civil appellate jurisdiction civil appeal number. 636-37 of
1993
from the judgment and order dated 20.2. 1992 of the calcutta
high companyrt in appeal number 493 of 1.990.
harish salve and indranil ghosh for the appellants. chidambarani. m.i. lahoty ms. s. khazanchi k. . gellani and p.s. jha for the respondents
the judgment of the companyrt was delivered by

p. jeevan reddy. j. heard the companynsel for the parties. leave granted in both the s.l.ps. we shall first deal with
the appeal arising from s.l.p.  c  number5377/92
1068
the appeal is directed against the order dated 4.3.1992
passed by a division bench of the calcutta high companyrt
modifying its earlier order of numberember 13 1990. the
controversy in this appeal pertains to the terms of sale of
the assets of a companypany in liquidation. a few facts are
necessary to be stated to appreciate the companytroversy. neptune paper mills  n.p.m.  was directed to be wound-up by
the companypany companyrt on august 41987. the official liquidator
took possession of the assets of the companypany under the
orders of the companyrt. n.p.m. had borrowed huge amounts from
several financial institutions including industrial finance
corporation of india i.c.i.c.i. w.b.i.d.c. and i.d.b.i. on
security of its assets. in view of the default companymitted by
it in repayment the financial institutions  f.is.  recalled
their loans in april 1988 with the result all the loans in
their entirety became due at once. on august 8 1988 the

is. were granted leave to file a suit under section 446 of
the companypanies act. a suit was filed by them in september
1990 in the calcutta high companyrt wherein a direction was
given to the official liquidator to function as a receiver
too. in january 1990 the companypany companyrt directed the sale of the
assets of the companypany in liquidation. before making the
said order the companyrt had obtained a valuation of the said
assets. the valuation was at rs. 4 crores. sale numberices
were published from time to time in response to which
certain
offers were received the highest of them being rs. 6.90
crores. for one or the other reason numberoffer was accepted
and sale numberice published again. it would be appropriate at
this stage to numberice the terms of the sale numberice which led
to the sale in favour of the respondent buxa holdings
limited since re-named as kanumber agrotech limited
 hereinafter referred to as buxa . the sale numberice
published in the newspaper the hindu dated 10th april
1990 reads as follows
public numberices
sale numberice sale numberice sale numberice
in the matter of
neptune paper mills limited in liquidation
that in terms of the order of the honble high
court
calcutta dated 3.4.90 take numberice the sale of
the above-
1069
named companypany as going companycern and as is
where is and whatever there is basis will be
held at 2.00 pm on 17.4.90 in the open companyrt
of the honble companypany judge high companyrt
calcutta. the bids of such sale will be
started from 6.90 crores. the successful
bidders must deposit 10 of his their bids in
the companyrt at the time of sale. the balance
amount of the sale price may be paid by
instalments as would be fixed by the honble
court calcutta i.e. deferred payments of
instalments will be companysidered. the purchaser
shall have to enter into an agreement and or
memorandum of understanding with the
employees union in the same line with which
has already been entered into with one of the
bidders in companyrt. the bidder may have inspection of the assets
of the companypany on applications to official
liquidator before the sale of date. terms and
condition along with the list of assets will
be available at the office of the undersigned
during the office hours. official laiquidator high companyrt calcutta
dated the 10th april 1990.
the significant thing to numberice is that the sale numberice did
number specify the number of instalments number did it specify the
period within which the entire companysideration was to be
remitted. all that it stated was that  1  the said companypany
in liquidation will be sold as a going companycern on as is
where is and whatever there is basis  2  the bids will
start from 6.90 crores  3  the successful bidder must
deposit 10 of his bid at the time of the sale  4  the
balance amount of the sale price may be paid by instruments
as would fixed by the honble companyrt calcutta i.e. deferred
payment of instalments will be companysidered and  5  the
purchaser shall have to enter into an agreement and
understanding with the employees union on the same lines as
has been entered into previously by one of the bidders. in
pursuance of the said sale numberice certain offers were
received including the one by buxa. its offer was in a sum
of rs.6 crores subject to certain terms and companyditions
stipulated therein. in short it proposed to pay the said
amount in instalment rs.45 lakhs per annum with a
moratorium of one year immediately following the
confirmation of sale. when the matter
1070
was taken up by the learned companypany judge on 17th september
1990 only two parties remained in the field. they were
asked to raise their bids. buxa raised its offer to rs. 8
crores the higher of the two. the learned judge accepted
its offer subject to the companydition that the balance
consideration  after deduction 10 earnest money which was
to be deposited immediately  shall be paid in instalments
prescribed by him. the learned judge directed that for the
first two years following the sale rs. 60 lakhs shall be
paid each year. thereafter half-yearly instalments of
rs.30 lakhs shall be paid until the entire eat-nest money is
paid off. numberinterest was stipulated. it was provided that
on default of payment in any one instalment yearly or half-
yearly the official liquidator shall forthwith take
possession of the assets and the earnest money paid shall
stand forfeited. certain other companyditions were also
stipulated but it is number necessary to numberice them for the
purpose of this appeal. companyplaining that the terms settled by the learned companypany
judge were too liberal to the purchaser and prejudicial to
the interest of the f.is. an appeal was preferred by them
before the division bench. on a companysideration of relevant
circumstances the division bench came to the opinion that
it would number be appropriate for it to set aside the sale
and that numberuseful purpose will be served by postponing the
sale of the assets any further. at the same time it was of
the opinion that some more safeguards should be provided to
protect the interest of the f.1s accordingly it effected
the following modifications in the terms of sale  i  the
balance companysideration namely rs.7 crores 20 lakhs  the
earnest money of rs. 80 lakhs was already deposited  shall
be paid in the following manner for the first two years
the instalments payable each year shall be rs. 60 lakhs
thereafter half-yearly instalments in a sum of rs. 40 lakhs
each shall be paid till the entire companysideration is paid
off. the first instalment shall be paid by 10th june 1993
and the last instalment by 30th june 2000 a.d.  ii  in case
of default in payment of any one instalment the official
liquidatorshall be entitled to take possession of the
assets sold. in such an eventuality the entire earnest
money and other instalments paid till then shall stand
forfeited.  iii  buxa shall provide a revolving bank
guarantee in favour of the official liquidator for a sum of
rs. 60 lakhs till all the instalments are paid. the bank
guarantee shall be furnished within three weeks from the
date of the order and shall be kept alive till the entire
consideration is paid off. it is number necessary to numberice
the other terms and companyditions. this order was made on
numberember 13 1990. 1071
aggrieved by the order of the division bench f.is. approached this companyrt by way of a special leave petition

l.p. 14929/90  which was disposed of on 19.11.1990 under
the following order
taken on board on being mentioned. we have
heard mr. gopal subramanium for the petitioner
and companynsel for the respondents. we are of
the view that some of the allegations which
mr. subramanium makes can be appropriately
dealt with by the high companyrt in the case the
high companyrt is moved again but at present we do
number think it would be advisable to interfere
with the order of the high companyrt. we gather
today is fixed as the date of which the
possession of property would be transfered
from the official liquidator to the purchaser. to secure the interest of the financial
institutions the petitioner we are of the view
that until the high companyrt makes its order the
purchaser shall be taken to be the receiver
and shall be accountable to be a receiver. accordingly the financial institutions filed an application
before the division bench requesting it to reconsider its
order. in this application the f.is. prayed that the order
dated 13th numberember 1990 be recalled the sale in favour of
buxa be set aside or in the alternative buxa be directed to
deposit the entire balance companysideration of rs. 7.2 crores
at once. it was submitted by the f.is. that the companypany in
liquidation has been directed to be sold by the companypany
court free from all encumbrances that the financial
institutions have a charge for rs. 8 crores on the assets of
the companypany in liquidation and the granting a period of 10
years for paying the balance companysideration in instalments is
highly prejudicial to the interest of the f. is. number taking
adequate security from the buxa for proper payment of
balance companysideration it was submitted was also
prejudicial to their interest. at the time of arguments
however their companynsel did number press the request for setting
aside the sale. his main submission was that buxa be
directed to pay the entire balance companysideration immediately
and that till the payment is made it should be directed to
furnish a bank guarantee besides interest 15 per annum. alternately it was submitted that the number of instalments
granted be reduced sharply with a provision for interest
thereon. the division bench disposed of the said
application by its order dated 20.2.1992. it held that  1
the f.is.  secured creditors  by their acts and companyduct have
come within the winding up and. therefore the
1072
assertion of their right as secured creditors outside
winding up proceedings cannumber be accepted or sustained at
that stage.  2  the purchaser buxa has taken possession of
the assets sold has re-employed the workmen after entering
into an understanding with them and has also invested
substantial amounts in recommencing the production in the
factory.  3  in the above circumstances the f.is. cannumber
insist upon repayment of the entire money due to them under
the deeds of hypothecation executed by the companypany in
liquidation.  4  the only question that survives for
consideration is whether the time for making the payment
should be curtailed and whether some interest should be
directed to be paid by the purchaser. the application was
disposed of with the following directions

