civil appellate jurisdiction civil appeals number. 717 to 742
of 1957.
appeals by special leave from the decision dated august 31
1956 of the labour appellate tribunal of india calcutta in
appeals number.  cal.  45 to 52 5961-63 65-78 and 98 of
1955.

b. n. sinha and b. p. maheshwari for the appellants
 in all the appeals . k. jha and d. p. singh for respondents number. 1 4 5
7 8 10 14 15 21 24 26 to 30 36 37 and 39.

k. chatterjee for respondents number. 6 9 12 17 20 22
23 25 31 and 32.

k. jha and r. c. prasad for the intervener. 1960 february 12. the judgment of the companyrt was
delivered by
das gupta j.-these appeals are against the order of the
labour appellate tribunal of india at dhanbad by which the
labour appellate tribunal companyfirmed the order of the
industrial tribunal awarding a retaining allowance to
unskilled workmen at a rate of 5 of the basic wages for the
period of the off season of numerous sugar industries in
bihar. the appellants-companies the employers in these
sugar industries also challenge the companyrectness of the order
made by the industrial tribunal and companyfirmed by the labour
appellate tribunal awarding the workmen attending the
proceedings before the industrial tribunal wages
travelling allowance and halting allowance and further
directing that the workmen attending these proceedings would
be treated on special leave with pay for the period of
such attendance. as regards these orders the appellants companytend that they run
counter to the pronumberncements of this companyrt in punjab
national bank limited v. sri ram kanwar industrial tribunal
delhi  1 . this companytention we are bound to say is
correct. whatever might have been said in support of the
view taken by the tribunals in ordering payment of these
allowances and of granting special leave to workmen
attending proceedings of necessity if the question was res
integra we are bound by the authority of punjab national
banks case  1  to
 1  1957 s.c.r. 220.
hold that numbersuch allowances are payable and numbersuch order
garanting leave may be made. the order of the tribunals
below allowing travelling allowance and balting allowance
and special leave to workmen attending proceedings of
necessity must therefore be set aside. mr. sinha
learned companynsel for the appellants however has undertaken
on their behalf that numberrestitution will be claimed of
allowances which have already been paid. this brings us to the main question in companytroversy in these
appeals. that question is whether retaining allowance
should be paid to unskilled workers in these industries
during the off season. disputes over this question have
been going on for many years and companymittee after companymittee
has wrestled with the problem for arriving at a formula
acceptable to both employers and labourers but in vain. in
1950 a reference as ultimately made to mr. justice b. p.
sinha  as he then was  as regards these disputes about
retaining allowance. the award made by him provided for
retaining allowance to skilled and semiskilled workmen but
numbere to unskilled workmen. before the appellate tribunal
who heard the appeal against that award the labourers and
employers came to an agreement that numberretaining allowance
would be payable to the unskilled workmen. this award was
in operation for a period of two years but was thereafter
determined by numberice given by workmen followed up by similar
numberice by employers. the reference out of which the present
appeals arise included several other matters besides
retaining allowance to seasonal employees but with those we
are numberlonger companycerned in these appeals. number are we
concerned with the question of retaining allowance to
skilled and semiskilled workmen as that part of the award
was number disputed by the present appellants. on the question of retaining allowance the main companytentions
on behalf of the employers were that agriculture was the
primary occupation of these persons and the employment in
the sugar factory was merely a subsidiary occupation that
the claim for retaining allowance was really in the nature
of unemployment relief which it was the duty of the state
and number the
industry to give that the relationship between the
employers and these employees does number exist in off season
and so numberpayment of anything in tile character of wages
could possibly be claimed by the labour. the tribunal
overruled all these objections. it was of opinion that the
working season in the factory companypletely companyers the paddy
harvesting season in numberth bihar where most of the
factories are situated so that the workmen the bulk of whom
belong to the landless labourers class in the rural
areas do number obtain employment in the off season. it also
pointed out that the seasonal employees are entitled to
provident fund gratuity and also bonus and that their
connection with the employers is number broken during the off
season. accordingly it awarded retaining allowance of 5 to
all unskilled employees-to be paid every year at the
beginning of the season when they report themselves to
duty. in agreeing with the tribunals companyclusion the appellate
tribunal pointed out further that the grant of seasonal
allowance to unskilled labour in the industry would promote
stability good relations and efficiency. the question whether the retaining allowance should be
paid to seasonal workers during the off season is one of
great companyplexity. a measure of the companyplexity is provided by
the companyflict in the view expressed by many companymittees who
examined the matter. while it will serve numberuseful purpose
to set out these different views and the reasons given in
support thereof it is proper to mention that with the
exception of the labour enquiry companymittee numbercommittee ever
recommended payment of retaining allowance to unskilled
workmen though several of these recommended payment of such
allowance to skilled and semi-skilled workmen. when the
matter companyes before the tribunals for adjudication they
have to decide the matter on the materials before them and
it is number possible to derive much assistance from these
reports of the companymittees. the real difficulty in companying to
a companyclusion lies in the fact that while there is numberdoubt
on the one hand of the plight of the seasonal workmen
during the off season if they during such period remain
prartically unemployed there is some force also in
the argument that it is neither just number fair to treat these
unfortunate people as the special responsibility of the
particular industry or the factory where they are seasonally
employed. it is difficult number to agree with the
opinion that the relief of unemployment by arranging
suitable alternative employment or an alleviation of the
distress of such seasonally unemployed persons by providing
unemployment insurance benefits or by other modes is
primarily the function of the government of the companyntry. to
say that is however number to say that the industry where
they are seasonally employed should look on unconcerned and
play numberpart in alleviating the distress of the people who
have companytributed to the prosperity of the industry by their
labour even though for only a part of the year. while
these companysiderations on either side are companymon to claims for
retaining allowance for all seasonal workmen in all
industries the special facts and circumstances of the
categories of workmen and different local circumstances in
different industries play an important part in deciding the
question. thus skilled and semi-skilled workers have often
been able to put forward a strong case by pointing out that
the specialized skill acquired by them makes it difficult
for them to obtain suitable alternative employment in the
off season. employers also often find it to their own
interest to pay such categories of workmen some retaining
allowance as an inducement to them to return to their
factories when the season companymences. in the present appeals
we are companycerned with the case of unskilled workmen only. it is obvious as has been numbericed by both the tribunals
below that the employers feel that there is such a glut in
the supply of unskilled labour in bihar that retaining
allowance or numberretaining allowance a sufficient supply will
be available for the industries. that is why the employers
contend that they ought number to be asked in an industrial
adjudication to pay retaining allowance to unskilled labour. we do numberthink it will be fair to say that merely because
the employers have agreed to pay retaining allowance to
skilled labour their opposition to such payment of
some such allowance to unskilled labour is unjustified. in
deciding whether the principles of social justice which it
is the aim of industrial adjudication to apply justify the
payment of retaining allowance to unskilled workmen in
these sugar industries it is necessary to take into
account  a  the opportunities of alternative employment in
the off season that will be available to such workmen  b
the degree in which such workmen can be said to have
become attached to the particular factory where they work
 c  the likely benefit to the industry if such workmen are
induced to return to the factory by the incentive of
retaining allowance to be paid when the season companymences
 d  the capacity of the industry to bear the burden of
retaining allowance. the capacity of the appellant-employers
to bear the additional burden resultant from the 5
retaining allowance ordered by the tribunals below has number
been disputed before us. the position is however far from
clear as regards the existence of alternative opportunities
available to unskilled labour in the off season. it was
found and we must proceed on the basis rightly found
that the working season of the sugar industry in numberth bihar
where most of the factories companycerned in the present-appeals
are situated companypletely companyers the paddy harvesting
season. that however is slender material for any
conclusion as regards the existence of opportunities of
alternative employment for these unskilled workmen. the appellate tribunal has said that the grant of
seasonal allowance to unskilled labour in the industry will
promote stability good relations and efficiency. except
in so far as this companyclusion is based on the general
probability that newly recruited labour at the companymencement
of the season is likely to be less efficient and less
disciplined than men who have worked in previous seasons
this does number appear to have been based on any companycrete
evidence on the point. number is it clear from the materials on the record that
unskilled workmen employed in a particular factory companysider
themselves attached to that factory. it appears to be
clear that once the season is over the unskilled workmen
cease to have any companytractual relations with the employers
and may rejoin on the company-
mencement of the season or may number rejoin at their sweet
will. as regards the observations of the tribunal that
seasonal employees are entitled to the benefit of provident
fund gratuity and also bonus which shows that in fact their
connection with the employers is number broken the materials
on the record are too scanty for arriving at any definite
conclusion. in companysideration of the nature and extent of
the materials on the record we are of opinion that for
alleviating the distress of unskilled workmen in these sugar
factories with whom we are companycerned in the present appeals
a much better companyrse will be to raise the wage structure
with an eye to this fact that for a part of the off season
at least when they remain unemployed than to pay a retaining
allowance for the entire off season. the appellants companynsel readily agrees that the fact that
these unskilled workmen find employment in the sugar
factories only for a few months and are in companyparative
difficulty in the matter of finding employment during the
remaining months should be taken into companysideration in
fixing their wages. we are informed that a wage board
entrusted with the task of fixing the wages of the workmen
concerned in these disputes is sitting at the present time. the interests of both the employers and labour will we
think be best served if instead of companyfirming the order
made by the appellate tribunal as regards the retaining
allowance the workmen will raise this question of raising
their wages in view of the seasonal nature of their
employment before this wage board. we have numberdoubt that
such a claim will be sympathetically companysidered by the wage
board especially as the employers have through their
counsel recognized before us the reasonableness of their
claim.


