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Pramod C. Bhat Vs. Kanwar Raj Nath - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai High Court
Decided On
Case NumberO.C.J. Appeal No. 49 of 1954 and Misc. No. 55 of 1954
Judge
Reported inAIR1954Bom518; (1954)56BOMLR873
ActsAdministration of Evacuee Property Act, 1950 - Sections 8, 8(4), 9, 10, 12, 12(1), 12(2), 12(3) and 56; Administration of Evacuee Property Rules - Rule 14, 14(1), 14(2), 14(4) and 14(5); Transfer of Property Act, 1882 - Sections 54; Administration of Evacuee Property Ordinance, 1949 - Sections 8; Code of Civil Procedure (CPC), 1908; Rent Act
AppellantPramod C. Bhat
RespondentKanwar Raj Nath
Appellant AdvocateM.P. Amin, Adv. General and ;R.M. Kantawala, Adv.
Respondent AdvocateA.A. Peerbhoy, ;K.H. Bhaba and ;S.J. Sorabji, Advs.
Excerpt:
property - authority of custodian - sections 10 and 12 of administration of evacuee property act, 1950 - custodian of evacuee property issued notice to lessee in respect to termination of lease deed for violation of agreement and also gave directions to lessee under section 10 - notice and directions challenged by lessee - custodian duty bound to preserve and safeguard evacuee property - custodian vested with widest powers under section 12 with respect to evacuee property - custodian even competent to terminate lease granted by evacuee - competency of custodian with regard to lease not extended to give directions with respect to properties of lessee in which he is not custodian - challenge partly allowed. - - 7,00,000 or furnish to the custodian a guarantee for the like amount by a.....chagla, c.j.1. this appeal raises a very important question as to the right of the custodian of evacuee property to terminate a lease granted by him in respect of evacuee property, and also the right of the custodian to give certain directions under section 10 of the administration of evacuee property act, 1950.on 12-9-1951, messrs. ahmed abdul karim bros., ltd., were declared to be evacuees and their property vested in the custodian. on 30-8-1952, the custodian entered into an agreement of lease with the petitioners in respect of some of the properties of ahmed abdul karim bros., ltd., which had been declared to be evacuee properties, and the properties in respect of which the lease was executed were three mills with bungalows and chawls attached thereto at ambernath, and a bobbin.....
Judgment:

Chagla, C.J.

1. This appeal raises a very important question as to the right of the Custodian of evacuee property to terminate a lease granted by him in respect of evacuee property, and also the right of the Custodian to give certain directions under Section 10 of the Administration of Evacuee Property Act, 1950.

On 12-9-1951, Messrs. Ahmed Abdul Karim Bros., Ltd., were declared to be evacuees and their property vested in the Custodian. On 30-8-1952, the Custodian entered into an agreement of lease with the petitioners in respect of some of the properties of Ahmed Abdul Karim Bros., Ltd., which had been declared to be evacuee properties, and the properties in respect of which the lease was executed were three mills with bungalows and chawls attached thereto at Ambernath, and a Bobbin Factory, and the agreement of lease provided that the petitioners should have a lease of these properties for a period of five years.

It was provided that on the execution of the agreement the lessees shall deposit with the lessor a sum of Rs. 1,50,000 as security for the due fulfilment and observance of the term as to regular payment of the instalments of rents provided by the agreement, and this security of Rs. 1,50,000 was liable to be forfeited if any instalment of rent was not paid on the due date. The rent payable by the lessees in respect of the demised premises was fixed at Rs. 6,00,000 and the rent was to be paid by quarterly instalments of Rs. 1,50,000 each.

It was also provided that within 30 days from the completion of valuation of all stocks of raw materials, unsold finished goods, stores, spare parts and other articles referred to in the next clause, the lessees should deposit with the lessor a sum of Rs. 7,00,000 or furnish to the Custodian a guarantee for the like amount by a bank acceptable to the Custodian as security for payment of the value of these goods. Then clause. 6 embodied an agreement of the sale of stocks of raw materials and unsold finished goods, etc., to which we have just referred, by the Custodian to the lessees and the price of the goods was to be fixed through one or more experts who would be the representatives of a recognised mercantile association dealing in goods of similar nature, to be nominated by the Custodian.

