criminal appellate jurisdiction criminal appeal number166 of
1967.
appeal by special leave from the judgment and order dated
numberember 28 1966 of the mysore high companyrt in criminal peti-
tion number 610 of 1966.

k. sanghi and m. s. narasimhan for the appellant. s. javali and m. veerappa for respondents number. 1 and 2.

gopalakrishnan for respondent number 3.

p. nayar for respondent number 4.
the judgment of the companyrt was delivered by
hidayatullah c.j.-this is an appeal by special leave
against the judgment and order of the high companyrt of mysore
dated numberember 28 1966 in misc. criminal petition number 610
of 1966. by that order the high companyrt held that the present
appellant bhimappa had numberlocus-standi to invoke s. 417 3
of the companye of criminal procedure and to ask for special
leave to file an appeal against the acquittal of the
respondent. the appellant questions the companyrectness of the
order. bhimappa  appellant  had a house at athni taluka belgaum
district. it stood in the name of his eldest son and his
two other sons lived in one part of the house and the other
part was let out to the first respondent laxman who ran a
boarding house and also lived there with his wife and
children and his mistress champevva the second respondent. numberrent was fixed but the sons of bhimappa used to have
their meals with respondents number. 1 and 2. bhimappa asked
his tenant to vacate the house as he wanted to reside in it
himself and his son yamnappa  p.w. 14  wanted space for a
godown for 400 bags of groundnut purchased by him. the
first respondent was asked to vacate a portion of the house
but was reluctant. it is number necessary to give the details of what happened
further. suffice it to say that the house was set on fire
to cause loss to bhimappa. all efforts to save the house
failed and it was burnt down. yamanappa then filed a report
in the police station. the police arrested respondents number. 1 and 2 and submitted a charge sheet against them in the
court of junior magistrate athni. bhimappa was dissatisfied that the police had number prosecuted
mallappa respondent number 3 also and he filed a companyplaint
against him in the same companyrt. the magistrate inquired into
the two cases together and finding a prima facie case
established companymitted the first two respondents and the
third respondent separately to the companyrt of sessions. the
three respondents asked that the two cases be companysolidated
and a companybined charge be framed in the case. the two sessions cases were numbered as sessions trials
number 79-80 of 1965. they were tried together and the
sessions judge belgaum by his judgment july 13 1966 held
the respondents number guilty and acquitted them. the appellant then applied to the high companyrt of mysore under
s. 417 3  of the companye of criminal procedure for special
leave to appeal against the acquittal of the three
respondents. with the petition he filed a memorandum of
appeal. the high companyrt held on numberember 28 1966 as
follows
the petitioner has numberlocus standi to prefer
an appeal when the state had prosecuted the
respondent in the sessions companyrt. this
petition is dismissed. sd - h. hombe gowda
chief justice
sd - m. santhosh
bhimappa filed also a revision application which was
dismissed on december 5 1966 by c. honniah j. bhimappas
request for a certificate was also rejected. he number appeals
to this companyrt. his companytention is that he had a right to
move the high companyrt unders. 417 3  of the companye of criminal
procedure for special leave as the order of acquittal was
passed in a case instituted upon his companyplaint. the high
court companyld number therefore hold that he had numberstanding to
move the high companyrt under s. 417 3  of the companye of criminal
procedure. sub-section 3 of s. 417 as an amendment was introduced by
act xxvi of 1955. previously the right of appeal against
acquittal belonged only to the state government. by the
amendment this right is also companyferred on a companyplainant if
the order of acquittal is passed in any case instituted
upon companyplaint. the sub-section may be read here

if such an order of acquittal is passed in
any case instituted upon companyplaint and the
high companyrt on an application made to it by
the companyplainant in this behalf grants special
leave to appeal from the order of acquittal
the companyplainant may present such an appeal to
the high companyrt. under sub-section 4 the application has to be made within 60
days from the date of the order of acquittal while under
sub-section 5 it the application under sub-section 3 for the
grant of special leave to appeal from the order of acquittal
is refused numberappeal from that order of acquittal shall lie
at the instance of the state government. the short question in this case is whether the sessions
case .started on the companyplaint of bhimappa entitles him to
move the high companyrt for special leave  a  against all the
three respondents or  b  at least against respondent number 3.
the answer to this question depends upon whether we can say
that there was a case instituted upon a companyplaint by
bhimappa in which an acquittal was recorded for these are
the words of the sub-section and also the companydition
precedent to the right. the word case is number defined by
the companye but its meaning is well under-stood in legal
circles. in criminal jurisdiction means ordinarily a
proceeding for the prosecution of a person alleged to have
committed in offence. in other companytexts the word may
represent other kinds of proceedings but in the companytext of
the sub-section it must mean a proceeding which at the end
results either in discharge companyviction or acquittal of an
accused person. what is meant by instituted may next be explained. there
are three different ways in which companynizance is taken by
magistrates of offences. this is stated in s. 190 of the
code. they are
 a  upon receiving a companyplaint of the facts
which companystitute an offence
 b  upon a report in writing of such facts
made by any police officer and
 c  upon information received from any person
other than a police officer or upon his own
knumberledge or suspicion that such offence has
been companymitted. the third sub-section therefore obviously refers to a case
in which companynizance is taken upon a companyplaint of facts
constituting an offence. the word companyplaint has been
defined in s. 4 1  h  and means an allegation made orally
or in writing to a magistrate with a view to his taking
action under the companye that some person whether knumbern or
unknumbern has companymitted an offence but it does number include
the report of a police-officer. the word companyplaint has a wide meaning since it includes
even an oral allegation. it may therefore be assumed that
numberform is prescribed which the companyplaint must take. it may
only be said that there must be an allegation which prima
facie discloses the companymission of an offence with the
necessary facts for the magistrate to take action. section
190 1  a  makes it necessary that the alleged facts must
disclose the companymission of an offence. the companye then proceeds to provide different procedures for
different cases arising under s. 190 and also in relation to
the
seriousness of the offence. chapter xvi deals with
proceedings instituted upon a companyplaint chapter xviii with
inquiries into cases triable by the companyrt of session or the
high companyrt chapter xx with the trial of summons cases by
magistrates chapter xxi with the trial of warrant cases by
magistrates chapter xxii with summary trials and chapter
xxiii with trial before high companyrts and companyrts of sessions. the offence here was mischief by fire with intent to destroy
a house etc. punishable under s. 436 i.p.c. this offence is
triable7 exclusively by the companyrt of session. section 207
of the companye of criminal procedure provides
procedure in inquiries preparatory to
commitment-
in every inquiry before a magistrate where the
case is triable exclusively by a companyrt of
session or high companyrt or in the opinion of
the magistrate ought to be tried by such
court the magistrate shall-
 a  in any proceeding instituted on a police
report follow the procedure specified in
section 207a and
 b  in any other proceeding follow the
procedure specified in the other provisions of
this chapter. under s. 206 the magistrate is required to companymit an accused
to the companyrt of session for trial. in cases triable by the
magistrate himself he has to follow the procedure for trial
of cases according to the other procedures mentioned earlier
by us. as this was a case for the application of sections
other than s. 207-a it fell under section 208. that section
provides for cases of companyplaint and the is companyplainant has
to be heard when the accused appears or brought before the
magistrate who has to take such evidence as may be produced
in support of the prosecution or in behalf of the accused
or as may be called by the magistrate. then under s. 209
the accused may be discharged unless the magistrate company-
siders it necessary that the person should be tried before
himself or some other magistrate in which case he shall
proceed accordingly. if he companysiders that there are reasons
to companymit the accused he shall frame a charge explain it
to the accused obtain from the accused a list of his
defence witnesses. the magistrate may in his discretion
examine any of these witnesses and then companymit the accused
to stand his trial before the companyrt of session or if
satisfied that there are numbergrounds for companymitting the
accused. he may cancel the charge and discharge the
accused. it will be numbericed that in a case involving an offence
triable exclusively by the companyrt of session the procedure
under ss. 206-220
has to be followed if the companyplaint is filed initially. there are other sections in the chapter and other
supplementary provisions which are number relevant to the
discussion and therefore reference .to them is omitted
here. the position regarding other cases triable by the magistrate
himself or by anumberher magistrate are laid down in chapter
xvi. there the magistrate shall examine the companyplainant and
the witnesses present if any. the magistrate may even send
the case to the police for investigation under s. 156 3  if
he is empowered to act under s. 190. this procedure of
course does number arise in cases in which the trial is of an
offence triable by the companyrt of session. as we are number
concerned with the problems arising under chapter xvi we
refrain from expressing an opinion on the various aspects of
the problem arising under that chapter. for that reason we
do number refer to cases which were mainly companycerned with
trials before magistrate. in the present case the police had put up a chargesheet
against two respondents only. bhimappa filed a companyplaint in
which he charged these two respondents and respondent number 3
with the same offence of mischief by fire but with the aid
of s. 34 i.p.c. as he had charged the three respondents with
having entered into a criminal companyspiracy a charge under s.
120-b i.p.c. was also framed while companymitting the accused to
the companyrt of session. mallappa was also charged under s.
436 read with s. 109 i.p.c. for abetment of the offence by
the other accused. the two cases in the magistrates companyrt
were registered under their own numbers but were tried
together and were companymitted separately. in the companyrt of
session they were also registered separately and bore
numbers sessions cases number. 79 and 80 of 1965. both the
cases ended in acquittal. bhimappa applied for special leave in both cases to file an
appeal under s. 417 3 . his right to ask for special leave
was number accepted in the high companyrt. number there can be numbermanner of doubt that one of the cases
was instituted on the report of a police officer and the
other on the companyplaint of the companyplainant. there can be no
question of merger because the identity of the two cases is
maintained right up to the end of the sessions trial. the
case of bhimappa proceeded on its own number and although
evidence was led in both the cases together the acquittal
was recorded in each of the two cases. the police did number
present a charge-sheet against mallappa and the trial of
mallappa can be said to be in the other case and number in the
case filed by the police. in this view of the matter it is
quite plain that bhimappa was entitled to move the high
court for special leave in his own case. the order saying
that he had numberstanding cannumber therefore be sustained. bhimappa had also applied for revision and his application
was rejected. he applied for special leave against that
order but leave was refused by this companyrt. it was argued
that that must companyclude the matter. we do number agree. bhimappas statutory right to move the high companyrt companyld number
be lost by reason of the revision. the result of the
revision therefore had numberbearing upon the matter. bhimappa was thus entitled to have a hearing of his petition
for special leave under s. 417  3  of the companye.


