....

NATRAJ STUDIOS (P) LTD

NAVRANG STUDIOS & ANR

January 7, 1981

R. S. PATHAK

0. CmNNAPPA REDDY

BAHARUL ISLAM

February 1, 1973

section 15A

section 33

section 39

section 8

sections 5(8) and 5(8A)

section 6(1)

section 5(8)

section 5

section 15A

section 15A

Section 28(1)

[1964] 3 S.C.R. 214

section 34

section 34

section 34

section 40

section 34

CIVIL APPELLATE JURISDICTION

Soli J. Sorabji

Talat Ansari

A. N. Haksar

P. R. Mridul

P. H. Parekh

Jushubhai

R. N. Karanjawala

CHINNAPPA REDDY

Natraj Studies (P.) Ltd.

Navrang Studios

Andheri Bombay

November 5, 1972

Janpary 1, 1973

S. 15A

S. 15A

April 28, 1979

Court of Small Causes, Bombay

August 4, 1979

S. 33

Bombay High Court

November 12, 1979

January 21, 1980

March 28, 1970

February 29, 1980

February 28, 1980

Novem~ ber 12, 1979

Soli Sorabji

Lodging Honse Rates Control Act

Mridual

Lodging House Rates Control Act, 1947

Section 5

Section 5(8)

Section 5

Section 5

Section 15A

Sec. 6(1)

Schedule I

Sec. 15A

Sec. 28

Sec. 6( 1)

Part II of the Act

Sec. 5

Sec. 5

Sec. 5(4A)

Sec. 5(8)

Sec. 5(8A)

S. 15A

Sec. 15A

S. 5

Part II of the Act

S. 6(1)

Mridul

Dal Mill Building

S. 3

AIR 1965 SC 716

[1976] 1 SCR 277

Sec. 2(a)

Rent and Eviction Act, 1947

Andheri

Bombay

Natraj Studios (P) Ltd.

House Rates Control Act

S. 15

S. 28

Rates Control Act, 1947

City Civil Court, Bombay

[1964] 3 SCR 964

Registrar of Cooperative Societies

[1969] 1 SCR 887

Rent Act

Choagla C.J.

Bhagwati

Chagla

s. 28

Bombay Act LVII of 1947

s. 28

Lodging House Rates Cemtrol Act

s. 28

High Court of Bombay

S. 8

S. 40

s. 34

s. 34

S. 40

s. 34

s. 34

s. 34

s. 40

s. 34


- '

SMT. SOORAJ DEVI

PYARE LAL AND M'R.

January 8, 1981

[R. S. SARKARIA AND R. S. PATHAK, JJ.]

Code of Criminal Procedure, 1973, S. 362-Scope of.

Whet!Ier the High Court can alfe'J' or review its OlVll judgment in exercise of inherent powers under s. 482.

Words and Phrases-'otherwise pl'ovided by thls Code or by any other lau." for the time being in force'-'Clerical or arithmetical error'-Meaning of.

Section 362 of the Code of Criminal Procedure, 1973, mandates a court not to alter its judgment. It declares that: "save as otherwise provided by this

Code or by any other law for the tin1e being in force, no Court, when it has signed its judgment or final order disposing of a case, shall alter or review the same e.xcept to correct a clerical or arithnietical error."

The house property owned by the husband of the appellant was sold in a court auction sale and the first respondent purchased the property and obtained possession through the Civil Court Amin. In his absence, it was alleged, that the second respondent (son of the appellant) had removed tl1e lock and entered into possession. The first respondent, instituted a criminal proceeding against the second respondent, and he was ultimately convicted and sentenced by the High Court under section 448 of the Indian Penal Code, with the further direction that 'the house property be restored to the possession of the first respondent'. Pursuant to that order the first respondent applied for possession, but the appellant objected asserting her right to the property. The Magistrate overruled the objection and observed that it was open to the appe1lant to establish her right by way of a civil suit. This order was upheld by the High Court.

~- -- The appellant thereafter filed a Criminal Miscellaneous Application before the High Court under section 482 of the Code of Criminal Procedure, 1973 alleging that she was not a party to the criminal proceedings against the first respondent and that she was in possession in her own right and that the earlier order of the High COurt in the criminal proceedings directing restoration of possession to the first respondent be clarified by a declaration that it was not binding on her and did not affect her possession. The High Court dismissed this application.

Dismissing the appellant's appeal

HELD : 1. The High Court was right in declining to entertain the application. [489 CJ

2. "A clerical or arithmetical error" is anl error occasioned by an accidental slip or omission of the Court.

It represents that which the court never r

15-57 SC!/81

A intended to say.

It is an error apparent on the face of the record and does not depend for its discovery on argument or disputation. An arithmetical error is a mistake of calculation, and a clerical error is a rristake in writing or typing. [488 G] ,

Master Construction Co. (P) Ltd. v. State of Orissa and Another, [1966] 3 S.C.R. 99 referred to.

In the instant case \Vhat the appellant sought by the applicatian, was not the correction of a clerical or arithmetical error, but a declaration that the High Court order in the criminal proceedings rtid not affect her right in the house property and that the direction to restore ession to• the first respon dent was confined to that portion only of the house property respecting which the offence of trespass was committed so that she was not evicted from the • portion in her possession. This controversy cannot be brought within the des~ ~\ cription "clerical or arithmetical error". [488 DF]

3. The inherent power of the Court under section 482 of the Code is not contemplated by the saving provision contained in section 362 and, therefore, the attempt to invoke that power by the appellant can be of no avail.

