PETITIONER: <NAME> AND <NAME>. Vs. RESPONDENT: <NAME> AND <NAME>. DATE OF JUDGMENT10/10/1979 BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) GUPTA, A.C. CITATION: 1980 AIR 214 1980 SCR (1) 875 1980 SCC (1) 321 ACT: The Tamil Nadu Buildings (Lease and Rent Control) Act 1960 as amended by the Amending Act of 1964-S. 30(iii)-Scope of. HEADNOTE: In July, 1940 the plaintiffs father leased out the building of which he was the owner, to the defendant on a monthly rent of Rs. 950 for running a restaurant. Even after the expiry of the period of lease in July, 1943 the defendant continued to be in possession of the building. By virtue of the Madras Non-residential Buildings Rent Control order, 1946 the defendant became a statutory tenant and under the order fair rent was fixed at Rs. 1680 p.m. In 1949 the 1946-order was replaced by the Madras Buildings (Lease and Rent Control) Act. 1949. On the death of his father in 1955 the plaintiff became the owner of the building. The 1949 Act was repealed and replaced by the Tamil Nadu Buildings (Lease and Rent Control ) Act, 1960 (the Principal Act). Section 30(iii) of the Principal Act provided that it was not applicable to non-residential buildings, the rental value of which, according to the assessment of <ORG>, exceeded Rs. 400 p.m. Even so the defendant continued to be in possession of the building. Since the building was not governed by the Principal Act the plaintiff issued notice to the defendant to quit and instituted a civil suit in <ORG> on March 2, 1964 for eviction and damages. In the meantime in June, 1964, by an amendment Act, the exemption contained in s. 30 of the Principal Act in respect of non-residential buildings was withdrawn so that from then on non-residential buildings with a monthly rent of Rs. 400/- and above were also governed by the Principal Act. Sec ion 3 of the Amending Act also provided that proceedings for eviction of the tenants of such non-residential buildings instituted in civil courts should be treated as having abated. In view of the amendment in December 1964 <ORG> dismissed the plaintiff s suit as having abated. Thereupon the plaintiff filed an application under O. IX, r. 9 of the Code of Civil Procedure to set aside, its order dismissing the suit as having abated. This application was allowed. The defendants filed additional written statements in <ORG> raising the plea that the suit had actually abated by virtue of s. 3 of the Amending Act. In the meantime as a result of the plaintiff s application under s. 24 , Code of Civil Procedure <ORG> withdrew the suit to its file (on the death of the original defendant, defendants 2 to 10 were impleaded as his legal representatives). On the issue whether the suit had abated on June 10, 1964 by virtue of s. 3 of the Amending Act the trial judge of <ORG> refused to record a finding and disposed of the suit as if it was a fresh suit after the death of the 876 original defendant. He passed a decree for possession and damages for use and occupation. On appeal by the defendants <ORG> of <ORG> held that from March 1, 1964 the original defendant was a trespasser, that he was not entitled to the benefit of the Principal Act, that with the coming into force of the Amending Act the building itself was outside the scope of the principal Act, that s. 3 of the Amending Act did not apply to the suit and so it did not abate on June 30, 1964 and that on the death of the original defendant, defendants 2 to 10 were not entitled to the protection against eviction under the Principal Act as amended in 1973. Allowing the appeal, ^ HELD: Section 3 of the Amending Act was applicable to the suit as it was a proceeding instituted in <ORG> on the ground that the building was exempt from the provisions of the Principal Act by virtue of s. 30(iii) thereof although no express allegation was made in the plaint to that effect. [891 B] 1. (a) The view of <ORG> that s. 3 of the Amending Act was not applicable to this case was erroneous in the absence of a contention by the plaintiff that s. 3 was unconstitutional. It was not for the court to ask whether there was any justification for the legislature to make a contrary provision in respect of the suits of the present nature. There was every justification for enacting s. 3 in order to give protection to the tenants against whom suits for eviction had been filed for buildings. which were brought within the scope of the Principal ACT by deleting cl. (iii) of s. 30 of the Principal Act. [886G, 887B] (b) In the context in which s. 3 of the Amending Act was enacted it could not be said that it was not possible to identify the proceedings to which that provision referred. In <NAME> case this Court held that a proceeding which had been instituted on the ground that a non- residential building was exempt from the provisions of the Principal Act by virtue of s. 30(iii) and was pending on the date of publication of the amendment in the official gazette would abate but did not consider the type of cases which would fall within the scope of 3 of the Amending Act [888A- B, 889G- <CITATION> .  2 S.C.R. 401; held inapplicable. (e) The words "instituted on the ground that such building or part was exempt from the provisions of the Principal Act by virtue of cl. (iii) of s. 30 of the Principal Act" should be construed in the context in which they appeared as referring to a proceeding which had been instituted in the light of s. 30(iii) of the Principal Act which granted exemption in respect of the buildings refer red to therein from the operation of the Principal Act. Any other construction would defeat the object of the Amending Act . [890E-F] In the instant case the original plaint was filed on the basis that The tenancy had been terminated with effect from the expiry of February 29, 1964. The plaintiff prayed for the eviction of the defendant damages for use and occupation and not the fair rent fixed under the Rent Control law. The suit could be filed only because of the exemption contained in s. 30(iii) of the Principal Act 877 because in the absence of such exemption no effective decree for ejectment could be passed by <ORG> in view of s. 10 of the Principal Act. [890 G-H] 2. The original defendant was not a trespasser in possession of the premises after June 10, 1964. He became a statutory tenant of the premises and could not be evicted from them except in accordance with the procedure specified in the Principal Act. The position would not have been different even if a decree for eviction had been passed against him before June 10, 1964 and the decree had not been executed or satisfied in full on that date [894 C-D] 3. (a) The building in question was a building within The meaning of that expression in s. 21 '>) of the Principal Act on the date when s. 3 of the amending Act came into force. [896 F-G] (b) The view of <ORG> that the suit property was not a "building" within the meaning of s. 2(2) on the ground that there was no lease in force and hence it was not let and that on that date the plaintiff had no intention to lease it and therefore it was not to be let was erroneous. A definition clause does not necessarily apply in all possible contents in which the word may be found. The opening clause of s. 2 of the Principal Act suggests that any expression defined in that section should be given a meaning assigned to it therein unless the context otherwise requires. [896 B-C] 4. The original defendant became entitled to The protection of the Principal Act on June 10, 1964 and he could be evicted from the building only after an order was made by the Rent Controller. <ORG> did not pass an order the suit had abated on June 10, 1964 till the death of the original defendant on January 15, 1968. As a result of the proceedings instituted by one or the other of the parties the case was treated as pending although in law it was not open to the Court to proceed with it after 10. 1964. [896G-897A] 5. It has not permissible for the trial court to treat the proceeding which had been instituted against the original defendant prior to June 10, 1964 as a live proceeding which could be converted into fresh suit instituted against defendants No. 2 to 10 after the death of the original defendant. An amendment of the plaint by inclusion of a new prayer or by addition of new parties can be made only where in the eye of law a suit is pending before a Court. When the suit filed on March 2, 1964 stood terminated with the coming into force of the amending Act on June 10, 1964 there was no plaint in a live suit which could be amended by the addition of new parties and the inclusion of a new prayer. Therefore the addition of parties which took place after the death of the original defendant and the amendment of the plaint in 1973 requesting the court to pass a decree against defendants 2 to 10 who were not' parties to the suit prior to June 10, 1964 on a cause of action which accrued subsequent to January 15, 1968 were without jurisdiction. [898A- <CITATION> ,  2 S.C.R. 774; held inapplicable. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1172 of 1979.

Appeal by Special Leave from the Judgment and order dated 1-2-1979 of <ORG> in O.S.A. No. 75/77.

<NAME>, <NAME>, <NAME>, <NAME> and <NAME> for the Appellant.

<NAME>, <NAME>, <NAME> and <NAME> for Respondent No. 1.

