.838 SUPRE!v!E COCR T REPORTS [J 964) VOL.

BASTI SUGAR .MILLS LTD.

RAM UJAGAR A'.'\D OTHERS

(P. B. GAJg]'i; DRAOADKAR, K. N. WA.r;; OHOO,

K. C. DAS GUPTA, J.C. SIIAfl and

N. RAJAOOPALA AYYANOAI~ JJ.)

Industrial Diptdt!--'l'ermint'Jtion uf Serri~-' Employr.r' and 'workman' t1ta11ing of-Infringtmcnt vf funda1nfnlal right

lo carry on tra<le-Uttar l'rndult 1"du-<lrial J)i, put<a Act, 1947 (U.P. XXVJll of 1947). '' 2 (i) (iv).•· 2 (Z).

An Industrial Di.pule arose bctwren tho appellant ad the respondent~ in respect of t\\'O rnatti:-rs, nan1ely (I) for

terminatin~ the services of the respondents (2) and for paying the respondents at a rate lower than Rs. 55,'- per month which was the miniinum prescribed 'vage for workmen of \tacuum Pan Sugar Factorirs of Uttar Pradesh under the Standin~ Orders dated Oct<>Uer 3, 1958, issued by the Government of

Uttar Pradesh. The dispute was refrrrcd to the Labour Court.

The appellant's case was that the work of removal of press mud had been given by the company to a contractor and these respondents were employed by that contractor to do that work.

Their services were terminated by the contractor .and the management had nothing to do with these workmen.

Therefore the appellant contend"! that the management con1pany did not come within the definition of "employer" under the provisions of littar Pradesh Industrial Di1putes Act, 1947. The respondents succreded in the Labour Court and hence this appeal.

Htld (I) that the respondent> arc workmen within the meaning of s. 2 ( Z), being perso1 s employed in the industry to do manual work for reward, and the appellant is the employer within the meaning of sub-cl. (IV) of s. 2 (i) as the workman was employed by a contactor with whom the appellant company had contracted in the course of conducting the industry for the execution by the said contractor of the work of removal of press mud which i1 ordinarily a part of the indUltry.

(2) that the imposition of restricti<;>~' on the appellan~'s right to carry on trade under the definmon of employer m sub-cl, (iv) of s. 2 (i) of the Act is in the intere<ts of the General public and as such the appellant's fundamental right under Art. 19 (1) (g) of , the Constitution has not been contravened.

(3) that in the ordinary grammatical sense the words "employed by a factory" which occur in the definition of the word "workmen" in the Standing Orders include every person who is employed to do the work of the factory and they are wide enough to include workmen employed by the contractors of the factory also.

The appellant was not allowed to raise a new plea for tho first time in this Court.

llahalakshmi Sugar Mills Company v. Their Workmtn, 1961 (II) L, L.J. 623, referred to.

CrvIL APPELLATE . fURISDIOTION : Civil Appeal No. 225 of 1963.

Appeal by special leave from the award dated November 26, 1902 of the Labour Court, Lucknow, in Adjudication Case No. 68 of 1962.

G.S. Pathak and D.N. Mukherjee for the appellant. M. Rajagopalan and /(. R. Chaudhuri for the r<!spondents.

1963. April 4. The Judgment of the Court was. delivered by

DAS GUPTA J.-The twentyone persons who are the respondents in this appeal were engaged from November 21, 1958, to February 5, 1959, in the work of removal of press-mud in the sugar factory belonging to the appellant. On February 6, 1959, their services were terminated. It also appears that for the period of work of November 21, 1959, to February 5, 1959, they were paid wages at rates lower than Rs. 55/- per month which was

Basti Su:ar Mills

Ltd.

•• Ram Ujaz1r

n., Gufll• J.

BaJti Sugar ,\fills

Ltd,

" Ram Ujagar

Das Gu/J.'• J.

the mm1mum prescribed wage for workmen of vacuum pan sugar factori<'S of Uttar Pradesh under the Standing Orders dated October :~. I !151!; issued by the Government of Uttar Pradesh.

On .July 31, 1962, the Governor of Uttar Pradesh referred to the Labour Court, Lucknow, a dispute between these respondents and the Basti Sugar Mills Ltd. In this the Basti Sugar Mills Ltd., was described as the employers and the respondeuts as their workmen.

The mailers in dispute were thus mentioned in the order of reference : -

"(!) Whether the employers have terminated the services of their workmen, named in the Annexure, will effect from February ti, 1959 legally and/or Justifiably ? If not, to what relief arc the workmen concerned entitled ~

(2) Whether the action of the employers in paying to the workmen; named in the Annexure to issue No. 1, llt rates lower than the minimum prescribed wage of Rs. 55 per month, for the period from November 21, 1958 to February 5, 1959 is legal and/or justified. If not, to what relief are the workmen concerned entitled and with what details."

The appellant contended that these 21 workmen were not employed by the management of the sugar mills. The appellant's case was that the work of removal of pressmud had been given by the Company to a contractor, Banarsi Das, and that these 21 men were employed by that contractor to do the work.

The management of the Company, it was said, had nothing to do with these men.

Banarsi Das left the work on February G, 1959, and the termination of the services of these workmen was made by him. The respondents through their

Union contended, on the contrary, that they had been employed directly by the management of the Company.

On a consideration of the evidence the Labour Court accepted the appellant's case that the work of removal of press-mud was being done through the contractor Banarsi Das and it was Banarsi Das under whom these 21 persons were employed. It further held that in view of the definition of "employer" in sub-cl. (iv) of s. 2 (i) of the Uttar Pradesh Industrial Disputes Act, 194 7, the appellant wa~ in law the employer of these 21 persons.

