HARINAGAR SUGAR MILLS LTD.

A ·- • v.

M. W. PRADHAN .......

March 21, 1966

(K. SUBBA RAO, V. RAMASWAMJ AND]. M. SHELAT, JJ.) B

CivU Procedure Code 1908, OXL r. 1 (d)-Receiver directed by court , lo flU winding up pOl/tlon agabut debtor Company--Such direction whether

permltl1d by said rwlt.

Indian Compania Act, 1956, ss. 439(1) and 434-Wiuthtr Receiver appolnttrd by Court is a 'creditor' within the meaning of s. 439-Notl~ 11iven by Receiver to company asking It to pay 10 the Additional Collector c

t~ income tax demanded from it under s. 46 of the Indian Income-tax Act, 1922--.s'uch notice whether contravenes s. 434-Company not moking payment to Additional Collector whttMr 'negkcts to pay lls deb(, within

meaning of •. 434.

Tho appellant company purchased a farm from a joint Hindu family tor Rs. 40 laca out of which Rs. 25 lacs remained to be paid. The lncome- IAX Ofllcer served a notice under s. 46 of the Indian Income-tax Act, 1922 on the company asking it not to pay the said amount of Ra. 2S lacs to the joint family but towards income-tax payable by the said family.

Thereafter ooe of the mernben of the joint family filed a suit for the partition of the family assets and at his request the coon appointed a

Rocciver.

The Receiver by notice under s. 434 of the Companies Act asked the company to pay Rs. 25 lacs towards income-lax to the Additional Collector and when it did not do so he 90Ught permis.ion from the Coun under 0.XL r. I (d) of the Code of c:vil Procedure to filo a

tition for winding up against the company .. which was allowed.

The Company's appeal to the Division Bench of the High Court failed and it appealed to this Court by special leave.

The Court had to comider (i) whether the coun could under O.XL r. l(d) of the Code authorise the

Receiver to file a winding-up petition against the company, (ii) whether a received was a 'creditor' within the meaning of s. 439(1) of the Indian

Companies Act, (iii) whether in asking the company to pay the sum in question to the Additional Collector the Receiver contravened s. 434,

(iv) whether in not making the payment the company 'neglected to pay its debt' and (v) whether there was a bona fide dispute as to the liability of the company to pay the debt.

HELD :

(i) AMuming that a petition for winding up of a company WolS not a suit wilhin tc meaning of O.XL r. I (d) of the Code, the other powers mentioned therein wero comprehensive enough to enable the Receiver to take D"""-'sary proceedings to realise the property of and debl5 due to the joint family.

A winding up petition ia one of the modes of realising deb ta form a company, and the Respondent therefore bad power to file such a petition.

Bowes v. Hope Lift Insurance a1ld GUIJ1'antt1 Co. (1865) II H.L.C. 388, Rt Gtneral Company for Promotion of Land Credit, (1870) L.R. S Ot.D. 380 and Re National Ptrmontnt Building Socitty, (1869) L.R. S Ch.D. 309, Relied on.

That apart, under 0.XL. R. I ( d) the Court can also confer on the Rcc:eivor ailch of those powers as the Coun think& ftL It is implicit in 948

A -

this apparently wide power that it shall be confined to the scope of the Receiver's administration of the estate. If, for the proper and effective management of the estate of which the Receiver has been appointed the Court thinks fit that it shall confer power on the said Receiver to talce steps for the winding up of the debtor-company, it must be conceded that the Court shall have power to give necessary directions to the Receiver in that regard. [951 G-952 E]

(ii) The Receiver was a 'creditor' within the meaning of s. 439(1) (b} of the Indian Companies Act. [956 DJ

In Re Sacker, Ex Parle Sacker (1888) L.R. 22 Q.B. 179 and In re- Macoun, L.R. (1904) 2 K.B. 700, considered.

K. V. Mallayya v. T. Ramaswami & Co .• [1963) II M.L.J. 100 (S.C.), relied on.

(iii) By asking the company to pay the sum in question to the Addition Collector the requirements of s. 434 wer~ not contravened. [957 DJ

Japan Cotton Trading Co. Ltd. v. Jajodia Colton Mll/J Ltd. (1926) l.L.R. 54 Cal. 345, Kureshi v. A.rgu Footwear Ltd. A.I.R. 1931 Rang. 306 and W. T. Henley's Telegraph Works Co. Ltd., Calcutta>". Gorak/ipur Electric Supply Co. Ltd., Allahabad, A.I.R. 1936 All. 840, referred to.

(iv) By not paying the amount in question to the Additional Collector the company clearly neglected to pay the amount within the meaning of s. 434 of the Indian Income-tax Act. [958 HJ

In re Europe and Banking Company Ex Parle Bayll< (1866) L.R. 2 Eq. 521. distinguished.

( v) On the facts of the case thei:e was no bona fide dispute as to tho liability of the company to the joint family so as to render the winding up petition an abuse of the process of the Court. (9 59 F]

W. T. Henley's Telegraph Works Co. Ltd., Calcutta v. Gorakhpur Electric Supply Co. Ltd., Allahabad, A.LR. 1936 All. 840 and In rt Gold Hill Mines, (1883) LR. 23 Ch. D. 210, referred to.

CML APPELLATE JURISDICTION : Civil Appeal No. 569 of 1965.

Appeal by special leave from the judgment and order dated December 14, 1964 of the Bombay High Court in Appeal No. 67 of 1964.

N. C. Chatterjee, S. T. Desai, M. M. Vakil, Ganpat Rai and S. S. Khanduja, for the appellant.

S. V. Gupte, Solicitor-General, J. B. Dadachanjl, 0. C. Mathur and Rarinder Narain, for the respondent.

The Judgment of the Court was delivered by

Subba Rao, J. The facts that gave rise to this appeal may be briefly stated : On January 3, 1933, Messrs. Harinagar Sugar Mills Ltd., hereinafter called the Company, was incorporated under the Indian Companies Act, 1913 (Act 7 of 1913). Narayanlal Bansilal was the Chairman of the Board of Directors of

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the Company.

He was also the karta and manager of the joint Hindu family consisting of himself, his sons and daughters. As such karta he purchased a large block of shares of the Company from and out of the funds of the joint family. The said family also owned a sugarcane farm at Harinagar in the State of Bihar.

On March 8, 1956, Narayanlal Bansilal and his three sons sold the said farm to the Company for a sum of Rs. 40,00,000. Under the sale-deed the Company agreed to pay the price in instalments.

Though the Company paid a few instalments, a sum of Rs. 25,00,000. still remained to be paid by it to the joint family.

In July 1961, one of the sons of Narayanlal Baosilal filed Suit No. 224 of 1964 on the Original Side of the Bombay High Court against his father and others for partition of the joint family properties. Pending the suit, on October 20, 1961, the Court, in exercise. of its powers under O.XL, r. 1, of the Code of Civil Procedure, appointed a Court Receiver as Receiver of all the joint family properties. Long prior to the filing of the said suit for partition, on July 24, 1956, the Additional Income-tax Officer, Section V, Central Bombay, issued a notice to the Company under s. 46 of the Indian Income tax Act, 1922, prohibiting it from paying the debt due by it to the joint family and calling upon it to pay the said amount to the Income-tax authorities towards income-tax due from the said joint family. After the Receiver was appointed, on June 29, 1962, the said Receiver issued a notice under s. 434 of the Indian Companies Act calling upon the Company to pay the amount, due from it to the joint family, with interest to the Additional Collector of Bombay towards the income-tax dues of the family and also informing it that, in case the said payment was not made within 21 days of the receipt of the notice, proceedings for winding up of the Company under the Indian Companies Act would be taken.

As the Company did not comply with the terms of the said notice, the Receiver moved the High Court for directions and obtained an order on November 22, 1963, authorizing him to file a petition for winding up of the Company. After obtaining the permission of the Court, on January 10, 1964, the Receiver filed a petition in the High Court for winding up of the Company. After hearing the objections filed by the Company, Kantawala, J., admitted the petition and directed advertisements to be given in the newspapers and in the Government Gazette mentioning his order.

The Company preferred an appeal against that order and that was

heard by a division Bench consisting of Patel and Tulzapurkar, JJ. The learned Judges dismissed the appeal. Hence the present appeal, by special leave.

Mr. N. C. Chatterjee, learned counsel for the appellant Com- H pany raises before us the same contentions which were advanced un1usfully on behalf of the Company in the High Court.

We shall deal with the said contentions seriatlm.

, ,

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HAllINAGAR MILLS v. PRADHAN (Subba Rao, J.) 951

A The first contention of the learned counsel is that the Court Receiver had no power to file a petition in the Court for winding up of the Company. Elaborating this contention the learned counsel contends that under O.XL, r. l(d), of the Code of Civil Procedure a court can only confer on a Receiver the power to bring a suit and that the expression "suit" does not talce in a peti- B tion for winding up of a company.

Order XL, r. 1., of the Code of Civil Procedure reads : Where it appears to the Court to be just and convenient, the Court may by order-

(d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as n the owner himself has, or such of those powers as the Court thinks fit."

In exercise of the said power, the Court appointed the respondent as the Court Receiver on October 20, 1961, of the properties belonging to the joint family in the suit. The material part of the order reads :

" ............ IT IS FURTHER ORDERED that the Court Receiver be and is hereby appointed Receiver of the properties belonging to the joint family in suit and all the books of accounts papers and vouchers with all necessary powers under Order XL Rule 1 of the Code of Civil Procedure including power to vote and or exercise all the property rights in respect of shares belonging to the joint family in the several joint stock companies mentioned in the plaint including power to file suit .............................. " .