[488H-489A]

4. The inherent power of the Court cannot be exercised for doing that which is specifically prohibited by the Code. [489 BJ

Sa11katha Singh v. State of U.P. A.I.R. 1962 SC 1208 referred to.

5. The prohibition in section 362 against the Court altering or reviewing its judgment is subject to what is "otherwise provided by this Code or by any other law for the time being in force.". These words refer only to those provisions where the Court has been expressly authorised by the Code or other law to alter or review its judgment.

[489B]

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 471 of 1979.

F From the Judgment and Order dated 5-1-1979 of the Allahabad

High Court in Criminal Case No. 5127 of 1978.

Kameshwar Prasad and Pramod Swarup for the Appellant.

S. K. Jain for the Respondent.

The Judgment of the Court was delivered by

PATHAK, J: This appeal by special leave is directed against an order of the Allahabad High Court dismissing an application for "clarification" of an earlier order made by the court iJi a criminal proceeding.

The dispute in this appeal relates to a property described as house H No. 24/47, Birhana Road, Kanpur.

A suit filed by the South India Trading Company against Jethmal Laxmichand was decreed and execution proceedings were taken for the attachment and sale of the

f •

' • -

aforesaid house property. The house was owned by one Khem Raj, who died leaving a widow, Smt. Sooraj Devi (the appellant) and a son, Kailash Chandra Jain (the second respondent). The property was purchased by Pyare Lal (the first respondent). Pyare Lal obtained possession through the Civil Court Amin on 8th October, 1965, but in his absence Kailash Chandra Jain is said to have removed the lock and entered into possession.

In a criminal proceeding against him on a complaint by Pyare Lal, he was ultimately convicted and sentenced by the High Court under s. 448, Indian Penal Code by an order dated 1st September 1970, under which the High Court ) also directed "that house No. 24/47, Birhana Road, Kanpur be restored to the possession of the complainant". Pursuant t() that order, Pyare Lal applied for possession. The appellant filed an objection, asserting a right to the property.

The Magistrate overruled her objection, observing that it was open to her to establish her right by way of suit.

The rejection of her objection was upheld by the High Court by its order dated 21st July, 1978. The appellant then filed Criminal Miscellaneous Application No. 5127 of 1978 before the Higla Court under s. 482 of the Code of Criminal Procedure alleging that she was not a party to the criminal proceeding against Kailasil Chandra Jain, that she was in possession in her own right, and that the earlier order of the High Court dated 1st September, 1970 directing restoration of possession to Pyare Lal be clarified by a declaration that it was not binding on her arid did not affect her possession.

On 5th January, 1979, th~ High Court dismissed the application in view of the decision of this Court in State of Orissa v. Ram Chander Agarwala etc.(') The order has led to this appeal.

Before passing on the merits of this appeal, we may observe that

the house property has been, and still is, the subject of civil litigation.

F Civil Suit No. 73 of 1963 was filed by Kailash Chandr.!_ Jain a'nd his ?*'rilfuor sons alleging that they were entitled to the house property and the decree obtained by the South India Trading Compa'ny was not binding on them and could not be executed against them.

As the property was meanwhile sold and the sale confirmed the suit was regarded as infructuous and the plaint was allowed to b~ rejected G for want of court fee.

Instead, Civil Suit No. 53 of 1964 was filed by the minor sons of Kail ash Chandra Jain claiming that they were joint owners of the property, that the sale conferred no right, title or interest in Pyare Lal and that they were entitled to an injunction.

The appellant, who had originally been impleaded as a defendant in the suit, was t!ansposed to the array of plaintiffs. The suit was H dismissed in default, but subsequently restoration was allowed by the

(I) A.I.R. 1979 SC 87.

Trilil Court on payment of costs, and the time for payment of costs was extended by the High Court. A third suit, Civil Suit No. 18 of 1977, was filed by the appellant for partition. An application for interim injunction for preserving th~ appellant's possession in the house property has been dismissed by the trial court.

The sole question before us is whether the High Court was right in refusing to entertain Criminal Miscellaneous Appliction No. 5127 of 1978 on the ground that it had no power to review its order dated 1st September, 1970. Section 362 of the Code of Criminal Procedure declares :

"Save as otherwise provided by this Code or by any other law for the time being in !om" no Court, _when it has signed its judgment or final order disposing of a case, shall alter or review the same except to correct a clerical or arithmetical error".

It is apparent that what the appellant seeks by the application is not the correction of a clerical or arithmetical error.

What she desires is a declaration that the High Court order dated 1st September, 1970 does not affect her rights in the house property and that the direction to restore possession to Pyare Lal is confined to that portion only of the house property respecting which the offence of trespass was committed so that she is not evicted from the portion in her possession.

The appellant, in fact, asks for ; n adjudication that the right to possession alleged by her remains unaffected by the order dated 1st September, 1970. Pyare Lal disputes that the order is not binding on her and tht she is entitled to the right in the property claimed by her. Having considered the matter, we are not satisfied that the controversy can be brought within the description "clerical or arithmetical error". A clerical or arithmetical error is an error occasioned by an aecidental slip or omission of the court. ""<; It represents that which the court never intended to s_ay.

It is an error apparent on the face of the record and does not depend for its discovery on argument or disputation. An arithmetical error is a mistake of calculation, and a clerical error is a mistake in writing or typing.

