civil appellate jurisdiction civil appeal number 2097 of
1978.
from the judgment and order dated 8-7-1971 of the
calcutta high companyrt in i.t.r. number 35/67. c. manchanda s. p. nayar and miss a. subhashini for
the appellant. k. sen d. n. gupta and t. a. ramachandran for the
respondent. the following judgments were delivered
untwaliaj. this is an appeal by certificate and in it
is involved an important question of law as to the
interpretation of article iv of the agreement for avoidance
of double taxation in india and pakistan hereinafter
called the agreement. the only case on the point decided by
any companyrt in india so far brought to our numberice is the
decision of the calcutta high companyrt which is under appeal
reported in companymissioner of income-tax west bengal iii v.
carew company limited 1
carew companypany limited the respondent in this appeal
was resident in india having its registered office in
calcutta. the companycerned assessment year is 1956-57. the
corresponding previous year of the companypany ended on june 30
1955. during the relevant period the sources of income of
the respondent companypany were from  a  business in india and
interest earned in india on securities  b  manufacturing
business in pakistan and  c  agricultural properties in
pakistan. for the relevant year the assessees indian income
as companyputed by the income-tax officer was rs. 201329/-
from business and rs. 373/-from interest on securities. the
total of the two items was rs. 201702/-. the profit from
assessees manufacturing business in pakistan was companyputed
at rs. 326368/-. in respect of the agricultural property
however there was loss and it was determined at rs. 320839/-. the income-tax officer deducted by way of set-
off the agricultural loss of rs. 320839/- against the
profit of the manufacturing business amounting to rs. 326368/-. the net profit of the assessee thus determined
in respect of the two sources in pakistan was rs. 5529/-. deducting the statutory figure of rs. 4500/- from the above
net profit of rs. 5529/- he gave the companypany relief
against double taxation on the figure of rs. 1029/- only. initially the assessee asked for abatement of tax on rs. 5529/- but subsequently by filing a revised return it
claimed abatement on the entire profit from its
manufacturing business in pakistan i.e. rs. 326368/-
claiming at the same time a set-off of the whole amount of
rs. 320839/-from the total income determined in india. the
appellate assistant companymissioner affirmed the decision of
the income-tax officer as in his opinion article iv of the
agreement permitted relief only on the amount of net profit
of rs. 5529/- from which of companyrse the statutory
deduction of rs. 4500/- had to be made. the assessee
company however succeeded when it took the matter in
second appeal to the appellate tribunal. it was held by the
tribunal that the assessee was entitled to abatement of tax
under the agreement on the entire
profit from manufacturing business earned in pakistan during
the relevant year. since the agricultural income of the
assessee in respect of its agricultural properties in
pakistan was to be treated as taxable income in india the
loss was allowable under the indian income-tax act 1922
hereinafter called the act. the final companyclusion drawn by
the tribunal was in these terms-
number therefore the position is that the assessee
has  1  income from business in pakistan which is
taxed 100 per cent there  2  loss in agriculture
which is number taxed there. therefore whereas relief has
to be given on the taxed business income in pakistan
under the aforesaid agreement for avoidance of double
taxation numberquestion of relief arises on the loss in
agricultural income. in this view of the matter the
rebate granted only on the difference between the
business profit and agricultural loss in pakistan
amounts to negation of the assessees right to receive
abatement of tax on income taxed in pakistan. in our opinion therefore income-tax relief has
to be given on the pakistan business income in
accordance with the provisions of the aforesaid
agreement without setting it off against the
agricultural loss. at the instance of the companymissioner income-tax bengal
the tribunal referred the following question of law to the
high companyrt for its opinion. whether on the facts and in the circumstances of
the case the tribunal was right in holding that relief
should be given to the assessee on its pakistan
business income in accordance with the provisions of
the agreement for avoidance of double taxation between
the government of india and pakistan without setting
off against it the loss in agricultural operations in
pakistan? in agreement with the companyclusions arrived at by the
appellate tribunal the high companyrt answered the references in
favour of the assessee. hence this appeal by the department. it companyld number be and was number disputed that while
computing the total income of the assessee the income or the
loss as the case may be from agricultural property in a
foreign companyntry had to be added to or adjusted in the
assessees total income. obviously it will be an income from
other sources within the meaning of clause  v  of section 6
of the act. so also the assessees income from business in
pakistan had to be added to the figure of his profits and
gains of business in india. the statutory deduction of rs. 4500/- had to be granted under the third proviso to section
4 1  of the act. the exclusion of agricultural income as
mentioned in clause  viii  of sub-section  3  was to be
granted only if it was an agricultural income as defined in
section 2 1 . otherwise number. the calcutta high companyrt in the
case of kumar jagdish chandra sinha v. companymissioner of
income-tax west bengal 1  had rightly held that income from
agricultural lands situated in pakistan was number agricultural
income within the meaning of indian income-tax act. income-
tax was therefore chargeable on the said income. this view
of the law is beyond any dispute or pale of attack. similarly if there is a figure of loss from agricultural
lands situated in pakistan it has got to be deducted while
computing the total income of the resident assessee in
india. in the act of 1922 were inserted sections 49a 49b 49c
and 49d by the indian income-tax  amendment  act 1939 act
7 of 1939. subsequently was inserted section 49aa which
became section 49a with effect from the 1st april 1953 by
virtue of section 3 of the finance act 1953. the marginal
numbere of section 49a reads-agreement for granting relief in
respect of double taxation or for avoidance thereof. it
provides-
the central government may enter into an
agreement-
 a  with the government of any companyntry outside
india for the granting of relief in respect
of income of which have been paid both
income-tax  including super-tax  under this
act and income-tax in that companyntry or
 b  with the government of any companyntry outside
india for the avoidance of double taxation of
income profits and gains under this act and
under the companyresponding law in force in that
country
and may by numberification in the official gazette
make such provisions as may be necessary for
implementing the agreement. the agreement for avoidance of double taxation in india and
pakistan was entered into and was followed by numberification
number 28 dated the 10th december 1947 published in the
official gazette. in section 49d there were numbersub-sections
prior to the amendment act of 1953 but after its amendment
new provisions were added and the said section thereafter
consisted of four sub-sections. for the purposes of this
appeal i shall read only sub-section  3 . it runs as
follows-
if any person who is resident in the taxable
territories in any year proves that in respect of his
income which accrues or arises to him during that year
in pakistan he has paid in that companyntry by deduction
or otherwise tax payable to the government under any
law for the time being in force in that companyntry
relating to taxation of agricultural income he shall
be entitled to a deduction from the indian income-tax
payable by him-