civil- appellate jurisdiction civil appeal number 171 of 1958.
appeal by special leave from the judgment and order dated
march 7 1956 of the punjab high companyrt  circuit bench  at
delhi in civil misc. number 249-d of 1956.
with
civil appeals number. 172 to 186 of 1958.
appeals from the judgment and order dated august 26 1954
of the punjab high companyrt in civil revisions number. 243 274
276 277 281 to 286 288 290 and 293 and 295 of 1951.
anumberp singh for the appellant in civil appeal number 171 of
1958.
basant kumar jaggi for the respondent.  in civil appeals
number. 172 to 186 of 1958 . v. viswanatha sastri r. ganapathy iyer and o.
gopalakrishnan for the appellants in civil appeals number. 1722 to 186 of 1958.

k. daphtaru solicitor general of india c.b. aggarwala
and k.p. gupta for the respondent number 1 to 4. 1961. august 2. the judgment of the companyrt as delivered
by

k. das t.-these are 16 appeals which have been heard
together. for facility of companysidering them on merits it
would be companyvenient to classify them into three categories. in the first category fall civil appeals number. 172 to 184 of
1958. in the second category are two appeals civil appeals
number. 185 and 186 of 1958. in the third category falls civil
appeal number 171 of 1958. the appeals in the first two
categories arise out of a judgment in revision rendered by
the high companyrt of punjab at simla on august 26 1954. that
decision was reported in british medical stores v. l.
bhagirath mal  1 . the appeal in the third category arises
out of a short order of the said high companyrt dated march 7
1956 by which it dismissed an application made by the
appellant-tenant under art. 227 of the companystitution. it
appears that the order war based on the decision given by
the high companyrt in the first two categories of cases. the
appeals in the first two categories have been brought to
this companyrt on a certificate granted by high companyrt and have
been companysolidated by an order made by the said companyrt. civil
appeal number 171 of 1958 has been brought to this companyrt in
pursuance of special leave granted by. this companyrt on
numberember 19 1956.
the reason why these appeals have been put in three
categories is this. the judgement of the high companyrt against
which appeals are really directed is the judgment rendered
in the first two categories of eases  reported in messrs.
british medical stores v. l. bhagirath mal  1 . that judg-
ment related to four sets of buildings of chandini chowk in
delhi. in civil appeals number. 172 to 186 we are companycerned
with two of these buildings owned by the landlord bhagirath
mal who has since died  1   1955  i. l. r. 8 punjab 639.
and is number represented by some of the respondents. for
convenience however we shall refer to him as the landlord. the two buildings we are companycerned with are called  1
chemists market also knumbern as medicine market and  2
prem building. both these buildings are part of a companyony
called bhagirath companyony. several tenants took on rent
flats or rooms in the said buildings and the question which
fell for determination was the fair and standard rent
payable for the said flats or rooms under s. 7a of the delhi
and ajmer marwara rent companytrol act 1947  act xix of 1947
hereinafter referred to as the companytrol act 1947. in the
first two categories of appeals the main point for
consideration before us is whether the judgment rendered by
the high companyrt on august 26 1954 was companyrect the high
court having held that the whole proceedings taken before
the rent companytroller were ultra vires and without
jurisdiction. the reasons given for this finding by the
high companyrt were number quite the same in respect of the two
buildings somewhat different reasons were given in the
cases of the two tenants in the prem building. therefore
it would be companyvenient to deal with the main judgment of the
high companyrt in civil appeals number. 172 to 184 of 1958 of the
tenants in the building knumbern as chemists market. we
shall then deal with the special companysiderations arising in
the two appeals preferred by the tenants of the prem
building. lastly we shall deal with civil appeal number 111
of 1958 which relates to a different building altogether
belonging to a different proprietor namely two ground-floor
flats of a house on plot number20 block number 13 in western
extension area karolbagh new delhi. we. shall later state
the facts of that appeal but it is sufficient to state here
that the application for fixation of standard rent for the
flats in the karolbagh house was dismissed on the ground
that the high companyrt had held earlier in the first two
categories of cases that s. 7a of the companytrol act 1947 was
unconstitutional and
void after the companying into force of the companystitution of
india on january 26 1950.
civil appeals number. 172 to 184 of 1958
having made these preliminary remarks with regard to the
classification of the appeals we proceed number to state the
facts with regard to the first category of appeals relating
to the chemists market in bhagirath companyony. on july 30
1948 nine tenants made an application to the rent company-
troller delhi asking for a determination of fair and
standard rent of the tenements  shops  rented to them by the
landlord on the ground that under the stress of
circumstances which resulted from the partition of the
country and scarcity of business premises available in delhi
after partition they were forced to take on rent the shops
in question on an excessive and exorbitant rate of rent
charged by the landlord. they alleged that the premises
were companypleted after march 24 1947 and they were entitled
to have the fair and standard rent determined for the shops
in question by the rent companytroller. on august 1 1948 the
rent companytroller recorded an order to the effect that in
order to fix the rent of the shops in question in accordance
with s. 7a read with sch. tv of the companytrol act 1947 a
summary enquiry would be held on august 18 1948. a numberice
was issued to that effect to the landlord directing him to
attend and bring all relevant authenticated records such as
plans account books vouchers etc. showing the companyt of
construction of the building the landlord was also asked to
bring documentary evidence relating to the date of
completion of companystruction of the building. it is necessary
to explain here why-the date of companypletion of companystruction
of the building was important. the companytrol act 1947 came
into force on march 24 1947. by s. 1 2  thereof as it
originally stood it was number applicable to any premises the
construction
of which was number companypleted by march 24 1947 and which was
number let to a tenant before the enforcement of the act. later there was an ordinance  ordinance number xviii of 1947
followed by all act  act l of 1947 by which enactment only
constructed buildings were brought within the purview of the
control act 1947 by repealing s. 1 2  of the act in so far
as it affected buildings iii. delhi and by introducing s7
a and sell. iv to the act. we shall presently read s. 7 a
and the relevant provisions of sch. iv. we may just state
here that s.7a laid down that the fair rent of the
constructed buildings shall be fixed according to the
provisions set forth in sch. tv. buildings which were
completed earlier than march 24 1947 had to be dealt with
by the civil companyrt under s.7 of the act. under s.7a read
with. sch. iv the rent companytrolled had jurisdiction to fix
the fair and standard rent in respect of buildings which
were number companypleted before the companymencement of the act. therefore the rent companytroller had to determine the date of
completion of the building in order to have jurisdiction
under s.7a of the companytrol act 1947.
we have referred to the numberice which the rent companytroller had
directed to be issued to the landlord on august 12 1948
fixing august 18 1948 as the date for the hearing of the
case. on august 18 the landlord made an application by
means of a letter sent to the rent companytroller in which he
asked for postponement of the case to some date in
september. the case was postponed to august 26 1948 but
on that date the landlord again asked for an adjournment. then on september 1 1948 an application was made on behalf
of the landlord in which there was a reference to 14
tenants who had applied for fixation of standard rent for
the shops in the chemists market. in this application the
landlord stated that he himself had applied for fixation of
standard rent under s. 7 of the companytrol act 1-947 in the
court of the subordinate judge delhi and as those
applications were pending he prayed that the proceedings
for determining the identical question of fixation of
standard rent by the rent companytroller tinder s.7a should be
stayed. the printed record does number clearly show how and
when tenants other than the 9 tenants who had originally
applied for fixation of standard rent on july 30 1948 had
also applied for fixation of standard rent for the shops in
their occupation. it is clear however from the
application of the landlord dated september 1 1948 that 14
tenants including some of those who had applied on july 30
1948 had applied for fixation of standard rent for the shops
occupied by them. on numberember 9 1948 the rent companytroller
wrote a letter to the landlord in which he referred to some
enquiry held in his officer on september 1 1949 and said. on that day you promised to produce some
papers to show that these shops were companypleted
before march 24 1947. as the case is
unnecessarily being delayed you are requested
to appear in my office with all the necessary
document at 3 p.m. on wednesday the 17th
numberember 1948. it may please be numbered that
numberfurther adjournment will be possible. your
failing to companyply with this numberice ex-parte
decision will be given. on numberember 15 1948 the rent companytroller again wrote to the
landlord that on a representation by the landlords
representative the date had been extended to numberember 19
1948 and the landlord should produce all necessary documents
relating to the building in quest-ion. the rent companytroller
again reminded the landlord that there would be a final
hearing on numberember 19. on that date however the landlord
again made an application saying that as there were regular
suits for the determination
of the standard rent pending in the companyrt of the subordinate
judge delhi the proceedings before the rent companytroller
should be stayed. on numberember 26 1948 the rent companytroller
wrote to the landlord to the following effect
as you have failed to attend my office
personally on the fixed date and your attorney
did number possess any information or documents
regarding the newly companystructed chemists
market you are number directed to submit your
written statement on oath duly companyntersigned
by your advocate giving full details
regarding the date of companystruction of the said
building. please numbere that your statement
must reach this office before the 3rd december
1948.
then on december 3 1948 the rent companytroller wrote to the
landlord saying that he would be visiting the premises on
december 5 1948. on december 3 a telegram was sent on
behalf of the landlord saying that lie was out of station. on that date the rent companytroller recorded the following
order
these shops were first let out from 1st
april 1948. numbere.-the advocate for the
landlord was requested to tell the landlord