<NAME> and <NAME> for Respondent 2, 4-6. The Judgment of the Court was delivered by <NAME>, J. The question involved in this case is whether a suit for ejectment filed in respect of any non- residential building or part thereof pending before any court on the date on which the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Act No. XVIII of 1960) (hereinafter referred to as 'the principal Act') was amended by the Tamil Nadu Buildings (Lease and Rent Control) Amendment Act, 1964 (Act No. XI of 1964) (hereinafter referred to as 'the Amending Act ') could have been proceeded with after that date. It arises in the following circumstances:

<NAME>, the father of the plaintiff, <NAME> was the owner of a building situated in the city of Madras. He leased it out in favour of the defendant, <NAME> under a lease deed dated July 8, 1940 for the purpose of Running a restaurant known as '<ORG>' in it for a period of three years with effect from July 15, 1940 on a monthly rent of Rs. 950/-. The agreed h period of lease expired in July, 1943 but the defendant continued to be in possession of the building as a tenant holding over. On the coming into force of the Madras Non-residential Buildings Rent Control order in 1946, the defendant became a statutory tenant of the said building and fair rent in respect of it was fixed under that order in the year 1946 at Rs. 1,680/- per month. The aforesaid order was replaced by the Madras Buildings (Lease and Rent Control) Act. 1949 which was also applicable to the said building. On the death of the landlord <NAME> in 1955, under a partition amongst his heirs the plaintiff became the owner of the building. The protection which the defendant was enjoying under the Act of 1949 came to an end on the passing of the principal Act by virtue of section 35 thereof which repealed the Act of 1949 and section 30(iii) thereof which provided that nothing contained in the principal Act was applicable to any non-residential building, the rental value of which on the date of the commencement of the principal Act as entered in the property tax assessment book of the municipal council, district board, panchayat or panchayat union council or <ORG> exceeded Rs. 400/- per mensem. The defendant, however, continued to be in possession of the building by paying the rent every month.

The plaintiff issued a notice to the defendant terminating the tenancy with effect from the expiry of February 29, 1964 and as the building was not governed by the principal Act at that point of time, he instituted a suit in Civil Suit No. 730 of 1964 on the file of <ORG>, Madras on March 2, 1964 for eviction and for damages at the rate of Rs. 6000/- per month. The defendant filed his written statement on May 2, 1964 before the City' <ORG>. On June 10, 1964, the Amending Act came into force. The relevant part of it is reproduced below:-

"2. Amendment of section 30 , Madras Act XVlII of 1960.-In section 30 of the Madras Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the principal Act)-

(i) in clause (ii) the word "or" occurring at the end shall be omitted;

(ii) clause (iii) shall be omitted;

(iii) in the Explanation, for the words, brackets and figures "clauses (ii) and (iii) ", the word, brackets and figures "clause (ii)" shall be substituted.

3. Certain pending proceedings to abate.-Every proceeding in respect of any non-residential building or part thereof pending before any court or other authority or officer on the date of the publication of this Act in <ORG> and instituted on the ground that such building or part was exempt from the provisions of the principal Act by virtue of clause (iii) of section 30 of the principal Act, shall abate in so far as the proceeding relates to such building or part. All rights and privileges which may have accrued before such date to any landlord in respect of any non-residential building or part thereof by virtue of clause (iii) of section 30 of the principal Act, shall cease and determine and shall not be enforceable:

Provided that nothing contained in this section shall be deemed to invalidate any suit or proceeding in which the decree or order passed has been executed or satisfied in full before the date mentioned in this section."

The statement of objects and reasons appended to the Bill which ultimately became the Amending Act read as follows:-

"The Madras Buildings (Lease and Rent Control) Act, 1960 (Madras Act 18 of 1960), relates to the regulation of the letting of residential and non-residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the State of Madras. Under section 30 of the said Act, certain buildings are exempted from the provisions of the said Act. Any non-residential building or part thereof occupied by any one tenant if the monthly rent paid by him in respect of that building or part exceeds four hundred rupees is one such building or part is exempted under the said section 30 . It has been brought to the notice of the <ORG> that the landlords of such non-residential buildings, taking advantage of the exemption, referred to above, demand exorbitant rents from the tenants of such buildings, who mostly belong to the business community, and threaten to evict the tenants when the latter do not concede to the demands for such rents. In order to provide relief to such tenants and to ensure that the interests of trade and industries do not suffer by demands of landlords for unreasonable and exorbitant rents. the <ORG> consider that the exemption now available to any non-residential building or part thereof fetching a monthly rent exceeding four hundred rupees should be withdrawn. At the same time, the <ORG> consider that there is no need to take away the exemption available at present to any residential building or part thereof fetching a monthly rent exceeding Rs. 250/-.

The Bill seeks to achieve the above object."

The result of the amendment was that the buildings which had been exempted from the operation of the principal Act under clause (iii) of section 30 came within the scope of the principal Act and the relationship between landlords and tenants of such buildings was to be regulated thereafter in accordance with the provisions of the principal Act. Apparently in order to give protection to tenants of such buildings against whom proceedings for eviction had been instituted in civil courts, section 3 of the Amending Act provided that such proceedings should be treated as having abated. The proviso to section 3 of the Amending Act however provided that nothing contained in that section should be deemed to invalidate any suit or proceeding in which the decree or order passed had been executed or satisfied in full before the date mentioned in that section, the said date being, June 10, 1964. This by necessary implication, section 3 of the Amending Act was applicable even to the case of a building in respect of which a decree for eviction had been passed but had not been executed or satisfied in full before June 10, 1964. In view of the above provision, <ORG> dismissed the suit as having abated by its order dated December 4, 1964. The plaintiff filed two applications before <ORG> in March, 1965-one under order 9 Rule 9 of the Code of Civil Procedure to set aside the order dated December 4, 1964 dismissing the suit as having abated and another under section 5 of the Limitation Act for condoning delay in filing the application, under order 9, Rule 9 of the Code of Civil Procedure. He also filed an appeal in A.S. No. 266 of 1965 on the file of <ORG> against the order of <ORG> dated December 4, 1964. Both the above applications were allowed by <ORG> on August 3, 1965. On August 13, 1965, the defendant filed an additional written statement before <ORG> raising the plea that the suit had actually abated by virtue of section 3 of the Amending Act. He also filed two revision petitions against the order passed by <ORG> allowing the two applications on August 3, 1965. In the meanwhile, on an application made under section 24 of the Code of Civil Procedure by the plaintiff, the suit was withdrawn to the file of <ORG> and it was renumbered as C.S. No. 218 of 1965. It should be mentioned here that owing to the alteration of the pecuniary jurisdiction of <ORG>, the suit stood transferred to the file of <ORG> on May 1, 1964 itself. The defendant died on January 15, 1968. He had made will on January 7. 1968 appointing executors and administrators in respect of his assets and issuing directions regarding the manner in which his assets should be disposed of. By an order dated July 20, 1970 made by <ORG>, defendants Nos. 2 to 10 who had been appointed executors an administrators were impleaded as legal representatives of the defendant (who was shown as defendant No. 1 thereafter). The two civil revision petitions filed by the defendant! against the order passed on August 3,.1965 by <ORG> and the Appeal Suit No. 266 of 1965 filed by the plaintiff against the order of <ORG> dated December 4, 1964 were disposed of by a Division Bench of <ORG> by a common order on June 28, 1972, the relevant part or which read as follows:-

"It is seen from the foregoing dates that at the time of the dismissal of the suit, the lower court had no jurisdiction to deal with suit and in that view the counsel appearing on both sides represent that the order dismissing the suit as having abated may be set aside and the suit may be tried on the original side of this Court. We accordingly allow the appeal and set aside the order of dismissal of the suit on the ground that <ORG> had no jurisdiction to deal with the same on the date of dismissal and direct the suit to be posted on the original side for being dealt with."

It may be mentioned here that as stated earlier, the suit had already been withdrawn to the file of <ORG> under section 24 of the Code of Civil Procedure and had been numbered as Civil Suit No. 218 of 1965. In July, 1973, the plaintiff sought an amendment of the plaint praying for relief against defendants Nos. 2 to 10 on the ground that after the death of the original defendant No. 1, they were not entitled to continue in possession of the building as 'statutory tenants and the plaintiff was entitled to a decree against them in that very suit. The above contention was based on the definition of the expression "tenant" in section 2(8) of the principal Act as it stood then. After the amendment of the plaint, fresh written statements were filed by defendants Nos. 2 to 10 raising several pleas including the pleas which had already been raised in the written statements filed by defendant No. 1 before <ORG>. On the basis of the pleadings, the trial court framed the following issues:-

"1. Is the suit maintainable ?

2. Has the plaintiff given proper notice of termination of the suit premises ?

3. Does the suit abate by reason of Act XI of 1964 ?

4. Are not the defendants entitled to protection under the Madras Buildings (Lease and Rent Control) Act, 1960, as amended by Act 23 of 1973 ?

