S.S. Dhavan, J.
1. This is a petition under Article 226 of the Constitution praying for the quashing of an order of Rent Control and Eviction Officer Kanpur (respondent No. 1) dated 10-9-1956, declaring a godown belonging to the petitioner as vacant for allotment, and for a writ in the nature of mandmus commanding the aforesaid Officer to withdraw the impugned order and not to continue the allotment proceedings in respect of the house.
2. The petitioner, Abdul Shakoor is the owner and landlord of the premises in dispute known as No. 95/32 Pechbagh Kanpur. The respondent No. 1 is the Rent Control and Eviction Officer, Kanpur and the respondent No. 2 the District Magistrate of Kanpur. The respondents 3, 4, 5 and 6 are persons who made applications for allotment of the house and are rival claimants.
3. The relevant facts, as stated in the petitioner's affidavit, are these. The property in dispute is a godown which is a part of the premises No. 95/32 Pechbagh Kanpur mentioned above. The petitioner is in possession of a portion of the premises and residing in it. There was some dispute between various persons and the petitioner about this godown, which is not relevant to the present controversy. It ended in the petitioner's favour on 10-5-1955 when the Rent Control and Eviction Officer Kanpur, hereinafter to be called R.C. and E.O., passed an order releasing the godown in the petitioner's favour in the following terms:
'Reference your application dated 3-5-1958 regarding allotment of godown, you are hereby informed that the same is released in your favour for your personal use and that you will please not let it out for a period of three years.'
The petitioner had for a long time been desirous of starting a suitable business. He was advised that the hide business would be a good field for investment and so he decided to make plans for starting his own individual business as a commission agent in the sale of hides. He could not carry out his plans for want of suitable accommodation. Subsequently the heavy litigation in respect of this godown swallowed up the petitioner's small fortune.
He realised that, lacking in both finance and experience, he would not be able to carry on the bide business by himself alone. He therefore entered into a partnership with two persons, Rizwan Ullah and Shamshul Huda. On 5-7-1956 the parties executed a partnership deed, which is Annexure 'A' of the petitioner's affidavit. The aforesaid two gentlemen are experienced in this business which they had long been carrying on under the name and style of the East India Hide Co., at Kanpur.
This business was replaced by the new partnership firm consisting of the petitioner and the other two. The new firm was also given the same name -- East India Hide Co., to avail fully of the goodwill and reputation of the old firm. But one Syed Ahmad, who had carried on a dispute with the petitioner in respect of the godown and had consequently become hostile to him, set up another person for filing an application before the R.C. and E.O. for the allotment of the godown.
This person, whose name is Abdul Hamid made a false allegation before the authorities that the petitioner was not utilising the godown. The District Magistrate Kanpur passed an ex parte order on 16-1-1956, allotting the godown to Abdul Hamid. Proceedings were initiated against the petitioner and his family for their eviction under Section 7A of the U.P. (Temporary) Control of Rent and Eviction Act. But the petitioner filed a revision before the Additional Commissioner, Allahabad, who set aside the allotment order and directed that if it was considered necessary to take further allotment proceedings in respect of the godown, 'this should be done in accordance with law'.
Subsequently four persons filed rival applications for the allotment of the godown. The petitioner resisted the allotment and filed an affidavitbefore the R.C. and E.O. in which lie stated that the godown was not vacant nor likely to fall vacant. He further pointed out in this affidavit that he was the owner in possession of the godown under a valid and legal allotment order, and carrying on his partnership business in a portion of it.
He contended that the R.C. and E.O. had no jurisdiction to allot the premises which were not vacant. He filed before the officer the original partnership deed together with a certificate of the Registrar of firms, Uttar Pradesh, to prove that the firms had been duly registered under Section 68 of the Indian Partnership Act.
4. The Rent Control and Eviction Officer heard all the four applications and the petitioner's objection together on 10-9-1956. He held that the godown had been sublet by the deponent and declared that it was vacant for allotment. His order is dated 10-9-1956 and is Annexure 'E' of the petitioner's affidavit. The R.C. and E.O. fixed 19-9-1956 for continuing allotment proceedings, but before that date the present petition was filed on 18-9-1956.
This Court admitted it and also passed an interim order staying further proceedings before the R.C. and E.O. The petitioner contends that the order of the R.C. and E.O. is erroneous on the face of the record, as it is based on an incorrect view of the law of the partnership. The petitioner therefore prays for a writ of certiorari quashing that order and a writ of mandamus directing the R.C. and E.O. not to continue the allotment proceedings any further.
5. The petition is opposed by all the respondents. A counter-affidavit has been filed on behalf of the R.C. & E.O. & the Dist. Magist, Kanpur, as also on behalf of Khaliuddin respondent No. 5. Babu Khan, respondent No. 6, has also filed a counter-affidavit sworn by himself. In the counter-affidavit on behalf of the R.C. and E.O. and the District Magistrate, it is stated that, according to the report of the Senior Inspector, the petitioner executed a fictitious deed of partnership with the firm East India Hide Co. for the purpose of safeguarding himself from the clutches of the law. It is contended that the terms of the partnership deed make it clear that it was a case not of partnership but of letting out of the accommodation.
The petitioner, after securing a release of the premises in his favour, kept them locked for a considerable time and never used them. The respondents lay emphasis on the terms of the deed to show that the partnership is a sham transaction. Though the petitioner's share of the profits is in the proportion of -/3/- to the rupee, it is subject to the proviso that his profits would remain fixed at Rs. 4,000/-per annum irrespective of the total amount of profits earned by the firm.
Furthermore, the petitioner is not required to invest any capital, the entire investment being that of the other partners who are the proprietors of East India Hide Co. They have also been given the entire control over the management of the business to the exclusion of the petitioner. These and other conditions show, according to the respondents, that behind the face of a partnership deed the petitioner has virtually let out the premises on an exorbitant rent in violation of the provisions of the U.P. (Temporary) Control of Rent and Eviction Act.
6. The counter-affidavit on behalf of the respondent No. 5 Khaliluddin has been sworn by his Munshi or Pairokar Rahmatullah. It says that the petitioner Abdul Shakoor was never in a position to start any business of his own. In fact he obtained possession of the premises at the instance of Razwan Ullah and Shamshul Huda (his present partners) to enable them to start a business of theirs. The device of a partnership deed including the name of Abdul Shakoor as a partner was adopted because the other partners were not sure that they would succeed in obtaining an allotment in their own name in the existence of a number of rival applicants, who had better claims.
It is pointed out that the releasing order of 10-5-1955, contained an express provision that the petitioner Abdul Shakoor must not let out the premises for a period of three years and that the premises were being released for Abdul Shakoor's 'personal use'. It is alleged that Abdul Shakoor has been set up by other persons who want to make use of the accommodation.
7. The respondent No. 6 Babu Khan, also_ a rival claimant in the allotment proceedings, states in his counter-affidavit that the petitioner Abdul Shakoor is not a partner in the firm East India Hide Co. nor is the godown occupied by him. It has been surreptitiously let out to that firm in contravention of the law. The entire aim of the petitioner in entering into the so-called partnership was to let out illegally the godown on exorbitant rent and take a premium in the garb of partnership.
The petitioner's explanation that he was prevented from starting his own business by the swallowing up of his capital in litigation is denied. It is pointed out that in an earlier statement before the R.C. and E.O. the landlord had denied any intention of entering into partnership or of starring any business and assured the R.C. and E.O. that he needed the premises for residential purposes only. Babu Khan's case is that the partnership is a sham transaction made with the object of enabling the petitioner to draw a rental of Rs. 4,000/- a year, though the legal rent of the premises is only Rs. 93/12/- per annum.