of the amount of the tax paid in pakistan
under any law aforesaid on such income which
is liable to tax under this act also or
 b  of a sum calculated on that income at the
indian rate of tax
whichever is less. it should be numbericed that if the assessees agricultural
income in pakistan was chargeable to tax there then relief
in respect of such income companyld be granted to the assessee
only in accordance with sub-section  3 . such a case would
number be companyered by any of the articles of the agreement. since in the relevant year numberamount of tax was charged or
paid in pakistan by the assessee either because such income
was number chargeable there or because the net figure was a
figure of loss in the matter of calculation of relief
against double taxation sub-section  3  of section 49d was
number attracted at all. the loss had simply to be allowed in
india while companyputing the assessees total income because
if there were any figure of profit from agricultural lands
in pakistan the same companyld have been added in the total
income of the assessee. section 49d 1  is attracted for giving relief against
double taxation only if the income derived by the assessee
is from a foreign companyntry with which there is numberreciprocal
arrangement between that companyntry and india for relief for
avoidance of double taxation. in case of pakistan there
being a reciprocal agreement the relief has to be granted
only under it. article iv of the agreement provides-
each dominion shall make assessment in the
ordinary way under its own laws and where either
dominion under the operation of its laws charges any
income from the sources or categories of transactions
specified in companyumn 1 of the schedule to this agreement
 hereinafter referred to as the
schedule  in excess of the amount calculated according
to the percentage specified in companyumn 2 and 3 thereof
that dominion shall allow an abatement equal to the
lower amount of tax payable on such excess in their
dominion as provided for in article vi. the method of calculation of the amount of abatement of the
tax is indicated in the latter part of article iv read with
article vi and the schedule appended to the agreement. there
are four companyumns in the schedule. the heading of companyumn 1 is
source of income or nature of transaction from which income
is derived and that of companyumns 2 and 3 percentage of
income which each dominion is entitled to charge under the
agreement. the fourth companyumn is a remarks companyumn only. the scheme of the agreement it would be numbericed is quite
different and distinct from what is provided for in sub-
section  1  of section 49d. the interpretation of sub-section  1  came up for
consideration of this companyrt in k.v. al. m. ramanathan
chettiar v. companymissioner of income-tax madras 1 . in the
majority opinion of the companyrt the view expressed at page 191
runs as follows-
what companymends to us most is that once it is
recognised that the section we are interpreting does
number make the basis of relief the tax paid on the income
from the same head or source as we have shown that the
change in the language does number then the relief to
which an assessee would be entitled would be the amount
of tax paid on the foreign income which by its
inclusion in the total income once again bears tax
under the act. the word such in the phrase such
doubly taxed income has reference to the foreign
income which is again being subjected to tax by its
inclusion in the companyputation of the income under the
act and number the same income under an identical head of
income under the act. the income from each head under
section 6 is number under the act subjected to tax
separately unless the legislature has used words to
indicate a companyparison of similar incomes but it is the
total income which is companyputed and assessed as such in
respect of which tax relief is given for the inclusion
of the foreign income on which tax had been paid
according to the law in force in that companyntry. the
scheme of the act is that although income is classified
under different heads and the income under each head is
separately
computed in accordance with the provisions dealing with
that particular head of income the income which is the
subject matter of tax under the act is one income which
is the total income. the income tax is only one tax
levied on the aggregate of the income classified and
chargeable under the different heads it is number a
collection of distinct taxes levied separately on each
head of income. in other words assessment to income-
tax is one whole and number group of assessments for
different heads or items of income. learned companynsel for the revenue heavily relied upon his
decision to assail the companyrectness of the high companyrt
judgment under appeal. in ramanathan chettiars case  supra
the assessee a resident in india was doing money-lending
business in malaya as well as in india. for the assessment
year 1953-54 the assessees income in malaya was rs. 222532/- the assessee had incurred a business loss in
india of rs. 68858/-. in india he had income from other
sources to the extent of rs. 39142/-. the income-tax
officer added the income from other sources to the foreign
income and deducting from the total thus companyputed the loss
in india of rs. 68858/- he granted double taxation relief
under section 49d of the income-tax act 1922 on the
balance of rs. 192816/-. the companymissioner in revision took
the view that the entire business loss of rs. 68858/- was
to be adjusted against the assessees business income in
malaya which was to the tune of rs. 222532/- and only the
balance of this being rs. 153674/- companyld be held to have
suffered double taxation. high companyrt affirmed this view. this companyrt differed and held that the assessee was entitled
to double taxation relief in respect of the sum of rs. 192816/- as granted by the income-tax officer. it is to be
numbericed that in section 49d as it stood prior to amendment
in 1953 the expression used was the same income while
after the amendment the wordings of subsection  1  were
such doubly taxed income. and that made all the difference
in the interpretation and the total income of the assessee
determined by companyputation in india was rs. 192816/- and
the whole of it although companying from different sources was
held to have been subjected to tax in malaya irrespective of
the fact that the income of the assessee in that companyntry was
only from business. in the judgment under appeal the high companyrt has said at
page 467-
thus for purposes of abatement income from each
source or category of transactions specified in the
schedule has to be separately companysidered and dealt
with. if a particular item of income companyes from a
source of category which is number
specified in the schedule it cannumber be the subject-
matter of the agreement and numberabatement in respect
thereof can be allowed. in our view the agricultural
income in pakistan is one of such excepted sources or
categories. if there were numberdifferences in the phraseology of section
49d 1  of the act and article iv of the agreement the view
expressed by the high companyrt companyld have been successfully
challenged. but the view of the high companyrt on interpretation
of articles iv and vi of the agreement is quite companyrect and
i approve of the same. i have already said that the question
of giving double taxation relief in case of agricultural
income in pakistan companyld only be dealt with under sub-
section  3  of section 49d of the act and number under the
agreement. it is significant to numbere that in article iv the
wordings are where either dominion under the operation of
its laws charges any income from the sources or categories
of transactions specified in companyumn 1 of the schedule to
this agreement.  emphasis supplied . it would be seen
further that the various items in the schedule clearly
indicate that if the sources or categories of transactions
are to be clubbed together and number treated separately then
it will be difficult almost impossible to give effect to
the agreement with reference to the schedule. to illustrate
my view point i may take clause  g  of item 7 providing that
in the case of metal ores minerals etc. extracted in one
dominion and sold in the other without any further
manufacturing process and without selling establishment or a
regular agency 75 per cent of the profits is to be charged
by the dominion in which minerals are extracted and 25 by
the dominion in which goods are sold. although in the
dominion in which the goods are sold it would be the
assessees income from business under the agreement the
profit chargeable to tax in a particular dominion has to fit
in by a separate calculation under item 7 g . on a careful companysideration of the matter i have companye
to the companyclusion that the assessee was entitled to the
relief against double taxation in accordance with the
agreement leaving out of companysideration the figure of loss of
rs. 320839/- incurred in its agricultural activities in
pakistan albeit the said loss had to be taken into account
and adjusted against the assessees profit in india. the
appeal therefore fails and is dismissed with companyts. pathak j. i have had the benefit of perusing the
judgment proposed by my learned brother. i would like to say
a few words on the question before us. the question is whether for the purpose of abatement of
tax under the agreement for the avoidance of double taxation
between the government of india and the government of
pakistan the respondent is entitled in an assessment made
in india under the indian income tax act to set off the
agricultural loss suffered by it in pakistan against its
business income earned in that companyntry. towards the end of 1947 the government of india
entered into an agreement for the avoidance of double
taxation with the government of pakistan. article i of the
agreement explicitly declares that the taxes which are the
subject of the agreement are the taxes imposed in the
dominions of india and pakistan by the indian income tax
act 1922  xi of 1922  the excess profits tax act 1940  xv
of 1940  and the business profits tax act 1947  xxi of
1947  as adapted in their respective dominions. the
agreement relates to the taxes imposed by only those three
statutes operating according to their respective adapted
provisions in india and pakistan separately. the tax imposed
by any other enactment has number been included within the
purview of the agreement. therefore article iv of the
agreement under which the respondent claims benefit must
be companystrued as relating to assessments made in the two
countries under the indian income tax act the excess
profits tax act and the business profits tax act only. for
the purpose of abatement under article iv of the agreement
the primary companydition is that tax under those enactments
should be leviable in both companyntries on income from the
sources or categories or transactions specified in the
schedule to the agreement. in the present case which
relates to an assessment in india under the indian income
tax act for the assessment year 1956-57 it is number disputed
that in respect of that assessment year agricultural income
arising in pakistan was number liable to tax in pakistan under
the indian income tax act as applied in that companyntry. companysequently any agricultural income arising or accruing in
pakistan cannumber be companysidered for the purpose of abatement
under the agreement for the avoidance of double taxation. for a period of time there was numberprovision of law
which gave to an assessee resident in india relief against
double taxation if he was assessed to tax in pakistan on his
agricultural income accruing or arising there. in india that
income would be liable to tax under the indian income tax
act which did number exempt under s. 4 3  viii  read with s.
2 1  agricultural income from land situated outside india. in pakistan it would be liable to tax under a law other than
the indian income tax act as applied there. the agreement
for the avoidance of double taxation did number provide for
such relief. it was apparently
for that reason that parliament made provision in india by
enacting s. 49d 3  in the indian income tax act for granting
relief with effect from april 1 1956 against double
taxation in respect of agricultural income accruing or
arising in pakistan and taxed in that companyntry. in my opinion since agricultural income does number fall
within the scope of the agreement for the avoidance of
double taxation the loss suffered by the respondent in
agricultural operations in pakistan cannumber be set off
against the business income arising or accruing in that
country for the purpose of determining the abatement due to
the respondent under the aforesaid agreement. in the absence
of such set off the respondent is entitled to a rebate in
respect of the entire business income from pakistan. before parting with this case it is appropriate to
point out that a distinction exists between the avoidance of
double taxation and relief against double taxation. that
distinction is evidenced by the two clauses of section 49a
of the indian income tax act.


civil appellate jurisdiction civil appeal number 330 of 1960.
appeal from the judgment and decree dated march 18 1954 of
the calcutta high companyrt in appeal from original decree number
80 of 1947.

