TRA VANCORE-COCHIN CHEMICALS (P.) LTD. v.

COMMISSIONER OF WEALTH-TAX, KERALA April 6, 1967

[J. C. SHAH, S. M. SIKRI AND V. RAMASWAMI, JJ.J

Wealth Tax Act (27 of 1957), s. 45(d), proviso-Company incorpo- B rated on one date and commencing business on a later date-When "'estab/ished"-Meaning of "estab/ishetf'.

The appellant, which was a private limited company, was formed and registered under the Indian Companies Act, 1913, on 8th November,

1951. The erection and construction of its factory was completed in December 1953 and production conunenced from 1-1·1954. On the question whether the company was established on 8th November, 1951, C the date of its incorporation and was therefore liable to pay wealth tax for the assessment years 1957-58, 1958-59 and 1959-60, on the basis that the exemption from payment of wealth tax under the proviso to s. 45d) was only for five successive assessment years commencing with the assessment year next following the date on which the company was established.

HELD: A comparison of clauses (d) and (f) of s. 45 shows that D the word "established" in cl. (d) and its proviso, does not mean "in corporated". The word "established" bas the same meaning it has in s. 5 ( 1 )(xxi) of the Act, namely, that the Company has been put into such a shape that it can start functioning as a business or a manufacturing organisation.

So construed, the appellant was established within s. 45(d) only in December, 1953,, or 1st January 1954, and the five assessment years next following would be 1954-55, 1955-56, 1956-57, 1957-58 and

1958·59. Therefore, the appellant would be entitled to exemption for E tho assessment years 1957-58 and 1958-59 but not for 1959-60. [451F;

452D-E; 453B-C] Commissioner of Wealth Tax, Madras v. Ramaraju Surgical Cotton Mills Ltd. [1967] I S.C.R. 761, followed.

Thomas !. Davidson v. W. L. Lanier, 18 'L.Ed. 377, 379, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 405- F 407 of 1966.

Appeals by special leave from the judgment and order dated March 9, 1964 of the Kerala High Court in Income Tax Referred Case No. 4 of 1963.

S. T. Desai and G. L. Sangh1', for the appellant (in all the appeals).

G T. V. Vishwanatha l, ver, Gopal Singh, S, P. Nayyar and R. N.

Sachthey, for the respondent (in all the appeals).

The Judgment of the Court was delivered by Sikrl, J. These appeals by special leave are directed against the judgment of the High Court of Kerla in a reference made H to it by the Income-Tax Appellate Tribunal, Madras Bench, under s. 27(1) of the Wealth Tax Act, 1957, hereinafter referred to as the Act. The reference was made a• the instance of the

Commissioner of Wealth Tax, Kerala, and the question referred was as follows :-

"Whether the exemption from tax for the assessment years 1957-58, 1958-59 and 1939-60 was not rightly granted."

The High Court held that the exemption from tax granted to the assessee under s. 45 ( d) of the Act for the assessment years 1957-58, 1958-59 and 1959-60 was not rightly granted and answered the question against the assessee.

The relevant facts are as follows :-The appellant, Travancore Cochin Chemicals

(P) Ltd., hereinafter called the assessee, was formed and registered under the Indian Companies Act on November 8,

1951. The prior history of the Company is given in the statement of the case as follows :-

"On 22-7-1949, a partnership was formed between two public limited companies, viz., Fertilisers & Chemical Travancore Ltd., Alwaye, and the Mettur Chemical & Industrial Corporation Ltd., Mettur, for establishing a Caustic Soda Factory with an estimated capital of Rs. one crore. The firm could not function due to lack of finance.

The Government of Travancore was approached for necessary finance to complete the purchase of plants and machinery which had been started in August 1949, and that Government entered the Company and subscribed a large share capital and a new private limited company was formed and registered under the Indian Companies Act on 8-11-1951." Further facts given in the statement of the case are as follows :-

"This new company took over the plant, machinery, buildings, construction stores, materials, etc., at different stages of erection and also all book debts and liabilities.

The erection and construction of the factory was completed in December, 1953, and production commenced from 1-1-1954. The trading accounts were closed for the first time on 31-3-1954. There was a loss of Rs. 16,04,212/- incurred." For the assessment year 1957-58 (the relevant date of valuation being March 31, 1957) the asessee claimed before !he Wealth Tax Officer that it was not liable to pay wealth tax dunng the year of account as it was exempted from wealth tax under

s. 45(d) of the Act. The Wealth Tax Officer rejected the claim on the ground that the assessee was established within the meaning of s. 45(d) and the proviso thereto, in November 1951, a!ld consequently the period of five years exemption was over with the assessment year 1956-57.

SUPREME COURT REPORTS

(1967) 3 S.C.R.

The relevant portion of s. 45 of the Act reads as follows :-

"45. The provisions of this Act shall not apply to- (a) (b) ( c) any company established with the object of financing, whether by way of making Joans or advances to, or subscribing to the capital of, private industrial enterprises in India, in any case where the Central Government has made or agreed to make to the company a special advance for the purpose or has guaranteed or agreed to guarantee the payment of moneys borrowed by the company from any institution outside India; ( d) any company established with the object of carrying on an industrial undertaking in India in any case where the company is not formed by the splitting up, or the reconstruction of a business already in existence or by the transfer to a new business of any building, machinery or plant used in a business which was being previously carried on : Provided that the exemption granted by clause (d) shall apply to any such company as is referred to therein only for a period of five successive assessment years commencing with the assessment year next following the date on which the company is established, which period shall, in the case of a company established before the commencement of this Act, be computed in accordance with this Act from the date of its establishment as if this Act had been in force on and from the date of its establishment; Explanation.- ( e) ..... .

(f) any company registered under section 25 of the Companies Act, 1956." The Wealth Tax Officer followed the same reasoning for the assessment years 1958-59 and 1959-60. The Appellate Assistant Commissioner of Wealth Tax upheld the orders of the Wealth Tax Officer.

The Income Tax Appellate Tribunal, however, allowed the appeals of the assessee. It held that the woFd "established" in s. 45 ( d) was used in contradistinction to the word "incorporated". It observed :

"It seems to us that this 'establish' (sic) can be inferred only wh1n the object with which the company was formed or incorporated is begun to be achieved."

T. C. CHBM. LTD, v. COMMR. W. TAX (Sikri, J.) 451

A It further held :

"To attract tax under sec. 3 there must be an assessment year as defined in sec. 2(d). In this case, the assessment has commenced for the first time in 1954-55 and having regard to Part II of the Scliedule to the Wealth Tax Act, the first year 1954-55 having ended in a loss, the assessment year can be said to commence only from 1955-56. For five years from then, the asseo; see would be entitled to the exemption."

As mentioned above, the Appellate Tribunal referred the question at the instance of the Commissioner, and the High Court answered the question against the assessee. The assessee having obtained leave from the High Court, the aru>eal is now before us.

The learned counsel for the assessee contends that the word "eStablished" in s. 45 ( d) has the same me.an'ing ils it has in s. 5 ( l) ( xxi) of the Act, which was inrpreted by this Court in

Commissioner of Wealth Tax, Madras v. Ramaraju Surgical Cott0rt Mills Ltd. ( 1) He says that the w11rd "established" cannot be equated with the word "incorporated''. The learned counsel for the respondent, on the other harid, contend• that the word "established" ins. 4S(d) has a different meaning to that in s. S(l)(xxi), ass. 45(d) deals with a company being established while s. 5 (l )( xxi) deals with a unit being established. Bhargava, J., speaking for the Court, in Commissioner of Wealth Tax, Madras v. Ramaraju Surgical Cotton Mills Ltd.,(') observed:

'A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up. It is only when tho unit has been put into such a shape that it can start functioning as a business or a manufacturing organisation that it can be said that the unit has been set up. The expression used in the proviso, under which the period for which the exemption is available is to be determined, is not the same as that used in the principal clause. In the proviso, the period of five successive years of exemption has to commence with the assessment year next following the date on which the company commences operations for the

establishment of the unit. Operations for the establishment of a unit, from the very nature of that expression, can oy signify i; teps that have to be fali:en to establish tho unit. The word 'set up' in the principal clause, in our opinion, is equivalent to the word established', but operations for establishment cannot be equated with the establishment of the unit itself or its setting up. The applicability of the proviso has, therefore, to be decided

(I) [~967) I.S.C.R. 761, 7114 : 63 l.T.R. 478, 481-482.

LSSup CJ/67-16

452 SUP.IU!MB COURT .RBPOJtTS [1967] 3 s.c.R.

by finding out when the company commenced operations for establishment of the unit, which operation must be antecedent to the actual date on which the company is held to have been set up for purposes of the principal clause.

This is also the meaning that the Bombay High Court derived in the case in Western India Vegetable Products Ltd.,(') where that Court was concerned with the interpreta .ion of the expression 'set up' as used in section 2 ( 11 ) of the Income-tax Act.

Th.at court held : 'It seems to us that the expression setting up means, as is defined in the Oxford English Dictionary,-to place on foot or to establish, and in oontradistinction to commence. Tho distinction is this that when a business is established and is ready to eommence

business, then it can be said of that business that it is set up. But before it is ready to oommence business it is not set up.

This view was expressed when that Court was considering the difierence between the meaning of the expression setting up a business and oommencing of a business." It seems to us that the same meaning must be given to tho word "established" ins. 45(d) as ins. 5(l)(xxi). Ii would be noticed that s. 45 uses tho word "established" in cl ( c) and in tho proviso to cl. ( d), while the word "formed" is also used, apart from the word "established" in cl. ( d); and in cl. (f) the word "registered" is used.

Thero is a clear distinction between tho word "registered" or "inoorporated" and the word "established".

If the Legislature was thinking of inoorporation of a oompany, then we fail .to understand why this word was not used instead of the word "established". Further, if we look at cl. (d), it excludes certain industrial undertakings from the benefit of s. 45; wha:t artl -excluded are oompanies "formed by tho splitting up, or tho :reconstruction of a business already in existence or by the transfer to a new business of any buildin~. machinery or plant used in a business which was being previously carried _on." Ordinarily the date of incorporation of a company has nothing to do with the transfer qf a machinery or plant to it.

The case of Thomas I. D11Vidso11 v. W. L. Lanier(") also

Jen~ support to the interpretation which we have placed on the word "established" .. Chase, C.J .. Observed:

"What is meant by. putting in operation ()r esiablishing a Banking Company ?