It is pointed out that the Rent Control Inspectors got wind of this sham transaction even before it was made and submitted their reports to the authorities. Two such reports are filed as Annexures to Babbu Khan's affidavit.
8. Arguments of learned counsel lasted several days and covered a wide field including such questions as the conduct of the petitioner, the prematurity of the petition and the existence of an alternative remedy. I summoned the record of the proceedings before the R.C. and E.O. which was made with the consent of the parties, a part of the record of these proceedings. The pleadings of the parties and the arguments of counsel raise the following questions for determination:
1. Is the writ petition premature?
2. Has the petitioner an alternative remedy which disentitles him to any relief under Article 226 of the Constitution?
3. Is the impugned order an administrative or quasi-judicial order?
4. Does the impugned order contain an error so palpable and apparent on the face of the record as to call for the interference by the High Court in the exercise of its jurisdiction under Article 226 of the Constitution?
5. Is the finding of the Rent Control Officer that the alleged partnership deed is not a genuine transaction erroneous on the face of the record?
6. Is the finding that the deed is more or less a contract under which the landlord has passed on the possession of the godown to the proprietor of M/s East India Hide Company in view of Rs. 4,000/- a year erroneous on the face of the record?
7. Is the finding that the transaction evidenced by the deed 'seems to have been thrashed out to evade the provisions of the Rent Control Act' erroneous on the face of the record?
8. Is the finding that the landlord has passed on possession illegally to the proprietors of Messrs. East India Hide Company erroneous on the face of the record?
9. Is the finding that the godown is vacant for allotment erroneous on the face of the record?
10. If the order is correct, does it have the effect of making the building vacant within the meaning of Section 7 of the Rent Control and Eviction Act?
11. Did the R.C. and E.O. have the jurisdiction, to make an order of allotment under Section 7 (2) of the U.P. (Temporary) Control of Rent and Eviction Act?
12. Has the petitioner's conduct been such as to disentitle him to any relief from this Court?
9. I shall now proceed to give my findings on these questions.
10. 1. Is the writ petition premature? Learned counsel for the respondent No. 6 contended that the petition is premature as it had been filed in the middle of the proceedings which have not yet terminated. He drew attention to the last sentence in the order of the R.C. and E.O. 'The question of allotment shall be considered on 19-9-1956'. The entire proceedings were under Section 7 (2) of the U.P. (Temporary) Control of Rent and Eviction Act, which, inter alia, empowers the Rent Control and Eviction Officer to require a landlord to let any person any accommodation which has fallen vacant.
This Officer had received applications from several persons, each praying that the godown be allotted to him. The petitioner had opposed all the applications. The R.C. and E.O. considered the applications and the petitioner's objections together. He could not make the order of allotment without holding that the accommodation had become vacant, in view of the landlord-owner's specific allegation that it had not. Therefore on 10-9-1956 the R.C. and E.O. heard both sides and decided that the godown had fallen vacant and was available for allotment.
Normally he should have proceeded to make an allotment order then and there. But, for some reason, he adjourned the hearing to 19-9-1956. But the petitioner had rushed to this Court with his application under Article 226 of the Constitution without waiting for the final order of the R.C. and E.O. Learned counsel therefore contended that no right of the petitioner had been violated at this stage and the petition must be rejected as premature.
11. I am unable to accept this argument. It is true that the R.C. and E.O. Kanpur has not yet passed an order of allotment. But he has held that the premises are vacant. This finding irrevocably affects the right of the landlord in respect of a property of which he is the admitted owner. Learned counsel for the respondent No. 6 conceded that, after this order there is little likelihood of the petitioner continuing in enjoyment of his property irrespective of whosoever may be the lucky allottee of the godown.
He further conceded that the petitioner was out of the race in the competition for the use and occupation of this property. Thus the passing of this order constituted an imminent threat to the fundamental right of citizen to hold and dispose of his property. The fact that the proceedings for allotment have not yet terminated before the R.C. and E.O. is not) an absolute bar against the maintainability of this petition. The English Courts have not hesitated to give relief against orders which, though not final, affected the rights of a citizen.
In King v. Postmaster General, 1928-1 KB 291, a certificate of a medical officer was quashed even though it had to be followed by another examination and enquiry. Lord Hawe C.J., observed.
'........ I do not think Miss Carmichel (the petitioner) would be in the same position before the medical referee as that in which she would have been if there had been a refusal on the part of the officer to give her a certificate at all.'
12. It should be noted that a writ of certiorari was issued in spite of the fact that the petitioner had a right of appeal against the final decision of a certifying surgeon. Again, in Rex v. Boycott, (1939) 2 KB 651, the opinion of an examining doctor was quashed by a writ of certiorari even though it had to be followed by subsequent examination and enquiry because the opinion directly related to the petitioner and was the starting point for proceedings under the Detention Act and under the Mental Deficiency Act. In Errington v. The Minister of Health, 1935-1 KB 249, an order affecting, the rights of property owners was quashed though it was not a final order.
I see no reason why the petitioner should wait till proceedings are taken under Section 7-A of the U.P. (Temporary) Control of Rent and Eviction Act for his ejectment. After the passing of an ejectment order, he would be in grave danger if the authorities proceed to execute their decision without giving him any time to come to this Court for relief. In my view the petitioner is entitled to be heard on. merits even at this stage.
13. Learned counsel for the respondent further contended that the petitioner has an alternative remedy by way of revision before the Commission.. This will be available to him when, and if, an allotment order is passed by the R.C. and E.O. The Commissioner has the power, even in a revision under Section 7 (A) of the U.P. (Temporary) Control of Rent and Eviction Act to pronounce upon the validity of an allotment order. In the event of the godown being allotted to a person other than the petitioner, he will be served with a notice of eviction under Section 7 (A). This will be the stage when he can file a revision before the Commissioner and challenge the validity of the allotment itself. At present there is no imminent danger or threat to the petitioner's rights and the petition should not be entertained. I do not agree with this argument. Learned counsel conceded that the remedy by way of revision before the Commissioner is not available to the petitioner at present, and that he must wait till an ejectment order is actually passed against him. I have already held that the petitioner need not wait till the danger of ejectment is so close upon him that he may not be in a position to protect himself at all. Moreover he may have to wait indefinitely. If the R.C. and E.O. pass on allotment order in favour of any one or adjourns the allotment proceedings for a long time, the petitioner must continue to wait.
Even if no one else acquires the right to occupy the godown, the petitioner's right to do so has been destroyed already by the impugned order. Furthermore, the remedy by way of revision, is not a legal remedy and, in any case, not as efficacious as a petition under Article 226 of the Constitution. Moreover, in my view, the proper time in most cases to consider this question of alternative remedy is at the time when a petition is moved before this Court.
In this case, the Court admitted this petition and issued notice to the respondents. The petitioner has waited for two years for the decision of his case. If the court now says to him, 'you should never have come here at all', this would not be very fair to him. I must not be understood to hold that the question of alternative remedy can never be raised at the final hearing of the writ petition. But in view of the long delay in the disposal of this case and the other circumstances mentioned above, I hold that the petitioner is entitled to be heard on merits.