Under this order, all the necessary powers under O.XL, r. I, of the Code of Civil Procedure were conferred upon the Receiver, including the right to file suits. Assuming that a petition for winding up of a company is not a suit within the meaning of O.XL, r. l(d) of the said Code, the other powers mentioned therein are comprehensive enough to enable the Receiver to take necessary proceedings to realise the property of and debts due to the joint family. Can it be said that the petition filed by the Receiver for winding up of the Company is not a mode of realisation of the debt due to the joint family from the Company ? In Palmer's Company Precedents, Part II, 1960 Edn., at p. 25, the following passage appears :

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"A winding up petition is a perfectly proper remedy A for enforcing payment of a just debt. It is the mode of execution which the Court gives to a creditor against a company unable to pay its debts." This view is supported by the decisions in Bowes v. Hope Life

Insurance and Guarantee Co.('), Re General Company for Promotion of Land Credit(•) and Re National Permanent Building Society(3).

B It is true that "a winding up order is not a normal alternative in the case of a company to the ordinary procedure for the realisation of the debts due to it"; but nonetheless it is a form of equitable execution. Propriety does not affect the power but only its exercise.

If so, it follows that in terms of cl. (d) of r. 1 of O.XL of the Code of Civil Procedure, a Receiver can file a petition for winding up of a c company for the realisation of the properties, movable and immovable, including debts, of which he was appointed the Receiver.

In this view, the respondent had power to file the petition in the Court for winding up of the Company.

That apart, under O.XL, r. l(d), of the Code of Civil Procedure the Court can also confer on the Receiver such of those powers as D the Court thinks fit. It is implicit in this apparently wide power that it shall be confined to the scope of the Receiver's administration of the estate.

If, for the proper and effective management of the estate of which the Receiver has been appointed the Court thinks fit that it shall confer power on the said Receiver to take steps for winding up of the debtor-company, it must be conceded E that the Court will have power to give necessary directions to the Receiver in that regard.

On November 22, 1963, the Receiver obtained the directions of the Court empowering him to file the winding-up petition against the Company. But, it is contended that the learned Judge made that order without prejudice to the contentions of the members of the joint family and that one of the contentions was that a petition for the winding up of the Company was not maintainable at the instance of the Receiver. This reservation, no doubt, entitles the appellant to raise the plea of the maintainability of the petition by the Receiver for winding up of the Company. But it docs not bear on the question of authorization obtained by the Receiver to file the said petition. The question of the maintainabili!f of the petition will be dealt with by us at a later stage of the Judgment. In this view also the Receiver had the power to file the petition before the Court for winding up of the Company. There are, therefore, no merits in the first contention.

The second contention of the learned counsel is that the Court Receiver is not a "creditor" within the meaning of the relevant "-----· (I) 11865) ti H.LC. 388.

(2) [1870) LR. 5 Ch. D. 380.

(3) [1869) L.R. 5 Ch. D. 3<J9.

I '

A . sections of the Indian Companies Act. The relevant provisions of the Indian Companies Act read:

Section 433. A company may be wound up by the Court,-

(e) if the company is unable to pay its debts.

Section 434. (1) A company shall be deemed to be unable to pay its debts-

(a) if a creditor, by assigning or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor.

Section 439. (1) An application to the Court for the winding up of a company shall be by petition presented, subject to the provisions of this section,-

(d) by any creditor or creditors, including any contingent of prospective creditor or creditors.

A combined reading of these provisions indicates that unless the Court Receiver is a creditor by assignment or otherwise to whom the company is indebted, he cannot maintain an application under s. 439 of the Indian Companies Act. In support .of the contention that he is not such a creditor, strong reliance is placed on the decision in In Re Sacker, Ex Parte Sacker('). The facts of that case, as given in the head-note are as follows: In an action in the Chancery Division a receiver was appointed to collect and receive goods comprised in a charge given to the plaintiffs by one of the defendants, including therein any balance of the proceeds of the goods so charged in the hands of the other defendant.

An order was subsequently made for the payment by the last-mentioned defendant to the receiver of a specific sum, being money received by him in respect of the proceeds of the goods, and comprised in the charge. The Court of Appeal held that the receiver was not a "creditor" entitled to present a bankruptcy petition against such defendant within the meaning of s. 6 of the Bankruptcy Act, 1883. Lord Esher, M.R., in coming to the said conclusion described the legal status of a receiver thus:

"The petitioner is a receiver. He is not a trustee.

There is no debt due to him from the appellant. He could

(I) [1888] L.R. 22 Q.B. 179, 183, 185, 186.

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not sue for this sum of money in his own name either at law or in equity.

Even if he could by the authority of te Court sue fo~ it in his own name, is the money due to hi~ personally either at law or in equity? At law it is certamly not. The debt was due to another person for whom he 1s not a trustee. The money will not he his when he has got it. Would it he his in equity? I apprehend that he would hold it subject to the authority of the Court, who would deal with it according to the circumstances of the case, but certainly not for his benefit."

Fry, L.J., said much to the same effect thus:

"There is no debt of any kind due from Sacker to the C receiver; consequently he is not a good petitioning creditor, and the petition cannot be maintained."

Lopes, L.J., expressed the same idea thus:

"To constitute a good petitioning creditor's debt the alleged debt must be certainly due and payable to the D person who presents the petition. There is no debt due to this receiver. He could not maintain an action of debt for this money in his own name."

This decision, therefore, goes to the extent of holding that there is no debt due to a receiver either at law or in equity, that he cannot maintain an action of debt for the money in his own name and that, therefore, he is not a good petitioning creditor. The scope of this decision was explained by the Court of Appeal in !11 re Macowi(1).

There, on the dissolution of a firm of stock-brokers by the death of one of the partners, the partnership assets, including a debt to the late firm in respect of certain Stock Exchange transactions, were assigned by the surviving partners to L for the purpose of winding up the partnership, and notice of the assignment was served on the debtor. L obtained a decree against the debtor. Thereafter, he commenced an action in the Chancery Division for the winding up of the partnership, and in that action a receiver was appointed of the partnership assets. The receiver took an assignment of the judgment debt from L and obtained leave to issue execution. Thereafter he served a bankruptcy notice on the debtor and ultimately presented a bankruptcy petition against the debtor.

The Court of Appeal held that, as the receiver had obtained an assignment of the judgment debt, he was a creditor entitled to present a bankruptcy petition. In the context, when the judgment in In re Sacker's case(1) was pressed upon the Court to come to a contrary conclusion, Vaughan Williams, L.J., had this to say in regard to that judgment:

(I) L. R. [19J4J 2 K. B. 7J.l, 7v3.

(2)[1888] LR. 22Q.B.179

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HARINAGA!t MILLS v. PllADHAN (Subba Rao, J.) 9 5 5

"In these circumstances it seems to me that we ought not to hold the case of In re Sacker(') to be an authority for the proposition that a receiver cannot be a good petitioning creditor even though the state of things is such that he could maintain an action at law. Itis plain that Fry L.J. thought that he could; and Lopes L.J. seems to have taken the same view-that is, the view that if the receiver were the holder of a bill of exchange he could be a good petitioning creditor. In the present case the receiver happns to be the assignee of a judgment, and I think that bemg the assignee of a judgment he can be a good petitioning creditor even though when the money is received it is recovered for the purpose of enabling the Court of Chancery to deal with it."

A comparison of these two decisions leads to the following legal position: If a receiver could maintain an action at law or in equity for the recovery of a debt, he would be a good petitioning creditor; and, if he could not; he would not be one. In In re Sacker's case(') it was not possible for the receiver to bring an action to recover the debt either at law or in equity, whereas in Macoun's case(2), the receiver, having obtained the assignment of the debt, could maintain an action at law for the recovery of the debt. Therefore, even in England a receiver, who can maintain an action to recover a debt, would be a good petitioning creditor. In India, the scope of the receiver's power is governed by the express provisions of the Code of Civil Procedure. It is common place that a receiver appointed by court has no estate or interest himself and the scope of his power is defined by the provisions of O.XL of the said Code and the specific orders made by the Court thereunder.

He is frequently spoken to as the "hand of the Court". In exercise of the power under the said cl. ( d) if a court confers upon the receiver power to bring a suit to realise the assets which are the subject-matter of the suit, it cannot be denied that the said receiver can file suits to recover the debts forming part of the said assets. This Court in K. V. Ma/ayya v. T. Ramaswami & Co. (3) held that a receiver authorized to file suits to recover debts could institute suits therefor in his own name. In that event, the position of such a receiver is analogous to that of a receiver who can file an action in law or in equity to recover a debt under the English law. If the latter is a creditor in English law in respect of the debt recoverable by him, there is no reason why a receiver empowered to file a suit under O.XL of the Code of Civil Procedure cannot be a creditor. In one case there is a voluntary assignment and in the other there is a statutory assignment.

(1) (18881 L.R 22 Q.B.179.

(2) L R. [19;41 2. K. B. 700

(3) [1963] 2 M. L J, 110 (S. C.).

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The relevant provisions of the Indian Companies Act also lead to the same position. Section 434 speaks of a creditor by assignment or otherwise to whom the company is indebted in a particular sum. Such creditor can file a petition for winding up under s. 439 of the said Act. A creditor, therefore, under the Indian Companies Act is any person who acquires that character by assignment or otherwise. The expression "otherwise" takes in any person to whom another becomes indebted howsoever the relationship of creditor and debtor is brought about between them. We come back to the meaning of the word "creditor". Stroud's Judicial Dictionary, 3rd Edn., Vol. I, defines "creditor" to mean a person to whom a debt is payable. Though this is one of the many definitions given in the said dictionary, this appears to be the appropriate meaning.