Master Construction Co. (P) Ltd. v. State of Orissa and A not her.(')

The appellant points out that he invoked the inherent power of the High Court saved by s. 482 of the Code and that notwithstand- H ing the prohibition imposed by s. 362 the High Court had power to

griint relief. Now it is wen settled that the inherent power of the

court cannot be exercised for doing that which is specifically prohibited by the Code.

Sankatha Singh v. State of U.P.( 1) It is true that the prohibition in s. 362 against the Court altering or reviewing its judgment is subject to what is "otherwise provided by this Cod.; or by any other law for the time being in force".

Those words, however, refer to those provisions only .where the Court has be.en expressly authorised by the Code or other law to alter or review its judgl)lent.

The inherent power of the Court is not contemplated by the saving provi$.iQn contained in section 362 and, therefore, the attempt to invoke that power can be of no avail. ,_

The High Court, in our opinion, is right in decliajng to entertain the application.

The appeal must be dismissed. But we may observe that anything said by the High Court in the criminal proceeding agai'nst Kailash Chandra Jain should not be allowed to influence the judgment of the court in the civil suits mentioned above or in any proceeding arising therefrom.

The appeal is dismissed.

N.V.K.

Appeal dismissed.

(I) A.I.R. 1962 SC 1208.

SOORAJ DEVI

PYARE LAL AND M'R

January 8, 1981

R. S. SARKARIA

R. S. PATHAK, JJ.

Code of Criminal Procedure, 1973

S. 362

s. 482

Section 362

Code of Criminal Procedure, 1973

section 448

Indian Penal Code

section 482

Code of Criminal Procedure, 1973

[1966] 3 S.C.R. 99

section 482

section 362

section 362

Kameshwar Prasad

Pramod Swarup

S. K. Jain

PATHAK

Allahabad High Court

Kanpur

South India Trading Company

Jethmal Laxmichand

Khem Raj

Sooraj Devi

Kailash Chandra Jain

Pyare Lal

Pyare Lal

8th October, 1965

Kailash Chandra Jain

s. 448

Indian Penal Code

1st September 1970

21st July, 1978

Higla Court

s. 482

Code of Criminal Procedure

Kailasil Chandra Jain

1st September, 1970

5th January, 1979

Kailash Chandr.!_ Jain

South India Trading Compa'ny

Kail ash Chandra Jain

Section 362

Code of Criminal Procedure

s. 482

s. 362

s. 362

section 362

N.V.K.


P. KASILINGAM v.

P.S.G. COLLEGE OF TECHNOLOGY

January S, 1981

[Y. V. CIIANDRACHUD, C.J., A. P. SEN AND BAHARUL !SLAM, JJ.J

The Tamil Nadu Private Colleges (Regulation) Act, 1976, sections 20, 22, 39 and 40, scope of-Competence of the Governrncnt in dealing with an appeal under section 20 of the Act to come to its own conclusoion and even -f contrary to tire findings of the enquiry officer-Rules of natural justice as enjoined by section 39 of the Act must be followed by the Government while disposing of an appeal in a disciplinary proceeding-While adjudicating upon the claim to payment of back wage.r the employer is entitled as a matter of law to adjustment of equities between the parties by an account being taken of the &alaT)' earned by the discharged employee elsewher, e-Constitution of India, Article 226, writ of certiorari, intention behind, issuance of.

D Allowing the appeal and remitting the matter to the Government for

adjudication of the claim for back wages, the Court~

HELD: {!). The manner in which the letter of resigr1ation was obtained from the appellant together with the letter of apology, just before the departmental enquiry was to commence suggests that they were integral parts of the same transaction. It was somewhat unusual for a delinquent officer to be called to the residence of the Correspondent of the College along with the Principal and to have the two documents signed by him, as a condition for dropping the enquiry. The submission of letter of apology, which amounted lo an admission of guilt, along with the uru:onditional letter of resignation, was

part of a deal between the management and the appellant.

It was meant to act as an inducement for the enquiry not to be proceeded with. The management wanted to dispense with tho services of the appellant. The Government was, therefore, justified in holding that if the appellant placed in such circumstances submitted his resignation, it would not necessarily give rise to an.....,.._ inference that his act in doing so was voluntary. The Government in dealing - \ with an apreal under section 20 of the Tamil Nadu Privat<l Colleges (Regulation) Act, 1976 was, at any .rate, entitled to come to that conclusion.

[494C-F]

(2) It is open to a Government servant to make his resignation operative from a future date and to withdraw such resignation. bef,>re its acceptance.

The services of a Government servant normally stand terminat:ed from the date on which the letter of resignation is accepted by the appropriate authority, unless there is any law or statutocy rule governing the conditions of service to tbe contrary. There is no reason why the same principle should not be applicable to the case of any other employee. (497 ErFJ H Rai Kumar v. Union of India, (1968] 3 SCR 857, followed.

Union of ndia v. Shri Gopal Chandra Misra & Anr., (1978] 3 SCR 12, distinguished.