14. I shall now proceed to consider whether the petitioner has established his case for the reliefs prayed for by him.
15. 3. Is the impugned order administrative or quasi-judicial? According to Mr. Pathak it was of the latter variety. He argued that the proceedings which led up to the passing of the impugned order affected the petitioner's right of property--a fundamental right guaranteed by the Constitution. He relied upon the case of 1935-1 KB 249, discussed above, in support of his contention that proceedings affecting the right of property-owners are quasi-judicial.
In that case the decision was based on an interpretation of the relevant provisions of the Housing Act, 1930. The court held that the Minister of Health in dealing with a clearance order under the Act, occupied a quasi-judicial position as the Statute provided for the raising of objections by the owners of the property in the area and there was a true contest between the owners of the property and the local authority; in other words, there were two sides as between whom the Minister had to come to a determination after consideration.
Learned counsel conceded, in reply to a question from me, that the essential test of a quasi-judicial decision which distinguishes it from an administrative act is that the law empowering the quasi-judicial authority to make a decision requires a judicial approach, either expressly or by necessary implication.
This principle was settled beyond controversy by the Supreme Court in the case of Province of Bombay v. Khushaldas S. Advani : 1SCR621 . In that case the Government of Bombay issued an order requisitioning a flat under Section 3 of the Bombay Land Requisition Ordinance No. 5 of 1947. The premises were allotted to a lady and the existing occupant was asked to vacate the premises.
He filed an application for a writ of certiorari against the Government. Bhagwati J., issued a writ, of certiorari and on appeal, the Division Bench of the Bombay High Court (Chagla C. J. and Tendolkar J.) confirmed the order. On further appeal, the Supreme Court reversed the findings of the Bombay High Court and set aside the order mainly on the ground that the impugned order was administrative and not quasi-judicial and therefore not amenable to a writ of certiorari.
It is note-worthy that the provisions of the Bombay Act under which the property was requisitioned and allotted were similar to those of the relevant provisions of the U.P. (Temporary) Control of Rent and Eviction Act. Sections 3, 4 and 4A of the Bombay Ordinance were as follows:
Section 3: 'If in the opinion of the Provincial Government it is necessary or expedient to do the Provincial Government may by order in writing requisition any land for any public purpose:'
Section 4: 'If any premises situate in an area specified by the Provincial Government by notification in the Official Gazette are vacant on the date of such notification & whenever any such premises becomes vacant after such date either bythe landlord ceasing to occupy the premises; or by the termination of a tenancy, or by the eviction of a tenant, or by the release of the premises from requisition or otherwise, the landlord of such premises shall give intimation thereof in the prescribed form to an officer authorised in this behalf by the Provincial Government.'
Section 4-A: 'Whether or not an intimation under Sub-section (1) is given, and notwithstanding anything contained in Section 3, the Provincial Government may by order in writing requisition the premises and may use or deal with the premises in such manner as may appear to it to be expedient,'
16. The Supreme Court considered the question whether the action of the Government, permited under Section 3 of the Ordinance read along with the scheme of the Ordinance, was a quasi-judicial decision or an administrative act. It held that there was nothing in the Ordinance to show that in arriving at its decision the Provincial Govt., had to act judicially. Applying this test to the proceeding under review, I find nothing in the Statute to hold that the Bent Control and Eviction Officer is required to act judicially before passing an order under Section 7 (2) of the Act requiring the landlord to let any premises which have become vacant by his ceasing to occupy it. True, that allotment order can only be passed if the accommodation is vacant -- a condition precedent -- and the R.C. and E.O. must decide whether the premises are vacant before he can allot them.
But there is nothing in the language of the Act to show that he is required to conduct a quasi-judicial inquiry before passing an order of allotment. In fact, the question is concluded by a decision of a Division Bench of this Court in the case of Mahabir Prasad v. The District Magistrate, Kanpur : AIR1955All501 , in which it was held that the allotting authority when passing an allotment order under Section 7 (2) of the Act is not bound to hold an inquiry to hear the parties, or to permit them to produce evidence,
I am bound by this decision with which I most respectfully agree. But learned counsel relied on some observations of Mootham C.J., explaining an observation of this Court in the earlier case of Sri Chandrabhan v. The Rent Control and Eviction Officer, Agra : AIR1954All6 . In that case it had been said,
'.................... When the Rent Control and Eviction Officer decides a question of fact the result of which determines the right of a person to the benefit of Rule 4 that is of the Rules made under the Act -- he acts in a quasi-judicial capacity.'
The learned Chief Justice explained that this observation related to the inquiry which the Rent Control and Eviction Officer must make under Rule 4 and not to the allotment proceedings under Section 7 (2). This observation is no authority for the proposition that the proceedings under Section 7 (2) are quasi-judicial. Counsel for the petitioner contended that the allotment proceedings before the R.C. and E.O. consisted of two stages. First he held an inquiry as to whether there was a vacancy as the result of the conduct of the landlord.
This was the dividing line between the judicial and administrative functions of the Rent Control and Eviction Officer. The proceedings uptill this stage were quasi-judicial. The next stage would be to exercise his administrative function of making the allotment. I am afraid I cannot agree. If the Rent Control and Eviction Officer had passed a short order saying 'The accommodation has become vacant. I allot the premises to X'; this would havebeen an administrative order. But the Officer imbued with an extra sense of fairness made an enquiry in which the parties were permitted to lead evidence and be represented by counsel, and then fixed a date for allotment.
This gesture on the part of the Rent Control and Eviction Officer would not convert the proceedings under Section 7 (2) into a quasi-judicial enquiry.
17. However, this controversy is academic in view of two facts. First, the Rent Control and Eviction Officer did in fact hear the parties and give them a full hearing. Secondly, the power of this Court to issue writs, orders or direction under Art, 226 is not limited to administrative ones.
In the case of Rameshwar Prasad v. The District Magistrate : AIR1954All144 , a Division Bench of this Court held that the High Court can quash even an administrative order in suitable cases particularly when a person is deprived of his right of property without being given an opportunity of being heard. This principle would extend to a case where a citizen complains that an administrative order interfering with his right of property has been passed illegally or without jurisdiction.
I have already held that the impugned order of the Rent and Eviction Officer, Kanpur, has the effect of interfering with the petitioner's right to enjoy his property. If he can establish that the order is without jurisdiction or illegal, he has a right to seek appropriate relief under Article 226 of the Constitution. In view of my finding that the proceedings before the R.C. and E.O. Kanpur are administrative and not quasi-judicial, no writ of certiorari can issue.
18. Even assuming that the proceedings before the R.C. and E.O. on 10-9-1956 are quasi-judicial, the question still remains whether the petitioner has made out a case for the issue of a writ of certiorari. Learned counsel for the petitioner contended that the order of the R.C. and E.O., dated 10-9-1956 (Annexure D of the petitioner's affidavit) was vitiated by several errors all of which were apparent on the face of the record.
He had held that the terms and conditions of the partnership deed show that the alleged partnership 'is not a genuine partnership in the right sense of the term.' This finding rests upon an erroneous interpretation of the deed of partnership. No reasonable person could have come to the conclusion, on a reading of the document, that the transaction was not a partnership.
Secondly, he had held that the transaction 'is more or less a contract under which the landlord has passed on the possession of the godown to the proprietor of Messrs. East India Hide Co., in lieu of the amount of Rs. 4,000/- per year.' This finding too was palpably erroneous as it was not borne out by the plain language of the document itself.