A receiver appointed by the court to realise a debt can demand the payment of the debt. If the debtor pays the debt to him, he gets a full discharge; in default of payment, the receiver can file a suit in his own name and obiain a decree. After obtaining the decree he will certainly be a judgment-creditor. Such a receiver is a person to whom a debt is payable by the debtor. In the present case, the respondent was authorised to file suits to realise the assets of the joint family, including the debt. We hold that the respondent is a creditor within the meaning of s. 439(1)(b) of the Indian Companies Act and, therefore, is competent to maintain the petition for winding up of the Company.

It is then contended that the notice issued by the Receiver was not in strict compliance with the statutory requirements of s. 434 of the Indian Companies Act. Two main defects are pointed out, namely, the notice did not require the appellant to pay the debt to the joint family or the Receiver but to the Additional Collector of Bombay and the said notice put it beyond the reach of the Company to secure or compound for the debt to the reasonable satisfaction of the Court Receiver.

Section 434 of the Indian Companies Act has been quoted earlier. Under the section before a company shall be deemed to be unable to pay its debts two conditions must be satisfied, namely, (i) the creditor shall have delivered a demand in the prescribed manner on the company to pay the sum due to him; and (ii) the company has for three weeks thereafter neglected to pay the same, or to secure or compound for it to the reasonable satisfaction of the creditor. We have already held that the Receiver is a creditor within the meaning of cl. (a) of s. 434(1) of the Indian Companies Act. In the statutory notice issued by the Receiver he had called upon the Company to make payment of Rs. 25,00,000/ to the Additional Collector of Bombay by whom the debt had been attached within the prescribed period of 21 days.

He had to do so because the Additional Collector had served a notice dated July 24, 1956, under s. 46(5)(a) of the Indian Incometax Act, 1922, calling upon the Company to pay to him whatever

J ...

HAlt!NAGAR MILLS v. PRADHAN (Subba Rao, J.) 957

amount was held by the Company on account of the joint family.

Section 434(1 )(a) of the Indian Companies Act does not say that the demand made by the creditor on the Company shall be to pay the amount due only to the creditor and not to any other person; nor does it by necessary implication impose any such condition. What is necessary is that the debtor by paying the amount demanded shall be in a position to get full discharge of his liability. In the present case the Receiver directed the amount to be paid to the Additional Collector of Bombay for the purpose of liquidating the income-tax payable by the joint family. Indeed, by paying the said amount, and in view of the notice served on the Company under s. 46(5)(a) of the Indian Income-tax Act, 1922, the Company will get a full discharge of its liability to the joint family. Section 46(5)

(a) of the Income-tax Act says that any person making any payment in compliance with a notice under s.46(5) (a)shall be deemed to have made the payment under the authority of the assessee and the receipt of the Income-tax Officer shall constitute a good and sufficient discharge of the liability of such person to the assessee. The Receiver, therefore, in directing the amount to be paid to the Additional Collector of Bombay did not do anything in derogation of the provisions of s. 434(l)(a) of the Indian Companies Act.

Nor are there any merits in the second link of the contention.

The question is whether, if proceedings were taken against the Company under s. 46(5)(a) of the Indian Income-tax Act, the Company was deprived of the opportunity to pay the sum due to the respondent or to secure or compound for it to the reasonable satisfaction of the creditor within the meaning of s. 434(1)(a) of the Indian Companies Act. After the statutory notice the Company could pay the sum demanded or secure or compound for it to the reasonable satisfaction of the creditor. The section does not confer a right on a debtor but only gives him an opportunity to discharge the debt in one or other of the ways mentioned therein. The debtor could secure or compound for a debt only where the circumstances under which the demand is made permit such a mode of discharge. But whereas in this case both the debtor and the creditor were under an obligation to discharge the income-tax dues and, as the creditor directed the debtor to pay the entire amount due to him towards the income-tax dues, there is no scope for the debtor to approach the creditor for securing or compounding his claim. In this view, no right of the Company is violated. as it has done under s. 434(l)(a) of the Indian Companies Act. That apart, s. 46(5)(a) of the Indian Income-tax Act does not in terms prevent the debtor from compounding his claim with the creditor. It only directs him to hold the money for or on account of the assessee to pay to the Incometax Officer. But, if in contravention of the notice issued to him, the debtor pays the said money to the creditor, he will be personally liable to the extent of the liability discharged or to the extent of

(1966] 3 S.C.R.

the tax and penalties, whichever is less.

The Income-tax Officer can also proceed against the debtor, as if the amount in respect whereof the notice was issued was attached by the Collector in exercise of his powers under the proviso to sub-s. (2) of s. 46 of the Indian Income-tax Act. These provisions do not prevent the debtor from compounding his claim with the creditor. If he compounds the claim, any agreement entered into by him with the creditor will not affect his liability t" pay the income-tax of the creditor to\the extent covered by the notice issued under s. %(5) (a) of the Incometax Act; but the agreement would certainly be binding between the creditor and the debtor. The Income-tax Officer has no concern with it. In either view, therefore, the notice cannot be said to have been issued in contravention of the provisions of s. 434(I)(a) of the Indian Companies Act.

No doubt courts have held, in our view rightly, that a statutory notice under s. 434(1)(a) of the Indian Companies Act shall strictly comply with the provisions of the said

ection: see J:ipa11 Cotton Trading Co. Lid. v. Jajodia Cotton Mills, Ltd.(1); K11reshi v. Argu< Footwear Ltd.(2); and W. T. Henley's Telegraphs Works Co., Ltd., Calcutta v. Gorakhpur Electric Supply Co., Ltd., Allahabad(').

But in this case the statutory notice issued by the respondent did not violate any of the requirements of the Section. We, therefore, reject this contention.

The next contention is that the appellant had not neglected to pay the sum to the respondent, as the said amount must he deemed to have been attached by the Collector in exercise of his powers

undr the proviso to sub-s.(2) of s. 46 of the Indian Income-tax Act,

1922. In support of this contention reliance is placed upon In re European Ba11ki111: Company Ex Parre Baylis (I). There, a petition was presented for winding-up of a Banking Company for a debt of £65 due to the petitioner; but the said debt was attached in the Lord Mayor's Court. The petition was dismissed on the ground that, 'though the attachment did not absolutely do away with the debt, it seized the debt into the hands of the Lord Mayor's Court.

In that case the demand was that the debtor should pay the amcunt to the petitioning creditor and because of the attachment of that amount by Lord Mayor's Court the debtor could not pay the amount to the creditor.

But that judgment cannot possibly be of any help to the appellant, for in the instant case the Receiver asked the debtor to pay the amount due to the joint family to the Additional Collector, Bombay, towards the income-tax due from the joint family. The debtor was not only not aked to do som~ thing which was legally prohibited but was asked to comply with the Collector's requisition under s. 46 of the Indian Income-tax Act,

1922.

By not doing so, the Company clearly neglected to pay the amount within the meaning ors. -134 of the Indian Companies Act.

(l) [1'26] I.L.R. 54 Cal. 345.

(2) A.I.R. 1931 Rang_ 3)6.

(3) A.l.R. t936 All. 84~. (4) [181>6] L.R. 2 Eq. S21.

j F

Lastly it is argued that there was a bona fide dispute in respect of the liability of the Company to the joint family. It is said that the Company's case was that the debt was due to four individuals mentioned in the conveyance, namely, the father and his three sons, whereas the Receiver's case was that the amount was due to the joint family and, therefore, in the circumstances it cannot be said that the Company neglected to pay the amount to the Receiver.

In W. T. Henley's Telegraph Works Co., Ltd., Calcutta v. Gorakhpur Electric Supply Co., Ltd., Allahabad(') it was ruled that a mere service of notice of demand of debt by a creditor on a solvent company did not entitle the creditor to a winding-up order if the company bona fide disputed the existence of the debt. In that case it was found that there was a bona fide dispute between the parties and that the notice issued was a vehicle of oppression and an abuse of the process of the Court. But the same cannot be said in the present case. In In re Gold Hill Mines\2) also a winding-up petition was dismissed on the finding that it was an abuse of the process of the Court, it being a petition to compel payment of a small debt which was under bona fide dispute.

In the present case, Narayanlal Bansilal was not only the karta of the joint family but was also the Chairman of the Board of Directors of the Company. In the partition suit he filed an affidavit wherein he stated:

"Referring to para !O(c) of the affidavit I deny there is any manipulation in the balance sheet of Harinagar Sugar Mills Ltd., as falsely sought to be suggested by the 3rd defendant. No loan of Rs. 25,00,000/- has been given by me to the said company. The said amount is the balance of the purchase price payable by the said company to the joint family in respect of Harinagar Cane Farm."

In view of the said affidavit it is manifest that the alleged dispute was not bona fide but was only a part of a scheme of collusion between the Company and the karta of the joint family. There are, therefore, no" merits in any of the contentions raised by the Company.

In the result, the appeal fails and is dismissed with costs.

Appeal dismissed.

(1) A.I.R. 1936 Au. 84Q.

(2) (1833) L.R. 23 Ch. D. 210.

M!2Ssp. Cl./65-2,500-11-2-67-G!PF.