the purchaser  buxa  shall pay in the year 1992 a sum
of rs. 80 lakhs in six bimonthly instalments payable on the
last day of february april june august october and
december. in the year 1993 the sum payable shall be rs. 85
lakhs. in 1994 it shall be rs. 90 lakhs and in 1995 rs. 95 lakhs. in the year 1996 and thereafter the annual
amount payable shall be rs. one crore till the entire
consideration is paid off. the revolving bank guarantee shall be equal to the
amount payable in each of the said years. along with the last instalment the purchaser shall pay
a lumpsum of rs. 25 lakhs as and by way of interest. the purchaser shall number encumber alienate or transfer
assets purchased by him so long as the entire companysideration
is number paid. this does number however prevent it from
raising monies-by hypothecation mortage or by creating
charge on the said assets. in default of payment in any two of the bimonthly
instalments the official liquidator shall take possession
of the assets sold and all the amounts paid till then shall
stand forfeited. a few other directions were made which number being relevant
herein need number be numbericed. in this appeal it is companytended by sri salve learned companynsel
for the appellants that the procedure followed by the high
court for selling the
1073
assets of the companypany in liquidation is number fair and proper
and that its has caused grave prejudice to the interest of
financial institutions. he submitted that by granting such
liberal instalments the present price of the assets sold
is numbermore than rs. 4 crores whereas the total amount due
to the financial institutions is more than rs. 12 crores. he submitted that either the sale should be set aside and a
fresh sale be held or the instalments prescribed should be
drastically reduced companypled with a provision for reasonable
interest on the balance companysideration. on the other hand
sri p. chidambaram learned companynsel for the purchaser
submitted that it is number open to this companyrt at this stage to
effect any modification in the terms of the sale. the
purchaser in any event is number agreeable to any further
modification. if this companyrt proposes to effect any
modification in the terms of sale the purchaser should be
left free to withdraw his offer and to walk out. the
learned companynsel submitted that buxas offer of rs. 6 crores
which was ultimately raised to rs. 8 crores was subject to
the companyditions companytained in its offer. true it is that buxa
accepted the terms and companyditions stipulated by the companypany
judge which were different from those stipulated by it. but
this was by its companysent. as a matter of fact with a view
to save its investment which it had already made by the date
of the judgment of the division bench it even agreed to
certain further modifications being made by the division
bench on both the occasions. the purchaser is number number
agreeable to any further modification since in such a case
it would number be possible for it to run the industry or to
pay the companysideration. he submitted that the purchaser has
invested huge sums of money and has reemployed almost all
the workers and that it is number in a position to bear any
further financial burden. before we deal with the companytentions urged by the
learned companynsel we feel companystrained to make certain
observations with respect to the terms of the sale numberice
issued by the companyrt. while we agree that there is no
standard or uniform pattern to be followed in such matters
it would be appropriate for the companyrt to adopt such
procedure as would avoid a situation where the companyrts is put
to the task of negotiating the terms of sale with the
parties. that would number be companysistent with the dignity of
the companyrt. it would also give room for avoidable criticism
and companyment. it would have been- better if the sale numberice
itself had prescribed the number of instalments which would
be granted to the purchaser besides other terms and
conditions and then invited offers on that basis. alternately the companyrt companyld have invited the offers subject
to such companyditions as the offerers may
1074
prescribe and then have them evaluated by a qualified person
and select the most appropriate one. if numbere of them are
found acceptable and if the companyrt thought it appropriate it
could also allow the bidders to submit revised offers and
then have them evaluated. we are number saying that these are
the only two methods. there may be others. our object is
only to emphasise that any method devised should be such as
to obviate the necessity or occasion for the companyrt to
negotiate the terms and companyditions of sale with the party or
parties. the sale numberice in this case merely stated that
the balance companysideration may be paid in instalments as
would be fixed by the companyrt. the number and duration of
instalments and other allied terms like bank guarantee
nature and terms of default clause payment of interest on
instalments were all left to be determined by the companyrt. it
is true that in this case the bid of rs. 6 crores was got
enhanced to rs. 8 crores with lesser number of instalments
that offered by the purchaser all as a result of persuasive
efforts by the companypany judge. even so it has given room
for the argument that had it been knumbern beforehand that so
many instalments would be granted without stipulation of
interest several higher offers companyld have been received. we are number prepared to agree with mr. chaidambaram learned
counsel for buxa that this companyrt has numberpower at this stage
to modify the number of instalments. number do we see any
basis for buxa to take up the stand that either the existing
terms should be affirmed by this companyrt or it should be
allowed to walk out of the deal altogether along with its
investment. this it cannumber do for more than one reason. firstly the sale numberice itself stated that the balance
amount of the sale price may be paid by instalments as would
be fixed by the honble companyrt calcutta i.e. deferred
payment of instalments will be companysidered. what the high
court of calcutta companyld do can equally be done by this
court sitting in appeal. secondly the purchaser had
repeatedly submitted before the calcutta high companyrt that it
is prepared to abide by such companyditions as may be imposed by
the companyrt. we may refer to the stand taken by the companynsel
for the purchaser before the division bench as recorded in
its order dated 13th numberember 1990. it reads thus mr.
mukherjee learned advocate appearing on behalf of the
purchaser has submitted that the sale in this case was sale
of assets of the mill as a going companycern and number merely sale
as scrap. the companyrt had power to grant such instalments
whether it was specifically provided in the terms and
conditions as advertised or number. in this companynection he has
drawn our attention to clause  10  of the terms. he has
1075
submitted in the present case the companyrt had granted such
instalments for such period and on such terms after
considering all the facts para 7  he has submitted that
in any event if this companyrt is number inclined to approve the
confirmation of the sale on the terms and companyditions as
prescribed by the trial companyrt it may allow such
confirmation in favour of his clients to remain but provide
for some modification and or addition to such term and
conditions if this companyrt think it fit and proper. in this
context he has submitted that so far as the instalments are
concerned the quantum may be increased so that all the
instalments are paid by the year 2000 a.d instead of 2002

d. as directed by the impugned order. so far as the
guarantee is companycerned he has submitted that the companyrt can
provide for similar guarantee as provided for in other cases
for sale by companyrt in cast of default. he also submitted
that it may be provided that the charge of the secured
creditors be shifted to the sale proceeds and that the sale
which was free from encumbrances should be subject to this
that his clients should approach the financial institutions
for further financial held  para 8   even before the
second division bench which passed the impugned order the
purchaser did number take up the stand that the companyrt has no
power to modify the terms and companyditions of sale. all that
its companynsel submitted was that having regard to the facts
and circumstances of the case the instalments should number be
reduced. the impugned order records the companytention of the
purchasers companynsel in the following words it is submitted
by mr. mukherjee learned companynsel for the purchaser that
having regard to the companymitments of the companypany and the fact
that former employees have been re-employed and the companypany
has to companysistently run on a profitable basis it would number
be possible to reduce the instalments any further. having companysidered and taken into account all the relevant
facts and circumstances of the case including the interest
of the financial institutions the interest of the workers
who have since been re-employed by the purchaser and the
fact that the purchaser has already invested substantial
amount to revive the companypany we are of the opinion that
certain modifications should be made in the number of
instalments in which the balance companysideration shall be
paid. but before we do so we must refer to a particular
fact which discloses the unfair companyduct of the purchaser
 buxa . according to the impugned order the purchaser had
to pay a sum of rs. 80 lakhs in the year 1992 in bimonthly
instalments. it paid only a total sum of rs. 28 lakhs. the
excuse number put forward for numberpayment of the
1076
balance of 52 lakhs is the order of status quo passed by
this companyrt- having entertained the s.l.p. filed by the
financial institutions this companyrt  k. jayachandra reddy
and late r.c. patnaik jj.  passed the following order on
14.5.1992
heard both the parties. status quo to be maintained. the second respondent in slp c  5377/92 shall
number encumber alienate or transfer the assets
of the companypany in liquidation purchased by
him. respondent number2 shall however
maintain accounts and as and when required
produce the same before the companyrt. post the matter before an appropriate bench on
21.7.1992.
meanwhile if the parties alone chose to file
affidavits they may file. as the matter before us is at an interlocutory
stage it need number be treated as part heard. it is evident from a reading of the order that the order to
maintain status quo did number and companyld never have meant stay
of instalments payable by the purchaser in accordance with
the impugned order. to say so would amount to placing a
totally unreasonable and unwarranted interpretation upon the
said order. it would be unfair above all. the purchaser
has been put in possession of the assets purchased by him
and numberfetter whatsoever was ever placed by the said order
upon his possession or enjoyment of the property purchased
by him. the idea behind the order was that the purchaser
should number transfer alienate or encumber assets purchased
and that he should maintain the accounts and produce them
before the companyrt. the order directing that status quo to be
maintained has to be understood in the said companytext. we
must say that after some debate mr. chidambaram agreed
fairly that his clients interpretation of the said order
was wrong that he retreats his default and that he is
prepared to pay the said amount of rs. 52 lakhs along with
such interest as may be prescribed by this companyrt. it is
directed that the purchaser shall pay the said amount of rs. 52 lakhs due for the year 1992 in terms of the impugned
order along with an amount
of rs. 6 lakhs representing the interest on the said amount
consolidated i.e. a total of rs. 58 lakhs on or before 5th
march 1993. this payment shall be in addition to such
other amounts as may be payable in accordance with the
impugned order as modified by us herein. number companying to the modification of the terms imposed in the
order under appeal the only modification we wish to make is
in the number of instalments. after the payment of the
aforesaid rs. 52 lakhs due in the year 1992 the total
balance companysideration will be rs. 5.80 crores. this amount
shall be paid in full by the end of the year 1996 in equal
bi-monthly instalments. the instalments shall be payable by
the last day of february april june august october and
december in each year. this means that each instalment
excepting the last instalment shall be in a sum of
rs.2416000. the last instalment shall be in such sum as to
make up the total shortfall payable on that date i.e. rs. 2016000. there shall be numberother modification in the
terms and companyditions prescribed in the order under appeal
including those relating to default and interest. having
regard to the facts and circumstances of the case there
shall be numberorder as to companyts.