The sale was to be completed within a period of three months from the date of the agreement and the balance of the purchase price was to be paid on or before the date of completion of the sale. There was also a provision by which the lessees had to insure and keep insured the demised premises and the machinery lying therein, in the joint names of the lessor and the lessees, and the insurance was to be effected with a company acceptable to the lessor. There was also a submission clause by which disputes between the parties were to be referred to arbitration. The lessees were put into possession of the demised premises and all the stocks which they had purchased on 31-8-1952.

2. On 12-2-1954, the Custodian issued a notice against the petitioners to show cause and in this notice the Custodian stated that the petitioners had generally failed to observe and fulfil most of the important terms and conditions of the agreement of lease and in particular they had committed breaches of and violated the terms and conditions specified in the schedule annexed to this notice. By this notice, which the Custodian said he, was issuing in exercise of the powers, vested in him by Section 12 of the Administration of Evacuee Property Act, 1950, read with Sub-rules (2), (4) and (5) of Rule 14, being the rules framed under the Act, he was calling upon the petitioners to show cause on 22-2-1954, why the agreement of lease should not be forthwith cancelled and terminated and the petitioners be evicted from the demised premises.

In the schedule the Custodian set out the various important defaults committed by the lessees. According to the Custodian, the lessees had committed default in paying the sixth quarterly instalment of rent which fell due on 30-11-1953, and which should have been paid on 30-12-1953, at the latest, and it is pointed out that although a cheque for Rs. 1,50,000 was given on 31-12-1953, that cheque was not honoured, and then a sum of Rs. 50,000 was paid towards this liability on 6-1-1954, a further sum of Rs. 25,000 was paid on 20-1-1954, and a further sum of Rs. 25,000 on 9-2-1954, and a sum of Rs. 50,000 still remained due from the lessees on account of the sixth instalment.

Then it was pointed out that the lessees had failed to pay the sum of Rs. 7,00,000 and also failed to give a bank guarantee as required by Clause 5 of the agreement. It was also pointed out that the lessees had deliberately raised disputes and evaded completion of the sale on frivolous and false grounds; and finally the lessees had failed to insure the premises to the full insurable value, and they had also failed to obtain the approval of the Custodian to the insurance effected by them.

This notice also gave certain directions, to the petitioners and by this notice the Custodian stated that for the purpose of preservation of the demised premises and the goods and the stock-in-trade lying in the demised premises, he considered it necessary to give the following directions, and he called upon the petitioners to comply with the same, and the directions substantially are that the petitioners were directed not to remove stocks of raw materials, finished goods, goods in process, stores, spare parts and other moveables as well as books of account, etc., lying on the premises without the express permission in writing of certain Inspectors who were posted by the Custodian at the mills factory, godowns and offices.

The petitioners were further prohibited from raising any money on the security of the stock of finished goods, goods in process, etc. They were directed to submit a daily report to the Custodian of all the transactions entered into by the petitioners including payments made and received by them in connection with the affairs of the mills and the Bobbin Factory from the date of the notice till the disposal of the show cause notice proceedings. Finally, the petitioners were directed to furnish to the Custodian in writing such information as may be required by him from time to time, and they were further required to furnish to him information in writing regarding the quality, quantity, nature, approximate value and place of storage of raw materials, finished goods and goods in process before 2 p. m. on the 13th instant.

3. The petitioners filed this petition from which this appeal arises on 15-2-1954, and by this petition they challenged the authority of the Custodian to proceed under Section 12 and his authority either to issue a notice to show cause or ultimately to terminate the lease as threatened by him in the event of the petitioners failing to show cause. They also challenged the authority of the Custodian to issue the directions which he issued in the notice.

4. Now, turning to the first point, the decision wholly turns upon the proper construction to be placed upon Section 12 of the Administration of Evacuee Property Act, and that section provides:

'(1) Notwithstanding anything contained in any other law for the time being in force, the Custodian may cancel any allotment or terminate any lease or amend the terms of any lease or agreement under which any evacuee property is held or occupied by a person, whether such allotment, lease or agreement was granted or entered into before or after the commencement of this Act.'

Sub-section (2) provides:

' (2) Where by reason of any action taken under Sub section (1), any person has ceased to be entitled to possession of any evacuee property, he shall on demand by the Custodian surrender possession of such property to the Custodian or to any person duly authorised by him in this behalf.'