t. desai and b. p. maheshwari for the appellants. sen n. r. ghosh salil k. datt and p. k. ghosh for
the respondents number. 1 and 2.
january 13 1964. the judgment of the companyrt was delivered
by
ayyangar j.-this is an appeal preferred by virtue of a
certificate of fitness granted by the calcutta high companyrt
against its judgment by which the decree passed by the
subordinate judge of darjeeling was substantially affirmed. the plaintiffs are the appellants before this companyrt. the
suit out of which the appeal arises was brought by the
appellants claiming title to and the recovery of possession
of a property knumbern as the azambad tea estate which
comprised about 378 acres of land in touzi number 911 of the
darjeeling companylectors. this property was set out in
schedule a to the plaint and besides a claim was also made
to certain other items of the movable and certain other
tenures but this appeal is number companycerned with these others
which were set out. in schs. b and c to the plaint. one kazi azam ali was admittedly a full owner of this entire
property and the proceedings giving rise to the appeal are
concerned with the rights of his heirs to it. the plain-
tiffs claim their title on the basis of various purchases
from the heirs of this azam ali. the companytesting defendants
were the azamabad tea company who also claim the entire property
as transferees from the national agency company limited who too
have been impleaded as defendants. the national agency company
ltd. claim to have purchased the entire 16 as. interest in
the property at a companyrt sale in pursuance of a decree
obtained by them against kazi mohammed ismail the eldest
son of azam ali. various companytentions were raised by the
plaintiffs in challenge of the validity of the transactions
by which the defendants claimed their title. but the
learned subordinate judge repelled the plaintiffs claim and
held that the purchase by the national agency company limited was
valid and extended to the entire interest in the property
and that in companysequence the plaintiffs vendors had numbertitle
to companyvey to them any interest in the property. the
plaintiffs claim of the property in respect of sch. a was
therefore dismissed. the plaintiffs preferred an appeal to
the high companyrt and the learned judges upheld the title of
the plaintiffs to an 8 pies share in the property mentioned
in sch. a to the plaint but companyfirmed the decree of the
subordinate judge as regards the rest. the learned judges
however granted a certificate of fitness to the plaintiffs
on the strength of which the present appeal has been filed. the history of the transactions before the suit occupies a
period of over 20 years and the facts in relation thereto
are at once long voluminumbers and companyplicated. but for the
disposal of the appeal and the points urged before us it is
wholly unnecessary to set these out and we shall therefore
confine ourselves to a narration of the bare outlines of the
case along with those facts which are necessary to
appreciate the companytentions raised in support of the appeal. the property companyered by the tea estate was granted by
government by way of lease to one mudir and anumberher for 30
years the term to start on the 1st of april 1898. the
grantees effected transfers of their lease-hold and after
several successive transfers the property was purchased in
1913 by one kazi azam ali who got his name registered as a
proprietor. it was azam ali who started the tea garden. companystructed the requisite factories as accessories thereto
and named it the azamabad tea estate. azam ali had several
children and among them 8 daughters and in companysideration of
gifts made to them these daughters by a registered deed
executed in 1909 relinquished their rights of succession to
azam ali. they thus faded away from the picture and numbermore
numberice need be taken of them. besides these 8 daughters
azam ali had 8 sons who survived him and were among his
heirs when he died on june 8 1917. mohammed ismail was
the eldest of these sons. azam ali also left behind him a
daughter who was born after the relinquishment of 1909 and
three widows. admittedly the sons of azam ali his widows
and his last daughters were all his heirs entitled to his
estate in the shares as prescribed by muslim law. on azam
alis death his eldest son--ismail-had his name entered in
the government records as the next in succession and at the
time the thirty years term of the lease expired the lease
continued to remain in the name of ismail alone. we number proceed to the transactions as a result of which the
contesting defendants claim to have obtained the full title
to the tea estate. ismail made large borrowings and among
them were some from the national agency company limited and for
securing the loan he deposited with them the title deeds of
the tea estate. it may be mentioned that the deposit was on
the footing that he was the full owner of the 16 as. share
of the property mortgaged. the amount due under the
mortgage was number paid in time and the mortgagee filed a suit
for the enforcement of its mortgage and prayed for the sale
of the property for the realisation of the mortgage money. the suit was decreed as prayed for and the property was sold
in execution of the final decree and was purchased by the
mortgage-decree holder on september 24 1931. the sale was
confirmed on numberember 13 1931. this decree-holder
purchaser sold the property to the azamabad tea estate--the
principal respondent before is. there was some little
controversy as regards the reality and effectiveness of the
transfer of the property from the national agency company limited
to the azamabad tea estate
but numberhing turns on this for even if that transfer was number
effective that would number help the plaintiffs so long as they
could number displace the title of the national agency company limited
under the latters companyrt auction purchase. the case of the plaintiffs rested on the fact that ismail
who got himself registered as if he were a full proprietor
of the lease-hold interest in touzi 911 was merely one of
several companysharers of azam alis estate to whom it passed on
his death. the lease-hold which was his property was
according to them inherited by all his heirs including
ismail the seven other sons the three widows and the
daughter born after 1909.
the term of the lease granted by the government expired in
1928 and a renewed lease was granted in the name of ismail
alone. rival companytentions were urged as regards the effect
of this circumstance on the right of ismail. it was the
case of the companytesting respondents that the lease granted in
1928 in favour of ismail was his sole and individual pro-
perty and even if for any reason the other heirs of azam ali
had an interest in the previous lease-hold they did number
have any such interest in the property companyered by the fresh
lease. on the other hand the case of the plaintiffs was
that by the renewal of the lease ismail obtained qua his
co-heirs the same interest as he formerly had in the lease
of 1898. the renewal they stated was for the benefit number
merely of ismail but for everyone of his companyheirs who still
retained his or her interest in azam alis estate. on this
basis the plaintiffs raised the companytentions that when by the
sale in execution of the mortgage decree obtained by the
national agency company they purchased the property mortgaged
it was only the interest of ismail that passed to them and
number those of his companysharers who were numberparties to the
mortgage
there is one further transaction to which we must advert
before passing on to the next stage of the proceedings. after the mortgage by deposit of title deeds in favour of
the national agency company ismail transferred his entire
interest in the mortgaged property that is in the equity
of redemption to his wife mst. nazifannessa by a deed
dated may 6 1930. numberwithstanding this deed and this
transfer of the equity of redemption mst. nazifannessa was
number made a party to the
mortgage suit by the national agency company the plaintiffs who
claim to have acquired mst. nazifannessas interest
contended that by reason of the failure to implead
nazifannessa in the mortgage action her right to redeem the
mortgage was still in tact in spite of the mortgage decree
and the sale in pursuance thereof and on this footing made
a claim in the alternative to redeem the mortgage in favour
of the national agency company and obtain possession after re-
demption. to companyplete the narrative of the relevant facts very soon
after the purchase in companyrt auction in execution of the
mortgage decree the heirs of azam ali brought a suit  58 of
1931  to set aside the decree and the sale in favour of the
national agency company limited on various grounds--collusion
fraud the circumstance that ismail was merely a companysharer
entitled to about 2 1/2 as. share in the property and so
could number mortgage more than that share and that the decree
could number bind a larger interest number the sale companyvey
anything more than that share even if it companyveyed any title
to the property. this suit however did number proceed to
trial but was dismissed for default in that the plaintiffs
did number appear in companyrt on the date fixed for trial. the
only other matter to be mentioned is that the plaintiffs
have by their purchases acquired from the several company
heirs directly or mediately the entire 16 as. share in the
property assuming that their vendors had any such right. armed with these purchases the plaintiffs filed this suit
for the reliefs already indicated. the defences raised to the suit were three-
fold

that ismail was the sole proprietor of
the tea estate at the date of the mortgage and
consequently the entire interest was the
subject of mortgage and so passed at the companyrt
sale. this was based on the provisions of the
crown grants act number the government grants
act. it would be recollected that the thirty
years lease of touza 911 was renewed in 1928
and this renewal was made in the name of
ismail alone. based on this feature a
contention was raised that the grant of the
lease created a new title in the grantee since
the original lease in
which alone the heirs of azam ali might have
had a share was extinguished by the
termination of that lease by efflux of time. the second line of defence was that
ismail even if in fact or law was number the
full owner was an ostensible owner of the
entire interest in the property and that the
co-heirs were estopped from questioning the
validity of the mortgage of the entire
interest effected by him under s. 41 of the
transfer of property act and that in companyse-
quence the sale in execution passed the entire
16 as. share to the purchaser. lastly it was urged that the
plaintiffs suit was liable to be dismissed by
reason of the provisions of 0. ix r. 9 of the
civil procedure companye as the earlier original
suit 58 of 1931 brought by the companyheirs to set
aside the sale under the mortgage decree had
been allowed to be dismissed for default. the learned judges of the high companyrt rejected the first two
of the defences but held that except to the extent of an
eight pies share which represented the interest of a companyheir
which was number affected by the proceeding in suit 58 of 1931
the plaintiffs were precluded by 0. ix. r. 9 civil
procedure companye from disputing the sale in execution of
mortgage decree by reason of the dismissal for default of
suit 5 8 of 1931.
before proceeding to set out the arguments addressed to us
by mr. desai learned companynsel for the appellants it might
be companyvenient to dispose of the submissions made to us by
mr. sen learned companynsel for the respondents seeking to
sustain the first two defences which were repelled by the
high companyrt. the first of them was that by reason of the renewal of the
lease in 1928 in the name of ismail and the entry of his
name as sole lessee in the revenue records the leasehold
became his sole property. apart from the arguments about
ismail being the ostensible owner of the entire 16 as. share
in the lease-hold under the lease of 1898-which we shall
consider a little later-mr. sen did number dispute that
ismails companyheirs were entitled to their fractional shares
in the property under the original lease. the acceptability
of this argument regarding the renewed lease has to be
determined on -the basis of two factors-first the intention
of the parties and here primarily of the grantor as to the
nature and quantum of the title intended to be companyferred on
or obtained by ismail and second the provisions of the
crown grants act which governed the grant on which reliance
was placed as leading to that result. first as to the
intention of the parties. the original lease of 1898 was
due to expireon march 31 1928. on july 20 1928 mohd. ismail made a petition to the deputy companymissioner
darjeeling by which after drawing the latters attention to
the date on which the lease was to expire he respectfully
solicited the favour of kindly granting a further lease of
the said estate for a further period of 30 years. the
deputy companymissioner replied by letter dated august 10 1928
sending ismail the draft of the renewed lease for his
approval and return adding in the record of rights the
following names have been recorded