It held accordingly that they were entitled to the benefit of the ::, tanding Orders regarding minimum wages and were also entitled to reinstatement. In that view the Labour Court ordered, (a) payment to the •..vorkmen at the rate of Rs. 55/- per month from February 6, 1959 upto the end of the crushing season of 1958 59;

(b) reinstatement of the workmen if not already employed by the Company in the crushing season of 1962-63; and (c) payment of difference of wages computed at the rate of Rs. 55/· per month and Re. I/· per day in the case of Ram Ujagar and 14 anaas per day in the case of other workmen for the period November 21, 1958 to February 5, 1959.

Against this order of the Labour Court the present appeal. has been filed by the Company with the special leave of this Court.

Three points are raised by Mr. Pathak in support of the appeal. The first is that the definition of"employer" in subcl. (iv) of s. 2 (i) of the Act does not make the appellant, the employer of these workmen. The second . point, urged rather faintly, is that if the above definition be so construed as to make the contractor's labourers, workmen of the company the definition should be held to violate the provisions of Art. 19 (1) (g) of the Constitution,

I!ld3

Basti Sugar ,\lills

Ltd. v.

Ram Ujjagar

DaJ G11.pta J,

B4Sti Su1ar Mil/$

Lid.

Ram Ujota'

Du Gup111 J.

The third point urged is that, In any case, the respondents arc not entitled to the benefit of the Standing Orders which fixed the minimum wage for the workmen of the Vacuum Pan Sugar Factories of Uttar Pradesh.

Section 2 (i) of the Act contains an inclusive definition of employer. The effect of subcl. (iv) of s. 2 (i) is that where the owner of any industry in the . course of or for the purpose of conducting the industry contracts with any person for the execution by or under such person of the whole or any part of any work which is ordinarily a part of the industry, the owner of such industry is an employer within the meaning of the Act. Mr. Pathak's su11gestion that the effect of this definition is that the owner of the industry becomes the employer of the contractor is wholly untenable and cau even be described as fantastic to deserve serious consideration. The obvious purpose of this extended definition of the word "employer" is to make the owner of the industry, in the circumstances mentioned in the subclause, the employer of the workmen engaged in the work which is done through contract. The words used in the sub.clause are clearly sufficient to achieve this purpose.

It is true, as pointed out by Mr. Pathak, that the definition of the word "workmen" did not contain any words to show that the. contract labour was included. That however does not affect the pos1t1on.

The words of the definition of workmen in s. 2 (z) to mean "any person (including an apprentice) employed in any industry to do any skilled or unskilled, manual, supervisory, technical or clerical work for hire or rewacd, whether the terms of employment be express or implied" are by themselves sufficiently wide to bring in persons doing work in an industry whether the employment was . by the management or by the contractor of the

2 S.C.R.

SUPREME COllRT REPORTS 843

management. Unless howe'Ver the definition of the word "employer" included the management of the industry even when the employment was by the contractor the workmen employed by the contractor could not get the benefit of the Act since a dispute between them and the management would not be an industrial dispute between "employer" and workmen. It was with a view to remove this difficulty in the way of workmen employed by contractors that the definition of employer has been extended hy sub-cl. (iv) of s. 2 (i). The position thus is: (a) that the respondents are workmen within the meaning of s. 2 (z), being persons employed in the industry to do 'manual work for reward, and (b) they were employed by '!:. contractor with whom the appellant company had contracted in the course of concluding . the industry for the execution by' the said contractor of the work of removal of press-mud which is ordinarily a part of the industry. It follows therefore from s. 2 (z) read with sub-cl. (iv) of s. 2 (i) of the Act that they are workmen of the appellant company and the appellant company is their employer. There is no. substance therefore in the first point raised by the learned . counsel for the appellant.

The second point, viz., that this definition contravenes the appellant's fundamental rights under Art. 19 (I) (g) is equally devoid of substance.

Assuming that the result of this definition of employer in sub-cl. (iv) of s. 2 (i) is the imposition of some restrictions on the appellant's right to carry on trade or business, it cannot be doubted for a moment that the imposition of such restrictions is in the insterest of the general public.

For, the interests of the general public require that the device of the engagement of a contractor for doing work which is ordinarily part of the industry should not be allowed to be availed of by owners of industry for evading . the provisions of the Industrial Disputes Act. That these provisions are in the interests of the general

ilasn Sugar Milts

ltd v.

Ram Uj1gar

Das Gupta J.

. 1963

Ba1ti Suar MiUs

Lld .

•• &zm 1, ja1a'

Das Gupta J.

public cnnot be and has not been disputed. That being the position, the impugned ddini1ion which gives the benefit of the provision of 1he Act to the workmen engaged under a contract in doing work which is ordinarily part of the industry cannot but be held to be also in the interesls of the general public.

This brings us to Mr. Palhak's main contention that in any case the respondents are not 'workmen' within the meaning of the Standing Orders and so cannot get the benefit of the minimum wage prescribed thereby.

In the standing Orders the word "workmen" is defined to mean "any person (including an apprentice) employed by a factory, to do any skilled or uuskilled manual, supervisory, technical or clerical work for hire or reward whether the terms of employment be express or implied" but does not include any person mentioned in els. (i) and (ii). We are not concerned in this case with these clauses. Mr. Pathak argues that on a reasonable construction, the words "employed by a factory" in this definition can only mean "employed by the management of the factory" an<! can not include persons employed by a.contractor of the factory. He points out that this dfinition of 'workmen' in the Standing Orders uses the words "employed by a factory" though the definition of 'workmen' in the Act itself uses the words "employed in any industry" and contends that the words "by a factory" were deliberately used instead of words "in a factory" to exclude , persons other than those employed by the management of the factory from the benefit of the Standing Orders. Neither grammar nor reason supports this argument.