(3) Ordinarily the Government must, in all cases, before it comes to a contrary conclusion, as a matter of course, give the parties the opportunity of making their representations before taking a decision. In the instant case, the Government acted in breach of the rule of natural justice inasmuch as there was on its part non-compliance of the requirements of clause ( 1) of subsec. (2) of section 39 of the Tamil Nadu Private Colleges (Regulation) Act,

1976. Ho\vever, remitting the appeal in this particular case to the Government for a re-hearing would really serve no usual purpose inasmuch as

(i) the charges levelled a-gainst the appellant were not of such a nature as would merit his dismissal from service,

(ii) on the contrary, it could easily be visualised that even if the appeal were to be sent back to the Government, it would either exonerate the appellant or may let him off \vith a minor penalty.

[497 F-G, 498 B, C-D)

(4) Sub-section (!) section 40 Of the Act makes deposit of arrears of salary and allowances upon reinstatement by the appellate authority referred to in section 20 of the Act a pre-condition to the preferment of an appeal by the management under section 22. Only when such an appeal is preferred by the management the Tribunal is invested with jurisdiction to make a direction under sub-section ( 1) of section 40 that the management shall deposit the arrears of pay and allowances within such time as it directs. In that event, it is of course, open to the management to raise a dispute according to subsection (3) Of section 40 of the Act as to the amount to be deposited under sub-section (1). In the instant case, however, since there is no appeal filed by the management under section 22 of the Act, the question of making a direction in terms of sub-section (1) of section 40 of the Act does not arise.

[498 F-H]

(5) It was, however, open to the Government whl1e allowing the appeal

preferred by the appellant under section 20 of the Act to make a direction E not only for his reinstatement but also for payment of all his arrears of pay and a11owances. The words "make such order as it deems just and equitable'~ read in the context of sub-clause (iii) thereof. "considering all the circumstances of the case", occurring in sub-section (2) of section 39 of the Act, are wide enough to include the power to make such a direction. Normally, the reinstatement of a person in service should carry a direction for payment of his bock wages.

In the instant case, the Government has made no direction F in that behalf. [498 H, 499 A]

(6) The management was entitled, as a matter of 1aw, to adjustment of equities bet\veen the parties by an account being taken of the salary earned by the appellant elsewhere or of a.ny income derived by him from any source whatsoever. [499C-D]

CiVIL APPELLATE JURISDICTION : Civil Appeal No. 493 Of 1980.

' Appeal by Special Leave from the Judgment and Order dated 11-10-1979 of the Madms High Court in W.P. No. 16/79.

R. K. Garg, Vimal Dave and R. C. Misra for the Appellant.

T. S. T. Krishnamurthy Iyer, A. T. M. Sampath and P. N. Ramalingam for respondent No. 1.

A. V. Rangam for Respondent No. 2.

The Judgment of the Court was delivered by

SEN, J.

This appeal by special leave is directed against a judgment of the Madras High Court dated October 11, 1979 quashing an order of the State Government of Tamil N adu dated December 20, 1978 passed in appeal preferred by the appellant under s. 20 of the Tamil Nadu Private Colleges (Regulation) Act, 1976, hereinafter referred to as 'the Act', by which the Government held that the resignation submitted by him on March 19, 1976 from his post as Lecturer in the Department of Electronics in P. S. G. College of Tech- -~

nology, Coimbatore, was not voluntary and, therefore, directed his reinstatement with immediate effect.

The facts giving rise to the appeal are these : On February 28, 1976, the appellant while he was on probation as a Lecturer in the Department of Electronics in P.S.G. College of Technology, Coimbatore, was subjected to a departmental enquiry for den!liction of duty and irresponsible conduct by the Principal and the two charges levelled against him were (I) on February 18, 1976 he did not allow one batch of students of III-B Techonology Class to complete their laboratory experiments in the test that was being held from 1.45 p.m. to 4.30 p.m. and further that he left the college before 4.30 p.m. without collecting the answer books of the students who had carried out their laboratory experiments in that test and without signing the attendance register, and (2) he failed to conduct the laboratory class for III-B Technology students which was to be held on February 25, 1976.

On March 3, 1976, the appellant submitted his explanation refuting the charges framed against him and prayed that an oral enquiry be held.

The Principal accordingly appointed an enquiry officer who was to commence the enquiry on March 13, 1976, but at his request it had to be adjourned to 9.0 a.m. on March 19, 1976. ~\ On March 19, 1976 at 8.30 a.m., i.e., just as th! departmental enquiry was to commence, the appellant accompanied by the Principal of the College came to the Correspondent's residence and handed over two letters addressed to the Principal, first was a letter of apology and the other a letter of resignation. The letter of apology submitted by him was virtually an admission of guilt and contained a promise that he would reform in future and give no further cause for complaint. It reads :

"I apologize sincerely for thes~ lapses on my part. I assure you that hereafter I will conduct myself in conformity with the rules and the regulations of the institution and to the satisfaction of my superiors."

. ,_

The letter of resigntion submitted along with the written apology signified his intention to leave the service of the respondent with a request that his services may be retained for six months. It was in these terms :

"I hereby tender my resignation as Lecturer. I request B that I may be relieved of my duties on 19th September, 76."

There is an endorsement of even date by the Principal at the foot of the letter of resignation by which he accepted the resignation but directed that the appellant as desired by him, be relieved from duties with effect from September 19, 1976. He further directed that the enquiry into the charges levelled against the appellant be dropped.

On April 5, 1976, the Principal, however, issued a relieving order dispensing his services forthwith on payment to him salary for a period of six months by a cheque for Rs. 5,165.53 i.e., upto the period ending on September 19, 1976 because the date September 19, 1976 fell in the midst of the academic session 1976-77 and would have disrupted the normal working of the College.