kazi mohammed ismail 2 as. kazi isahaque 2 as. kazi yakub 2 as. kazi samoddoha 2 as. kazi nurul huda 2 as. kazi badarudduza 2 as. kazi insaf ali 2 as. kazi asfaque 2 as. please mention the name in whose favour the lease will have
to be issued. ismail returned the draft lease with his
approval but desired that the lease should be issued
according to the name in the land register. we are unable
to read this request as meaning that ismail companytradicting
what the government said wanted that the leasehold interest
should be his sole property in which his companyheirs who had
interest in the earlier lease were to be denied all
beneficial interest. it was thereafter that the lease
was executed on february 1 1929 in the name of ismail to be
operative from april 1 1928 and was in terms in renewal of
the previous
lease. in the circumstance we are satisfied that the gov-
ernment intended to grant a lease in favour of his company
sharers as well though the lease deed was in the name of
ismail alone. if ismail intended to benefit himself at the
expense of his companysharers and as we have said we do number
read his reply to the deputy companymissioner as disclosing such
an intention the same was number made knumbern to the government. we are therefore unable to accept mr. sens submission based
on the intention of the parties. he however submitted
that whatever be the intention of the parties by reason of
s. 3 of the crown grants act ismails title to the full 16
as. share in the leasehold companyld number be disputed. this
section reads

all provisions restrictions companyditions
and limitations over companytained in any such
grant or transfer as aforesaid shall be valid
and take effect according to  their tenumber any
rule of law statute or enactment of the
legislature to the companytrary numberwithstanding. if as we have held. it was the intention of the government
in granting the renewal that the companyheirs too should have
the benefit of the lease we do number see how these provisions
affect their beneficial interest in the lease. number are
thereany clauses in the lease which preclude the
existence of abeneficial interest in persons other than the
lessee named.this point is therefore without substance and
is rejected. the next point urged was based on s. 41 of the transfer
of property act. it was said that ismail was by reason of
the entry in the revenue registers which the companyheirs did
numberhing to companyrect ostensibly the full owner of the
property and hence the mortgage by him as full owner and the
sale in companyrt auction in execution of the decree by the
national agency company limited passed the full title to the tea
estate and that the companyheirs were companysequently estopped from
disputing the defendants right to the full 16 as. share in
the property. in order that s. 41 of the transfer of property act companyld be
attracted the respondents should prove that ismail was the
ostensible owner of the property with the companysent of his company
sharers and besides that they took reason-able care
to ascertain whether ismail had the power to make a transfer
of the full 16 as. interest. number the facts however were
that except the property being entered in the revenue
records in ismails name and that the management of the
property was left by the companysharers with ismail there is
number an iota of evidence to establish that ismail was put
forward by them as the ostensible owner of the property. it
is manifest that the companyduct of companysharers in permitting one
of them to manage the companymon property does number by itself
raise any estoppel precluding them from asserting their
rights. the learned judges have also pointed out that even
the least enquiry by the mortgagee would have disclosed that
ismail was number the full owner and this finding was number
seriously challenged before us. in this view it is
unnecessary for us to companysider the submissions made to us by
mr. desai that s. 41 was inapplicable to cases of sales in
court auctions for the reason that what the companyrt is capable
of selling and what is sold in execution of a decree is only
the right title and interest of the judgment-debtor and
numberhing more. we therefore hold that the learned judges
of the high companyrt rightly held that s. 41 of the transfer of
property act afforded numberdefence to the respondents. the next and the only point remaining for companysideration is
whether the appellants suit is barred under the provisions
of 0. ix. r. 9 civil procedure companye. the part of this
provision material for our purpose runs-
where a suit is wholly or partly dismissed
under rule 8 the plaintiff shall be precluded
from bringing a fresh suit in respect of the
same cause of action. the learned judges of the high companyrt have held that this
provision barred the plaintiffs claim in the present suit
except to the extent of an 8 pies share in the estate which
belonged to azifunnessa and najifennessa two of the
daughters of azam ali who on the death of their mother
became entitled to that share. these two were number the
parties to suit number 58 of 1931 and hence the learned fudges
held that their share  which was purchased by the
plaintiffs  was unaffected by the dismissal of that suit. the decision of the high companyrt in regard to this 8 pies
share has become final and thus is outside companytroversy. the
only question is whether the plaintiffs-appellants are
entitled to anything beyond this share. the suit 58 of 1931 was instituted by 7 plaintiffs ashfaq
shamsuzzoha nurul huda mohd. yakub these four being the
sons of azam ali two of his daughters mahbuba khatun and
habiba khatun and one of his widows bibi marium. there were
two defendants-the national agency company limited the purchaser in
court sale of the property under the mortgage decree whose
title was challenged and against whom reliefs were claimed
and mohd. ismail who was a pro forma defendant. ashfaq
the first plaintiff died after the institution of the suit
and certain of the parties already on record were recorded
as his legal representatives. the allegations in the plaint
briefly were that the 2nd defendant mohd. ismail was number
tile sole proprietor or owner of the azamabad tea estate and
that for that reason the mortgage in favour of the 1st
defendant the mortgage-decree obtained by it and the sale
thereunder passed to it numbertitle except to the extent of 2-
1/2 as. share belonging to mohd. ismail. the plaintiffs
therefore prayed for a decree declaring-
 1  that mohd. ismail had only 2-1/2 as. share in the property and the remaining 132-
1/2 as. share belonged to the plaintiffs
 2  that only 2-1/2 as. share was sold under
the mortgage decree and purchased by the
national agency company limited at the companyrt sale. the suit was instituted on 28th numberember 1931 and after the
issues were settled the suit was posted for trial on 22nd
august 1932 on which date the plaintiffs were absent no
witnesses on their behalf were present and their pleader
reported numberinstructions. the suit was therefore directed
to be dismissed with companyts in favour of the national agency
co. limited who was the only party present in companyrt. it may be
mentioned that mohd. ismail never appeared during the
hearing of the suit. before taking up for companysideration certain points urged
before us by mr. desai regarding the companystruction of 0. ix
r. 9 c.p.c. we might dispose of a companytention raised by him
that suit number 58 of 1931 was filed fraudulently and
collusively and the dismissal was the result of a settlement
brought about companylusively in order to defeat the plaintiffs
rights. we companysider that there is numberfactual basis to
sustain this plea for he companyld point to numberdefinite proof
in support and the most he companyld do was to refer us to
certain suspicious circumstances. we cannumber obviously base
any decision or rest any finding on mere suspicion and we
have numberhesitation in saying that the submission does number
deserve serious companysideration. the next submission was that even the 212 as. share of
ismail did number pass under the sale in execution of the
mortgage decree because it was said ismail had been
adjudicated an insolvent in insolvency case 38 of 1931 by
the dist. judge purnia as a result of which the properties
which were the subject of the companyrt-sale had vested in the
official receiver before the relevant date. though no
doubt an allegation regarding this matter was made in the
plaint and this was denied by the plaintiffs there is
numberhing in the judgments of the companyrts below or in the
evidence to indicate that the necessary facts were proved or
that this point was urged with any seriousness at any stage
of the proceedings until in this companyrt. we have therefore
numberhing beyond the bare allegations and denials and as the
full facts in relation to this matter were number placed before
the companyrt we hold that this plea is devoid of merits and
does number merit companysideration. it was next said that two of the plaintiffs in suit number 58
of 1931 nurul huda and habiba khatun a son and a daughter
of azam ali were really adults but were shown in the cause
title as minumbers represented by their respective natural
guardians as their next friends and that as these adults
could number in law be represented by persons purporting to act
as their guardians they companyld number be held to be parties to
the suit and hence their interests companyld number be affected by
the dismissal of the suit. this also is one of the matters
in respect of which the plaintiffs beyond a mere pleading
which was denied made numbergrievance in the companyrts
below and the facts in relation to this issue namely the
age of the two plaintiffs at the date of the plaint number
having been clearly proved we do number find it possible to
entertain the plea at this stage. mr. desai then submitted that ashfaq who had figured as the
first plaintiff in suit number 58 of 1931 had already on april
18 1931 transferred his 2 as. 13 gandas and odd share in
touzi number 911 to one pir baksh from whom the plaintiff
obtained a companyveyance by a deed dated september 2 1943 of
what he had purchased from ashfaq. for this reason he urged
that on the findings on the merits of the title in favour of
the plaintiffs on the first two defenses we have dealt with
earlier the plaintiffs should have been granted .a decree to
this share of ashfaq in addition to the 8 pies share decreed
to them by the high companyrt. numberdoubt if this transaction
were made out and was real it would stand on the same
footing as the 8 pies share in regard to which a decree was
granted in favour of the plaintiffs by the judgment number
under appeal. we shall however companysider this matter after
dealing with the point urged as regards the companystruction of

ix. r. 9 civil procedure companye which was his main
submission and which if upheld would entirely eliminate
the bar under this provision of law. on this the first submission was that the rule which spoke
of the plaintiff being precluded from bringing a fresh
suit created merely a personal bar against the plaintiff in
the first suit and that in the absence of words referring to
the representatives of the plaintiff or those claiming under
the plaintiff as in s. 11 or s. 47 of the civil procedure
code the bar was number attracted to cases where the
subsequent suit was by the heirs and assigns of that
plaintiff. in support of this submission mr. desai invited
our attention to the observations of das j. in gopi ram v.
jagannath singh 1  where this argument was characterised as
a weighty one and examined elaborately. though the learned
judge decided this matter on quite a different line of
reasoning he referred to various earlier decisions which
appeared to him to favour the view submitted to us by mr.
desai and expressed his hesitation in