5. Whether the tenancy came. to an end upon the death of <NAME> ?

6. Whether the defendants have no legal interest in the premises and consequently liable to be rejected ?

7. To what reliefs are the parties entitled ?

At the conclusion of the trial, the learned Judge held on issue No. 1 that the suit was maintainable, on issue No. 2 that the notice to quit had validly terminated the tenancy, on issue No. 4 that the defendants were not entitled to protection under the Madras Buildings (Lease and Rent Control) Act, 1960; on issue No. S that the tenancy had come to an end even on March 1, 1964 and on issue No. 6 that the defendants had no legal interest in the premises. He, however, declined to record any finding on issue No. 3 which related to the question whether the suit had abated ar not on June 10, 1964 by virtue of section 3 of ,; the Amending Act . The learned Judge proceeded to dispose of the suit as if it was a fresh suit instituted after the death of the original defendant No. 1 on January 15, 1968 even though there was no specific issue on the question whether it cd be treated such. This appears to be so in view of the following observations made by the trial Judge in the course of his judgment:-

"Under the above circumstances, if the plaintiff files a suit today against the defendants he is entitled to get an executable decree for possession (without the necessity of going to <ORG>) inasmuch as defendants 2 to 10 had never become 'tenants' under the Act. Therefore even if the suit filed in. <ORG> is held to have abated, under the peculiar circumstances of this case, I see no reason why I should not treat the suit before me to be a fresh one. It is to be seen that the application under section 24 of the Code of Civil Procedure for transfer of the suit from <ORG> to this court was consented by the defendants. In A.S. No. 266 of 1965, apart from setting aside the order of abatement passed by <ORG>, this <ORG> directed that the suit be tried on the original side of this <ORG>. Even if <ORG> had no pecuniary jurisdiction to deal with the matter and record abatement, the defendants could have pressed in A.S. No. 266 of 1965 for an order by this <ORG> that the suit had abated. It is need less to point out that the order that was under appeal was one by which <ORG> held that the suit had abated. No doubt that was passed without jurisdiction, inasmuch as the pecuniary jurisdiction of that <ORG> had been reduced. But it is open to this <ORG> to have held in the said appeal itself that the suit had abated. But the order was that the suit was to be tried on the original side. The suit had been originally filed in 1964, that is more than 12 years ago. Under such circumstances, I think it is wholly unnecessary to drive the plaintiff to a fresh suit."

On the basis of the findings recorded by him, the learned trial Judge passed a decree for possession and damages for use and occupation. The quantum of damages was directed to be determined under order 20, Rule 12 of the Code of Civil Procedure. Defendants Nos. 2 to 10 were, however, allowed three years' time to deliver vacant possession of the premises. Aggrieved by the decree passed by the trial Court, the plaintiff filed O.S.A. No. 23 of 1977 and defendant No. 2 filed O.S.A 75 of 1977 on the file of <ORG>. The plaintiff in his appeal questioned the decree of the trial court only to the extent it granted a period of three years to the defendants to deliver possession of the premises. Defendant No. 2 in his appeal questioned the entire decree. Both the appeals came up for hearing before <ORG> of <ORG>. In the course of its judgment, <ORG> formulated the following points for its consideration:-

"1. What was the status of late <NAME> after the termination of the tenancy-whether he was a trespasser or a tenant holding over or a tenant at sufferance ?

2. Did the suit building come within the purview of the Act and did late <NAME> become a tenant as defined in the Act, on the coming into force of the Tamil Nadu Act XI of 1964 ?

3. Whether the suit instituted by the plaintiff abated in view of section 3 of the Tamil Nadu Act XI of 1964 ?

4. Whether the "tenancy" came to an end upon the death of <NAME> ?

5. Whether defendants 2 to 10 are entitled to protection against eviction from the suit property by virtue of the Act as amended by the Tamil Nadu Act 23 of 1973 ?"

The Division Bench held that the status of the defendant, <NAME> from March 1, 1964 was that of a trespasser and he was liable to pay profits or damages for use and occupation to the plaintiff; that the defendant, <NAME> was not entitled to the benefit of the principal Act by the coming into force of the Amending Act as the building itself was outside the scope of the principal Act and even if the building was within its scope, he was not a tenant as defined in the principal Act; that section 3 of the Amending Act did not apply to the suit in question and hence it did not abate on June 10, 1964 and that after the death of the defendant, <NAME>, defendants 2 to 10 were not entitled to the protection against eviction under the principal Act as amended by the Tamil Nadu Act No. 23 of 1973. Accordingly, it dismissed the appeal filed by defendant No. 2. The appeal filed by the plaintiff was also dismissed as a period of 2.6 years out of the period of three years' time granted by the trial court had expired by the time the judgment in appeal was delivered. Aggrieved by the decree passed by <ORG>, defendants 2 to 4 and 10 have filed the above appeal by special leave in this <ORG>.

The principal contention urged in support of the appeal before us was that the suit having abated on the coming into force of the Amending Act , it was not open to the trial court to treat the proceedings before it as a new suit instituted after the death of the defendant, <NAME> against defendants Nos. 2 to 10 and to pass a decree. In the instant case, as noticed earlier, the trial court did not decide the question whether the suit abated on the coming into force of the Amending Act . The Division Bench of <ORG> has held that the provisions of section of the Amending Act were not applicable to the suit and, therefore, the question of its abatement did not arise.

The undisputed facts in this case are: (1) <NAME> held the suit property as a lessee before the institution of the suit; (2) that the lease had been terminated by the issue of a notice in accordance with section 106 of the Transfer of Property Act; (3) that a suit for eviction of <NAME> was filed on March 2, 1964 before <ORG>, Madras which was competent to try it on the date of its institution; (I) that by virtue of alteration of the pecuniary jurisdiction of <ORG> and consequential provisions made in that connection, the suit stood transferred to the file of the original side of <ORG> with effect from May 1, 1964 and that the suit was, therefore, deemed to be pending in law on the file of <ORG> on June 10, 1964 on which date the Amending Act was published in the official <ORG> even though in fact the file was Lying on that date with <ORG>. The other proceedings which have been referred to above in some detail are not relevant for the purpose of deciding the question whether the suit abated on the publication of the Amending Act in the official <ORG>.

Section 2 (ii) of the Amending Act repealed clause

(iii) of section 30 of the principal Act. Consequently any non-residential building, the rental value of which on the date of the commencement of the principal Act as entered in the property tax assessment book of the municipal council, <ORG>, panchayat or panchayat union council or <ORG>, as the case may be exceeded four hundred rupees per mensem was also brought within the scope of the principal Act and the relationship between the landlord and tenant of such building came to be regulated by it with effect from June 10, 1964.

Section 3 of the Amending Act consists of three parts. Under the first part, it directed that every proceeding in respect of any nonresidential building or part thereof pending before any court or other authority or officer on the date of the publication of the Amending Act in <ORG> and instituted on the ground that such building or part was exempt from the provisions of the principal Act by virtue of clause (iii) of section 30 of the principal Act abated in so far as the proceedings related to such building or part. Under the second part, it provided that all rights and privileges which might have accrued before such date to any landlord in respect of any non- residential building or part thereof by virtue of clause

(iii) of section 30 of the principal Act would cease and determine and would not be enforceable. The proviso to section 3 which is the third part of that section provided that nothing contained in section 3 should be deemed to invalidate any suit or proceeding in which the decree or order passed had been executed or satisfied in full before the date mentioned in that section.

On behalf of the plaintiff, three contentions were urged in the appeal before <ORG> in support of his case that section 3 of the Amending Act was inapplicable to the present case. They were (i) that section 3 of the Amending Act had no reference to a suit at all; (ii) that even if it had any reference to a suit, it did not apply to a suit of the present nature and (iii) that even if it applied to a suit of the present nature still on the pleadings of the plaintiff. the present suit was not affected by the said provision. <ORG> rejected the first contention of the plaintiff that section 3 had no reference to a suit at all but it, however, upheld me case of the plaintiff on the basis of the other two contentions. Relying upon the language of section 10(l) of the principal Act which provided that a tenant was not liable to be evicted whether in execution of a decree or otherwise except in accordance with the provisions of that section or sections 14 to 16 and the decision of <ORG> in <CITATION> . and the decision of this Court in <CITATION> , <ORG> held that it was settled law that the principal Act itself did not prohibit the filing of a suit by a landlord for recovery of possession of the property from a tenant but only a decree passed in the said suit could not be executed except in accordance with the provisions of the principal Act and if that was the true legal position in respect of the buildings to which the principal Act applied from its commencement' there was no justification whatever for the <ORG> making a contrary provision in respect of non-residential buildings to which the principal Act became applicable by virtue of the Amending Act . <ORG>, therefore, held that section 3 of the Amending Act was not applicable to the case on hand. We are of the view that the above conclusion of <ORG> is erroneous. It is not for the Court to ask whether there was any justification for the <ORG> to make a contrary provision in respect of the suits of the present nature. It was not the contention of the plaintiff that section 3 of the Amending Act was unconstitutional. In that situation, <ORG> had no option but to apply the provision in question to the case on hand without going into the question whether there was any justification for enacting it. We are, however. Of the view that in the circumstances in which the Amending Act came to be enacted, there was every justification for enacting section 3 in order to give protection to tenants against whom suits for eviction had been filed from buildings which were brought within the scope of the principal Act by deleting clause

(iii) of section 30 of the principal Act.