The appellant preferred an appeal under s. 20 of the Act tG the Government on September 27, 1976.

The Tamil Nadu Private Colleges (Regulation) Act, 1976 is E enacted, inter alia, for the regulation of the conditions of service of teachers employed in private colleges. The avowed purpose and object of the Act is to confer protection to the teachers of private educational institutions against arbitrary action of or victimisation by the management of such educational institutions, Section 20 of the Act, insofar as material, provides : F If' "20. Any teacher or other person employed in any private college-

(a) who is dismissed, removed or reduced in rank or whose appointment is otherwise terminated,

(b) by any order, may prefer an appeal against such order to such authority or officer as may be prescribed .... ".

The Government directed the Addi. Director of Technical Education to hold an enquiry into the allegations made by the appellant that

his letter of resignation was not voluntary but had been obtained by

' B the respondent by coercion.

It appears that the Addi.

Director, Technical Edncation held an enquiry and afforded the parties an opportunity to lead their evidence and ultimately submitted a report holding that the allegations made by the appellant were baseless. The Government, however, by their order dated December 20, 1978 did no~ accept the report of the Addi. Director of Technical F..Pucation and

held that the letter of resignation submitted by the appellant was not voluntary.

T, he Government, accordingly, allowed the appeal and directed the reinstatement of the appellant with immediate effect. The respondent challenged the impugned order of the Government by a writ petition. The High Court has by its judgment under appeal quashed the mder of the Government.

There is no manner of doubt that the circumstances attendant upon the submission of the letter of resignation and the letter of apology on March 19, 1976 are somewhat strange. The manner in which the

letter of resignation was obtained from the appellant on that day at 8.30 A.M. together with his letter of apology, just before the departmental enquiry was to commence at 9.00 AM., clearly suggests that they were integral parts of the same transaction. It was somewhat unusual fm a delinquent officer to be called to the residence of the Correspondent of the College along with the Principal and to have the two documents signed by him, as a condition for dropping the enquiry.

It appears that the submission of letter of apology, which virtually amounted to an admission of guilt, along with the unconditional letter of resignation, was part of a deal between the management and the appellant. It was meant to act as an inducement for the enquiry not to be proceeded with. One is left with the unfortunate impression that the management wanted to dispense with the services of the appellant. The Government was, therefore, justified in holding that if the appellant placed in such circumstances submitted his resignation, it would not necessarily give rise to an inference that his act in doing so was voluntary. The Government in dealing with an appeal under s. 20 of the Act was, at any rate, entitled to come to that conclusion.

The stand of the Government before the High Court is reflected in para 8 of its return, which reads :

"8. As for averrnents contained in para 16 of the Affidavit it is submitted that a close examination and on comparison of the exhibits R9 and Rl 0 with exhibits R20 and R21, it is seen that both the apology and resignation letters seem to have been typed by the management themselves.

It is also clear that the correction in the apology letter was carried out in handwriting of the Advocate for the management.

Therefore, these circnmstances were taken into

-f •

account and in view of the position, the Government independently came to a conclusion on materials available that the resignation letter was obtained by force. Further, there will be no necessity to give resignation and apology letters simultaneously."

Regrettably the High Court has in allowing the writ petition converted itself into a court of appeal and examined for itself the correctness of the conclusion reached by the Government and decided what was the proper view to be taken or the order to be made. It adverts to the three circumstances relied upon by the Government for reaching the conclusion that the letter of resignation was not voluntary and not accepting the report of the enquiry officer.

It observes that 'though Prof. Shamnughasundaram, Head of the DeJl'llrtment, had been examined dnring the enquiry, there was no specific question put to him during his cross-examination that the two letters had been typed by him.' It further observes that 'there was absolutely no evidence at all as to who typed the letters in question and on whose typewriter they were got typed'. It observes that 'the Govermncnt was also aware of the lack of evidence on this aspect of the case and it was for this reason they have not made any specific averment in the counter affidavit. They merely say the letters seem to have been typed by the management themselves.

This appears to be a mere conjecture and a finding based on such a conjecture cannot at all be supported as based on any acceptable evidence'. It then proceeds to refute the suggestion of the Government that the corrections made in the two letters were in the handwriting .of the Advocate appearing for the management, and goes on to say that 'the Government once again merely surmises that the letter contained corrections by the Advocate for the management'. It also rejects the suspicion attaching to the submission of the letters of resignation and apology simultaneously by expressing that 'we do not see how the Government can delve into the mind of the management and find out whether there was necessity to give the letter of resignation and apology simultaneously'.

The Government was competent to come to the conclusion that G it did upon the facts appearing on the record. The High Court could not speculate as to what were the 'circumstances' which outweighed the finding recorded by the Add!. Director of Technical Education holding that the appellant had voluntarily submitted his resignation.

The fact remains that the report submitted by him was not accepted by the Government and it came to the conclusion that the letter of H resignation could not be treated to be voluntary. The Govermnent was circumspect in viewing the circumstances surrounding the sub-

mission of the letter of resignation with certain amount of suspicion.

The finding reached by the Government does not necessarily mean that the letter of resignation was obtained from the appellant under coercion. It may well be that the appellant was acting under an element of compulsion for he had become a victim of the situation brought about by the holding of a departmental enquiry and if the appellant placed in such circumstances submitted a letter of resignation it would not necessarily give rise to an inference that his act in doing so was voluntary.