And Sub-section (3) confers upon the Custodian the authority to eject any person who fails to surrender any property on the demand made under Sub-section (2) and to take possession of such property in the manner provided in Section 9.

Two contentions have been put forward before us with regard to the true interpretation of Section 12. On the one hand, the Custodian contends that his power to cancel a lease is not limited and he can cancel any lease, whether the lease was granted by the evacuee or by himself. On the other hand, the contention of the petitioners is that the power of the Custodian under Section 12 is confined to those cases where a lease was granted by the evacuee and not by himself. It is urged by the petitioners that when a Custodian himself grants a lease, he is bound by the contractual obligations which he enters into with the lessee and his right to terminate the lease or cancel the lease must be according to the ordinary law of the land and not according to the powers given to him under Section 12.

It is further urged that even if a lease is terminated or cancelled, it is not competent to the Custodian to take possession by the summary remedy provided Under Section 9 of the Act, but he must have recourse to the ordinary Courts of the land and can only take possession by the means accepted and recognised under the law. Now, on a plain natural reading of Section 12, the Legislature has not in any way qualified the power of the Custodian in respect of leases under which any evacuee property is held. All that Section 12 requires is that there must be a lease and the lease must be of evacuee property, and if these two conditions are satisfied, the discretion is conferred upon the Custodian to cancel any such lease. In this case it is not disputed that the property which was leased to the petitioners was evacuee property, and therefore at the date when the Custodian purported to act under Section 12(1), the property in respect of which he was exercising his power was evacuee property held under a lease.

What is urged by Mr. Peerbhoy on behalf of the petitioners is that what is held by the petitioners is not evacuee property at all. It is urged that when a lease is granted to a third party, the right under which the third party holds the property is his own right and that right Is not evacuee property, and therefore when the Custodian attempts to terminate that right he is dealing with property which is not evacuee property, and therefore it is suggested that Section 12 has no application to a case where a lease is granted by the Custodian of Evacuee Property.

In our opinion this contention is based upon a misapprehension as to the true position of a lessee and a lessor with regard to a particular property. The property in this case is indisputably evacuee property; it belonged to an evacuee and it was declared to be evacuee property. In respect of this property the Custodian granted a lease. A lease is the transfer of a right to enjoy a property and therefore the right to enjoy the property was given to the petitioners. But although it is perfectly true that that right which the petitioners enjoyed was not evacuee property, the right was to enjoy a property which was undoubtedly evacuee property, and what Section 12 requires is that the right which a person has to enjoy a particular property must be in respect of property which is evacuee property. If the property which he has the right to enjoy is evacuee property, then it is competent to the Custodian to terminate that right and to claim back that . property. In cancelling the lease the Custodian is dealing with evacuee property. The effect of the cancellation is that the petitioners ceased to have any right to enjoy the evacuee property. The demise comes to an end and the Custodian becomes entitled to re-enter upon the property and to deal with the property as he thinks proper. Therefore, in our opinion it is impossible to urge that when a lease is granted of evacuee property by the Custodian, he cannot cancel the lease because the property is not evacuee property. The! evacuee property which is contemplated by Section 12 is the subject-matter of the lease and is the property which is demised under the lease. It is not material as to whether the right to enjoy that property is exercised independently and that right is not evacuee property. In this view of the case it is also immaterial as to whether the lease is granted by the Custodian or was granted by the evacuee. What is material is that there must be a lease under which evacuee property is held and if there is such a lease, the power arises in the Custodian to terminate that lease. It is significant to note that before the amendment effected in 1953 the power of the Custodian to cancel a lease was limited to leases which had been granted. after 14-8-1947. But after the amendment effected in 1953 it is expressly provided that the power under Section 12 can be erercised whether the lease was granted before or after the commencement of the Act.

5. It is then urged that the Custodian can only exercise the summary powers given to him under Section 9 of the Act against a person who is an unauthorised person or who is a trespasser. Undoubtedly the powers given to the Custodian under Section 9 are very vast, and it provides:

'If any person in possession of any evacuee property refuses or fails on demand to surrender possession thereof to the Custodian or to any person duly authorised by him in this behalf, the Custodian may use or cause to be used such force as may be necessary for taking possession, of such property and may, for this purpose, after giving reasonable warning and facility to any woman not appearing in public to withdraw, remove or break open any lock, bolt or any door or do any other act necessary for the said purpose.'