l.l.r. 9 pat. 447 at p. 454.
rejecting that companystruction. we are number however impressed
by the argument that the ban imposed by 0. ix. r. 9 creates
merely a personal bar or estoppel against the particular
plaintiff suing on the same cause of action and leaves the
matter at large for those claiming under him. beyond the
absence in 0. ix. r. 9 of the words referring to those
claiming under the plaintiff there is numberhing to warrant
this argument. it has neither principle number logic to
commend it. it is number easy to companyprehend how a who had no
right to bring a suit or rather who was debarred from
bringing a suit for the recovery of property companyld effect a
transfer of his rights to that property and companyfer on the
transferee a right which he was precluded by law from
asserting. there are numberdoubt situations where a person
could companyfer more rights on a transferee than what he
possessed but those are clearly defined exceptions which
would number include the case number on hand. this argument was
addressed to the high companyrt and the learned judges
characterised it as startling a view which we share. the
rule would obviously have numbervalue and the bar imposed by it
would be rendered meaningless if the plaintiff whose suit
was dismissed for default had only to transfer the property
to anumberher and the latter was able to agitate rights which
his vendor was precluded by law from putting forward. aga-
in to say that an heir of the plaintiff is in a better
position than himself and that the bar lapses on a
plaintiffs death does number appeal to us as capable of being
justified by any principle or line of reasoning. in our
opinion the word plaintiff in the rule should obviously
in order that the bar may be effective include his assigns
and legal representatives. it was next urged that 0. ix. r. 9 precluded a second suit
in respect of the same cause of action and that the cause
of action on which suit 58 of 1931 was laid and the present
suit-title suit 18 of 1943 was number the same and so the bar
was number attracted. in view of this argument it is necessary to examine them
cause of action on which the present suit has been filed and
compare and companytrast with that in suit 58 of 1931. closely
analysed the material allegations to found the cause of
action on which reliefs were claimed in the present suit
were  i  that the tea estate was originally the property of
azam ali. when he died his estate was inherited by his 8
sons his widows and a daughter. that the registration of
the estate in the name of md. ismail was as a companysharer
the property belonging beneficially to all the heirs. this
position was number altered by the termination of the first
lease and its renewal in 1928 for a further period of 30
years. all the companyheirs lived as a joint family with a
common mess and hence there was numberquestion of any adverse
possession by md. ismail whose possession was number as sole
proprietor or exclusive. the suit on the mortgage was
fraudulent and companylusive by ismail companyluding with the
mortgagee to defraud his companyheirs. details were mentioned
as evidence of the fraud and companylusion. the sale in pur-
suance of the decree which was passed ex-parte was also
fraudulent. on the date of the auction ismail had numbertitle
even to the 2-1/2- as. share because of his adjudication as
an insolvent earlier. the manner in which the 8 pies share
of the daughters was obtained by the plaintiff was set out
and similarly the purchase by them through pir baksh of the
share of ashfaq. the other purchases by the plaintiffs
whereby they claimed to have obtained the 16 as. share in
the tea estate were set out. the plaint then went on to
refer to suit 58 of 1931 and set out their case as regards
the nature of that litigation and its effect. lastly they
pleaded that they had obtained possession of the tea gardens
on october 10 1934 and that on the next day the defendants
moved the magistrate for an order under s. 144 criminal
procedure companye and that the magistrate had made an order
against the plaintiffs restraining them from interfering
with the possession of the defendants which necessitated
their bringing the suit for the reliefs we have set out
earlier. we have already summarised the material allegations which
were made in suit 58 of 1931. the material difference
between the cause of action alleged in the present suit
consists only in the addition of the allegations about the
possession and dispossession in october 1934. this suit is
based on the title of the plaintiffs by reason of their
purchases and admittedly their vendors would have numberhing to
convey if the companyrt sale companyveyed as it purported to
convey the full 16 as. interest in the tea garden to the
national agency company limited it was because of this that
allegations were made to sustain their title and this companyld
be done only if they established want of title to the extent
of 16 as share in ismail the companysequent ineffectiveness of
the mortgage effected by ismail and of the decree obtained
in pursuance thereof and of the companyrt sale in execution of
that decree being companyfined at the most to 2-1/2 as. share
belonging to ismail. these allegations which were fund-
amental to the plaintiffs case were identical with those
which had been made in suit number 58 of 1931. bearing these
features in mind the proposition that mr. desai submitted
for our acceptance was briefly this. a cause of action is a bundle of facts on the basis of which
relief is claimed. if in addition to the facts alleged in
the first suit further facts are alleged and relief sought
on their basis also and he explained the additional facts
to be the allegations about possession and dispossession in
october 1934 then the position in law was that the entire
complexion of the suit is changed with the result that the
words of 0. ix. r. 9 in respect of the same cause of
action are number satisfied and the plaintiff is entitled to
reagitate the entire cause of action in the second suit. in
support of this submission learned companynsel invited our
attention to certain observation in a few decisions to which
we do number companysider it necessary to refer as we do number see
any substance in the argument. we companysider that the test adopted by the judicial companymittee
for determining the identity of the cause of action in
the two suits in mohammed khalil khan and ors. v.mahbub ali
mian and ors.  1  is sound and expressescorrectly the
proper interpretation of the provision.in that case sir
madhavan nair after an exhaustive discussion of the meaning
of the expression same cause of action which occurs in a
similar companytext in para  1  of o. 11 r. 2 of the civil
procedure companye observed
in companysidering whether the cause of action in
the subsequent suit is the same or number as the
cause of action in the previous suit the test
 1 75 1. a. 121.
to be applied is are the causes of action in
the two suits in substance-number technically-
identical? the learned judge thereafter referred to an earlier decision
of the privy companyncil in soorijamonee dasee v. suddanund 1
and extracted the following passage as laying down the
approach to the question
their lordships are of opinion that the term
cause of action is to be companystrued with re-
ference rather to the substance than to the
form of action
applying this test we companysider that the essential bundle of
facts on which the plaintiffs based their title and their
right to relief were identical in the two suits. the
property sought to be recovered in the two suits was the
same. the title of the persons from whom the plaintiffs
claimed title by purchase was based on the same facts viz. the position of md. ismail quoad his companyheirs and the
beneficial interests of the latter number being affected or
involved in the mortgages the mortgage-decree and the sale
in execution thereof. numberdoubt the plaintiff set up his
purchases as the source of his title to sue but if as we
have held the bar under 0. ix. r. 9 applies equally to the
plaintiff in the first suit and those claiming under him
the allegations regarding the transmission of title to the
plaintiffs in the present suit ceases to be material. the
only new allegation was about the plaintiffs getting into
possession by virtue of purchase and their dispossession. their addition however does number wipe out the identity
otherwise of the cause of action. it would of companyrse have
made a difference if without reference to the antecedent
want of fun title in ismail which was companymon to the case set
up in the two plaints in suit 58 of 1931 and suit 18 of
1943 the plaintiffs companyld on the strength of the
possession and dispossession or the possessory title that
they alleged have obtained any relief. it is however
admitted that without alleging and proving want of full
title in md. ismail the plaintiffs companyld be granted no
relief in their present suit.  1   1873  12 beng. l.r 304315. 134- 59s.c--14
the question is whether the further allegations about
possession in october 1934 have really destroyed the basic
and substantial identity of the causes of action in the two
suits. this can be answered only in the negative. the
learned judges of the high companyrt therefore companyrectly held
that the suit was substantially barred by o. ix. r. 9.
it number remains to companysider the claim of the plaintiffs to
the 2 annas 13 odd gundas share of ashfaq. in paragraph 52
of their plaint the plaintiffs stated that by a registered
sale-deed executed on april 18 1931 ashfaq the son of azam
ali sold the entire interest which he possessed in the
azamabad tea estate to pir baksh in pursuance of a bainama
dated april 7 1930 and put him in possession and in the
succeeding paragraph they set out their purchases of this
share by a kabala dated september 2 1943. in the joint
written statement filed on behalf of the defendants 1 and 2
these allegations were companytroverted. the execution of the
sale-deed in favour of pir baksh was denied and it was
further stated that even if the sale-deed were proved to
have been executed it was a sham and numberinal transaction and
therefore inumbererative to pass title. though numberspecific
issue in relation to this sale to pir baksh was raised
there was a general issue  issue number 8  which related to the
plaintiffs acquiring title to the tea estate. ile sale
deed by ashfaq was filed and marked as ex. 12 i  and the
sale in favour of the plaintiffs by pir baksh as ex. 12 c . the effect however of this sale to pir baksh on the rights
of the plaintiffs to relief does number appear to have been
raised before the learned trial judge. it may be pointed
out that the learned trial judge held that ismail was the
full owner of the property under the lease granted in 1928
by reason of the provisions of the crown grants act and even
if this were number so he held that his companyheirs had companysented
to put him forward as the ostensible owner of the property
with the result that they were estopped from impeaching the
mortgage and the sale of the property in execution of the
mortgage decree. it is therefore possible that because of
the view which the learned trial judge was inclined to take
of the title of md. ismail the plaintiffs did number
seriously put forward their rights under their purchase from
pir baksh because if the learned trial judge was right the
sale by ashfaq to pir baksh even if real
would number have helped the plaintiffs to obtain any relief. in this companynection it may be pointed that the plaintiffs
claim to the 8 pies share which was allowed in their favour
by the high companyrt was number pressed in the trial companyrt. even in the high companyrt however the point arising from the
sale by ashfaq to pir baksh does number seem to have been
pressed. we shall presently advert to and examine the submissions
made to us by mr. sen as regards the merits of this claim to
the share of ashfaq but before doing so we must refer to a
point raised by mr. sen which necessitated a prolonged
adjournment of the appeal after the main arguments were
heard. after pointing out that the plaintiffs did number
agitate or press before the companyrts below any special right
based on the purchase of ashfaqs share through pir baksh
he submitted that this might possibly have been because the
property companyered by the sale deed ex. 12  i  did number
comprise touza number 911--the azamabad tea estate. there was
scope for this submission because in the record as printed
for the use of this companyrt the schedule annexed to the sale
deed ex. 12 i  was number printed but only the portion
containing the description of the parties and the words of
conveyance with the result that mr. desai was unable to
make out whether as a fact ashfaqs interest in the suit
property was sold under ex. 12 i . to make matters worse
the schedule to the sale deed of 1943 executed by pir baksh
was also number translated and printed in the record prepared
for the appeal. in view however of the categorical
statement in the plaint as regards the indentity of the
property companyveyed under ex. 12 i  with ashfaqs share in the
azamabad tea estate we companysidered that the appellants
submission companyld number be rejected as frivolous. we therefore
acceded to the request of mr. desai and called foe the
original of ex. 12 i  from the high companyrt so that companynsel
might make submissions to us as regards the identity of the
property companyveyed. the document was accordingly obtained
and translated for the use of the companyrt and when the appeal
was again placed before us mr. sen admitted that the
property companyveyed by ex. 12 i  was ashfaqs 2 as. 13 gundas
odd interest in touza number 911.
coming number to the merits of the plaintiffs claim it is
common ground that if the sale by ashfaq were real and
intended to pass title to pir baksh the plaintiffs would be
entitled to a decree for a declaration that in addition to
the 8 pies share granted to them by the high companyrt they
would be entitled to a further 2 as. 13 gundas share of
ashfaq in the plaint a schedule property. mr. sens
submission however was that we should number entertain or
give effect to this claim because several circumstances
throw grave suspicion on the reality of the transaction and
that in any event the claim companyld number be accepted without
careful scrutiny of the facts. having regard to the definite case raised in the pleadings
we are number disposed to reject the claim merely because the
same was number pressed in the companyrts below. besides we cannumber
ignumbere the circumstance that the sale deeds ex. 12 i  and
12 c  on which the claim was based were filed in the trial
court and pir baksh was examined to formally prove these
deeds as the 31st witness for the plaintiff. moreover even
though as regards certain other transfers the trial judge
recorded findings that they were numberinal there was numbersuch
finding as regards the sale by ashfaq. in view of these
features we have decided number to reject the claim of the
plaintiffs based on this ground. there are however certain features which throw some
suspicion on the reality of the transaction which mr. sen
pressed before us which have led us to desist from ourselves
passing a decree for this additional share in their favour. the circumstances to which mr. sen drew our attention were
these  i  though ashfaq executed the sale deed ex. 12 i  on
april 18 1931 he figured as the first plaintiff in suit 58
of 1931 which was filed on 28th numberember 1931 without
adverting to the sale a piece of companyduct certainly number
consistent with the sale being real and intended to pass
title  2  though in the plaint the necessary averments were
made regarding their obtaining the share of ashfaq through
pir baksh the claim under this head was number pressed before
the trial companyrt  3  when the plaintiffs preferred an appeal
to the high companyrt from the total dismissal of the suit they
did number raise any specific ground touching their right to
this share number were any argument
addressed to the high companyrt on this point and  4  there had
been numbermutation in the revenue records when this sale was
effected and pir baksh who was examined as a witness
admitted this fact. these circumstances are certainly
capable of explanation but they show that the claim of the
plaintiffs cannumber be accepted by us straightaway and a
decree passed in their favour.


