B.K. Mukherjea, J.
1. This appeal is on behalf of the Governor-General of India in Council and is directed against a judgment of the Small Cause Court Judge of Sealdah dated 187-19-10, passed in an assessment appeal under Section 141, Calcutta Municipal Act.
2. The point in controversy relates to the mode of assessment of premises No. 4 Dum Dam Road which is owned by the Government of India and which was assessed to consolidated rate by the Corporation of Calcutta, at its last revaluation Under Section 127 (b), Calcutta Municipal Act.
3. The case of the Government of India is that the assessment should have been made Under Clause (a) of Section 127 of the Act. There was an appeal taken against the assessment order to the Small Cause Court Judge of Boaldah under the provisions of Section 141, Calcutta Municipal Act. The learned Small Cause Court Judge dismissed the appeal holding that the assessee not was rightly made. The assessee has now come up on appeal to this Court.
4. Premises No.4 Dum Dum Road, which is the subject-matter of assessment, comprises a total area of 111 bighas of land, including within it 42 residential houses, an institute, a playground, tennis courts, recreation fields, bowling green spare grounds, roads and tanks. Mr. Mitchell who is the Assistant Manager of the Cossipore Gun and Shell Factory states in his deposition that the land was acquired by the Government for the purpose of erecting quarters for the officers and employees of the Cossipore Gun and Shell Factory. Of the 42 residential buildings 22 are class VI quarters each carrying a rental of Rs. 125 per month, 16 are class VIII quarters for each of which the monthly rent payable is Rs. 75, while the remaining four are class IX quarters for which the occupier hag to pay a rent of Rs. 50 per building per month. Some of the houses are allotted to the officers of the Gun Factory and they pay rents as stated, above subject to maximum of 10 per cent, of their salary. The subordinate employees are allowed to occupy these quarters free of rent while a few of the buildings are let out to outsiders who hold them on certain terms and conditions which are embodied in a standard form of lease, a copy of which was marked as an exhibit in this case. This witness further says that the quarters are not sufficient to accommodate even half the number of employees of the Shell Factory and more than half reside elsewhere. A Subordinate officer who cannot get free quarters is allowed house allowance, but if he is given a quarter and does not choose to reside in it no allowance is given to him.
5. We have no evidence here to show that the buildings were erected for letting purposes and the whole question for our consideration is as to whether the premises are ordinarily let so as to attract the operation of Section 127(a) of the Calcutta Municipal Act. That some of the residential quarters are let out to outsiders and the latter occupy the same as tenants is not and cannot be denied. It is in evidence, however, that the number of such outsiders was always very small and it has further dwindled, down in recent years. The main controversy centres round the point as to whether the employees of the Gun and Shell 'Factory who are allowed to occupy the different buildings comprised in this premises occupy the same as tenants or as employees or servants on behalf of their masters. It is not disputed that if they are held to be in occupation as tenants the mode of assessment will be what is contemplated by Section 127(a), Calcutta Municipal Act.
6. Our attention has been drawn to a number of English cases where the question as to whether a person occupies a house as a tenant or as a servant has been discussed with reference to the law relating to rating, income-tax, franchiss and settlement. As hag been observed by their Lordships of the Judicial Committee in their recent pronouncement in Corporation of Calcutta v. Province of Bengal 0043/1943 the general principles upon which a tenancy as opposed to occupation by a servant is created are not in dispute. If it is a requirement of the contract of service that a servant should live in a house owned by the master whether it is suitable to him or not or; if the occupation is necessary and subservient to the service it should be deemed to be the occupation of a servant and not of a tenant.
7. In Reed v. Cattermole (1937) 1 K.B. 613 Lord Wright M.R. who reviewed almost all The decisions on the point observed as follows:
The essence of The matter, I thin, is that the enjoyment which the minister has of this house, the enjoyment in the sense that he uses it as a dwelling house and therefore in the sense that it is a benefit to him, is subsidiary and ancillary. He dwells in the house, not for his own convenience we do not know in this case whether it would have been more convenient for him to live in a house or in a residence of a simpler character; but in fact he lives there for the purposes of the Church as part of the obligation which he owes to the Church, as part of the service, and under the compulsory requirement of the Church, as it is said, whether it is suitable for him or not, in order that he may perform his duties. Under those circumstances the authorities as well as the principles which have been laid down, to my mind, involve the view that he is not the occupier for revenue purposes.