On the ordinary grammatical sense of the words "employed by a factory" they include, in our opinion, every person who is employed to do the work of the factory. The use of the word "by" has

nothing to do with the question as to who makes the appointment .. The reason why "by" was used insiead of "in" appears to be to ensure that if a person has been employed to do the work of the industry, whether the work is done inside the factory or outide the factory, he will get the benefit of the

Standing Orders.

We can also see no reason why the Government in making the Standing Orders would think of denying to some of the persons who fall within the definition of workmen under the Act, the benefit of the Standing Orders.

The Standing Orders were made under s. 3 (b) of the Act under which the State Government may make provision "for requiring employers, workmen or both to observe for such period as may be specified in the order such terms and conditions of employment as may be determined in accordance with the order." The purpose of the order was thus clearly to require employers to observe certain terins and conditions of employment of their workmen as defined in the Act. It is unthinkable that in doing so the Government would want to exclude from its benefit~-parti culary, that of the minimum wage-a class of workmen who would otherwise get the benefit under the definitions of workmen and employer . in the Act itself. No reason has been suggested and we cannot think of any.

We have therefore come the conclusion that the words "employed by a factory" are wi\ie enough to include workmen employed by the contractors of factory also.

Mr. Pathak wanted to raise a new point based on the provisions of cl. (K) of the Standing Orders.

That clause provides that a seasonal workman who has worked or, but for illness or any other unavoidable cause, would have worked under a

Basti Sugr Mills

Ltd. v.

Ram Ujazar

Das Gupta J • .

!ltUri Sugar Mills

Ltd. . •.

~Ml Ujagar

Uas Gupta J.

846 SUPREME COURT REPORTS [lll64J VOL.

factory during the whole of t, he second half of the.last preceding season will be employed by the factory in the current season.

In view of this Mr. Pathak . wants to urge that it will be difficult for the appellant to give effect to the order of reinstatement of these 21 workmen as that would mean getting rid of at least some workmen who are entitled to be employed by the factorv under the provisions of cl. (K). If the facts were known to be as suggested by the learned Counsel we would have felt obliged to take note of these provisions of cl. (K) and would have thought fit to make an order as was made by this Court in similar circumstances in Maha/akshmi Sugar Mills Company

Ltd. v. Their Workmen (1), making it clear that these 21 workmen should be re-employed in the crushing season of 1962-63 only in so for as it was possible to do so without breach of the provisions of cl. (K) of the Standing Orders. There are no materials on the record however to sh.1w how many of the workmen

alrady employed by the Company in the crushing season of I 9ti2-196:l had actully worked in the latter half of I!J()[.(i2 season.

In the written statement of the Company. no such point about the difficulty of reinstatement of anv of these 21 workmen because of the provisions of c1: (K) was raised.

In these circumstamces. we have not allowed l\fr. Pathak to raise th!s nw pka for the first time in this Court.

A> all the pDint> raised in the appeal fail, the appeal is dismiscd with costs.

Appeal dismissed.

(I) 1961 (Iii LL. J. 623,

BASTI SUGAR .MILLS LTD

RAM UJAGAR A'.'\D OTHERS

K. C. DAS GUPTA, J

Government of

Uttar Pradesh

s. 2

s. 2

s. 2

Art. 19

G.S. Pathak

D.N. Mukherjee

M. Rajagopalan

R. Chaudhuri

DAS GUPTA

February 6, 1959

November 21, 1959

February 5, 1959

Basti Su:ar Mills

Ltd.

Governor of Uttar Pradesh

Basti Sugar Mills Ltd.

Banarsi Das

February G, 1959

s. 2

Industrial Disputes Act

Ram Ujagar

November 21, 1958

Pathak

s. 2

Art. 19

DaJ G11.pta

Section 2

s. 2

s. 2

s. 2

s. 2

s. 2

s. 2

Art. 19

s. 2

Industrial Disputes Act

Das Gupta

Palhak

s. 3

Uas Gupta


6 S.C; R.

SUPREME COURT REPORTS 1001

Nothing has been placed before us to establish that the 1961 Superintending Engineer was legally authorized to enter into Karamshi l•thasuch a contract on behalf of the Government; nor do the bhai d

~ ocuments ex facie show that the agreement was expressed Stat< of Bombay to be made in the name of the Provincial Government. The Subba Rao J. letters mentioned the name of the Minister of the Public Works Department and also the Government, in the context of the rates that might be fixed thereafter, but the said documents did not purport to emanate from the Governor.

At best they were issued under the directions of the Ministe_r.

We find it difficult to stretch the point further, as such a construction will make the provisions of s. 175(3) of the Government of India Act, 1935, nugatory. We cannot, therefore, hold that either the contract was entered into by the person legally authorized by the Government to do so or expressed to be made in the name of the Governor. The agreement is void, as it has not complied with the provisions of s. 175(3) of the Government of India Act, 1935.

In this view, it is not necessary to express our opinion

'111 other interesting questions raised in this case.

In the result, the appeal fails and is dismissed, but in the circumstances, without costs.

Appeal dismissed.

I>HIRENDRA NA TH GORAi AND SUBAL CHANDRA

SHAW AND OTHERS

SUDHIR CHANDRA GHOSH AND OTHERS

(K. SUBBA RAo, K. C. DAS GUPTA AND

RAGHUBAR DAYAL, JJ.)

March 4.

~ Execution-Court salt of property in execution of a decree in respect o/ a loan-Judgment-debtor not objecting to valuation even after 1ervict of notice-Application for selling asidt tht 1al• on tht vourul of

Dhirendranath Gorai v. 5udhir Chand1a

Ghos/1

SUPREME CO!JRT REPORTS

no11-cu1npliance of the provisions of s. 35 vf the Bengal Jo,, Jvney Lenders Act-Maintainability-Sale if, valid-Bengal AJoney Lenaer~' Act, 1940 ( 10 of 1940), s: 35-Code of Civil Procedure, 1908

( V of 1908), U.XXI, rr. 64, 66 and 90.

ln execution of a decree passed in a mortgage suit, the appellant 11.n11exed in the execution application a Schedule comprising of J 1 provertlC1' sought to be sold for the satisfaction of the claim. The appellant gave valuation of the said properties.