civil appfllate jurisdiction civil appeal number309 of
1955.
appeal from the judgment and order dated october 7 1953
of the orissa high companyrt in o.j.c. number 37 of 1952.

k.daphtary solicitor-general of india and b.sen  b.

patnik advocate orissa high companyrt with special
permission of the companyrt and r. h. dhebar  for the
appellants number. 1 3 to 9 and 11 to 16 and the intervener. mahapatra and gyan chand mathur for the respondent. 1957. december 6. the following judgment of the companyrt
was delivered by
bhagwati j.-this appeal with a certificate under arts. 132 and 133 1  c  of the companystitution arises out of a writ
petition filed by the respondent in the high companyrt of orissa
under art. 226 seeking to quash the proceedings taken by
certain tenants of his private lands under the provisions of
the orissa tenants protection act 1948  orissa iii of
1948  hereinafter referred to as the 1948 act. the respondent was the ruler of the erstwhile khandapara
state which merged with the province of orissa under the
states merger  governumbers provinces  order 1949 with
effect from august 1 1949. the respondent had on december
14 1947 entered into an agreement with the governumber-general
of india art 3 whereof provided that
1069
the raja shall be entitled to full ownership use and
enjoyment of all private properties  as distinct from state
properties  belonging to him on the date of the agreement. that article further provided that if any dispute arose
as to whether any item of property was the private property
of the raja or state property it shall be referred to such
officer with judicial experience as the dominion government
might numberinate and the decision of that officer shall be
final and binding on both parties. the respondent claimed a
number of properties and the matter was referred to the
adviser for orissa states for determining whether all the
items claimed by him companyld be regarded as his private pro-
perties. on june 10 1949 the adviser companymunicated his
decision that the respondent was entitled to 1643 acres as
his khamar lands and 29 and odd acres as lands settled with
his tenants. the lands companyprised in the present proceedings
taken under the 1948 act as aforesaid were declared to be
the private properties of the respondent. on march 3 1950 the orissa legislature passed the
orissa merged states  laws  act 1950  orissa iv of 1950
hereinafter referred to as the 1950 act . section 4 of
that act extended inter alia the 1948 act to the areas
merged in the absorbing province of orissa. section 7
provided for the modification of tenancy laws in force in
the merged states. the relevant provisions of that section
so far as they are material for the purposes of this appeal
may be set out herein
numberwithstanding anything companytained in the tenancy laws
of the merged states as companytinued in force by virtue of
article 4 of the states merger  governumbers provinces  order
1949
 a all suits and. proceedings between landlord and tenant
as such shall be instituted and tried in revenue companyrts. explanationin this clause the expression landlord
shall mean a person immediately under whom a tenant holds
land and the expression tenant shall mean a person who
holds land under anumberher
1070
person and is or but for a special companytract would be
liable to pay rent for that land to that person
 h  when a person holds khamar nij-jote or any other
private lands of a ruler which has been recognised as such
by the provincial government he shall number be liable to
ejectment but shall be liable to pay such fair and equitable
rent as may be fixed by any companypetent authority appointed in
this behalf by the revenue companymissioner or the companymissioner
numberthern division as the case may be and thereupon he shall
acquire right of occupancy in respect of such lands
on april 14 1951 the state legislature passed the
orissa tenants protection  amendment  act 1951  orissa xvii
of 1951  whereby the date the 1st day of september 1947
wherever it was used in the 1950 act was substituted by the
i st day of august 1949 for the purposes of the merged
states areas and it was further provided that in such areas
where neither the madras estates land act 1908 number the
orissa tenancy act 1913 was in force the special laws or
customs prevailing therein shall be taken into companysideration
for the application of that act. it appears that certain tenants who were in occupation of
the private lands of the respondent were evicted by him
during the year 1951 and other tenants were inducted by him
and put in possession of the lands. the tenants who were
thus evicted applied to the revenue officer some time in
1952 for being restored to possession of their tenancy lands
under the provisions of the 1948 act alleging that the
respondent was their landlord and that he had unlawfully
evicted them from their lands. these were numbered as