Section 8 deals with vesting of evacuee property in the Custodian, and Sub-section (4) provides:

'Where after any evacuee property has vested in the Custodian any person is in possession thereof, he shall be deemed to be holding it on behalf of the Custodian and shall on demand surrender possession of it to the Custodian or to any other person duly authorised by him in this behalf.'

Now, it is undoubtedly true that the person referred to in Sub-section (4) of Section 8 is a trespasser who is in possession of evacuee property without any title, and what is urged is that the power of the Custodian to take possession of evacuee property is limited to cases where a person is in possession of evacuee property without title. But such a power, it is contended, cannot be exercised in the case of a person who is in possession of evacuee property by reason of a lease granted by the Custodian himself. The fallacy underlying this argument is that the case of the petitioners doss not fall under Sub-section (4) of Section 8. If the Custodian was exercising his power under Section 9 on. the assumption that the petitioners were trespassers and their case fell under Section 8(4), then undoubtedly the exercise of the power would be bad.

But the case of the Custodian is that he can exercise his power under Section 12, he can terminate the lease, he can demand surrender or possession under Sub-section (2) of Section 12, and it is only if possession is not given to him that he can eject the petitioner in the manner provided in Section 9. Therefore, it is not by reason of Section 8(4) but by reason of Section 12(3) that the Custodian would have the power to eject the petitioners in the manner laid down in Section 9. Section 12(3) merely refers to the mode prescribed under Section 9 of obtaining possession, and that mode can be availed of by the Custodian not only in cases falling under Section 8(4) but also in cases falling under Section 12(1). Therefore, if we come to the conclusion that the Custodian is entitled to cancel the lease granted to the petitioners, then undoubtedly he is empowered to take all the necessary action under Section 12(2) and also action under Section 12(3), which action is the same as provided in Section 10 of the Act.

6. In this connection it is necessary to look at the rules framed under Section 56 of the Act with regard to the manner in which the Custodian should exercise his power under Section 12. Section 56 is the section which confers power to make rules and Sub-section (1) confers the general power upon the Central Government to make rules to carry out the purposes of the Act, and Sub-section (2), without .affecting the generality of the power, mentions the various matters on which rules can be framed, and Sub-clause (i) deals with the circumstances in which leases and allotments may be cancelled or terminated or the terms of any lease or agreement varied. When we turn to the rules, the material rule is Rule 14. Sub-rule (1) of that rule deals with leases which were subsisting at the time the Custodian takes possession of evacuee property. Sub-rule (2) in terms deals with the case of a lease or allotment granted by the Custodian himself and the rule provides that

'......the Custodian may evict a person on any ground justifying eviction of a tenant under any law relating to the control of rents for the time being in force in the State concerned, or for any violation of the conditions of the lease or the allotment.'

It is under this rule that the Custodian has cancelled the lease granted to the petitioners because his case is that they have violated the conditions of the lease. Then Sub-rule (4) provides:

'Before cancelling, or varying the terms of a lease or before evicting any lessee the Custodian shall serve the person or the persons concerned with a notice to show cause against the order proposed to be made and shall afford him a reasonable opportunity of being heard.' And it is under this Sub-rule that the notice to show cause was issued by the Custodian. Sub-rule (5) is very wide in terms and provides: 'Nothing in this rule shall be deemed to abridge or limit the power of the Custodian to cancel, or vary the terms of a lease relating to evacuee property, or to evict a lessee of such property where he is of the opinion that, for reasons to be recorded in writing, it is necessary or expedient to do so for the preservation, or the proper administration of the management of such property or for carrying out any other object of the Act.'

It is rather significant that the rule-making authority clearly understood Section 12 as conferring power upon the Custodian to cancel not only a lease granted by the evacuee, but also a lease granted by himself. It does not necessarily follow that because the rule-making authority takes a particular view of the law that it is necessarily the right view. Many rules have been framed which Courts o law have declared to be 'ultra vires'. If a rule goes beyond the scope of the authority conferred by a statute, then the rule would obviously be bad and the rule cannot extend the authority of an officer conferred upon him by the Legislature. But in cases where there is ambiguity in the language used by the Legislature, or where more than one construction is possible, then the rules framed may help the Court in coming to the right conclusion as to the construction to be placed upon a particular provision in the law. Authority for this canon 0f construction is to be found in -- 'Ex parte Wier; In re Wier', (1871) 6 Ch A 875 (A). At p. 879, Lord Justice Mellish says this:

'.....We are of opinion that, where the construction of the Act is ambiguous and doubtful on any point, recourse may be had to the rules which have been made by the Lord Chancellor under the authority of the Act, and if we find that in the rules any particular construction has been put on the Act, that it is our duty to adopt and follow that construction.'