Though the 1st responUent received a notice under 0.XXl, r. 66 of the Code of Civil Procedure, be did not file any objection to the valuation. Though he got the sal.! adjourned a number of times promising to pay the decretal amount, be

failed to do so. Finally, two of the said properties were :sold.

The

l.!:il respondent then filed an application in the executing court for setting

ai<le, the saiO. sale unde:- O.XXI, r. 90 of the Code of Civil Procedure.

inter aiia, on the ground that s. 35 of the Bengal NloneyLender's Act was not complied with. The learned subordinate Judge held that there was no fraua in publishing and conducting the ale, that the price of the lots sold was fair and that lhe s;.li~ was not vitiated by reason of 1nfringen1cnt of s. 35 of the A!.:t.

On appeal, the High Court held that though there bad not been any substantial injury to the 1st respondent,

the provisions of s. 35 of the Act were 111andatory and. therefore, the infringen1eut of the said provisions would invalidate the sale. In this Court it was contended on behalf of the appellants that whether s. 35 of the Act was mandatory or directory, the sale held in violation of the saiJ provision \Vas only illegal but not a nullity and, therefore, it could be set aside only in the manner and for the reasons prescribed in Q.XX:l, r. ~O of the Code of Civil Procedure, and further that. as the respondents did not attend at the drawing up of the proclamation of sale. the !).de could not be set aside at their instance.

Held; The non-compliance with the provisions of s. 35 of the Acl

J~ a defect or <.1 irregularity in publihing or conducting the sale.

A pany who received the notice of the proclamation but did not attend at the drawing up of the proclamation or did not object to the said defect cannot maintain an application under O.XXI, r. 90 of the Code of Civil Procedure. Even if he coul'd, the sale cannot be set aside unless by reason of the said defect or irregularity he bad sustained substantial injury.

Ashrun1 Thikadar v. Vijay Singh Chopra, LL.R. (1944) l Cal. 166, distinguished.

Alanindra Cha11dra v. Jogdish Chandra, ( 1945) 50 C. W.N. 266 and Maniruddin Ahmed v. Umanprasamma, (1959) 64 C.W.N. 20, approved.

On a true construction of s. 35 of the Act, it must be hefd that it was intended only for the benefit of the judgment-debtor and, therefore, be could waive the right conferred on him under s. 35 of the Act. '

Case law reviewed.

1964 If that be the legal position, Q.XXI, r. 90 of the Code of Civil Procedure is immediately attracted. The concurrent finding of the courts is that by reason of the non-observance of the provisions of s. 3S of the Act no substantial injury was caused to the judgment-debtor. Further, though notice was given to the judgment debtor, in one case he did

D\lt file objection at all and in the other case, though the judgment-debtor filed objections, he did not atlend at the drawing up of the proclamation.

The sales are. therefore, not liable to be set aside under the terms of the said provision.

Dhirendronath

Gorai v.

Sudhir Chandra

G'ho.rh

CIVIL APPELLATE JURISDICTION: C.A .. Nos. 85 and • 8':> of 1961.

Appeals from the judgment and decree dated November 23, ! 954 of the Calcutta High Court in Appeals from Original Orders Nos. 84 and 83 of 1953.

B. Sen and P. K. Ghosh, for the appellants (in both • the appeals).

Suk111nar Ghosh, for the respondents Nos. 12 and 13 (in C.A. No. 85 of 1961).

March 4, 1964. The Judgment of the Court was delivered by

SunnA RAO J .-These two appeals raise the question of Subba Rao J. the validity of the court sale held in contravention of s. 35 of the Bengal Money-Lenders Act, 1940 (Bengal Act X of

1940), hereinafter called the Act.

The facts in both the appeals may be briefly stated. In Civil Appeal No. 85 of 1961, Sudhir Chandra Ghosh, respondent No. l, executed a first mortgage in favour of one Provash Chandra Mukherjee, since deceased, for a sum of Rs. 12,000 /-. Respondent No. I executed a second, third and fourth mortgages in favour of the appellant for a total sum of Rs. 7,700/-. He also executed another, mortgage in favour of the 9th respondent. In the year 1948 respondents 2 and 3, representing the first mortgagee's estate, filed Title Suit No. 8 of 1948 in the 7th Additional Court of the Subordinate Judge at Alipore, for enforcing the first mortgage. To that suit the puisne mortgagees were also made parties. On May 24, 1948, a preliminary decree by consent was made in the suit whereunder the judgment-

:Jhirendranath

Gorai v.

Sudhir Chandra

Ghosh

Subba Rao J.

SUPREME COURT REPORTS . debtor was directed to pay a sum of Rs. 15,473-7-9 to the appellant in 7 equal annual instalments. As the judgmentdebtor failed to pay the said amount, in due course a final decree was passed in the mortgage suit on or about February 2, 1949.

Thereafter, the decree was put in execution on January 31, 1950, and in the said execution application a schedule of properties sought to be sold for the satisfaction of the said claim was annexed. The schedule comprised 11 properties and the appellant gave valuation of the said properties.

Though the I st respondent received a notice under 0. XXI, r. 66 of the Code of Civil Procedure, he did not file any objection to the valuation.

Though the first respondent got the sale adjourned a number of times promising to pay the decretal amount, he failed to do so.

Finally two of the said properties were put up for sale on June 23, 1951, and one of the said propertie• was purchased by the 12th respondent for a sum of Rs. 11,800/- and the other, by the 13th respondent for a sum of Rs. 10,100/-.