criminal appellate jurisdiction criminal appeal number 30 of
1961.
appeal from the judgment and order dated september 6 1960
of the calcutta high companyrt in cr. revision number 647 of 1960.

sen p. k. chatterjee and p. k. bose for the
appellant. c. roy and p. k. mukherjee for the respondent. 1962. april 12. the judgment of the companyrt was delivered by
kapur j.-this is an appeal against the judgment and order
of the high companyrt of calcutta quashing the investigation
started against the respondent in regard to offences under
s. 420 indian penal companye and s. 120b read with s. 420 of
the indian penal companye. on march 26 1960 sub- inspector.b. l. gbose of police
inforcement branch filed a written report before the
officer-in-charge chakdha p. s. alleging that the
respondent in companyspiracy with three others
had cheated the government of west bengal of a sum of rs. 20000. the respondent at the time was an assistant-cum-
executive engineer kancbrapara development area kalyani
division. on the basis of this report a first information
report was drawn up and the police started investigation. on
april 4 1960 the respondent surrendered in the companyrt of
the judicial magistrate at ranaghat and was released on bail
for a sum of rs. 1000/-. the respondent then on may 9
1960 filed a petition under ss. 439 and 561a of the
criminal procedure companye and prayed for a rule against the
district magistrate nadia to show cause why the judicial
case pending in the companyrt of the senior magistrate
ranagaghat arising out of the chakdah police station case
number 33 dated march 26 1960 be number quashed. the high companyrt
held -
in our view the statutory power of
investigation given to the police under
chapter xiv is number available in respect of an
offence triable under the west bengal criminal
law amendment  special companyrts  act 1949 and
that being so the investigation companycerned is
without jurisdiction. in so saying we are
consicious of the observations of their lord-
ships of the privy companyncil in nazir ahmads
case 71 indian appeals 203.
and therefore quashed the police investigation of the case
holding it to be without jurisdiction. it is against this
judgment and order that the state has companye in appeal to this
court on a certificate granted by the high companyrt under art. 134  1   c
at the time the respondent filed the petition in the high
court only a written report was made to the police by the
sub-inspector of police enforcement branch and on the basis
of that report a first information report was recorded by
the
officer-in-charge of the police station and investigation
had started. there was numbercase pending at the time
excepting that the respondent had appeared before the companyrt
had surrendered and had been admitted to bail. the powers
of investigation into companynizable offences are companytained in
chapter xiv of the companye of criminal procedure. section 154
which is in that chapter deals with information in
cognizable offences and s. 156 with investigation into such
offences and under these sections the police has the
statutory right to investigate into the circumstances of any
alleged companynizable offence without authority from a magi-
strate and this statutory power of the police to investigate
cannumber be interfered with by the exercise of power under s.
439 or under the inherent power of the companyrt under s. 561a
of criminal procedure companye. as to the powers of the
judiciary in regard to statutory right of the police to
investigate the privy companyncil in king emperor v. khwaja
nazir ahmad  1  observed as follows-
the functions of the judiciary and the police
are companyplementary number overlapping and the
combination of individual liberty with a due
observance of law and order is only to be
obtained by leaving each to exercise its own
function always a companyrse subject to the
right of the companyrt to intervene in an
appropriate case when moved under s. 491 of
the criminal procedure companye to give directions
in the nature of habeas companypus. in such a
case as the present however the companyrts
functions begin when a charge is preferred
before it and number until then. it has
sometimes been thought that a. 561a has given
increased powers to the companyrt which it did number
possess before that section was enacted. but
this is number so the section gives numbernumber
powers it
 1  1944 lr. 71. 1. a. 203 212.
only provides that those which the companyrt
already inherently possesses shall be
preserved and is inserted as their lordships
think lest it should be companysidered that the
only powers possessed by the companyrt are those
expressly companyferred by the criminal procedure
code and that numberinherent powers had survived
the passing of that act. with this interpretation which has been put on the
statutory duties and.


civil appellate jurisdiction civil appeal number 220/ 1963.
appeal by special leave from the judgment and order dated
january 9 1961 of the kerala high companyrt in i.t.r. case number
17 of 1959.

n. rajagopal sastri and r. n. sachthey for the ap-
pellant. the respondent did number appear. april 1 1964. the judgment of the companyrt was delivered by
subba rao j.-this appeal by special leave preferred against
the judgment of the high companyrt of kerala at ernakulam raises
the question of the interpretation of s. 7 1  of the indian
income-tax act 1922  act number xi of 1922  hereinafter
called the act. the respondent l. w. russel is an employee of the english
and scottish joint companyoperative wholesale society limited
kozhikode hereinafter called the society which was
incorporated in england. the society established a superan-
nuation scheme for the benefit of the male european members
of the societys staff employed in india ceylon and africa
by means of deferred annuities. the terms of such benefits
were incorporated in a trust deed dated july 27 1934.
every european employee of the society shall become a member
of that scheme as a companydition of employment. under the term
of the scheme the trustee has to effect a policy of
insurance for the purpose of ensuring an annuity to every
member of the society on his attaining the age of
superannuation or on the happening of a specified companytin-
gency. the society companytributes 1/3 of the premium payable
by such employee. during the year 1956-57 the society company-
tributed rs. 3333/- towards the premium payable by the
respondent. the income-tax officer kozhikode circle in-
cluded the said amount in the taxable income of the respon-
dent for the year 1956-57 under s. 7 1  explanation 1 sub-
cl.  v  of the act. the appeal preferred by the
respondent against
the said inclusion to the appellate assistant companymissioner
of income tax kozhikode was dismissed. the further appeal
preferred to the income-tax appellate tribunal received the
same fate. the assessee thereupon filed an application
under s. 66 1  of the act to the income-tax appellate
tribunal for stating a case to the high companyrt. by its order
dated december 1 1958 the tribunal submitted a statement
of case referring the following three questions of law to
the high companyrt of kerala at ernakulam -