The third contention of the plaintiff in support his plea that section 3 of the Amending Act was inapplicable was formulated thus: The provisions of the aforesaid section 3 would apply only when the three conditions viz. (i) that there should be a proceeding in respect of a non-residential building or part thereof; (ii) that proceeding should be pending before any court or other authority or officer on the date of the publication of the Amending Act in <ORG>; and (iii) that proceeding should have been instituted on the ground that such building or part thereof was exempt from the provisions of the principal Act by virtue of clause (iii) of section 30 of the principal Act, existed. It was argued that since the present suit did not satisfy the third requirement referred to above as the plaintiff had not referred to clause (iii) of section 30 of the principal Act in the plaint, section 3 of the Amending Act should be held to be inapplicable to it. <ORG> upheld the above contention observing that in order to attract section 3 of the Amending Act, there should be an allegation in the plaint that the building in question was exempt from the provisions of the principal Act by virtue of clause (iii) of section 30 of the principal Act. In order to arrive at the above conclusion, it relied upon the decision of <ORG> in <CITATION> . and the decision of this Court in <CITATION> passage in the case of M/s. <ORG> (supra) on which <ORG> relied was follows:

"It has to be immediately conceded that the wording of this section can by no means be described as happy, or free from any cloud of ambiguity. It is not very clear how a proceeding could have been instituted 'on the ground that such building or part was exempt from the provisions of the principal Act by virtue of clause (iii) of s. 30 ', or what is the precise scope of the rights and privileges which may accrue to the landlord, and which are to cease and determine."

We do not think that in the context in which section 3 of the Amending Act was enacted, it could be said that it was not possible to identify the proceedings to which that provision referred. In the case of <ORG> (supra), the effect of section 3 of the Amending Act is set out as follows:-

"The obvious result of section 30(iii) of the Act, as it stood before the amendment, was that, if the rental value of a non-residential building,, as entered in the property tax book of the <ORG> exceeded Rs. 400/-per mensem, a description which applies to the premises under consideration before us the landlord would have no right to proceed against the tenant for eviction under section 10(2) (ii) a) of the Act. Section 3 of the Amending Act, on the face of it, applies to two kinds of cases. Its heading is misleading in so far as it suggests that it is meant to apply only to one of these two kinds. It applies: firstly, to cases in which a proceeding has been instituted "on the ground" that a non-residential building "was exempt from the provisions of the principal Act" and is pending; and secondly, to cases where "rights and privileges, which may have accrued before such date to) any landlord in respect of non- residential building by virtue of clause (iii) of section 30 of the principal Act" exist. In the kind of case falling in the first category, the amendment says that the pending proceedings shall abate. As regards the second kind of case, the amendment says that "the rights and privileges of the landlord shall cease and determine shall not be enforceable."

Proceeding further, this Court observed:

"It is not necessary, for the purposes of tho case before us, to speculate about the types of cases which may actually fall within the two wings of the obviously inartistically drafted section 3 of the Amending Act. It is enough for us to conclude, as we are bound to on the language of the provision, that the case before us falls outside it."

The above observations were made by this Court in a case where a proceeding had been initiated before the City Rent Controller in December, 1964 by a landlord for eviction of his tenant from a non-residential building situated in the city of Madras which had been leased at Rs. 600/- per month on the ground that the building had been sub-let. The City Rent Controller ordered the eviction of the tenant. In appeal, <ORG> allowed the tenant's appeal holding that the tenant had the right under the original lease of August 21, 1944 to sub-let, and also because even violation of a clause of the subsequent lease of April 3, 1963, prohibiting subletting, did not entail a forfeiture of tenancy rights under the provisions of the Transfer of Property Act . Its view was that, in the case of what it described as "a contractual tenancy" the provisions of the Transfer of Property Act applied to the exclusion of the remedies provided by the principal Act so that unless the lease deed itself provided for a termination of tenancy for sub-letting in addition to a condition against subletting, the tenancy right itself could not be forfeited or determined by such a breach of the contract of tenancy. In exercise of its revisional jurisdiction, under section 25 of The principal Act, <ORG> reversed the judgment and order of <ORG> holding that the rights of the landlord and tenant were governed on the date of the application for eviction by section 10(2) (ii) (a) of the principal Act which contained a prohibition against sub- letting which involved parting with possession. On appeal to this Court, the decision of <ORG> was affirmed holding that the effect of the amendment was that the landlord acquired a new right to evict a tenant under section 10(2) (ii) a). This Court held that by virtue of section 3 of the Amending Act, all rights and privileges which might have accrued before the date of publication of the Amending Act in the official Gazette to any landlord in respect of any non-residential building or part thereof by reason of clause (iii) of section 30 of the principal Act alone became enforceable. But the right to seek eviction of the tenant Under section 10(2) (ii) (a) was unaffected even though the sub-letting of the building had taken place prior to the enactment of the Amending Act .

From a reading of he above decision, it is obvious that This <ORG> held that the right which the landlord acquired under section 10(2) (ii) (a) to evict the tenant was a now right and was not a pre-existing right which could possibly be affected by section 3 of the Amending Act. It is, however, clear from the observations of this <ORG> extracted above that a proceeding which had been instituted "on the ground" that a non-residential building "was exempt from the provisions of the principal Act" by virtue of clause (iii) of section 30 of The principal Act and was pending on the date of publication of the amendment in the official Gazette would abate. This <ORG> did not, however, go into the question as to what types of cases would fall within the scope of section 3 of the Amending Act. We are of the view that the identification of such cases depends on the true cons-

truction of the said provision. In this case, we are faced with that question.

It is appropriate to refer at this stage to the following passage occurring in Craies on Statute Law (Sixth Edition) at page 99:-

"In <NAME> v. <NAME> [1926] 3 Addams 210, 216, Sir <NAME> said as follows: "The key to the opening of every law is the reason and spirit of the law; it is the animus imponentis, the intention of the law-maker expressed in the law itself, taken as a whole. Hence, to arrive at the true meaning of any particular phrase in a statute, the particular phrase is not to be viewed detached from its context in the statute; it is to be viewed in connection with its whole con text, meaning by this as well the title and preamble as the purview or enacting part of the statute."

We have already referred to the object with which the Amending Act was passed and that was to give relief against unreasonable evictions and demands for unconscionable rates of rents to tenants of buildings which had been originally exempted from the operation of the principal Act. It is clear that while doing so the <ORG> gave relief also to persons against whom suits had been filed. WE think that the words "instituted on the ground that such building or part was exempt from the provisions of the principal Act by virtue , of clause (iii) of section 30 of the principal Act" should be construed in the context in which they appear as referring to a proceeding which had been instituted in the light of section 30(iii) of the principal Act which granted exemption in respect of the buildings referred to therein from the operation of the principal Act and any other construction would defeat the object of the Amending Act . lt is seen that in the instant case, the original plaint was filed on the basis that the tenancy had been terminated with effect from the expiry of February 29, 1964. The plaintiff prayed for eviction of the original defendant and also for a decree for damages for use and occupation at the rate of Rs. 6000/- per month from the date of the plaint till delivery of the vacant possession on the assumption that after the termination of the lease the original defendant No. 1 was not a tenant and was liable to pay damages and not the rent of Rs. 1,680/- per month which was the fair rent fixed in respect of the building in a former proceeding under the rent control law in force then. The suit in the above form could be filed for the relief referred to above only because of the exemption granted by clause (iii) of section 30 of the principal Act because in the absence of such exemption, no effective decree for ejectment could be passed by <ORG> in view of section 891  10 of the principal Act which provided that no tenant could be evicted from a building except in accordance with the provisions of section 10 and section 14 to 16 thereof. The plaintiff could not also have asked for a decree for damages at Rs. 6000/- per month which he had claimed in the plaint but for such exemption. We are, therefore. Of the view that section 3 of the Amending Act was applicable to the suit in question as it was a proceeding instituted in <ORG> on the ground that the building in question was exempt from the provisions of the principal Act by virtue of clause

(iii) of section 30 thereof although no express allegation was made in the plaint to that effect.