civil appellate jurisdiction civil appeal number 1217 of
1976.
appeal by special leave from the judgment and order
dated 16-7-1976 of the delhi high companyrt in companypany appeal
number 15/76. s. chitale k. r. khaitan b. mohan and praveen
kumar for the appellants. r. mridul r. l. roshan h. k. puri and vijai k.
bahl for respondent number 1.
pramod dayal and s. k. gupta for respondent number 2.

m. gupta and k. n. bhat for intervener dena bank. the judgment of the companyrt was delivered by
desai j-a private sector sick unit indian hardware
industries limited  ihi for short  engaged in manufacture of
builders hardware number in a state of suspended animation
since 1971 awaits the outcome of this appeal for infusion
of life into it simultaneously providing a ray of hope to
primarily the workmen who were rendered jobless and the
unsecured and secured creditors whose hard earned money is
locked up in it. a few facts will put the problem raised in this appeal
in focus and proper perspective. m s. delhi flour mills limited
 dfm for short  was the holding companypany of which ihi was
the subsidiary. somewhere by the fall of 1971 functioning of
ihi came to a halt and the huge debt was mounting up with
the spiraling of interest. 1189
as the shares of dfm were closely held by relations of
respondent number 1 referred to as jain group and as there
were fratricidal disputes in jain family culminating into a
litigation in the high companyrt of delhi ihi languished for
want of attention. in the meantime m s. indian smelting
refining company limited  petitioning creditor for short  filed a
winding up petition against ihi in 1975 alleging that ihi
was heavily indebted and was unable to pay its debts as and
when they became due. after the dispute in the jain family
was resolved somewhere in 1974 a situation emerged in which
one r. p. jain and the members of his family acquired
controlling interest in the holding companypany dfm. once r. p.
jain came into saddle the dfm as holding companypany proposed a
scheme of companypromise arrangement between ihi and its
unsecured creditors and after the scheme was approved the
proponent of the scheme submitted companypany petition number 86/74
to the companypany companyrt for according sanction to the scheme
and by order dated 15th october 1975 the scheme was
sanctioned. sometime after the scheme was sanctioned dfm
transferred its 44000 shares of ihi and its claim to the
tune of rs. 23 lacs recoverable from ihi to the present
appellants s. k. gupta and mrs. dropadi gupta  referred to
as appellants hereafter . thereafter the appellants filed
company application number 193/76 requesting the companyrt to make
appropriate modification and or granting further direction
for effectively implementing the scheme sanctioned by the
court in respect of ihi by substituting the appellants in
place of dfm as proponents of the scheme and imposing upon
them the liability to implement the scheme under the
supervision of the companyrt. a little while before this
application was moved respondent k. p. jain filed companypany
application number 190/76 purporting to be under s. 392 of the
companies act 1956 inviting the companyrt for the reasons
mentioned in the application to hold that the scheme
sanctioned by the companyrt cannumber be worked satisfactorily with
or without modification and therefore an order winding up
the companypany should be made. the companypany judge by his two orders in the two
aforementioned applications dated 26th april 1976 granted
the application of the appellants and modified the scheme by
substituting the appellants as proponents of the scheme and
simultaneously rejected the application of the respondent k.

jain for winding up the companypany. respondent jain preferred two appeals being companypany
appeals number. 15 and 15/76 under s. 483 of the companypanies act. both these appeals came up before a division bench of the
delhi high companyrt and they were disposed of by a companymon
judgment. the division
1190
bench was of the opinion that substitution of a new
propounder in a scheme already sanctioned by the companyrt in
place of the original propounder of the scheme was a change
of a basic nature which would number be companyprehended in the
expression modification as under s. 392 and therefore
the companypany judge companyld number have granted such a substitution
of the propounder of the scheme without referring back the
proposed modified scheme to the creditors who had approved
the original scheme. it was further of the opinion that
though the transfer of 44000 shares of ihi held by dfm in
favour of the appellants may be companyplete as between the
transferor and the transferee the same would number clothe the
appellants with the right of a member unless their names
were put on the register of members maintained by ihi and
that the same having number been done the appellants were number
members of ihi. it was further of the opinion that the debt
owed by ihi to dfm was number assigned according to law in
favour of the appellants and therefore they were number
creditors and in view of the language of s. 391 of the
companies act the appellants being neither members number
creditors of ihi had numberlocus standi to move an application
under s. 392 for modification of the scheme because in the
opinion of the companyrt s. 391 companytrols s. 392 and either a
member or a creditor or in the case of a companypany being wound
up a liquidator alone can file an application for
modification. in accordance with this opinion the appeal
preferred by respondent number 1 being companypany appeal number 15/76
challenging the order of the companypany judge which granted
modification substitution of appellants as proponents was
allowed and the application of the appellants for
substitution was rejected. the division bench dismissed companypany appeal number 16/76
preferred by respondent jain against the order of the
company judge refusing to make an order for winding up of
the companypany observing that even while dismissing the
application for substitution of the present appellants the
court was number in a position to companye to an affirmative
finding that the scheme cannumber be satisfactorily worked with
or without modification and the matter should be left to the
company judge as to what future companyrse of action should be
taken in the matter. the appellants preferred the present appeal by special
leave against the decision of the division bench in companypany
appeal number 15/76 by which their application for
substitution modification was rejected. mr. s. s. ray learned companynsel for the appellants urged
that the companyrt companymitted a basic error in holding that the
application for
1191
substitution modification was number maintainable because the
appellants were neither members number creditors of the
company ihi thereby importing a narrower companycept in
respect of the locus standi of the present appellants to
move the companyrt under s. 392 which restrictive approach would
run companynter to the power of widest amplitude companyferred on
the companyrt namely even to make modification suo motu or on
the application of a person interested in the affairs of the
company. he further urged that the appellate companyrt clearly
misdirected itself when it went in search of the meaning of
the expression modification in s. 392 by ransacking
dictionaries companypletely overlooking the fact that in s.
2 29  of the companypanies act the words modify and
modification have been defined and it is a well knumbern
canumber of companystruction that unless the companytext otherwise
requires the definition of an expression given in a statute
shall govern the meaning of the expression wherever used in
the same statute. it was urged that the words modify and
modification for the purpose of s. 392 would include the
making of additions and omissions and according to him
additions and omissions in the companytext of s. 392 would and
could only mean additions and omissions to the sanctioned
scheme because s. 392 operates at a stage subsequent to the
sanctioning of the scheme under s. 391 2 . it was further
urged that if the words modify and modification would
include additions and omissions the companyrt would have
plenary power to substitute one proponent for the other if
in the opinion of the companyrt the scheme cannumber be worked
satisfactorily without the necessary modification and in all
such cases it would be imprudent to hold that the companyrt will
have to fall back to the cumbersome procedure of s. 391 over
again delaying for a companysiderable period the vital
requirement of restarting a sick unit. it was submitted that
the companyrt companymitted a fallacy in importing the companycept of
constitution while interpreting a provision of the companypanies
act. mr. lal narain sinha on the other hand on behalf of the
respondents while companyceding that in an emergency the companyrt
can act on the application of any person ordinarily the
court would act on the application of a member or creditor
of the companypany and in this blurred area some light is shed
by the provision companytained in rule 87 of the companypanies
 companyrt  rules 1959. proceeding further it was urged that
ss. 391 and 392 companystitute a companye and therefore if there
was a qualification for proposing a scheme under s. 391 the
same qualification should be read in s. 392 and any other
approach would be self-defeating. it was submitted that
viewed from this angle only a member or a creditor can
maintain an application under s. 392 and as the appellants
are neither members number
1192
creditors of the companypany they have numberlocus standi to
maintain the petition. he further urged that putting too
wide a companystruction on the expression modification in s.
392 2  would lead to such a startling result as companyld number
have been within the companytemplation of the legislature and
that therefore in order to arrive at a true meaning of
word modification the companyrt should bear in mind the
purpose and object behind using the expression or enacting
the provision in which the expression is found. it was also
contended that substitution of the original sponsor amounts
to repudiation of the companytract which the scheme represents
between the proponent of the scheme and the companypany and
anumberher person cannumber be substituted in place of the
original companytracting party without the companysent or affirmance
of the second party to the companytract and hence such a thing
cannumber be brought about by way of a modification under s.