Lastly, he had held that 'the landlord has passed on possession illegally to the proprietor of Messrs. East India Hide Co. and therefore the godown is vacant for allotment.' This finding is based on a complete misconception of the law of partnership and contract, as it ignored the elementary and fundamental principles of partnership that every partner was the agent of all the others and the possession of one must be deemed to be on behalf of the rest.
Learned counsel pointed out that the use of the godown was brought by the petitioner into the common pool of assets as his contribution to the assets under Article 7 of the deed of partnership. This was, on the face of it, not a transfer of possession from the petitioner to another person but a contribution to the assets of partnership. How could one partner 'transfer' possession of the part of thepartnership assets to a fellow partner? The R.C. and E.O. could not spell out a contract of tenancy from the terms of a partnership deed. Learned counsel's argument in effect, was this.
'Interpret the deed yourself. If you come to the conclusion that it is a contract of partnership, then you must reject the interpretation of the R.C. and E.O. as erroneous on the face of it, for he has held that it is not a genuine partnership but something else.'
Learned counsel contended that the findings of the R.C. and E.O. are derived from the deed of partnership and nothing else. Therefore his order must stand or fail by his interpretation of the deed; contained therein. Now, is the contention that the conclusions of the R.C. and E.O. based only on the deed correct? It is necessary to consider the impugned order in some detail.
19. It is divided into four paragraphs. The first relates very briefly the facts which led up to the proceedings before the R.C. and E.O. It states that the godown was released in favour of the landlord on 10-5-1955, that several persons applied for the allotment of the godown in their favour, that the District Magistrate had observed that the landlord had not utilised the accommodation and allotted it to one Abdul Hamid, that the landlord had filed a revision against the allotment order before the Additional Commissioner who set it aside and remanded the case for a fresh decision. The second paragraph begins thus:
'I have heard the parties and have looked into the record of the case. The main argument advanced on behalf of the landlord is that lie godown has not been let out either to the East India Hide Co. or to any other person and is still in his occupation. Previously the godown has no doubt been lying idle but he has now started his own business in partnership with two or three persons ......... In support of this contention the partnership deed in original has been filed ................ I have closely looked into the terms of the partnership deed.'
The rest of this paragraph is devoted to an examination of the partnership deed, The third paragraph contains the conclusions of the R.C. and E.O. He found (1) that the deed of partnership showed that the transaction was not a genuine partnership; (2) that it was a transaction transferring possession of the godown to the proprietors of East India Hide Co., in lieu of Rs. 4,000/- per year; (3) that this was obviously an illegal form of subletting which had been made to evade the provision of the Rent Control law. The fourth paragraph contains the final finding of the R.C. and E.O. It runs thus:
'Looking to the circumstances of the case, I arrived at a conclusion that the landlord has passed on possession illegally to the proprietors of Messrs. East India Hide Co., and therefore the godown is vacant for allotment.'
20. Thus the order shows that the conclusions of the R.C. and E.O. are not based entirely on an interpretation of the deed of partnership. In the second paragraph he clearly states that he had heard the parties and looked into the record of the case. With the consent of the parties, I called for the record of the proceedings for the allotment of the godown.
It reveals, inter alia, that the petitioner Abdul Shakoor had made an application before the R.C. and E.O. on 31-8-1956 for permission to inspect the file to enable him to argue that the case on the date fixed. (Flag A of the record) Inspection was permitted by the R.C. and E.O. and there is a note signed by the petitioner certifying that he had inspected the file. Arguments were heard on 9th September.
Thus the R.C. and E.O.'s observation that he had heard the parties and looked into the record of the case obviously means that the petitioner led him into the entire record of the case which had been previously inspected by him with the declared object of arguing his case on the basis of the record. The word 'record' in the R.C. and E.O.'s order does not mean the deed alone.
Learned Counsel's contention that the phrase 'looking to the circumstances of the case' means only such circumstances as are related in the deed of partnership and no more, is not correct. In my view this phrase means that the Officer considered all the relevant circumstances in addition to the deed. The R.C. and E.O. has discussed the deed of partnership in detail because, as observed by him, the main argument of the petitioner was based on the deed. But the order does not show that he considered the deed in isolation from all the relevant circumstances.
21. Learned counsel for the respondent No. 6 contended that the crucial question concerned the intention of the parties who executed the deed of partnership. Did they have any intention to enter into a contract of partnership? He contended that they had none. Mr. Kakkar conceded that the terms of the deed were not in contravention of the Partnership Act (this is not quite correct as discussed by me below).
The fact that there was no intention to create a partnership was clear from the deed and the surrounding circumstances considered together. Learned counsel relied on Section 6 of the Indian Partnership Act, which lays down that regard must be had to the real relation between the parties, as shown by all the relevant facts taken together, in determining whether a group of persons is or is not a firm or whether a person Is or is not a partner in a firm.
The R.C. and E.O. had found that there was no genuine partnership. This is a finding of fact which cannot be disturbed by the Court in proceedings under Article 226. On the other hand learned counsel for the petitioner contended that 'motive' must be distinguished from the object of a transaction. The object must be ascertained from the document embodying the transaction.
If the document shows that the transaction is an agreement of partnership, the motive of the parties in making it is irrelevant. The law does not probe into the motive of a person making an agreement which is, on the face of it, a legal contract. On the other hand, learned counsel for the respondent argued that motive was all important in this case.
He laid emphasis on the motive of the parties to the deed and submitted that their motive was to evade the provisions of the U.P. (Temporary) Control of Rent and Eviction Act. This leads me to the question: to what extent is the motive of the petitioner and the other parties to the deed relevant in deciding whether the transaction contained in the deed is a genuine partnership or not?
22. In one sense the motive of the parties is irrelevant. It may be that their motive in making the partnership was to avoid the mischief of the aforesaid Act. But if this Court holds after a proper scrutiny of the deed of partnership that it is a valid transaction drawn up in conformity with the law of partnership and that the parties had an intention to create a relation of partnership and that the agreement has been acted upon, any enquiry into their motive would be irrelevant.
Citizens are entitled so to conduct their affairs as to avoid the incidents, obligations and mischief of a particular Statute. One could give many examples of cases where a citizen can legitimately make arrangements or reduce his obligations under a statute or avoid them altogether. The steep rise in the income-tax and super-tax in recent years has compelled many Hindu joint families to resort to partition.
This is usually effected by a deed of partition, followed by a division of the assets among the coparceners. The decision to disrupt the family is taken reluctantly and the sole motive is to reduce the rate of tax on the individual members--to evade the Income-tax Act, in one sense. But the partition is a valid transaction provided it has been acted upon, and the 'motive' of the coparceners is irrelevant. The parties have kept the transaction out of the mischief of the Statute and they are entitled to do so. In Inland Revenue Commissioners v. Duke of Westminster, 1936 AC 1 at p. 19, Cord Tomlin observed,
'Every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate acts is less than it otherwise would be.'
It was observed by Lord Cranwortli, L. C. in Edwards v. Hall, (1856) 25 LJ Ch 82 at p. 84 :
'I never understood what is meant by an evasion of an Act of Parliament, either you are within the Act or not within the Act. If you are not within it, you have a right to avoid it and keep out of the prohibition. If you are within it, say so, and then the course is clear, and I do not think you can be said not to be within it because the very words have not been violated.'
Lindley L. J. made a similar observation in Yorkshire Railway Wagon Co. v. Maclure, (1882) 21 Ch D 309
'In one sense you cannot evade an Act of Parliament -- that is to say, the Court is bound to construe every Act of Parliament as to take care that that which is really prohibited may be held void. On the other hand, you may avoid doing that which is prohibited by the Act of Parliament and you may do something else equally advantageous to you which is not prohibited.'