The High Court has viewed the matter from a wrong perspective.

In quashing the order of the Government, the High Court observes that its finding is based on no evidence but proceeds on conjectures and surmises.

In doing so, it ignores lhe long line of decisions starting from T. C. Basappa v. T. Nagappa & Anr.(') laying down that the supervision of the High Court exercised through writs of certiorari goes on two points. One is the area of jurisdiction •and the qualifications and conditions of its exercise, the other is the observance of law in the course of its exercise.

Such writs are obviously intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record •and such act, omission, error or excess has resulted in manifest injustice.

It was rightly observed in Basappa's case that a writ of certiorari will not issµe as a cloak of an appeal in disguise. It does not lie to bring up an order or decision for re-hearing. It exists to correct error of law when revealed on the face of an order or decision or irregularity or absence of or excess of jurisdiction when shown.

It is clear beyond doubt that the High Court had transgressed its jurisdiction under Art. 226 of the Constitution by entering upon the merits of the controversy by embarking upon an quiry into the facts

as to whether or not the letter of resignation submitted by the appel lant was voluntary.

The question at issue as to whether the resignation was voluntary was a matter of inference to be drawn from other facts.

The question involved was essentially one of fact. It cannot be questioned that the Government undoubtedly had the jurisdiction to draw its own conclusions upon the material before it.

In the view that we take of the case, the submission of the learned counsel for the appellant based on the majority decision in Union of

(I) [1955] 1 SCR 250.

.""' '

India v. Shri Gopal Chandra Misra & Anr.(1) does not really arise. It is urged that it is open to a civil servant to tender his resignation on a prior date to take effect on a subsequent date specified and, therefore, it could always be withdrawn before the expiry of such date. There can be no dispute with the proposition, but the decision on which reliance is placed is cleady distinguishable on facts. The letter addressed by Satish Chandra J., as he then was, to the President signifying his intention to demit the office of a Judge was couched in entirely different language. It ran thus :

"I beg to resign my office as Judge High Court of Judi cature at Allahabad.

I will be on leave till 31st of July, 1977. My resignation shall be effective on 1st of August, 1977."

The Court in construing the words 'resign his office' in proviso (a) to Art. 217(1) of the Constitution held that a High Court Judge's letter addressed to the President intimating or notifying his intention to resign his office of a Judge on a future date, does not and cannot sever him from the office of the Judge, or terminate his tenure. It may be conceded that it is open to a servant to make his resignation operative from a future date and to withdraw such resignation before its acceptance. The question as to when a Government servant's resignation becomes effective came up for consideration by this Court in Raj Kumar v. Union of India('). It was held that the services of a Government servant normally stand terminated from the date on which the Jetter of resignation is accepted by the appropriate anthority, unless there is any lw or statutory rule governing the conditions of service to the contrary. The.fe is no reason why the same principle should not :ipply to the case of any other employee.

,..,-- - We are, however, constrained to observe that the Government acted in breach of the rules of natural justice inasmuch as there was on its part non-compliance of the requirements of cl. (1) of sub-s. (2) of s. 39 of the Act, which reads :

"39(2) On receipt of any such appeal, the appellate authority shall, after-

(i) giving the parties an opportunity of making their representations,

(ii) . . . . . . . . . . . . . . . . . . . (iii) ................. .

make such order as it deems just and eqnitable." H

(I) [19781 3 SCR 12.

(2) [1968] 3 SCR 857.

A II is contended on behalf of the respondent that the High Court instead of resting its decision on merits, should have directed the Government to re-hear the appeal under s.20 of the Act. It is submitted that there was a duty cast on the Government to hear the respondent since the Addi. Director of Technical Education had on the basis of the evi- 8 dence adduced, come to a definitive finding that the letter of resignation submitted by the appellant was volunlary, before it came to a contrary conclusion.

The contention has considerable force. It is needless to stress that ordinarily the Government must, in all such cases, as a matter of course, give the parties the opportunity of making their representations before taking a decision. c In our judgment it would however, really serve no useful purpose in remitting the appeal in this particular case to the Government for a re-hearing. It is not seriously disputed before us that the charges levelled against the appellant were not of such a nature as would merit his dismissal from service.

On the contrary, it can easily be visuallsed that even if the appeal were sent back to the Government, it would either exonerate the appellant or may let him off with a minor penalty. The better course would be to restore the order of the Government for the reinstatement of the appellant in service, having regard to the facts and circumstances of the case.

There still remains the question of back-wages. It is sought to be urged on behalf of the appellant that upon such reinstatement he would be entitled under the terms of sub-s. (1) of s.40 of the Act to all his arrears of pay and allowances. We are afraid, we can make no such direction in this appeal. There is nothing on record to show that any such appeal has been filed by the respondent.

Sub-section

(1) of s.40 makes deposit of arrears of salary and allowances upon reinstatement by the appellate authority referred to in s.20 of the Act, a pre-condition to the preferment of an appeal by the management under s.22. Only when such an appeal is preferred by the management the Tribunal is invested with jurisdiction to make a direction under sub-s.(1) of s.40 that the management shall deposit the arrears of pay and allowances due to the appellant within such time as it directs. In that event, it is of course, open to the management to raise a dispute according to sub-s.(3) of s.40 of the Act as to the amount to be deposited under sub-s. (1). In the instant case, however, since there is no appeal filed by the respondent under s.22 of the Act, the question of making a direction in terms of sub-s.(1) of s.40 of the Act does not arise.