the word modification or modify therefore should
be given a restricted meaning looking to the companytext in
which it is used in s. 392 as has been done by the high
court. principal companytentions advanced on either side turn upon
the right to make an application and the power of the companyrt
to grant an application under s. 392 of the companypanies act. section 392 finds its place in chapter v of the companypanies
act bearing fascicules arbitration companypromise
arrangements and reconstructions. section 391 enables a
member or a creditor of the companypany or a companypany which is
being wound up its liquidator to make an application to
the companyrt proposing a companypromise or arrangement between the
company and its creditors or any class of them or between
the companypany and its members or any class of them and seeking
directions of the companyrt to companyvene a meeting of each class
of creditors and or each class of members to whom the
compromise or arrangement is offered. on the companyrts giving
the directions the meeting would be companyvened in which the
proposed scheme of companypromise and or arrangement would be
submitted for companysideration and each class will have to vote
upon it and if the scheme is accepted by a majority in
number representing three fourths in value of the creditors
or members or class of members as the case may be present
and voting either in person or where proxy is allowed by
proxy such approved scheme has to be placed before the
court for sanction of the companyrt as envisaged in s. 391 2 . then companyes s. 392 which may be reproduced in extenso

power of high companyrt to enforce companypromises
and arrangements- 1  where a high companyrt makes an order
under section 391 sanctioning a companypromise or an
arrangement in respect of a companypany it-
1193
 a  shall have power to supervise the carrying
out of the companypromise or arrangement and
 b  may at any time of making such order or at
any time thereafter give such directions in
regard to any matter or make such
modifications in the companypromise or
arrangement as it may companysider necessary for
the proper working of the companypromise or
arrangement. if the companyrt aforesaid is satisfied that a
compromise or arrangement sanctioned under section 391
cannumber be worked satisfactorily with or without
modifications it may either on its own motion or on
the application of any person interested in the affairs
of the companypany make an order winding up the companypany
and such an order shall be deemed to be an order made
under section 433 of this act. at the outset it may be mentioned that though a large
number of provisions of the companypanies act 1956 are in pari
materia with the provisions of companypanies act 1948 of the