8. On the other hand, if residence is merely optional or is a matter of convenience to the employee and is not requited for the better or more efficient performance of his service the occupation will be deemed to be that of a tenant and riot of a servant. In Smith v. Seghill Overseers (1875) 10 Q.B. 422 a colliery provided a number of houses for the benefit of its workmen and filled up those houses at its discretion giving preference to married men. Some of the workmen who were single had no houses given to them and they got no allowance for that either. Allowance was however, given to a married workman if he could not be given a quarter. S, a married workman resided in one of these houses for which no rent was paid; the question was whether he could be assessed to rates as occupier of the house. The question was answered in the affirmative and it was held that his occupation was that of a tenant. It is to be noted that in this case accommodation was provided as a matter of convenience for married workmen only; single workmen had no houses provided for them and even among the married workmen residence in these houses was not compulsory. Mellor J, in course of his judgment observed as follows:
The colliery owners desire that the married workmen should reside near the works but that does not change the relation between the parties; unless the men are required to live in the houses for the better performance of their duties, it does not convert the occupation of a tenant into that of a servant.
There are quite a number of decisions by English Courts which lay down that where occupation is allowed to a servant in part remuneration of his service and is not related to the performance of the service the occupier is in the position of a tenant: vide Hughes v. Chattham (1844) 5 M. and G. 54 Queen v. Spucrell (1866) 1 Q.B. 72. It is settled, however, that to constitute the occupation of a servant it is not necessary to prove that the service could not be performed sit all if the servant resided elsewhere. In Dobson v. Jones (1844) 5 M. and G. 112 the servant was required to live in the house for the purpose of enabling him the more readily thereby to perform the services required of him; but it was not impossible for him to perform his work if he resided at any other place. It was held that he occupied the house as a servant. The law on this point has been summed up by their Lordships of the Judicial Committee in Corporation of Calcutta v. Province of Bengal 0043/1943 referred to above as follows:
The mere fact that it is convenient to both parties that the servant should occupy a particular house and that he is put in possession of it for that reason does not prevent the servant from being a tenant; his possession is that of a tenant unless he is required to occupy the promises for the better performance of his duties though his residence is not necessary for he purpose or if his residence there be necessary for the performance of his duties, though not specifically required.
9. In the last passage their Lordships of the Judicial Committee reiterated the observation of Brett J. in Fox v. Dally (1875) 10 G.P. 285 at p. 295. In that case a Sergeant of a Militia lived in a house assigned to him close to the storehouse for arms and built expressly for the accommodation of men looking after the stores. He could not leave the house without the permission of the commanding officer but he could perform his duties equally well if he were living elsewhere, which he could do with his master's permission. It was held that he was not occupying the house as a tenant and was not entitled to vote.
10. We will now proceed to examine the facts and circumstances of this case in the light of the principles laid down above. The evidence adduced in this case makes it perfectly clear that it could not, have been intended by the Government that all the employees of the Gun and Shell Factory should be accommodated in these quarters nor were the quarters meant for the exclusive use of the employees only. Whatever their number might be, outsiders were and are allowed to reside in these buildings and it is not disputed that their occupation is that of a tenant. Mr. Kelly, the Garrison Engineer states in his deposition that none of the employees are compelled to live in these buildings; they can reside anywhere they like; the only loss that the subordinate officers suffer if they are offered quarters but do not reside in them is that no house allowance is given to them. It is not possible, however, as the witness himself says, to give quarters to even half the number of the subordinate staff. Mr. Mitchell, the Assistant Manager also says that it is not essential that all the employees should reside in the quarters on the estate.
11. The position, therefore, is that residence in these quarters is not required either under the contract of service nor is it necessary having regard to the nature of the duties which the employees have got to perform. But can it be said that even though not specifically required, the residence of the workmen in these premises is necessary for the better performance or for the more efficient discharge of their duties? The answer to this question in our opinion should be in the negative. The evidence of Mr. Mitchell upon which Mr. Basu relied very much is as follows:
It would be convenient if we get the members of our staff at one place. I see no reason why it should be that for the better performance of their works the employees should be nearer the factory as they are happier at Calcutta. Factory Manager would not be happier if the staff is nearer at hand. I think that the efficiency of the staff would increase if they reside here as there are clubs and play grounds,. The rule that for administrative purposes the staff should be as near as possible to the place of work should also apply to our Factory. Such administrative purposes would be served by the residence of the staff at 4 Dum Dum Road.