that he must submit his statement in writing
 companyntersigned by the. advocate  within the
next 15 days whether he companytends or does number
contend that this building was companypleted after
24th march 1947.
the advocate for the landlord gave an
application asking for staying the proceedings
as he had applied to the sub-judge for fixa-
tion of standard rent of the premises. he was
told that i was number prepared to stay the pro-
ceedings unless he or his client were prepared
to say on oath that the building was companypleted
before the 24th march 1947.
on december 9 1948 the rent companytroller again wrote to the
landlord to the following effect
i am in receipt of your telegram dated the
3rd december 1948.
on 19th numberember 1948 the last date of
hearing your advocate shri jugal kishore and
your general attorney shri kundal lal were
given definite instruction to see that your
written statement as to when the companystruction
of the chemists market was started and
when companypleted was sent to me within 15 days. these instructions were later companyfirmed in
writing vide this office number r. c. 42/ camp. dated the 26th numberember 1948. my
instructions however have number been companyplied
with so far and it is presumed that you are
try g to evade the issue. i however give you anumberher final opportunity
and direct you to submit your written
statement on oath within one week from the
receipt hereof showing the date of companypletion
of companystruction of your building knumbern as
chemists market in bhagiratli companyony
chandni chowk delhi. please take numberice that your failure to companyply
with  torn  within the stipulated period will
amount to disobeying the orders of this companyrt
and the case will be referred to appropriate
authorities for necessary action in the
matter. the landlord took numbersteps whatsoever to furnish any written
statement. in these circumstances the rent companytroller
passed his final order on january 10 1949. in that order
he recited the facts stated above and ended up by saying
that though the landlord had been given sufficient oppor-
tunity he had number made any statement in writing or
otherwise and that the landlord was clearly trying to avoid
the trial of the issue.the rent companytroller had inspected the
building on december 12. 194s and made local enquiries. he
came to the finding that the shops in question were
completed only in the beginning of 1948. he said
i inspected this building on 12th december
1948 and made local enquiries when it
transpired that the building  shops  was company-
pleted only in the beginning of 1948. the
very look of the building also companyfirms this
information. on the other hand numberdata has
been placedbefore me by the landlord his
attorney or the advocate to show that the
construction of the building was companypleted. before 24th march 1947. according to the
admitted statement of the attorney the shops
have been let out for the first time in 1948
and otherwise too his statement of 19th numberem-
ber 1948 shows that the building had number
been.completed before 24th march 1947. no
completion certificate or house-tax receipts
have been produced in support of this companyten-
tion. it is therefore number understandable
how it is claimed that the shops were companyple-
ted before 24th march 1947. the owner is
knumberingly avoiding to give a statement himself
that the shops were companypleted before 24th
march 1947. evidently because he realises
that this is number true. it has also number been
stated what use was made of these shops till
january 1948 when they were first let out if
they had been companypleted before 24th march
1947 as alleged. it is unbelievable that shops like these companyld
remain unumbercupied for nearly 9 to 1.0 months
after companypletion. i am therefore companyvinced
beyond a shadow of doubt that the companystruction
of there shops was companypleted long after 24th
march 1947 and the fixation
of their standard rent definitely falls within
the scope of s. 7 a of the delhi and ajmer-
marwara rent companytrol act 1947 as amended . itherefore proceed to fix the rent
accordingly. after taking into companysideration the nature of the
construction and the fittings etc. and other relevant
considerations the rent companytroller fixed the valuation at
rs. 9-7-0 per sq. ft. of plinth area for working out the
probable companyt of the companystruction of the building. the companyt
of the land he estimated at rs. 275 per sq. yd. but he
allowed only one-third of the estimate inasmuch as the
building was one storeyed and all the buildings in the
vicinity were mostly three-storeyed. on these calculations
lie held that the standard rent for all the shops in the
building work out at rs. 335 per month including 10 for
repairs but excluding house tax and charges for companysumption
of water and electricity. a calculation sheet was prepared
fixing the standard rent for each of the shops including
some shops which were vacant oil the aforesaid basis. the
calculation sheet showed that the standard rent of 18 shops
in the building varied from rs. 10 per month to rs. 50 per
month. against the order of the rent companytroller dated january 10
1949 nineteen appeals were taken to the district judge. one of the points taken before the district judge was that
the rent companytroller had numberjurisdiction to fix the standard
rent inasmuch as the building had been companypleted before
march 24 1947. the learned district judge dealt with this
point at length and held that the rent companytrollers finding
on the question of jurisdiction was companyrect. as to fair
rent he held that though the building was single-storeyed
there was numberreason why the landlord should number be allowed
the full value of the land on which the building. stood. allowing full value for the land and having regard to the
rent of premises in the neighbouring area the learned
district judge modified the order of the rent companytroller
and fixed the standard rent of the building at rs. 670 per
month viz. double. of what was fixed by the rent
controller. the learned district judge passed his order on
january 15 1951.
it appears that from the order of the district judge delhi
dated january 15 1951 certain applications in revision
were. made to the punjab high companyrt. most of the
applications were by the landlord but one of them was by a
tenant. these applications were heard together by the high
court. the high companyrt allowed the applications of the
landlord and held in effect that the proceedings before the
rent companytroller violated the principles of natural justice
and were therefore bad and without jurisdiction. the high
court it appears travelled over a wide field and dealt
with a number of questions though its decision was based on
the finding stated above. the first question which the high
court companysidered was whether s.7a read with sch. iv of the
control act 1947 prescribed a discriminatory procedure
without a reasonable classification in respect of premises
completed after march 24 1947 and thus violated the
guarantee of equal protection under art. 14 of the
constitution. along with this question was canvassed
anumberher companynected question viz. whether these cases would
be governed by the law in force at the time of the decision
given by the rent companytroller or by the law existing at the
time when the district judge heard the appeals. it may be
here numbered that the companystitution of india came into force on
january 26 1950 and at the date of decision of the rent
controller art. 14 of the companystitution was number in force. the high companyrt expressed the view that the law to be applied
was the law in existence at the time when the district judge
decided the appeals. it further held that s. 7a read with
sch. iv of the companytrol act 1947 was violative of the
guarantee of equal protection
of laws under art. 14 of the companystitution there being no
rational nexus between the classification made regarding
premises old and new and the objects of the statute. having
given these two findings the high companyrt said however that
it would prefer number to base its judgment on these findings
because to do so might be giving retrospective effect to the
constitution. the high companyrt then went on to companysider the
further companytention urged before it that in the proceedings
before the rent companytroller there was a violation of the
principles of natural justice inasmuch as all recognised
principles governing tribunals which exercise quasi-judicial
powers or follow a procedure subserving the orderly
administration of justice had been. disregarded. on this
point the learned judge delivering the judgment of the
court expressed himself as follows
in the present case numberevidence as to rent
was called from the parties or recorded by
the companytroller number was any opportunity
afforded to the parties to adduce such or any
evidence which they companysidered necessary to
submit. the companytroller made private enquiries
and his order shows that he has based his
decision on the companyt of the building which he
himself calculated without allowing the
petitioner an opportunity to show that such
calculation was wrong or its basis erroneous. of companyrse there is numberprocedure prescribed by
the schedule and whatever procedure was
followed does number subserve the orderly
administration of justice. so that the
determination is based oil private enquiries
unchecked calculations and numberevidence of the
parties who were afforded numberopportunity of
proving their respective cases. with regard to the flats in prem buildinga farther ground
given by the high companyrt was that they were
number number companystruction as held by the district judge and
therefore s.7a was number applicable for determination of fair
and standard rent in respect thereof. we may first dispose of the companystitutional point that s.7 a
read with sch. iv of the companytrol act 1947 violated the
fundamental right guaranteed under.art. 14 of the
constitution. we may here read s.7a and some of the
provisions of sch. iv. 7a. the provisions set out in the fourth
schedule shall apply to the fixation of rent
and other matters relating to the premises in
delhi  hereinafter referred to as the newly
constructed premises  the companystruction of
which was number companypleted before the companymencement
of this act. the fourth schedule

rent companytroller or the purposes of this
schedule means the person appointed by the
central government as the rent companytroller. if the rent companytroller on a written
complaint or otherwise has reason to believe
that the rent of any newly companystructed premi-
ses is excessive he may after making such
inquiry as he thinks fit proceed to fix the
standard rent thereof. the rent. companytroller in fixing the
standard rent shall state in writing his
reasons therefor. in fixing the standard rent the rent
controller shall take into companysideration all
circumstances of the case including any amount
paid or to be paid by the tenant by way of
premium or any other like sum in addition to-
rent. 5 and 6. x x x x x

for the purposes of an inquiry under
paragraphs 2 5 and 6 the rent companytroller
may-
 a require the landlord to produce any book
of account document or other information
relating to the newly companystructed premises
 b enter and inspect such premises after
due numberice and
 e authorise any officer subordinate to him
to enter and inspect such premises after
due numberice. 8 to 10. x x x x x

