PETITIONER: ASSOCIATED HOTELS OF INDIA LTD. Vs. RESPONDENT: <NAME> DATE OF JUDGMENT: 19/05/1959 BENCH: <NAME>, S.K. BENCH: <NAME>, S.K. SARKAR, A.K. SUBBARAO, K. CITATION: 1959 AIR 1262 1960 SCR (1) 368 ACT: Rent Control-Application for standardisation of rent Room in a hotel Meaning of Delhi and Ajmer-Merwaya Rent Control Act, 1947 (19 Of 1947), Ss. 2(b) and 7(1). HEADNOTE: Section 2(b) of the Delhi and Ajmer-Merwara Rent Control Act 1947, provided as follows:-, " S. 2 . In this Act, unless there is anything repugnant in in the subject or context,- (a)......................................................... (b) Premises' means any building or part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose...... but does not include a room in a dharamshala, hotel or lodging house." The respondent occupied two rooms in the appellant's hotel, described as the Ladies' and Gents' Cloak Rooms, where he used to carry on his business as a hair-dresser. The document executed by the parties purported to be one as between a licenser and licensee and provided, inter alia, that the respondent was to pay an annual rent of Rs. 9,600 in four quarterly installments, which was later reduced to Rs. 8,400 by mutual agreement. The respondent made an application for standardisation of rent under s. 7(1) of the Delhi and Ajmer-Merwara Rent Control Act, 1947, and the Rent Controller of Delhi fixed the rent at Rs. 94 per month. On appeal by the appellant, the I District judge reversed the order of the Rent Controller and dismissed the application holding that the Act did not apply. <ORG> in revision set aside the order of the District judge and restored that of the Rent Controller, holding that the agreement created a lease and not a license and that S. 2 of the Act did not exempt the two rooms from the operation of the Act. The two questions for determination in this appeal were, (1) whether the agreement created a lease or a license and, (2) whether the said rooms were rooms in a hotel within the meaning of s. 2(b) of the Act. Held, (Per <NAME> and <NAME>, <ORG>., <NAME>, J. dissenting), that the rooms let out by the appellant to the respondent were rooms in a hotel within the meaning of S. 2(b) of the AjmerMerwara Rent Control Act, 1947, and were as such excluded from the purview of the Act and the respondent was not entitled to claim standardisation of rent under its provisions. Per <NAME>, j In order that a room may be 'a room in a hotel' within the meaning of the Act, it must fulfill two conditions, (1) it must be part of the hotel in the physical sense and, (2) its user must be connected with the general purpose of the hotel of which it is a part, 369 A hair-dresser's business provided one of the amenities of a modern hotel and as such it was connected with the business of the hotel. There could be no doubt from the terms of the agreement executed by the parties in the instant case that it was a lease and not a licence. Per <NAME>, J.-The words "room in a hotel" in S. 2(b) of the Act must be given their plain meaning and a room in a hotel must, therefore, mean any room in a building in the whole of which the business of a hotel was carried on. Per <NAME>, J.--Although the document executed by the parties was apparently in a language appropriate to a licence, the agreement between them, judged by its substance and real intention, as it must be, left no manner of doubt that the document was a lease. It had all the characteristics that distinguished it from a license, namely, (1) that it created an interest in the property in favour of the respondent, and, (2) it gave him exclusive possession thereof, which, in the absence of any circumstances that negatived it, must indicate a clear intention to grant a lease. <NAME> v. <NAME>,  1 All E.R. 149 and <NAME> v. <NAME>,  1 All E.R. 1199, referred to. The words 'room in a hotel', properly construed, must mean a room that was part of a hotel and partook of its character and did not cease to do so even after it was let out. Consequently, where a hotel, as in the instant case, occupied the entire building, and rooms were let out for carrying on a business different from that of a hotel, such rooms could not fall within purview Of S. 2 of the Act. There could be no reasonable nexus in this case between a hair-dresser's business and that of a hotel as there was nothing in the document in question to prevent the tenant from carrying on any other business, or to bind him to give any preferential treatment to the lodgers, who could take their chance only as general customers, the tenant's only liability being to pay the stipulated rent. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 38 of 1955.

Appeal by special leave from the judgment and order dated the April 29, 1953, of <ORG> at Simla in Civil Revision No. 761 of 1951, arising out of the Appellate Order dated October 6, 1951, of <ORG>, Delhi in Misc. Civil Appeal No. 248 of 1950, against the order of the Rent Controller, Delhi dated the December 14, 1950.