12. The evidence as quoted above is obviously of a very general character. It may be convenient from the abstract point of view if all the employees of the Factory are collected together. But this, as the evidence goes to show, is not certainly a feasible scheme so far as the Gun and Shell Factory is concerned and it is not attempted to be carried into practice, The fact remains that not even half of the subordinate staff could be accommodated in these quarters and this witness admits that it is a matter of indifference to the Factory Manager whether the employees live in the premises or at a distant place. Mr. Kelly clinches the matter when he says that there is neither any advantage nor any great disadvantage to have half the employees of the Factory near about the Factory. The fact that there are clubs and play grounds within the premises is to our mind, not mater at all. It might show that the Government are not unmindful of the health and comforts of the employees but from that it cannot be argued that the residence in these quarters is in any way ancillary to the work of The workmen or required for the better performance of their duties. It is for the workmen to decide, as Mr. Mitchell himself says as to whether they will feel happier in these quarters or elsewhere outside this place. Mr. Basu laid considerable stress upon the evidence of Mr. Mitchell when he says that for administrative purposes it is desirable that the staff should be as near as possible to the factory. This is another expression of a general opinion, and is supposed to be a general rule which guides all factory owners and Mr. Mitchell says that there is no reason why this should not be applied to the Gun Factory as well. As a matter of fact, however the premises in question are situated at a distance of about a mile from the Factory site and, as stated above, only a fraction of the employees can be accommodated there. We have in evidence that one of the Assistant Managers lives at Barrackpore which is certainly at a considerable distance from the Factory. Then again, we do not know exactly what administrative purposes mean. Mr. Basu seems to think that there are military secrets which ought not to be divulged to outsiders but we are unable to see how it at all helps the authorities in carrying out this object as more than half of the staff are left to find their residence elsewhere outside the place and, at the same time outsiders are admitted to a portion of the premises.
13. Mr. Basu further argued that with, regard to the majority of the quarters no rent is paid by the occupiers and hence one of the main indicia of the existence of the relationship of landlord and tenant is wanting in this case. This argument does not impress us very much. As has been said already, rent is certainly paid by the outsider tenants and also by the superior officers to whom quarters are allowed. The members of the subordinate staff are indeed not required to pay any rent but we think that actual payment of rent is not essential for the purpose of creating a tenancy. The members of the subordinate staff to whom quarters could not be given are allowed house allowances at certain rates which have been mentioned by Mr. Mitchell. If quarters are offered to them but they do not choose to reside in them, in that case only they lose the house allowance. We do not think that it would be improper to say that the house allowance that is given to the members of the subordinate staff represents the consideration for the use and occupation of the building by these occupiers. Whether this allowance is a part of the remuneration of the employees it is not1 necessary to decide in the present case. The law is well settled that if a servant is allowed to reside in a house belonging to the master as a part of the remuneration for his service, his occupation would be that of a tenant and not of a servant. In the present case where the employees are servants of the Grown a strict contract of service in the eye of law may not be possible but we think that the arrangement relating to residence and payment of house allowance could be regarded as an independent arrangement separate and distinct from the terms of the service. By allowing its officers and men to occupy the buildings for certain consideration, a tenancy, in our opinion, is created though the exact nature of the tenancy does not require determination in the present case. As we have said already, the occupation of the employees cannot be said to be that of servants. In our opinion where a right to the exclusive use of the premises is given to the occupiers they are not in a position of licensee either. The conclusion is irresistible that they are tenants and the premises are let out to them within the moaning of Section 127, Calcutta Municipal Act.
14. Our attention has been down to certain rules for quarters and payment of rent which are applicable to the Army Department. How far these rules, are applicable to the present case itself a debatable point and neither party hag been able to give a clear answer to this question, There are certain rules undoubtedly which go to show that the officers to whom the quarters are allotted are treated as monthly tenants though the provisions do not undoubtedly apply to military officers to whom house allowances are given. Whatever The position might be we do not think that we should base our decision upon the provisions of these rules. The evidence that is actually before us is sufficient, in our opinion, to warrant the findings we have arrived at.
15. The result, therefore, is that we allow the appeal, set aside the judgment of the Small Cause Court Judge arid hold that the proper mode of assessing premises No. 4 Dum Dnm Road is that which is contemplated by Section 127(a), Calcutta Municipal Act. The appellant is entitled to his costs in this Court, hearing fee 10 gold mohurs.
16. The Corporation of Calcutta will certainly be entitled to assess premises No. 4 Durn Dum Road for the period in suit Under Section 127(a), Calcutta Municipal Act.
Amiruddin Ahmad, J.
17. I agree.