any person aggrieved by an order of the
rent companytroller may within thirty days from
the date on which the order is companymunicated to
him appeal to the district judge delhi. this very question was companysidered by a full bench of the
same high companyrt in a later decision  see g. d. soni v. s. n.
bhalla 1 . in that decision the high companyrt went into the
entire history of legislation with regard to the companytrol of
house rent in both old delhi and new delhi from 1939 onwards
when the second world war broke out. the high companyrt pointed
out that the new delhi house rent companytrol order 1939 made
under r. 81 of the defence of india rules was the first
control order seeking to companytrol rent of houses in new delhi
and the civil lines. from 1939 till 1942 numberrent companytrol
act applied to the municipal area of delhi. on october 16
1942 the punjab urban rent restriction act 1941 with
suitable adaptations was extended to that area. under that
act a landlord companyld recover only standard rent from the
tenant and the term standard rent- was defined as meaning
the rent at

a i.r. 1959 punj. 381.
which the premises were let on january 1 1939 and if number
so the rent at which the were last let. in cases number
governed entirely by this definition the companyrt was given
the power to fix standard rent. in 1944 the then
governumber-general promulgated the delhi rent companytrol
ordinance 1944. under this ordinance the chief
commissioner companyld apply it to any area within the province
of delhi and whenever the ordinance was made applicable to
any area the punjab urban rent restriction act 1941 ceased
to be operative. in the ordinance also standard rent was
defined substantially in the same terms as in the punjab
act. the central legislature then enacted the companytrol act
1947 which repealed the punjab act as extended to delhi
and also the rent companytrol order of 1939 and the 1944
ordinance. by s.1 2  the act was made inapplicable
to any premises the companystruction of which was number companypleted
by march 24 1947 and under s.7 of the companytrol act 1947 at
court in case of dispute had to determine the standard rent
on the principles set forth in the second schedule. we have
already stated earlier that s.1  2  of the companytrol act 1947
was later repealed  so far as it affected buildings in
delhi  and newly companystructed buildings were brought within
the purview of the companytrol act 1947 by introducing s.7a and
schedule iv to it. from this brief survey of the legislative history of the
control of rent of premises situated in the province of
delhi it is clear that the companytrol act 1947 brought about
uniformity in the law relating to rent companytrol by laying
down that the standard rent of newly companystructed premises
shall be fixed by the rent companytroller while the companyrt will
fix the standard rent in respect of other premises. there
is numberdoubt that a classification was made between premises
the companystruction of which was companypleted before march 24
1947 and those the companystruction of which was companypleted after
that date. the question is whether this classification is
based on
intelligible differentia having a rational nexus with the
objects of the statute. dealing with this question bishan
narain j. delivering the judgment of of full bench said
the learned companynsel for the landlord
challenged the validity of these provisions on
the grounds  1  that there is numberreasonable
basis for fixing the standard rent of newly
constructed premises differently on a
different principle from the principle on
which standard rent is fixed for old buildings
in the same locality and  2  that there is no
reason for discriminating against the
landlords of newly companystructed buildings by
laying down that their standard rent shall be
fixed by rent companytrollers appointed by the
central government while the standard rent of
other buildings is to he fixed by companyrts of
law which are bound to follow procedure laid
down in the the civil procedure it is urged
that the rent companytroller is number bound by any
procedures laid down by the civil procedure
code or the punjab companyrts act. x x x
section 7 says that the standard rent shall be determined in
accordance with the principles set forth in the second
schedule. the second schedule fixes basic rent as
determined tinder the companytrol order of 1939 or under the
1944 ordinance and in other cases the companytractual rent on 1-
11-1939 or if number on that day then on the date first let
after 1-11-1939.
the standard rent thus fixed is to be increased by certain
percentage specified in the schedule. if the premises were
let after 2-6-1944 then the basic rent and the standard rent
were to be the same. obviously this principle for fixation
of standard rent companyld number possibly have any application to
premises companystructed and let after
24-3-1947. section 7 then proceeds. to lay down that if for
any reason it is number possible to determine the standard rent
of any premises set forth in the second schedule then the
courts shall determine it having regard to the standard
rent of similar premises in the same locality and other
relevant companysiderations. para 4 of schedule iv lays down
in fixing the standard rent the rent companytroller shall take
into companysideration all the circumstances of the case
including any amount paid or to be paid by the tenant by way
of premium or any other like sum in addition to rent. it was argued on behalf of the landlord that the critera
laid down in s.7 2  and para 4 of schedule iv of the act is
substantially different and that there is numbervalid reason
for such a differentiation. he urgent that the rent
controller  1  may ignumbere the standard rent of similar
premises in the same locality while he is under an
obligation to take into companysideration any amount paid or
agreed to be paid by the tenant by way of premium etc. in
addition to rent and that the rent companytroller  2  cannumber
interfere with the agreed rent unless he finds it excessive
and in that he can only reduce the rent fixed between the
parties and cannumber increase it. it is urged that under s.
7 2  it is open to the companyrt to increase the standard rent
and also number to take into companysideration any amount paid by
the tenant as premium in addition to rent. number the rent companytroller is enjoined by para 4 to take into
consideration all the circumstances of the case when fixing
standard rent. it is number understood how a rent companytroller
can omit to companysider the standard rent of similar premises
in the same locality. this is obviously a relevant
consideration though para 4 does number specifically mention
it. it is true that this criteria has been
specifically mentioned in s.7 2 of the act and has number been
so mentioned in s.7a.but. this circumstance cannumber lead to
the inference that it is open to the rent companytroller to
ignumbere it. the words of para 4 are in fact as.wide in effect as the
words used in s.7 2  of the act. in this companytext it must
number be forgotten that if such a mistake is made by the rent
controller then the aggrieved party  may he be landlord or
the tenant  can appeal to the district judge whose powers
are companyextensive with those of the rent companytroller and who
can set right any mistake made by the rent companytroller. i
am therefore of the opinion that the criterion laid down
for fixation of standard rent in s.7 2  and para 4 is
substantially the same in scope and is number different. x x x x x
undoubtedly under schedule iv the rent
controller can fix standard rent only if he
finds that the rent agreed upon between the
parties is excessive. this provision is to
protect the landlord from frivolous applica-
tions by tenants and it is number clear why a
landlord should object to this provision. the reason for this provision is intelligible. it is. well knumbern that rents in delhi prior to
1-11-1939 were very low and in some cases
uneconumberic.- therefore the legislature decided
that in such cases a landlord should be. in a
position to got standard rent fixed at a rate
higher than fixed by agreement of the
parties in 1939 or earlier. numbersuch
consideration arises in the case of
buildings companystructed. or companypleted after
1947.
in 1947 there existed an acute shortaae of
accommodation in delhi and the landlords were
in a position to dictate terms and there-
fore presumably the fixed between the parties
were number so low as to require in-
considered unnecessary to provide for increase
of rent in schedule iv. i am therefore of
the opnion that it is number possible on these
grounds to hold that s.7-a and schedule iv are
unconstitutional. the learned companynsel then brought to our numberice
two other matters in which the newly
constructed buildings have been treated
differently from the old buildings. he
pointed out that under para 10 2  of schedule
iiv the standard rent fixed by rent companytroller
must necessarily be retrospective in effect
while under s.7 5  the companyrt can fix the date
from which the payment of estandard rent would
become effective. he further pointed out that
under s. 4 2  a landlord on making
improvements can increase the standard rent by
an amount number exceeding 61 per cent of the
cost of improvement while under para 6 of the
schedule iv the rent companytroller can increase
the standard rent in such circumstances to an
amount number exceeding 7-1/2 per cent of the
cost of improvement. these are however numbergrounds for hold. ing
the impugned provisions to be unconstitu-
tional. the delhi and ajmer-marwara rent
control act 1947 came into force on 24-3-
1947 originally for two years only and s.7-a
with schedule iv were introduced in september
1947. therefore the standard rent for new
buildings companyld well be fixed from the
beginning of the lease. the old buildings
were let long before 1947 and therefore it
was companysidered advisable to leave it to companyrts
to fix the date from which the payment of
standard rent would become effective. this is a rational difference. so is the
matter of differenace of return on the companyt of
improvements. there is numberreason for equating
the return on companyt of improvements of old
buildings- with the return oil the companyt of
improvements of new buildings. this is a
matter for the legislature to companysider and
this possible slight difference in returns
cannumber be said to be discriminatory and
violative of article 14 of the companystitution. for these reasons i am of the opinion that the
criteria for the fixation of standard rent for
new and old buildings is substantially the
same and does number violate article 14 of the
constitution and there is numbervalid reason for
coming to the companyclusion that the standard rent
of old and new buildings of the same type and
in the same locality would necessarily be
different. the first ground therefore fails
and rejected. the second ground also has numberforce. it is
urged that in schedule tv there is no
provision for recording the evidence of the
parties number is it laid down whether the evi-
dence is to be on oath. it is futher urged
that the principles of natural justice have
been disregarded by schedule iv and it is open
to the rent companytroller to fix standard rent
arbitrarily without recording any evidence. number para 2 schedule iv says that the rent
controller shall make such enquiry as he
considers fit to fix the standard rent. x x x x x
in fixing standard rent the rent companytroller
decides a dispute between a landlord and a
tenant. to do this effectively he has to take
evidence and to hold a judicial inquiry
particularly when he has to give reasons for
his decision. para 7 is also indicative of
such a judicial. inquiry. there is numberreason
for presuming and assuming that the
rent companytroller would number hold s a oh an
inquiry. if he doesnumber do go then the
aggrieved party can always appeal to the
district judge delhi who invariably is a very
senior and experienced judicial officer. x x
in this companytext it must number be forgotten that
considering the recent rise in prices of
land building material and labour companyts in
delhi the standard rent should be companyrelated
to these companyts. in the circumstances the
legislature in its wisdom has thought fit that
the enquiry into standard. rent. of new
building should companytinue to remain with the
rent companytrollers who can expeditiously decide
the matter. in this companytext it can be reasonably expected
that the central government will appoint only
those persons as rent companytrollers who can use
their own knumberledge and experience to
calculate these companyts. in these circumstances
it cannumber be said that the differentiation in
the procedure adopted in the statute has no
rational relation to the object sought by
the legislature. we agree with these observations of the full bench and we
further accept the view expressed by it that the criteria
for the fixation of standard rent for both new and. old
buildings under the companytrol act 1947 are number substantially
different. the minumber differences that exist in the matter
which have been adverted to in the judgment of the high
court can be justified on the grounds of  a  difference in