But evasion can have another and sinister meaning--an underhand dealing. If so, this would be simply a case of fraud. Such a case
'does not really involve a question of verbal construction of Statute at all. It is no less than a flagitious attempt to pass off an existing state of things as being some thing other than that which it really is.' (Maxwell on Interpretation of Statutes, 9th Edition page 118).
The parties to the transaction may use words to throw dust in the eyes of the law and the authorities. This would be a case of dishonest attempt to evade the Statute, and it is the duty of the Court to 'make short work of it.' Here the Court will ignore the language of the deed or document interpreting the transaction and try to get at the real, intention of the parties who may have used words to cloak the transaction. In such cases, motive becomes all important.
23. The law has, been summed up by Maxwell in these words :
'Whenever Courts see such attempts of concealment', they brush away the cobweb varnish and show the transaction in its true light. They see things as ordinary men do, and so see through them. Whatever might be the form or colour of the transaction, the law looks to the substance. For this purpose the Courts go behind the documents and formalities and inquire into the real facts.
They may, and therefore must, inquire into the real nature of that which was done............. An Actis not to be evaded by putting forward the document which gives a false description of the matter; In all such cases, it is in truth rather the particular transaction than the Statute which is the subject of construction, and if the transaction is found in reality to be within the Statute, it is not suffered to escape from the operation of the law by means of the disguise under which its real character is marked.' (Maxwell page 119).
If a contract really is an usurious loan of money but skilfully dressed up so as to take it out of the Statute prohibiting usury, 'the wit of man could mot find a shift to take it out of the Act.' A transaction may be ostensibly a partnership but in reality an usurious loan. In that case, the Court will be entitled to examine the circumstances and see whether the transaction falls within the act against usury. This matter was considered in the case of Enderby v. Gilpin, (1821.) 5 Moo PC 571. In that case Lord Chief Justice Dallas observed,
'A deed may be clear or doubtful on the face of it; and if it be doubtful, it must generally raise a suspicion that it was not fairly intended, and therefore, taking for the moment, this deed to have excited such suspicion, what was more rational, than for a Court that is vested with a competent authority, to order the defendant to be examined upon oath, as being a party to it, thereby embodying or explaining any previous agreement, which might have been made between the parties?'
The issue was tried by a Jury who, after hearing the parties and examining the deed, found that the deed was not a shift and contrivance but that a partnership was really and fairly intended. In other cases agreements which were passed off as sales of land, goods, or stock, or a lease, or an agency were also held to be usurious loans. These cases are cited in Maxwell's Interpretation of Statutes at p. 119.
24. In India it has been held that if a contract be a wager in substance, no matter how the end is brought about, it would be void, though the object was concealed in the form given to the transaction. In Doshi Talakshi v. Shah Ugmasi, ILR 24 Bom 227, Jenkins C. J. observed,
'We are not, find we must not be, bound by the mere normal rectitude of the documents, if in fact, there lurks behind them the common intention to wager and parties cannot be allowed to obtain from the Courts any sanction for their wagers, merely, because they use a form which is not a true expression of their common purpose and intention.'
In that case, the plaintiff sued the defendants to recover the balance due to him on account of brokerage, commission and losses incurred in certain transactions. The nature of the transaction was this. The plaintiff had been employed by the defendants to enter into cotton transactions on their behalf at Dholera. The contracts for the sale and purchase of cotton were made on terms contained in a printed form which incorporated the rules framed by the cotton merchants of Dholera.
These rules expressly provide for the actual delivery of cotton in every case and forbade all gambling in differences. In spite of these rules and 'the express terms of the contract, the course of dealings was such that none of the contracts were ever completed except by payment of differences between the contract price and the market price in Bombay on the Vaida day.
The plaintiff entered into numerous transactions of this kind on the defendants' behalf. Subsequently 'he filed the suit for the recovery of sums on account of brokerage, commission and losses incurred in these transactions. The Court held that the transactions were mere gambling for differences and no suitwould lie to recover any of the items connected with Such transactions.
It was further held that in order to determine whether a contract is a wagering contract, the Court will not only look at the terms of the written contract', but also probe among the surrounding circumstances to find out the true intention of the parties The observation of Jenkins C. J. is relevant to the controversy in the present case.
'Now, if ..... we could ..... look only to the contract and the rules all would be well, for they repel the idea of any thing that savours of a wager. Unfortunately however, that cannot be for the law says that we must find, as best as we can, the true intention of the parties; we must not take them at their written word, but we must probe among the surrounding circumstances to find out what they really mean.'
The learned C. J., then made the observation, quoted above that it was the duty of the Court to see if there lurked behind the formal rectitude of the documents any intention to wager. It was argued on behalf of the plaintiff that the Court should not look to the surrounding circumstances but have regard only to the intention with which the contracts were made, not the mode in which they sought to have been performed. The Court negatived this contention with the observation
'It is quite true that we are only concerned with the intentions of the contracting parties, but there arises the important question, how are we to learn what these intentions were except from those surrounding circumstances?'
The Court concluded :
'Is it an unnatural or strained inference to draw from these facts that behind those apparently innocent documents there is a tacit and recognised understanding according to which parties should enter into these contracts do so without any intention of performing them........In my opinion this is reasonable and natural inference to be drawn; ......... the conclusion then to which I come, is that the dealings in cotton out of which a great part of the plaintiff's claim arises were by way of wager.'
25. The learned Judges relied upon two English cases (1) Universal Stock Exchange v. Strachan, 1896 AC 166, (2) In re Gieve, (1891) 1 QB 794. In the former case, the House of Lords had to consider whether a particular arrangement was a gambling transaction or a contract for the delivery of goods. The Court decided that 'the whole transaction had to be looked in.' Evidence was led in an attempt to prove that it was a concern expressly designed for the purpose of enabling people to gamble in such a way as to evade the provisions of law.
There were certain terms of business which the customers were called on to sign and which were to constitute the contractual relations between the parties. Lord Halsbury held that the whole scheme appeared to be intended with great ingenuity to pretend that there was a real transaction. Lord Herschell observed,
'The proposition amounts to this, that parties who intended to gamble with one another, but wanted to have the security against one another of being able in a Court of Justice to recover their bets, could compel a Court of Justice to adjudicate and secure to them their bets by a judgment, if only they inserted in their contract a provision which might in certain events become operative to compel the goods to be delivered and received, although neither of them anticipated such a contingency; the purpose of inserting the provision creating an obligation being only to cloak the fact that it was a gambling transaction, and enable them to sue one another for gambling debts.
The proposition contended for by the learned counsel for the appellants would really lead to that result, and I should require much consideration before I gave ray assent to a proposition involving such consequences.'
He further observed that
'the documents themselves, coupled with the nature of the transactions entered into, the position of the parties who entered into them, raised a question for the Jury whether those were real transactions of commerce or whether they were mere gambling for differences.'
In other words, he held that it was a question of fact. In 1899-1 QB 794 also relied upon by the Bombay High Court, the Court of the first instance had held that though there was a gravest suspicion that the transactions between the parties were purely gambling transactions, there was not sufficient evidence that the parties had laid their heads together to conceal a bargain for differences only under cover of a bargain which, though no doubt prima facie resulting in differences only, was yet to some extent a real bargain. This decision was reversed by the Court of Appeal. Rigby L. J. observed.