We think that this Ian guage has a much wider. import than mere commen<; cment of business. To establish a company for any business means complete and -permane!lt provision for

. (I) 26 I.T.R. 151.

(2) 18 L. Ed. 377, 379 • . •

carrying on that bu5iness, and putting a company in operation may well include its continued as well as its first or original operation." We may mention that no other poirit was debated before us.

In the result w~ hold that the assessee was established within s. 45 ( d) of the Act in December 1953, or January 1, 1954. The first llSSC$Sment year following the date of establishment of the Company was 1954-55, and the next four assessment years would

be 1955-56, 1956-57, 1957-58 and 1958-59. The only assessment year in dispute that is not covered is 1959-60. Consequently the answer to question referred is that the exemption for the

:wessment years 1957-58 and 1958-59 was wrongly withheld while the exemption for the year 1959-60 was rightly not granted.

We accordingly accept the appeals and answer the question as indicated above. There will be ao order to costs.

V.P.S.

Appeal allowed In part.

TRA VANCORE-COCHIN CHEMICALS (P.) LTD

COMMISSIONER OF WEALTH-TAX, KERALA

April 6, 1967

C. SHAH

S. M. SIKRI

V. RAMASWAMI, JJ

Wealth Tax Act

s. 45(d)

Indian Companies Act, 1913

8th November,

1951

s. 45

s. 45

s. 5

s. 45(d)

1st January 1954

S. T. Desai

G. L. Sangh1

G T. V. Vishwanatha

Gopal Singh

S, P. Nayyar

R. N.

Sachthey

Sikrl

High Court of Kerla

s. 27(1)

Wealth Tax Act, 1957

s. 45

Travancore Cochin Chemicals

(P) Ltd.

Companies Act

November 8,

1951

Fertilisers & Chemical Travancore Ltd.

Alwaye

Mettur

Government of Travancore

Companies Act

March 31, 1957

s. 45(d)

s. 45(d)

s. 45

India

Central Government

section 25

Companies Act, 1956

Assistant Commissioner of Wealth Tax

Income Tax Appellate Tribunal

s. 45

sec. 3

sec. 2(d)

s. 45

s. 5

s. 5

Bhargava

Bombay High Court

Western India Vegetable Products Ltd.

section 2

Income-tax Act

s. 45

s. 45

s. 45


MANGAL SINGH & ORS.

SHRIMATI RATTNO & ANR.

April 6, 1967

[K. N. WANCHOO, V. BHARGAVA AND G. K. MITTER, JJ.)

Hindu Succession Act (30 of 1956), 1. 14-lllndu widow inheriting properlj1 from husband in 1917-DisposseSJed by husband's coUaterqls in 1954-Suit for recovery of possession filed by her-During pendent:l. of 1uit Act 30 of 1956 passt<J:-S. 14 of Act conferring rights of fllll ownership to women holding as limited owners In respect of property "possessed by" them-Dispossessed owner whether posseS1t11 property within meaning of section.

A Hindu widow in the Punjab came into possession of her busband'a land on his death in 1917. She continued in possession till 1954 when on an application made by certain collaterals of her late husband the Naib Tebsildar effected a mutation in favour of the collaterals. On the basis of the Naib Tehsildar's order the collaterals d:apossessed the widow.

She filed a suit for recovery of possession of the land. After the institution of the suit the Hindu Succession Act, 1956, came into foo:e. During the pendency of the suit, in. 1958, the widow died and her daughter was substituted as legal representative. The defendants pleaded that the widow had lost her right to the land because of her karewa marriage with one of the collateral&, and that the daughter could not succeed to the land as she was not in possession of the hind on the coming into force of the Hindu Succession Act so as to become full owner of the land under s. 14 thereof. The trial court di•miw:d the suit but the 1lmt appellate court decreed it, holding that there was no karewa marriage as

alleged by the defendants, and that s. 14 was applicable to the case. The High Court dismissed the appeal filed by the defendants who came to this court by special leave.

HELD : (i) The finding of fact by the first appellate court that there was no karewa marriage was binding on the delOndants, and the High Court rightly accepted it. It was not open to the defendants to challenge the finding in this Court.

[457H] ·

(ii) The use of the expression ''possessed by" instead of the expression "in possession of" in s. 14(1) was intended to enlarge the meaning of this expression to cover cases of possession in law. On the language of s. 14 ( I ) the provision will become applicable to any property which is owned by a female Hindu even though she is not in actual physical or constructive possession of the property. [459C-D; 460DJ ·

The section however will not apply to cases where the Hindu female G may have parted with her rights so as to place herself in a position where she could in no manner exercise her rights in that property any longer.

[465CJ

On the facts of the case the plaintiff widow had acquired full rights of ownership of the land under s. 14 of the Hindu Succession Act. On her death in 1958 the property passed to her daughter. The High Court, rightly dismissed the defendants, appeal. [4650] ll

Gwmnalapura Taggina Matada Kotturuswami v. Setra Veerayya & Ors. [1959] Supp. I S.C.R. 968 and Brahmdeo Singh v. Deomani Misslr.

C.A. No. 130/ 1960 dated 15-10-1962, d1stingulshed.

A S. S. Munria Lal v. S. S. Ra; kumar, [1962] Supp. 3 S.C.R. 418 and Eramma v. Veerupana, A.I.R. 1965 S.C. 1879, applied.

Gaddam Venkayamma v. Gaddam Veerayya, A.I.R. 1957 A.P. 280, Sansir Pate/in & Anr. v. Satyabatl Naikani & Anr. A.l.R. 1958 Orissa 75,

Gaiesh Mahanta v. Sukria Bewa, A.LR. 1963 Ori•sa 167, Hapak Singh

v. Kai/ash Singh & Anr. A.I.R. 1958 Patna 581, Ram Gu/am Singh v.

Pa/akdhari Singh, A.LR. 1961 Patna 60" Nathuni Prasad Singh v. Mst.

B Kachnar Kuer, A.l.R. 1965 Patna 160 and Mst. Mukhtlar Kaur v. Mst.

Kartar Kaur & Ors., A.I.R. 1966 Pun. 31, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 51 of 1964.

Appeal by special leave from the judgment and decree dated January 3, 1962 of the Punjab High Court in Regular Second C Appeal No. 1958 of 1959.

Bishan Narain and Sadhu Singh, for the appellant.

J. P. Goyal and Raghunath Singh, for respondents Nos. 1 (a) to l(d).

The Judgment of the Court was delivered by D Bhargava, J. This appeal arises out of a suit brought for possession of some land which was admittedly owned at one time by one Labhu. Labhu died in the year 1917 and, on his death his widow, Smt. Harnam Kaur, who filed the suit as plaintiff,

came into possession of the land. She continued in passession of the land until the year 1954 when, on an application made by E the collaterals of Labhu, the Naib Tehsildar, by his order dated 26th June, 1954, effected mutation in favour of these collaterals ..

These collaterals were defendants 1 to 4, Manga! Singh, Amer Singh, Santa Singh and lshar Singh. These collaterals, on the basis of the order of the Naib Tehsildar, dispossessed Smt. Harnam Kaur.

Harnam Kaur's appeal against the order of the F Naib Tehsildar was dismissed by the Collector.

The claim of these collaterals was that Smt. Harnam Kaur had entered into karewa marriage with one of these collaterals, Ishar Singh, defendant No. 4 and, consequently, she had lost her right to hold the land of her first husband Labhu. Smt. Harnam Kaur denied that she had entered into any karewa marriage with Ishar Singh

and, on the basil of this denial, instituted the suit claiming pos-.

G session of that land. She pleaded that the four defendants had no right to this land and had wrongfully dispossessed her, so that they were mere trespassers. This suit was instituted on 1st March, 1956. After the institution of the suit, the Hindu Succession Act, 1956 (No, 30 of 1956) hereinafter referred to as "the Act" came into force on 17th June, 1956. The suit was, at that H time, pending and it continued to remain pending until the year

195~ when Smt. Hamam Kaur died.

Thereupon, Smt. Rattno applied to be substituted as plaintiff in place of Smt Harnam Kaur as her legal representative. This application was allowed, though

it was Opposed by defendants 1 to 3. In the trial of . the suit, defendants 1 to 3 took the plea that Smt. Hamam Kaur, the original plaintiff, had lost her right to the land because of her karewa marriagoe with Ishar Singh, defendant No. 4. Defendant Nt>. 4, however, admitted the claim of Smi. Hamam Kaur in his written statement, denied that he had dispossessed her and also denied the allegation of her karewa marriage with him.

In these circumstances, two main questions came up for decision by the trial court.

The first question was whether Smt. Hamam Kaur had entered into a karewa marriage with Ishar Singh, defendant No. 4, so as to lose her right to the disputed land as widow of the. previous male owner, Labhu ? The second question that arose was whether Smt. Rattno, who was substituted as the legal representative of Smt. Hamam Kaur, was entitled to succeed to the property of Smt. Hamam Kaur .?

This second question depended on whether Smt. Hamam Kaur had, or had not, become full owner of the land under s. 14 of the Act.

The trial court held that Smt. Hamam Kaur had contracted karewa marriage with Ishar Singh, defendant No. 4, and had lost her rights. The further finding of the trial court was that Smt. Hamam Kaur had been dispossessed before the Act came into force and, consequently, s. 14 of the Act did not apply, with the result that Smt.

Rattno could not claim succession to Smt. Hamam Kaur under that provision of law. On these findings, the trial court dismissed the suit.

On appeal, the Additional District Judge, Patiala, recorded the finding that Smt. Hamam Kaur had not entered. into karewa marriage with Ishar Singh, defendant No. 4, and, further, that s. 14 of the Act was applicable to the present case, as the land in suit was possessed by Smi. Hamam Kaur so as to make her full owner of ibis land under that provision of law. On these findings,. the first appellate Court decreed the suit against defendants 1 to 3 with costs in bOth courts, after making a comment that Ishar Singh, defendant No. 4, was a proforma defendant.

Defendants 1 to 3, thereupon, came up in second appeal tothe High Court of Punjab and impleaded as respondents Smt. Rattno as well a5 Ishar Smgh. The High Court dismissed the appeal and, thereupon, defendants 1 to 3 have come up to ibis Court in appeal under special leave granted to them. In this appeal also, defendants 1 to 3 impleaded bOth Smt. Rattno and Ishar Singh as respondents.