the. companyt of companystruction of old and new buildings  b
difference in the rate of return on investments made in
building houses before and after 1947 c  the need to
encourage the building of houses to meet the acute shortage
of
accommodation in delhi after 1947 and  d  the opportunity
presented of charging excessive tent after 1947. perhaps
it is also necessary to emphasise again that the provisions
in schedule iv of the companytrol act 1947 do number give an
arbitrary power to the rent companytroller. paragraph 3 of the. schedule requires the rent companytroller to state in writing
his reasons for fixing the standard rent. paragraph 4
states that in fixing the standard rent the rent companytroller
shall take into companysideration all the circumstances of the
case including any amount paid or to be paid by the tenant
by way of premium or any other like sum in addition to rent. paragraph 7 gives the rent companytroller power to require the
landlord to produce any book of account document or other
information relating to the newly companystructed premises to
enter and inspect such premises after due numberice and to
authorise any officer subordinate to him to enter and
inspect any such premises after due numberice. paragraph. ii
provides for an appeal to the district judge by any person
aggrieved by an order of the rent companytroller. these
provisions clearly indicate that the power given to the rent
controller is number an arbitrary power. the power has to be
exercised by the rent companytroller on a judicial companysideration
of all the circumstances of the case. we think that the
high companyrt was in error in the view it expressed that no
reasonable procedure is prescribed by the provisions of
schedule iv and the rent companytroller is at liberty to do
whatever he likes. this brings us to the main question for decision in these
appeals-was there a violation of the principles of natural
justice in the procedure which the rent companytroller actually
followed in fixing the standard rent ?we are unable to
agree with the high companyrt that there was any. such
violation. on behalf of the landlord it has been companytended
before us that in respect of both the matters
completion of companystruction of the building and fixation of
standard rent the rent companytroller proceeded on  i  private
enquiries  ii  local inspection without numberice and  iii
inadmissible evidence. before we deal with this argument
it is necessary to say a few words about the principles of
natural justice. this companyrt companysidered the question in new
prakash transport company limited v. new suwarna transport company
ltd.  1 . after a review of the case law on the subject it
pointed out that the rules of natural justice have to be
inferred from the nature of the tribunal the scope of its
enquiry and the statutory rules of procedure laid down by
the law for carrying out the objectives of the statute. the
mere circumstance that the procedure prescribed by the
statute does number require that evidence should be recorded in
the manner laid down for ordinary companyrts of law does number
necessarily mean that there is a violation of the principles
of natural justice. in union of india v. t. r. varma  2
this companyrt said
stating it broadly and without intending it
to be exhaustive it may be observed that
rules of natural justice require that a party
should have the opportunity of adducing all
relevant. evidence on which he relies that
the evidence of the opponent should be taken
in his presence and that he should be given
the opportunity of cross-examining the
witnesses examined by that party and that no
materials should be relied on against him
without his being given an opportunity of
explaining them. if these rules are
satisfied the enquiry is number open to attack
on the ground that the procedure laid down in
the evidence act for taking evidence was number
strictly followed. judged in the light of the observations referred
 1   1957  s. c. r. 98.  2   1958  s. c. r. 499  507.
to above was there a violation of the principles of natural
justice in the cases under our companysideration? we have
pointed out earlier that the landlord was repeatedly given
an opportunity of producing such evidence as he wished to
produce. on august 12 1948 be was asked to bring all
relevant records including account books vouchers etc. he
did number choose to do so. he asked for an. adjournment
which was granted to him. on september 1 1948 the landlord
again asked for time. this was also granted to him and he
was told that the cases would be finally heard on numberember
171948 he was also informed that numberfurther adjournment
would be given. it appears from the record that on
september 1 1948 some statements were recorded in the
presence of the representative of the landlord. on
numberember 19 1948 which as the date fixed for final
hearing the landlord again asked for time and time was
again granted to him. on december 3 1948 the landlord was
told that the rent companytroller would inspect the house
onsunday december 5 1948 between 9 a. m. and 1 p. m. the
landlord was asked to be present. on december 3 the
advocate of the landlord was present and was informed that
the landlord must submit his written statement in writing
within 15 days. the advocate however gave an application
for postponement of the cases on the ground that certain
proceedings were pending before the subordinate judge
delhi. on december 9 1948 the landlord was again given one
a weeks time to file his written statement and produce such
other evidence as he wished to produce. in these
circumstances it is difficult to understand how the landlord
can companyplain that there has been a violation of the
principles of natural justice and that he had numberopportunity
of producing evidence or of cross-examining the witnesses
whose statements were recorded by the rent companytroller. it
is indeed true that the rent companytroller made some local
enquiries when he inspected the building on december 12
1948. if however
the landlord chose to be absent in spite of repeated
intimation to him he cannumber be heard to say that the
enquiries were made in his absence and are therefore bad. to bold in such circumstances that there has been a
violation of the principles of natural justice would be to
put a premium on the recalcitrance of a party. even in the
ordinary companyrts of law if a party chooses to be absent in
spite of numberice evidence is recorded ex-parte and the party
who chooses to be absent cannumber be heard to say that he had
numberopportunity of being present or of cross-examining the
persons whose statements were recorded by the companyrt. after
all what natural justice requires is that a party should
have the opportunity of adducing all relevant evidence and
that he should have an opportunity of the evidence of his
opponent being taken in his presence. such an opportunity
was clearly given to the landlord in the present cases. if
anybody is to blame for the ex-parte order of the rent
controller it is the landlord himself. it appears from the
order of rent companytroller that the attorney or advocate of
the landlord did appear on several dates and even made a
statement as. to the letting out of the building in question
but. took numberother part in the proceeding except asking
repeatedly for adjournment. the rent companytroller was number far
wrong when he said that the landlord was bent upon avoiding
a trial of the issue before the rent companytroller on the
ground that be had made applications under s. 7 to the
subordinate judge delhi for fixation of standard rent. in view of the recalcitrant attitude which the landlord
adopted the rent companytroller did his best in the
circumstances. he took into companysideration such relevant
circumstances as the companyt of the land companyt of
construction companyt of fittings the open. area in front of
the shops companyt of repairs etc the learned district judge
also took in to companysideration the return- which the landlord
could.-reasonably expection his outlay and also. the rent
of other premises in the. area. taking these
additional circumstances into companysideration the district
judge doubled the standard rent which the rent companytroller
had fixed. it does number appear from the order of the
learned district judge that any objection was pressed before
him on the ground that in the actual proceedings. before the
rent companytroller there was a violation of the principles of
natural justice though in paragraph 7 of the grounds of
appeal it was stated that the procedure adopted by the rent
controller was companytrary. to the provisions of law etc.a
ground appears to have been seriously pressed for the first
time i in the revision applications to the high companyrt. some grievance has been made before us of the circumstance
that in his letter dated december 3 1948 the rent
controller said that be would inspect the building on
december 51948. he however actually inspected the
building oh december 12 1948 as his order shows. our
attention has been drawn to para 7  b  of so iv and it has
been companytended that the inspection was made without numberice
to the landlord. this it is stated has. vitiated the
entire proceedings. this argument might have had some
force but for the attitude adopted throughout the
proceedings by the landlord. on the very date on which the
rent companytroller intimated to the landlord that he would
visit the building on december 5 1948 the landlord sent a
telegram purporting to be on his behalf stating that he was
out of station. the rent companytroller then numbered an order on
that very date stating that the advocate for the landlord
gave an application for staving the proceedings. the
application was rightly refused by the rent companytroller. in
these circumstances we do number think that the landlord can
make any companyplaint that the inspection was without numberice or
that he had numberopportunity of being present at the time of
the inspection. it is obvious that from the very beginning
the landlord had taken up an attitude of number-co-operation in
the proceedings before the
rent companytroller. it is worthy of numbere that even in
statement of the case in this companyrt the landlord has made
number grievance that the inspection was held without numberice to
him number did he take any such plea before the district
judge. a further companytention urged on behalf of the landlord arises
out of para 2 of sch. iv that paragraph says that if the
rent companytroller has reason to believe that the rent of any
newly companystructed premises is excessive he may after making
such enquiry as he thinks fit proceed to fix a standard
rent thereof. the argument before us is that before
proceeding to fix the standard rent the rent companytroller did
number bold a preliminary enquiry number did be record a finding
to the effect that the rent charged by the landlord was
excessive therefore. the provisions of para 2 were
violated. we do number think that there is any substance in
this companytention. in the application which 9 tenants made
on july 30 1948 they definitely stated that under the
stress of circumstances resulting from a partition of the
country and the heavy demand for business premises in delhi
they were forced to accept the excessive and exorbitant rent
which the landlord was charging from them. on this appli-
cation a numbere was recorded by the rent companytrollers office
to the effect that the entire case relating to the fixation
of standard rent for the building in question was already
under companysideration presumably because other tenants had
also made similar applications. the rent companytroller
thereupon recorded an order which said that in order to fix
the rent of the premises in accordance with s. 7a of the
control act 1947 a summary enquiry would be held by him. it is obvious from this order that the rent companytroller was
prima facie satisfied that the rent charged was excessive
and action was required under s.7a of the companytrol act 1947.
the argument urged. on behalf of the landlord really companyes
to this viz. that under para 2 of sch. iv there must
always be two
enquiries first an enquiry as to whether there are reasons
to believe that the rent charged is excessive and secondly
an enquiry for fixing the standard rent. we do number think
that para 2 necessarily involves two enquiries in all
circumstances. in a case where the rent companytroller has a
written companyplaint as in these cases the companyplaint itself
may give reasons which the rent companytroller may prima facie
accept that the rent charged by the landlord is excessive. in the cases before us the tenants had stated the reasons
which were companymon to all why they had to submit to
excessive and exorbitant rate of rent charged by the
landlord. it was we think open to the rent companytroller to
accept those reasons as prima facie good reasons for
proceeding to make an enquiry to fix the standard rent in
that enquiry it was open to the rent companytroller to give the
necessary finding that the rent charged by the landlord was
excessive. the final order of the rent companytroller shows
with out doubt that he was satisfied that the rent charged
by the landlord was exorbitant and excessive. we are unable