7. In our opinion, really, it would not be correct to say that there is any doubt or ambiguity about the language used by the Legislature in Section 12. But even assuming there was any such doubt or ambiguity, it would be open to us to consider what view of the law has been taken by the authority which had to make rules under the statute by authority of the Legislature.

8. It is then urged that we should refuse to give an interpretation to Section 12 which puts the Custodian above the law and which makes him a judge in his own cause. It has been often pointed out by this Court that the Administration of Evacuee Property Act is a very special Act which was the result of very special circumstances, and it would be erroneous to judge this Act by the ordinary standards by which ordinary laws are judged. The Act was put on the statute book to deal with a grave crisis which arose in the history of our country, and a special law had set up a special machinery, given wide powers to special authorities and had not hesitated to abrogate ordinary laws and ordinary tribunals of the land.

Therefore, it would be wrong to assume that because Section 12 would give the power to the Custodian to absolve himself from his contractual obligations, therefore necessarily such a construction would be erroneous. As we have just pointed out, the rules framed under the Act give a guidance to the Custodian as to how he should act and in what circumstances he should cancel leases granted by him, and it is not wise to assume that a public officer, in a public office of great responsibility, would act otherwise than in the interest of the property of which he is the Custodian and would arbitrarily or capriciously interfere with contractual rights or obligations.

It is said that even with regard to the violation of terms and conditions of the lease, it is left to the Custodian . himself to decide whether there has been such a violation, and surprise is expressed' that the Legislature should have made the Custodian a judge in his own cause. It is wrong to suggest that the Custodian is judging in his own cause. He does not derive any pecuniary benefit from the property' of which he is the Custodian and the cause which he judges is not his own private personal cause but it is the public cause, and what the law and the Act require him to do is to administer, preserve and safeguard evacuee property. It is also incorrect to suggest that there is no corrective provided in the Act against his decision. Power of revision is granted to the Custodian General, and if the Custodian goes wrong he can be corrected by the Custodian General.

9. Mr. Peerbhoy has relied on two judgments of Mr. Justice Shah where the learned Judge has taken the view that the Custodian has no power under Section 12 to cancel a lease granted by himself. In our opinion, it is unnecessary to consider whether the view expressed by the learned Judge was 'obiter' or was necessary for the determination of the case. Any observation on a question of law of any learned Judge of this Court must be entitled to respect, but as this is a Divisional Bench we can differ from the view taken by the learned Judge and it would be open to us to take a contrary view. Therefore, we may consider the observations made by Mr. Justice Shah on this question of law without deciding, as it is not necessary, to decide, whether the observations were 'obiter' or not.

10. The first is the judgment of Mr. Justice Shah which came in appeal and the decision of the appellate Court is reported in -- 'P. R. Nayak V.B.D. Bharucha', : AIR1951Bom406 (view of Chagla C. J.'s judgment) (E). In that case Mr. Justice Shah took the view that even in cases where the Custodian had the power and the authority to cancel a lease under Section 12, the tenant could not be ejected and he could claim the protection of the Rent Act. Mr. Peerbhoy himself does not support the view of the learned Judge at least to the extent where the Custodian terminates the lease which has been granted by the evacuee. Dealing specifically with the question of terminating the lease granted by the Custodian, the learned Judge, says this at p. 657 of the report:

'.... .Again, if the Custodian has granted a lease, or accepted attornment from a tenant of the evacuee, he is not entitled thereafter to terminate the right of the tenant purporting to act under Section 12(1) of the Act. In my judgment there is nothing in Section 12(1) which enables the Custodian to absolve himself from the contractual obligations undertaken by himself and to set himself above the normal process of law, so as to obtain possession of property from tenants or grantees from him without recourse to a Court of law.'

With respect to the learned Judge, he has overlooked the fact that Section 12 starts by stating, 'Notwithstanding anything contained in any other Jaw for the time being in force.' Therefore, the very purpose of Section 12 was to abrogate the ordinary law and to substitute for the Courts of law in the land the decision and determination by the Custodian himself. If one were only to appreciate the reason why the Legislature enacted Section 12, it, would be clear that the intention of the Legislature was to confer upon the Custodian the widest power.