<NAME>, Solicitor-General of India, <NAME>, <NAME> and <NAME>, for the Appellant.

The respondent did not appear.

1959. May 19. The following Judgments were delivered <NAME> have had the advantage and privilege of reading the judgments prepared by my learned brethren, <NAME>, J., and <NAME> J. I agree with my learned brother <NAME> J., that the deed of May 1, 1949, is a lease and not a licence. I have nothing useful to add to what he has said on this part of the case of the appellant. On the question of the true scope and effect of s. 2(b) of the Delhi and Ajmer-Merwara Rent Control Act,  hereinafter called the Rent Control Act, I have reached the same conclusion as has been reached by my learned brother <NAME>, J., namely, that the rooms or spaces let out by the' appellant to the respondent in <ORG>, New Delhi, were rooms in a hotel within the meaning of s. 2(b) of the Rent Control Act; therefore that Act did not apply and the respondent was not entitled to ask for the determination of fair rent under its provisions. The reasons for which I have reached that conclusion are somewhat different from those of my learned brother, <NAME> J., and it is, therefore, necessary that I should state the reasons in my own words.

I read first s. 2(b) of the Rent Control Act so far as it is relevant for our purpose:

"S. 2. In this Act, unless there is anything repugnant in the subject or context,-

(b) 'premises' means any building or building which is, or is intended to be, let for use as a residence or for commercial any other purpose......... but does not include a room in a dharamshala, hotel or lodging house." The question before us is-what is the meaning of the expression 'a room in a, hotel' ? Does it merely mean a room which in a physical sense is within a building or part of a building used as a hotel; or does it mean something more, that is the room itself is not' only within a hotel in a physical sense but is let out to serve what are known as 'hotel purposes'? If a strictly literal construction is adopted, then a room in a hotel or dharamshala or lodging house means merely that the room is within, and part of, the building which is used as a hotel, dharamshala or lodging house. There may be a case where the entire building is not used as a hotel, dharamshala or lodging house, but only a part of it so used. In that event, the hotel, lodging house or dharamshala will be that part of the building only which is used as such, and any room therein will be a room in a hotel, dharamshala or lodging house. Rooms outside that part but in the same building will not be rooms in a hotel, dharamshala or lodging house. Take, however, a case where the room in question is within that part of the building which is used as a hotel, dharamshala or lodging house, but the room is let out for a purpose totally unconnected with that of the hotel, lodging house or dharamshala as the case may be. Will the room still be a room in a hotel, lodging house or dharamshala ? That I take it, is the question which we have to answer.

The word 'hotel' is not defined in the Rent Control Act. It is defined in a cognate Act called the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Bom. 57 of

47). The definition there says that a hotel or lodging house means a building or a part of a building where lodging with or without board or other service is provided for a monetary consideration. I do not pause here to decide whether that definition should be adopted for the purpose of interpreting s. 2(b) of the rent Control Act . It is sufficient to state that in its ordinary connotation the word 'hotel' means a house for entertaining strangers or travellers: a place where lodging is furnished to transient guests as well as one where both lodging and food or other amenities are furnished. It is worthy of note that in a. 2(b) of the Rent Control Act three different words are used 'hotel', dharamshals' or 'lodging house'.

Obviously, the three words do not mean the same establishment. In the cognate Act, the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, however, the definition clause gives the same meaning to the words 'hotel' and lodging house'. In my view s. 2(b) of the Rent Control Act by using two different words distinguishes a hotel from a lodging house in some respects and indicates that the former is an establishment where not merely lodging but some other amenities are provided. It was, however, never questioned that <ORG>, New Delhi, is a hotel within the meaning of that word as it is commonly understood, or even as it is defined in the cognate Act. Passing now from definitions which are apt not to be uniform, the question is whether the partitioned spaces in the two cloak rooms let out to the respondent were rooms in that hotel. In a physical sense they were undoubtedly rooms in that hotel. I am prepared, however to say that a strictly literal construction may not be justified and the word 'room' in the composite expression 'room in a hotel' must take colour from the context or the collocation of words in which it has been used; in other words, its meaning should be determined noscitur a sociis. The reason why I think so may be explained by an illustration. Suppose there is a big room inside a hotel; in a physical sense it is a room in a hotel, but let us suppose that it is let out, to take an extreme example, as a timber godown. Will it still be a room in a hotel, though in a physical sense it is a room of the building which is used as a hotel? I think it would be doing violence to the context if the expression 'room in a hotel' is interpreted in a strictly literal sense. On the view which I take a room in a hotel must fulfil two conditions: (1) it must he part a hotel in the physical sense and (2) its user must be connected with the general purpose of the hotel of which it is a part. In the case under our consideration the spaces were let out for carrying on the business of a hair dresser. Such a business I consider to be one of the amenities which a modern hotel provides. The circumstance that people not resident in the hotel might also be served by the hair dresser does not alter the position; it is still an amenity for the residents in the hotel to have a hair dressing saloon within the hotel itself. A modern hotel provides many' facilities to its residents; some hotels have billiard rooms let out to a private person where residents of the hotel as also non- residents can play billiards on payment of a small fee; other hotels provide post office and banking facilities by letting out rooms in the hotel for that purpose. All these amenties are connected with the hotel business and a barber's shop within the hotel premises is no exception. These are my reasons for holding that the rooms in question were rooms in a hotel within the meaning of s. 2