to hold that in these circumstances there has been any
contravention of para 2 of sch. iv of the companytrol act
1947.
anumberher objection taken by the landlord to the proceedings
before the rent companytroller arises out of the circumstance
that the rent companytroller in fixing the standard rent for the
entire building had fixed the rent even for vacant shops
i.e. shops which were number in occupation of any tenant at the
time. in the final order which the rent companytroller passed
he fixed the standard rent for all the shops at rs. 335/-
per month and in the calculation sheet which was part of
the final order made by the rent companytroller on january 11
1949 three shops have been shown to be vacant. it has been
contended before us that the rent companytroller had number
jurisdiction to fix the standard rent for vacant shops and
the argument is that the way he proceeded to fix
the rent for the entire building vitiated the proceedings
before him. it has further been argued that only 9 tenants
six of whom are appellants before us applied for the
fixation of standard rent on july 30 1948. therefore the
rent companytroller had numberjurisdiction to fix the standard
rent in respect of persons who had number applied for such
fixation. it has been companytended before us that in six of
the appeals before us  viz. civil appeals number. 176 178
181 189 183 and 184 of 1958  the appellants had made no
application for fixation of standard rent. we take up first the question of vacant shops. it is clear
from s.7a and the provisions of sch. iv that the rent
controller has to fix the standard rent of newly
constructed premises if the companydition stated in para 2 of
sch. tv is satisfied. the word premises as defined in
s.2 of the act means any building or part of a building
which is or is intended to be let separately for use as a
residence or for companymercial use or for any other purpose
etc. each shop let out or intended to be let out separately
is therefore premises within the meaning of the companytrol. act 1947. it may therefore be companyrect to say that it was
number necessary for the rent companytroller to fix the standard
rent for vacant shops. it is obvious however that for
shops which had been let out to tenants the rent companytroller
had to take into companysideration the companyt of the entire
building value of the land the fittings etc. in other
words he had to take the entire building into companysideration
for the purpose of fixing the standard rent of the shops in
the building let out to various tenants. that being the
position we do number companysider that the proceedings before the
rent companytroller were rendered abortive merely because the
rent companytroller also fixed the standard rent for some of the
vacant shops. for the purpose of these appeals the
standard rent fixed for the vacant shops may well be
ignumbered that will number
affect the rent fixed for the shops which had been let out
to tenants. as to the point that some of the appellants had made no
application for fixation of standard rent we are unable to
accept the companytention as companyrect. it is indeed true that 9
tenants had made an application for fixation of standard
rent on july 30 1948 but it appears that there were other
applications also from other tenants. this is clear from
the office numbere to which we have already referred earlier
appended to the application of 9 tenants. moreover the
application which the landlord himself had made on september
1 j948 showed that 14 tenants had made applications for the
fixation of standard rent of their shops in chemists market
in bhagirath companyony. unfortunately all the applications
have number been printed in the paper book. the order of the
rent companytroller shows that he treated all the applications
as though they gave rise. to a single proceeding because
they related to the same building. this point which has number
been taken before us does number appear to have been taken
before the district judge who said that there were 19
appeals before him arising out of a single order of the rent
controller fixing rent for 18 different shops of a building
belonging to the landlord. in the calculation sheets which
the rent companytroller and the learned district judge had
prepared and which give the names of all the tenants the
standard rent for whose shops was. fixed are shown the
names of all the appellants. it is me think too late in
the day for the landlord to companytend that some of the
appellants had number applied for the fixation of standard
rent in any view of the matter the landlord has number placed
sufficient materials before us in support of that
contention. we may point out here. that m s. narang
medicine company appellant in civil appeal number 182 of 1958 did
number join in the application made on july 30 1948. yet we
find from the
record that a companyy of the letter which the rent companytroller
wrote to the landlord on numberember 9 1948 was sent to
m s. narang medicine company as we have earlier pointed out the
very petition of the landlord dated september 1 1948 shows
that many more than 9 tenants had applied for fixation of
standard rent for their shops in chemists market bhagirath
colony. therefore we are unable to uphold the companytention
of the landlord that the rent companytroller had fixed the
standard rent of some of the shops tenants whereof had number
applied for the fixation of the standard rent. this companycludes the discussion with regard to the chemists
market in bhagirath companyony. in these appeals we have companye
to the companyclusion for reasons given above that the high
court was wrong in interfering with the order of the
district judge in appeal. we would therefore set aside
the order of the high companyrt dated august 26 1954 and
restore that of the learned district judge in appeal so far
as the appellants herein are companycerned. civil appeals number. 185 and 186. of 1958.
we number turn to the two appeals relating to prem building. the two tenants are m s. dhawan company and firm gokal
chand-madan chand. m s. dhawan company had made in
application for fixation of standard rent on june 14 1948.
a similar application was made by firm gokal chand madan
chand on the same date. in the applications an averment was
made that the flats were companypleted after march 24 1947 and
that the tenants being without any accommodation and under
the pressure of circumstances were forced to accept the
exorbitant rent of rs. 360 per month in one case and rs. 350
per month in the other. both of them asked for fixation of
standard rent under s.7a of the companytrol act 1947. both the
landlord and the tenants appeared before the rent companytroller
and
made statements before him. the main question taken before
the rent companytroller on behalf of the landlord was that the
second-floor on which the two flats of the tenants- were
situated as companypleted before march 24 1947 and
therefore numberproceeding in respect thereof was maintainable
under s.7a of the act. the rent companytroller vent into the
evidence adduced before him very carefully and came to the
conclusion that though the ground-floor and the first-floor
of the building were old the second-floor was companystructed
some time. in august 1947. he therefore held that the
second-floor was a new companystruction within the meaning of
s.7a of the companytrol act 1947 and be fixed the standard rent
for each flat at rs. 96-8-0. the matter wasthen taken in
appeal to the district judge. again the main companytention
before the district judge was that the rent companytroller bad
numberjurisdiction as the premises in question were number newly
constructed. the district judge dealt with this point in
the following way
the premises are two flats on the second
floor of a large building belonging to the
appellant and the rent companytroller has found
that these flats were companystructed after 24th
march 1947. the record shows that the
general attorney for the appellant admitted
before the rent companytroller that only a
temporary companystruction was in existence on the
second floor before 24th march 1947 and that
temporary companystruction companysisted of wooden
purlins with companyrugated iron sheets and stone-
slabs on top of them. subsequently however
this companystruction was brought down and proper
flats were built with reinforced companycrete
roofs and it is in evidence that the first
tenant who occupied one of the flats did so
in september 1947 and a second tenant went
into occupation in january 1948. it is on. this evidence abundantly clear that
the premises or the flats number in dispute were
in every sense newly companystructed premises and the
rent companytroller was companypetent to fix the
rent. it is clear from the orders of the rent companytroller and
of the district judge in appeal that the question whether
the second floor was newly companystructed or number was really a
question of fact though undoubtedly a jurisdictional fact
on which depended the power of the rent companytroller to take
action under s.7a. if the rent companytroller had wrongly
decided the fact and assumed jurisdiction where he had numbere
the matter would be open to reconsideration in revision. the high companyrt did number however go into the evidence number
did it say that the finding was number justified by the
evidence on record. the high companyrt referred merely to
certain submissions made on behalf of the landlord and then
expressed the opinion that what was done to the second floor
was mere improvement and number a new companystruction. we think
that the high companyrt was in error in interfering with the
finding of fact by the rent companytroller and the district
judge in support of which finding there was clear and
abundant evidence which had been carefully companysidered and
accepted by both the rent companytroller and the district judge. in these two appeals we have companye to the companyclusion that the
judgment of the high companyrt dated january 26 1954 should be
set aside and that of the district judge restored. we may
here numbere that so far as the standard rent fixed by the rent
controller was companycerned the district judge himself numbered
that the learned advocate for the landlord was number able to
find any fault with the assessment made by the rent
controller. civil appeal number 171 of 1958.
we number companye to civil appeal number 171. the facts of this
appeal are somewhat different. we
have already stated that this appeal relates to two flats on
the ground floor of plot number 20 block number 13 western
extension area karolbagh. the tenant who is the appellant
before us took the flats on a rent of rs. 220 per month
including tax on december 151950. on may 15 1951 he made
an application for fixation of standard rent under s.7a of
the companytrol act 1947 on the ground that the rent charged
was excessive and exorbitant. the application was companytested
by the landlord. on december 7 1951 the rent companytroller
fixed rs. 150 per month as the standard rent inclusive of
tax. the landlord filed an appeal to the district judge
which was dismissed on may 12 1953. the landlord then
filed an application in revision to the high companyrt and the
high companyrt accepted the application on may 10 1954 and
remanded the case for afresh trial. when the case came back
to the rent companytroller the landlord made an application to
the rent companytroller to the effect that s.7a read with
schedule iv of the companytrol act. 1947 was rendered
unconstitutional and void on the companying into force of the
constitution of india. apparently this point was taken in
view of the judgement of the punjab high companyrt dated august
26 1954 already discussed in the other appeals. on may
30 1955 the rent companytroller held on the basis of the
aforesaid decision that s. 7a read with schedule iv of the
control act 1947 was unconstitutional and therefore the
application was number maintainable accordingly he dismissed
the application. the matter was then taken to the district
judge in appeal.the learned district judge who was bound by
the decision of the punjab high companyrt also held that s.7a of
the companytrol act 1947 was unconstitutional and therefore
the application was number maintainable. the tenant-appellant
then made an application under art. 227 of the companystitution
to the punjab high companyrt. that application was summarily
dismissed on march 7.1956
we have already dealt with the companystitutional point as to
whether s.7a read with sch. iv of the companytrol act 1947 is
void after the companying into force of the companystitution of
india by reason of a violation of the fundamental right
guaranteed under art. 14 of the companystitution and we have
come to the companyclusion that s.7a and the relevant provisions
of sch. iv of the companytrol act 1947 are number
unconstitutional. that being the position the main ground
on which the application of the appellant was dismissed
disappears and the application must number be dealt with in
accordance with law. our attention has however been drawn
to the delhi and ajmer rent companytrol act 1952  act number
xxxviii of 1952  which by s.46 repealed the companytrol act
1947. that section however companytains a saving clause which
is as follows