HARINAGAR SUGAR MILLS LTD

M. W. PRADHAN

K. SUBBA RAO

M. SHELAT, JJ.

CivU Procedure Code 1908

Indian Compania Act, 1956

ss. 439(1) and 434

s. 439

s. 46

Indian Income-tax Act, 1922

s. 434

s. 46

Indian Income-tax Act, 1922

s. 434

Companies Act

s. 439(1)

Companies Act

s. 434

s. 439(1)

Companies Act

s. 434

s. 434

Income-tax Act

CML APPELLATE JURISDICTION

Bombay High Court

N. C. Chatterjee

S. T. Desai

M. M. Vakil

Ganpat Rai

S. S. Khanduja

S. V. Gupte

B. Dadachanjl

0. C. Mathur

Rarinder Narain

Subba Rao

January 3, 1933

Harinagar Sugar Mills Ltd.

Indian Companies Act, 1913

Narayanlal Bansilal

Harinagar

Bihar

March 8, 1956

Narayanlal Baosilal

October 20, 1961

the Code of Civil Procedure

July 24, 1956

s. 46

Indian Income tax Act, 1922

June 29, 1962

s. 434

Companies Act

Bombay

Companies Act

November 22, 1963

January 10, 1964

Kantawala

Patel

Tulzapurkar

the Code of Civil Procedure

the Code of Civil Procedure

the Code of Civil Procedure

the Code of Civil Procedure

Palmer

SUPREME COURT REPORTS

[ 1966] 3 S.C.R.

the Code of Civil Procedure

the Code of Civil Procedure

Companies Act

Companies Act

Section 433

Section 434

Section 439

s. 439

Companies Act

Sacker

s. 6

Bankruptcy Act, 1883

Esher

SUPRBMB COURT RBPORTS

[1966] 3 S.C.R.

Fry

Lopes

Vaughan Williams

Macoun

England

India

the Code of Civil Procedure

the Code of Civil Procedure

Companies Act

Section 434

s. 439

Companies Act

Stroud

s. 439(1)(b)

Companies Act

s. 434

Companies Act

Section 434

Companies Act

s. 434(1)

Companies Act

s. 46(5)(a)

Indian Incometax Act, 1922

Section 434(1 )(a)

Companies Act

s. 46(5)(a)

Indian Income-tax Act, 1922

Section 46(5)

Income-tax Act

s. 434(l)(a)

Companies Act

s. 46(5)(a)

Income-tax Act

s. 434(1)(a)

Companies Act

s. 434(l)(a)

Companies Act

s. 46(5)(a)

Income-tax Act

s. 46

Income-tax Act

s. 434(I)(a)

Companies Act

s. 434(1)(a)

Companies Act

s. 46

Indian Income-tax Act

s. 46

Indian Income-tax Act

Companies Act

W. T. Henley

Gold Hill Mines\2

Harinagar Sugar Mills Ltd.

Harinagar Cane Farm


MIS. NANDRAM HUNATRAM, CALCUTTA

UNION OF INDIA & ANR.

March 29, 1966

[M.

H!DAYATULLAH, J. R. MUDHOLKAR, R. S. BACHAWAT

AND

J. M. SHELAT, JJ.1

Mines and Minerals-Failure t.o fulfil condition of lease and enda!lQering colliery-Government if can determine lease-Revi3ion-

Procedure for passing order-Mineral Concession Rules, 1960.

The appellant-firm held mining lease of a colliery on the condi tlon to continue the wnrk, without voluntary intermission, in a ski!· fut and v."Orkmanlike manner. The partners fell out amongst themaelves, the work of the colliery stopped, wages of the labourers were not paid, the essential services stopped working, and the colliery began to get flooded. The State Government stepped in and made a promise to the essential workmen that their wages would be paid D and this saved the colliery. The State Government gave a notice asking the firm to remedy the defect within sixty days failing which It would take over the colliery. As the firm did nothing to remove the defects and did not request for extension of time, the State G<lvernmcnt took over the colliery and terminated the lease. The firm filed a revision before the Central Government. The Central Government asked for the comments of the State Government and invited the firm to make its own comment upon the reply of the State Gov ernment. Taking the entire matter into consideration, the Central E Government rejected the revision. In appeal to this Court, the firm contended that the action by the State Government was arbitrary and highhanded and that the Central Government did not give a hearing to the firm and also did not give any reasons in its order dismissing the revision.

HELD: The action of the State Government far from being arbitrary or capricious was not only right but proper. This was hardly a case in which any action other than rejecting the app!ication for rep vision was called for and a detailed order was really not required because after all the Central Government was merely approving the action taken in the case by the State Gavernment, which stood completely vindicated. [108 B.c]

The Mineral Concession Rules make it incumbent on the Central Government to obtain the comments of the State Government upon the application for revision and cast a duty on the Central Gov G ernment to afford an opportunity to the applicant to make representations in respect of the commenL' of the State Government. This procedure was correctly followed and the Central Government thus had a detailed discussion of the pros and cons of the case before it

[107 G].

H11rinaaar Sugar Mills Ltd. v. Shvam Sundar Jhunjhunwala,[19621 2 S.C.R 339, Madh11a Pradesh Industries Ltd. v. Union of India. (1966] J.S.C.R. 466 and Aluminium Corporation of India r, td. v. Union of India and Ors., C.A. No. 635/64, dated 2~1965] referred to.

. '

NANDRAM HUNATRAM v. TTNIO" (!lirlayatul!ah, J.) 105

The firm did not fuM\I its obhgations under the lease and, whatever the reason, it was guilty of voluntary intermission in the working of the colliery and of endangering it by neglect. This entitled the State Government to step in and determine the lease under the terms of the lease and the provisions of the Mineral Concession Rules. [107 C-D].

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 257 of 1964.

Appeal by special leave from the judgment and order dated February 19, 1963 of the Government of India, Ministry of Mines and Fuel, New Delhi on an application for review under rule 54 of the Mineral Concession Rules 1960.

S. N. Andley, Ramesliwar Nath, P. L. Vohra and Mahinder Narain, for the appellant.

C. K. Daphtary, Attorney-General, R. Ganapathy Iyer and B. R. G. K. Achar, for respondent No. I.

R. N. Sachthey, for respondent No. 2.

The Judgment of the Court was delivered by

Hidayatullah, J. The appellant Messrs. Nandram Hunatram of Calcutta, a firm co:isisting of four partners including one Kishan Lal Aggarwal, held a mining lease for coal in respect of Handidhua Colliery for a period of 30 years commencing on April 6, 1959. Under Part VII of the lease, which contained the covenants of the lessee, the firm had undertaken to commence mining operations within one year from the date of the execution of the lease and then to continue the work of searching and winning minerals without voluntary intermission in a skilful and workman-like-manner. The firm had appointed one M. L. Goel as the Manager and Kishan Lal Aggarwal as the occupier of the colliery. It appears (and in fact it is not denied) that the partners fell out among themselves and 2s none of them was willing to spend money on the colliery, work deteriorated and came to a standstill in May 1962. Goel reported to the State Government that the wages of the labourers had not been paid for weeks, that work had stopped at the colliery and that even the essential services were not being maintained owing to non-payment of wages.

He wrote to the firm and Government early in the first week of May, bringing to their notice that the colliery was in danger of being flooded if the essential services stopped working. On May 9, 1962 the essential services stopped working as their wages had not been paid for several weeks. The colliery began to get flooded when the pumps stopped and it was apprehended that within the next few honrs the pumps would be drowned and the cdlliery

lost. Government, however, stepped in and made a promise to the essential workmen that their wages would be paid and this saved the colliery. On May 14, the Chief Inspector of Mines was informed by Kishan Lal Aggarwal that he was restrained by the other L, S5CSI-9( a)

81JPREMB COURT REPORTS I 19fi!j) 8UPP. o.C.R.

partners af the fim1 from making pa)ment for running expenses A

of the colliery and that he was not in a position to perform his duties as an occupier. He accordingly resigned his office. Goel also resigned and on May 16, 1962 the Subdivisional Officer, Talchar informed Government that the situation had become very alarming and that some action was absolutely necessary. Government there- B upon gave a notice on May 19, 1962 asking the firm to remedy the defect within sixty days of the receipt of the notice failing which Government threatened to take over the colliery from the firm. As the firm did nothing to remove the defects and did not request for extension of time, Government took over the cr-lliery and terminated the lease.

The firm thereupon filed an application for revision before the C Central Government under Rule 54 of the Mineral Concession Rules 1960. The Central Government asked for the comments of the State Government on the application and invited the firm to make its own comments upon the reply of the State Government.

Taking the entire matter into consideration the Central Government by order, Febiuary 19, 1963, rejected the application for revision. The present appeal is against the order of the Central Gov- D ernment by special leave of this Court.

It was admitted in the application for revision and it is not denied before us that the partners were quarrelling among themselves and the work at the colliery had therefore stopped. It is admitted that the wages of the labourers were not paid for about five weeks before Government sent its notice on May 19, 1962. It is E further admitted that the essential services hld also stopped working and that but for the timely action oo the Government, the colliery would have been flooded in a matter of hours and probably rendered unworkable till dewatered. With this background in mind we have to consider the objections of the firm to the order of the Central Government in the first instance and of the State Government in the final analysis.

Clause (3) of Part VII of the lease is one of the covenants by the lessee and under it the lessee undertook to continue work, without voluntary intermission. in a skilful and workman-like-manner.