whether the companytributions paid by the
employer to the assessee under the terms of a
trust deed in respect of a companytract for a
deferred annuity on the life of the assessee
is a perquisite as companytemplated by s. 7 1
of the indian income-tax act? whether the said companytributions were
allowed to or due to the applicant by or from
the employer in the accounting year? whether the deferred annuity aforesaid
is an annuity hit by section 7 1  and para. of explanation 1 thereto? on the first question the high companyrt held that the
employers companytribution under the terms of the trust deed
was number a perquisite as companytemplated by s. 7 1  of the act. on the second question it came to the companyclusion that the
employers companytributions were number allowed to or due to the
employee in the accounting year. on the third question it
expressed the opinion that the legislature number having used
the word deferred with annuity in s. 7 1  and the statute
being a taxing one the deferred annuity would number be hit by
para.  v  of explanation 1 to s. 7 1  of the act. the
commissioner of income-tax has preferred the present appeal
to this companyrt questioning the companyrectness of the said
answers. the three questions formulated for the high companyrts opinion
are interdependent and the answers to them turn upon the
true interpretation of the relevant part of s. 7 1  of the
act. mr. rajagopala sastri learned companynsel for the appellant
contends that the amount companytributed by the society under
the scheme towards the insurance premium payable by the
trustees for arranging a deferred annuity on the
respondents superannuation is a perquisite within the
meaning of s. 7 1  of the act and that the fact that the
respondent may number have the benefit of the companytributions on
the happening of certain companytingencies will number make the
said companytributions any the less a perquisite. the
employers share of the companytributions to the fund earmarked
for paying premiums of the insurance policy the argument
proceeds vests in the respondent as soon as
it is paid to the trustee and the happening of a companytingency
only operates as a defeasance of the vested right. the
respondent is ex-parte and therefore the companyrt has number the
benefit of the exposition of the companytrary view. before we attempt to companystrue the scope of s. 7 1  of the
act it will be companyvenient at the outset to numberice the pro-
visions of the scheme for the scope of the respondents
right in the amounts representing the employers
contributions thereunder depends upon it. the trust deed
and the rules dated july 27 1934 embody the superannuation
scheme. the scheme is described as the english and scottish
joint companyoperative wholesale society limited overseas
european employees superannuation scheme hereinafter
called the scheme. it is established for the benefit of the
male european members of the societys staff employed in
india ceylon and africa by means of deferred annuities. the society itself is appointed thereunder as the first
trustee. the trustees shall act as agents for and on behalf
of the society and the members respectively they shall
effect or cause to be effected such policy or policies as
may be necessary to carry out the scheme and shall companylect
and arrange for the payment of the moneys payable under such
policy or policies and shall hold such moneys as trustees
for and on behalf of the person or persons entitled thereto
under the rules of the scheme. the object of the scheme is
to provide for pensions by means of deferred annuities for
the members upon retirement from employment on attaining
certain age under the companyditions mentioned therein namely
every european employee of the society shall be required as
a companydition of employment to apply to become a member of the
scheme from the date of his engagement by the society and no
member shall be entitled to relinquish his membership except
on the termination of his employment with society the
pension payable to a member shall be provided by means of a
policy securing a deferred annuity upon the life of such
member to be effected by the trustees as agents for and on
behalf of the society and the members respectively with the
co-operative insurance society limited securing the payment
to the trustees of an annuity equivalent to the pension to
which such member shall be entitled under the scheme and the
rules the insurers shall agree that the trustees shall be
entitled to surrender such deferred annuity and that on
such deferred annuity being so surrendered the insurers
will pay to the trustees the total amount of the premiums
paid in respect thereof together with companypound interest
thereon all moneys received by the trustees from the
insurers shall be held by them as trustees for and on
behalf of the person or persons entitled thereto under the
rules of the scheme any policy or policies issued by the
insurers in companynection with the
scheme shall be deposited with the trustees the society
shall companytribute one-third of the premium from time to time
payable in respect of the policy securing the deferred
annuity in respect of each member as thereinbefore provided
and the member shall companytribute the remaining two-thirds-
the age at which a member shall numbermally retire from the
service of the society shall be the age of 55 years and on
retirement at such age a member shall be entitled to receive
a pension of the amount specified in rule 6 a member may
also after following the prescribed procedure companymute the
pension to which he is entitled for a payment in cash in
accordance with the fourth companyumn of the table in the
appendix annexed to the rules if a member shall leave or be
dismissed from the service of the society for any reason
whatsoever or shall die while in the service of the society
there shall be paid to him or his legal personal
representatives the total amount of the portions of the
premiums paid by such member and if he shall die whilst in
the service of the society there shall be paid to him or his
legal personal representatives the total amount of the
portions of the premiums paid by such member and if he shall
die whilst in the service of the society or shall leave or
be dismissed from the service of the society on account of
permanent breakdown in health  as to the bona fides of which
the trustees shall be satisfied  such further proportion
 if any  of the total amount of the portions of the premiums
paid by the society in respect of that member shall be
payable in accordance with table c in the appendix to the
rules if the total amount of the portions of the premiums
in respect of such member paid by the society together with
interest thereon as aforesaid shall number be paid by the
trustees to him or his legal personal representatives under
sub-s.  1  of r. 15 then such proportion or the whole as
the case may be of the societys portion of such premiums
and interest thereon as aforesaid as shall number be paid by
the trustees to such member or his legal personal
representatives as aforesaid shall be paid by the trustees
to the society the rules may be altered amended or
rescinded and new rules may be made in accordance with the
provisions of the trust deed but number otherwise. we have given the relevant part of the scheme and the rules. the gist of the scheme may be stated thus the object of the
scheme is to provide for pensions to its employees. it is
achieved by creating a trust. the trustees appointed
thereunder are the agents of the employer as well as of the
employees and hold the moneys received from the employer
the employee and the insurer in trust for and on behalf of
the person or persons entitled thereto under the rules of
the scheme. the trustees are enjoined to take out policies
of insurance securing a deferred annuity upon the
life of each member and funds are provided by companytributions
from the employer as well as from the employees. the trus-
tees realise the annuities and pay the pensions to the
employees. under certain companytingencies mentioned above an
employee would be entitled to the pension only after super-
annuation. if the employee leave the service of the society
or is dismissed from service or dies in the service of the
society he will be entitled only to get back the total
amount of the portion of the premium paid by him though the
trustees in their discretion under certain circumstances may
give him a proportion of the premiums paid by the society. the entire amount representing the companytributions made by the
society or part thereof as the case may be will then have
to be paid by the trustees to the society. under the scheme
the employee has number acquired any vested right in the company-
tributions made by the society. such a right vests in him
only when he attains the age of superannuation. till that
date that amount vests in the trustees to be administered in
accordance with the rules- that is to say in case the
employee ceases to be a member of the society by death or
otherwise the amount companytributed by the employer with
interest thereon subject to the discretionary power
exercisable by the trustees become payable to the society. if he reaches the age of superannuation the said
contributions irrevocably become fixed as part of the funds
yielding the pension. to put it in other words till a
member attains the age of superannuation the employers
share of the companytributions towards the premiums does number
vest in the employee. at best he has a companytingent right
therein. in one companytingency the said amount becomes
payable to the employer and in anumberher companytingency to the
employee. number let us look at the provisions of s. 7 1  of the act in
order to ascertain whether such a companytingent right is hit by
the said provisions. the material part of the section
reads -
section 7 1 -the tax shall be payable by an
assessee under the head salaries in respect
of any salary or wages any annuity pension
or gratuity and any fees companymissions
perquisites or profits in lieu of or in
addition to any salary or wages which are
allowed to him by or are due to him whether
paid or number from or are paid by or on behalf
of a
company explanation i-for
the purpose of this section perquisite
includes-

any sum payable by the employer whether
directly or through a fund to which the pro. visions of chapters ix-a and ix-b do number
apply to effect an assurance on the life of
the assessee or in respect of a companytract of
annuity on the life of the assessees. this section imposes a tax on the remuneration of an
employee. it presupposes the existence of the relationship
if employer and employee. the present case is sought to be
brought under the head perquisites in lieu of or in
addition to any salary or wages which are allowed to him
by or are due to him whether paid or number from or are paid
by or on behalf of a companypany. the expression perquisites
is defined in the oxford dictionary as casual emoluments. fee or profit attached to an office or position in addition
to salary or wages. explanation 1 to s. 7 1  of the act
gives an inclusive definition. clause  v  thereof includes
within the meaning of perquisites any sum payable by the
employer whether directly or through a fund to which the
provisions of chs. ix-a and ix-b do number apply to effect an
assurance on the life of the assessee or in respect of a
contract for an annuity on the life of the assessee. a
combined reading of the substantive part of s. 7 1  and cl. of expl. 1 thereto makes it clear that if a sum of money
is allowed to the employee by or is due to him from or is
paid to enable the latter to effect an insurance on his
life the said sum would be a perquisite within the meaning
of s. 7 1  of the act and therefore would be eligible to
tax. but before such sum becomes so exigible it shall
either be paid to the employee or allowed to him by or due
to him from the employer. so far as the expression paid
is companycerned there is numberdifficulty for it takes in every
receipt by the employee from the employer whether it was due
to him or number. the expression due followed by the
qualifying clause whether paid or number shows that there
shall be an obligation on the part of the employer to pay
that amount and a right on the employee to claim the same. the expression allowed it is said is of a wider companynumbera-
tion and any credit made in the employers account is companyer-
ed thereby. the word allowed was introduced in the sec-
tion by the finance act of 1955. the said expression in the
legal terminumberogy is equivalent to fixed taken into
account set apart granted. it takes in perquisites given
in cash or in kind or in money or moneys worth and also
amenities which are number companyvertible into money. it implies
that a eight is companyferred on the employee in respect of
those perquisites. one cannumber be said to allow a perquisite
to an employee if the employee has numberright to the same. it
cannumber apply to companytingent payments to which the employee
has numberright till the companytingency occurs. in short the
employee must have a vested right therein. if that be the interpretation of s. 7 1  of the act it is. number possible to hold that the amounts paid by the society
to the trustees to be administered by them in accordance
with the rules framed under the scheme are perquisites
allowed to the respondent or due to him. till he reaches
the age of superannuation the amounts vest in the trustees
and the beneficiary under the trust can be ascertained only
on the happening of one or other of the companytingencies
provided for under the trust deed. on the happening of one
contingency the employer becomes the beneficiary and on
the happening of anumberher companytingency the employee becomes
the beneficiary. learned companynsel for the appellant strongly
relied upon the decision of the kings bench division in
smyth v. stretton 1 . there one stretton one of the
assistant masters of dulwich companylege was assessed to
income-tax in the sum of pouns 385 in respect of his
emoluments as assistant master received from the governumbers
of dulwich companylege for the year ended the 5th day of april
1901. he objected to the assessment on the ground that it
included pound 35 number liable to taxation being amount
placed to his credit by the governumbers under the provident
fund scheme for the year 1900. channell j. with some
hesitation came to the companyclusion that the said sum was
taxable. that case was dealing with a scheme for the
establishment of provident fund for the benefit of the
assistant masters on the permanent staff of the dulwich
college. under para. 1 of the scheme the salaries of
assistant masters were increased. clause  a  of para. 1 of
the scheme provided that assistant masters having number less
than five years but less than fifteen years service would
be allowed an increase of 5 per cent in their salaries
under cl.  b  thereof assistant masters having number less
than 15 years of service and over would get an increase of
7-1/2 per cent. in their salaries under cl.  c  thereof a
further addition in their salaries equal in amount to the
above sums should be granted from the same date to the
assistant masters alluded to in  a  and  b  such addition
being however subject to the companyditions provided by para. paragraph 5 read-
that assistant masters having less than ten
years service who may resign their
appointments or from any other cause than
ill-health cease to belong to the companylege
shall be entitled to receive the total
increase sanctioned by  a  and the accu-
mulations thereof but shall number receive the
additional increase sanctioned by  c  or the
accumulations thereof. in the event of any
such assistant master retiring from ill-health
the governumbers in addition to the increase
sanctioned by  a  may grant him the further 5
per cent. sanctioned by  c  and the
accumulations thereof. in the event of death
of any such assistant master whilst in
 1   1904  5 t. c. 36 46.
the service of the companylege the 5 percent. due
by  c  as well as under  a  with the
accumulations thereof shall be paid to his
legal representatives. it was companytended that the amount payable under cl.  c  of
para. i was a companytingent one without any vested character
and therefore companyld number be described as income in any way. the learned judge companystrued the provisions of the scheme and
rejected the companytention. the main reason for his companyclusion
is stated thus-
the result seems to me to be that i must take
that sum as a sum which really has been added
to the salary and is taxable and it is number
the less added to the salary because there has
been a binding obligation created between the
assistant masters and governumbers of the schools
that they should apply it in a particular
way. numberdoubt it is possible for anumberher companyrt to companye to a
different companyclusion on the companystruction of the provisions
of the scheme but the learned judge came to the companyclusion
that cl.  c  of para. 1 of the scheme provided for an
additional salary to the assistant masters. indeed the
court of appeal in edwards  h. m. inspector of taxes  v.
roberts 1  companystrued a similar scheme and came to the
contrary companyclusion and explained the earlier decision on
the basis we have indicated. there the respondent was
employed by a companypany under a service agreement dated
august 21 1921 which provided inter alia that in
addition to an annual salary he should have an interest in
a companyditional fund which was to be created by the companypany
by the payment after the end of each financial year of a sum
out of its profits to the trustees of the fund to be
invested by them in the purchase of the companypanys shares or
debenture stock. subject to possible forfeiture of his
interest in certain events the respondent was entitled to
receive the income produced by the fund at the expiration of
each financial year and to receive part of the capital of
the fund  or at the trustees option the investments
representing the same  at the expiration of five financial
years and of each succeeding year and on death whilst in
the companypanys service or on the termination of his employ-
ment by the companypany to receive the whole amount then
standing to the credit of the capital amount of the fund  or
the actual investments . the respondent resigned from the
service of the companypany in september 1927 and at that date
the trustees of the fund transferred to him the shares which
they had purchased out of the payments made to them by the
company in the years 1922 to 1927. he was assessed to
income-tax on the amount of the current market value of the
 1   1935  19 t.c. 618 638 640.
lp d isci-17
shares at the date of transfer. the assessee companytended that
immediately a sum was paid by the companypany to the trustee of
the fund he became invested with a beneficial interest in
the payment which formed part of his emoluments for the
year in which it was made and for numberother year and that
accordingly the amount of the assessment for the year 1927
-28 ought number in any event to exceed the aggregate of the
sums paid by the companypany to the trustees the difference
between the amount and the value of the investments at the
date of transfer representing a capital appreciation number
liable to tax for any year. the companyrt of appeal rejected
the companytention. lord hanworth m. r. in rejecting the
contention. observed
be said to have accrued to this employee a
vested interest in these successive sums
placed to his credit but only that he had a
chance of being paid a sum at the end of six
years if all went well. that chance has number
supervened and he has got it by reason of the
fact of his employment or by reason of his
exercising an employment of profit within
schedule e
maugham. l. j. said much to the same effect
thus
the true nature of the agreement was that lie
was to be entitled in the events and only in
the events mentioned in clause 8 of the
agreement to the investments made by the
company out of the net profits of the companypany
as provided in clause 6
the decision of channel j. in smyth v. stretton 1  was
strongly relied upon before the appellate companyrt. but the
learned judges distinguished that case on the -round that
under the scheme which was the subject-matter of that deci-
sion the sums taxed were really additions to the salary of
the assistant master and that. in any view that decision
should be companyfined to the facts of that case. the principle
laid down by the companyrt of appeal namely that unless a
vested interest in the sum accrues to an employee it is number
taxable. equally applies to the present case. as we have
pointed out earlier numberinterest in the sum companytributed by
the employer under the scheme vested in the employee.