In order to get over the inevitable consequences flowing from section 3 of the Amending Act and the effect of an earlier decision of <ORG> of <ORG> in <NAME> v. <ORG> a novel and ingenious contention was urged on behalf of the plaintiff, the said contention being that after the termination of the lease with effect from February 29, 1964 by the issue of a notice under section 106 of the Transfer of Property Act, the original defendant became a trespasser and the premises in question ceased to be a building as defined in section 2(2) of the principal Act. On the above basis, it was contended that the original defendant could not claim the benefit of any of the provisions of the principal Act and section 3 of the Amending Act. It was argued that since a contention of this nature had not been considered in the case of <NAME> (supra), it had no binding effect on <ORG> which heard this case. It is appropriate at this stage to set out the passage from the judgment of <ORG> of <ORG> in which the binding nature of <NAME>'s case (supra) is considered:-

"In this context, Mr. <NAME> brought to our notice a decision of a Bench of this Court in <NAME> v. <ORG> (supra) to which one of us was a party. In our opinion, in that decision this question was not considered. That case also was concerned with a non-residential building which did not fall within the purview of the Act because of section 30(iii) of the Act. The tenancy was terminated on 31st October, 1960 and the suit in ejectment was instituted on 19-12-1960 which ended in a compromise decree dated 31st January, 1963. The decree provided for a direction for eviction against the quondam tenant, subject to cer-

tain terms thereafter mentioned, to wit, the landlord being entitled to take possession of the portion of the premises in occupation of one <ORG> and <ORG> immediately by executing the decree in so far as The said portion was concerned and the quondam tenant delivering possession of the rest of the portion in his occupation on or before 31st January, 1964 and the quondam tenant paying mesne profits at Rs. 1340/- per month for the period from 1st November 1960 to 31st January, 1963 and further mesne profits at Rs. 800/- per month for the period commencing from 1st February, 1963 till delivery of possession. The decree also provided that if there was default in payment of the sum of Rs. 800/- or the other sum per month, the landlord would be entitled to execute the decree immediately. Time for vacating was extended and before the building was actually vacated the Tamil Nadu 'Act 11 of 1964 intervened. The question was, whether by virtue of the intervention of the Tamil Nadu Act 11 of 1964, the decree could be executed. The learned trial Judge felt that in view of the fact that there had been a surrender of a part of the holding by the quondam tenant's sub-tenant, there was a disruption of the entire holding and therefore the quondam tenant would not be a statutory tenant within the meaning of section 2(8) of the Act. The Bench disagreed with this conclusion and held that the quondam tenant would be a tenant under section 2(8) of the Act as he continued to remain in possession of the property even after the termination of the tenancy in his favour. No point was urged before the Court that the termination of tenancy having taken place ? before Tamil Nadu Act 11 of 1964 came into force, the definition of the term 'tenant' in section 2(8) did not apply to the quondam tenant in that case and therefore the said decision cannot be considered to be an authority for the point which is now raised before us."

From the facts of <NAME> case (supra) it is clear that <ORG> of <ORG> had held that a tenant whose tenancy had been terminated with effect from October 31, 1960 and against whom a decree for eviction had been passed prior to the date on which section of the Amending Act came into force was entitled to be treated as a tenant by virtue of the said provision since he had continued to remain in possession of the property even after the termination of the tenancy. The only ground on which <ORG> which heard the present case did not follow the ruling in <NAME> case (supra) is that the effect of the termination of tenancy prior to the date on which <ORG> of 1964 came into force had not been considered in that case. The binding effect of a decision, as observed by this Court in <CITATION> does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided. On going through the decision in <NAME> case (supra) we are of the view that the appropriate procedure which <ORG> should have followed in this case was to refer it to a full Bench instead of bypassing the said decision in the manner in which it has been done in this case. The well-settled practice to be followed in such cases is succinctly put by <NAME>, J. in <CITATION> as follows:-

"Before we part with this appeal, however, it is our duty to refer to one incidental matter. We have noticed with some regret that when the earlier decision of two judges of the same <ORG> in <NAME>'s case (1953) 58 C.W.N. 64 was cited before the learned Judges' who heard the present appeal they took on themselves to say that the previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring the question to a larger Bench. Judicial decorum no less than legal propriety forms the! basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if judges of co-ordinate jurisdiction in a <ORG> start overruling one another's decision. If one <ORG> of a <ORG> is unable to distinguish a previous decision of another <ORG>, and holding the view that the earlier decision is wrong, itself gives effect to that view the result would be utter confusion. The position would be equally bad where a Judge sitting singly in the <ORG> is of opinion that the previous decision of another single Judge on a question of law is wrong and gives effect to that view instead of referring the matter to a larger Bench.

In such a case lawyers would not know how to advise their the clients and all courts subordinate to <ORG> would find themselves in an embarrassing position of having to choose between dissentient judgments of their own <ORG>.

As far as we are aware it is the uniform practice in all the <ORG> in India that if one Division Bench differs from an earlier view on a question of law of another Division Bench, a reference is made to a larger Bench."

Be that as it may, we are of the view that having regard to our finding that the suit stood abated on June 10, 1964 by virtue of the provisions of section 3 of the Amending Act, the original defendant, <NAME> became a statutory tenant of the premises in question and he could not be evicted from the premises except in accordance with the procedure specified in the principal Act. The position would not have been different even if a decree for eviction had been passed against him before June 10, 1964 and the decree had not been executed or satisfied in full on that date. The several decisions on which reliance was placed by <ORG> for determining the character of possession of the original defendant, <NAME> after the expiry of the notice given under section 106 of the Transfer of Property Act were not relevant for the purpose of this case because in none of them there was any occasion to consider the effect of a provision similar to section 3 of the Amending Act. We, therefore, do not agree with the finding of <ORG> that the original defendant was a trespasser in possession of the premises in question after June 10, 1964.

We also find it difficult to agree with the finding of <ORG> that the premises in question was not a 'building' as defined in section 2(2) of the principal Act. The reason given by <ORG> for holding that the building in question was not a 'building' within the meaning of section 2(2) of the principal Act was that it was not a building which was either 'let' or 'to be let' separately for residential or non-residential purposes. It is necessary to extract that part of the judgment of <ORG> where the above question is dealt with:-

"The definition of the word 'building' in section 2(2) states:

"building' means any building or hut or part of a building or hut, let or to be let separately for residential or non-residential purposes ........

Consequently it is not every building that comes within the scope of the Act, but only a building let or to be let separately for either of the two purposes. Admittedly on 10-6-1964 the suit building was not let because the tenancy came to an end by 29-2-1964 and late <NAME> was not occupying the building from 1-3-1964 as a tenant, as found by us. Therefore, the only other question is, whether the suit building can be said to be a building to be let separately for non- residential purposes on 10-6-1964. We have already referred to the claim of their plaintiff in his plaint that he needed the building for his own use and the contention of late <NAME> in his written statement dated 25-4-1964 that the plaintiff was merely anxious to extort higher rent and for that purpose had from time to time approached him, that although he was prepared to pay a reasonable rent, he was not willing to pay anything exorbitant and that it is because of that the plaintiff had instituted the present suit on a pretence of requiring it for his own business. With reference to the notice Ex. P-2, late <NAME> stated that notice was merely in keeping with the previous notices to the same effect which were not intended to be acted upon. However before the trial Judge the claim of the plaintiff that he required the premises for his own need was not put in issue and no issue was framed with reference thereto. Tho learned Judge himself states in his judgment:

"On the relevant date, undoubtedly there was no letting of the building and it is nobody's case that the same was to be let."

The correctness of this statement found in the judgment of the learned Judge, namely, that it was nobody's case that the building was to be let has not been challenged either in the ground of the appeal filed before this- Court or in the arguments before us. Therefore we have to proceed on the basis that it was not the case of the defend its that the plaintiff wanted to let the premises in question. This Court has construed the relevant expression, namely, 'building to be let' occurring in section 2(2) of the Act as meaning 'building intended to be let' in <NAME> & Anr. v. N. Gopalan (1961 1 M.L.J. 223. In the present case on 10-6-1964 it was not the case of the defendants that the building was intended to be let and it was not also their case that at any stage thereafter the plaintiff intended to let the suit building. Therefore, it follows that the suit building did not come within the purview of the Act as a result of the amending Act 11 of 1964."