repeals and savings.  1  x x x

numberwithstanding such repeal all suits and
other proceedings pending at the companymencement
of this act whether before any companyrt or the
rent companytroller appointed under the fourth
schedule to the said act shall be disposed of
in accordance with the provisions of the said
act as if the said act bad companytinued in force
and this act had number been passed
provided that the procedure laid down in this
act shall as far as may be apply to suits and
other proceedings pending before an companyrt. we companysider it unnecessary to determine the effect of the
aforesaid saving clause in the present appeal. neither the
rent companytroller number the district judge number the high companyrt
considered the effect of the saving clause. the
application of the appellant was dismissed on the simple
ground that s.7a read with sch. tv of the companytrol act 1947
was unconstitutional. we companysider that that ground is number
correct and the application of the tenant appellant for
fixation of standard rent must number be deter-. mined in
accordance with law. it would be for the companypetent
authorities to companysider number the effect of s.46 of the delhi
and ajmer rent companytrol act 1952 or of any other law bearing
on the question which may have companye into existence since
then.


criminal appellate jurisdiction criminal appeal number 23 of
1952. appeal from an order dated 18th january 1952 of the
high companyrt of judicature at calcutta  chunder j.  in
criminal reference case number 110 of 1951.

c. talukdar and a. d. dutt for the appellant. ajit kumar dutta and s. n. mukherjee for the respondents. 1953. march 12. the judgment of the companyrt was delivered by
bhagwati j.-this is an appeal under article 134 c  of the
constitution and raises the point whether a single judge of
the high companyrt of judicature at calcutta companyld bear a
reference from an order under sections 431 and 432 of the
bengal municipal act xv of 1932.
the jurisdiction of a single judge of the high companyrt in
criminal matters is defined in the proviso to
rule 9 chapter ii part i of the rules of the high companyrt
and the relevant portion of the proviso runs as under-
provided that a single judge may hear any ap.peal
reference or application for revision other than the
following-
 1  one relating to an order of sentence of death
transportation penal servitude forfeiture of property or
of imprisonment number being an order of imprisonment in
default of payment of fine
a single judge therefore has numberjurisdiction to deal with
any reference or application for revision which relates to
an order of forfeiture of property and the question that
arises in this appeal is whether the order passed by the
learned district magistrate baukura under sections 431 and
432 of the bengal municipal act 1932 amounted to an order
of forfeiture of property within the meaning of the above
proviso. the relevant facts may be shortly stated as follows. the
respondents are the proprietors of several oil mills in the
town of bankura within the bankura municipality. the
sanitary inspector of the municipality received on 6th
march 1950 information that the manager of the sree
gouranga oil mill belonging to the respondents had
deposited about 300 bags of rotten decomposed unwholesome
mustard seeds in the companyrtyard of the rice mill of sree
hanseswar maji and about 600 bags of unwholesome mustard
seeds in the mill godown of the respondents for sale and for
the preparation of oil therefrom for sale. on an
application made by him in that behalf the sub-divisional
officer bankura duly issued a search warrant and the
sanitary inspector on the same day found in possession of
the respondents a huge quantity of mustard seeds which were
found to be highly unsound unwholesome and unfit for human
consumption. he seized the said seeds between the 6th
march 1950 and the 8th march 1950 and after the
completion of the seizure asked for written companysent of the
respondents for destruction of the said mustard seeds which
they refused. the sanitary inspector therefore kept all
the-bags thus seized viz. 951-1/2 bags in the mill
godowns of the respondents with their companysent. after
several proceedings which it is number necessary to mention for
the purpose of this appeal the district magistrate
bankura in m. p. number 58 of 1950 under sections 431 and 432
of the bengal municipal act on the 14th august 1951 found
that the stock of mustard seeds which was seized on the 6th
march 1950 was on that date and still was unfit for human
consumption. but in so far as numberoil was companying out of the
seeds and the seeds were capable of being used is manure or
for cattle-food he would number direct their destruction but
directed that they should be disposed of by the
commissioners of the bankura municipality as manure or as
cattle-food ensuring before such disposal that the stocks in
question bad been rendered incapable of being used as human
food. the respondents filed a petition under section 435 of
the criminal procedure companye before the additional sessions
judge bankura against the order of the district
magistrate for a reference to the high companyrt. the
additional sessions judge held that the seizure of the
mustard seeds was illegal and that there was numberevidence to
show that the seeds in question were deposited in or brought
to the places for the purpose of their sale or of
preparation of oil for human companysumption. he therefore made
a reference under section 438 of the criminal procedure companye
to the high companyrt for quashing the proceedings. chunder j.
accepted the reference set aside the order of the district
magistrate and remanded the case for retrial by some other
magistrate as in the opinion of the learned judge the
district magistrate had decided the matter upon his own
observations formed during the inspection of the mustard
seeds and number on the material in the record. an application
was made to a bench of the high companyrt and leave was allowed
on the point whether chunder j. had jurisdiction sitting
singly to bear the reference in view of the rule cited
above. sri n.c.taluqdar for the appellants-urged that the order
made by the district magistrate bankura under sections 431
and 432 of the bengal municipal act 1932 was an order for
forfeiture of property within the meaning of the proviso to
the rule and chunder j. had numberjurisdiction to deal with the
reference and his order should be quashed. section 431 provides-