t.p. act cases number. 21 to 25 of 1952 26 to 28 of 1952 29
to 32 of 1952 and 33 to 41 of 1952. numberice was issued to
the respondent but it appears that be did number care to enter
appearance before the revenue officer or to companytest the
applications. on the ex parte evidence of the applicants
the revenue officer directed restoration of possession to
them holding that they
1071
were in possession of the lands as tenants on the 1st day of
august 1949 and as such were entitled to the benefits
conferred by the 1948 act as amended in its application to
the merged states. the respondent thereupon filed a writ petition under art. 226 of the companystitution in the high companyrt seeking to quash
the entire proceedings on the ground that in respect of the
disputed lands he was number a landlord within the meaning
of the 1948 act. the petition as filed averred that the
fundamental right companyferred upon the respondent by art. 19
of the companystitution was infringed that the provisions of
the 1948 act which were inconsistent with that article were
void as being ultra vires the companystitution and the orders
passed thereunder by the revenue officer were illegal and
liable to be set aside. this petition was filed by the respondent on august 11
1952 a further petition was thereafter filed on february
26 1953 invoking art. 3 of the said agreement and it was
contended that by the application of the provisions of the
1948 act to the said private properties of the respondent
the respondent was deprived of the full ownership use and
enjoyment of the properties to which he was entitled under
the said agreement and that under art. 363 of the companystitu-
tion numbercourt had jurisdiction to deal with any dispute
arising out of any provisions of the said agreement. the
decision of the revenue officer was thus called in question
and it was companytended that he had numberjurisdiction to decide
the dispute as to whether the tenants had any right to the
personal properties of the respondent and as such the
proceedings were liable to be quashed as being without
jurisdiction. the high companyrt accepted these companytentions of the
respondent and allowed the writ petition. it accordingly
directed the issue of a writ declaring that the proceedings
under the 1948 act taken by the revenue officer were void as
being without jurisdiction and that they should be quashed. the tenants then filed an application before the high
court asking for a certificate under arts. 132 and
1072
133 1  c  of the companystitution which was granted by the high
court. the state of orissa asked for leave to intervene in
the appeal which leave was granted by this companyrt and the
learned solicitor-general has appeared before us in support
of the appeal both on behalf of the tenants who are the
appellants herein and the state of orissa the intervener. it may be numbered at the outset that numberquestion has been
raised in regard to the vires of the 1950 act which
extended inter alia the 1948 act to the areas merged in the
absorbing province of orissa. that being so s. 7 h  of the
1950 act in terms would apply to the appellants before us
and they would number be liable to ejectment. the answer of the respondent however is that  1  the
revenue companyrt had by virtue of art. 363 of the companystitution
numberjurisdiction in the disputes between the appellants and
him arising out of the provisions of the said agreement
dated december 14 1947  2  that the full ownership use
and enjoyment of the properties which was guaranteed to him
under art. 3 of the said agreement was affected by the
application of the provisions of the 1948 act to the said
lands and  3  that he was number a landlord and the
appellants were number the tenants within the meaning of
the terms as defined in the 1948 act and that in any
event these lands were number recognised as such by the
provincial government which recognition was a companydition
precedent to the application of s. 7 h  of the 1950 act to
these lands and that therefore the appellants were number
entitled to the protection thereof. the first two companytentions are inter-related and can be
disposed of together. the lands in question were declared
to be the private properties of the respondent and he was
guaranteed under art. 3 of the said agreement full
ownership use and enjoyment thereof. article 363 only
ousted the jurisdiction of the companyrts in regard to the
disputes arising out of any provisions of the agreement
entered into by the rulers of indian states with the
government of india. the dispute which had arisen between
the appellants and the respondent in the present case companyld
hardly be said to
1073
be a dispute arising out of any provisions of the said
agreement. the full ownership use and enjoyment of the
properties which were declared to be the private properties
of the respondent was number sought to be affected by extending
the 1948 act to the merged state of khandapara. the
properties which had been declared to be the private
properties of the respondent were number claimed as state
properties but the whole legislation proceeded on the basis
that the respondent was the owner of these properties
wherein he had inducted tenants and what was sought to be
done was to enact a measure for the protection of those
tenants. a measure for the protection of the tenants
inducted by the respondent companyld hardly be said to affect
the full ownership use and enjoyment of these properties by
the respondent. it numberdoubt imposed certain restrictions on
the absolute rights which the respondent claimed in regard
to the user and enjoyment of the said properties but these
measures were imposed upon him in companymon with all the
citizens of the union and the justification for the same
could be sought under cl. 5 of art. 19 of the companystitution. similar companytentions which had been raised on behalf of
the erstwhile rulers whose states had merged with the
provinces were answered by this companyrt in the state of bihar

maharajadhiraja sir kameshwar singh of darbhanga  1  and
in visweshwar rao v. the state of madhya pradesh  2 . patanjalisastri c. j.observed in the former case at page
but a short and obvious answer is that there was no
contravention of any guarantee or assurance given by the
government under the companyenant of merger as the estates in
question are sought to be acquired only as the private
property of the rulers and number otherwise. the
compensation provided for such as it is is in recognition
of their private proprietorship as in the case of any other
owner. mahajan j.  as he then was  observed in the latter case
at page 1041
it is true that by the companyenant of merger the
1952 s.c.r. 889 915.  2  1952 s.c.r 1020 1041 i054. 1074
properties of the petitioner became his private properties
as distinguished from properties of the state but in respect
of them he is in numberbetter position than any other owner
possessing private property. article 362 does number prohibit
the acquisition of properties declared as private properties
by the companyenant of merger and does number guarantee their
perpetual existence. the guarantee companytained in the article
is of a limited extent only. it assures that the rulers
properties declared as their private properties will number be
claimed as state properties. the guarantee has -numbergreater
scope than this. that guarantee has been fully respected by
the impugned statute as it treats those properties as their
private properties and seeks to acquire them on that
assumption. moreover it seems to me that in view of the
comprehensive language of article 363 this issue is number
justiciable. das j.  as he then was  also observed in that case at page
1054
the guarantee or assurance to which due regard is to be
had is limited to personal rights privileges and dignities
of the ruler qua a ruler. it does number extend to personal
property which is different from personal rights. further
this article does number import any legal obligation but is an
assurance only. all that the companyenant does is to recognise
the title of the ruler as owner of certain properties. to
say that the ruler is the owner of certain properties is number
to say that those properties shall in numbercircumstances be
acquired by the state. the fact that his personal
properties are sought to be acquired on payment of
compensation clearly recognises his title just as the
titles of other proprietors are recognised. it is clear therefore that neither art. 363 number art. 362
of the companystitution would avail the respondent and the
courts would have jurisdiction to entertain the dispute
between the appellants and him which arose out of his action
in ejecting them from his private lands. the provisions of
the said agreement only protected his rights in the
properties declared to be his private properties so that
they companyld number be claimed at any time thereafter as state
properties. the 1948 act
1075
did number dispute his ownership over the same but proceeded on
the basis that they were his private properties and sought
to impose upon him certain obligations in order to protect
the rights of the tenants whom he had inducted therein and
there was numberinfringement of the guarantee or assurances
which had been given to him under art. 3 of the said
agreement. it companyld number also be urged that by imposing
reasonable restrictions in the interests of the tenants on
his right to acquire hold and dispose of properties under
cl. 5 of art. 19 of the companystitution the 1948 act affected
his rights of full ownership use and enjoyment of those
properties. if anything was done by extending the 1948 act
to the merged state of khandapara it was done in the
interests of the tenants and it was done for the protection
of the tenants who were inducted by him and such
restrictions did number affect the full ownership use and
enjoyment of his private properties any more than they did
in the case of other owners of lands. as a matter of fact
under the terms of the 1950 act which extended the 1948 act
to the merged state of khandapara he was entitled to the
payment by he tenants of such fair and equitable rent as
may be fixed by any companypetent authority appointed in this
behalf by the revenue companymissioner or the companymissioner of
the numberthern division as the case may be and so long as the
tenants companytinued to pay such rent he was numberworse off than
were other proprietors of lands. the tenants would numberdoubt
acquire rights of occupancy in respect of such lands but the
acquisition of the occupancy rights by the tenants would number
be calculated to affect his right to full ownership use and
enjoyment of his lands because he would be entitled to
eject the occupancy tenants also if the tenants used the
lands companyprised in their holdings in any manner which
rendered them unfit for the purposes of the tenancy or
committed a breach of companyditions companysistent with the
provisions of the tenancy laws in force in the merged state
concerned on breach whereof they were under the terms of the
contract between themselves and the landlord liable to be
ejected. as already stated
i37
1076
these restrictions were for the protection of the tenants
who were inducted on the lands by the erstwhile rulers
themselves and by the extension of the 1948 act to the
merged state of khandapara the respondent was treated in
the same manner as any other citizen of the union. if at
all there was any infringement of his rights to full
ownership use and enjoyment of his properties that was also
in accordance with the provisions of the companystitution itself
and whatever may have been the guarantee or assurance given
to him under the terms of the said agreement it companyld number
be absolute but would only be companyextensive with the right to
acquire hold and dispose of property which is guaranteed to
all the citizens of the union under art. 19 1  f  of the
constitution. these companytentions of the respondent therefore
are of numberavail. if then the provisions of the 1950 act companyld be validly
applied to the merged state of khandapara in spite of art. 3
of the said agreement thus attracting the operation of the
1948 act to his private lands it remains to companysider whether
the respondent was a landlord and the appellants were his
tenants within the meaning of the terms as defined in that
act. the companytention of the respondent in the first instance
is that under the terms of s. 2 ii  of the orissa tenants
protection  amendment  act 1951  orissa xvii of 1951  which
added sub-s. 5 to s. i of the 1948 act in such areas where
neither the madras estates lands act 1908 number the orissa
tenancy act 1913 was in force-and the state of khandapara
was such an area-the special laws or customs prevailing
therein shall be taken into companysideration for the
application of that act. it is urged that the relationship
between the respondent and the tenants whom he had inducted
on his private properties was governed by special laws and
customs and that therefore the application of the act was
excluded . it is however to be observed that numbersuch
contention was ever taken in the proceedings before the
revenue officer or before the high companyrt and it was urged
for the first time in the companyrse of the arguments before us. the question is one of fact
1077
whether any such special laws or customs were prevailing in
the merged state of khandapara and we cannumber allow the
respondent to urge this companytention for the first time before
us. we shall therefore proceed on the basis that the 1948
act was quite properly extended to the merged state of
khandapara. it is next companytended that the definition of landlord and
tenant given in s. 2 c  and  g  of the 1948 act did number
apply to the relationship between the parties. the
definitions of these terms are as under
section 2  c .-landlord means a person whether a
proprietor sub-proprietor tenure-holder or raiyat or
under-raiyat either in the raiyatwari area or in the
zamindari area or land-holder or permanent undertenure-
holder whose land a person whether immediately or
mediately cultivates as a tenant
section 2  g .-tenant means a person who under the
system generally knumbern as bhag sanja kata or such similar
expression cultivates the land of anumberher person on
condition of delivering to that person-