During the pendency of this appeal, one of the defendantsappellants died and his legal representatives were brought on the record as appellants. Smt. Rattno also died and her legal representatives were impleaded as respondents. Further, Ishar Singh, defendant No. 4, who was a respondent in this appeal, also died.

The application to bring his legal representatives on record was dimi.issed by the order of ibis Court dated 14th September, 1965

B '

~- c

in Civil Miscellaneous Petition No. 1589 of 1965. In view of this order, a preliminary objection was raised at the time of hearing of this appeal by learned counsel for the respondents, who had been impleaded as legal representatives of Smt. Rattno, that the appeal had abated on account of the failure of the appellants to implead the legal representatives of Ishar Singh respondent.

It, however, appears that, on the pleadings of parties and the nature of the dispute that came to be settled by the lower courts, it cannot be held that this appeal must abate as a whole, or must fail because of its abatement against Ishar Singh on his death. We

have already mentioned that, though the plaintiff, Smt. Hamam Kaur, had come forward with the allegation that she had been dispossessed by alt the four defendants 1 to 4, Ishar Singh, defendant No. 4, in his written statement, repudiaied this claim.

He put forward the plea that he had not dispossessed the plaintiff and, further, supported the claim of the plamtiff by pleadini: that there had been no karewa marriage between them. 'The smt was

dismissed by the trial court. It was decreed by the first appellate Conrt only against defendants 1 to 3, treating Ishar Singh a a D proforma defendant.

In these circumstances, it is obvious that, when the case came up before the High Court, the dispute wu confined between Smt. Rattno, legal representative of the original

plaintiff on the one side, and defendants 1 to 3 on the otllet.

Defendants 1 to 3 sought vacation of the decree for possession which had been granted against them in favour of Smt. Rattno.

rhar Singh, against whom the suit had not been decreed at all; thus became an unnecessary party. In these circumstances even E

if Ishar Singh had not been impleaded as respondent in the High Court, the relief claimed by defendants I to 3 in that Court against Smt. Rattno could have been granied, without bringing into effect any contradictory decrees. In the appeal in this Court also, in these circumstances, Ishar Singh was an unnecessary party

and, consequently, the failure to implead his legal representati• as respondents in the appeal after his death does not affect die right of defendants 1 to 3 to claim the relief for' which they have come up to this Court in appeal. The preliminary objection, therefore, fails and is rejected.

On merits, we are of the opinion that the decision given by the High Court against the defendant-appellants must be upheld.

The first appellate Court, which was the final Court for deciding questiQn of fact, clearly recorded a finding that the karewa marriage alleged to have been entered into by the plaintiff, Smt. Harnain Kaur, with Ishar Singh, defendant No. 4, was not proved.

That finding of fact was binding on the High Court and was H rightly accepted by it. It is no longer open to the appellants to challenge that finding of fact in this Court. On this finding, it has to be held that the rights to the land, to which Smt. Hamam Kaur had succeeded as widow of Labhu, were not lost by her

458 SUPREME COURT llBPORTS

[1967) 3 S.C.R.

until her death, and that her dispossession by defendants 1 to 3 in the year 1954 was illegal. They had no right to this land in preference to Smt. Harnam Kaur.

It was, however, urged on behili of the appellants that, when

St. Harncm Kaur died, she was not in actuaJ possession of this land. She had been dispossessed in the year 1954 and, at the time of her death in 1958, this suit instituted by her for possession of that land was still pending. In the suit, her own pleading was there that the land was in actual possession of defendants 1 to 3 as trespassers, and, in such circumstances, it should be held that the land was not possessed by Smt. Haro.am Kaur at any time after the Act came into force, so thats. 14 of the Act never became

applicable and she never became full owner of that land. It may be mentioned that there was no dispute in the High Court, nor was it disputed before us that, if it be held that s. 14 of the Act had become applicable and Smt. Hamam Kaur became full owner of this land, her rights would pass on her death to Smt Rattno and, subsequently, on the latter's death, to the present respondents in this appeal. The only question for decision in this appeal, therefore, is whether it can be held that this property was possessed by Smt. Harnam Kaur as envisaged by s. 14 of the Act, so that she became full owner of this land.

Section 14(1) of the Act is as follows :-

"14. (I) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as foll owner thereof and not as a limited owner.

Explanation.-In this sub-section, "property" includes both movable and immovable; "property acquired" includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately befOre the commencement of this Act." The , dispute in the case has arisen, because this section confers the right of full ownership on a Hindu female only in respect of property possessed by her, whether acquired before or after the commencement of the Act; and, in the present case, admittedly, the plaintiff had been dispossessed in the year 1954 and was ~

able to recover possession from the defendants-appellants until her death in the year 1958. It was ured on behalf of the appellants that, in order to attract the provisions of s. l~( 1) the Act, it must be shown that the female Hindu was either m actual

E -

physical possession, or constructive possession of the disputed

pperty. n the other side, it was urged that, even if a female Hindu be, m fact, out of actual possession, the property must be held to .be P?ssessed .by her, .if her ownership rights in that property still exist .ad, m exercise of .those ownership rights, she is capable of obtammg actual possession of it. It appears to us that, on the language used in s. 14 (I) of the Act the latter interpretation must be accepted. ' It is significant that the Legislature begins s. 14 ( I) with the words "any property possessed by a female Hindu" and not "any property in possession of a female Hindu". If the expression used had been "in possession of' instead of "possessed by", the proper interpretation would probably have been to hold that, in order to apply this provision, the property must be such as is either in actual possession of the female Hindu or in her constructive possession.

The cou, structive possession may be through a lessee, mortgagee, licensee, etc.

The use of the expression "possessed by" instead of the expression "in possession of', in our opinion, was intended to enlarge the meaning of this expression~ It is commonly known in English language that a property is said to be possessed by a person, if he is its owner, even though he may, for the time being, be out of actual possession or even constructive possession.

The expression "possessed by" is quite frequently used in testamentary documents, where the method of expressing the property, which is to pass to the legatee, often adopted is to say that "all property I die possessed of shall pass to ......... " In such documents, wills, etc., where this language is used, it is clear that whatever rights the testator had in the property would pass to the legatee, even though, at the time when the will is executed or when the will becomes effective, the testator might not be in actual, physical or constructive possession of it.

The legatee will, in such a case, succeed to the right to recover possession of that property in the same manner in . which the testator could have done.

Stroud in his Judicial Dictionary of Words and Phrases, Vol. 3, at p. 2238, has brought out this aspect when defining the scope of the words "possess" and -"possessed". When dealing with the meaning of the word "possession", Stroud defines "possession" as being in two ways, either actual possession or possession in law.

He goes on to say that "actual possession is when a man enters in deed into lands or tenemenis to him descended, or otherwise. Possession in law is when lands or tenements are descended to a man, and he has not as yet really, actually, and in deed, entered into them." In Wharton's Law Lexicon, 14th Edn., at p. 777, the word "possession" is defined

as being equivalent to 'the state of owning or having a thing in one's own hands or power." Thus, three different meanings are given; one is the state of owning, the second is having a thing in one's own hands, and the third is having a thing in one's own

power.

In case where property is in actual physical possession, pbviously it would be in one's own hands. If it is in constructive possession, it would be in one's own power. Then, there is the third case where there may not be actual, physical or constructive possession and, yet, the person still possesses the right to recover actual physical possession or constructive possession; that would be a case covered by the expression ·the state of owning".

In fact, elaborating further the meaning of the word "possession",

Wharton goes on to say that "it is either actual, where a person enters into lands or tenements descended or conveyed to him; apparent, which is a species of presumptive title where land descended to the heir of an abator, intruder, or disseisor, who died i; eise.d; in law, when lands, etc., have descended to a man, and he tias not actualy entered into them, or naked, that is, mere possession, without colour of right." It appears to us that the expression used in s. 14( I) of the Act was intended to cover cases of possession in law also, where lands may have descended to a female Hindu and she has not actually entered into them.

It wou Id of course, cover the other cases of actual or constructive

poscssion. On the language of s. 14(1 ), therefore, we hold that this provision will become applicable to any property which is owned by a female Hindu, even though she is not in actual, physical or constructive possession of that property.

Section 14 (I) came up for interpretation in various cases before a number of High Courts, and was considered by this Court also in several cases. In none of those cases, however, did the question directly arise as to whether s. 14 ( 1) will be appli-'

cable, if the female Hindu is out of actual, physical or constructive possession and the property happens to have beeri wrongfully taken into possession by a trespasser. Most of those cases were

caes where the female Hindu had either alienated her rights by a deed of transfer or had made a gift, and it was only incidentally that, in some of those cases, comments were made on the question whether s. 14( 1) of the Act will be attracted or not in cases the female Hindu had been dispossessed by a trespasser.

So far as this Court is concerned, the earliest case is that of Gumrna/pura Taggina Matada Kotturuswami v. Setra Veeravva

and others('). Dealing with the scope of s. 14(1) of the Act in that case, this Court cited from a decision of Viswanatha Sastri, J. in Gaddam Venka; vamma v. Gaddam Veerayya(•), and noticed the fact that in that case it was held that the word "possessed"

is used in s. 14 in a broad sense and, in the context, possession means the state of owning or having in one's hands or power. It was also noticed that the learned Judges of the Andhra Pradesh High Court in that case had expressed the view that even if a trespasser were in possession of the land belonging to a female

(ll [1959] Supp, I S.C.R. 968,

'(2) A.1.R. 1957 A.P. 280.

owner, it might conceivably be regarded as being in possession of the female owner, provided the trespasser had not perfected his title. Since in that case this Court was not concerned with a situation where a trespasser had actually dispossessed the female owner, the Court went on to hold : "We do not think that it is. necessary in the present case to go to the extent to which the learned Judges went. It is sufficient to say that "possessed" in s. 14 is used in a broad sense and, in the context, means the state of owning or having in one's hand or power." Thus, in that case decided by this Court, the broad meaning of the word "possessed" was accepted as even including cases where the state of owning the property exists.

Learned counsel for the appellants, when bringing to our notice the views expressed by this Court in that case, also drew our attention to another part of the judgment, where this Court remarked : "Reference t" property acquired before the commencement of the Act certainly makes the provisions of the section retrospective, but even in such a case, the property must be possessed by a female Hindu at the time the Act

came into force in order to make the provisions of the section applicable. There is no question in the present case that Veeravva acquired the property of her deceased husband before the commencement of the Act. In order that the provisions of s. 14 may apply to the present case, it will have to be further established that the property was possessed by her at the time the Act came into force." Learned counsel, from these words, tried to draw an inference that this Court had laid down thats. 14(1) will only apply to cases where the property was possessed by the Hindu female at the commencement of the Act.