The reason given by <ORG> for holding that the building in question was not a 'building' within the meaning of section 2(2) of R the principal Act appears to be a strange one.

A definition clause does not necessarily in any statute apply in all possible contexts in which the word which is defined may be found therein. The opening clause of section 2 of the principal Act itself suggests that any expression defined in that section should be given the meaning assigned to it therein unless' the content otherwise requires. The two-fold reasoning of <ORG> for holding that the building in question was not a 'building' is that on June 10, 1964 (i) there was no lease in force and hence it was not let and (ii) that on that date the plaintiff had no intention to lease it and therefore it was not to be let. We are of the view that the words "any building..... let.. " also refer to a building which was the subject matter of a lease which has been terminated by the issue of a notice under section 106 of the Transfer of Property Act and which has continued to remain in occupation of the tenant. This view receives support from the definition of the expression 'tenant' in section 2(8) of the principal Act which includes a person continuing in possession after the termination of the tenancy in his favour. If the view adopted by <ORG> is accepted then it would not be necessary for a landlord to issue a notice of vacancy under section 3 of the principal Act when a building becomes vacant by the termination of a tenancy or any the eviction of the tenant when he wants to occupy it himself. In law he cannot do so. He would be entitled to occupy it himself when he is permitted to do so under section 3(3) or any of the provisions of section 3A of the principal Act. This also illustrates that the view of <ORG> is erroneous. We, therefore, hold that the building in question was a 'building' within the meaning of that expression in section 2(2) of the principal Act on the date on which section 3 of the Amending Act became operative.

It thus becomes clear that the Suit came to an end in the eye of law on June 10, 1964 and the original defendant became entitled to the protection of the principal Act. He could thereafter be evicted from the building only after an order was made, by the Controller under any of the provisions of the principal Act which conferred jurisdiction on him to do so. As mentioned earlier, no formal order was passed by <ORG> on its original side stating that the suit had abated on June 10, 1964 till the death of the original defendant which took place. On January 15, 1968. Owing to certain proceedings which were instituted by one or the other of the parties, the case was treated as a pending proceeding on the file of <ORG> although in law, it was not open to the court to proceed with it after June 10, 1964.

The next significant step that was taken before <ORG> was the application made by the appellant in the year 1973 requesting the <ORG> to permit him to amend the plaint by the inclusion of a prayer for possession against defendants Nos. 2 to 10 on the basis that they were not 'tenants' as defined in section 2(8) of the principal Act. That application was allowed. Defendants Nos. 2 to 10 thereafter filed their written statements and the issues framed in the suit were recast in the light of the pleadings. The learned trial Judge, as stated above, disposed of the suit as a fresh one as against defendants Nos. 2 to 10 without recording a finding on the question whether it had abated or June 10, 1964. The learned trial Judge does not state in the course of its judgment the date from which the proceeding was treated as a fresh suit. In the instant case, the suit itself was originally flied on March 2, 1964. The original defendant died on January 15, 1968. Even if the proceeding was treated as a fresh suit against defendants Nos. 2 to 10, it could be treated as such only from a date subsequent to January 15, '968 on which date the original defendant did since the contention of the plaintiff which found favour with the learned single judge and <ORG> of <ORG> was that defendants Nos. 2 to 10 who were legal representatives of the original defendant could not succeed to the tenancy right of the original defendant. In the instant case, since the plaintiff based his claim on the above contention in the year 1973 when he made the application for 1 amendment of the plaint, the date of the institution of the fresh suit could not be earlier than the date on which the application for amendment was made even if it was permissible to do so. By his judgment the learned single Judge passed a decree for possession against defendants Nos. 2 to 10 and for damages to be determined under order 20 Rule 12 of the Code of Civil Procedure without specifying the date from which damages would be payable. In the absence of such - specification, the plaintiff became entitled to claim damages under order 20, Rule 12 of the Code of Civil Procedure even from the date of the suit i.e. March 2, 1964. <ORG> by its judgment affirmed that part of the decree of the trial court. The direction for payment, of mesne profits given in the decree of the trial court without specify the date from which damages should be computed could not have been passel consistently with its judgment in which it had been stated that the suit was being treated as a fresh suit. This defect, however is of a 3-473SCI/79 minor character. What is more fundamental in this case is that it was not permissible for the trial court to Treat the proceeding which had been instituted against the original defendant prior to June 10, 1964 as a live proceeding which could be converted into a fresh suit instituted against defendants NOS. 2 to 10 after the death of the original defendant, <NAME>. An amendment of a plaint by inclusion of a new prayer or by addition of new parties can be made only where a suit is pending before a court in the eye of law. On June 10, 1964, the entire proceedings commenced with the plaint filed on March 2, 1964 stood terminated and there was no plaint in a live suit which could be amended by the addition of new parties and the inclusion of a new prayer. We are of the view that the addition of new parties which took place after the death of <NAME> and the amendment of ' the plaint in the year 1973 and the passing of the decree by the trial Judge against defendants Nos. 2 to 10 who were not parties to the suit prior to June 10, 1964 on a cause of action which accrued subsequent to January 15, 1968 were all without jurisdiction. It was, however, argued on behalf of the plaintiff before us relying upon the decision of this <ORG> in <CITATION> . Pan that since the parties had gone to trial with open eyes knowing fully that the plaintiff was relying upon a cause of action which accrued in his favour after the death of the original defendant and on the basis of the amendment of the plaint in the year 1973, the decree passed by the trial court and affirmed by <ORG> of <ORG> should not be interfered with in the interests of justice and equity. It is no doubt true that in the decision referred to above, this <ORG> permitted the t parties to file fresh pleadings and to prosecute the proceedings after the disposal of the case by this <ORG> having regard to the delay which had already ensued. It was possible for this <ORG> to do so in that case because there was no legal impediment as we have in the present case. To repeat, in the present case, the suit abated by reason of an express provision in a statute on June 10, 1964, the new cause of action on which the plaintiff depended accrued on January 15, 1968 i.e. the date of the death of the original defendant, the plaint itself was amended in the year 1973 claiming relief against defendants Nos. 2 to 10 not as legal representatives who inherited the tenancy right of the original defendant but as persons who had not inherited the said right . It is thus seen that there was no proceeding in the eye of law rending after June 10, 1964, the cause of action on the basis of which relief was claimed was totally different and the persons against whom the relief was sought were also different. Parties could not either by consent or acquiescence confer jurisdiction on court when law had taken it away.

In these circumstances, we feel that the only course which we can adopt is to set aside the findings of the trial court and of <ORG> on issues relating to the claim of the plaintiff to get possession of the property from defendants Nos. 2 to 10 on the ground that they were not statutory tenants i.e. issues Nos. 4 and 6 and to leave the questions involved in them open reserving liberty to the parties to agitate them in appropriate proceedings. In view of our finding on issue No. 3, we hold that the decree passed by the trial court and the appellate court are unsustainable.

We accordingly allow the appeal, set aside the decrees passed by the trial court and by <ORG> of <ORG> and dispose of the suit as having abated on June 10, 1964. The findings on issues Nos. 4 and 6 are set aside without expressing any opinion on them reserving liberty to the parties to agitate the question in appropriate proceedings. Having regard to the peculiar circumstances of: the case, we direct the parties to bear their own costs throughout.

P.B.R. Appeal allowed.


<NAME>, J.

1. The petitioner is a manufacturer of crockery and porcelain ware in its factory at Mehrauli. It was selling its manufactured goods through its own selling depots in various parts of the country at a uniform retail price as per their price list. The petitioner had no price list showing the ex-factory price or the wholesale cash price for purposes of Section 4 of the Central Excises Act. The Central Excise authorities determined the assessable value of the goods of the petitioner for the purposes of levying excise duty on the basis of the retail prices. It will be appreciated that the retail prices at which the petitioner sold the goods were burdened with the various expenses of the post-manufacturing stage such as establishment, advertisement, distribution expenses, cartage, railway fright, special packing charges and so on. The petitioner claimed that the wholesale cash price or the dutiable value should be arrived at by deducting the following percentages from the retail sale price :

Cartage 5% Trade Discount 25% Railway Freight 3% Advertisement 11-1/2% Distribution 7-1/2% Breakage 10% ------ Total 62% ------

2. The petitioner from time to time submitted its consumers' price list which was accepted by the <ORG> after deducting the expenses attributable to post-manufacturing process referred to above. However, in the year 1962 the <ORG>, <ORG>, did not allow discount and other expenses referred to above but only allowed trade discount to the extent of 12-1/2%. The petitioner made a representation to the Asstt. Coll. of <ORG> who by his order dated 30-3-1962 allowed a trade discount of 25%. An appeal was rejected on a technical ground. There was a further revision preferred to the Government which resulted in the allowance of trade discount of 25% and cartage of 5 % from the retail sale price. The balance of the claim in regard to 32% of the retail sale price was disallowed.