On July 21, 1951, the 1st respondent filed an application in the executing court for setting aside the said sale under

0. XXI, r. 90 of the Code of Civil Procedure, inter alia, on the ground that s. 35 of the Act was not complied with.

The learned Subordinate Judge held that there was no fraud in publishing and conducting the sale, that the price of the lots sold was fair and that thesale was not vitiated by reason of infringement of s. 35 of the Act. On appeal a Division Bench of the High Court held that though there had not been any substantial injury to the !st respondent, the rprovisions of s. 35 of the Act were mandatory and, therefore, the infringement of the said provisions would invalidate the sale.

In that view, it set aside the sale and directed the appellant to refund the money with interest.

Civil Appeal No. 86 of 1961 also arises out of the same execution proceedings.

Under the said compromise preliminary decree the judgment-debtor agreed to pay the decretal amount of Rs. 25,687 /- to the executors of the estate of the first mortgagee, respondents 2 and 3. As the amount was not paid, the said respondents filed an arpplica- , tion in the 7th Court of the Additional Subordinate Judge, Alipore, for the execution of the said decree. In the

execution petition 8 properties were described and their valuations were _given. The judgment-debtor filed objections to the valuations given by the decree-holders, but on the date fixed for settling the valuations of the said properties neither the judgment-debtor nor his advocate appeared in court.

The learned Subordinate Judge, by his order dated February 11, 1950, directed that both the valuations of the decreeholders and the judgment-debtor be noted in the sale proclamation. Thereafter the sale proclamation was duly issued and the date of the sale was fixed for May 11, 1950. The judgment-debtor took as many as 15 adjournments of the sale promising to pay the decretal amount, but did not do so. Finally the sale of the properties was fixed for June 23, 1951 and on that date two lots of the property were sold in execution and the appellants purchased lot No. 1 at a price 0f Rs. 14,000/- and respondent No. 9 purchased Lot No. 2 at a price of Rs. 19,60b/-.

On July 21, 1951, the 1st respondent filed an application' before the learned , Subordinate Judge for setting aside the sale under 0. XXI, r. 90 of the Code of Civil Procedure, on grounds similar to those raised in the other application, the subject-matter of Civil Appeal No. 85 of 1961.

The said application was heard by the learned Subordinate Judge along with the said other application. For the same reasons, he dismissed the application.

On appea\, the Division Bench of the High Court heard the

appeal along with the connected appeal and set aside the sale. The present appeals me fikd by certificate against the common judgment of the High Court in both the matters.

Mr. Sen, learned counsel for the appellants in both the appeals, contends that whether s. 35 of the Act is mandatory or directory the sale held in violation of the said provision is only illegal but not a nullity and, therefore, it can be set aside only in the manner and for the reasons prescribed in

0. XXT. r. 90 of the Code of Civil Procedure, and further that. as the respondents did not attend at the drawing up of the proclamation of sale, the sale cannot be set aside at lheir instance.

To appreciate the argument it is necessarv and con- \'enient to read at the outset the relevant provisions of the Act and the Code of Civil Procedure.

Dliirendranath

Gorai v.

Sudhir Chandra Ghosh

Subba Rao /.

Dhirt':1d1anath

Gorai v.

Sudhir Cha1u/ra

Ghosh

Subba Rao J.

Section 35 of the Act.

"Notwithstanding anything contained in any other law for the time being in force, the proclamation of the intended sale of property in execution of a decree passed in respect of a loan shall specify only so much of the property of the judgment-debtor as the Court considers to be saleable at a price sufficient to satisfy the decree, and the property so specified shall not be sold at a price which is less than the price specified in such proclamation :

Provided that, if the highest amount bid for the property so specified is less than the price so specified, the Court may sell such property for such amount, if the decree-holder consents in writing to forego so much of the amount decreed as is equal to the difference between the highest amount bid and the price so specified."

CODE OF CIVIL PROCEDURE

Order XX/, r. 64

Any Court executing a decree may order that any property attached by it and liable to sale, or -' such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive tbe same.

Order XX!, r. 66.

( I ) Where any property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended snle to be made in the language of such Court.

(2) Such proclamation shall be drawn up after notice to the decree-holder and the judgment-

6 S.C.R.

debtor and shall state the time and place of sale, and specify as fairly and accurately as possible- -

la) the property to be sold;

• • • •

Order XX/, r. 90.

(I) Where any immovable property has been sold in execution of a decree. the decree-holder, or any person entitled to share in a rateable distribution of assets. or whose interests are affected by the sale, may apply to the Court to set nside the sate on the ground of a material irregularity or fraud in publishing or conducting it or on the ground of failure to issue notice to him a; required by rule 22 of this Order :

Provided ( i) that no sale shalt be set aside on the ground of such irregularity. fraud or failure unless. upon the facts proved. the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity. fraud or failure.

(ii) that no sale shall be set aside on the ground of any defect in the proclamation of sale at the instance of any person who after notice did not attend at the drawing up of the proclamation or of any person in whose presence the proclamation was drawn up, unless ob, iection was made by him at the time in respect of the defect relied upon.

Under 0. XXT. r. 64 of the Code of Civil Procedure, the executing court may order that any property attached by it and liable to sale or such portion thereof as may seem necessary to satisfy the decree shall be sold. Under r. 66 of the said Order of the Code when a property is ordered to be sold in public auction in execution of a decree the court shalt cause a proclamation of the intended sale to be made and such proclamation shalt specify as fairly and accurate! y as possible. among others, the property to

Dhirendranath Gorai v.

Sudhir Chandra Ghosh

Subba Rao J,

Dhirendranath Gorai v.