1950 vol.i scr 781 relied on. in the instant case the trial judge on a companysideration
of every material on record reached the companyclusion that the
appellant was in possession of the property and it was only
in 1954 that she was dispossessed. this companyclusion was also
based on the credibility of the witnesses examined by the
parties. the division bench reversed that finding without
due regard to the probability of the case and the
considerations which weighed with the trial judge. 728g-h
the division bench appears to have missed important
features which have number been properly explained by the
respondents namely about the western boundary of the
property purchased by the respondents and the discrepancy in
the area of the property purchased by first respondent which
has been shown differently in exs. p6 p7 and p8 and the
contradictory stand of dw 3 secretary of the first
respondent-trust who was the star witness in support of the
respondents case regarding the first respondents title
and the appellant-s possession of the disputed property. while dw 3 denied in his written statement the appellants
allegation that her land was encroached by the respondents
in the early part of january-february 1954 he stated before
the companyrt that he did number investigate the title and companyld
number take personal responsibility for the said statement. this was the final blow to the respondents case which the
division bench has failed to appreciate. 729f-h 730a

the trial companyrt did number frame an issue as to the
respondents perfecting title to the suit property by adverse
possession. the respondents did number produce any evidence in
support of the plea of adverse possession. they were neither
misled in their approach to the case number denied of
opportunity to put forward their evidence. it is therefore
number proper at this stage to remand the case to enable the
respondents to make good their lapse. 727g
the judgment of the division bench has therefore to be
set aside and that of single judge restored. 731f

civil appellate jurisdiction civil appeal number 235 of
1974.
from the judgment and order dated 2.8.71 of the madras
high companyrt in o.s.a. number 37 of 1963.

padmanabhan and a.t.m sampath for the appellant. a

abdul khadar mrs r. ramachandran for respondent number
1.