Under els. (i) to (x) of Rule 41 of the Mineral Concession Rules. 1949 and under Rule 27(5) of the Mineral Concession Rules, 1960 power is conferred on the State Government to require the lessee G by notice to remove a breach within 60 days of the receipt of notice and in default to determine the lease and for.feit the whole ex part of the security in deposit. Under Ru!e 27(J)(f) the lc, sec is also required to conduct operations in a proper. skilful and workmanlike-manner. It is abvious that there was a breach by the lessee of the covenants and the Mineral Concession Rules when the firm H stopped working the colliery. Even if the firm did not order the

stoppai:e of the work at the colliery it is clear from the complaint!

NA~DRAM m; NATRAM v. UNI0N (Hidayalullah, J.) 107

of Goel and Kishan Lal Aggarwal that no payment was being made to the labourers and they stopped work. On record there are many telegrams and letters sent by the Workers' Association to Government complaining of the failure of the firm to pay their wages for weeks. It is thus clear that action was absolutely necessary to save the colliery from being ruined. It is contended, however, that the wages were paid in full on the 17th of July but that obviously cannot do away with voluntary intermission which had already taken place for a few weeks. The firm in its representation to the Central Government said that it had plans to raise as much as 240,000 tons of coal per year but their performance shows that in April, 1962 they had raised less than 2,000 tons and nothing in May, June and July. In these circumstances, there is no merit whatever in the submission of the firm that the action by the State Government was arbitrary and high-handed. It is plain that the firm did not fulfil its obligations under the lease and, whatever the reasooi., it was guilty of voluntary intermission in the working of the colliery and of endangering it by neglect. This entitled the State Government lo step in and determine the lease under the terms of the lease and the provisions of the Mineral Concession Rules.

It is, however, argued before us that the Central Government did not give a hearing to the firm and also did not give any reasons in its order dismissing the application for revision. Reliance is placed upon two recent decisions of this Court which, following the earlier decision reported in Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwa/a(') have laid down that Government should give reasons when it performs quasi-judicial functions such as hearin~ appeals and revisions. The two cases are Madhya Pradesh Industries Ltd. v. Union of India and Ors.(') and Aluminium Corporation of India Ltd. v. Union of India and Ors.(') In Harinagar Sugar Mills(') the order was reversed on the ground that reasons for the decision should have appeared. In the Aluminium case there was dispute as to how much scrap was remelted and Government gave its decision on a report received behind the back of the aggrieved party again without stating why a part of the assessee's case was rejected. In the Madhya Pradesh Industries case it was pointed out that an order affirming an earlier decision need not fail because it does not repeat the same reasons over again.

The Mineral Concession Rules make it incumbent on the Central Government to obtain the comments of the State Government upon the application for revision and cast a duty on the Central Government to afford an opportunity to the applicant to make representations in respect of the comments of the State Government. This procedure was correctly followed and the Central Government thus had a detailed discussion of the pros and cons of the case before it. The facts in the case were quite clear and spoke

(') (1962] 2 S.C.R. 330.

I') (196f>] J S.C.R, 466.

( 3) C.A. o. 635 of 1964decitl!O'd on September 23, 1065.

108 SUl'REMF. COURT lt!!:PORTS [196Gj 8Ul'P. 8, C, R.

for themselves. The belated attempt to pay the back wages of the workmen did not undo the voluntary intermission for a significantly long period and did not wipe off the dereliction on the part of the finn by which the existence of the colliery was gravely endangered. The documents on the record quite clearly establish that the colliery was being flooded as the .es•ential services had stopped functioning and but for the timely intervention of the State Government the colliery would have been lost. In these circumstances. it is quite clear that the action of the State Government was not only right but proper and this is hardly a case in which any action other than rejecting the application for revision was called for and a detailed order was really not required because after all the Central Government was merely approving of the action taken in the case by the State Government. which stood completely viPc; icated. The order of the Central Government is clearly sustainable on the material and it is not said that anything has been withheld from us.

The action of the State Government far from being arbitrary or capricious was perhaps the only one to take and all that the Central Government has done is to approve of it.

The appeal fails and is dismissed with costs.

Appeal dismissed.

MIS. NANDRAM HUNATRAM, CALCUTTA

UNION OF INDIA & ANR

R. MUDHOLKAR

R. S. BACHAWAT

M. SHELAT, JJ.

Mineral Concession Rules 1960

Mineral Concession Rules 1960

Mineral Concession Rules, 1960

(1962] 2 S.C.R. 330


• A '

GYASI RAM

BRIJ BHUSHAN DAS AND ORS.

March 30, 1966

[K. N. WANCHOO, J.C. SHAH AND S.M. SIKRI, JJ.]

Code of Civi! Procedure (Act 5 of 1908) O.XXXIV, r. 7(l)(c)

(i) and (ii)-"Amount adjudged in respect of subsequent costs, charges, expenses and interests"-Scope of.

A preliminary decree was passed in the appellant's suit for redemption of a mortgage. The decree specified the amoun.ts due as principal and interest, provided for payment of future mterest at 3% from the date of decree till date of realisation, and payment of the amount due by a certain date. It also provided that, if payment was made by that date, a final decree would be passed in favour of the appellant, but that, if the payment was not so made, the respondent would be entitled to apply for a final decree for foreclosure. The appellant appealed against the preliminary decree to the High Court and applied for stay of the order requiring him to deposit the decretal amount within the date fixed by the trial court, and the High Court granted stay on his undertaking to pay 9% interest instead of 3%, during the period of stay. Subsequently, the High Court dismis- Sed the appeal and confirmed the preliminary decree, but, the additional amount due for the period of stay on account of the undertaking, was not included by the High Court in the preliminary decree.

The appellant then applied for a final decree in his favour, after depositing a sum which was more than the amount to be deposited when calculated according to the preliminary decree, but was less than the amount when circulated according to the condition imposed by the High Court in its stay order. The trial Court however directed that a final decree for foreclosure in favour of the respondent be drawn up, On appeal, the lower appellate court ordered that a final decree be drawn up in favour of the appellant. In second appeal, the High Court took the view that the appellant had to deposit the entire amount due on the date of the deposit, as per its direction in the stay order, and as them was a shortaJge on the date of depositthough the shortage was made up after the judgment of the lower appellate court-onlv a final decree for foreclosure could be passed in the respondent's favour.

In appeal to this Court, HELD: The appellant was entitled to a final decree.

In order that a final deree may be passed in favour of the •Ppellant. he had to carry out before a final decree is passed, the terms of the preliminary decree and to pay "the amount adjudged due in respect of the subsequent costs, charges, expenses and interests" under O.XXXIV, r. 7(1) (c) (i) and (ii) of the Civil Procedure Code.

The appellant had carried out the terms of that decree by the deposit made by him and he had nothing to pay on account of $Ubsequent charges. costs, expenses and interest, because. the extra interest of 6% was not made a part of the decree, and it could not come within the \Vords "in respect of subsequent costs, charges, expenses and in terests." as it arose out of an independent order of the High Court

HO 8t'PREME COURT Rf.PORTS

J.1966] "1'1'1'. H.~.K.

and was only payable on account of the undertakmg for purposes of

A • stay. Further, .such subsequent costs. charges, expenses and interest have to be adjudged before the mortgagor is asked to deposit the amount. As regards the appellant's undertaking in the stay matter the court could insist on his honouring it before the final decree is passed. (112 F-113 CJ.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 959 of B 1964.

Appeal by special leave from the judgment and decree dated March 16, 1963 of the Madhya Pradesh High Court in Second Appeal No. 86 of 1962.

S. V. Gupte, So/iritor-General, Rameshwar Nath. S. N. A11dley P. L. Volzra and Mahinde1 .'Varain. for the appellant. c A. K. Sen and R. Gopalakrishna11, for respondent no. I.

The Judgment of the Court was delivered by Wanchoo, J. This is an appeal by special leave against the judgment of the Madhya Pradesh High Cmirt and arises in the following circumstances. The appellant brought a suit for redemption of certain mortgaged property. A preliminary decree was pass- D ed in the suit on February 3, 1954. It specified the amount due as principal and the amount due as interest upto a certain date. It also provided that future interest was to be paid at three per cent per annum on a certain sum from that date till the date of realisation.

Parties were to bear their own costs. Further the decree provided for payment of the amount due on or bofore July 15, 1964 or within such time as might be extended. It also provided that if payment E was made within the time limited under 0.XXXIV r. 7(1)(c) of the Code of Civil Procedure, final decree would be passed. In the alternative it was provided that if the deposit was not made, the respondent would be entitled to apply for passing of a final decree praying that the right of the appellant to redeem the mortgaged property be debarred.

There were appeals by both parties from this preliminary decree to the High Court. In the meantime the appellant had prayed for extension of time and the trial court had extended time for making payment upto August 15, 1954. About the same time, the appellant applied to the High Court praying that the arder requiring him to deposit the decretal amount by August 15, 1954 be stayed till the disposal of the appeal by the High Court. On this appli- G cation, the High Court passed an order on July 26, 1954. This order provided that if the appellant gave an undertaking to pay nine per cent per annum interest instead of three per cent per annum during the period of stay, the order of the trial court directing the appellant to deposit the decretal amount by August 15, 1954 would be stayed. Thereupon the appellant gave an undertaking to the trial H court on August 7. 1954 that he would pay nine per cent per annum simple interest instead of three per cent per annum cluring the period

GYASI RAM v. BR!J BHUSHAX DAS (Wrmc.lwo, .J.) 111

of stay. In consequence the order of stay passed by the High Court came into force and no deposit was made by August 15, 1954. On October 16, 1958, the High Court dismissed both the appeals and the preliminary decree stood confirmed.