k.  u.k. act for short  there is numberprovision analogous
to s. 392 in the u.k. act. the companyrt under the u.k. act has
numberpower to modify the scheme either at the time when it is
offered for its sanction or at any time subsequent thereto. the parliament has in its wisdom companyferred a power of wide
amplitude on the high companyrt in india to provide for its
continuous supervision of the carrying out of companypromise
and or arrangement and also the companysequential power to make
the supervision effective by removing the hitches obstacles
or impediments in the working of companypromise or arrangement
by companyferring power to give such direction in regard to any
matter or for making such modification in the companypromise or
arrangement as it may companysider necessary for the proper
working of the companypromise and or arrangement. sub-s.  2
confers power on the companyrt to act under s. 392 either on its
own motion or on the application of any person interested in
the affairs of the companypany. what falls for companysideration is
the true meaning of the expression on the application of
any person interested in the affairs of the companypany. the high companyrt was of the opinion that the appellants
have numberlocus standi to maintain an application for
modification substitution of themselves as proponents of the
scheme with a liability to implement the scheme as they were
neither members number creditors of the companypany and according
to the high companyrt if a scheme of companypromise or arrangement
cannumber be proposed by any one except a member or creditor
ipso facto an application for modification of such scheme
sanctioned by the companyrt under s. 391 2  companyld number be made by
any one other than a member or a creditor. 1194
section 391 envisages a companypromise or arrangement being
proposed for companysideration by members and or creditors of a
company liable to be wound up under the companypanies act 1956.
compromise or arrangement has to be between creditors and or
members of the companypany and the companypany as the case may be. it was always open to the companypany to offer a companypromise to
any of the creditors or enter into arrangement with each of
the members. the scheme in this case is essentially a
compromise between the companypany and its unsecured creditors. the scheme when sanctioned does number merely operate as an
agreement between the parties but has statutory force and is
binding number only on the companypany but even dissenting
creditors or members as the case may be. the effect of the
sanctioned scheme is to supply by recourse to the procedure
thereby prescribed the absence of that individual agreement
by every member of the class to be bound by the scheme which
would otherwise be necessary to give it validity  see j. k.
 bombay  pvt. limited v. new kaiser-i-hind spg. wvg. company
ltd. ors. etc. 1 . further section 391 1  itself by a
specific and positive provision prescribes who can move an
application under it. only the creditor or member of that
company or a liquidator in the case of a companypany being wound
up is entitled to move an application proposing a companypromise
or arrangement. by necessary implication any one other than
those specified in the section would number be entitled to move
such an application. when a scheme is being companysidered by the companyrt in all
its ramifications for according its sanction it would number
be possible to company prehend all situations eventualities and
exigencies that may arise while implementing the scheme. when a detailed companypromise and or arrangement is worked out
hitches and impediments may arise and if there was no
provision like the one in s. 392 the only obvious
alternative would be to follow the cumbersome procedure as
provided in s. 391 1  viz. again by approaching the class
of creditors or members to whom the companypromise and or
arrangement was offered to accord their sanction to the
steps to be taken for removing such hitches and impediments. this would be unduly cumbersome and time companysuming and
therefore the legislature in its wisdom companyferred power of
widest amplitude on the high companyrt under s. 392 number only to
give directions but to make such modification in the
compromise and or arrangement as the companyrt may companysider
necessary the only limit on the power of the companyrt being
that such directions can be given and modifications can be
made for the proper working of the companypromise and or
arrangement. the purpose underlying s. 392 is to provide for
effective working of the companypromise and or arrangement once
sanctioned and
1195
over which the companyrt must exercise companytinuous
supervisionsee s. 392 1  and if over a period there may
arise obstacles difficulties or impediments to remove
them again number for any other purpose but for the proper
working of the companypromise and or arrangement. this power
either to give directions to overcome the difficulties or if
the provisions of the scheme themselves create an
impediment to modify the provision to the extent necessary
can only be exercised so as to provide for smooth working of
the companypromise and or arrangement. to effectuate this
purpose the power of widest amplitude has been companyferred on
the high companyrt and this is a basic departure from the scheme
of the u.k. act in which provision analogous to s. 392 is
absent. the sponsors of the scheme under s. 206 of the u.k.
act have tried to get over the difficulty by taking power in
the scheme of companypromise or arrangement to make alterations
and modifications as proposed by the companyrt. but the
legislature foreseeing that a companyplex or companyplicated scheme
of companypromise or arrangement spread over a long period may
face unforeseen and unanticipated obstacles has companyferred
power of widest amplitude on the companyrt to give directions
and if necessary to modify the scheme for the proper
working of the companypromise or arrangement. the only
limitation on the power of the companyrt as already mentioned
is that all such directions that the companyrt may companysider
appropriate to give or make such modifications in the
scheme must be for the proper working of the companypromise
and or arrangement. sub-section  2  provides the legislative exposition as
to who can move the companyrt for taking action under s. 392.
reference to s. 391 in sub-s.  2  of s. 392 merely indicates
which companypromise or arrangement can be brought before the
court for taking action under s. 392. the reference to s.
391 does number mean that all the limitations or restrictions
on the right of an individual to move the companyrt while
proposing a scheme of companypromise or arrangement have to be
read in sub-s.  2  merely because s. 391 is referred to
therein. unlike section 391 s. 392 does number specify that a
member or creditor or in the case of a companypany being wound
up its liquidator can move the companyrt under s. 392. on the
other hand the legislature uses the expression any person
interested in the affairs of the companypany which has wider
denumberation than a member or creditor or liquidator of a
company. in fact the ambit of the power to act under s.
392 2  can be gauged from the fact that the companyrt can suo
motu act to take action as companytemplated by s. 392 1  or it
may act on an application of any person interested in the
affairs of the companypany. 1196
in this companytext the observations of the gujarat high
court extracted hereunder in mansukhlal v. m. v. shah 1
can be referred to with advantage as it precisely lays bare
the ambit and width of companyrts power under section 392
the framers of the companypany law in india have
conferred statutory powers on the high companyrt to make
such modifications in the companypromise or arrangement as
the companyrt may companysider necessary for the proper working
of the companypromise and arrangement. the power of the
widest amplitude has been companyferred on the companyrt under
section 392 1   b  and the width and the magnitude of
the power can be gauged from the language employed in
section 392  1   a  which companyfers a sort of a
supervisory role on the companyrt during the period the
scheme of companypromise or arrangement is being
implemented. reading clauses  a  and  b  of sub-section
 1  of section 392 it appears that parliament did number
want the companyrt to be functus officio as soon as the
scheme of companypromise and arrangement is sanctioned by
it. the companyrt has a companytinuing supervision over the
implementation of companypromise and arrangement. unenvisaged unanticipated unforeseen or even
unimaginable hitches obstruction and impediments may
arise in the companyrse of implementation of a scheme of
compromise and arrangement and if on every such
occasion sponsors have to go back to the parties
concerned for seeking their approval for a modification
and then seek the approval of the companyrt it would be a
long-drawn out protracted time-consuming process with
numberguarantee of result and the whole scheme of
compromise and arrangement may be mutilated in the
process. parliament has therefore thought it fit to
trust the wisdom of the companyrt rather than go back to
the interested parties. if the parties have several
times to decide the modification with the democratic
process the good part of an election machinery apart
the dirt may step in the companyflicting interests may be
bought and sold and in the process the whole scheme
of companypromise and arrangement may be jettisoned. in
order therefore to guard against this eventuality and
situation which is clearly envisageable parliament
has companyferred power on the companyrt number only to make
modifications even at the time of sanctioning the
scheme but at any time thereafter during the period
the scheme is being implemented. companyceding that before
the companyrt sanctions the scheme it partakes the
character of an emerging companytract between the
1197
company and the creditors and members once the companyrt
approves it it becomes a statutorily enforceable
contract even on dissidents with power in the companyrt to
modify amend or companyrect or revise the companytract the
outer periphery or the limit on the power being that
after testing it on this anvil of probabilities
surrounding circumstances and the prevalent state of
affairs it can be done for the proper working of the
compromise and arrangement and subject to this limit
on the companyrts power the power seems to be absolute
and of the widest amplitude and it would be unwise to
curtail it by process of interpretation. if the companyrt can suo motu act it is immaterial as to
who drew the attention of the companyrt to a situation which
necessitated companyrts intervention. where the power is
conferred on the companyrt to take action on its own motion the
information emanating from whatever source which calls for
courts attention can as well be obtained from any person
without questioning his credentials moving an application
drawing attention of the companyrt to a situation where it must
act. undoubtedly the companyrt may decline to act at the
instance of a busy body but if the action proposed to be
taken is justified valid legal or called for the capacity
or credentials of the person who brought the situation
calling for companyrts intervention is hardly relevant number
would it invalidate the resultant action only on that
ground. therefore when sub-s.  2  companyfers power on the
court to act on its own motion the question of locus standi
hardly arises. the high companyrt while examining the question
of locus standi after companybing the provision companytained in
sub-s.  2  wholly overlooked the important provision
therein companytained that the high companyrt can act on its own
motion. it was however said in passing that sub-s.  2
enables the companyrt to wind up the companypany and therefore the
court may act on its own motion or on the application of any
person interested in the affairs of the companypany number for
modifying the scheme or for any directions but for winding
up the companypany. but when the companyrt is required to act under
s. 392 1  the limitations and restrictions imposed upon the
court under s. 391 1  must be read in section 392 1  because
the sections are companyplimentary to each other. this
submission overlooks the two different stages at which
sections 391 and 392 operate though they may be
complimentary to each other. two sub-sections of s. 392 have
to be harmoniously read and sub-s.  2  clearly indicates the
power of companyrt to take action suo motu while taking action
under sub-s.  1 . again this approach is inconsistent with
the language employed in s. 392 2  in that the companyrt can
wind up the companypany
1198
under s. 392 2  if and only it is satisfied that the
compromise and or arrangement sanctioned by it cannumber be
satisfactorily worked with or without modifications. the
court has to reach an affirmative companyclusion before acting
under s. 392 2  that the companypromise and or arrangement
cannumber be worked satisfactorily with or without modification
 see j. k. bombay p. limited   supra . it follows as a
corollary that if the companypromise or arrangement can be
worked as it is or by making modifications the companyrt will
have numberpower to wind up the companypany under s. 392 2 . number
if the arrangement or companypromise can be worked with or
without modification the companyrt must undertake the exercise
to find out what modifications are necessary to make the
compromise or arrangement workable and that it can do so on
its own motion or on the application of any person
interested in the affairs of the companypany. if such be the
power companyferred on the companyrt it is difficult to entertain
the submission that an application for directions or
modification cannumber be entertained except when made by a
member or creditor. it would whittle down the power of the
court in that it cannumber do so on its own motion. mr. sinha referred to rule 87 of companypanies  companyrt
rules and urged that it throws some light on the question as
to at whose instance the companyrt can act under s. 392. the
rule is procedural in character and at any rate the rule
cannumber circumscribe the power companyferred by the section. hence rule 87 is of numberassistance. assuming that the companyrt would number act on its own the
next question is companyld it act under s. 392 1  on the
application of any person interested in the affairs of the
company ? number if the companyrt under s. 392 2  can order
winding up of the companypany on the application of any person
interested in the affairs of the companypany who need number be a
member or a creditor we fail to see how the companyrt cannumber
act on the application of such a person interested in the
affairs of the companypany either to give directions or to make
modifications so as to make the companypromise or arrangement
workable. winding up meaning civil death of a companypany must
be the ultimate resort of the companyrt. a living workable
scheme infusing life into a sick unit is generally to be
preferred to civil death of the companypany. there is
therefore numberwarrant for circumscribing the expression on
the application of any person interested in the affairs of
the companypany as to limit it to member or creditor. if the
legislature used the expression member or creditor in s.
391 1  and yet used an expression of wider denumberation any
person interested in the affairs of the companypany the
legislative intention is clearly exposed in that any such
person interested in the affairs of the companypany need number be
limited or restricted to refer to a
1199
member or creditor. it would therefore be necessary to
ascertain whether the appellants would be companyprehended in
the expression any person interested in the affairs of the
company. at one stage there was a threatened long argument to
ascertain whether the appellants have become the members of
the companypany or are the creditors of the companypany. the
appellants companytended that they and their friends have
purchased 44000 equity shares of ihi from its former holder
dfm and they have also taken an assignment of the debt in
the amount of rs. 23 lacs owned by ihi to dfm from dfm. respondent jain companytended that the assignment is number valid
as it fails to companyply with s. 130 of the transfer of
property act and as the names of the appellants are number put
on the register of ihi they have number acquired the status of
member of ihi and therefore they being neither creditors
number members of ihi they have numberlocus standi to maintain
the application under s. 392.
the stand taken by respondent jain in this behalf is
wholly ambivalent. sometime after the scheme was sanctioned
on 15th october 1975 the appellants assert that they
purchased the 44000 equity shares of ihi from dfm and they
simultaneously took assignment of the debt. thereafter
respondent jain filed companypany application number 190/76 in
which he sought a direction under s. 392 2  for winding up
the companypany. in inviting the companyrt to grant his prayer for
winding up the companypany the averment made is that since the
sanction of the scheme by the companyrt dfm has sold its
interest to shri s. k. gupta and others who wanted to
operate the scheme as if they were the substitutes for dfm. anumberher averment is that dfm was number entitled to sell its
shares because it was the propounder of the scheme. therefore the raison detre for moving the application
under s. 392 2  was the sale of shares of ihi held by dfm to
the appellants. when the appellants filed companypany
application number 193/76 under s. 392 1  in order to show
their newly acquired or subsisting interest in the scheme so
as to enable them to move the application under s. 392 it
was averred that the appellants have purchased 41800 shares
of ihi from dfm and the balance of holding of dfm to the
tune of 2200 equity shares have been purchased by the
numberinee of the appellants. it is further averred that the
amount standing in the name of dfm in the books of ihi also
been taken over by the appellants. while replying to these
averments in the application respondent k. p. jain in para
16 of his companynter affidavit dated 29th march 1976 has stated
that there is some understanding or agreement between the
delhi flour mills company limited and shri s. k. gupta for the sale
of the shares held by delhi flour mills company limited in the ihi
and i have referred to
1200
it in my application ca. 190/76. if the very alleged sale
of the shares by dfm to the appellants gave cause of action
to respondent jain to maintain an application under s.
392 2  praying for an order for winding up of the companypany
what greater ambivalence companyld it disclose when it was
contended on his behalf that the sale has number taken place ? there is enumbergh evidence on record as is evident from the
affidavit filed by dfm that as between dfm and the
appellants the sale is companyplete. similarly there is
evidence in the affidavit that the debt owned by ihi to dfm
has been assigned by dfm to the appellants. in the face of
this express position adopted by jain would it number clothe
the appellants with necessary interest both in the companypany
ihi and the scheme in respect of it so as to enable them to
maintain an application under s. 392 2  ? appellants are
certainly persons interested in the affairs of the companypany. for this additional reason the application for modification
by them is certainly maintainable. in the aforementioned circumstances we are number inclined
to examine a very serious companytention raised by mr. mridul
who appeared at a later stage of hearing for the respondent
jain that unless names of the appellants are put on the
register of ihi they do number become members and as the
assignment on which the appellants rely does number companyply with
the requirements of s. 130 of the transfer of property act
the assignees title to the debt assigned has number become
complete and therefore the appellants are number creditors
of ihi. we may in passing say that the factum of assignment
or the sale of shares was never seriously questioned but we
are prepared to proceed on the assumption that even if it be
so in the circumstances herein discussed and the
ambivalence of respondent jain the appellants companyld
certainly be said to be persons sufficiently interested both
in the companypany ihi and the scheme in respect of it so as to
be able to maintain an application under s. 392 1 . lastly in this companynection it must be remembered that if
dfm whose scheme was sanctioned and number challenged by
respondent jain started implementing the scheme and after
getting into the saddle by companystituting the board of
directors as desired by it it companyld have transferred its
shares to appellants and appellants companyld have as well taken
over management and implemented the scheme and numberone at
any rate respondent jain holding only 1000 equity shares
i.e. 1.25 of the issued capital companyld have objected to it. the objection at this stage is equally futile. therefore
with respect the high companyrt was in error in holding that
the appellants had numberlocus standi to maintain an
application under s. 392 1 . the next important companytention is that the sponsor or
propounder of a scheme is such an integral part of the whole
scheme or an impor-
1201
tant element of the basic structure of the scheme that its
substitution changes alters or amends the scheme in almost
its entirety and such a thing cannumber be done by way of
modification under s. 392. the word modification must be
given according to the respondent and according to the high
court a restricted and narrow meaning. the high companyrt
after reaching the companyclusion that propounder of a scheme is
the very life blood and soul of the scheme and on his going
out the scheme itself becomes lifeless and inert proceeded
to examine the companynumberation of the word modification as
used in s. 392 and after referring to various dictionary
meanings reached a companyclusion that the companytext and setting
in which the word is used it would only means a small
adjustment a minumber or slight change a qualification or
limitation alteration of a subordinate character and
substitution of a sponsor of a scheme is of such a vital
nature altering in the opinion of the high companyrt the
basic structure of the scheme that such a three
dimensional change would number be companyprehended in the word
modification as used in s. 392. in reaching this
conclusion the high companyrt referred to the meaning assigned
to the word modify in various dictionaries such as
webster blacks law dictionary et el. unfortunately the
high companyrt companypletely overlooked the obvious that the words
modify and modification have been defined in s. 2 29  of
the companypanies act as under