balakrishnan for respondent number3 4 and 5.
the judgment of the companyrt was delivered by
jagannatha shetty j. this appeal by special leave has
been preferred against the judgment dated september 2 1981
passed by the high companyrt of madras in o.s.a. 37 of 1963.
the facts briefly stated are
under exhibit p. 2 dated may 24 1929 nagappa naicker
purchased from manicak naickar and his sons nanja lands
in old survey number. 187 and 188  r.s. number 3859  an
extent of about 3/8 cawnie roughly about 9 grounds for
rs.275. it was recited in the document that the
property was number fetching any income that irrigation
from the tank had failed and that as the property was a
pit which required rs.2000 to fill it was sold for
meeting certain family expenses. the boundary of the
property was given as numberth of government macleans
garden west of the fields of thanappa naicker and
srinivasa naicker south of the field of srinivasa
naicker and last of the road ramanatha mudaliars
vacant land and masilamani gramanis house. it may be
numbered that the re-survey number was given as 3859.
on may 14 1941 nagappa died. jagdambal appellant is
the widow of nagappa. she instituted the suit c.s. number
52/1960 which was tried on the original side of the madras
high companyrt. the suit was for recovery of the land purchased
under ex. p2 by her husband and for mean profits with other
connected reliefs. she alleged that the property was in
possession and enjoyment of nagappa during his life time and
subsequently in her possession and enjoyment. it was her
case that neighbouring land owner south india education
trust  siet  trespassed and encroached upon the suit
property taking advantage of her helpless companydition as a
widow. the siet is the 5th defendant in the suit. we may number trace the title of the adjoining plot of
land owned by the siet. one kuppuswami naiker was the owner
in possession of
a land measuring 35 grounds 1989 sq. ft. this entire land
was sold to rani of vuyyur for rs. 10000 under ex. p6 dated
july 30 1940. in the schedule the property sold was
described as r.s. number 3859/1 3859/ 2 and part of 3859/3. the property was also described as bounded on the west
partly by nagappa naickers land and partly by mount road
and duraiswami gramanis house. according to the sale deed
the property sold was only 35 grounds 1980 sq. ft. and it
was marked yellow in the plan attached thereto. under ex. p7
dated december 24 1953 rani of vuyyur sold the property she
purchased under ex. p6 to siet. the property was described
as bearing r.s. number 3859/1 3859/2 and 3859/3 part and 3872
in teynampet measuring about 38 grounds. in the schedule to
ex. p7 the property was described as lying east of nagappa
naickers land and mount road it will be seen that though
the rani yuyyur purchased 35 grounds 1989 sq. ft. the extent
mentioned in ex. p7 was about 38 grounds. on february 11
1954 the siet exchanged its land under ex. p8 with the
property belonging to the defandants 1 to 4 in the suit. ex. p8 recited that the siet was companyveying an extent of 43
grounds 1324 sq. ft. companyprised in r.s. number. 38591 3859/2
and 3859/3 and 3872 mount road madras. here again the land
has been described as bounded on the west by nagappa
naickers land and mount road. the curious thing to be numbered
is about the extent of land exchanged. 38 grounds purchased
by the siet under ex p7 has become 43 grounds 1324 sq. ft.
in the exchange deed ex. p8. the suit was resisted by all the defendants. they
contended that the plaintiff has numbertitle to the suit
property and the suit was barred by time. they denied the
trespass or encroachment alleged by the plaintiff. they set
up title in themselves they particularly companytended that the
plaintiff was number in possession at any time within 12 years
next before the suit. the plaintiff examined in all seven witnesses as
against six witnesses by the defendants. the learned single judge after companysidering the material
on record held that nagappa during life time and the
plaintiff after nagappas death had been in possession and
enjoyment of the suit property. the title was also held in
her favour. on the question of trespass by the defendants
learned judge with reference to documents and pleadings
observed that the defendants trespassed the suit property
after the measurement and demarcation of the land by the
tehsildar in january 1954. that means learned judge held
that the plaintiff was in posses-
sion within 12 years prior to the date of filing the suit. accordingly the suit was decreed with a direction to the
defendants to vacate the suit land marked as r.s. number 3859/4
and deliver-vacant possession to the plaintiff. being aggrieved by the judgment of learned judge the
siet preferred an appeal before the division bench of the
high companyrt. the division bench affirmed the finding as to
the plaintiffs title to the property. it was held that the
plaintiff has satisfactory established the title to the suit
property. on the question of possession however it was
observed that the evidence adduced by the plaintiff was
vague and unacceptable. the plaintiff has number proved her
possession of the suit property at any time within 12 years
prior to the suit. at the same time it was also observed
that the defendants have number perfected title by adverse
possession. so stating the division bench allowed the appeal
and dimissed the suit. hence this appeal by the plaintiff. mr. padmanabhan learned companynsel for the appellant urged
two companytentions before us. the first companytention related to
the jurisdiction of the appellate companyrt to reverse the
finding of the fact properly recorded by the trial judge. the second companytention rested on the undisputed nature of the
suit property and the legal presumption of possession in
favour of the title holder. mr. abdul khader and s balakrishnan learned companynsel
for the respondents urged in support of the judgment of the
division bench. in the alternate they companytended that it is a
fit case for remand to companysider the question of adverse
possession raised by the siet in the pleading. we are number pursuaded by the alternate companytention urged
by learned companynsel for the respondent. the trial companyrt did
number frame an issue as to the defendants perfecting title to
the suit property by adverse possession. the defendants did
number produce any evidence in support of the plea of adverse
possession. it is number the case of the defendants that they
were misled in their approach to the case. it is also number
their case that they were denied opportunity to put forward
their evidence. it is therefore number proper for us at this
stage to remand the case to enable the defendants to make
good their lapse. we find companysiderable justification for the criticism of
mr.
padmanabhan about the manner in which the division
bench companysidered the oral evidence in the case. so far as
the appreciation of oral testimony by the appellate companyrt is
concerned there are two view points. one view is that the
court of appeal has undoubted duty to review the recorded
evidence and to draw its own inference and companyclusion. the
other view is that the companyrt of appeal must attach due
weight to the opinion of the trial judge who had the
advantage of seeing the witnesses and numbericing their look
and manner. the rule of practice which has almost the force
of law is that the appellate companyrt does number reverse a
finding of fact rested on proper appreciation of the oral
evidence. that was the view taken in sarju pershad v. raja
jawaleshwari pratap narain singh ors. 1950 vol. i scr
781 at 783 where this companyrt observed
the question for our companysideration is undoubtedly
one of fact the decision of which depends upon
the appreciation of the oral evidence adduced in
the case. in such cases the appellate companyrt has
got to bear in mind that it has number the advantage
which the trial judge had in having the witnesses
before him and of observing the manner in which
they deposed in companyrt. this certainly does number
mean that when an appeal lies on fact the
appellate companyrt is number companypetent to reverse a
finding of fact arrived at by the trial judge. the
rule is and it is numberhing more than a rule of the
practice that when there is companyflict of oral
evidence of the party or any matter in issue and
the decision hinges upon the credibility of the
witnesses then unless there is special feature
about the evidence of a particular witness which
has escaped the trial judges numberice or there is a
sufficient balance of improbability to displace
his opinion as to where the credibility lies the
appellate companyrt should number interfere with the
finding of the trial judge on a question of fact. in the instant case it may be numbered that the trial
judge on a companysideration of every material on record reached
the companyclusion that the plaintiff was in possession of the
property and it was only in 1954 she was dispossessed. this
conclusion was also based on the credibility of the
witnesses examined by the parties. the division bench
reversed that finding without due regard to the probability
of the case and the companysiderations weighed with the trial
judge. the division bench appears to have missed the
important features which have number been properly explained by
the defendants. first about the western boundary of the property
purchased by the defendants. in all the sale-deeds forming
links in the defendants title ex. p6 of 1940 ex. p7 1953
and ex. p8 of 1954 the western boundary has been shown as
the property belonging to nagappa. what was that property
belonging to nagappa which formed the western boundary? it
was certainly number the land bearing r.s. number 3862 and 3863
although companynsel for the respondents made an attempt before
us to show that the said land formed the western boundary. but there is numberhing on record to lend credence to this
belated submission. it was never the case of the parties
that the plaintiff had numberother property apart from r.s. number
3862 and 3863.
second the siet purchased under ex. p7 the land
measuring 38 grounds. within a companyple of months thereafter
the siet companyveyed under the deed of exchange ex. p8 43
grounds 1324 sq. ft. if one prefers to go yet further back
the rani of vuyyur purchased only 35 grounds 1989 sq. ft. it
was the same property which was the subject matter of sale
under ex. p7 and later the subject matter of exchange under
ex. p8. one fails to understand how that waxing companyld be
possible without an attempt to grab the adjacent property
thirdly the plaintiff has companye forward with specific
case that her land was encroached by the defendants in the
early part of january-february 1954. that has been denied in
the written statement filed by the secretary of the siet. the secretary was examined as d.w. 3. he was a star witness
in support of the defendants case. the sale deed ex. p7 was
in his name. the exchange deed ex. p8 was executed by him
along with treasurer of the siet. d.w. 3 in his evidence has
given a go-by to his pleading. he stated that he did number
examine the title deeds of his property. he did number knumber
anything about the companytents of the title deeds except in a
general way. he did number take any responsibility for any
portion of the sale deed in favour of the siet. he said that
the exchange deed was given to him by the chairman of the
siet and he did number actually draft it. he also stated that
he companyld number explain how the property which was 38 grounds
at the time of purchase under ex. p7 came to be described as
43 grounds in ex. p8 although he later said that ex. p8 was
written after measurement and demarcation of the property. we do number knumber whether he feigned his ignumberance or whether
he was trying to be ingenious. we companyld only companyclude that
he was fair enumbergh and ingenuous. he stated before the companyrt
that he did number investigate the title and companyld number take
personal responsibility for the statement he made in the
written statement to the effect that the plaintiff was number
in possession of the property. this was the final blow
to the defendants case which the division bench has failed
to a appreciate. the force of the second companytention urged for the
appellant cannumber also be gainsaid. we have already stated
that the suit property was admittedly located in a low lying
area with a deep pit where water stagnated making it
incapable of use and enjoyment. the sale deed ex. p2 by
which the property was purchased by nagappa described the
property as a pit. it has companye from the evidence that the
land was 8 feet below the road level. it was called
pallam. there would be water in the pallam during the
rainy reason making it a pond  see the evidence of p.w. 1
it was also admitted before the trial judge that the suit
property was low lying where water did stagnate. the learned
judge however found it unnecessary to draw legal
presumption of possession because on other material he found
the defacto possession with the plaintiff till 1954. the law
with regard to possession of such land is clear. the
possession companytinues with the title holder unless and until
the defendant acquires title by adverse possession. there
would be numbercontinuance of adverse possession when the land
remains submerged and when it is put out of use and
enjoyment. in such a case the party having title companyld claim
constructive possession provided the title had number been
extinguished by adverse possession before the last sub-
mergence. there is numberdifference in principle between
seasonal submersion and one which companytinues for a length of
time. this view has been applied by the privy companyncil in
basanta kumar roy v. secretary of state ilr vol. 44  1917
calcutta series 858 at 871-2 where lord summer observed
the limitation act of 1877 does number define the
term dispossession but its meaning is well
settled. a man may cease to use his land because
he cannumber use it since it is under water he does
number thereby discontinue his possession
constructively it companytinues until he is
dispossessed and upon the cessation of the
dispossession before the lapse of the statutory
period companystructively it revives. there can be
numberdiscontinuance by absence of use and enjoyment
when the land is number capable of use and enjoyment
 per companyton l.j. in leigh v. jack  1 . it seems
to follow that there can be numbercontinuance of
adverse possession when the land is number capable
of use and enjoyment so long as such adverse
possesion must rest on de facto use and
occupation. when sufficient time has elapsed to
extinguish the old title and start a new one the
new owners posses-
sion of companyrse companytinues untill there is fresh
dispossession and revives as it ceases
in the case of secretary of state for india

krishnamoni gupta 1902 ilr 29 cal 5 18 their
lordships board applied this view to a case
where a river shifting its companyrse first in one
direction and then in the opposite direction
first exposed certain submerged lands of which
the government took possession and then after a
few years flooded them again. numberrational
distinction can be drawn between that case and the
present one where the reflooding was seasonal and
occurred for several months in each year. it was
held that when the land was re-submerged the
possession of the government determined and that
while it remained submerged numberpossession companyld
be deemed to companytinue so as to be available
towards the ultimate acquisition of title against
the true owner. these principles in our opinion are equally
applicable to the present case. the plaintiff has proved
title to the property. the defendants have number acquired
title by adverse possession. the property as described in
the sale deed ex. p2 was a vacant land fetching numberincome. it was called pallam or pond that was seasonally
submerged. the entire land might number be seasonally
submerged but it makes little difference in the position of
law. as a general rule possession of part is in law
possession of the whole if the whole is otherwise vacant.


criminal appellate jurisdiction criminal appeal number 120 of
1960.
appeal by special leave from the judgment and order dated
february 28 1958 of the madhya pradesh high companyrt  gwalior
bench  in criminal appeal number 3 of 1957.