We do not think that any such interpretation can be placed on the words used by this Court. Section 14( 1) covers any property possessed by a female Hindu, whether acquired before or after the conuiiencement of the Act.

On the face of it, property acquired after the commencement of the Act by a female Hindu could not possibly be possessed by her at the commencement of the Act. This Court, when it made the comments relied upon by learned counsel, was, .in fact, concerned with a case of a female Hindu, who had acquired the right to the property before the commencement of the Act, but was alleged to be no longer possessed of it because of having adopted a son before the commencement of the Act. It was in these circumstances that the Court in that particular case was concerned with the question whether the female Hindu was possessed of the property in dispute or not at the time the Act came into force.

The Court was not laying down any general principle that s. 14 (I) will not be attracted at all to cases where the female Hindu was not possessed of the property at the date of the commencement of the Act. In fact, there are no words used in s. 14(1) which would lead to the interpretation that the proparty mus~ be possessed by the female Hindu at the date of the

.commencement of the Act. It appears to us that the relevant date, on hie~ the female Hindu should be possessed of the property in dispute, must be the date on which the question of .applying the provisions of s. 14(1) arises. If, on that date when the provisions of this section are sought to be applied, the property is possessed by a female Hindu, it would be held that she is full owner of it and not merely a limited owner. Such a question may ai:ise in her own life-time or may arise subsequently when '.Succession to her property opens on her death. The case before us falls in the second category, because Smt. Harnam Kaur Wll!i a limited owner of the property before the commencement of the Act, and the question that has arisen is whether Smt. Rattno was entitled to succeed to her rights in this disputed property on hec death which took place in the year 1958 after the commencement -0f the Act.

The next case in which s. 14 was considered by this Court was Brahmdeo Singh and Another v. Deomani Missir and Others(').

In. that case, the female Hindu, who had succeeded to the property as the widow of her husband, Ramdeo Singh, had transferred the property under two sale-deeds. It was held that the sale-deeds were not for legal necessity; and the question arose whether, in those circumstances, when the Act came into force, it could be held that the widow was possessed of that property. This Court, .after citing the judgment in the case of Gummalapura Taggina Matada Kotturuswamz'(') held that the conflict of judicial opinion -0n this question had already been resolved in that earlier case, where the Court had observed : ''The provisions in s. 14 of the Act were not intended to benefit alienees who, with their eyes 'Open, purchased the property from a limited owner without justifying necessity before the Act came into force and at a time when the vendor had only a limited interest of a Hindu woman." The Court further dealt with the contention that the possession of the alienees is the possession of the widow herself who is still alive, and held : "We are unable to accept this contention as correct. It is well settled that an alienation madle by a widow or other limited heir of property inherited by her, without legal necessity and without the consent of the next reversioners, though not binding on the reversioners, is, neverthelesi;, binding on her so as to pass her own interest (i.e. life interest) to the alienee." It wa~. thus, made clear in that case that the property was held not to be pos- '.Sessed by the widow, because, the alienation made by her being binding on her, she had no longer any legal right left in that property even in the sense of being in the state of owning it. The case, thus, explains why, in cases of alienation or a gift made by a widow, even though that alienation or gift may not be bind-

(!J Civil Appeal No. 130of1960 decided on October 15, 1962.

(2) (1959! Supp, 1 S.C.R. 968.

ing on a reversioner, the property will not be held to be possessed by the widow, because the alienation or the gift would be binding on her for her life-time and she, at least, would not possess any such rights under which she could obtain actual or constructive possession from her transferee or donee. Having completely partted with her legal rights in the property, she could not be said to be possessed of that property any longer.

The third case of this Court brought to our notice is that of S.S. Munna Lal v. S.S. Rajkumar and Others('). In that case, a Digamber Jain of the Porwal sect died in 1934 leaving behind his widow, his son and three grand-sons. His son died in 1939. In 1952, a son of one of the grandsons filed a suit for partition of the joint family properties, while the widow was still alive.

While the suit was still pending, the widow died. Amongst other questions arising in the partition suit, one question that arose was whether the I/ 4th share of the widow declared in the preliminary decree was possessed by her and whether, on her death, it descended to her grandsons in accordance with the provisions of sections 15 and 16 of the Act. Dealing with this question, this Court explained the scope of s. 14(1) by stating that, by s. 14(1), the Legislature sought to convert the interest of a Hindu female which, under the Sastric Hindu law, would have been regarded as a limited interest into an absolute interest. It was held that, by s. 14(1), manifestly, it was intended to convert the interest, which a Hindu female has in property, however restricted the nature of that interest under the Sastric Hindu law may be, into absolute estate. It was also noticed that "under the Sastric Hindu law, the share given to a Hindu widow on partition between her sons or her grandsons was in lieu of her right to maintenance, and she was not entitled to claim partition.

But the Legislature, by enactmg the Hindu Women's Right to Property Act, I 937, made a significant departure in that branch of the law; the Act gave a Hindu widow the same interest in the property which her husband had at the time of his death, and if the estate was partitioned, she became owner in severalty of her share, subject, of course, to the restrictions on disposition and the peculiar rule of extinction of the estate on death actual or civil." Applying these principles to the facts of that case, it was remarked : "In the light of the scheme of the Act and its avowed purpose, it would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to property. If, under a preliminary decree, the right in favour of a Hindu male be regarded as property, the right declared in favour of a Hindu female must also be regarded as property.

The High Court was, therefore, in our judgment, in error in holding that the right declared in favour of Khilonabai

(1) [19621 Supp. 3 S.C.R. 418.

SUPRE!.!E COURT REPORTS

[1967] 3 S.C, R.

was not possessed by her, nor are we able to agree with the submission of the learned counsel for Rajkumar that it was not property within the meaning of s. 14 of the Act." In that case, it will be noticed that the widow died, while the suit for partition was still pending, and she was not in actual, physical or constructive possession of the property which was held to be possessed by her at the time of her death. Only a preliminary decree declaring her right to the share had been passed. That decree was passed before the Act came into force and the widow died after the Act came into force. On these facts, the Court came to the finding that the disputed property was possessed by the widow; and this finding was given despite the circumstance that she was not in actual possession or constructive possession of the property, but had merely obtained the right to the property under the preliminary decree. The prin- Ciple laid down in .that case, thus, supports the broader meaning given to the expression "possessed by" indicated by us earlier.

The last case of this Court brought to our notice is Eramma v.

Veerupana and Others('). That was a converse case in which the female Hindu, in fact, did not possess any legal right or title to the property, though she was actually in physical possession of it. It was held : "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title, whether before or after the commencement of the Act.

It may be noticed that the Explanation to s. 14( 1) sets out the various modes of acquisition of the property by a female Hindu and indicated that the section applies only to property to which the female Hindu has acquired some kind of title, however restricted the nature of her interest may be. The words "as full owner thereof and not as a limited owner" as given in the last portion of sub-section (l) of s. 14 clearly suggest that the legislature intended that the limited ownership of a Hindu female should be changed into full ownership.

In other words, s. 14 (1) of the Act contemplates that a Hindu female who, in the absence of this provision, would have been limited owner of the property, will now become full owner of the same by virtue of this section. The object of the section is to extinguish the estate called "limited estate" or "widow's estate" in Hindu Law and to make a Hindu woman, who, under the old law, would have been only a limited owner, a full owner of the property with all powers of disposition and to make the estate heritable by her own heirs and not revertible to the heirs of the last ma.le holder." In the concluding part, it was held : "It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser. In other words, the provisions of s. 14(1) of the Act cannot be attracted in the case of a Hindu female who is in possession of the property

(I) A.I.R. 1966 S.C. 1879.

of the last male holder on the date of the commencement of the Act when she is only a trespasser without any right to property." This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for cases where the Hindu female possesses the right of ownership of the property in question.

Even mere physical possession of the property without the right of ownership will not attract the provisions of this section.

This case also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the rights of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled.

The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could, in no manner, exercise her rights of ownership in that property any longer.

In this view that we have taken, it does not appear to be necessary for us to refer to the decisions of the various High Courts which were cited before us by learned counsel for the appellants.

The cases mentioned were : Sansir Pate/in and Another v. Satyabatl Naikani and Another('); Ganesh Mahanta and Others v.

Sukria Bewa and Others('); Harak Singh v. Kailash Singh and Another('); Ram Gulam Singh and others v. Palakdhari Singh and Others('); Nathuni Prasad Singh and Another v. Mst. Kachnm Kuer & Others('); and Mst. Mukhtiar Kaur v. Mst. Kartar E Kaur and Others( 8 ). All these were cases relating to situations where the widow had made some alienation of her rights in the property and none of them was concerned with a case where the female Hindu might have been dispossessed by a trespasser. The reasons given by the High Courts in those cases are, therefore,

of no assistance in deciding the applicability of s. 14( 1) of the Act to a case of the nature before us.

On the interpretation of s. 14(1) of the Act that we have accepted above, it must be held that the property involved in the present suit was possessed by Smt. Harnam Kaur when she died in the year 1958 and, consequently, Smt. Raitno and, after her, the present respondents must be deemed to have succeeded to those rights. We have already mentioned above that it was not disputed that, if it is held that Smt. Hamam Kaur had become 'full owner of this property, it would pass on her death to Smt. Rattno.

As a result, t)le decision given by the High Court must be upheld. The appeal is dismissed with costs.

G. C.

(I) A.I.R. 1958 Orlssa 75.

(3) A.I.R. 1958 Patna 581.

(5) A.1.R. 1965 Patna 160.

Appeal dismissed.

(2) A.1.R, 1963 Oriss1 167.

(4) A.1.R. 1961PatM60.

(6) A.I.R. 1966 Pun. 31.