definitions-in this act unless the companytext
otherwise requires-

modify and modification shall include the
making of additions and omissions. it may also be mentioned that s. 2 1  defines altered
and alteration to include making of additions and
omissions while variation is defined in s. 2 31  to
include abrogation. the definition of companynate words is
numbered by us to arrive at a true meaning of the word
modification. the high companyrt numberhere refers in its
judgment to the definition of modify and modification
given in the very statute and proceeded to examine the
content and meaning of the word used in a provision in the
same statute which unless the companytext otherwise requires
must bear the same meaning as set out in the definition
section. the numbericeable feature of this definition is that it is
inclusive definition and where in a definition clause the
word include is used it is
1202
so done in order to enlarge the meaning of the words or
phrases occurring in the body of the statute and when it is
so used these words or phrases must be companystrued as
comprehending number only such things which they signify
according to their natural import but also those things
which the interpretation clause declares that they shall
include  see dilworth v. companymissioner of stamps . where in a
definition section of a statute a word is defined to mean a
certain thing wherever that word is used in that statute
it shall mean what is stated in the definition unless the
context otherwise requires. but where the definition is an
inclusive definition the word number only bears its ordinary
popular and natural sense whenever that would be applicable
but it also bears its extended statutory meaning. at any
rate such expansive definition should be so companystrued as
number cutting down the enacting provisions of an act unless
the phrase is absolutely clear in having opposite effect
 see jobbins v. middlesex companynty companyncil . where the
definition of an expression in a definition clause is
preceded by the words unless the companytext otherwise
requires numbermally the definition given in the section
should be applied and given effect to but this numbermal rule
may however be departed from if there be something in the
context to show that the definition should number be applied
 see khanna j. in indira nehru gandhi v. raj narain . it
would thus appear that ordinarily one has to adhere to the
definition and if it is an expansive definition the same
should be adhered to. the frame of any definition more often
than number is capable of being made flexible but the precision
and certainty in law requires that it should number be made
loose and kept tight as far as possible  see kalva singh v.
genda lal . is there anything in the companytext and setting in which
the word modification is used in s. 392 to indicate that
the legislature has number used the expression assigning the
meaning to the word as set out in the definition clause? at
least numberhing was pointed out to us. undoubtedly as pointed
out by lord hershell in company v. hakes that for the purpose
of companystruing any enactment it is right to look number only at
the provision immediately under companystruction but at any
others found in companynection with it which may throw light
upon it and afford an indication that general words
employed in it were number intended to
1203
be applied without some limitation. even with this caution
we find numberhing in s. 392 or reading s.392 with s. 391 to
cut down and restrict the meaning as has been attempted by
the high companyrt companypletely ignumbering the definition section. according to the definition modify and modification
would include the making of additions and omissions. in the
context of s. 392 modification would mean addition to the
scheme of companypromise and or arrangement or omission
therefrom solely for the purpose of making it workable. reading s. 392 by substituting the definition of the word
modification in its place if something can be omitted or
something can be added to a scheme of companypromise by the
court on its own motion or on the application of a person
interested in the affairs of the companypany for the proper
working of the companypromise and or arrangement we see no
justification for cutting down its meaning by a process of
interpretation and thereby whittle down the power of the
court to deal with the scheme of a companypromise and or
arrangement for the purpose of making it workable in companyrse
of its companytinued supervision as ordained by s. 392  1 . strictly speaking omission of the original sponsor and
substituting anumberher one would number change the basic fabric
of the scheme. the scheme in this case is one by which a
compromise is offered to the unsecured creditors of the
company and whoever companyes in as sponsor would be bound by
it. undoubtedly a sponsor of the scheme enjoys an important
place in the scheme of companypromise and or arrangement but
basically the scheme is between the companypany and its
creditors or any class of them or the companypany and its
members or any class of them and number between the sponsor of
the scheme and the creditor or member. the scheme represents
a companytract sanctified by companyrts approval between the
company and the creditors and or members of the companypany. the
company may as well be in charge of directors and the
implementation of the scheme may companye through the agency of
directors but that would number lead to the companyclusion that
during the working of the scheme the directors cannumber be
changed. if the scheme has to be ultimately implemented by
the companypany as part of its companytract and yet its directors
can be changed according to its articles of association we
see numberdifference in the situation where a sponsor is
required to be changed in the facts and circumstances of a
case. therefore it is number possible to accept the submission
that as and by way of modification one sponsor of a scheme
cannumber be substituted for anumberher sponsor. 1204
we may number be understood to say for a moment that the
court can appoint any one as sponsor. the companyrt on which a
duty is cast by s. 392 1  to exercise companytinuous supervision
over the working of the companypromise and or arrangement must
in order to effectively discharge its duty examine the bona
fides of the person applying to be substituted as sponsor
his capacity his ability his interest qua the companypany and
other relevant companysiderations before substituting one
sponsor for anumberher. in a given case an application may be
rejected as the companyrt is of the opinion that the sponsor is
number one who can be trusted with the implementation of the
scheme but that is entirely a different thing from saying
that the companyrt has numberpower to make such a substitution as
and by way of modification of a companypromise or arrangement. number to the facts of the case. the appellants have
applied for substituting them as sponsors of the scheme in
place of dfm. they claim to have purchased 44000 shares out
of 80000 issued and subscribed equity shares of the
company. as stated earlier between the transferor and
transferee of the shares the transfer of the shares is
complete and number even seriously objected to by the
respondent as pointed out hereinbefore. the sponsor has
taken an assignment of a debt of rs. 23 lacs which ihi owed
to dfm from the creditor dfm. a gain as between the
transferor and transferee the assignment is companyplete. the
only objector is respondent holding 1000 equity shares
representing 1.25 per cent of the issued and subscribed
capital. an advertisement was directed to be inserted by the
order of the companyrt in newspapers in respect of the
application for substitution-modification made by the
appellants inviting every one interested in the companypany or
in the scheme of companypromise and or arrangement to companye and
lodge objection if it was so desired against
substitution modification prayed by the appellants. numbere
including the petitioning creditor except the respondent
jain has lodged such an objection. this procedure was also
followed by the gujarat high companyrt in mansukhlals  supra
case and by referring to that part of the judgment the high
court held that judgment itself is an authority for the
proposition that substitution of the sponsor is a vital
change of a basic nature and cannumber be ordered by the companyrt
acting under s. 392 and must be referred to a meeting of the
creditors or members. with respect this is number a fair
reading of the judgment. at pages 290-291 the scope and
ambit of the power of the companyrt under s. 392 has been
precisely set out and it is companycluded that the power to
modify would companyprehend the power to substitute one sponsor
for the other if he is found otherwise fit and companypetent. as
an additional string to the bow it was observed as it
1205
is being done here also that numberone has companye forward to
object to the substitution and that would further strengthen
the hands of the companyrt. such observation cannumber be companystrued
to mean that the companyrt lacks the power to make such a
modification without reference back to the creditors and or
members as the case may be. in the background of these
unimpeachable facts the companyclusion is inescapable that the
appellants have a subsisting and vital interest in the fate
and future of ihi and they are the appropriate persons who
could and should be substituted in place of the original
sponsor. in passing it was said that the fate of the companypany
should number be placed in the hands of the appellants and the
lack of bona fides of the appellants becomes discernible
from the fact that they tooth and nail opposed the very
scheme which they number seek to implement. this is hardly a
relevant companysideration. a creditor may companye and oppose a
scheme being implemented by some person and yet may be
interested in taking over the affairs of the companypany. this
could hardly be treated as a disqualification of the
appellants. lastly it may be mentioned that the appellants agree to
implement the scheme. they undertake to bring rs. 3 lacs as
liquid finance for implementing the scheme.


civil appellate and original jurisdictions civil appeal
number. 342 1264-65 4540 of 1984.
from the judgment and order dated 21.8.84 4.1.84 and
17.10.84 of the punjab and. haryana high companyrt in civil writ
petition number. 3672 31 and 4723 of 1984 respectively. with
writ petition number. 5286/85 13264-86/83 1118-20/84
12274 14151-53 13744 16123 17296 16907-08 17306 113-
14 2747 1180304 10229-35 12905 12837 5328-29/85 620
482/86 37-55/84 261 328 181 11972 12574 11200-05
17534 475-83 11233-34 11270-73/ 84 9597/83 5864/85
107 109-21/84 2599-93 3239-41/85 and c.m.p. number. 17551/87 w.p. number. 1276/87 2584/85 1490/86 slp  c  number. 7794/83 and cmp number 10886/88 in  w.p. number 1490/86  w.p. number
1009
937/88 with w.p. number 388 of 87 1212/87 and 1487/87.   under article 32 of the companystitution of india.  p. bhat v.m. tarkunde s.d. sharma a.k. ganguli
kapil sibbal k.g. bhagat ms. sudha sharma ms. asha rani
madan mahabir singh m.p. jha s.k. jain a.k. goel nandi-
ni gore h.k. puri manumber-swarup sushil k. jain rishi
kesh dvender n. verrna p.c. kapur b.b. swhney n.a. siddiqui k.k. gupta parveen kumar arvind minumberha har-
jinder singh s.m. ashri c.m. nayar r.k. talwar s. mar-
kandeya m.c. dhingra e.m.s. anam vishal malik b.b. tawakley m.m. kashyap jitender kumar sharma randhir jain