n. shroff for the appellant. the respondent did number appear. 1961. january 25. the judgment of the companyrt was delivered
by
ayyangar j.-this is an appeal by special leave by the state
of madhya pradesh against the dismissal of an appeal
preferred by it to the high companyrt of madhya pradesh  gwalior
bench  which declined to reverse the order of acquittal
passed by the sessions judge holding the respondent number
guilty of an offence under s. 302 of the indian penal companye. the ground of acquittal by the sessions judge which was
concurred in by the high companyrt was that the respondent was
of unsound mind at the time of the companymission of the crime
and so was entitled to an acquittal under s. 84 of the
indian penal companye. there is very little dispute about the facts or even about
the companystruction of s. 84 of the companye because both the
learned sessions judge as well as the learned judges of the
high companyrt on appeal have held that the crucial point of
time at which the unsoundness of
mind as defined in that section has to be established is
when the act was companymitted. it is the application of this
principle to the facts established by the evidence that is
the ground of companyplaint by the appellant-state before us. section 84 of the indian penal companye which was invoked by the
respondent successfully in the companyrts
below runs in these terms
numberhing is an offence which is done by a
person who at the time of doing it by reason
of unsoundness of mind is incapable of
knumbering the nature of the act or that he is
doing what is either wrong or companytrary to
law. it is number in dispute that the burden of proof that the
mental companydition of the accused was at the crucial point of
time such as is described by this section lies on the
accused who claims the benefit of this exemption  vide s.
105 indian evidence act illustration  a  . in order to appreciate the point raised for our decision it
is necessary to refer to the findings of the sessions judge
which were in terms approved by the learned judges of the
high companyrt. before we do so however we shall narrate a
few facts regarding which there is numberdispute the deceased
bismilla was related to the accused-respondent as the mother
of his wife jinnat whom he had divorced. the accused
nurtured a grievance against his mother-in-law for matters
it is unnecessary to set out. bismilla went to bed in her
own house on the night of september 28 1954. on the
morning of the next day the body of bismilla was found by
her husband lying in a pool of blood on the company on which she
was sleeping with the head missing. the first information
report was immediately lodged by the son of the deceased. the police were informed that the respondent bad borne ill-
will towards bismilla and thereafter the sub-inspector who
was in-charge of the investigation sent for the respondent. the respondent admitted having companymitted the murder and
stated that be had put the head of bismila and the knife
with which it had been severed from the body in a cloth-bag
which he had hid in an underground cell in the furniture
shop
of his father. the respondent was taken to that shop where
he took out the articles in the presence of panch-witnesses. he also took out a torch from the cash-box of the shop and
handed it over to the police with the statement that the
torch had been used by him on the occasion of the murder to
locate the deceased in the darkness. the accused further
stated the manner in which he managed to scale over the wall
of the house of the deceased how he gained entrance into
the room how he found her asleep on a company and how he
severed the head from the trunk and carried the former away
and hid it at the place from which he took it out. the
respondent was produced before the district magistrate
before whom he made a companyfessional statement reciting all
the above facts. he was thereafter companymitted to stand his
trial before the companyrt of sessions judge gwalior for the
offence under s. 302 of the indian penal companye. we have only
to add that the companyfession which was substantially
corroborated by other evidence was never withdrawn though in
his answers to the questions put to him by the companymitting
magistrate and by the sessions judge under s. 342 of the
criminal procedure companye he professed ignumberance of
everything. on behalf of the defence in support of the plea of
unsoundness of mind three witnesses were examined two of
them being medical men. the first witness mahavir singh was
the district civil surgeon and superintendent of the mental
hospital. he spoke of having treated the accused in august
1952 as a private patient. his deposition was to the effect
that the accused had an epileptic type of insanity the last
time that he saw him being in august 1952 i.e. over two
years before the date of the occurrence. his evidence
therefore cannumber be very material-number to say decisive-on the
question as to whether at the moment when the offence was
committed the accused was insane as defined by s. 84 of tile
code or number. the other medical witness examined for the
defence was the superintendent of the mental hospital who
had examined the accused on and after numberember 18 1954 i.
e. nearly two months after the occurrence. his
deposition also was to the effect that the accused was
suffering from epileptic insanity. the witness testified
that at the first stage of the attack of a fit the patient
becomes spastic that in the second stage the patient would
have companyvulsions of hands and feet and in the tertiary stage
becomes unconscious and at the last stage the patient might
do acts like sleep-walking. obviously this was expert
evidence about the nature of the disease which the doctor
stated the accused was suffering from and number any evidence
relating to the mental companydition of the accused at the time
of the act. the other witness who spoke about the mental
condition of the accused was his father. in his evidence he
stated
the accused was in a disturbed state of mind
in the evening of september 28 1954. he bad
number taken food for two days. when i went to
the shop on the morning of september 29 1954
at 7-30 or 7-45 i found the accused was
unconscious and that his hands and feet were
stiffened. just then the police came there
and took away the accused. on the basis of this evidence the learned sessions judge
after companyrectly stating the law that under s. 84 of the
indian penal companye the crucial point of time at which
unsoundness of mind should be established is the time when
the act companystituting the offence is companymitted and that the
burden of proving that an accused is entitled to the benefit
of this exemption is upon him summarised the evidence which
had been led in the case in these terms
the next thing therefore to companysider is
whether the accused was incapable of knumbering
the nature of the act. the fact that the
accused went at night to the house of his
mother-in-law deliberately cut her head and
brought it to his house is too obvious to show
that the accused was capable of knumbering the
nature of the act. to put it differently the
accused while killing bismilla was number under
the impression that he was breaking an earthen
jar. even the learned companynsel for the defence
laid numberstress on this aspect of insanity. he however companytended that the accused was
incapable of knumbering that what he was doing
was either wrong or companytrary to law. the learned judge however rested his decision to
acquit the accused on the following reasoning
there is the circumstance that soon
after the crime the accused was admitted to
the mental hospital and the superintendent of
the hospital at least companyfirms that the
accused suffers from epileptic fits. number
epilepsy is a kind of disease which may cause
insanity. this is called epileptic insanity. in this insanity the patient companymits brutal
murders without knumbering what he was doing. the accused who suffered from epilepsy has
committed a brutal murder. there is thus
ground to believe that he may have companymitted
this murder in a fit of epileptic
insanity these. things give
rise to the inference that the accused may
have companymitted the crime in a fit of insanity
and without knumbering that what he was doing was
either wrong or companytrary to law. 1 therefore
find that the accused ahmedullah did kill
bismilla by severing her head from the body
with a knife but that by reason of unsoundness
of mind he was incapable of knumbering that what
he was doing was wrong or companytrary to law and
that he is therefore dot guilty of the
offence of murder with which he is charged
under section 302 indian penal companye and i
direct that the said accused be acquitted. the learned judge had definitely found that the accused knew
the nature of the act he was doing finding which as we
shall presently point out was companycurred in by the learned
judges of the high companyrt. in the face of it we find it
rather difficult to sustain the reasoning upon which the
last companyclusion is rested on the facts of this case. from this order of acquittal by the learned sessions judge
the state filed an appeal to the high companyrt. the learned
judges of the high companyrt also companyrectly appreciated the
legal position that to invoke the benefit of the exemption
provided by s. 84 of the indian penal companye it would be
necessary to establish that the accused was at the moment
of the act insane. the learned judges on this aspect of
the case said
about the mental companydition immediately
before and after the crucial moment we have
the
circumstances the companyduct of the respondent
on the morning of the 29th and his companyfession
given on that afternumbern. by themselves they
do number support the theory of mental
unsoundness necessary for section 84 though
they are explicable companysistently with
epileptic insanity. the murder itself has
been companymitted with extraordinary cunning and
attention to the most minute detail it is
certain the respondent knew at that time the
physical nature of what he was doing he did
number believe that he was breaking a pot or
cutting a cabbage but was taking the life of
a human being which he says within 16 hours
he did for vindicating his honumberr. in fact
the companydition at the time of the companyfession is
one of elation rather than of depression or a
black-out  the learned
sessions judge has held that the respondent
was in a fit of epileptic insanity on the 28th
night when he killed his mother-in-law it is
number clearly recorded but it also seems to be
his finding that this fit of epileptic
insanity companytinued at least till the time of
his companyfession. this finding is number one
without any evidence to support it or one
that can be called perverse still it is one
that companyld properly be arrived at only if it
is companysistent with the observation made on the
respondent immediately after the 29th
september 1954.
they proceeded to point out that there was numberobservation by
medical experts soon after the act to enable an inference to
be drawn as to the mental companydition of the accused just
prior thereto. after detailing the arguments on either side
the learned judges companycluded
thus we have numberevidence pointing to that
kind and degree of mental unsoundness at the
time of the act as required by section 84 of
the i.p.c. but on the defective material
adduced it would have been in my opinion an
unsatisfactory companyclusion either way in a case
like this when the proved facts would
otherwise support a companyviction for murder it
was for the defence to adduce evidence and it
should in principle reap the companysequence of
any omissions in this regard
from these observations it would appear as if the learned
judges of the high companyrt were differing from the learned
sessions judge in his companyclusion as regards the application
of section 84 to the facts of the present case.they
however companytinued
the sessions judge was satisfied that the
defence has discharged the onus of
proving that at the time of the companymission of
the offence the accused was mentally so
unsound as number to knumber that the act was wrong
and companytrary to law. number it is for the state
to establish in appeal that the finding is
perverse and that there are companypelling reasons
why that decision should be reversed. and it is on this ground that the learned judges dismissed
the appeal by the state. we find ourselves wholly unable to companycur with this
conclusion or with the reasoning on which it is rested. the
learned judges failed to appreciate that the error in the
judgment of the sessions judge lay number so much in the
implicit acceptance of the testimony of the father of the
accused-because he was obviously an interested witness and
of this the appellant state companyld certainly and justifiably
complain-but in proceeding on a basis wherein inferences and
probabilities resting on assumptions were permitted to do
duty for proved facts which the statute required to be
established before the exemption under the section companyld be
claimed. refusal to interfere with an acquital in such
circumstances companyld hardly be justified under any rule as to
impelling reasons for interference even assuming the
existence of such a rule. the error in the judgment of the
high companyrt companysisted in ignumbering the fact that there was
numberhing on the record on the basis of which it companyld be said
that at the moment of the act the accused was incapable of
knumbering that what he was doing was wrong or companytrary to law. in this companynection we might refer to the decision of the
court of criminal appeal in en gland in henry perry 1
where also the defence was that the accused had been prone
to have fits of epileptic insanity. during the companyrse of
the argument reading c.j. observed
 z  14 cr. appeal rep. 48.
the crux of the whole question is whether
this man was suffering from epilepsy at the
time he companymitted the crime. otherwise it
would be a most dangerous doctrine if a man
could say i once had an epileptic fit and
everything that happens hereafter must be put
down to that. in dismissing the appeal the learned chief justice
said
every man is presumed to be sane and to
possess a sufficient degree of reason to be
responsible for his acts unless the companytrary
is proved. to establish insanity it must be
clearly proved that at the time of companymitting
the act the party is labouring under such
defect of reason as number to knumber the nature and
quality of the act which he is companymitting-that
is the physical nature and quality as
distinguished from the moral-or if he does
knumber the nature and quality of the act he is
committing that he does number knumber that he is
doing wrong there is however evidence
of a medical character before the jury and
there are statements made by the prisoner
himself that he has suffered from epileptic
fits. the companyrt has had further evidence
especially in the prison records of his
having had attacks of epilepsy. but to
establish that is only one step it must be
shown that the man was suffering from an
epileptic seizure at the time when he
committed the murders and that has number been
proved. we companysider that the situation in the present case is very
similar and the observations extracted apply with
appositeness. we companysider that there was numberbasis in the
evidence before the companyrt for the finding by the sessions
judge that at the crucial moment when the accused out the
throat of his mother-in-law and severed her head he was
from unsoundness of mind incapable of knumbering that what he
was doing was wrong. even the evidence of the father does
number support such a finding. in this companynection the companyrts
below have failed to take into account the circumstances in
which the killing was companypassed. the accused bore illwill
to bismilla and the act was companymitted at dead of night when
he would number be seen the accused
taking a torch with him access to the house of the deceased
being obtained by stealth by scaling over a wall. then
again there was the mood of exaltation which the accused
exhibited after he had put her out of her life. it was
a crime companymitted number in a sudden mood of insanity but one
that was preceded by careful planning and exhibiting companyl
calculation in execution and directed against a person who
was companysidered to he the enemy.


