(15) The two accused were convicted by the learned Presidency Magistrate, 19th Court, for having committed an offence under Section 13(1) of Bombay Act 57 of 1947 and sentenced to two months' rigorous imprisonment & a fine of Rs. 1,200 & in default rigorous imprisonment for six weeks. The two accused preferred an appeal to this Court and the appeal came before the criminal bench and that bench has referred a question of law that arises out of this appeal to a full bench.
(16) The facts briefly are that the two accused on 23-11-1950, received a deposit of Rs. 75 from a prospective tenant and the tenant also paid, according to the case of the prosecution, a sum of Rs. 2,400 as premium. The premises which were to be demised to the tenant consisted of a flat on the third floor of the building, and the division bench has found as a fact that this flat was not ready for occupation. Further, when the deposit was made and when, as alleged by the prosecution, the premium was paid, the tenant did not seek to obtain possession and the landlords did not offer to give possession of the flat in question because it was agreed Between them that the possession should be given after the building has been properly completed.
(17) The question that has been submitted to us is whether 'if as owners of an incomplete building the appellants accepted Rs. 2,400 from the complainant 111 respect of an agreement between them that the appellants were bound to give and the complainant was entitled to take possession of flat No. 15 in the said building as soon as the said building was completed on the agreed rent of Rs. 75 per month, did the acceptance of Rs. 2,400 by the appellants fall within the mischief of Section 18 of Bombay Act 57 of 1947?' In the first place, it is necessary to consider whether this agreement entered into constituted a lease as defined by law. It is not disputed that the agreement is an oral agreement, and turning to Section 107, Transfer of Property Act, it is clear that where you have an oral agreement, delivery of possession is necessary before a lease could be made. Therefore, the interesting question which has been discussed in the refering judgment as to whether the agreement arrived at between the landlord and the tenant In the case before us constituted a present demise or not, in our opinion, with respect to the learned Judges, does not arise for consideration in this appeal. Once we have the admitted fact that there was an oral agreement between the landlord and the tenant, unless delivers- of possession was given to the tenant there could be no lease, and it is again an admitted fact that no delivery of possession was given to the tenant. Indeed, under the circumstances of the case, no delivery of possession could be given because the premises were not ready for occupation or enjoyment. Therefore, what the landlord received as a premium was not for the grant of a lease because there, being no lease it could not be said that the landlord received the sum of Rs. 2.400 In consideration of granting a lease to the tenant. But the question still remains as to whether looking to the language used by the Legislature in Section 18, the act of the landlord comes within the mischief, even though he may have received the consideration for an executory agreement or for a contract to grant a lease in future. There can be no doubt that although this oral agreement does not constitute a lease it does constitute an agreement to grant a lease in future. (18) Now turning to Section 18 and I am setting out only the relevant part of it, if any landlord receives any premium in respect of the grant of a lease for any premises, he shall be liable to the penalty set out in that section. What the Legislature has penalised is the receipt of a premium by the landlord and the Legislature has also required a nexus between the receipt by the landlord of a premium and the grant of a lease of any premises. Therefore, a receipt alone by a landlord would not constitute an offence, but that receipt must be connected with the grant of the lease of any premises. Unless that connection is established, no offence would be committed. The contention of Mr. Lulla on behalf of the accused is that the receipt of the premium must be simultaneous with the grant of the lease. If the lease comes into existence at a future date, then the receipt of a premium according to him is not in respect of the grant of a lease. Therefore me key words according to us in this section are 'in respect of,' It is relevant to observe that the Legislature has advisedly not used the expression 'for' or 'in consideration of' or 'as a condition of' the grant of a lease. It has used an expression which has the widest connotation and the expression used is 'in respect of.' 'In respect of' means in its plain meaning 'connected with or attributable to,' and therefore it is not necessary that there must be a simultaneous receipt by the landlord with the grant of the lease. So long as some connection is established between the grant of the lease and the receipt of the premium by the landlord, the provisions of the section would be satisfied. In our opinion it is impossible to contend that in the present case there was no connection whatever between the landlord receiving the premium and his granting the lease of the premises. It is true that when he received the premium he did not grant a lease. It is true that all that he did when he received the premium was to enter into a contract with his tenant to grant a lease in future, But the object of the landlord in receiving the premium and the object of the tenant in paying the premium was undoubtedly on the part of the landlord the letting of the premises and on the part of the tenant the securing of the premises. Therefore the object of both the landlord and the tenant was the grant of the lease of the premises concerned & that object was achieved partly and to start with by an oral agreement being arrived at between the landlord and the tenant with regard to the granting of this lease, the lease being completed when delivery of possession of the premises would be given. Therefore, in our opinion, on the facts of this case it is not possible to contend that the payment or the premium received by the landlord was unconnected with the grant of a lease of any premises. The fact that no grant was made at the time when the premium was received, the fact that there was amerely an agreement to grant a lease, the fact that the lease would come into existence only at a future date, are irrelevant facts so long as the connection between the receiving of the premium and the lease is established.
(19) It has been contended by Mr. Lulla that in this particular case not only the grant of the lease is in future, but there is a possibility of the lease never coming into existence. Mr. Lulla says that if there was a certainly even at a future date of the lease coming into existence, then it may be said that the receipt of a premium by the landlord is in respect of the grant of the lease. In our opinion the point of time with which we are concerned is the point when the landlord received the premium. If at that point of time the receipt was in respect of the grant of a lease, it is immaterial whether in fact at a subsequent date the lease came into existence or not.