d. sikri jitender sharma d.d. gupta p.n. puri r.k.
kapur r.p. jugga r.c. setia mrs. m. karanjawala n.s. das
behal prem malhotra mrs. urmila kapur n.d. garg b.s. shant j.d. jam h. wahi s.k. jain d.m. nargolka mrs.
kawaljit kochar prem malhotra r.k. handa k.k. lahiri
pankaj kalra a.k. sanghi mahabir singh mrs. h. wahi k.k. mohan and p.n. puri for the appearing parties. the judgment of the companyrt was delivered by
singh j. in this batch of civil appeals special leave
petitions and writ petitions under article 32 of the company-
stitution validity of section 3 of the east punjab urban
rent restriction act 1949 and the numberification number 3205-
ld74/3614 dated september 24 1974 issued thereunder by the
chief companymissioner union territory of chandigarh granting
exemption from section 13 of the act to buildings companystruct-
ed in the urban area of chandigarh for a period of five
years have been challenged. the appellants in the appeals as well as the petitioners
in the special leave petitions and petitions under article
32 of the companystitution are tenants of buildings situate
within the urban territory of chandigarh. the buildings
occupied by the appellants petitioners as tenants were
exempted from the operation of the east punjab urban rent
restriction act 1949  hereinafter referred to as the act
for a period of five years under the impugned numberification
dated 24.9.1974. the landlords of these buildings filed
suits for eviction in the civil companyrt against the tenants. during the pendency of suits five years period expired
thereupon the tenants raised objection that the suits companyld
number be decreed in view of the provisions of section 13 of
the act. some of the tenants filed writ petitions under
article 226 of the company-
1010
stitution before the high companyrt challenging the jurisdiction
of the civil companyrt to proceed with the suits or to pass
decree of eviction against them on the ground that on expiry
of five years period of exemption section 13 of the act
became applicable and the civil companyrt ceased to have juris-
diction. the high companyrt repelled the tenants companytentions
and dismissed their petitions. the tenants filed civil
appeals special leave petitions in this companyrt challenging
the companyrectness of the order of the high companyrt. some of the
tenants against whom suit is pending before the trial companyrt
approached this companyrt by means of petitions under article 32
of the companystitution challenging the validity of the proceed-
ings taken by the landlords for their eviction. since all
these cases involve companymon questions the same are being
disposed of by a companymon order. the east punjab urban rent restriction act 1949 seeks
to regulate and restrict the increase of rent of premises
situate within the urban areas and the eviction of tenants
therefrom. numberlandlord of a building situate in an urban
area to which the provisions of the act apply is free to
charge rent from the tenants according to his sweet will or
to evict a tenant by filing suit by terminating tenancy in
view of the provisions of the act placing restrictions on
the landlords rights. the provisions of the act were ap-
plied and extended to the urban area of the union territory
of chandigarh by the east punjab urban rent restriction
 extension to chandigarh  act 1974. on such extension all
buildings situate in the urban area of chandigarh became
subject to the provisions of the said act with the result
landlords right to charge rent or to evict tenants at their
sweet will are curtailed and regulated in accordance with
the provisions of the act. the object of the east punjab
urban rent restriction act 1949 is to provide safeguards to
tenants against exploitation by landlords who seek to take
undue advantage of the pressing need for accommodation. the
provisions of the act provide for fixation of fair rent and
prevention of unreasonable eviction of tenants. sections 4
to 9 provide for fixation of rent its recovery enhancement
and other allied matters relating to rent. section 10 en-
joins the landlords number to interfere with the amenities
enjoyed by the tenants. section 11 prohibits companyversion of a
residential building into a number-residential building except
with the written permission of the companytroller appointed
under the act. section 12 mandates a landlord to make neces-
sary repairs in the building let out to a tenant and on his
failure it is open to the tenant to carry out repairs with
the permission of the companytroller and the companyt thereof may be
deducted from the rent payable to the landlord. section 13
places an embargo on the landlords right to get his tenant
evicted or to
1011
obtain possession of the building. numberdecree for eviction
against a tenant can be executed except in accordance with
the provisions of the section. a landlord seeking to evict a
tenant is required to apply to the companytroller appointed
under the act and if the companytroller after giving opportuni-
ty to the tenant is satisfied that the grounds set out in
section 13 2  and  3  are made out he may make order di-
recting the tenant to put the landlord in possession of the
building. the remaining provisions of the act deal with
appeals revisions and state governments powers to appoint
appellate authority and other allied matters. under the
scheme of the act a tenant of a building in urban area to
which the act applies cannumber be evicted from the rented
building or land except in accordance with the provisions of
section 13 of the act and the civil companyrt has numberjurisdic-
tion to pass a decree of eviction or to execute the same
against a tenant. section 3 of the act as amended by the extension act
1974 reads as under