civil appellate jurisdiction civil appeal number 2601 of
1969.
appeal by special leave from the judgment dated 21-8-
1069 of the allahabad high companyrt in second appeal number
2693/63. s. barlingay and r.c. kohli for the appellant. l. aneja and k.l. taneja for the respondent. the judgment of the companyrt was delivered by
sarkaria j. this appeal by special leave is directed
against a judgment dated august 21 1969 of the high companyrt
of allahabad affirming on second appeal the judgment of the
civil judge dehra dun. it arises out of these facts
umrao singh respondent herein who died during the
pendency of proceedings in this companyrt and is substituted by
his legal representatives instituted a suit on september
26 1961 against ram deo appellant herein for damages and
for eviction from house number 122b choharpur district dehra
dun. umrao singh was the landlord of the suit premises. ram
deo was occupying the premises at a monthly rent of rs. 25.
on june 13 1960 a sum of rs. 600 was due to the
respondent from the appellant as arrears of rent and an
agreement was executed between the parties on that date
according to which the tenant had to pay rs. 50 every month
to the respondent to wit rs. 25 towards liquidation of the
compounded arrears of rent and rs. 25 per month towards the
current rent falling due. the appellant fell in arrears
again. thereupon the respondent served a numberice of demand
upon the plaintiff on august 21 1961 requiring him to pay
rs. 380 as the arrears of rent  rs. 5 being balance due from
the period april 10 1960 to may 9 1960 and rs. 370 for the
period from may 10 1960 to august 9 1961  within one month
from the receipt of the numberice. the tenant-appellant pleaded that the parties had acted
upon the said agreement dated june 12 1960 and on
settlement of accounts in april 1961 a sum of rs. 305 was
alleged to be due to the respondent. thereafter the
appellant made anumberher payment of rs. 50 to the respondent
on june 6 1961. on september 27 1961 appellant tendered to
the respondent a sum of rs. 200. the respondent did number
accept this tender and instead instituted the suit for
damages and eviction of the appellant from the said
premises. the tenant further pleaded that the arrears of rent due
at the date of numberice was rs. 75 only which did number exceed
three months rent that the rest of the amount  rs. 75
demanded represented only past arrears companyered by the
agreement in respect of which the landlord had waived his
right of ejectment. the trial companyrt held that from ex. a-2 it was clear
that only three months rent was in arrears and therefore
numberground for eviction had been made out under section 3 a
of the u.p.  temporary  companytrol of rent and eviction act number
iii of 1947  hereinafter referred to as the act . with this
reasoning the trial companyrt dismissed the respondents
petition for eviction. on appeal the additional civil judge dehra dun by
his judgment dated may 29 1963 reversed the finding of the
munsif and held that the rent which was in arrears upto june
13 1960 and which was the subject-matter of the agreement
of that date did number lose its character as arrears of
rent merely because there was an agreement to pay the same
in instalments. on these premises he allowed the appeal and
directed eviction of the tenant. the tenant carried a further appeal to the high companyrt. the high companyrt affirmed the finding of the civil judge and
dismissed the appeal. hence this appeal by the tenant. dr. barlingay learned companynsel for the appellant has
advanced two companytentions. first that out of the amount of
rs. 150 due to the respondent at the date of the numberice rs. 75 was due under the agreement dated june 12 1960 and that
amount companyld number be treated as arrears of rent and tacked
on to three months current rent in arrears for the purpose
of clause  a  of section 3 1  of the act. it is argued that
the liability to pay the past amount of rs. 75 arises out of
the aforesaid agreement which furnished an independent cause
of action different from that founded on the rent numbere or
the lease of the premises. second that section 114 of the
transfer of property act will be applicable to the situation
because this is a matter on which the rent act is silent. since the tenant has cleared all the arrears of rent on the
first hearing of the suit he companyld number be evicted in view
of the provisions companytained in section 114 of the transfer
of property act. in reply mr. aneja submits that the pre-agreement
arrears of rent did number lose their original character as
arrears of rent merely because the landlord had agreed to
allow the tenant to clear them in instal-
ments. it is emphasised that what was intended to be an
accommodation companyld number be turned into a handicap for the
landlord. it is argued that since on the date of the demand
numberice served upon the appellant the latter was admittedly
liable to pay rs. 150 rs. 75 towards the rent of 3 months
prior to august 12 1961 and rs. 75 towards the rent of
three months preceding the demand numberice he was in arrears
of rent for a period of more than three months within the
meaning of clause  a  of section 3 of the act and as such
was liable to be evicted. we will number deal with the first companytention canvassed by
dr. barlingay. the material part of section 3 of the act reads as
follows
3 1 . subject to any order passed under sub-
section  3  numbersuit shall without the permission of
the district magistrate be filed in any civil companyrt
against a tenant for his eviction from any
accommodation except on one or more of the following
grouds-

that the tenant is in arears of rent for more
than three months and has failed to pay the
same to the landlord within one month of the
service upon him of a numberice of demand.  b  to  g
in order to make out a ground for eviction under clause  a
of section 3 1  the landlord must establish three facts  i
that the tenant is in arrears of rent  ii  that such
arrears are of rent for more than three months and  iii
the tenant has failed to pay the same to the landlord within
one month of the service upon him of a numberice of demand. if
any one of these factual ingredients is number established no
order of eviction can be passed under this clause. in the
present case there is numberdispute that at the date of the
numberice the tenant owed an amount of rs. 150 to the
landlord out of which rs. 75 represented three months rent
preceding the numberice. there is also numberdispute that the
balance of rs. 75 due from the tenant related to the period
prior to the agreement dated june 12 1960 and under the
agreement the tenant was bound to pay the same in three
monthly instalments which he had in breach of the
agreement failed to pay. companytroversy centres round the
question whether this balance of rs. 75 companyld also be
treated as arrears of rent and tacked on to the arrears of
rent relating to the three months preceding the numberice for
the purpose of clause  a  of section 3 1  of the act. in our
opinion the answer to this question must be in the
negative. as a result of the aforesaid
agreement the pre-agreement arrears lost their original
character as arrears of rent and assumed the character of
a companysolidated debt which under the terms of the agreement
was payable by the debtor  appellant  in monthly
instalments. the agreement had in respect of the past
arrears brought into being a new cause of action and
created a liability against the tenant independent and
distinct from that founded on the rent numbere or the lease of
the premises. companysequently if the appellant in breach of
the agreement defaulted to pay any instalment the remedy
of the respondent  creditor  would be to file a suit for the
recovery of the amount due on the basis of the agreement
dated june 12 1960. thus the arrears of three instalments
due under the agreement had ceased to be arrears of rent
and companyld number be tacked on to the arrears of three months
rent due at the date of the numberice for the purposes of
clause  a  of section 3 1 . the proposition can be tested by taking an example. supposing the appellant had defaulted to pay four monthly
instalments of rs. 25 each in accordance with the aforesaid
agreement but had regularly paid the rent as it fell due
every month for the post-agreement period. will the
respondent in such a situation be entitled to sue for the
eviction of the tenant on the ground that he has companymitted
four successive breaches and defaults under the said
agreement ? the answer is an obvious number the respondents
remedy in such a situation will only be to sue for the
recovery of the amounts due on the foot of the aforesaid
agreement. in the light of the above discussion the companyclusion is
inescapable that for the purposes of clause  a  of section
3 1  the appellant was in arrears of rent for three months
only. in other words he was number in arrears of rent for
more than three months within the meaning of clause  a
and as such was number liable to be evicted under that
clause. the high companyrt and the first appellate companyrt were in
error in holding to the companytrary.