It was, however, open to the Government while allowing the appeal preferred by the appellant under s. 20 of the Act to make a

...

direction not only for his reinstatement but also for payment of all his arrears of pay and allowances.

The woJ:>Js 'make such order as it deems just and equitable' read in the context of cl. (iii) thereof:

"(iii) considering all lhe circumstances of the case" occurring in sub-s. (2) of s.39 of the Act, are wide enough to include the power to make such a direction. Normally, the reinstatement of a person in service should carry a direction for payment of his back-wages.

We regret to find that the Governmenl has made no direction in that behalf.

We are, therefore, constrained to remit the matter to the Government. While adjudicating upon the claim of lhe appellant to t payment of all his arrears of pay and allowances, the Government shall give an opportunity to the respondent to have its say in the matter. The respondent is entitled, as a matter of law. it adjustment of equities between the parties by an account being taken of the salary earned by the appellant elsewhere or of any income derived by him from any source whatsover, between the period from September 19, 1976 till the date of reinstatement. The appellant had a duty to mitigate his loss and it cannot be that during the aforesaid period he remained idle throughout.

In the result, the appeal succeeds and is allowed. The judgment of the High Court is set aside and the order of the State Government

for reinstatement of the appellant in service is restored. We remit the appeal to the Government to decide as to whether the appellant is E entitled to all his arrears of pay and allowances upon his reinstatement in service, and direct that while dealing with the question, it shall afford the parties full opportunity to raise all such contentions as they may be advised and lead their evidence thereon, for determination of the amount payable. There shall be no order as to costs.

, W S.R.

Appeal allowed and matter remitted to Government.

P. KASILINGAM

S.G. COLLEGE OF TECHNOLOGY

A. P. SEN

sections 20, 22, 39 and 40

section 20

section 39

Constitution of India

Article 226

section 20

(1968] 3 SCR 857

(1978] 3 SCR 12

section 39

section 40

section 20

section 22

section 40

section 40

section 22

section 40

section 20

section 39

CiVIL APPELLATE JURISDICTION

Madms High Court

R. K. Garg

Vimal Dave

R. C. Misra

T. S. T. Krishnamurthy Iyer

A. T. M. Sampath

P. N. Ramalingam

V. Rangam

SEN

s. 20

February 18, 1976

February 25, 1976

March 3, 1976

March 13, 1976

March 19, 1976

19th September, 76

September 19, 1976

April 5, 1976

s. 20

September 27, 1976

Section 20

December 20, 1978

s. 20

Shamnughasundaram

Basappa

Art. 226

[1955] 1 SCR 250

Satish Chandra

High Court of Judi cature at Allahabad

31st of July, 1977

1st of August, 1977

Art. 217(1)

s. 39

[1968] 3 SCR 857

s. 20


STATE OF GUJARAT

CHAMANLAL MANJIBHAI SONI

January 8, 1981

[S. MURTAZA FAZAL Au AND A. VARADARAJAN, JJ.]

Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974, .ection SA, interpretation of.

}i{aintaining the order of the High Court quashing the detention, the Court

HELD : (I) The detention under section 3 of the COFEPOSA is only for the purpose of preventing smuggling and all the grounds, \\'hether there are one or more, \\'Ould be relatable only to various activities of smuggling and no other sepa-rat'e ground which could deal with matters other than smuggling could be conceived of because the Act of smuggling covers several activities each forming a separate ground of detention and the Act deals with no other act except smuggling.

Indeed, if the interpretation, namely, that Section 5A contemplates that there should be only one' ground which relates to the violation of section 3 of the Act and if that ground is irrelevant while the other grounds which relate to the same subject rnatter are clear and specific the detention order will not stand vitiated, is accepted, then section 5A will become otiose. [501 H, 502 A-q

(2) Whenever allegations of smuggling are made against a person who is sought to be deta-ined for preventing further smuggling, there is bound to be one act or several acts with the con1mon object of smuggling gocxls wltlch is sought to be prevented by the Act.

Jt would, therefore, not be correct to My that the object of the Act constitutes the ground for deten tion. If this is so, in no case there could be any other ground for detention, except the one which relates to smuggling. This is neither the object of the Act nor ca!l such an object be spelt out from the language in which sec~ tion 5A is couched. What section 5 (A) of the Act provides is that where there are a number of grounds of detention covering various activities of the detenu spreading over a period or periods, ea-ch activity is a separate ground by itself and if one of the grounds is irrelevant, vague or unspecific, then that will not vitiate the ordep of detention on the other grounds.

[502 H, 503 A)

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 91 of

...

19m ~

Appeal by Special Leave from the Judgment and Order dated 22-12-1978 of the Gujarat High Court in Criminal Application No. 245/78.

M. N. Phadke and M. N. Shroff for the Appellant.

J. G. Shah, Vineet Kumar and Ashok Kaul for the Respondent.

The Judgment of the Court was delivered by

FAZAL ALI, J.-This appeal by special leave is directed against . tbe judgment of the Gujarat High Court dated December 22, 1978 in a Criminal Habeas Corpug Writ for quashing the order of detention PMl!ed against the detenu. 'I1Je detenu was arrested on October 20, 1978 and grounds of detention were sefved on him that very day.