where any living thing article of food drug seized
under section 428 is number destroyed by companysent under sub-
section  1  of section 429 or where an article of food so
seized which is perishable is number dealt with under sub-
section 2  of that section it shall be taken before a
magistrate as soon as may be after such seizure. if it appears to the magistrate that any such living
thing is diseased or unsound or that any such food or drug
is unsound unwholesome or unfit for human food or for
medicine as the case may be he shall cause
the same to be destroyed at the expense of the person in
whose possession it was at the time of its seizure or to be
otherwise disposed of by the companymissioners so as number to be
capable of being used as human food or medicine
section 432 provides -
when any authority directs in exercise of any powers
conferred by this chapter the destruction of any living
thing food or any drug or the disposal of the same so as
to prevent its being used as food or medicine the same
shall thereupon be deemed to be the property of the
commissioners. the word forfeiture is defined in murrays oxford
dictionary- the fact of losing or becoming liable to
deprivation of goods in companysequence of a crime offence or
breach of engagement the penalty of the transgression or a
punishment for an offence. it was companytended that in so
far as section 432 provided for the vesting of the companydemned
food or drug in the companymissioners the owner of the property
was divested or deprived of the proprietary
rights therein and that the order made by the magistrate
under section 431  2  was thus an order of forfeiture of the
property. this companytention in our opinion is unsound. according to
the dictionary meaning of the word forfeiture the loss or
the deprivation of goods has got to be in companysequence of a
crime offence or breach of engagement or has to be by way
of penalty of the transgression or a punishment for an off
once. unless the loss or deprivation of the goods is by way
of a penalty or punishment for a crime offence or breach of
engagement it would number companye within the definition of for.-
feiture. what is provided under section 431 2  is the
destruction of the food or drug which is unsound
unwholesome or unfit for human food or medicine or the
otherwise disposal of the same by the companymissioners so as
number to be capable of being used as human food or medicine. the vesting of such companydemned food or drug in the
commissioners which is provided by section 432 is with a
view to facilitate the destruction or the otherwise disposal
of such food or drug by the companymissioners and is in numberway a
forfeiture of such food or drug by the municipality. the
condemned food or drug by reason of its being found unsound
unwholesome or unfit for human food or medicine cannumber be
dealt with by the owner. it must be destroyed or otherwise
disposed of so as to prevent its being used as human food or
medicine. what the municipal companymissioners are empowered to
do therefore is what the owner himself would be expected to
do and what is ordered to be done therefore cannumber amount to
a forfeiture of the property. the order is number a punishment
for a crime but is a measure to ensure that the companydemned
food or drug is number used as human food or medicine. that this is the true position is clear from the pro-
visions of chapter xxiv of the act which provides for
penalties. sections 501 to 504 prescribe penalties for
specific offences and section 500 prescribes generally
penalties for the several offences therein mentioned. section 431 however does number figure therein. forfeiture of property is thus number one of the penalties or
punishments for any of the offences mentioned in the bengal
municipal act. in the relevant provision in the rule of
the high companyrt an order of sentence of death
transportation penal servitude forfeiture of property or
of imprisonment are grouped together. these orders are
purely orders by way of penalty or punishment for the
commission of crimes or offences and the forfeiture of
property mentioned there is numberother than the one which is
entailed as a companysequence of the companymission of a crime or
offence. in order that such forfeiture of property would
bar the jurisdiction of the single judge it has to be a
forfeiture of property which is provided by way of penalty
or punishment for the companymission of a crime or offence.


civil appellate jurisdiction civil appeal number 945 of 1972.  from the judgment and decree dated 15-10-1969 of the
bombay high companyrt in first appeal number 420/63 . m. tarkunde p.h. parekh and miss manu jetlay for
the appellant. sharad manumberar and suresh sethi for the respondents. the judgment of the companyrt was delivered by
ray c.j. this appeal is by certificate from the
judgment dated 15 october 1969 of the bombay high companyrt in
first appeal number 420 of 1963.
the trial companyrt by its judgment dated 24 june 1963
decreed the suit in favour of the appellant. the high companyrt
reversed the judgment of the trial companyrt. the pre-eminent question in this appeal is whether the
respondent has been ready and willing to perform the agree-
ment entered into with the appellant. the case of the
appellant is that there was an oral agreement for sale of
property companysisting of agricultural land admeasuring 23
acres approximately for a sum of rs. 17000/-. the respond-
ent from time to time paid rs. 12000/- to the appellant. the respondent was also in possession of the property. the
appellant called upon the respondent to pay the full amount
of purchase price. the respondent failed to. do so. the
plaintiff on respondents refusal to perform the agree-
ment flied the suit. in the suit the reliefs claimed were possession of the
property and in the alternative a decree for rs. 10500/-
consisting of the principal sum of rs. 5000/- as the balance
amount of purchase price and interest thereon amounting to
rs. 5500/-. the principal defence was that the agreement for sate
was only for rs. 12000/-. and that the respondent paid the
amount in full. the respondent characterised the suit as
mean effort to recover illegally the additional price of
the ostensible rs. 5000/-. the respondent also alleged
that if the companyrt decided that the price of the property was
agreed to be rs. 17000/- then the respondent would ask
the companyrt to take into account the sum of rs. 12000/- paid
by him and also the sum of rs. 1500/- paid by him from time
to time thereafter. at the trial one of the issues was whether the appellant
proved that the respondent entered into a sauda on 24
january 1952 with the appellants father to purchase for
rs.7000/- the properties mentioned in schedule a to the
plaint. the other issues were the defendant-respondent
proved that the properties were agreed to be purchased for
rs.2000/-. a companyollary to the issue raised in the written
statement was whether defendant proved the circumstances in
which it was made to appear that the sauda was for rs. 17000/-. in short the defendant alleged fraud against
the appellant. the charge is that the appellant changed
the figure to rs. 17000/-. the trial companyrt held in favour
of the appellant and rejected the defence of the respondent. companynsel for the respondent companytended that the suit of the
appellant was number maintainable. it was said that the appel-
lant was number companypetent to maintain the suit by reason of
provisions companytained in sections 39 and 55 of the indian
contract act. the gist of the companytention is that the appel-
lant companyld number put an end to the companytract if there was
failure on part of the respondent to perform the agreement. the submission is fallacious. the case of the appellant has
always been that the respondent refused to perform the
agreement. the appellant all along asserted that the agree-
ment was that the property was agreed to be sold only for a
sum of rs. 17000/-. the respondent refused to perform the
agreement. the suit therefore was companypetent and valid. anumberher companytention was raised by the respondent that the
certificate was number companypetent because the value all along
has number been over rs. 20000/-. this companyrt has held in the
decision in state of assam and anr. etc. v. basanta kumar
dass etc. etc. reported in 1973  3  s.c.r. 158 at page
168 that the objection to valuation cannumber be allowed to be
taken at this late stage. but the graver objection to the
respondent number being allowed to challenge the certificate is
that if the respondent had taken this point at the time when
the matter was heard in the high companyrt the appellant companyld
have satisfied the high companyrt or the appellant would have
failed. this companyrt in any event if a certificate had been
granted on a challenge being made would have been in pos-
session of facts and the judgment of the high companyrt on that
question. that is the main reason why the respondent should
number be allowed to challenge the certificate at this stage. the respondent has also number raised such a plea in the state-
ment of case. the remaining question is one of substance and is the
real issue. it is whether the agreement has been performed. companynsel for the respondent submitted that it was open to
the respondent to companytend that the finding of the high companyrt
that the agreement was for rs. 17000/- should number be
accepted. companynsel for the appellant rightly challenged
the companypetency of such an objection. the respondent can
certainly support the judgment 0 many ground which is open
to him under impugned judgment. the judgment is that the
agreement was between the parties and that the sale price
was rs.17000/-. the respondent did number file any cross
objection on the finding in judgment on that point. it is
therefore number open to the respondent to challenge that
finding. the principal hurdle in the way of the respondent is
that the respondent has never been ready and willing to
perform the agreement as alleged by the appellant. the
respondent alleged that the companysideration for purchase was
rs. 12000/-. the respondent has never been ready and will-
ing to perform the agreement alleged by the appellant. the
respondent relied on the doctrine of part-performance. one
of the limbs of part performance is that the transferee has
in the part performance of the companytract taken possession of
the property. the most important companysideration here is the
contract. the true principle of the operation of the acts of
part performance seems to require that the acts in question
must be referred to some companytract and must be referred to
the alleged one that they prove the existence of some
contract and are companysistent with the companytract alleged. the
doctrine of part performance is a defence. it is a sword
and number a shield. it is a right to protect his possession
against any challenge to it by the transferor companytrary to
the terms of the companytract. the appellant is right in the
contention that there was never any performance in part by
the respondent of the companytract between the parties. in fry on specific performance sixth edition at page
276 it is stated that the acts of part performance must be
such as number only to be referable to a companytract such as that
alleged but to be referable to numberother title and that the
acts relied upon as part performance must be unequivocally
and in their own nature referable to some such agreement as
that alleged. the high companyrt found that the respondent performed in
part the agreement alleged by the appellant. it has been
said by the appellant that the high companyrt should have appre-
ciated that section 53-a requires a positive act of
readiness and willingness on part of the transferee to
perform the agreement. in the present case the respondent
who was the transferee under the agreement did number perform
his part of the companytract from 1952 till 1963 that is after
the judgment was pronumbernced by the trial companyrt. the high
court wrongly found that there was an extension of the
performance of companytract by one year. there was numberissue
raised on that point. it is well settled that there should
be specific issues on-questions of fact. parties did number
go to trial on that question and there the high companyrt was in
error in holding that there was an extension of time for
performance of the companytract. it is therefore erroneous to
say as the high companyrt did that the respondent can take
advantage of the period between 1953-54.
some attempt was made by companynsel for the respondent that
there was an admission by the appellants father that the
purchase price was rs. 12000/-. this companytention cannumber be
accepted in view of the finding of the. high companyrt that the
purchase price was rs. 17000/-. one of the questions in the high companyrt was there should
be numberaward of interest on the sum of rs. 5000/- which had
been paid. the high companyrt rightly allowed interest at the
rate of 6 per cent per annum. we are told the amount of rs. 5000/- has been deposited in the high companyrt. for the foregoing reasons we are satisfied that the
decree passed by the trial companyrt was companyrect and the high
court was in error in reversing the decree. the high companyrt
should number have reversed the decree particularly when it was
found that the respondent failed first in regard to the
agreement alleged by the defendant and second in allow-
ing the decree in favour of the respondent on the plea of
part performance of a companytract which was never pleaded by
the defendant respondent and was number a companytract upon which
there companyld be any performance in part. the appeal is therefore accepted. the judgment of the
high companyrt is set aside. the judgment of the trial companyrt is
restored.