MANGAL SINGH & ORS

SHRIMATI RATTNO & ANR

April 6, 1967

K. N. WANCHOO

V. BHARGAVA

G. K. MITTER, JJ.

Hindu Succession Act

S. 14

Hindu Succession Act

s. 14

s. 14

s. 14(1)

s. 14

s. 14

Hindu Succession Act

Bishan Narain

Sadhu Singh

J. P. Goyal

Raghunath Singh

D Bhargava

Labhu

Harnam Kaur

26th June, 1954

Manga! Singh

Amer Singh

Santa Singh

lshar Singh

Ishar Singh

Ishar Singh

1st March, 1956

Hindu Succession Act, 1956

17th June, 1956

Hamam Kaur

Rattno

Hamam Kaur

s. 14

s. 14

Additional District Judge, Patiala

s. 14

High Court of Punjab

Rattno

Ishar

Rattno

Hamam Kaur

Rattno

rhar Singh

if Ishar Singh

Harnain Kaur

Harncm Kaur

Haro.am Kaur

s. 14

s. 14

Section 14(1)

s. 14

s. 14

Stroud

Wharton

s. 14( I)

s. 14(1 )

Section 14

s. 14

s. 14( 1)

s. 14(1)

Viswanatha Sastri

Gaddam Venka

s. 14

Andhra Pradesh High Court

s. 14

s. 14

Section 14( 1)

s. 14

s. 14(1)

s. 14(1)

s. 14

Ramdeo Singh

Gummalapura Taggina Matada Kotturuswamz

s. 14

October 15, 1962

sections 15 and 16

s. 14(1)

s. 14(1)

s. 14(1)

Right to Property Act

Khilonabai

Rajkumar

s. 14

s. 14( 1)

s. 14

s. 14

s. 14(1)

s. 14( 1)

s. 14(1)

Raitno


SHAH & CO., BOMBAY

.v.

THE STATE OF MAHARASHTRA & ANR.

April 6, 1967

[K. SUBBA R.Ao, C.J., M. HIDAYAl'ULLAH, R. S. BACHAWAT,

J. M. SHBLAT AND C. A. YAIDIALINGAM, JJ.]

Bombay La11d Requisition Act, 1948 (Bom. 33 of 1948) s. 6-TrallS fer of going concern, tenancy recited Jncidenral-Difiertnt business carried on-Requisition, if within jurisdiction-I;' infringes Arts. 19(1)(/) and (g) of the Co11Sritution.

Bombay Rent,.-Hotel and Lodging House Rates Control Act, 1947 (Bom. 57 of 1947) s. lS(l)-Notificatio11 permittln11 assignnunt-Requisltio11 under Requisition Act-Effect,

By an assignment deed, the assignors, te11ant of a premises in Bim. bay, carrying on shoe business therein, assigned to the petitioners the whole of the business, as a going concern together with the tenancy and occupancy rights of the premises. It was, also, recited that no considers tion was paid for the transfer of the tenancy rights, but they were transferred as incidental to the sale of the business as a going concern. The petitioners, thereafter, carried on in the premises their business as impor .. ters of foreign liquor, provisions, and medicines. The premises were requisitioned under s. 6(4) (a) of the Bombay Land Requisition Act for a public purpose alle(ling that it was a case of suppressed vacancy. The petitioners filed a wnt petition in this Court challenging the requisition on the grounds that (i) the assignment was permitted under cl. (2) of a notification issued by the Government under the proviso to s. IS(!) of the Bombay Rents, Hotel and Lodging House Rates Control Act, and a proper construction of the relevant provisi•)ns in the Requisition Act, which were to be read harmoniously with the provisions of the Rent Act. would make it clear that there was no question of any vacancy having amen, in this case, so as to give jurisdiction co the respondents to re quisition the premi•es; and (ii) the provisions of the Requisition Act v.ere unconstitutional as infrlp.ging the petiti~)ner's rights under Art". 19(1)(f) and (g) of the Conslitution.

HELD : The petition must be dismissed.

(i) Section 6 of the Requisition Act gives power to the State Government to requisition vacant premises and, it is, in that context, that Explanation (a) to this section, has to be understood. Under the Explanation, there wilt be deemed to be a vacancy if a tenant assigns or trans~ fers, in any manner, his interest in the premises. Section 15 of the Rent Act, cannot be read into any part of the Rcq11isition Act, much less with s. 6 of the latter Act.

Under s. 6 of the Requisition Act, notwithstanding the fact that an assi&nment of tenancy rights may have been made, which is permk•ible under the Rent Act, such an assignment can he deemed to create a vacancy of the premises, so as to give jurisdiction to the State Government to requis.ition the same. There is no question of the legislature. having given something to the petitioner, under the Rent

Ac~. by permitting an assignment, under s. J 5, and taking it away by requisitioning the premises, under s. 6 of the Requisition Act. [479A-D]

The Rent Act was created for the purpose of amending and consoli• dating the law relating to the control of rents and repairs of certain premi>es, of rat"' of hotels and lodging houses and of evictions. The fact

SH.\11 a: co. 11. MAHAM$HTM (Valdialingam, J.) 467

that the aaslpent claimed by the petitioner may come under cl. ( 2) of the Notification, . will only enable the petioner tD be in occuption !'f tl!e premises under the Rent Act and the asa1gnment of tenancy rights 1n htS

favour will not become illepl or unlawful, aa it otherwise would, under •. 15(1) of the Rent Act. The Requisition Act was paased to provide for the requisition of land, for the continuance of requiait:on of land and certain other purposes. The various provisions, in this Ac~ relate tD the circumstance under which requisition of land can be made, for a public purpoee,

and the procedure to be adopted for the same, as well as the payment of com{lellsation, and deals with a matter, so totally different from that dealt with by the Rent Aot. The two Acts cannot be <X>nsidered to be in pari materla. [478C-H]

(ii) The Requisition Act, does not deal with trade, or business, u such, and hence, the constitutionality of that Act, having regard to Art.

19(1) (g) 1 does not arise for consideration. The assignment, claimed by the petitioners, must be regarded only as a colourable device, for really obtaining a transfer of tenancy rights, which is otherwise prohibited by s. 15 ( 1) of the Rent Act. The transaction, in question,. is not saved by clause 2 of the Notification. As the petitioners cannot claim any nghts on the basis of the assignment deed, either in respect of tenancy rights, or to carry on any business there, it follows that they cannot com plain !hat any fundamental rights, under Art. 19(1), (f) or (g), of tho Constitution, have been infringed.

(4790; 480H-481B]

ORIGINAL JURISDICTION : Writ Petition No. 229 of 1966.

Petition under Art. 32 of the Constitution of India for the enforcement of fundamental rights.

S. J, Sorabji, A. J. Rana, R. A. Gagrat and B. R. Aganvala, for the petitioners.

N. S. Bindra, R. H. Dhebar, R. N. Sachthey and S. P. Nayyar, for the respondents.

The Judgment of the Court was delivered by Vaidialingam, J, In this writ petition, under Art 32, the peti tioner seeks to have quashed, the proceedings taken by the respon dents, by way of requisitioning the premises, in question, and also to have the requisition order, dated September 24, 1966, cancelled.

The circumstances, under which this writ petition has been filed, may be briefly noted. The petitioner is a partnership firm, carrying on business of importers and dealers in wines and provisions and drugs and medicines, in Bombay. One Mrs. Dorethea Kumpig Leo, who was a tenant of shop No. 1, on the ground floor of a building known as Sitaram Building, in C-Block, Dadabhoy Naoroji Road, Fort, Bombay, was carrying on business of boot and shoe makers, in the name and style of Messrs. Lee & Co. She was also a tenant of Flat No. G-8/9, situate in the first floor of the same building and also of godown No. H/ 5, in the same building. The said flat, as well as the godown, were occupied by Mrs.

Dorethea, as tenant, in connection with and for the purposes of her shoe busineM. i 3 Su)). Cl/67t7

468 St:IPRBMB COURT REPORTS

(1967] 3 S, C, R.

By an assignment deed, dated August 18, 1964, Mrs. Dorethea Kumpig Leo, is stated to have assigned, in favour of the petitioners, the whole of her business, as a going concern, together with the name and goodwill, as also the assets, furniture, fixtures, articles and stock-in-trade, belonging to the said shoe business, together with the full benefit of the tenancy and. occupancy rights in the premises, viz., the shop, the flat and the godown, for a sum of Rs. 15,000/ -. The recital in the document is that the parties have agreed that out of the purchase price of Rs. 15,000/·, Rs. 1,000/- is the price of the furniture, fittings, articles and things and stockin-trade, which have been already delivered over to the assignees, the petitioners.

The further recital is that the assignor assigns and transfers to the assignees, all her beneficial interest and goodwill in the business carried on by her, in the name and style of M/s. Lee & Co., and, as incidental to sµch assignment, the assignor transfers her entire interest in the tenancy of Shop No. C-1, on the ground floor, fiat No. G/8/9,. on the first floor and the godown, No. H/ 5, in the premises, known as Sitaram Building, in Dadabhoy Naoroji Road, Bombay. There is also a recital to the effect that no cash consideration has been paid by the petitioners, as assignees, to their assignor, for the transfer, ln their favour, of the tenancy rights, but, on the other hand, those rights are being transferred to them, as incidental, to the sale of the business, as a going concern.

The petitioners claim that, after the date of this assignment, in their favour, they have been carrying on, in the said premises, their business as importers of foreign liquor, wines, provisions, drugs and medicines. While so, on or about April 7, 1966, an Inspector, of the Office of the Second Respondent, called at the shop of the petitioners and took a statement from one of the partners of the firm. According to the petitioners, a copy of the assignment deed, dated August 18, 1964, was also given to him; and the various rent bills and other documents, evidencing their right to be in use and occupation of the shop, are also stated to have beeil given to the Inspector. But, on August 8, 1966, the second respondent issued a notice to the petitioners stating that the Government have made inquiries and are considering the question of requisitioning the premises, viz .. Shop No. 1, Ground Floor, Sita:ram Building, C-Block, D. N. Road, Bombay. The petitioners were required to appear before the Officer, with the necessary materials, to show cause as to why the requisitioning of the premises should not be made. The petitioners' legal advisers sent a reply, on August 12, 1966, stating that one of the chief partners is absent from Bombay, due to the illness of his father, and requested for postponing the hearing of the matter. A request was also made to the Officer, to indicate as to what was the nature of the inquiry that is stated to have been made by the Government and, on what basis the pre-

SHAH & co. v. MAHARASHTRA (Valdialingam, J.) 469

mises is sought to be requisitioned, especially as there is no vacancy in respect of the same.