'The real question is, what is the true construction of this contract note? The very condition that it is to be optional for the purchaser to take up the stock shows that he is not bound to do so. He may do so if he chooses, by paying an extra sum, but not otherwise. This, therefore, is a contract for the payment of differences, and for nothing else.
No doubt these conditions are put in to make it appear that they are intended to protect the selling broker, but I am glad to say they are not sufficient to bind this Court to the real nature of the transaction, which was that there was no intention whatever to deliver or accept stock; the conditions are not intended to be acted upon at all.'
26. Reverting to the Bombay case, Candy, J., the other learned Judge, based his decision on the same grounds as those adopted by the House of Lords in 1896 AC 166 and observed :
'Assuming that this contract is a contract which, on the face of it, would enable one or both of the parties to insist on delivery or acceptance, the mere fact that the contract contained such a term would not prevent the Court from asking the question whether the transactions between the parties were really based on the contract if that was the true meaning of it or -- to use the words of Cave, J. in his summing up to the jury in 1896 AC 166 -- 'notwithstanding those ostensible terms of business, was there a secret understanding that the stock should never be called for or delivered, and that differences only should be dealt with?' If there was that secret understanding, then the plaintiff is entitled to recover his securities. If there was not that secret understanding, then he is not entitled to recover them.'
27. In the case of Perosha Curosetji Parakh v. Manakji Dessabhoy Watcha, ILR 22 Bom 899, Tyabji, J. held that, in order to ascertain the real intentions of the parties the Court must look at all the surrounding circumstances and will even go behind a written provision of the contract to judge for itself whether such provision was inserted merely for purpose of concealing the real nature of the transaction.
In this case the plaintiff filed a summary suit to recover from the defendant sums of money and interest upon two promissory notes. The defendant obtained leave to contest the suit. His principal defence was that the two notes in question were given for wagering contracts and were therefore void under Section 30 of the Indian Contract Act and under the Bombay Act III of 1865. The plaintiffs contention in that case was very similar to the petitioner's in this present petition.
It was contended for the plaintiff that the promissory notes having been admittedly passed by the defendant the Court ought not to go behind them and enquire whether the consideration for the notes was the loss sustained by the defendants in respect of the wagering contracts. The Court rejected this plea and, after making the observation quoted above, proceeded to examine the evidence relating, to the surrounding circumstances to discover the real nature of the transaction.
28. The above authorities were not cited at the bar but I drew the attention of learned counsel to them because I think that the principles enunciated in them are relevant to the present case. They establish two propositions. First, if a transaction is genuine and intended to be acted upon, it cannot be assailed on the ground that the motive of the patties was to avoid a particular statute.
Secondly, on the other hand, if it is 'sham' transaction never intended to be acted upon but only a legal mask for quite another sort of transaction, the Court will tear, off the mask to see the real face of the transaction; and the fact that the mask is legally perfect in itself will not save it from being torn off and discarded. The border line between motive and intention may be thin and hard to distinguish -- every border, is troublesome for those who have to guard it -- but the question whether a particular transaction is genuine or 'sham' is one of fact and the decision must depend upon the circumstances of each case.
29. In the light of these principles I shall now proceed to consider whether the impugned order is vitiated by such errors as to call for the interference of this Court under Article 226 of the Constitution, Questions 4 to 9 framed by me are inter-connected & can be considered together. Broadly speaking, the R.C. and E.O. formed three main conclusions : first, the document of 5-7-1956 is not genuine partnership deed; secondly, there was no intention to create a relation of partnership and they made a sham transaction; thirdly, the transaction is a form of illegal letting cloaked as a partnership to hide its real nature and character from the R.C. and E.O.
These findings are inter-connected and cannot be considered in isolation from each other. The common thread of intention runs through the entire controversy. I shall first consider, the R.C. and E.O.'s interpretation of the deed of partnership.
30. The R.C. and E.O. has held that the terms and conditions of the deed of partnership would show that the transaction between the parties is not a genuine partnership. Learned counsel for the petitioner argued that there is! nothing in the Articles of partnership to warrant that finding. He laid great emphasis on the statement in the impugned order that the petitioner's share of profits has been fixed at Rs. 4,000/- per year 'irrespective of the profits and losses.' This, he contended, is erroneous of the face of the record.
Article 4 of the deed of partnership expressly provides that every partner shall be responsible for his share of 'profits and losses' in accordance with the provisions of Article 11 of the deed. This feature of the partnership deed was brought to the notice of the R.C. and E.O. in the petitioner's objections to the Inspector's report dated 26-7-1956 (Flag X of the record). But the R.C. & E.O. had ignored Articles 4 and 11 of the partnership deed and observed that the petitioner is entitled to1 his Rs. 4,000/- per annum even if there are losses.
This is a material error in the interpretation of the documents which vitiates the finding. I do not agree. The R.C. and E.O. examined the deed of partnership as a whole and came to the conclusion that it does not appear to be a genuine partnership.It was not necessary for him to enumerate in his order all the provisions of the deed which compelled him to arrive at this finding. After examining the deed myself I am of the opinion that there is sufficient material in it to sustain his conclusion.
I cannot help observing that it is a very suspicious document. Article 7 provides that the petitioner is not required to contribute any capital, his 'contribution' to the assets being the godown. Article 9 excludes the petitioner from any share in the management or supervision of the business. It says that the petitioner, will have no right whatsoever to interfere in the business, in, which the entire capital will be that of the other partners.
Article 11 provides that the petitioner's share in the profits will be Rs. 4,000/- per annum irrespective of the amount of profits saved by the firm. The petitioner's contention that he is liable under Article 4 to share the losses is not necessarily correct. The exact words (translated in English) are 'each party will be responsible for profits and loss (nafa wa nuqsan) in accordance with the provisions of Article 11.'
But an examination of Article 11 reveals that it is completely silent about the liability of the petitioner in case of loss, but does provide that the petitioner shall be entitled t& a sum of Rs. 4,000/- per annum as profits. Learned counsel for the respondent argued that as Article 4 says that the petitioner's share of profit and loss will be governed by Article 11 but the latter provides only for profits and not for losses, it follows that the petitioner is not liable for losses of the firm.
Learned counsel for the petitioner contended that, where the deed of partnership is silent, the law of partnership will prevail. On the other hand, learned counsel for the respondent contended that Article 4 enjoins, in effect, that the parties must not look outside Article 11 which is intended to deal exhaustively with the rights and liabilities of the parties in case of profits as well as the losses.
As that Article docs not contain any provision for petitioner's liabilities for losses, the conclusion must be that the parties did not intend that the petitioner should bear any share of loss. It is not necessary for me to decide whether the petitioner's or the respondent's interpretation is correct. The R.C. and E.O. appears to have adopted the latter.
I have to consider whether the interpretation of the R.C. and E.O. is so palpably erroneous as to call for the interference of this Court. I do not think that there is any such error, even if the order is assumed to be quasi-judicial, which it is not.
31. The conclusions of the R.C. and E.O. are based on a reading of the deed of partnership as a whole and not on any particular clause detached from the others. There are other provisions in the deed which support his finding that the transaction is not a genuine partnership. One of them is Article 15. It deserves to be quoted in full. Translated in English it runs thus :
'It shall be incumbent on party No. 1 to give possession to the East India Hide Co. and to maintain (kayam rakhe) and preserve (barqarar rakhe) that possession during this, partnership, and to safeguard it against disputes of all nature whatsoever, so that the possession of party No. 2 is not disturbed during the partnership by the action of any person or persons whatever or of the Custodian, so that the go-down which party No. 1 has given to the firm and In consideration of which he has become entitled to a share of the profits should be preserved (kayam rakhe).