Sudhir Chandra

Ghosh

Subba Rao J.

be sold and such proclamation shall be drawn up after notice to tli'e decree-holder and the judgment-debtor: under sub-r. ( 4) thereof, the court may summon and examine any person or require him to produce any document in his possession or power relating thereto. Under the said provisions the court has power to direct the sale of the entire property attached or a part thereof sufficient to satisfy the decree and it shall also specify the said property directed to be sold in the proclamation fixed after giving notice to both the decree-holder and the judgment-debtor. Under s. 35 of the Act a duty is cast upon the court in settling the proclamation of the intended sale of property in execution of a decree passed in respect of a loan to which the Act applies to specify only so much of the property of the judgmentdebtor as the court considers to be saleal>le at a price sufficient to satisfy the decree and not to sell the property so specified at a price which is less than the price so specified in such proclamation. This provision is , in effect a statutory addition to 0. XXI, .r. 66 of the Code of Civil Procedure.

Indeed, this provision could have been added as another clause to the said rule. This statutory provision pertains to the field of proclamation. The rule says so in terms. The said two conditions are also steps to be taken by the court in the matter of publishing or conducting the sale.

If a sale is held without complying with the said conditions, what is the remedy open to a party affected thereby to get the sale set aside? Order XXI, r. 90 of the Code in terms provides for the remedy. It says that a person whose interests are affected by the sale may apply to the court to set aside the sale on the groun4 of a material irregularity or fraud in publishing or conducting it or on the ground of failure to issue notice to him as required by r. 22 of the Order.

As the non-compliance with the said conditions is a material irregulari.ty in publishing or conducting the sale the court under the first proviso to 0. XXI, r. 90 of the Code cannot set aside the sale unless it is satisfied that the applicant had sustained substantial injury by reason of such irregularity.

That apart, under the second proviso to the said rule, no sale shall be set aside on the ground of any defect in the proclamation of sale at the instance of any person, who after notice did not attend at the drawing up

of the proclamation or of any person in whose presence the proclamation was drawn up unless objection was made by him at the time of drawing up of the proclamation in respect of the defect relied upon.

Shortly stated, the noncompliance with the provisions of s. 35 of the Act is a defect or a irregularity in publishing or conducting the sale.

A party who received the notice of the proclamation but did not attend at the drawing up of the proclamation or did not object to the said defect cannot maintain an application under 0. XXT. r. 90 of the Code of Civil Procedure.

Even if he could, the sale cannot be set aside unless by reason of the said defect or irregularity he had sustained substantial injury,

On this question a divergence of views is reflected in the decisions cited at the Bar. Mukherjea and Pal. JJ., in Asharam Thikadar v. Bi jay Singh Chopra(') set aside the order of the executing court and sent the case back to that court. as the said court inserted in the proclamation the valuation of the property given by the judgment-debtor as well as that given by. the decree-holder and did not, as it should do under s. 35 of the Act. determine the price of the property which was to be put up for sale• on proper evidence.

This decision has no relevance to the question raised before us. as the appeal before the High Court was against the order made by the executing court dismissing the application fi'ed by the judgment-debtor requesting the court to demarcate the property to be sold pursuant to the provisions of s. 35 of the Act.

The question whether a sale held in non-compliance with the said provisions could be set aside de hors the provisions of 0. XXI, r. 90 of the Code of Civil Procedure did not arise for consideration therein.

The question now posed before us directly arose for decision before a Division Bench of the Calcutta High Court, consisting of Akram and Chakravartti. JI., in

Manidra Chandra v. Jagadish Chandra( 2 ). Chakaravartti, J., met the objection raised by the judgment-debtor who sought to set aside the sale on the ground of non-compliance with the provisions of s. 35 of the Act, thus :

(I) I.I..R. [I944] I Clll. 166.

134-159 S.C.-64

l9'U

I>hirP1ulranath

G,, ra1

Sudhir Chand•a

Ghmh

Subba Rao I.

1964 - Dhirendral!lllh

Gorai

Sudhir Chandra

Ghoah

Subba Rt1Jl /.

"It (s. 35 of the Act) is a provision relating to the contents of the sale rproclamation and its effect, to my mind, is to amend or supplement Or. 21, r. 66(2) (a) which directs the Court to specify in the sale proclamation "the property to be sold". Any objection regarding non-compliance with sec. 35 in specifying the property to be sold is, in my view, a defect in the sale proclamation within the meaning of the second proviso to Or. 21, r. 90, C.P.C. It follows that an objection that the sale proclamation did not conform to sec. 35 of the Bengal Money- Lenders Act cannot avail a judgment-debtor in an application under Or. 21, r. 90, if he was present at the drawing up of the ale proclamation and did not raise any such objection at the time, nor can it avail a judgment-debtor who, after receiving notice did not attend at the drawing up of the sale proclamation at all."

We agree with this reasoning. Another Division Bench of the Calcutta High Court, consisting of Guba and Banerjee, JJ., in Maniruddin Ahmed v. Umaprasanna('), considered the entire case law on the subject, including the decision now under appeal, and differed from the view expressed by

S. R. Das Gupta and Mallick, JJ., in the decision now under appeal and agreed with the view expressed by Akram and Chakravartii, JJ., in Manidra Chandra v. Jagdish Chandra( 2 ).

The said decisions are in accord with the view we have expressed earlier. The contrary view is

sustaintd by the High Court in the present case on the principle that the sale held in contravention of the provisions of s. 3 5 of the Act was a nullity and, therefore, no question of setting aside the sale within the meaning of 0. XXI, r. 90 of the Code of Civil Procedure would arise.

This raises the question whether such a sale is a nullity. If a provision of a statute is only directory, an act done in contravention of the provision is manifestly not a nullity.

Section 3 5 of the Act is couched in a mandatory form and it casts in terms a duty on the court to comply with its r

(t) (1959) 64 C.W.N. 20.

(2) (1945) 50 C.W.N. 266 •. 270.

provisions before a sale is held.