On March 20, 1959, the appellant applied to the trial court for permission to deposit the sum of Rs. 42,204/5/-. On March 27, 1959, the trial court permitted the appellant to deposit the amount but made it clear that this did not amount to any extension of time for making the deposit, and the question whether the deposit was made within time would be decided after hearing both parties. Notice was also issued to the respondent on the same date.

On March 28, 1959, the appellant deposited the amount. On April 8, 1959 the respondent appeared and objected that the amount due was not Rs. 42,204 / 5 /- but Rs. 46,882 / 6 / 6 and therefore the deposit was short by a sum over Rs. 4,000 /-. Thereupon the appellant deposited a further sum of Rs. 4,590/- on April 9,1959 and prayed for a final decree in his favour. The trial court held on April 18, 1959 that the deposit was made beyond time and therefore directed that a final decree for foreclosure in favour of the respondent be drawn up. The appellant then went in appeal to the District Judge. The Additional District Judge who heard the appeal rejected the memorandum of appeal as insufficiently stamped. The appellant then filed a revision before the High Court. The High Court allowed the revision on July 22, 1961 and remanded the appeal to the Additional District Judge for decision on the merits. On March 23, 1962, the Additional District Judge allowed the appeal holding on the basis of O.XXXIV, r. 8 that as the amount had been paid before the final decree was passed, it was within time. Consequently the Additianal District Judge ordered that a final decree be drawn up in favour of the appellant. It may be noticed that it was also contended before the Additional District Judge that the amount deposited was short by Rs. 8811 / •.

The Additional District Judge pointed out that this was not made a ground of attack in the trial court. In any case he held that the amount which had to be deposited was as required by the preliminary decree and that the same had certainly been deposited.

We may add that it is not in dispute between the parties that if the amount to be deposited is to be in accordance with the preliminary decree, the appellant has deposited that amount, rather more. The shortage has occurred because for the period of stay the High Court had ordered the payment of an extra six per cent per annum interest and it is with respect to that interest that the shortage has occurred.

The respondent then went in second appeal to the High Court.

The High Court agreed with the Additional District Judge and H held that in view of O.XXXIV r. 8(1) the deposit made on April 9, 1959 before the final decree was passed on April 18, 1959 was within time, even thougti the money might have been deposited

112 Sl!PR~.'IE OOUllT REPORTS (1966] BUPP. e.c.R.

after the time fixed under O.XXXIV r. 7. But the High Court also A took the view that the mortgagor-appellant had to depoi; it the entire amount due on the date of lhe deposit and as there was a shortage of Rs. 88/1 /-, the entire amount had not been deposited and in consequence no final dr.cree could be passed in favoor df the appellant. In the result the High Court set aside the order of B the Additional District Judge and retored the order of the trial .'!'( court passing a decree for foreclosure in favour of the respondent.

Thereupon the appellant obtained special leave from this Court, and that is how the matler has come before us.

The only question raised on behalf of the appellant is that he had deposited the amount which was strictly due under the pre- C liminary decree and something more. The shortage was only on account of the sum due as a result of the stay order passed by the High Court by which he was required to pay six per cent per annum more as interest for the duration of the stay. It is urged that this amount could not be taken into account in considering the ques-

.J._ tion whether the appellant had deposited the entire amount due 7 under the preliminary decree. We are of opinion that there: fa D force in this contention and the appeal must succeed. Under O.XXXIV, r. 8(1) the mortgagor can deposit all amounts due under 0.XXXIV r. 7(1) before the final decree debarring him from all rights to redeem is passed. Order XXXIV r. 7(1) Jays down what a preliminary decree should contain and we are in the pre>-

sent case concerned with els. (b) and (c) thereof. In this case the preliminary decree had declared the amount due upto a certain date towards principal and interest and had also provide for three per F. cent per annum interest on a certain sum from that date and had directed as required by cl. (c) of 0.XXXIV r. 7(1) that if the mortgagor-plaintiff paid in court the amount found before a certain date a final decree in his favour would be passed. The preliminary decree also laid down that if payment was not made within the time fixed a final decree for foreclosure in favour of the F defendant-mortgagee would be passed. Now under O.XXXIV ' r. 711Hc)(i) and (ii) what the appellant had to deposit was the amount found under the preliminary decree and also "the amount adjudged due in respect of subsequent costs, charges. expenses and ' interests". It is not in dispute. as we have already indicated tha~

the appellant paid the amount found due under the preliminary decree and also the subsequent interest as provided in the decree.

G Only there was a shortage in the extra amount he had undertaken to pay as extra interest at the rate of six per cent per annum for the period of stay. The question is whether this amount can be said to be within the words "the amount adjudged due in respect of subsequent costs. charges, expenses and interests". We are of opinion that this extra amount which was to be paid on account H of the undertaking of the appellant for the purpose of stay cannot ccme within the wards "in respect of subsequent costs. charges,

GYASI RAM v. BRIJ BllUSHAN DA~ (Wanchoo, J.) Jl3

expenses and interests". It is not in dispute that the High Court dismissed the appeal of the appellant in 1958 and confirmed the preliminary decree and that the amount due on account of the undertaking to pay extra interest at the rate of six per cent per annum for the period of stay was not included by the High Court in the preliminary decree. This amount arose out of an independent order of stay and though the appellant was bound to pay it in view of his undertaking. it was not made a part of the amount due under the preliminary decree. Nor can it be said that it was due in respect of subsequent costs, charges, expenses and interests.

Besides, such subsequent costs, charges. expenses and interests have to be ad judged before the mortgagor is asked to deposit the a.mount and it is not in dispute that no adjudgement as to any subsequent costs, charges, expenses and interests was .made. So in order that a final decree may be passed in favour of the appellant, he had to carry out the terms of the preliminary decree and it is not in dispute that he had carried out the ter.ms of that decree, and he had to pay nothing on account of subsequent charges, costs, expenses and interests, for nothing was adjudged in respect of these. Nor as we have said already can the amount due as extra interest on the basis of the undertaking given by the appellant for the period of stay be considered to be of the nature of subsequent costs, charges, expenses and interests mentioned in O.XXXIV r. 7(1)(c)(i) and (ii).

It is however urged that on this view there would be no way to enforce the appellant's undertaking to pay extra interest for the period of stay. We do not think so. It would in our opinion be in, order for the court to insist befo1e it passed the final decree tha't the appellant honours his undertaking. But that is not to say that this amount due under an independent order of the High Court in connection with stay became part of the amount due under the preliminary decree or could be considered to be "subsequent costs, :harges., expenses and interests". We may add that the shortage m questlon was made good by the appellant soon after the order of the. Additional District Judge and long before the judgment of the High Court. As we have come to the conclusioo that this

mount due on account of the undertaking given by the appellant m the matter of stay cannot be taken to be part of the amount due under the preliminary decree. it must be held that the appellant was entitled to a final decree in his favour. We therefore allow the appeal, set aside the order of the High Court and restore the order of the Additional District Judge. The respondent will be entitled to withdraw the amount deposited by the appellant including the amount deposited on April 21. 1962 on the conditions in that order. In the circumstances however we pass no order as to costs throughout.

Appeal a/llowed.

RAM

BRIJ BHUSHAN DAS AND ORS

K. N. WANCHOO, J

C. SHAH

S.M. SIKRI, JJ.

the Code of Civil Procedure


1~4

BISWAMBAR ROY 1

GIRINDRA,", KUMAR P~UL

March 30, 1966

[K. N. WANCHOO,.l_ C. SHAH ANDS. M. S!KRI, JJ.]

The NonGl!lricu!tura! Urban Areas-Tenancy Act, Assam Act 12 of 1955 s. 5(1) (a)-Tenant of Land builtling structures within prescribed ver1.d-Letting out structures--2-Protectioh. from eviction under section whether available to tenant of land-Construction whether should -be for his own use. ' C

Certain structures for residential "and business purposes were - raised by a tenant of land inthe term of Si.Jchar' in Assam. Theland-

Jortl secured a .decree for ejectment against the tenant. During the pendency of the appeal the Non-Agricultural Urban Areas Tenancy Act, Assain Act 12 of 1955 was brdught into force. The tenant claimed .L protection froin eviction under s. 3 of the Act. The Subordinate Judge I field that the tenant had acquired under s. 5(l)(a) of the Act the right of a permanent tenant since he had constructed within the pres- D

1cribed period structure~ for residential or business purposes. He accordingly dismissed the suit. The High Court in further appeal held that the protection under s. 5(1)(a) was not available to the tenant since' he had let out to tenants th<> buildings constructed on the land.

The tenant, by special leave, appealed to this Court. ·

HELD: (i) The section mee'ly requires that the permanent structure must' be one adapted for iesldential or business purposes. If the siru, tur~ i~ not adapated to such \)urposes, the prot"}'tion of's. 5(1)(a') 'Will not be .available. To read the expr€!>sion ·"permanent structur:e on the land o.f the tenancy for residential or business purposes" as meaning petmanent structure on the land of the tenancy construc- d by the tenant for his own residentjal or busines.s purposes is to a\ld words which are not found in the section. [116 HJ.

(ii) Protection is conferred in terms by s. 5 upon the tenant of the land and not upon the tenant of the buildings constructed upon the land. By letting out the structures'the'tenant of land does not loS<> the protection given by the statute .. [117 CJ.,

CIVIL APPELLATE JURISDICTION: .Civil Appeal No. 891 of . 1963. .