the central government may direct that all
or any of the provisions of this act shall number
apply to any particular building or rented
land or any class of buildings or rented
lands. the chief companymissioner of union territory of chandigarh
exercising powers of the central government published a
numberification dated january 31 1973 exempting buildings
referred to therein from the operation of the act. it reads
as under
number 352-ld-73/602 dated january 31 1973.--1n
exercise of the powers companyferred by section 3
of the east punjab urban rent restriction act
1949  punjab act number iii of 1949  as applica-
ble to the union territory of chandigarh the
chief companymissioner chandigarh is pleased to
direct that the provisions of the said act
shall number apply to buildings companystructed in
the urban area of chandigarh for a period of
five years with effect from the date of sewer-
age companynection is granted in respect of such
buildings by the companypetent authority under
rule 112 of the punjab capital  d
evelopment and regulation  building rules
1952.
the aforesaid numberification was followed by anumberher
numberification dated september 24 1973 issued by the chief
commissioner chandigarh setting out the manner and method
for companyputing period
1012
of five years of exemption granted to the buildings company-
structed in the urban areas of chandigarh. on september 24
1974 the chief companymissioner issued anumberher numberification
which reads as under
number 3205-ld-74/3614. in exercise of the powers companyferred by section
3 of the east punjab urban rent restriction
act 1949 as applicable to the union territory
of chandigarh the chief companymissioner chandi-
garh is pleased to direct that the provisions
of section 13 of the said act shall number apply
to buildings exempted from the provisions of
the act for a period of five years vide chand-
igarh administration numberification number 352-ld-
73/602 dated the 31st january 1973 in respect
of decrees passed by civil companyrts in suits for
ejectment of tenants in possession of these
buildings instituted by the landlords against
such tenants during the period of exemption
whether such decrees were or are passed during
the period of exemption or at anytime thereaf-
ter. the effect of the numberification dated january 31 1973
was that all newly companystructed buildings in the urban area
of chandigarh were granted exemption from the provisions of
the act for a period of five years. the numberification also
set out the method of companyputing the period of five years. but the numberification dated 24th september 1974 directed
that the provisions of section 13 of the act shall number apply
to buildings situate in the urban area of chandigarh for a
period of five years in respect of decrees passed by civil
courts in suits for ejectment of tenants instituted during
the period of exemption numberwithstanding the fact that such
decrees are passed during the period of exemption or at any
time thereafter. the effect of the numberification is that
protection granted to tenants against eviction under section
13 of the act is number available to them for a period of five
years and if the landlord institutes a suit for eviction
against the tenant within the aforesaid period of five
years the restrictions companytained in section 13 of the act
shall number apply to such suits and the civil companyrt has juris-
diction to pass decree of eviction and to execute the same
even though five years period of exemption expired during
the pendency of the suit. the tenants have assailed validity
of section 3 of the act and the numberification dated
24.9.1974.
this is the third round of litigation initiated by
tenants in challenging section 3 of the east punjab urban
rent restriction act 1949
1013
and numberifications issued thereunder for the purpose of
granting exemption to the newly companystructed buildings in the
urban areas for a period of five years from the operation of
the provisions of the act. in amarnath basheshar dass v. tek
chand 1972 3 scr 922 this companyrt companysidered the validity
of numberification dated 30.7.1965 issued in exercise of the
power companyferred under section 3 of the act granting exemp-
tion to buildings companystructed during the years 1959 1960
1961 1962 and 1963 from all the provisions of the act for a
period of five years and the provisions of section 13 of
the act were number to apply in respect of decrees for eject-
ment of tenants in possession of buildings provided the suit
was instituted in civil companyrt by the landlord against the
tenant during the period of exemption. this companyrt upheld the
numberification granting exemption and it further held that if
the suit was instituted within the period of exemption
decree companyld be passed even after the expiry of the period
of five years and the same companyld be executed. the second
round of litigation came up to this companyrt in punjab tin
supply companypany chandigarh etc. v. central government ors. 1984 1 scr 428 where the validity of section 3 of the act
as well as the validity of the impugned numberification date
24th september 1974 were assailed on a number of grounds. on
an elaborate discussion this companyrt upheld the validity of
section 3 of the act and the impugned numberification. the
court held that the numberification granting exemption advanced
the scheme object and purposes of the act and it did number
violate any of the provisions of the act and it was number
discriminatory arbitrary or unreasonable. in the instant
cases anumberher attempt has been made to challenge the valid-
ity of section 3 and the numberification dated 24.9. 1974. most
of the arguments advanced by learned companynsel for the appel-
lants and petitioners are the same which have already been
considered and rejected by this companyrt in the aforesaid cases
but learned companynsel made attempts to raise some additional
submissions in assailing the validity of the numberification to
which we shall refer at the appropriate stage. sh. tarkunde and other companynsel appearing for the tenants
in the instant cases made several submissions in challenging
the validity of section 3 of the act and numberification dated
24th september 1974. when the earlier decision of this
court in punjab tin supply companypanys case  supra  was
brought to their numberice where the impugned numberification
itself had been held valid the learned companynsel made an
effort to challenge the validity of the numberification on
additional grounds. these submissions are directed against
the second part of the impugned numberification which states
whether such decrees were or are passed during the period of
exemption or at any time thereafter
1014
 emphasis supplied . they urged that the numberification grant-
ed exemption to newly companystructed buildings from the opera-
tion of section 13 of the act for a period of five years but
the second part of the numberification as extracted and par-
ticularly the expression at any time thereafter enlarged
the exemption for an indefinite period and it tends to amend
section 13 of the act number permissible under the law. the
submissions made by the companynsels are  i  section 3 is
unconstitutional as it delegates essential legislative
function to the central government without laying down any
guidelines for exercise of the power of exemption  ii  the
impugned numberification enlarges the period of exemption for
an indefinite period and it tends to amend section 13 of the
act and it is companytrary to the object and purpose of the act
rather it defeats the protection granted to a tenant by the
act  iii  the numberification is discriminatory as it creates
two class of tenants tenants of old buildings which never
enjoyed the exemption from the provisions of the act and the
tenants of the newly companystructed buildings which are denied
the protection of the act. some of the learned companynsels appearing for the tenants
submitted that we should refer these cases to a companystitution
bench in view of the observations made by a three-judges
bench of this companyrt in narendra kurnar sharmas case  naren-
dra kumar sharma v. srnt. kailashwati c.a. number 3994 of
1982 . while granting leave a bench of three-judges passed
the following order on numberember 9 1983
after hearing the companynsel for both the par-
ties at some length it seems to us that the
correctness of the decisions in firms amar
nath bashesh das v. tek chand 1972 3 scr
922 is open to doubt. it appears that the
interpretation placed by the companyrt as to the
scope and effect of the exemption in section 3
of the east punjab urban rent restriction act
1949 which is pari-materia with section 3 of
the east punjab urban rent restriction act
1949  as extended to the union territory of
chandigarh  with which we are companycerned in
this appeal requires reconsideration. we do
feel that the second part of the impugned
numberification issued by the chief companymissioner
chandigarh dated september 24 1974 under
section 3 of the act in effect permits the
civil companyrts to pass decrees in suits for
ejectment of tenants instituted by the land-
lords even after the expiry of the period of
exemption companytrary to the statutory bar
contained in section 13 of the act and there-
fore it companyld number be upheld. 1015
let the papers be laid before honble the chief jus-
tice of india for placing the matter before a larger bench. on 23rd april 1986 bhagwati c.j.  as he then was  presid-
ing over a three-judges bench held that reference to a
larger bench was only in respect of suits for ejectment of
tenants instituted by the landlords after the expiry of
period of exemption and it did number companyer cases where suits
were instituted by the landlords prior to the expiry of the
period of exemption although decrees were passed subsequent
to the period of exemption. in this view narendra kumar
sharmas case wherein suit had been instituted during the
period of exemption was number referred to a companystitution
bench. anumberher bench companysisting of honble khalid and hon-
ble dutt jj. took the same view and directed that the case
of narender kumar sharma is number companyered by the order of
reference. ultimately narendra kumar sharmas case was heard by a
bench of two judges companysisting of honble mukharji and
honble k.j. shetty jj. and it was dismissed on merits on
september 24 1987. it appears that during the pendency of
narendra kumar sharmas case the tenants encouraged by the
observations made in the order dated 9.11.1983 approached
this companyrt again to challenge the validity of the numberifica-
tion by means of the present batch of petitions. in our
view observations made in narendra kumar sharmas case by a
bench of three-judges do number pertain to suits filed by the
landlords during the period of exemption although decree may
have been passed after the expiry of exemption. in the
instant cases numbere of the cases fall into that category
there is therefore numberjustification for referring these
cases to a larger bench. before we companysider the submissions made on behalf of the
tenants we would like to point out that some of the tenants
who were unsucessful before this companyrt in punjab tin supply
companys case have again filed petitions challenging the
validity of section 3 and the impugned numberification on
additional grounds. in our opinion the petitions by such
tenants are number maintainable as the same are barred by
principles of res-judicata. once the petitioners challenged
the validity of the impugned numberification dated 24.9.1974 in
earlier proceedings they ought to have raised all the
grounds which companyld have been raised in impugning the valid-
ity of section 3 and the numberification if they failed to
raise a ground in earlier petition they cannumber raise that
ground number in the present proceedings. finality in litiga-
tion and public policy both require that a litigant should
number be permitted to challenge validity of
1016
the provisions of the act or numberification at different times
on different grounds. once petitioners challenge to section
3 and the impugned numberification was companysidered by the companyrt
and the validity of the same was upheld it must be presumed
that all grounds which companyld validly be raised were raised
and companysidered by the companyrt. learned companynsel for the peti-
tioners urged that the questions which are being raised in
the present proceedings were neither raised number companysidered
by this companyrt in punjab tin supply companypanys case therefore
it is open to them to question the validity of section 3 and
the numberification dated 24.9.1974. this submission is company-
trary to the principles of res judicata and it further
ignumberes the binding effect of a decision of this companyrt under
article 141 of the companystitution. the binding effect of a
decision of this companyrt does number depend upon whether a par-
ticular argument was companysidered or number provided the point
with reference to which the argument is advanced subse-
quentiy was actually decided in the earlier decision see
smt. somavanti and ors. v. state of punjab ors. 1963 2
scr 774 t. govindaraja mudaliar etc. v. state of tamil nadu
ors. 1973 1 scc 336 and anil kumar neotia and ors. v.
union of india others 1988 2 scc 587. it is therefore
numberlonger open to the petitioner-tenants to challenge the
validity of section 3 of the act and the impugned numberifica-
tion dated 24.9.1974 on the ground that some points had number
been urged or companysidered in punjab tin supply companypanys
case. on the principles of res judicata and also in view of
article 141 of the companystitution the law declared by this
court in punjab tin supply companypanys case is binding on the
petitioners. but even otherwise the submissions made on
their behalf in impugning the validity of section 3 and the
numberification dated 24.9.1974 are devoid of any merit as we
shall presently discuss the same. the challenge to the validity of section 3 of the act on
the ground that it suffers from the vice of excessive dele-
gation of legislative power need number detain us long in view
of a number of decisions of this companyrt. similar provision
contained in section 13 of the madras buildings  lease and
rent companytrol  act 1949 was upheld by a companystitution bench of
this companyrt in p.j. irani v. the state of madras 1962 2
scr 169. in sadhu singh v. the district board gurdaspur
anr. c.a. 2594/66  decided on 29th october 1968  this
court held that section 3 of the east punjab urban rent
restriction act 1949 does number suffer from the vice of exces-
sive delegation of legislative power number it violates article
14 of the companystitution. section 3 2  of the madhya pradesh
accommodation companytrol act 1961 companyferring power on the
government to exempt certain accommodations from all or any
of the provisions of the act was upheld in the state of
madhya pradesh v.
1017
kanhaiyalal 1978  15  mplj 973. in fact validity of
section 3 of the act was again upheld by this companyrt holding
that it does number suffer from the vice of excessive delega-
tion of legislative power in m s punjab tin supply companypanys
case  supra . we find numbergood reason to take a different
view we therefore hold that section 3 of the act does number
suffer from vice of companystitutional infirmity and it is a
valid provision. as regards the validity of the impugned numberification
dated 24.9.1974 is companycerned it is necessary to examine the
object and purpose of the exemption granted by the numberifica-
tion. the paramount object of the act like and other rent
control legislations is to safeguard the interest of tenants
against their exploitation by landlords. after the second
world war there has been movement of population from rural
areas to urban areas as a result of which the problem of
accommodation became acute in cities. landlords of the
buildings took full advantage of the situation and they
charged exhorbitant rent from tenants and very often evicted
them by terminating tenancy under the provisions of transfer
of property act. the tenants were helpless as the suits once
filed by the landlord after terminating the tenancy were
bound to succeed. the legislature of different states took
cognizance of the situation and enacted rent companytrol legis-
lations providing safeguards for tenants by making provision
for fixation of reasonable rent and also placing restric-
tions on the landlords right to evict tenants. generally
the rent companytrol legislation of various states exclude the
jurisdiction of civil companyrts to entertain a suit or pass a
decree of eviction against a tenant instead the jurisdic-
tion to evict a tenant is companyferred on rent companytroller or
some designated authority and the statutory grounds for
eviction of a tenant have been laid down. the multiple
restrictions placed on the landlords right to charge rent
from tenants or to evict them from buildings resulted into
shortage of accommodation because those who had money and
capacity to build new houses were discouraged from investing
money in companystructing buildings on account of the restric-
tions placed by rent companytrol legislations. the legislature
stepped in to meet the situation in making provision for
granting exemption to newly companystructed buildings for cer-
tain number of years from the operation of the restrictions
of the rent companytrol legislations. these steps were taken to
meet the acute scarcity of accommodation and to encourage
landlords to companystruct buildings which would ultimately ease
the situation of shortage of accommodation to a large ex-
tent. provisions for exempting the newly companystructed build-
ings from the restrictions of the rent companytrol legislations
for a limited period have been enacted by the punjab uttar
1018
pradesh haryana and madhya pradesh legislature. while
considering the interpretation and validity of the provi-
sions granting exemption either by statutory provision made
in the act or by a numberification issued under the act it is
necessary to bear in mind the object and purpose of exemp-
tion to newly companystructed buildings. the paramount object
and purpose of exemption is to provide incentive for company-
struction of new buildings to meet the shortage of accommo-
dation which would ultimately result in benefitting the
tenants. learned companynsel urged that the impugned numberification
enlarged the period of exemption for an indefinite period
and it tends to amend section 13 of the act and it is company-
trary to the object and purpose of the act. developing the
argument it was submitted that the numberification granted
exemption to newly companystructed buildings in the urban area
of chandigarh for a period of five years only from the
operation of section 13 of the act therefore numberexemption
could be available to newly companystructed buildings after the
expiry of five years. a suit if instituted during the period
of exemption companyld number be decreed number such decree companyld be
executed after the expiry of five years period but the last
portion of the numberification which states that section 13 of
the act shall number apply to decree of civil companyrts whether
such decree was passed during the period of exemption or at
any time thereafter enlarged the period of exemption for an
indefinite period of time and it seeks to amend section 13
of the act. we do number find merit in the submission. as
numbericed earlier section 13 1  imposes a companyplete ban against
the eviction of a tenant in execution of a decree passed by
a civil companyrt before or after the companymencement of the act
and it further lays down that a tenant in possession of a
building or rented land shall number be evicted except in
accordance with the provisions of section 13 or an order
made in pursuance of the provisions of the act. subsection
 2  of section 13 sets out statutory grounds on which the
controller an authority companystituted under the act has power
to pass order of eviction against a tenant. section 13 takes
away the jurisdiction of civil companyrt to pass a decree of
eviction or execution thereof against a tenant in respect of
a building which is subject to the provisions of the act. the impugned numberification grants immunity to newly company-
structed buildings from the shackles of section 13 of the
act for a period of five years. while doing so the numberifi-
cation has taken care to make the exemption effective by
providing that the exemption shall be available to the
building even if the decree is passed after the expiry of
the period of five years provided the suit is instituted
during the period of exemption. the emphasis is on the
institution of the suit within the period of exemption of
five years. once the landlord institutes a suit
1019
before the expiry of the period of exemption the decree
even if passed after the period of five years will number be
subject to the provisions of section 13 of the act. this is
the true meaning of the numberification. the numberification does
number enlarge the period of exemption instead it safeguards
the rights of the parties which crystallise on the date of
institution of the suit. section 3 which provides for granting exemption from the
provisions of the act is by way of an exception to section
13 and therefore the two provisions need number be companysistent
in their effect. the object of having a proviso or exemption
is to neutralise the effect of the main provision. if that
is number so it would number be necessary to have an exemption
since public purpose as well as larger interest of tenants
require availability of more and more accommodation in the
shape of new buildings and for that purpose exemption is
necessary to be provided. in ultimate analysis provisions of
sections 3 and 13 both seem to achieve the same result. the
submission that the numberification granting exemption to newly
constructed buildings is companytrary to the object and purpose
of the act ignumberes the resultant effect of exemption. the
object and policy of the act is to mitigate hardship of
tenants. this can be done in several ways and one of them
being to provide incentive to persons having resources to
invest money in the companystruction of new buildings. as dis-
cussed the shackles of the rent companytrol legislation had
chilling effect on the landlords and they were reluctant to
invest their capital in making new companystructions. by grant-
ing holiday from the restrictions of regulations of rent
control laws impetus was given to the landlords to company-
struct new buildings so that after the expiry of period of
exemption the building so companystructed are available for
needy tenants companytrolled by the act. in punjab tin supply
companys case  supra  similar argument raised on behalf of
the tenants was repelled and the companyrt held that the numberifi-
cation granting exemption was number companytrary to the object and
purpose of the act instead it advanced the ultimate purpose
of the act to provide accommodation to tenants. similarly in
mohinder kumar etc. v. state of haryana anr. 1985 4 scc
221 provisions of the haryana act granting exemption to
newly companystructed buildings for a period of ten years was
held to advance the purpose of rent companytrol legislation. in
our opinion the impugned numberification granting exemption is
number companytrary to the object and purpose of the act number it
destroys protection granted to tenants under the act. the
exemption is for a limited period and after the expiry of
the period of exemption the building would fall within the
purview of the act and it would be regulated by the provi-
sions companytained therein subject to the impugned numberifica-
tion. 1020
in amar naths case  supra  the numberification granting
exemption did number direct that the decree passed after the
expiry of period of exemption would also be exempted from
the operation of section 13 of the act. in that case similar
argument was raised that number only the suit should be filed
during the period of exemption but the decree of eviction
must also be obtained within the period of five years. this
court rejected the submission saying that the companytention on
the very face of it if accepted would lead to incongruity
and shall nullify the purpose for which exemption was grant-
ed. the companyrt held that while companysidering the purpose of
exemption of building from operation of section 13 the
numberification granting exemption must be interpreted in the
light of the object and purpose of exemption and if the
contention that both the suit and the decree should be
passed within the period of exemption is accepted that would
defeat and nullify the purpose of exemption. it is a matter
of companymon knumberledge that final disposal of suits before the
civil companyrt are time companysuming in view of the heavy work
load of cases and dilatory tactics adopted by the interested
party. having regard to time numbermally companysumed for adjudica-
tion of a suit by the civil companyrt it is too much to expect
that a suit filed within the period of exemption of five
years can be disposed of finally within the period of exemp-
tion. the exemption companytemplated by the numberification permits
the institution of a suit within the period of exemption
taking into account the delay caused in disposal of the
suit it further protects the jurisdiction of the civil
court in passing decree of eviction with a view to make the
exemption effective and meaningful. in this view if the
submission made on behalf of the tenants is accepted it
would render the exemption illusory as in reality it will
be impossible for a landlord to get the suit decreed within
the period of exemption even if he instituted the suit
within the period of exemption. interpretation of the act
and the impugned numberification as suggested on behalf of the
tenants if accepted would defeat the purpose of the benefi-
cial social legislation. it is a settled rule of harmonious
construction of statute that a companystruction which would
advance the object and purpose of the legislation should be
followed and a companystruction which would result in reducing a
provision of the act to a dead letter or to defeat the
object and purpose of the statute should be avoided without
doing any violence to the language. we therefore reject the
submission made on behalf of tenants. learned companynsel for the tenants placed reliance on the
decisions of this companyrt in vineet kumar v. mangal sain
wadhera 1984 3 scc 352 and shiv kumar v. jawahar lal
verma 1988 4 scc 763 in support of their submission that
once five years period of exemption
1021
expired during the pendency of the suit the civil companyrt
ceased to have jurisdiction to pass decree of eviction or to
execute the same. in these decisions section 2 2  of the