3. Thereupon the petitioner preferred C.W. 545/67 in this court. This writ petition came up before <NAME> who disposed of the same by his order dated 20th May, 1969. [See 1978 E.L.T. (J 168).] After discussing the relevant case law the learned judge came to the conclusion that the only means for ascertaining the wholesale price in a case like this was to deduct from the retail price the necessary items of expenditure which belonged to the post-manufacturing stage. The only question was regarding the percentage claimed by the petitioner on the various items of deductable expenses. In para 3 of this order the learned judge pointed out that insofar as the percentage claimed on the aforesaid items as concerned there could be no serious controversy, as a fact, because the petitioner-company had been utilising the services of a Chartered Accountant of standing and the above figures had been worked out for the assessment period, namely, 1962-63 in accordance with the figures mentioned by the Chartered Accountant and there was no evidence, contra. There was no attack on the retail price list, However, towards the end of his judgment in paragraph 21 the learned judge observed as follows :

"At one stage I was inclined to take the figures given by the Chartered Accountant concerning the Railway freight, distribution, advertisement and insurance and straightway quash the duty on that basis, but <NAME> indicated at the latter stage of the argument, that these might be worked out in the event of my holding that these items had to be deducted, by the revenue authorities themselves. In this view the order of assessment of the Asstt. Coll. of C.E. confirmed in revision quashed with the direction that the Asstt. Coll. of <ORG>, who dismissed the petitioner's appeal on the ground that the demanded tax was not paid, shall decide afresh in the light of the legal principles mentioned in this judgment."

4. When the matter, thus went back to the Assistant Collector of <ORG> he passed an order on 18-10-1973 by which he allowed the petitioner a refund of Rs. 3.41 lacs. We are not concerned here with the items of deductions allowed except only the figure relating to breakages. As mentioned already the claims of the petitioner in this regard was to the extent of 10%. Dealing with this the Assistant Collector observed that "breakages had been allowed at a uniform rate of 10% on the basis of a certificate of an insurance company of repute and as admitted by the <ORG>." The refund determined by the Assistant Collector was actually made to the petitioner on 26-2-1974.

5. Thereafter, on 6th November, 1974 the successor Assistant Collector issued a notice purporting to be under rule 10 of the Central Excise Rules. He was of opinion that the allowance of deduction on account of breakage from the retail price at 10% made in the order date 10-10-1973 was not correct inasmuch as "no actual expenditure was incurred on account of insurance. What the court had allowed was only insurance charges". He, therefore, proposed to revise the earlier order and to call upon the petitioner to refund the excess amount of Rs. 1.25 lacs paid over to him as a result of the earlier determination. It may be mentioned here that the refund granted as well as the claim for recovery of a part of the excise refund allegedly made related to the years 1961 to 1966.

6. The petitioner filed reply to the show cause notice on 27th November, 1974. It was submitted that the loss on account of breakage was claimed because the retail prices had been loaded by 10% to cover the loss of breakage in transit. It was stated that instead of getting the goods insured with an insurance company against breakage the petitioner took upon itself the liability to indemnify the breakage in transit and cover the loss arising thereby. The breakage was calculated by them reasonably at 10% as normally insurance companies charged 10% for insuring against the breakage. This was substantiated by a certificate from a reputed insurance Company, namely, <ORG>. The claim for excluding this from the retail price was, therefore, well founded and in fact had been accepted by <NAME> in principle and the matter had been remitted to the Assistant Collector only to verify the figures. It was also contended that no power of review lay in the assessing authority in respect of an earlier order which is passes after full consideration.

7. On 25th March, 1975 the Assistant Collector passes an order directing the petitioner company to pay a sum of Rs. 1.25 lacs within 10 days being the excess amount of refund granted to it under the earlier order. According to him the claim in regard to breakage could not be allowed because the party could not show that the expenses on account of breakage on insurance had been incurred by them. The objection to action under Rule 10 was also rejected and a demand was made in the terms above referred to. The petitioner preferred an appeal to the Appellate Collector which was successful. The Appellate Collector pointed out that before <ORG> the figures mentioned by the petitioner had not been contradicted by the department and the retail price list had also not been attacked. <ORG> was almost on the point of accepting the figures supplied to them and quashing the original assessment order on that basis. Breakage allowance to the extent of 10% in the case of crockery which is fragile was unavoidable and was also admitted by <ORG>. After <ORG>'s order against which no appeal had been preferred the order disallowing the insurance cover against breakage was unsustainable. He also held that if the earlier order of refund was found to be erroneous, it should have been revised by <ORG> under Section 35A and it was not open to review by invoking rule 10. The above order was dated 25th October, 1975.

8. On 6th October, 1976 <ORG> issued a notice to the petitioner under Section 36(2) of the Central Excise and Salt Act , 1944 proposing to revise the order dated 25th October, 1975 passed by the Appellate Collector. After obtaining the petitioner's reply and affording an opportunity for personal hearing, the <ORG> revised the order dated 25th October, 1975 and restored the order of the Assistant Collector dated 25th March 1975. According to the revisional authority, <ORG> had merely laid down certain principles and directed the department to work out the admissible deduction on the basis of the principles set out in the judgment. The court referred only to insurance charges as being eligible for deduction. But what the petitioner claimed before the Appellate Collector was not insurance charges but a breakage allowance which was a totally different concept from the concept of insurance. In the view of the <ORG> the order the Appellate Collector holding that the breakage allowance was admissible on the ground that it was an insurance allowance was clearly wrong. The Assistant Collector was also held justified in taking action under the provisions of Rule 10. This order of the <ORG> is dated 27th July, 1979 and has given rise to this writ petition.

9. Before proceeding to deal with the contentions raised on behalf of the petitioner, it is necessary to clarify that the decision of <ORG> cannot be considered to have decided the issue presently in dispute. At that stage, the only question was whether any deductions could be permitted from the retail sale price and this was answered in the affirmative. No doubt the learned judge observed initially that the various items enumerated (one of which was referred to as "insurance covering breakage") appeared to be post-manufacturing expenses, but the exact nature of this item was not specifically considered by the learned judge, through Mr. <NAME> states that in the writ petition the assessed had explained in detail how the percentage of 10 had been arrived at. However, it is clear, from the concluding paragraph of the judgment that ultimately the learned judge decided to leave the issue of permissible deductions open for consideration by the appropriate authorities as requested by the learned counsel for the respondent. It is, therefore, not possible to say that the learned judge had decided that this deduction should be allowed and that it was not open to the respondents to consider the matter at all.

10. Learned counsel for the petitioner raised three contentions :-

(i) The refund having been granted by the order of an Assistant Collector dated 19-10-1973 after a careful consideration of the various points involved, it was not open to another Assistant Collector to "review" that order merely because he thought it was wrong and to hold to the contrary;

(ii) the order dated 25-3-1975 passed under Rule 10 was barred by limitation as the proceedings for the review commenced after the expiry of three months from the date of grant of refund; and

(iii) The refund had been correctly granted to the petition and its withdrawal was not in accordance with law.

11. The first two contentions turn on the language of Rule 10 and hence it is necessary to set out the provisions of rule as it stood at the relevant time :

"10. Recovery of duties or charges short-levied, or erroneously refunded :-

(i) When duties or charges have been short-levied, through inadvertence, error, collusion or mis-construction on the part of an officer, or through mis-statement as to the quantity, description or value of such goods on the part of the owner or when any such duty or charge, after having been levied has been owing to any such cause, erroneously refunded the proper officer may, within the three months from the date on which the duty or charge was paid or adjusted in the owner's account current if any or from the date of making the refund, serve a notice on the person from whom such deficiency in duty or charges is or are recoverable requiring him to show cause to the Assistant Collector of <ORG> why he should not pay the amount specified in the notice.