But if the possession of party No. 2 is disturbed or the business of partnership is disturbed or if any person makes a rival claim, then the party No. 1 will be responsible for fighting any litigation or incurring expenses. If the party No. 1 proves unwillingto fight the dispute or meet the expenses, the party No, 2 shall have the right to look after the proceedings and incur expenses itself and reimburse itself from party No. 2, and in the event of possession (of the godown) being lost the party No. 2 would not be entitled to any profits.'
Under, this clause the petitioner was required to transfer possession of the godown to the East India Hide Co. which is the name of the old firm as well as the new. But the ambiguity is cleared in the next sentence which says that the petitioner must do everything in his power to safeguard 'the' possession of party No. 2,' and contains elaborate provisions to maintain party No. 2 in possession.
'Party No. 2' is defined in the preamble of the deed as 'Rizanullah son of Sheikh Miran Ali, and Shamshul Huda son of Hafiz Abdul Rauf resident of Purwa Hiraman, Kanpur City' -- in other words, the partners of the old firm which did not include the petitioner. Thus the transfer of possession contemplated by this clause means transfer by the petitioner to these two persons.
Learned counsel did not give any satisfactory explanation why it was necessary to provide for transfer of possession of the godown to these two persons when it had been provided already that the petitioner must contribute the use and possession of the godown as his contribution to the assets of the firm, and why it was necessary to make such elaborate provisions to protect the quiet possession of these two persons after it had been provided that they would have the exclusive right to manage the business of the firm in which the petitioner would have no share.
This article contains other covenants by the petitioner which are usually found in a contract for sale or lease of immovable property by which the transferor not only agrees to deliver possession but guarantees quiet possession and enjoyment of the property by transferee. Such a covenant is never to be found in a deed of partnership. At one stage, Mr. Kakkar, learned counsel for the respondent, was inclined to concede that there was no clause in the deed of partnership which was inconsistent with or in violation of the law of partnership but argued that it was a sham transaction. But when I drew the attention of counsel for both parties to Clause 15 of the deed of partnership and asked learned counsel for the petitioner how he could reconcile this clause with a partnership he withdrew his concession.
In my view the language of the clause shows that the possession of party No. 2 was intended to be exclusive -- an intention destructive of the very basis of partnership under which every partner is the agent of the others and holds possession on behalf of all. Learned counsel for the petitioner argued that, as the firm is a convenient name for all the parties, any reference to transfer of possession to party No. 2 is only a convenient way of saying that the firm shall enjoy possession and that the use of the godown shall vest in the firm.
I am inclined to the view that this Article provides for transfer of possession to Rizwan Ullah and Shamshul Huda and contains covenants by the petitioner guaranteeing their quiet possession and enjoyment of the godown which was meant to be exclusive. Learned counsel for the petitioner then argued that, even if the Court finds that partnership, the document should be read as a whole.
Clause 15 is not the dominant clause but only subsidiary to the other clauses. There is an explicit provision that the right to use and occupy the go down would be the petitioner's contribution to the assets of the partnership. This negatives any idea of transfer of possession by the petitioner to the otherparties to the deed. The meaning of Clause 15 must be found in the light of provisions which are dominant.
Moreover even if it was not possible to reconcile two inconsistent provisions, Clause 15 must yield to the overwhelming effect of the document as a whole. In my view, if a deed of partnership contains clauses which are inconsistent with and contradict one another and the intention of the parties is under suspicion, the intention as to their real relation has to be ascertained by 'all the relevant facts taken together'.
This is precisely what the R.C. and E.O. has done. He considered the deed of partnership and the circumstances as revealed by the record and found that the transaction embodied in the deed is not a genuine partnership but an illegal agreement to transfer possession of the godown dressed up in the language of partnership. There is nothing either in the approach of the R.C. and E.O. or his findings to call for the interference of this Court.
It is not necessary for me to consider whether this interpretation is correct. Not every error can be corrected by a writ of certiorari. The Supreme Court has held that certiorari will not issue to correct a mere error of law or fact. The distinction between a mere error and an error apparent on the face of the record has not been defined. In Hari Vishnu Kamath v. Ahmad Ishaque, : 1SCR1104 , the Supreme Court held that the decision 'must be left to be determined judicially on the facts of each case.'
In Registrar University v. Dr. Ishwari Prasad : AIR1956All603 , Kidwai, J. and Mehrotra J. held that no exhaustive definition could be given to the words 'error apparent on the face of the record', and that each case must be determined on its own facts and merits. In that case, the Court held that an incorrect interpretation of Statute may be considered as an error apparent on the face of the record. But in the present case, the question whether the transaction between the parties is a partnership or not has to be gathered from all the surrounding circumstances of which the deed of partnership is one. It was observed by the Calcutta High Court in the case of Raja Makund Deb v. Gopinath Sahu, 21 Cal LJ 45 at p. 52: (AIR 1914 Cal 836 at p. S'19) that
'unless there is a question of the legal effect of deed which may be treated as a document of title or embodies a contract or is the foundation of a suit, a second appeal will not lie. A second appeal is not admissible, merely because some portion of the evidence is in writing of which the meaning has been mistaken by the lower appellate Court'.
In the present case, the question is whether, the parties had any intention to enter into partnership, and the deed is a piece of evidence on this question. Even if the tribunal has mistaken the meaning of this document, it is not such an error which can be corrected in a writ. In my view, the findings of the R.C. and E.O. regarding the nature of the transaction evidenced by the deed of partnership are no* erroneous.
32. The R.C. and E.O. after looking into the record and the circumstances of the case came to the conclusion that the transaction evidenced by the deed of partnership is not genuine and that the petitioner has really made a contract for transferring possession of the godown for Rs. 4,000/- per annum.
His finding, in effect, is that the deed of partnership is a sham transaction and the real object wag to let the premises and that the deed has been executed to give an appearance of legality to the transaction. Is there material on the record to justify this finding? I think there is. On 28-1-1956 the petitioner filed objections against the R.C. and E.O. praying that allotting the godown to Abdul Hameed be cancelled.
This is flag 'C' of the record. He denied the allegations that he was entering into negotiations for letting the premises under the guise of a partnership-agreement. In paragraph 7 of the objection, he admitted that he had been approached by various persons to let out the godown to them. He explained that he was not in a position to say no to them.
He had therefore suggested to them that they should form a partnership with him in respect of the godown, but ha took the precaution of proposing terms which would not be acceptable to them. The paragraph contains the following statement:
'The fact is that the objector has decided not to use this godown for any business purpose except his own residential purpose so long, his brother is not free from education and hence the godown has not so long been used for any business purpose.'
In paragraphs 4 and 5 of this objection the petitioner stated that the godown was needed by him for domestic reasons. He alleged that he and his brothers had been living together and carrying on the business of selling milk but his brothers had grown, up and were not pulling on well. It had therefore become necessary for all the brothers to live separately.
With this end in view, the petitioner got the godown released in his favour. Thus the petitioner as given a version completely different from the one in the affidavit supporting the present petition. In paragraph 11 of the affidavit he says that for a long time he had been desirous of starting a suitable business. He was advised that the hide business would be a good field to enter in Kanpur.