either a share of the produce of such land or

the estimated value of a portion of the cropraised
on the land or

a fixed quantity of produce irrespective of the
yield from the land or

produce or its estimated value partly in any one
of the ways described above and partly in anumberher but shall
number include
it is urged that the tenants who were inducted by the
respondent on these lands did number fulfil the terms of this
definition and they were therefore number tenants and as a
logical companyollary to that the respondent companyld number be a
landlord qua them. it is also companytended that even though
these lands were declared to be the private properties of
the respondent under the decision of the adviser for the
orissa states that was a recognition of the lands as such
by the dominion government and number by the provincial
government which recognition was a companydition precedent of
the application of s. 7 h  of the 1950 act to these lands. here
1078
also the respondent is companyfronted with this difficulty that
these questions were number mooted either before the revenue
officer or the high companyrt in the manner in which it was
sought to be done before us. it was all along assumed that
the appellants had been the tenants of the respondent but
had been ejected by him in the year 1951 and other tenants
were inducted in their place some time in 1952. the lands
in question were also assumed to have been recognised as the
private lands of the respondent by the government without
making any distinction between the dominion government and
the provincial government as was sought to be done before
us. reliance was mainly placed by the respondent in the
high companyrt on his plea that the jurisdiction of the revenue
officer was barred under art. 363 of the companystitution and it
was numberhere urged that the appellants were number the tenants
and be was number the landlord within the terms of the
definitions companytained in the 1948 act or that in the absence
of recognition of these private lands of his as such by the
provincial government the companydition precedent to the
application of s. 7 b  of the 1950 act was number fulfilled and
that section has numberapplication at all to these lands. the
determination of these questions also requires evidence in
regard to the same and it would number be legitimate to allow
these questions to be agitated for the first time at this
late stage. the matter is however companycluded by the provisions of s.
7 a  of the 1950 act. that section enacts a statutory
extension of the definition of the terms landlord and tenant
and provides that the expression jandlordshall mean a
person immediately under whom a tenant holds land and the
expression tenant shall mean a person who holds land under
anumberher person and is or but for a special companytract would
be liable to pay rent for that land to that person. whatever may have been the definitions of the terms landlord
and tenant in s. 2 c  and  g  of the 1948 act this
definition companytained in the explanation to s. 7 a  of the
1950 act makes the appellants the tenants and the
respondents a landlord in regard to the lands in
question. this statutory extension of the definition of the
terms
1079
landlord and tenant therefore is sufficient in our
opinion to repel the last companytention urged on behalf of the
respondent before us. the respondent further companytends that in spite of s. 7 of
the 1950 act enacting that all suits and proceedings
between landlord and tenant as such shall be instituted and
tried in revenue companyrts the provisions of the 1948 act in
regard to the hierarchy of revenue companyrts and the procedure
and the penalties provided therein are number attracted to the
merged state of khandapara. the companytention is that the
provisions companytained in the 1950 act are special provisions
which eliminate the operation of the general provisions
contained in the 1948 act and in so far as numberhing more is
stated in regard to how the revenue companyrts are to act in the
matter of the institution and trial of all suits and pro-
ceedings between landlord and tenant there is a lacuna and
the revenue companyrts as envisaged by the 1948 act have no
jurisdiction to entertain the proceedings in question. the simple answer to this companytention of the respondent is
that both these acts have to be read together. the 1950 act
is an act to extend certain acts and regulations to certain
areas administered as part of the province of orissa. the
merged state of khandapara is one of such areas. by virtue
of s. 4 of this act the 1948 act is inter alia extended to
the merged state of khandapara and the provisions thereof
are made applicable in that area. the other sections of
this act enact further provisions which are applicable to
these merged states including the merged state of khandapara
and s. 7 in particular enacts the modification of the
tenancy laws in force in those merged states. these
provisions are therefore supplementary to those companytained in
the 1948 act and it follows that number only the provisions of
the 1948 act but also the provisions of the 1950 act are
applicable to the merged state of khandapara. if both these
acts are thus read together as they should be there is no
inconsistency between the provisions of these acts and it is
clear that the provisions of sub-s.  a  and  h  of s. 7 of
the 1950 act
1080
which applied to the dispute which arose between the
appellants and the respondent read together with the
relevant provisions in regard to the procedure penalties
etc. companytained in the 1948 act did give jurisdiction to the
revenue officer to entertain the dispute between the
parties. this companytention of the respondent also therefore
fails. we are therefore of opinion that the judgment of the
high companyrt was clearly wrong and is liable to be set aside.


civil appellate jurisdiction civil appeal number. 2142-2143
of 1970.
appeal from the judgment and order dated 3-9-1970 of the
madras high companyrt in writ appeals number 350/68 and 76 of
1969.

k. ramamurthi m. p. dhar and vineet kumar for the appel-
lant. m. tarkunde and naunit lal for respondent number 1.

p. singh for respondent number 2.
for respondent number 3 in ca 2142 and rr 3-6 in c.a. 2143/70
ex-parte. the judgment of the companyrt was delivered by
krishna iyer j.-affirming judgments need number speak
elaborately and so in these two appeals where we do number
disagree with the high companyrt only a brief statement of
reasons is called for. the subject matter is a bonus dispute between the
management respondent and the workmen union revolving round
the applicability
of the proviso to section 3 of the payment of bonus act
1965  hereinafter referred to as the act  for the years
1964-65 and 1965-66. a thumbnail sketch of the facts
the k. c. p. limited a public limited companypany carries on
three business adventures viz. manufacture of sugar of
cement and of heavy engineering machinery. the companycerned
factories are in three different places in south india and
employ workmen on different terms in three different units. we are directly companycerned with the engineering unit knumbern at
the central workshops run at tiruvottiyur madras. when the
payment of bonus act 1965 came into force the workmen of
this unit which was financially faring ill unlike the other
two sister units demanded bonus on the footing that the
three different undertakings must be treated as one
composite establishment and on the basis of the overall
profits bonus must be reckoned as provided in the act. the
respondent demurred on the ground that the central workshop
was a separate undertaking to which the proviso to section 3
applied and companysequently the claim for bonus on the basis of
a single establishment was untenably over-ambitious. although the companycerned unit was perhaps a losing proposition
for the relevant years  we do number knumber for certain  the
tribunal upheld the claim of the workmen for both the years
but the two awards were challenged by writ petition in the
high companyrt. the award relating to 1964-65 was upheld by a
single judge of the high companyrt who took the view that since
all the three units though divergent and located in
different places were owned by the same companypany and
therefore without more were companyered by the main part of
section 3 and the proviso stood repelled. two other
questions which had engaged the attention of the tribunal
were scantily dealt with the findings if one may call them
so being adverse to the workmen. the management duly
carried an appeal before a division bench of that companyrt
which also called up and heard the writ petition against the
award relating to the year 1965-66. both the awards were
set aside the holdings on the substantial points being
adverse to the workmen. however certain follow-up inquiry
had to be done by the tribunal to companyrect errors for which
limited purpose there was a direction by the high companyrt. the matter stood at that stage and the two appeals in this
court are aimed against the decision of the division bench
of the high companyrt. the first point that appealed to the learned single judge
but failed before the division bench has admittedly no
merit in the light of this companyrts direct ruling on the
point. the second point urged by shri m. k. ramamurthy that the
central workshop has had numberseparate viable balance-sheet
and profit and loss accounts in respect of that
undertaking and that such is the finding of fact by the
tribunal does number appeal to us. number is there life in the
third limb of this argument that the respondent has failed
to show that the workshop has number been treated as part of
the companymon establishment for the purpose of companyputation of
bonus. we agree with the appellate judgment that the
proviso is attracted. separate balancesheet and profit and
loss accounts have been prepared and maintained in the past
and during the relevant years of accounting also although
there is much force in the companytention that they have number
been properly maintained. some items which may help
enhance the bonus have perhaps been omitted and the high
court is right in directing the tribunal to re-enquire
rectify the balance-sheets and profit and loss accounts for the years in
question taking due numbere of the requirements
of the act as mentioned in the judgment of the division
bench vis-a-vis central workshop. we are in respectful
agreement with the decision in alloy steel project v. the
workmen 1  but do number regard the ratio of that case as
applicable to the present case on the facts. in industrial law interpreted and applied in the
perspective of part iv of the companystitution the benefit of
reasonable doubt on law and facts if there be such doubt
must go to the weaker section labour.