(ii) The Assistant Collector of Central Excise, after considering the representation, if any, made by the person on whom notice is served under sub-rule (1), shall determine the amount of duty or charges due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined within ten days from the date on which he is required to pay such amount or within such extended period as the Assistant Collector of Central Excise may, in any particular case, allow."

It will be seen at once that the first contention urged by the learned counsel for the petitioner is untenable. In the very nature of the levy of excise duty, the initial decision to levy or not to levy duty has most often to be taken very expeditiously. It is no doubt true that there is provision enabling a provisional assessment initially to be followed on by careful consideration later on and that in the case of a refund order there may not have been the same amount of haste as in a case of levy. Nevertheless, the legislature has considered it expedient to confer on the assessing authority itself a limited power of review where, according to him or his successor, the earlier order is erroneous. The language of the rule clearly postulates the existence of a prior quasi-judicial determination by way of levy of duty or grant of refund or a decision not to levy duty and confers on the same authority a power of review of the earlier decision, subject to the fulfillment of the conditions mentioned in the rule and subject to action for review being taken within the prescribed period of limitation. <ORG> in <CITATION> . - observed :

'The term 'levy' appears to us to be wider in its import than the term "assessment". It may include both "imposition" of a tax as well as assessment. The term "imposition" is generally used for the levy of a tax or duty by legislative provision indicating the subject matter of the tax and the rates at which it has to be taxed. The term "assessment", on the other hand, is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax on account of particular goods or property or whatever may be the object of the tax in a particular case and determining its amount. <ORG> appeared to equate "levy" with an "assessment" as well as with the collection of a tax when it held that "when the payment of tax is enforced, there is a levy". We think that, although the connotation of the term "levy" seems wider than that of "assessment", which it includes, yet it does not seem to us to extent "to collection". Article 265 of the Constitution makes a distinction between "levy" and "collection". We also find that in <CITATION> . , this court made distinction between "levy" and "collection" as used in the Act and the Rules before us. It said there with reference to Rule 10 :

'We are not inclined to accept the contention of Dr. <NAME> that the expression "levy" in Rule 10 means actual collection of some amount. The charging provision Section 3(1) specifically says, "there shall be levied and collected in such a manner as may be prescribed the duty of excise. It is to be noted that sub-section (1) used both the expressions "levied and collected" and that clearly shows that the expression "levy" has not been used in the Act or the Rules as meaning actual collection.' We are, therefore, unable to accept the view that, merely because the "account current", kept under the third proviso (erroneously mentioned as second proviso by <ORG>) to Rule 9, indicated that an accounting had taken place, there was necessarily a legally valid or complete levy. The making of debit entries was only a mode of collection of the tax. Even if payment or actual collection of tax could be spoken of as a defacto "levy" it was only provisional and not final. It could only be clothed or invested with validity after carrying out the obligation to make an assessment that justify it. Moreover, it is the process of assessment that really determines whether the levy is short or complete. It is not a factual or presumed levy which could, in a disputed case, proved an "assessment", This has to be done by proof of the actual steps taken which constitute "assessment".'

12. In the context of these observations, it is quite clear that there could have been no non-levy or short-levy except by a process of assessment; likewise a refund could have been directed only after making a like determination of a quasi-judicial nature. It is therefore, difficult to accept the contention that the rule is not attracted merely because the earlier order has been passed after a detailed consideration. The rule permits a review when the appropriate authority comes to a conclusion that the earlier decision was erroneous and that more duty should have been levied or that no refund ought to have been granted, such error having crept in inter alia due to "inadvertence, error, collusion, or misconstruction on the part of an officer". These words are very wide and clearly cover the circumstances of the present case, as according to the respondents, the refund was erroneously granted due to misconstruction of law and the earlier order of <NAME> If the order of review is incorrect, it is, of course, subject to correction by appeal, further revision and, in appropriate cases, by judicial review in a writ petition but it is not open to objection on the ground that the authority has no jurisdiction to review a considered order.

13. On the second contention, the plea of the petitioner is, on the face of it, borne out by the language of the rule, the extended period of limitation contemplated by which is obviously, and also admittedly, not available to the respondents in the present case. Counsel for the respondents however seeks to overcome this objection on the ground that the present case is covered by Rule 173-J which is in the following terms :-

'173-J. Time limit for recovery of short levy or refund of excess levy. - The provisions of rules 10 and 11 shall apply to the assessed as if for the expression 'three months' the expression 'one year' were substituted in those rules."

Though there is some difficulty in the construction of this rule, we are of opinion that the contention of the learned counsel for the respondents should be accepted.

14. Rule 173-J has, it will be notices, a reference to Rule 10 as well as Rule 11. Rule 10 relates to the recovery by the department in case of short-levy or excess refund whereas Rule 11 gives the assessed a right to ask for refund where he finds that the department has collected more duty than it ought to have. The ambiguities in Rule 173-J are (i) that its heading refers to "short levy" which is only one of the two eventualities mentioned in Rule 10 and to "refund of excess levy" which is the subject-matter of Rule 11 giving scope for an argument that the other eventuality of Rule 10 viz. erroneous refund of a proper levy is not covered by it; and (ii) that it refers to Rule 10 and 11 applying "to the assessed", thus giving scope for an argument that it does not apply to the department acting under Rule 10. But we agree with Mr. <NAME> that these are minor lapses in drafting and that the rule fully applies to the present case. There is no logical reason why the rule should attract the applicability of Rule 10 only in respect of one of the two eventualities; the reference in the title to Rule 173-J is really a broad reference to the contents of rule 10 and should not be read as limited only to one type of action taken under Rule 10. Equally undue emphasis on the word 'to the assessed' in the manner suggested by the petitioner will render nugatory the reference to Rule 10 in the body of the rule. We think that on a fair reading of the rule it is clearly applicable to the review of a case of erroneous refund under Rule 10. The third difficulty posed by Mr. <NAME>, was that in the present case we are concerned with the excise duty levied and collected for the assessment period 1961-66 whereas Rule 173-J came into force only in 1968. This again does not help the petitioner. What is attempted to be reviewed under Rule 10 is an order of refund made on 19-10-1973. This order was passed much after 1968 and its review ability will, therefore, be governed by Rule 173-J read with Rule 10. The objection that the notice preceding the order dated 19-10-1973 mentioned only Rule 10 does not also affect the validity of the order passed because Rule 173-J is not an independent rule by itself; it only directs the application of provisions of Rule 10, in certain cases with a modification regarding the period of limitation.

15. This takes us to the third and last contention of Mr. <NAME> on the merits of the order under Rule 10 which has been revived by the order in revision of the <ORG>. He contends that the Government is wrong in thinking that <NAME> permitted a deduction only in respect of premia paid for insurance against breakage off goods in transit. The case of the assessed all along had been, that since substantial loss due to breakage in transit of the fragile goods manufactured by the petitioner was an inevitable incident of the business, the assessed had to take this into account in fixing its sale price. Since the loss incurred at the post-manufacturing stage, this element of "inflation" included in the sale price represented a post-manufacturing element which had to be excluded for excise duty purposes in view of the law settled by <ORG> - and <ORG>'s - .

16. Counsel for the respondents does not deny that the loss due to breakage claimed by the assessed occurs after the goods leave the factory. Indeed the Rules make an allowance in respect of loss due to breakage in the process of manufacture and usually no question arises in regard thereto. What he says, however, is that what the assessed is really seeking is to exclude from the manufacturing cost the cost of manufacture of a part of the goods manufactured which after their manufacture and removal from the factory, are lost to the assessed and that too not on the basis of actualities but on estimate. We do not think that the fact of the assessed's claim being based on an estimate can vitiate it but we find substance in Mr. <NAME>'s contention that the allowance of this loss will really result in the exclusion from the excisable value the manufacturing cost of a part of the excisable goods. The goods attract excise duty at the point of manufacture and removal ( Section 3 , Rule 9 and 49); their loss to the assessed subsequently is immaterial from the point of view of excise duty. We have, therefore, come to the conclusion that, plausible as the assessed's claim may sound, the claim of the assessed will really result in the reduction from the sale price a portion of the element of the assessed's manufacturing cost included in it, which is the subject matter of levy. This loss cannot be approximated to insurance premium paid for breakage in transit for purposes of sale which will clearly be a post-manufacturing expense.

17. We, therefore, reject the contentions of the petitioner, discharge the rule and dismiss the writ petition. We, however, make no orders as to costs.