The second respondent sent a further communication, on August 25, 1966, agreeing to the postponement of the case and fixing another date for appearance, in response to the original notice. On August 30, 1966, the partner, who was stated to be away from Bombay, sent a reply to the second respondent, from Chandigarh, stating that in view of his father's illness, he is not able to appear before the Officer and requesting for further adiournment.

On the next day, viz., September 1, 1966, there was a further communication, by the lawyers of the petitioners, to the second respondent, reiterating the right of the petitioners to be in occupation of the premises, under the assignment, dated August 18,

1964. As there was no vacancy, a request was made in this letter, to the second respondent, to withdraw the notice, dated August 8. 1966.

On September 19, 1966, the second respondent informed, by letter, the petitioners that, on the basis of the evidence produced before him, in respect of the premises, in question, he has come to the conclusion that this was a case of suppressed vacancy and therefore liable to be requisitioned, under s. 6(4)(a) of the Bombay Land Requisition Act, 1948 (Born. Act XXXIB of 1948) (hereinafter referred to as the Requisition Act). On September 24, 1966, the second respondent passed an order that the Governm11nt of Maharashtra is pleased to declare that the premises, in question, has become vacant after December 4, 194 7 and, to requisition the said premises for a public purpose, viz., for housing the Maharashtra State Government Office. It is also stated that on enquiry it has been found that the premises has become vacant in August 1964 and that the requisitioning is made under s. 6(4)

(a) of the Requisition Act.

The petitioners' counsel sent a further communication, on September 27, 1966, to the second respondent, expressing sul'\'rise at the o.rders of requisition passed, in respect of the premises, in

question. After detailing the circumstances under which they are in possession of the property, and adverting to the various correspondence referred to above, a request, on behalf of the petitioners, is made "to withdraw the order of requisition passed by the second respondent.

The second respondent sent a final reply, dated October 3, 1966, stating that the Government did not see any reason to revise the decision for requisitioning the property, in question, as already decided by it, and directing the petitioners to hand over vacant and peaceful possession immediately.

470 [19671 3 ii, C, K.

The petitioners, in this writ petition, challenge all the proceed ings, taken by the respondents, and, in particular, the orders dated September 19, 1966 and September 24, 1966. In the affidavit filed in support of this wtit petition, it . is stated that assignments, similar to the one in favour of the petitioners, on the basis of which the petitioner is in possession of the properties, are permissible, in View of the Notification, dated September 24, 1948, issued by the Bonibay Government, under the proviso to s. 15(1), of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Bom. Act LVII of 1947) (hereinafter called the Rent Act).

In particular, it is the case of the petitioners that the assigmnent, of August 18, 1964, in their favour, is protected by clause (2) of the said Notification. In this case, there is no vacancy, so as to give jurisdiction to the authorities concerned, to requisition the building, under s. 6( 4)(a) of the Requisition Act. Explanation (a), to s. 6 of tke Requisition Act, it is stated, when it deals with a preJliises deeming to be vacant on assignment or transfer, can be considered to refer only to assignments or transfers which are not perJliitted under the .Rent Act. Inasmuch as transfer or llSSignment of the entire interest of the transferor or assignor, in a leasehold premises, as incidental to the sale of a business, as a going concern, t<>gether with the stock-in-trade and goodwill, is permissible, under cl. (2) of the Notification issued by the Bombay Government, which protects the assignment in favour of the petitioners, there is no vacancy of the premises, much less a vacancy which may be deemed to exist by virtue of the Explanation to s. 6 of the Requisition Act. It is also stated that the provisions of the Requisition Act infringe the petitioners' fundamental right, guaranteed to them.under Arts. 19(1), (f) & (g). As to how these points are developed, will be indicated later.

On behalf of the respondents, it is stated that the assignment, in favour of the petitioners, was in effeot and substance, a transfer, not of the business of the assignors, but only of the tenancy rights of the assignors in the said premises. It is pointed out that the assignment is stated to be of the business of boot and shoe makers, whereas the petitioners are carrying on, in the said premises, the business of importers and dealers in wines, provisions, drugs and medicines. It is further pointed out that such transactions are nor protected by cl. (2) of the Notification relied on by the petitioners. It is further stated that, on the basis of the enquiries made by the Department, it was clear that the premises, in question, had become vacant, by the original lessees having ceased to carry on business, and no intimation was given about the vacancy, as required by law. The Government required the premises for accommodating one of their depamnents, viz., the Directorate of A yurveda and; thm!ore, Issued the notioc regarding

SlW:I" ~. v. ?iWWV.mn.A (Yt1ld1'1Ungam. /.) 47l

their proposal to requisition the said property. It was, after the petitioners were given an opportunity, th.at the order was passed.

The respondents further averrea that the provisions of the Rent Act cannot be read into the Requisition Act, and, under the provisions of the Requisition Act, it was clear that there had been a vacancy, wheµ Uie assignor of the petitioners sed to c~ .on business, and that gave jurisdiction to the authorities to requmuon the property, in question. It is further pointed out that as the order of requisition has been passed for a public purpose, the petitioners are not entitled to rely on Art. 19(1 )(f) of the Con stitution. They also further state that the order does not, in any manner, restrict the right of the petitioners to carry on their trade, occupation or business and, therefore, the Requisition Act cannot be considered to be violative of Art. 19(1 )(g) of the Constitution.

This will be a convenient stage to refer to the material provl sions of the statutes, as well as the Notification, issued by the Bombay Government.

The Rent Act was an Act passed to amend and consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions. It came into force on February 13, 1948. In the statement of Objects and Reasons, it is stated that control over rents and other accom modation was being exercised in varying degrees in several parts of the Province of Bombay, under two Acts, of 193 9 and 1944, mentioned therein. It is further stated that the 1939 Act was in tended to prevent an increase in rents of premises with a rental not exceeding Rs. 80/· per mensem, and the 1944 Act, was intended to check an inflationary rise in rents and hotel and lodging house rates in areas where there was an acute scarcity in accommodation.

It is further stated that both the Acts will expire very soon, but the conditions themselves, which led to the enactment of those measures, still continued in an even more aggravated form and therefore it was found essential that effective control should be continued. Hence it has been decided to introduce a revised and self-contained Act, covering control over rents of residential and other premises, as well as over hotel and lodging house rates.

Section 3(2) provides for the Rent Act remaining in force upto and inclusive of March 31, 1968. Section S defines the various expressions.

Section 5(11) defines the e:i:pression 'tenant' and !111der sb-cl. (aa), a 'tenant' means 'any person to whom interest m premises has been transferred under the proviso to sub-section

(1) of section 15'. Section lOC enables a landlord to claim an increased rent in respect of the premises, referred to therein, and to the extent indicated in the said section. One of the premises, in respect of which a landlord .can ask for an increase, is dealt with under cl. (5) of s. lOC(l), which is, as follows :

418 SUPiUIME COURT lUIPO&TS [1967] 3 s.c.R.

"Premises interest in which is transferred under the A proviso to sub-section (1) of section 15, on or after the Idate of the coming into force of the Bombay. Rents, Hotel and Lodging House Rates Control (Second Amendment) Act, 1953, as .incidental to the sale of a business together with the stock-in-trade and goodwill thereof." Section 13 deals with the circumstances, under which a landlord B ' may recover possession, and one of the circumstances dealt with, . under cl. (e) of sub-s. (1), is when

"the tenant has, since the coming into operation of this Act, unlawfully sub-let the whole or part of the pre- T. mises or . assigned or transferred in any other manner his c interest therein''.

Section 15(1 ), with the proviso, which is material for the present purpose,. is as follows : .~---

"15. (1) Notwithstanding anything contained in any law, but subject to any contract to the contrary, it shall not be lawful after the coming into operation of this Act D for any tenant to sub-let the whole or any part of the pre- ... mises let to him or to assign or transfer in any other manner his interest therein : Provided that thr State Government may, by notification in the Official Gazette, permit in any area the transfer of interest in premises held under such leases or E class of leases and to such extent as may be specified in the notification." Under this proviso, the Government of Bombay, have issued a Notification, dated September 24, 1948. That Notification is numbered as 5975/33 and it says that the Government is pleased to permit; in all areas to which Part IT of the Rent Act extends, all F transfers and assignments by lessees, of their interest in leasehold • premises as and to the extent specified in the Schedule. Clause (2)

"' of the Schedule, relevant for the case, on hand, is as follows :

"Transfer or assignment incidental to the sale of a business as a going concern together with the stock-intrade and the goodwill thereof, provided that the transfer G or assignment is of the entire interest of the transferor or " assignor in such leasehold premises together with the business and the stock-in-trade arid goodwill thereof." At this stage, it may be stated that it is by virtue of this clause that the petitioners urge that the assignment, taken by them, from M/s Lee & Co., on August 18, 1964, is valid and that, as they H are entitled to be in possession, on the basis of that assignment, there is no vncancy of the premises. so as to give jurisdiction to the authorities to pass an order of requisition.

SHAH&: co. v. MAHAMSHTRA (Valdia/ingam, I.) 47.1

On December 4, 194 7, .the Goverrunent of Bombay promulgated the Bombay Land Requisition Ordinance, 194 7 (Ordinance No. V of 1947). Jn the statement, annexed to this Ordinance, it is stated that there is great pressure on accommodation available in urban areas and, as the powers of requisitioning, which the Government had, under the Defence of India Rules, have lapsed, it has become necessary to regulate the distribution of vacant premises; and therefore, it was felt essential to have powers of requisitioning. Clause 2 of this Ordinance defines the various expressions like 'land', 'premises', 'to requisition' etc. Clause 3 provides for the Provincial Goverrunent, if it is of the opinion that it is necessary or expedient to do so, to pass an order in writing, requisitioning any land for any public purpose.

Clause 4, again, provides for requisitioning premises which are vacant, on the date of the Noti fication, and whenever any premises became vacant, either by the landlord ceasing to occupy the premises, or by the termination of tenancy or by vacation of a tenant, etc.

This Ordinance was followed by the Requisition Act, which came into force on April 11, 1948. In the preamble to this Act it is stated that it is an Act to provide for the requisition of land, for the continuance of requisition of land, and for certain other purposes.

Section 4 defines the various expressions, including 'land', 'premises' and 'to requisition'. Section 5 enables the State Government to requisition any land, for any public purpose. The proviso to s. 5(1) exempts the particular building or part thereof, referred to therein. Sub-s. (2) of s. 5 provides for the State Government making an enquiry when action is taken under sub-s. (1) and to make a declaration in the order of requisition, and it also provides for such declaration being conclusive evidence that the owner, landlord or tenant, has not so resided.