Appeal by special leitve from the judgment and decree dated June 26, 1959 of the Assam Higli Court in Letter Patent Appeal "Nb.- I of 1959. .

r,~ C. Chatter.jee and D •. N. Mukherjee. for the appellants.

Sarjqo Prasad and K. P. Gupta, foI' respondents.

The Jiidgment of the Court was delivered by

~, .

Shah, J.

Biswambar Roy-predecessor-interest of the H appellants-was granted on Februarv 20, 1928, a lease for ten

BISWAMllAR 11.

Gl&INDHA KUMAR (8/wh, J.) 115

years 1335 B.S. to 1344 B.S. at an annual rental of Rs. 75/- in respect of a plot of land, part of Dag No. 3615 in the town of Silchar, District Cachar in the State of Assam. Biswambar Roy constructed on the land, buildings, some for residential use, and others as warehouses. On the expiry of the period of the original lease, Biswambar Roy obtained a fresh lease in respect of a part of the land for ten years-Baisakh 1345 B.S. to Chaitra 1354 B.S. -at an annual rental of Rs. 70 /- under an instrument dated February 22, 1938.

The respondents purchased the interest of the landlds :in the land and instituted on August 3. 1951 an action in the Court of the Sadar Munsiff, Silchar against Biswambar Roy for a decree for vacant possession of the land. The suit was decreed by the Munsiff. Biswambar Roy appealed to the Subordinate Judge, Silchar. During the pendency of the appeal, the Non-1gricultural Urban Areas Tenancy Act 12 of 1955 enacted by the Assam Legislature was brought into force. Biswambar Roy claimed prctection from eviction under s. 3 of Act 12 of 1955. The Subordinate Judge held that Biswambar Roy had acquired under s. 5(1)(a) of the Act the rights of a permanent tenant. since he had constructed within the period prescribed permanent structures for residential or business purposes. He accordingly reversed the decree passed by the Trial Court and dismissed the suit. Agalnst that decree, an appeal was preferred to the High Court of Assam. Deka, .T., held that Biswambar Roy could not claim the protection of s. 5(1)

(a) of the Act, since he hacl let out to tenants the buildings constructed on the land. In the view of the learned Judge, by the use of the expression "for residential br business purposes" in s. 5(1)(a) it is intended that buildings constructed by the tenant should be utilized by the tenant himself for his own residence or for carrying on business and that it is not the intention of the Legislature that third persons should be protected by s. 5 from eviction from those structures. An appeal under the Letters Patent from that judgment was heard by C. P. Sinha, C. J., and Mehrotra, J. The learned Judges differed. Sinha, C. J., was of the view that permanent structures constructed by Biswambar Roy conformed to the description "residential or business purposes" and Biswambar Roy became under Act 12 of 1955 a permanent tenant thereof and was not liable to be evicted except for non-payment of rent. With that view Mehrotra, J., did not agree. He held that a tenant who obtains land on lease for erecting a structure thereon not for his own residential or business purposes but for letting O'Ut to others does not build "a permanent structure on the land of the tenancy for residential or business purposes". and may not claim protection under s. 5(l)(a). Since there was no majority concurring in the judgment agreeing or reversing the decree appealed from, under s. 98(2) of the Code of Civil Procedure the appeal was ordered tb be dismissed. Against the decree passed bv the High Court. with special leave, this appeal i< rreferred. -

116 [l966) 8UPP. 8, C'.B, ~

This Court has held that s. 5 of Assam Act 12 of 1955 has A retrospective operation: Refique11nessa v. Lal Bahadur Che1ri & Others,(') and the only question to be determined in this appeal is whether a tenant qualifies for protection under s. 5 of the Act only after building permanent structures on the land of the tenancy if he occupies them for his own residential or business purposes. The material part of the section reods: B

"(!) Notwithstanding anything in any contract or in any law for the time being in force-

(a) Where under the terms of a contract entered into between a landlord and his tenant whether before ar after the commencement of this Act, a tenant is entitled to build. and has in pursuance C of such terms actually built within the period of five years from the date of such contract. a permanent structure on the land of the tenancy for residential or business purposes. or where a tenant not being so entitled to build, has actually built any such structure on the land of the ten- D ancy for any af the purposes aforesaid with the knowledge and acquiescence of the landlord, the tenant shall not be ejected by the landloird from the tenancy except on the ground of non-payment of rent;"

Protection under the first part of s. 5(1)(a) may be claimed by a tenant if three conditions co-exist: (i) under the terms of the con- Jil tract of tenancy the tenant is entitled to build on the land of the tenancy; (ii) that pursuant to such liberty, he has actually buiilt within the period of five years from the date of the contract a permanent structure on the land of the tenancy; and (iii) that the permanent structure is for residential or business purposes. The first two conditions are fulfilled in this case. But the learned Judges of the High Court dLagreed on the fulfilment of the third F condition: they differed as to the true meaning of the exp<essinn

"a permanent structure . . . . for residential or business purposes". In the view of Sinha, C. J., under the Act the character of the structure is determinative and not personal use by the tenant. Mehrotra, J ., held that the permanent structure must be for residential or business purposes of the tenant. We are unable to agree with the view taken by Mehrotra, J ., because the Legislature G has not. in conferring rights of permanent tenancy, either expressly or by implicaticn enacted any such qualification as is suggested by the learned Judge. The section merely requires that the permanent structure must be one adapted for residential or business purposes.

If the structure is not adapted to such purposes, the protection of s. 5(1)(a) will not be available. To read the expression "permanent B ------------

(') [100.J 6 S.C.R. 87A.

I I

BlSWAMBAR V. GIR!NDRA. KUMAR (Shah, J.) 117

structure on the land of the tenancy for residential or business purposes" as meaning permanent structure on the land of the tenancy constructed by the tenant for his own residential or business purposes is to add words which are not found in the section.

It was urged on behalf of the landlords that it could not have been the intention of the Legislature to confer by s. 5(l)(a) protection upon sub-tenants. It was said that a sub-tenant is not a tenant within the meaning of s. 3(g) of the Act, and he cannot claim protection from eviction under s. 5(l)(a). In our judgment, the argument is wholly misconceived. Protection is conferred in terms by s. 5 upon the tenant of the land and not upon the tenant of the buildings constructed upon the land. It is not necessary in this case to consider whether by virtue of the definition of "tenant" in s. 3(g) of the Act which includes a person who derives his title from a tanant, a sub-tenant of the land is entitled to protection of s. 5(1)(a). In the present case, the tenant of the land has claimed protection. By merely letting the premises cDnstructed on the land obtained by him on lease, the tenant does not cease to be in possession of the land. The relation between the landlord and the tenant of the land continues to subsist until it is lawfully determined. Possession of the land ubtained by the tenant remains his even after he has let oi; t the building constructed by him, and a building constructed by the tenant for use as residential or business purposes does not cease to be one for residential or business purposes, when it is let out.

We therefore agree with the view taken by Sinha, C. J., that the protection of s. 5(1)(a) extends to a tenant who has constructed on the land obtained on lease permanent structures which are adapted for use for residential or business purposes and by letting out the structures the tenant does not forfeit the protection conferred by the statute.

The appeal is herefore allowed and the decree passed by the High Court vacated and the plaintiffs' suit dismissed. The appellants who are the representatives of the tenant will be entitled to their costs in this Court. There will be no order as to costs in the High Court.

Appeal allowed.

4

BISWAMBAR ROY

K. N. WANCHOO

l_ C. SHAH

Urban Areas-Tenancy Act

s. 5(1)

s. 3

s. 5(l)(a)

s. 5(1)(a)

s. 5(1)(a')

s. 5

Urban Areas Tenancy Act

s. 3

s. 5(1)(a)

s. 5(1)

s. 5(1)(a)

s. 5

Biswambar Roy became under Act

s. 5(l)(a)

s. 98(2)

the Code of Civil Procedure

s. 5

s. 5

s. 5(1)(a)

s. 5(1)(a)

s. 5(l)(a)

s. 3(g)

s. 5(l)(a)

s. 5

s. 3(g)

s. 5(1)(a)

s. 5(1)(a)


JJS '.

TillRUNAGAR PANCHAYAT

v .

. MADURAI CO-OPERATIVE" HOUSE

CONSTRUCTION ·

SOCIETY

. March 31, 1966

. (K. SUBBA RAO AND V. RAMASWAMI, JJ.]

Madras Village Panchayats Act (10 of 1950). s. 5~Scope of.

The respondent-Society formed a housing colony, laid out pub-. lie roads and set apart public common places for parks, play-grounds, schools, library, hospital and club for . the benefit of. the :members of the colony. The respondent passed a resolution for handing over the roads arid the other common places to the appellant-Panchayat, but later, passed another resolution cancelling it. The appellant, thereupon, filed a suit for an injunction restraining the respondent from obstructing the appellant in the exercise of its statutory. duties in relation to the roads and other common places. The High Court, on appeal, held that the streets and. the roads in the colony alone would vest in the zppellant under the Madras Village Panchayats Act, 1950 and that.· an injunction could be granted only with respect to them, but not, with respect to the other amenities which the respondent had provided for the residents of the colony. . ·

In appeal to this Court, it was contended that th~ amenities excluded would also vest in the appellant under s .. 58 "of the Act, especially because they had been dedicated to the public.

I . - . - •.