The whole object of the Act is to enable the Custodian not only to administer evacuee property, but to preserve and safeguard it, and in cases where a lease is granted by the Custodian himself, there is no less an obligation upon him to preserve and safeguard evacuee property than in cases where the lease was granted by the evacuee. Is it suggested that where the Custodian, comes across a case where a lessee under a lease granted by him violates the terms of the lease and uses the evacuee property to the detriment of that property, he must follow the ordinary procedure, go to a Court of law, file a suit, get an ejectment decree, and then only eject She lessee? It is precisely because the Legislature intended that the Custodian should act expeditiously that wide powers were conferred upon him under Section 12. It is difficult to understand what is the distinction in principle between a lease granted by an evacuee and a lease granted by the Custodian himself. The object in both the cases is the same and that object can only be achieved by conferring upon the Custodian wide powers. Why the Custodian should set himself above the law in cases where the lease is granted by the evacuee and not set himself above the law where the lease is granted by himself, is a question which it is difficult to answer. One can appreciate the contention put forward by Mr. Peerbhoy that the Custodian should only deal with evacuee property. But if he is dealing with evacuee property, then it is immaterial how the lessee comes into possession of that evacuee property, whether by reason of a grant from the evacuee or by reason of a grant from the Custodian. Mr. Justice Shah also says at the same page (p, 657):

'....... .Section 12(1) only entitles the Custodian to terminate contracts, leases or allotments by the evacuee whose property has vested in the Custodian, and does not enable him to terminate his own contracts or grants, or allotments. Nor is the Custodian entitled to take possession otherwise than under a decree or order of a Court, where he was either granted the right to remain in possession or has accepted by attornment the right of a person to be in possession.'

With respect, for the reasons we have just stated, we are unable to accept this view of the learned Judge as the correct view of the law When this matter came in appeal we disposed of the appeal on the narrow ground that inasmuch as the lease was granted prior to 14-8-1947, the Custodian, as the law then stood, had no power to terminate the lease and therefore no question arose as to whether the Custodian could exercise the power under Section 12 in respect of a lease granted by himself. Therefore, the Court of appeal did not go into this question at all.

11. The other judgment of Mr. Justice Shah on which reliance is placed is the judgment delivered by him in -- 'Acharj Nath Vig vs. R.V. Deshmukh', O. C. J. Misc. No. 132 of 1950, D/-29-9-1950 (Bom) (C). In that judgment the learned Judge says:

'I am unable to find any provision in the Administration of Evacuee Property Ordinance 27 of 1949 which would enable the Custodian to terminate the contractual obligations undertaken by himself and to claim possession without recourse to a Court of law. It appears to have been assumed by the Custodian that, notwithstanding the acceptance of rent and the acceptance of the status of the petitioner as a tenant of the premises in question, he was still entitled to call upon the petitioner to deliver possession under the provisions of Section 8, Clause (4), of the Ordinance.'

With respect, the learned Judge has failed to appreciate the fact that the provision which he was looking for was to be found, and clearly found, in Section 12 and Section 12 did not impose any limitation upon the power of the Custodian to terminate leases only in cases where leases were granted by an evacuee and not by himself.

12. Reliance is then placed upon a decision of the Court of appeal in -- 'B. C. Patel v. A.V. Patel', O. C. J. Appeal No. 105 of 1952. D/- 20-2-1953 (Bom) (D) and we must say that reliance can be placed on this judgment with greater force than on the other judgments on which Mr. Peerbhoy has relied. In that case we accepted the finding of Mr. Justice Tendolkar that the petitioner was a tenant of the Custodian. The lease had been granted by the Custodian, and undoubtedly if the Custodian had the right to terminate the lease under Section 12, then the petitioner would have failed and the Custodian would have succeeded.