The High Court allowed the Writ Petition mainly on the ground that, as one of the grounds, namely, ground No. 7 was irrelevant, the entire order of detention is vitiated. In corning to this finding, the High Court, has put, in our opinion, a wrong interpretation on Sec. 5 (A) Of the Conservation of Foreign Exchange and Prevention of Smuggling

Activities Act, 1974 (hereinafter referred to as the Act). Section SA reads thus:

,,.: . . .

"SA. Ground9 of detention severable.-Where a person has been detained in pursuance ol' an order of detention under sub-section (1) of section 3 which has been made o'n two or more grounds, such order of detention shall be deemed to have been made separately on each of snch grounds and accordingly-

( a) such order shall no't be deemed to be invalid or inoperative merely because one or some of the grounds is or are-

(i) vague,

(ii) non-existent,

(iii) not relevant,

(iv) not connected or not proximately connected with

S'Uch person, or ·~

(v) invalid for any other reason whatsoever, and it is not therefore possible to bold that the Government or officer making such order would have been satisfied as provided in sub-section

(1) of section 3 with reference to the remaining ground or grounds and made the order of detention,

(b) the Government or officer making the order of detention shall be deemed to have made the order of detention under the said snb-section ( 1) after being

satisfied as provided in that sub-section with reference to the remaining ground or grounds."

The High Court seems to think that Sec. 5 (A) contemplates that there should be only one ground which relates to the violation of

l~-57 SCI/81

SUPREME COURT REPORTS

[198]\ 2 $.C..R.

Sec. 3 of the Act and if that gronnd is irrelevant and the other grounds which relate to some other subject matter are clear and specific, the detention will not stand vitiated. In our opinion, the argument of the High Court with due respect amounts to begging the question because the detention under Sec. 3 of the Act is only for the purpose of preventing smuggling and all the grounds whether there are one or more, would be relatable only to vrious activities of smuggling and we cannot conceive of any other separate ground which could deal with matters other than smuggling because the act of smuggling covers several activities each forming a separate ground of detention and the Act deals with no other act except smuggling. Indeed, if the interpretation of the High Court in respect of Sec. S(A) is accepted. then Sec. 5/\. will become otioe. While construing section 5 (A) the High Court observed thus :-

"But in the present case the subjective satisfaction i; based on one ground, that is, for preventing the present petitioner from smuggling goods and in support of that ground various statements have been relied upon and the totality of consideration of all these statements has resulted in the subjective satisfaction of the detaining authority when it passed the impugned order of detention. Now for these totality of circumstances considered by the detaining authority, if one irrelevant or unsustainable element has entered in the process of subjective satisfaction, the process of arriving at subjective satisfaction being comprehensive, the said element would disturb the entire process of subjective satisfaction and consequently, even if one statement which could not have been relied upon appeared before the mind's eye of the detaining authori!j, it could easily be seen that its subjective satisfaction would be vitiated and its final decison would rest upon a part of the material which is irrelevant."

The process of reasoning adopted by the High Court is absolutely unintelligible to us.

It is manifest that whenever the allegations of smuggling are made against a person who is sought to be detained by way of preventing further smuggling, there is bound to be one act or several acts witl1 the common object of smuggling goods which is sought to be prevented by the Act. It would, therefore, not be correct to say that the object of the Act constitutes the ground for detention. If this is so, in no case there could be any other ground for detention, except the one which relates to smuggling. In our opinion, this is neither the object of the Act nor can such an object be spelt ou! from the language in which Sec. SA is couched. What the Act provides is that where there are a number of grounds of detenfion covering various

f i

I I I l

activities of the detenu spreading over a period or periods, each activity is a separate ground by itself and if one of the grounds is irrelevant, vague or unspecific, then that will not vitiate the order of detention. The reason fo'r enacting Sec. 5 (A) was the fact that several High Courts took the view that where several grounds are mentioned in an order of detention and one of them is found to be either vague or irrelevant then the entire order is vitiated because it cannot be predicted to what extent the subjective satisfaction of the autho~ rity could have been influenced by the vague or irrelevant ground. It was to displace the basis of these decisions that the Parliament enacted Sec. 5 (A) in order to make it clear that even if one of the

grounds is irrelevan.t but the other grounds are clear and specific that by itself would not vitiate the order of detention. Mr. G. A. Shah

appearing for the detenu frankly conceded that he is not in a position to support the view taken by the Gujarat High Court on the interpretation of Sec. 5 (A). He also stated that he does not want to challenge the vires of Sec. 5 (A) of the Act. Mr. Phadke has frankly slated that he only wants the law to be settled in the peculiar circumstnces of this case and the order of the High Court quashing the detention need not be disturbed. We, therefore, hold that t)le view taken by the High Court on interpretation of Sec. 5(A) is legally erroneous and is hereby overruled. With these observations the appeal is disposed of with-. out disturbing the order. of the High Court quashing the order of detention.

S.R.

Appeal dismissed.

STATE OF GUJARAT

CHAMANLAL MANJIBHAI SONI

January 8, 1981

A. VARADARAJAN, JJ.

section 3

Section 5A

section 3

section 5A

section 5

M. N. Phadke

M. N. Shroff

J. G. Shah

Vineet Kumar

Ashok Kaul

FAZAL ALI

Sec. 5

Activities Act, 1974

section 3

section 3

Sec. 5

Sec. 3

Sec. 3

Sec. 5

section 5

Sec. 5

Parliament

Sec. 5

G. A. Shah

Gujarat High Court

Sec. 5

Sec. 5

Phadke

Sec. 5(A)