HELD: The scope of the section must be confined to communal property and income of the Panchayat which, by custom, belong to the villagers in common, or, has been administered for their benefit as a matter of custom. Therefore, the section cannot be extended to amenities such as parks, play-grounds etc. provided by the respondent for the benefit of the members of the colony; and dedication is not a relevant_ circumstance in considering its scope and mean ing. [121 E-F; 122 A-BJ. • · . ·

OVIL APPELLATE JURISDICTION: Civil. Appeal No .. 374 of 1965: .. ··· ... •.. i .. · . . Appeal by special' leave from the jdgment and deree dated August 9, 1963 of the Madras High Court in LP.A. No. 45 of 1962. . . - .

A. V. Narayanaswami Iyer and S. Venkatakrishnan, for the appellant.

A. K. Sen, N. Natesan and R. Ganpathy Iyer for the respond ent.

The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by special leave, from

the judgment and decree of the Madras High Court dated August 9, E 1963 in Letters Patent Appeal No. 45 of 1962.

, t I

. .

THIRUNAGAR PANCHAYAT v. COOP. HOUSE SOCY. (Ramaswami, J.) 119

A The suit which is the subject-matter of this appeal was filed by the Tirunagar Panchayat, hereinafter called the 'Panchayat', against the Madurai Co-operative House Construction Society (hereinafter called the 'Society') in the District Munsif's Court of Tirumangalam. The Tirunagar Colony has been formed by the Society. The Colony consists of about 300 houses and its total population ex- B ceeds J ,500. At its inception the colony was within the jurisdiction of the Tirupparakundram Panchayat. On February 21, 1955 the Tirunagar colony was excluded from Tirupparankundram Panchayat and was declared as a separate village and was constituted as a separate Panchayat known as Tirunagar Panchayat. In the formation of the colony the Society has laid out and set apart and formed public roads, parks, play grounds and other public common C places. There was a change in the Board of Directctrs of the defendant-Society and as a consequence of this change the Society passed a resolution on July 23, 1956 cancelling its previous resolution handing over the roads, streets and scavenging arrangements to the Panchayat. The Panchayat therefore filed a suit-0.S. 38 of 1957, in the District Munsif's Court of Tirumengalam for an injunction restraining the Society and its servants from obstructing D and intdedr:ig with its lawful exercise of statutory duties relating to the roads and streets in Tirumgar and cleaning of latrines, public and private, lighting the houses and roads and making arrangements for the civic needs of the village of Tirunagar. The Society contested the suit on the ground that the constitution of the Pan chayat was illegal as the provisions of the Madras Village Panchayats Act (Madras Act 10 of 1950), hereinafter to be called the E 'Act', had not been complied with. The Society also contended that the public cannot use the roads or streets as a matter of right, that the entire colony was a closed one and no outsider except the members of the Society had the right to enter the colony and that the Parks, central oval, play grounds and open spaces were the exclusive properties of the Society. The contentions of the Society were all over-ruled by the trial court and a permanent injunction was F granted to the plaintiff-Panchayat, as prayed for. The decision of the trial court was affirmed by the Subordinate Judge of Madurai in A.S. 92 of 1958. The Society took the matter in Second Appeal to the High Court. The appeal was partly allowed by Ramakrishnan, J. who held that the streets and roads in Tirunagar colony alone would vest in the Panchayat and that the injunction passed by the lower appellate court should be confined only to streets and roads G in the colony and should not be extended to any other place like the parks, oval park, play grounds, schools, library or club and such other amenities which the Society had provided for the residents of the colony. The decision cf Ramakrishnan, J. was affirmed by the High Court in Letters Patent Appeal and the injunction granted by the lower courts was accordingly confined to roads and streets H and the cleaning of public and private latrines, and the decree of the lower courts was set aside so far as the injunction relat, d to the parks. play grounds, bus-stand and other public places.

L/S5SCI-!O

120 St:PRE~K COt'RT REPORTS

[J 966] SUPI'.S.O .II,

The question presented for determination in this appeal is whether there is a statutory vesting in the panchayat of the parks, play grounds, schools, libraries and other public places which the Society provided for its members and whether the Panchayat is entitled to a permanent injunction restraining the Society and its servants in the manner decreed by the trial court.

On behalf of the appellant reference was made toss. 56 and 58 of the Act relating to vesting of the property in the Panchayat.

Section 56 of the Act reads as follows: -

"56. (!) All public roads in any village (other than district roads and roads which are classified by the Government as national or State highways), shall vest in the panchayat together with all payments, stones and other materials thereof, all works, materials and other things provided therefore, all sewers. drains, drawings works tunnels and culverts, whether made at the cost of the panchayat fund or otherwise, in, alongside or under such roads, and all works, materials and things appertaining thereto.

..J Section 58 is to the following effect: -

SI I I• •

"Any property or income which by custom belongs to, or has been administered for the benefit of, the villagers in common, or the holders in common of village land generally or of lands of a particular description or of lands under a particular source of irrigation shall vest in E the panchayat and be admini, tered by it for the benefit of the villagers or holders aforesaid."

The rules framed under the Co-operative Societies Act for the formation of House Building Societies required that when an area is set apart for a residential colony provisions for schools, markets, theatres. hospitals, clubs, religious places etc. should be made in F the layout. Reference was made, on behalf of the appellant, to the layout plan Ex. A-44 for the Tirunagar Housing colony. There is evidence in this case that the Government had assigned to the House

Buiding Society free of cost an area of about 5 acres for the proposed public amenities like schools, markets etc. It was submitted cm behalf bf the appellant that the parks. play grounds. hospitals, schools etc. of the Tirunagar Housing Colony would vest in the Pan- G chayat under s. 58 of the Act. We do not consider that there is any justification for this argument. Under s. 56 of the Act all 'public roads' in any village shall vest in the Panchayat together with al!

pavements, stones and other materials thereof. all sewers, drains. drainage works, tunnels and culvert,, whether made at the cost of the panchayat fund or otherwise. Under s. 2(20) of the Act a H 'public road' means "any street, road, square, court, alley. passage, cart-track, footpath or riding-path, over which the public have a

THIRUNAGAR PANCHAYAT v. COOP. HOUSE SOOY. (Ramaswami, J.) 121

right of way". Section 58 of the Act provides for vesting of the communal property in the panchayat. By this section the legislature has provided that any property or income which by custom belongs to the villagers in common, or the holders in common of village land generally or of lands of a particular description shall ves~ in the panchayat. The legislature has further provided m this section that any property or income which by custom has been adinistered for the benefit of the villagers in common or the holders m common of village land generally or of lands of a particular description shall vest in the panchayat and be administered by it for the benefit of the villagers or the holders aforesaid. In enacting s. 58 of the Act the legislature has made a provision for vesting of two kinds of property or income: (]) property or income which by custom belongs to the villagers in common or the holders in common of village land generally or of lands of a particular description, and (2) property or income which has been administered by custom for the benefit of the villagers in common or the holders in common ocf village land generally or of lands of a parficular description. Having regard to the grammatical structure and the context, we are of opinion that the expression "by custom" qualifies not only the property or income which belongs to the villagers but also property and income which has been administered for the benefit of the villagers in common. It is manifest that s. 58 provides for the vesting of such property and income to which the viliagers have acquired title as a matter of custom or which has been administered for the benefit of the villagers as a matter of custom. It was argued on behalf of the appellant that if parks or play grounds or markets had been dedicated to the public the Panchayat would acquire title to such properties under s. 58 of the Act. We do not think that dedication is a relevant circumstance in considering the scope and meaning of s. 58 of the Act. In the enactment of this section the legislature did not contemplate that parks, play grounds, schools or temple or hospital dedicated to the public should vest in the pan cha ya t merely by the fact of such dedication. What is required by s. 58 for the purpose of vesting is the proof of custom by which the villagers in common acquire title to any property or income. Vesting of rights takes place under s. 58 if there is proof of customary right Qlf administration of any property or income for the benefit of the villagers in common. Unless therefore there is proof of customary right, the

Panchayat cannot claim title to the property or income ad ministered for the benefit of the villagers in common.

For example, the Society may have established a library or a social club or a school for the benefit of its members Again, a private individual may have created a trust for the provision of amenities like parks, play grounds and hospitals for the residents of the village. In a case of this description the legal ownership of the Society or of the trustees will not vest in the Panchayat because of the provisions of s. 58 of the Act. It cannot be supposed that such a startling and unjust result was contemplated by the

L/S5SCI-IO(a)

122 s1:rRl'lllB C'Ol; HI' J\F.POIUS [1966) ScPP s.C.R.

legislature in enacting s. 58. We are accordingly of the opinion that the scope of s. 58 of the Act must be confined to communal property and income of the panchayat which by custom belongs to the villagers in common or has been administered for their benefit as a matter of custom, and the scope of that section cannot be extended to include parks, play grounds, hospitals, libraries and schools provided by the Society for the benefit of the members of the Tirunagar colony.

For these reasons we hold that the judgment and decree of the High Court in Letters Patent Appeal No. 45 of 1962 is correct and this appeal must be dismissed with costs.

Appeal dismissed.

A •

B .. -"·

TillRUNAGAR PANCHAYAT

MADURAI CO-OPERATIVE HOUSE CONSTRUCTION SOCIETY

K. SUBBA RAO

V. RAMASWAMI, JJ.

Madras Village Panchayats Act

s. 5

Madras Village Panchayats Act, 1950

S. 38

S. 92

Section 56

Section 58

s. 58

s. 56

s. 2(20)

Section 58

s. 58

s. 58

s. 58

s. 58

s. 58

s. 58

s. 58

s. 58

s. 58