Mr. Justice Tendolkar decided in favour of the petitioner on a concession made by the Advocate General before him that inasmuch as the lease had been granted by the Custodian, the Custodian had no power to terminate it under Section 12, and inasmuch as he had failed before the learned Judge on the question of fact as to whether the petitioner was or was not a tenant of the Custodian, he conceded that the petitioner must succeed. Before the Court of appeal the only question that was agitated was the question of fact and the decision of Mr. Justice Tendolkar was challenged. We upheld the finding of fact given by Mr. Justice Tendolkar, but when it came to the question of law this is what we observed:

'Indeed, the Advocate General made a clear and unequivocal concession before Mr. Justice Tendolkar that if it was held that the petitioner became the tenant of the Custodian the respondents have no legal right to eject him forcibly. In view of this concession, it seems to us entirely unnecessary to consider whether the Custodian has any power under Section 12 of the Act to eject his own tenant forcibly without recourse to law.'

Mr. Peerbhoy relies on an observation of the appellate Court in -- 'State v. Heman Santlal', : AIR1952Bom16 , to the following effect:

'.... .When counsel make a concession at the bar, it means that the point is so clear and inarguable that it must be taken as well-settled and any decision based on a concession must be considered as a binding decision.' Mr. Justice Tendolkar in his judgment in connection with this point has referred to the decision of the Privy Council in -- 'Brij Narain v. Mangla Prasad', AIR 1924 PC 50 (P). In the judgment of the Board delivered by Lord Dunedin at p. 55 are the following observations: 'It is true that the point was not actually taken so far as appears in any of these cases, but when a long series of cases, extending over a long period of time, the parties being represented by eminent counsel, is decided in one way, and if an evident plea had been taken and upheld the decisions would have been the other way, there arises an irresistible conclusion that the plea was not taken because it was felt to be bad.'

Mr. Justice Tendolkar points out that there have not been a long series of cases where such a concession has been made by counsel for the Custodian, and therefore the point cannot be considered to be decided by the appellate Court.

13. Now, Mr. Peerbhoy is very likely right when he points out that whereas the Privy Council was dealing with a case where a point was not taken, we are dealing with a case where a concession has been expressly made, and therefore what is pertinent is not the observations of the Privy Council, but the observations of the appellate Court in -- ' : AIR1952Bom16 ', and what Mr. Peerbhoy says is that inasmuch as the concession was made in -- 'B.C. Patel. v. A.V. Patel (D)' we are bound by the decision of the appellate Court in that judgment. Now, in order that a decision of a Court on a concession should be considered to be a binding decision and a decision which should bind Courts of co-ordinate jurisdiction, two conditions are necessary. The first is that the concession must be necessary for the decision of the case. Undoubtedly, in -- 'B.C. Patel v. A.V. Patel (D)', the concession was necessary for the decision of the case and but for that concession the decision. would have been the other way. The other condition is that the Court must accept that concession and put its own imprimatur upon that concession 'and' must accept that concession as the true statement of the law. We find the second condition absent in our decision in -- 'B.C. Patel v. A.V. Patel (D)' Far from the Court of appeal putting its own imprimatur upon the concession made by counsel, it has expressly stated in its judgment,

'In view of this concession, it seems to us entirely unnecessary to consider whether the Custodian had any power under Section 12 of the Act to eject his own tenant forcibly without recourse to law.'

Therefore, the Court of appeal did not apply its mind to the question of law at all. It expressly kept the question of law open and did not want it to be determined so as to be binding upon the Court if the question came up again for consideration. Therefore, we feel that we are in no way precluded from re-considering that question and deciding it on its merits. The position might have been perhaps different if we had stated in that judgment that the concession represented the correct position in law. Therefore, in our opinion, the matter is at large and we have to decide this question of law raised on its own merits.

14. Therefore, in our opinion, neither on principle nor on authority is there any justification for restricting the power of the Custodian under Section 12 to leases granted by the evacuee. His power extends to all leases, the subject-matter of which, is evacuee property. If he grants a lease and by that lease he demises evacuee property, it is open to him to cancel the lease provided he acts in the manner laid down under the rules framed under the Act.

15. Turning to the second and the more subsidiary point, what is urged by Mr. Peerbhoy is that in no view of the case was the Custodian justified in issuing the directions which he has issued to the petitioners and calling upon them to comply with those directions. This act on the part of the Custodian is sought to be justified by the Advocate General on the ground that he has issued these directions under Section 10 of the Act.