(20) It is further contended by Mr. Lulla that the lease must be of premises as defined by the Act. In the first place, reliance is placed on s.6 which provides that in areas specified in Schedule I, this part (and Section 18 finds a place in that part) shall apply to premises let for residence, education, business, trade, or, storage, and the argument is based on the expression 'premises let', that the premises referred to in Section18 must be premises which are actually let, and as those premises were not actually let, no offence is committed in respect of premises which were to be let at a future date. In our opinion, the object of Section 6 was to indicate and specify the premises which were let for a particular purpose, viz., residence, education, business, trade or storage. The Legislature was more emphasising the purpose for which the premises were let rather than the fact that the premises were let and were not to be Jet In future. We must really look at the definition of premises in order to appreciate the argument of Mr. Lulla that the premises referred to in Section is are not the premises defined, and what is relied upon is the second definition of 'premises', viz., any building or part of a building let separately, and Mr. Lulla again emphasises the fact that in order to constitute 'premises' within the meaning of the statute, part of the building with which we are concerned in this case must beactually let and unless it is actually let, the Act does not apply to any building. Even assuming that Mr. Lulla is right in the Interpretation he wants us to put upon the definition of 'premises,' it is clear that when the contract to grant a lease results in the actual lease, the lease would operate upon the premises as deemed. What we are concerned with is grant of a lease of any premises, and the lease which ultimately conies into existence must relate to the premises as defined, and there can be no doubt in this case that although the building was not let at the date when the agreement was entered into, as obviously it could not be, when the lease operated upon the building it would be a building as defined by the Act. Therefore, in our opinion, there is no substance in the contention put forward that the premises in respect of which the offence was committed are not premises as defined by the Act.
(21) Then Mr. Lulla has strongly urged upon us not to depart from the well accepted canon of construction of penal statutes. Mr. Lulla is perfectly right when he argues that if two possible and reasonable constructions can be put upon a penal provision, the Court must lean towards that provision which exempts the subject from penalty rather than one which imposes a penalty. It is also correct that the principle of construing a statute in order to suppress a mischief and to advance the object of the legislation does not apply to a penal statute. It is not competent to the Court to stretch the meaning of an expression used by the Legislature in order to carry out the intention of the Legislature. A penal statute must be construed according to its plain, natural and grammatical meaning. No authority is really required for this proposition, but the matter has been very succinctly and clearly stated by Lord Simonds in -- '(1951) 2 All. ER 278 (G)' that a man should not be put in peril on an ambiguity; and Lord Simonds relied in this case on the observations of Lord Macmillan in - '(1946) A C 278:
'..it must be borne in mind that while the statute and rule have the beneficent purpose of providing protection for workmen, their contravention involves penal consequences under Section11 of the Act. Where penalties for infringement are imposed it is not legitimate to stretch the language of a rule, however, beneficent its intention, beyond the fair and ordinary meaning of its language.'
The principle laid down by Lord Simon in - '(1940) A. C. 1014' is (p. 1022):
'..if the choice is between two interpretations,the narrower of which would fail to achieve themanifest purpose of the legislation, we shouldavoid a construction which would reduce thelegislation to futility and should rather acceptthe bolder construction based on the view thatParliament would legislate only for the purposeof bringing about an effective result.'
This canon of construction may well apply tolegislation which does not Impose penalties, butthe more correct test to apply where a Court isconstruing a penal statute is the test laid downby Lord Macmillan. But even applying that testand not stretching the language used by the legislation beyond its fair and ordinary meaning, we are of opinion that the very comprehensive expression, viz., 'in respect of', used by the Legislature can only lead to the conclusion that the Legislature wanted the penal consequences of Section 19 to apply to any nexus between the receipt by a landlord of a premium and the grant of the lease, and in our opinion the nexus is present and clearly present where a case arises where the landlord accepts a premium for the purpose of granting a lease in future.
(22) It has also been argued by Mr. Lulla that under Section 18(1) only a landlord who accepts a premium that renders himself liable to the penal consequences provided in that sub-section, and Mr. Lulla says that in this particular case the relationship of landlord and tenant was not established at the date when the premium was received by the accused. In our opinion, this contention is based upon a clear fallacy. The definition of 'landlord' is a person who is for the time being receiving or entitled to receive rent in respect or any premises. Therefore, in order to determine who is the landlord in respect of any particular premises, the question that has got to be asked is, who is the person who is entitled to receive rent in respect of those premises? Even if the person does not actually receive rent, his title to receive rent is sufficient. In this particular case it is impossible to contend, in our opinion, that the accused were not the landlords of the premises in respect of which they entered into an agreement in respect of which they accepted a deposit and in respect of which they actually passed a receipt, for rent. The accused were the persons who were entitled to receive the rent and, therefore, they satisfy the definition of the statute.
(23) In our opinion, therefore, the facts on whichthis reference has been made to us do bring thecase of the accused within the meaning of Section 18(1),and accordingly we answer the question submittedto us in the affirmative. The matter will go backto the criminal bench for disposal according tolaw.Reference answered