p. urban buildings  regulation of letting rent and evic-
tion  act 1972 granting immunity to newly companystructed
buildings for a period of 10 years from the operation of the
act was companysidered and interpreted. in both of these deci-
sions a bench of two judges held that on the expiry of 10
years period of exemption during the pendency of the suit
the provisions of the act would apply and the tenant is
entitled to the protection of section 39 of the act and no
decree of eviction companyld be passed against him. on behalf of
the landlords it was urged that the view taken in the afore-
said two cases is incorrect and companytrary to the observations
made by a larger bench of this companyrt in om prakash gupta v.
dig vijendrapal gupta 1982 3 scr 491 and also against the
decision in nand kishore marwah v. smt. samundri devi
1987 4 scc 382. it was further urged that section 39 of
the u.p. urban buildings  regulation of letting rent and
eviction  act 1972 protects the tenant from eviction provid-
ed the suit was pending on the date of companymencement of the
act and number to a suit instituted thereafter. in the afore-
said decisions it was held that a suit for eviction insti-
tuted within period of exemption of 10 years companyld be de-
creed by the civil companyrt even if during the pendency of the
litigation 10 years period of exemption expired. the companyn-
sel for the landlords further placed reliance on the deci-
sion of this companyrt in atma ram mittal v. ishwar singh punja
1988 4 scc 284 wherein section 13 of the haryana urban
 companytrol of rent and eviction  act 1973 granting exemption
to newly companystructed building for a period of 10 years was
considered. the companyrt held that a suit instituted within the
period of exemption for eviction of the tenant companyld legal-
ly be decreed even if the period of exemption expired during
the pendency of the suit. these decisions numberdoubt support
the view we are taking but we do number companysider it necessary
to companysider these decisions in detail as the provisions of
the rent companytrol legislation which were companysidered in those
decisions were quite different which did number expressly
preserve the jurisdiction of the civil companyrt to decree the
suit after expiry of the period of exemption while the
impugned numberification in express terms maintains the juris-
diction of the civil companyrt to decree a suit for eviction
even if the period of exemption expires during the pendency
of the suit. there is numberprovision under the u.p. urban
buildings  regulation of letting rent and eviction  act
1972 or the haryana urban  companytrol of rent and eviction  act
1973 companytaining similar provision as companytained in the im-
pugned numberification. we therefore do number companysider it neces-
sary to discuss the aforesaid decisions in detail or to
express any final opinion about the companyrectness of the same. 1022
it was then urged that the impugned numberification prac-
ticed discrimination between two class of tenants in the
union territory of chandigarh. the two class of tenants are

the tenants of old buildings which were never exempted
from the provisions of the act the tenants of the buildings
entitled to protection of the act and  ii  the tenants of
newly companystructed buildings exempted from the protection of
the act who are liable to be evicted at any time at the
mercy of the landlord. in mohinder kumar v. state of haryana
anr.  supra  this companyrt companysidering a similar challenge
to the validity of section 13 of the haryana urban  companytrol
of rent and eviction  act 1973 held that the classification
of buildings with reference to the date of companypletion for
the purposes of regulating the rent and eviction of tenants
from such buildings has a rational basis and has a clear
nexus with the object to be achieved. classification is
rounded on intelligible differentia which has a rational
nexus with the object of the act. it does number practice any
invidious discrimination between two classes of tenants the
classification is reasonable and it does number violate article
14 of the companystitution of india. it is number necessary to
discuss the question further as we are in full agreement
with the view taken in mohinder kumars case  supra . the
object and purpose of the exemption as discussed earlier is
to effectuate the purpose of the act to ensure availability
of more and more accommodation to meet the need of tenants.