That section, again, confers very wide powers upon the Custodian and it empowers him to take such measures as he considers necessary or expedient for the purpose of securing, administering, preserving and managing any evacuee property and generally for the purpose of enabling him satisfactorily to discharge any duties imposed on him by or under this Act and may, for any such purpose as aforesaid, do all acts and incur all expenses necessary or incidental thereto. The central feature of this section which should not be overlooked is that the power of the Custodian is confined to taking necessary action with regard to evacuee property. It does not confer power upon him to take any measures with regard to property which is not evacuee property.

It is obvious that the Act did not intend to confer upon the Custodian powers so wide as to entitle him to take action with regard to property of which he was not the Custodian. Wide as the powers of the Custodian are under the Act, they do not extend to controlling or directing a citizen how he should deal or what he should do with property which is not evacuee property. It appears, and it is not disputed, that after the lease was executed the petitioners dealt with the stocks of raw materials, finished goods, goods in process, stores, spare parts and other moveables which were lying on the premises. Even as farback as 2-6-1953, the Custodian in a letter which he wrote to the valuers stated that

'the finished goods have all since been disposed of by the lessee. Similarly wool tops and art silk yarn must also have been fully utilized by the lessee. Some of the chemicals, dye stuffs, machinery parts, spares and tools, must also have in the meantime been utilized by the lessee. The remainder of these stores will be available for inspection partly in the premises of the Mills at Ambernath and partly in the godowns in Bombay.'

When the petitioners in the petition averred that the raw materials, finished goods, and goods in process are the absolute property belonging to the petitioners and that these goods were not the goods which at one time were the property of the evacuee, the answer given by the Custodian in his affidavit is that it is not possible or practicable to separate the goods given over to the petitioners. Therefore, it seems to be indisputable that the large bulk of the materials lying on the premises are not the materials which at one time belonged to the evacuee and the possession of which was given to the petitioners.

Looking at it from a different point of view also, it seems fairly clear that under the agreement of lease the property in these goods passed to the petitioners. The goods were ascertained goods, the possession of the goods was given to the petitioners, and all that remained to be done was that the price was to be settled and on the settlement of the price it had to be paid by the petitioners. But the mere postponement of the payment of the price or even the postponement of the ascertainment of the price does not necessarily prevent property from passing. It always depends upon the intention of the seller and the purchaser as to when property should pass, and reading the agreement as a whole it seems to us that it was the intention of the parties that property in these goods should pass to the petitioners.

If that be the true position, then even with regard to those materials which originally belonged to the evacuee, on the sale taking place those articles belonged to the purchaser in his own right and they could no longer be described as evacuee property. All that the Custodian was entitled to was the price of those goods. He had no right to call back those goods or to take possession of those goods. Therefore, with regard to these articles the Custodian had no right to take any measures under Section 10 of the Act, and what he has attempted to do by these directions is to control the action of the petitioners in dealing with these goods. The petitioners are asked not to remove the stocks, they are asked not to raise any money, they are asked to submit a report with regard to the transactions, and they are asked to give information as to the quality, quantity, etc., of these goods.

Partly the attempt of the Custodian is--it may be from the best of intentions--really to enforce an attachment before judgment against the petitioners. In order that the price should be safeguarded he wants to prevent the petitioners from removing the goods or raising money on those goods. That surely he cannot do under Section 10 of the Act. Therefore, it seems to us that inasmuch as the Custodian has attempted to give directions with regard to property which is not evacuee property, he has exceeded his powers under Section 10 of the Act. and therefore the petitioners must succeed to' the extent that they challenged the directions given by the Custodian in the notice issued by him. We, therefore, agree with the view taken by Mr. Justice Tendolkar on this aspect of the case.

16. The result, therefore, will be that the appeal will partly succeed and the order of Mr. Justice Tendolkar prohibiting the Custodian from proceeding with the show cause notice under Section 12 will be set aside. The judgment of Mr. Justice Tendolkar will be confirmed to the extent that he has quashed the order of the Custodian which seeks to give directions to the petitioners.

17. With regard to costs, the petitioners came to this Court on two grounds. They have succeeded in one and failed in the other. There is force in what the Advocate General contends that the main and the real fight was with regard to the Custodian's power under Section 12 to terminate the lease granted by him to the petitioners. But on the other hand when the petitioners came to this Court there were two judgments of Mr. Justice Shah in which he had taken the view favourable to them, and if those judgments represent the correct law, then obviously the petitioners would have succeeded. Taking everything into consideration, we think the fairest order to make would be that there will be no order as to costs throughout.

18. Appeal partly allowed.


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