Section 6 deals with requisition of vacant premises.

Its sub-s. (1) provides for the landlord of the premises giving intimation, to the authority concerned, wherever any such premises, referred to therein, m vacant or become vacant by reason of the landlord, the tenant or the su~-tenant, .as the case may be, ceasing to occupy the premises, or by its becommg vacant because of the other circumstances referred to hereh~. . Sub-~. (2) provides for the manner in whih and the e~1od, w1thm wluch, the intimation is to be given. Sub-s. (3) proh1b1ts a landlord, without the permission of the State' Government, from .lettmg out or ocupying. or permitting the occupation of the premises, for the period mentioned therein.

Sub-s. ( 4) of s. 6 1s, as follows :

'.'(4)_ Whether or not an intimation under sub-section (I) !s given and notwithstanding anything contained in section 5, the State Government may by order in writing--

(a) requisition the premises for any pnbiic purpose

SUP!U!M! COURT RBP.ORTS [1967) 3 s.c.a.

lllld may use or deal with premises for any such purpose in such manner as may appear to it to be expedient;

Provided that where an order is to be made under clause (a) requisitioning the premises in respect of which no intimation is given by the landlord, the State Govern ment shall make such inquiry as it deems fit and make a declarati9n in the order that the premises were vacant or had becbme vacant, on or after the date referred to in sub-section (1) and such declaration shall be conclusive evidence that the premises were or had so become vacant." Sub-s. (5) provides for the punishment to be awarded to a landlord for violation of sub-ss. (2) and (3) of s. 6. There is an Explanation to s. 6, of which cl. (a}, which is material, for our purpose, is as follows:

"Explanation.-For the purpose of this section-(a) D premises which are in the occupation of the landlord, the tenant or the sub-tenant, as the case may be, shall be deemed to be or become vacant when such landlord ceases to be in occupation or when such tenant or sub tenant ceases to be in occupation upon termination of his tenancy, eviction, assi$nment or transfer in any other E manner of his interest m the premises or otherwise, not withstanding any instrument or occupation by any other person prior to the date when such landlord tenant or sub-tenant so ceases to be in occupation." It has already been mentioned that the notice, dated September 19, 1966, as well as the consequential order, dated September 24, F 1966,. which are under challenge in this writ petition, were issued under s. 6(4)(a) of.the Requisition Act.

Mr. Sorabji, learned counsel for the tltioners, urged, in the main, two contentions regarding the validity of the proceedings taken by the respondents, viz., (i) that a proper construction of the relevant provisions in the Requisition Act, which are to be G read harmoniously with the provision of the Rent Act, would make it clear that there is no question of any vacancy having arisen, in this. case, so as to give jurisdiction to the respondents to requisition the premises; and (ii) if it is held that the respondents have got jurisdiction to requisition the premises under the Requisition Act, ihe provisions of that Act must be held to be unconstitutional, H inasmuch as they affect the fund4mental rights guaranteed to the petitioners under Arts. 19(1), (f) and (g), and the Act is not saved by Art. 19(~ or 19(6) of the Constitution. On the other hand, Mr.

SHAH & co. v. MAHARASHTRA (Valdialingam, J.) 475

Bindra, learned counsel for the respondents, has urged that the assignment, on which the petitioners relied, is nothing but a colourable device for obtaining a transfer of the tenancy rights, which is illegal, under s. 15(1) of the Rent Act. Therefore, they have not acquired any rights, to be in possession of the property, in the face of the statute, and hence they cannot claim that there has been any infringement of their fundamental rights. According to Mr. Bindra, even assuming that the petitioners have got any right, the provisions of the Rent Act cannot be read into the Requisition Act, inasmuch as the subject matter of the two enactments, and the field on which each operates, are entirely distinct and different.

Learned counsel also points out that there is no question of any infringement of the fundamental rights, guaranteed to the peti.- tioners, either under Art. 19(l)(f) or under Art. 19(l)(g). In fact, according to counsel, Art. 19(1 )(g) does not come into the picture at all, inasmuch as the Requisition Act does not, in any way, affect the right of the petitioners, to carry on their trade or business. In any event, according to him, the restrictions must be considered to be saved by Arts. 19(5) and 19(6).

We shall assume, for the present purpose, that the assignment, relied on by the petitioners, is not a colourable device, for obtaining a transfer of tenancy rights, and discuss the first contention, urged for the petitioners. According to them, both the Rent Act, as well as the Requisition Act, deal with the same problem and were necessitated, because of the existence of the saine or identieal circumstances, viz., scarcity of accommodation and, therefore, both the statutes pertain to the same matter. In other words, both the statutes are in pari materia. On the date of the coming into force of the Rent Act, it is clear that the Legislature itself contemplates, by virtue of the powers conferred on the State Government under the proviso to s. 15(1), that by virtue of the Notification, transfer of leasehold interest in particular types of leases, under particular circumstances, will be permitted. By virtue of cl. (2) of the Notification, issued by the State Government on September 24, 1948, transactions, like the assignment, under which the petitioners claim, have full validity and legal effect. When such a permissible assignment of a leasehold interest has taken place, there cannot be any vacancy, either in fact or in law. Therefore, when the Legislature, in Explanation (a) to s. 6, of the Requisition Act, refers to a vacancy 'deeming to occur' on an assignment or transfer of a tenancy interest, the assignment or transfer dealt with therein must be one, which does not come under the permissible assignment or transfer, by virtue of the notification issued under the proviso to s. 15 of the Rent Act. That is, the assignment or transfer of a tenancy interest referred to in the Explanation to s. 6 of the Requisition Act, can relate, or must be considered to relate, only to prohibited assignments under s. 15 of the Rent Act. If that is so, according to the petitioners, in this case there is no vacancy when

SUPREME COURT REPORTS ll~O /j J ~.l,;.I<..

an assignment of the tenancy rights, in the manner prescribed under

cl. (2) of the Notification, was taken by the petitioners. Therefore, inasmuch as there is no vacancy, the State Government has no right or jurisdiction to requisition the premises, under s. 6 of the Re quisition Act.

We have been referred to certain passages in certain text books, as well as in certain decisions, to show, under what circumstances, statutes can be considered to be in pari materia; and the nan1re of the construction to be placed on such statutes. Sutherland, in 'Statutory Construction', 3rd E.dition, Vol. 2, at p. 535, states:

"Statutes are considered to be in pari materia-to pertain to the same subject matter-when they relate to the same pcirson or thing, or to the same class of persons or things, or have the same purpose or object."

The learned author, further states, at p. 537 :

"To be in pari materia, statutes need not have been enacted simultaneously or refer to one another." Again, at p. 544, it is stated :

"When the legislature enacts a provision, it has before it all the other provisions relating to the same subject matter which it enacts at that time, whether in the same statute or in a separate.act. It is evident that it has in mind the provisions of a prior act to which it refers, whether it phrases the later act as an amendment or an independent act. Experience indicates that a legislature does not deliberately enact inconsistent provisions when it is cognizant of them both, without expressly recognizing the inconsistency." The canon of construction, under these circumstances, is stated by the author, at p. 531 :

"Prior statutes relating to the same subject matter are to be compared with the new provision; and if possible by reasonable construction, both are to be so construed that effect is given to every provision of each. Statutes in pari materia although in apparent conflict, are so far as reasonably possible construed to be in harmony with each other." In Craies, on 'Statute Law', 6th Edition, at p. 133, it is stated :

"Where Acts of Parliament are in pari materia, that is to say, are so far related as to form a system or code, of legislation, the rule as laid down by the twelve judges in Palmer's Case [(1785) 1 Leach C.C. 4th ed., 355], is that such Acts 'are to be taken together as forming

. G•

SHAH & co. v. MAHARASHTRA (Vaidlalingam, I.) -477

one system,: and as interpreting and enforcing . each .other'. In the American case of United Society v. Eagle

Bank [(1829) 7 Conn. 457,470), Hosmer J. said: 'Statutes are in pari mater/a which relate to the same person or thing or to the same class of persons or

things ...• '."

In Maxwell on 'The Interpretation of Statutes', 11th Edition, at p. 153, the principle is stated thus :

"An author must be supposed to be consistent with himself, and, therefore, if in one place he has expressed his mind clearly, it ought to be presumed that he is still of the .same mind in another place, unless it clearly appears that he has changed it.

In this respect, the work of the legislature is treated in the same manner as that of any other author, and the language of every enactment must be construed as far as possible in accordance with the terms of every otil.er statute which it does not in express terms modify or repeal .... It cannot be assumed that Parliament has given with one hand what it has taken away with the other."

Mr. Sorabji, learned counsel, further pointed out that another pdnciple, that has to be borne in mind, in interpreting statutes, is 'to place such a construction as will save the statute from constitutioilal challenge'. The observations of Frankfurter J., in United

States v .. Rumely( 1)have been quoted before us, in this connection:

"Accordingly the phrase 'lobbying activities' in the resolution. must k given the meaning that may fairly be attributed to it, having special regard for the principle of constitutional adj'udication which makea it decisive in the choice of fair a ternatives that one construction may raise serious constitutional questions avoided by another.

In a long series of decisions we have acted on this prin oiple.. In the words of Mr. Chief Justice Taft, 'it is our duty in the interpretation of federal statutes to reach a conclusion which will avoid serious doubt of their consti • tutioiuility'."

Thls Court also. has held, in Kadar Nath Singh v. State of Bihar(•):

'It is well settled that if certain provisions of law construed .in one way would make them consistent with the Constitution, and another interpretation would render them unconstitutional, the Court would lean in favour of the f()[!ller COllStruction. '' (I) 345 v.s. 41,45-97 i. ed. 17Q; 775.. \2) (1962] Supp,2 s.c.R.769,808

SUPREME COURT. REPORTS

[1967) 3 S.C.R.

We may straight away say that the principles enunciated in the above decisions and in the text-books, are well-settled. But the question now is as to whether the Rent Act and the Requisition Act can be considered to be in {JQ(i materia. Can it be stated that these two statutes are in part materia, in the sense that they relate to th.;: same person or thing or to the same class of persons or things? For this purpose, it is necessary to examine the scope and ambit of the two enactments, concerned.