But the heavy litigation swallowed up his small fortune and he realised that he did not have the resources to start any business by himself. He, therefore, entered into negotiations with Rizwanullah and Shamshul Huda and entered into partnership business. Learned counsel for the petitioner conceded that this statement contradicts his previous statement in the objection dated 26-1-1956.
Obviously one or the other is false. I asked learned counsel for the petitioner to explain why it was necessary for him to make a false statement before the R.C. and E.O. when he was entering into a genuine transaction of partnership. No satisfactory explanation was given. Learned counsel suggested that the petitioner might have changed his mind between 28-1-1958 and 5-7-1956 and decided to enter into business after all.
But the respondent's counsel has suggested that the simple explanation is that the petitioner has deceived the R.C. and E.O. I think the respondent's explanation of the petitioner's conduct is more plausible than his own. If he was conscious that he was entering into an illegal transaction and that the Inspectors had got wind of it, it would be necessary for him to deny that there were any negotiations for partnership.
But when the allotment in favour of Abdul Hameed was set aside by the Commissioner, the petitioner felt that he was safe from the danger of eviction for the time being. At any rate, he lost no time in carrying out his design for partnership which he thought would enable him to checkmate the R.C. and E.O. and defeat the provisions of the U.P. (Temporary) Control of Rent and Eviction Act.
Learned counsel for the petitioner was unable to explain why it was necessary for him to conceal the negotiations and make false statements before the R.C. and E.O. if these negotiations were for the purpose of entering into a genuine partnership agreement.
33. Taking all these facts into consideration I am of the opinion that the petitioner had no intention to create a genuine relation of partnership with Rizwan Ullah and Shamshui Huda and the deed of Partnership was intended by the parties to be a cloak under which the real nature of the transaction could be hidden from the R.C. and E.O. The finding of the R.C. and E.O. that this is a case of illegal letting under the guise of partnership is correct.
If 'the cobweb varnish' of partnership is brushed away, what is the real character of the transaction? The story of the partnership, with the godown as the petitioner's contribution to the assets of the firm vanishes, and instead of the 'partners', there appear the parties in their true colours -- the petitioner as the landlord of the godown who has handed over possession to the proprietors of Messrs East India Hide Co., in consideration of a sum of Rs. 4,000/- per annum as rent skilfully dressed up as the petitioner's fixed share of the, profits.
This is precisely the sum total of the findings of the R.C. and E.O., and I see no error in them which calls for interference lay this Court. Therefore my answer to each one of the questions 4 to 8 formulated above is that the finding of the R.C. and E.O. is not erroneous.
34. If the landlord has parted with the possession he has 'ceased to occupy it' within the meaning of Section 7 (1) (a) of the U.P. (Temporary) Control of Rent and Eviction Act, and the building has become vacant. The finding of the R.C. and E.O. that the godown is vacant for allotment is correct, and he acted within his powers in fixing a date for its allotment,
35. I shall now consider whether the petitioner's conduct has disentitled himself to any relief from this Court under Article 226 of the Constitution. In view of my finding above it is clear that the transaction between the petitioner and his alleged partners is illegal as its object is of such a nature that, if permitted, it would defeat the provisions of the U.P. (Temporary) Control of Rent and Eviction Act. Such a transaction would be hit by Section 23 of the Indian Contract Act.
A petitioner who comes into court founding his cause of action on an illegality, will not get any assistance from the court. Ex turpi causa non oritur actio (out of a turpitude, no cause of action arises). As long ago as 1767, Wilmot C. J., observed, in the case of Collins v. Blantern, (1767) 95 ER 847,
'You shall not stipulate for inquiry. All writers upon our law agree in this, no polluted hand shall touch the pure fountains of justice. Whoever is a party to an unlawful contract if he has once paid the money stipulated to be paid in pursuance thereof, he shall not have the help of a Court to fetch it back again. You shall not have a right of action, when you come into a court of justice in this unclean manner to recover it back.'
The principles enunciated above have been extended to the jurisdiction of this court under Article 226 of the Constitution. A petitioner who does not come to this court with clean hands or who comes with his hands soiled with an illegal transaction made with the deliberate object of defeating the provisions of the law, disentitles himself to any relief from the Court.
So strict and vigilant is the court in ensuring that 'no poluted hand shall touch the pure fountains of justice,' that it refused relief to a petitioner on the ground of his conduct, even though he was able to prove that the order sought to be quashed was vitiated by a patent lack of jurisdiction. In Azizun-Nisa v. Asstt. Custodian, : AIR1957All561 , a Division Bench of this Court rejected thepetition of Azimunnisa and others on the ground that it was mala fide, though, an merits, it came to the conclusion that all the impugned orders had been passed under Ordinances which were illegal and beyond and jurisdiction of the Governor-General-in-Council, who had promulgated them.
The conduct of the petitioner is much worse than that of Azimunnisa and others in the case mentioned above. He entered into an under-hand dealing which he attempted to pass off as a genuine transaction. He would not have been entitled to any relief under Article 226 even if he had made out a case, which he has not.
36. Furthermore it appears that the petitioner has not been candid with the court in his presentation of facts in the affidavit supporting the petition. He stated that he had been desirous of starting a suitable business and was advised that the hide business would be a good field to enter in Kanpur, and therefore he made plans for starting his own individual business as a commission agent in the sale of hides,
He further stated that, as his small fortune was swallowed up in heavy litigation, he discovered that he would not be able to carry on that business by himself alone and was compelled to entertain the idea of entering into partnership with Rizwanullah and Shamshul Huda. In other words, he explained to the court the events leading up to the deed of partnership which was executed on 5-7-1956. But he kept back from the court the fact that, in his statement before the R.C. and E.O. on 28-1-1956 he protested that he had no intention of starting any business and that, if he had entered into any negotiations for partnership, his object was to put off certain people as he could not give a direct 'no' to them.
Now, the fact that he made this statement before the R.C. and E.O. was a material consideration to enable the court to determine whether his story of partnership was genuine or not. But he did not disclose these earlier statements made by him and left it to the court to discover them. This is not the conduct of a frank and candid petitioner. In Rex v. Kensington Income-tax Commr., 1917-1 KB 486, Lord Cozens-Hardy quoted with approval the headnote of another case, Dalglish v. Jarvie, (1850) 2 Mac and C 231, decided by Lord Langdale and Mr. Baron Rolfe. The headnote runs as follows:
'It is the duty of a party asking for an injunction to bring under the notice of the court of facts material to the determination of his right to that injunction, and it is no excuse for him to say that he was not aware of the importance of any fact which he has omitted to bring forward.' Lord Cozens Hardy further observed:
'On an ex parte application uberrima fides is required, and unless that can be established, if there is anything like deception practised on the court, the court will not go into the merits of the case, but simply say 'We will not listen to your application because of what you have done.'
37. The principles enunciated above were approved and applied by a Full Bench of this Court in Asiatic Engineering Company v. Achchru Ram : AIR1951All746 , in which a petitioner was held to be disentitled to any relief under Article 226 of the Constitution on the ground that his petition was not of a candid nature and did not fairly state the facts.
38. This is an additional ground for holding that the petitioner by his conduct has disentitled himself to any relief from this Court even if he had established his case on merits, which he has not.
39. The petition is therefore rejected with costs. The interim order staying further proceedings before the R.C. and E.O. is discharged. The hearing of this petition lasted for several days. I direct that the petitioner shall pay to the respondents 1 and 2 Rs. 200/- as counsel's costs and Rs. 100/- each to the other contesting respondent No. 6.