Prima fade the provision is mandatory; at any rate, we shall assume it to be so for the purpose of these appeals.

Even then, the question arises whether an act done in breach of the mandatory provision is per force a nullity.

In Ashutosh Sikdar v. Behari Lal Kirtania('), 'Mookerjee, J., after referring to Macnamara on "Nullity and Irregularities", observed :

" ...... no hard and fast line can be drawn between a nullity and an irregularity; but this much is clear, that an irregularity is a deviation from a rule of Jaw which does not take away the foundation or authority for the proceeding, or apply to its whole operation, whereas a nullity is a proceeding that is taken without any foundation for it, or is so essentially defective as to be of no avail or effect whatever, or is void and.incapable of being validated."

Whether a provision falls under one category or the other is not easy of discernment, but in the ultimate analysis it depends upon the nature, scope and object of a particular provision. A workable test has been laid down by Justice Coleridge in Holmes v. Russell('). which reads:

"It is difficult sometimes to distinguish between an irregularity and a nullity; but the safest rule to determine what is an irregularity and what is a nullity is to see whether the party can waive the objection; 'if he can waive it, it amounts to an irregularity; if he cannot, it is a nullity."

A waiver is an intentional relinquishment of a known right. but obviously an objection to jurisdiction cannot be waived, for consent cannot give a court jurisdiction where there is none.

Even if there is inherent jurisdiction, certain provisions cannot be waived.

Maxwell in his book "On the

(I) (1908) J.L.R. 3S Cal. 61, 72.

(2) [18411 9 Dowl. 487.

1964 - Dhire, idranatll

Gorai

"· .

Sudhir Chandra

Gho•h

Subba RIJO J.

Dltlrndranath

Gorai

Sudhir Chandra

Ghosh

Subb1> Ra1> J.

Interpretation of Statutes'', 11th Edn., at p. 375, describes the rule thus :

"Another maxim which sanctions the non-observance of a statutory provision is that cuilibet /icet renuntiare juri pro se introducto. Everyone has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, which may be dispensed with without infringing any public right or public policy."

The same rule is restated in "Craies on Statute Law", 6th Edn.,' at p. 269, thus :

"As a' general rule, the conditions imposed by statutes which authorise legal proceedings are treated a, being indispensable to giving the court jurisdiction.

But if it appears that the statutory conditions were inserted by the legislature simply for the security or benefit of the parties to the action themselves, and that no public interests are involved, such conditions will not be considered as indispensable, and either party may waive them without affecting the jurisdiction of the court."

The Judicial Committee in AL. AR. Ve/layan Chettiar v.

Government of Madras(') pointed out that there was no inconsistency between the propositions that the provisions of s. ~O of the Code of Civil Procedure were mandatory and must be enforced by the court and that they might be ,.. waived by the authority for whose benefit they were provided.

In that case the Judicial Committee held that s. 80 of the Code of Civil Procedure was explicit and mandatory; but still it held that it could be waived by the authority for whose benefit that was provided. This aspect of the law in the context of s. 3 5 of the Act was considered by a Division Bench of the Calcutta High Court in Gaya Prosatl v. Seth 'f

(I) (1947] L.R. 74 I.A. 223. 228.

' '

Ohanrupwal Bha11dari(').

Dealing with this argument, P. N. Muukerjee, J., speaking for the court, observed:

"'lt is true that section 35 of the Bengal Money-

Lenders Act casts a duty upon the court but such duty is solely for the benefit-the private benefit-of the judgment-debtor.

It is, therefore, open to him to waive this benefit, or;- in other words, to waive his objection of nonobservance of that statutory provision by the court . ..... ".

Guha and Banerjee, JJ., expressed much to the same effect in Maniruddin Ahmed v. Umaprasanna(') thus, at p. 30:

"The Bengal Money-Lenders Act, 1940 enacted for the purpose of making better provision for the control of money-lenders and for the regulation and control of money-lending, has certainly a public policy behind it. But some of its provisions. and section 3 5 one of them, are intended for the benefit of the individual judgment debtors and have no publi~ policy behind them.

Such provisions may be waived by the -person for whose benefit the same were enacted."

A Division Bench of the Patna High Court in Sheo Dayal Narain v. Musammat Moti Kuer('), speaking through Meredith. J., in the context of the provisions of s. 13 of the Bihar Monev-Lenders (Regulation of Transactions) Act. I 939, which are pari materia with the provisions of s. 35 of the Bengal Money-Lenders Act, 1940, tejected the contention that a sale held in contravention thereof was a nullity in the following words :

"Illegal the sale may have been, in the limited sense that it was held in a manner at variance with a mandatory statutory provision. That provision, however, has no reference at all to the jurisdicrion of the Court. It affords no foundation for

( l l (1953) 58 C.W.N. 503. 508.

(2) 64 C.W.N. 20.

(3) (1942) I.LR. 2t Pat. 281, 286.

1) himulr..,...111

Goral v.

Sudhir Challd111

Ghosh

Subbll RllO I.

Dhirendranath Gorai v.

Sudhir Chandra

Ghosh

Subba Rao J.

the contention that the sale was one which the Court concerned had .no power at all to hold."

Where the court acts without inherent jurisdiction, a party affected cannot by. waiver confer jurisdiction on it, which it has not.