We have already referred to the fact that the Rent Act was enacted for the purpose of amending and consolidating the law relating to the control of , rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions. A perusal of the various provisions will clearly show that the rent Act deals, substantially, with the relationship of landlord and tenant, in the matter of eviction, payment of ren_t, increase of rent under certain circumstances and the circumstances under which the landlord can get possession of the property.

There are provisions relating to residential and other premises and hotels and lodging houses. It is, in that context, that s. 15 occurs, which prohibits a tenant to sub-let or transfer his rights, in the absence of a contract to the contrary. But certain types of assignment ot transfer of tenancy rights can be premitted, under certain circumstances, by virtue of a notification issued by the State Government, under the proviso

o s. 15(1) of the Rent Act. But, if a transfer or .assignment of a tenancy right does not come within the purview of assignments or transfers permitted by the notificatio.n issued by the State Government, a transfer or an assignment of a tenancy right will be illegal and unlawful, under s. 15(1).

Therefore, the fact that, in this case, the assignment claimed by the petitioner may come under cl. {2) of the Notification, will only enable the petitioner to be in occupation of the premises under the Rent Act and the assignment of tenancy rights in his favour will not become illegal or unlawful, as it otherwise would, under s. 15(1) of the Rent Act.

Now, coming to the Requisition Act, here again, we have already referred to the fact that it was passed to provide for the requisiton of land, for the continuance of requisition of land and for certain other purposes.

The various provisions, in this Act, relate to the circumstances under which requisiton of land can be made, for a publie purpose, and the procedure to be adopted for the same, as well as the payment of compensation. It will therefore be seen that . this Act deals with a matter, so totally different from that dealt with by the Rent Act.

There is absolutely no similarity between the two enactments; and we cannot hold that the Requisition Act relates to the same person or thing, or to the -same class of persons or things, as the Rent Act.

Hence the two Acts cannot be considered to be ih pari materia.

SHAH & co. v. MAHARASHTRA (Valdialingam, /,) 479

Section 6 of the Requisition Act gives power to the State Government to requisition vacant premises and, it is, in that context. that Explanation (a) to this section, has to be understood. Under that Explanation, there will be deemed .to be a vacancy if a tenant assigns or transfers, in any manner, his interest in the premises.

Section 15 of the Rent Act, cannot be read into any part of the Requisition Act, much less with s. 6 of the latter Act.

Under s. 6 of the Requisition Act, notwithstanding the fact that an assignment of tenancy rights may have been made, which is permissible under the Rent Act, such an assignment can be deemed to create a vacancy of the premises, so as to give jurisdiction to the State Government to requisition the same. There is no question of the Legislature, having given something to the petitioner, under the Rent Act, by permitting an assignment, under s. 15, and taking it away by requisitioning the premises, under s. 6 of the Requisition Act. Therefore, the contention of the learned counsel for the petitioner, that the transfer or assignment of tenancy rights, contemplated under Explanation (a) to s. 6 of the Requisition Act, must be understood in a limited manner, in the sense that they deal with prohibited assignments, under the Rent Act, cannot be accepted.

The first contention, of the learned counsel, for the petitioner, will have, therefore, to be rejected.

Then, the second question as to whether the Requisition Act is constitutionally invalid, as affecting the rights of the petitioners, under Art. 19(l)(f) or (g), will have to be considered. This involves consideration from two points of view, viz., as to whether the Requisition Act deals with property, in which case the attack based upon Art. l 9(1)(f), will have to be considered; or, .as to whether the Requisiton Act deals with trade or business, so as to attract Art. 19(1) (g). So far as this is concerned, after a perusal of the entire provisions of the Requisition Act, we are satisfied that the said Act deals only with property and not with trade or business.

We have already dealt with the main features of the Requisition Act and it will be clearly seen that it deals only with property.

Therefore, the Requisition Act, does not deal with trade, or business, as such, and hence, the constitutionality of that Act, having regard to Art. 19(1)(g), does not arise for consideration.

But, it may be that an order of requisition passed by the respondents, may interfere with the right of a party to do business. That is an aspect, which will be considered later, after dealing with the contention of the petitioner that the Requisition Act contravenes Art. 19(1 )(f) and is not saved by Art. 19(5).

According to the petitioners, the Act, considered both from the point of view of procedural and substantive aspects, affects the petitioners' rights under Art. 19(1)(f). From the procedural aspect, it is pointed out that the determination of jurisdictional fact

SUPREME COURT REPORTS

[1967) 3 S.C.R.

of the existence of a vacancy, is left to the decision of an executive authority, and that decision is made conclusive and placed beyond the pale of judicial review under the proviso to s. 6(4); there is no machinery provided in the Act for redress or for correcting any errors, in respect of adverse orders passed by the authority; there is no legal obligatfon, on the part of the authorities, to provide an opportunity to parties who may be affected by the orders of requisiton, and there is no obligation on the authorities to give reasons for passing a particular order. From the substantive aspect, it is stressed that, as a fact, ne vacancy of the premises has arisen and the vice lies in introducing a fiction in Explanation (a) to s. 6. In fact, it has also been pointed out that a decision may be taken by the authorities that there is a vacancy, even when there is no assignment as a fact and, such a decision is conclusive and not amenable to correction, by judicial review.

In this connection, we have also been referred to certain decisions of this Court, where it has been held that there will be an infringement of fundamental rights when the executive Govern• ment is given a free hand to decide, both legally and factually, and judicial review is excluded. But we do not think it necessary to refer to those decisions, in view of the opinion that is being expressed, by us, on the nature of the transaction, relied on by the petitioners.

Counsel for the respondents, Mr. Bindra, contested the claim of the petitioners, of violation of Art. 19(l)(f) of the Constitution, on two grounds viz.,

(a) that the assignment relied on, by the petitioners, is only a colourable device for really obtaining a transfer of tenancy rights, which is prohibited by s. 15(1) of the Rent Act, and hence it is not saved by clause 2 of the Notification; and

(b) inasmuch as the Requisition Act is governed by Art. 31 (2) of

the Constitution, in view of the decision of this Court in Sltabatl

Devi v. State of West Bengal(1), the Act cannot be tested by reference to Art. l 9(1)(f) of the Constitution.

But Mr. Sorabji, learned counsel for the retitioners, urged that the transaction satis. fies the requirements o clause 2 of the Notification and the said decision in Sitabati Devi's case( 1) does not apply; in case that decision applies, counsel urged for a reconsideration of that decision.

From the various averments,. contained in the counter-affidavit of the respondents, and in view of some of the admissions made in the petition itself, by the petitioners, and, having regard to the object underlying clause 2 of the Notification, dated September 24, l 94 8, we are of the view that the assignment, claimed by the peti• tioners, must be regarded only as a oolourable device, for really

. '.) [J967J 2 s.c.R. 949.

SHAH & co. v. MAHARASHTRA (Vaidialingam, J.) 481

obtaining a transfer of tenancy rights, which is otherwise prohibited by s. 15(1) of the Rent Act. We are further of the view that the transaction, in question, is not saved by clause 2 of the Notification.

As the petitioners, in our opinion, cannot claim nny rights on the basis of the assignment deed, either in respect of tenancy rights, or to carry on any business there, it follows that they cannot complain that any fundamental rights, under Art. 19(1), (f) or (g), of the Constitution, have been infringed.

On this ground, this petition must fail.

In the view expressed above, it becomes unnecessary, in this case, to consider either the scope of the decision in Sitabati Devi's case('), or as to whether that decision requires reconsideration.

In the .result, the writ petition is dismissed with costs of the respondents, one set.

Y.P.

Petition dismissed .

. (1967j 2 S.C.R: 949.

SHAH & CO., BOMBAY

THE STATE OF MAHARASHTRA & ANR

April 6, 1967

R. S. BACHAWAT,

J.

Requisition Act, 1948

s. 6

Arts. 19(1)(/)

s. 6(4)

Section 6

Section 15

s. 6

s. 6

s. 6

Valdialingam

Art.

19(1)

s. 15

clause 2

Art. 19(1)

Art. 32

Constitution of India

S. J

Sorabji

A. J. Rana

R. A. Gagrat

B. R. Aganvala

N. S. Bindra

R. H. Dhebar

R. N. Sachthey

S. P. Nayyar

Vaidialingam

Art 32

September 24, 1966

Bombay

Dorethea Kumpig Leo

Fort

Lee & Co.

Dorethea

August 18, 1964

Dorethea Kumpig Leo

April 7, 1966

August 8, 1966

August 12, 1966

August 30, 1966

Chandigarh

September 1, 1966

August 18,

1964

August 8. 1966

September 19, 1966

s. 6(4)(a)

Bombay Land Requisition Act, 1948

Maharashtra

s. 6(4)

September 27, 1966

October 3, 1966

September 24, 1948

Bonibay Government

s. 15(1)

s. 6( 4)(a)

s. 6

Bombay Government

s. 6

Arts. 19(1)

Art. 19(1 )(f)

Art. 19(1 )(g)

February 13, 1948

Section 3(2)

March 31, 1968

Section 5(11)

section 15

SUPiUIME COURT lUIPO&TS [1967] 3 s.c.

section 15

Section 13

Section 15(1 )

Government of Bombay

Part IT of the Rent Act

December 4, 194 7

Clause 2

Clause 3

Clause 4

April 11, 1948

Section 4

Section 5

s. 5(1)

s. 5

Section 6

s. 6

section 5

s. 6

s. 6

September 24, F 1966

s. 6(4)(a)

Sorabji

Arts. 19(1)

Art. 19(~ or 19(6)

Bindra

s. 15(1)

Art. 19(l)(f)

Art. 19(l)(g)

Art. 19(1 )(g)

Arts. 19(5) and 19(6)

s. 15(1)

s. 6

s. 15

s. 6

s. 15

s. 6

Sutherland

Parliament

Palmer

Hosmer

Frankfurter

Taft

s. 41

s. 15

s. 15(1)

s. 15(1)

s. 15(1)

Section 6

Section 15

s. 6

s. 6

s. 15

s. 6

s. 6

Art. 19(l)(f)

Art. 19(1)

Art. 19(1)(g)

Art. 19(1 )(f)

Art. 19(5)

Art. 19(1)(f)

s. 6(4)

s. 6

Art. 19(l)(f)

s. 15(1)

clause 2

Art. 31

clause 2

Sitabati Devi

clause 2

September 24, l 94 8

s. 15(1)

clause 2

Art. 19(1)