Where such jurisdiction is not wanting, a directory provision can obviously be waived. But a mandatory provision can only be waived if it is not conceived in the public interests, but in the interests of the party that waives it. In the present case the executing court had inherent jurisdiction to sell the property. We have'assumed that s. 35 of the Act is a mandatory provision. If so, the question is whether the said provision is conceived in the interests of the public or in the interests of the person affected by the non-observance of the provision. It is true that many provisions of the Act were conceived in the interests of the public, but the same cannot be said of s. 35 of the Act, which is really intended to rprotect the interests of a judgment-debtor and to see that a 1arger extent of his property than is necessary to discharge the debt is not sold. Many situations may be visualized when the judgment-debtor does not seek to take advantage of the benefit conferred on him under s. 35 of the Act; for instance, if the part of the property carved out by the court for sale is separated from the rest of his property, the value of the remaining property may be injuriously affected by the said carving out, in which case the judgment-debtor may prefer to have his entire property sold so that he may realize the real value of the property and pay part of the sale price towards the decretal amount.

He cannot obviously be compelled to submit to the sale of a part of the property to his disadvantage. A provision intended for his benefit cannot be construed in such a way as to work to his detriment. But it is said that the proviso to s. 3 5 of the Act indicates a contrary intention.

Under that proviso, "if the highest amount bid for the pmperty so specified is less than the price so specified, the Court may sell such property for such amount, if the decree-holder consents in writing to forego so much of the amount decreed as is equal to the difference between the highest bid and the price so specified".

This is only an option given to the decree-holder : he may exercise this option, if he does

not like to go through the entire sale proceedings overagain.

In one contingency this proviso also works for the benefit of the judgment-debtor, for he will be relieved of part of his indebtedness.

But anyhow this does not show that the main provision is not intended for the benefit of the judgment-debtor.

We are, therefore, satisfied, on a true construction of s. 35 of the Act, that it is intended only foi: the be.nefit of the judgment-debtor and, therefore, he can waive the right conferred on him under s. 35 of the Act.

If that be the legal position, 0. XX!, r. 90 of the Code of Civil Procedure is immediately attracted. The concurrent finding of the courts is that by reason of the non-observance of the provisions of s. 35 of the Act no substantial injury was caused to the judgme.nt-debtor. Further, though notice was given to the judgment-debtor, in one case he did not file objections at all and in the other case, though the judgment-debtor filed objections, he did not attend at the drawing up of. the prodamation. The sales are, therefore, not liable to be set aside under the terms of the said provision.

In the result the orders of the High Court are set aside and those of the Additional Subordinate Judge are restored.

The appellants will get their costs throughout from the 1st respondent. There will be one set of hearing fee.

Appeals allowed.

N. VAJRAPANI NAIDU AND ANOTHER

THE NEW THEATRE CARNATIC TALKIES LTD.,

COIMBATORE

(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, J. c.

SHAH, N. RAJAGOPALA AYYANGAR AND S. M. S!KRI JJ.)

Afadras City Tena111.~· PriJtection Act, 1922 (Act 3 o/ 1922),.ss. 9, 12-··

uasr of land for purpo•• of •nacting buildlngl-lf l•as• not ,....,.

ed after twenty years lessor entitled to vacant possts&ion . of land after demolishing building-A.ct permitting tenant to either get

Dhittndranath

Gorai v.

S11dhir ChaJulra

Gho•lt

Subba Rao/.

Morch 4.

s. 175(3)

Government of India Act, 1935

s. 175(3)

Government of India Act, 1935

HIRENDRA NATH GORAI AND SUBAL CHANDRA SHAW AND OTHERS

SUDHIR CHANDRA GHOSH AND OTHERS

K. C. DAS GUPTA

RAGHUBAR DAYAL

SUPREME CO!JRT REPORTS

s. 35

Jvney Lenders Act

Code of Civil Procedure, 1908

the Code of Civil Procedure

the Code of Civil Procedure

s. 35

s. 35

s. 35

s. 35

the Code of Civil Procedure

s. 35

the Code of Civil Procedure

s. 35

s. 35

the Code of Civil Procedure

s. 3S

Dhirendronath

Gorai

Sudhir Chandra

November 23, ! 954

Calcutta High Court

B. Sen

P. K. Ghosh

Suk111nar Ghosh

SunnA RAO

s. 35

Bengal Money-Lenders Act, 1940

Bengal Act X of

Sudhir Chandra Ghosh

Provash Chandra Mukherjee

May 24, 1948

February 2, 1949

January 31, 1950

the Code of Civil Procedure

June 23, 1951

July 21, 1951

the Code of Civil Procedure

s. 35

s. 35

s. 35

February 11, 1950

May 11, 1950

the Code of Civil Procedure

Sen

s. 35

the Code of Civil Procedure

the Code of Civil Procedure

Sudhir Cha1u

Section 35

CODE OF CIVIL PROCEDURE

the Code of Civil Procedure

s. 35

the Code of Civil Procedure

s. 35

the Code of Civil Procedure

Mukherjea

Pal

s. 35

s. 35

the Code of Civil Procedure

Akram

Chakravartti

Chakaravartti

s. 35

Sudhir Chand•a

s. 35

sec. 35

C.P.C

sec. 35

Guba

Banerjee

S. R. Das Gupta

Mallick

Chakravartii

s. 3

the Code of Civil Procedure

Section 3

Mookerjee

Macnamara

Coleridge

Maxwell

Sudhir Chandra

Subba RIJO

Dltlrndranath

Gorai

the Code of Civil Procedure

s. 80

the Code of Civil Procedure

s. 3

L.R. 74 I.A. 223

Ohanrupwal Bha11dari

P. N. Muukerjee

section 35

Guha

Bengal Money-Lenders Act, 1940

section 3

Patna High Court

s. 13

s. 35

Bengal Money-Lenders Act, 1940

Goral

Sudhir Challd111

s. 35

s. 35

s. 35

s. 3

s. 35

s. 35

the Code of Civil Procedure

s. 35

N. VAJRAPANI NAIDU

NEW THEATRE CARNATIC TALKIES LTD

P. B. GAJENDRAGADKAR

K. N. WANCHOO

N. RAJAGOPALA AYYANGAR

S. M. S!KRI

PriJtection Act, 1922

ss. 9, 12