(b) of the Rent Control Act, 1947, and the respondent was not entitled to ask for fixation of fair or standard rent for the same. 1, therefore, agree with my learned brother <NAME>, J., that the appeal should be allowed, but in the circumstances of the case there should be no order for costs.

<NAME> is the proprietor of an hotel called <ORG> which is housed in a building on Queensway, New Delhi. <NAME>, the respondent named above who is now dead, was the proprietor of 'a business carried on under the name of <NAME>. Under an agreement with the appellant, he came to occupy certain spaces in the Ladies' and Gents' cloak rooms of <ORG> paying therefore initially at the rate of Rs. 800 and subsequently Rs. 700, per month.

On September 26, 1950, <NAME> made an application under s. 7(1) of the Delhi and Ajmere-Merwara Rent Control Act, 1947 , to the Rent Controller, New Delhi, alleging that he was a tenant of the spaces in the cloak rooms under the appellant and asking that standard rent might be fixed in respect of them. The appellant opposed the application, contending for reasons to be mentioned later, that the Act did not apply and no standard rent could be fixed. The Rent Controller however rejected the appellant's contention and allowed the application fixing the standard rent at Rs. 94 per month. On appeal by the appellant,. the,District Judge of Delhi If set aside the order of the Rent Controller and dismissed the application. <NAME> then moved <ORG> in revision. <ORG> set aside the order of the District Judge and restored that of the Rent Controller. Hence this appeal. We are informed that <NAME> died pending the present appeal and his legal representatives have been duly brought on the record. No one has however appeared to oppose the appeal and we have not had the advantage of the other side of the case placed before us. As earlier stated, the appellant contends that the Act does not apply to the present case and the Rent Controller bad no jurisdiction to fix a standard rent. This contention was founded on two grounds which I shall presently state, but before doing that I wish to refer to a few of the provisions of the Act as that would help to appreciate the appellant's contention.

For the purpose of the present case it may be stated that the object of the Act is to control rents and evictions. Section 3 says that no tenant shall be liable to pay for occupation of any premises any sum in excess of the standard rent of these premises. Section 2(d) defines a tenant as a person who takes on rent any promises. Section 2(b) defines what is a premises within the meaning of the Act and this definition will have to be set out later because this case largely turns on that definition. Section 2(c) provides how standard rent in relation to any promises is to be determined. Section 7 (1) states that if any dispute arises regarding the standard rent payable for any premises then it shall be determined by the <ORG>. It is under this section that the application out of which this appeal arises was made, the <ORG> presumably being the Rent Controller. It is clear from these provisions of the Act that standard rent can be fixed only in relation to premises as defined in the Act and only a tenant, that is, the person to whom the premises have been let out, can ask for the fixing of the standard rent.

I now set out the definition of " premises " given in the Act so far as is material for our purposes:

" "premises" means any building or part of a building which is or is intended to be let separately.............. but does not' include a room in a dharamsala, hotel or lodging house."

It is clear from this definition that the Act did not intend to control the rents payable by and evictions of, persons who take on rent rooms in a dharamsala, hotel or lodging house.

The appellant contends that the spaces are not premises within the Act as they are rooms in a hotel and so no standard rent could be fixed in respect of them. Thus the first question that arises in this appeal is are the spaces rooms in an hotel within the definition ? If they are rooms in an hotel, clearly no standard rent could be fixed by the Rent Controller in respect of them.

The Act does not define an hotel. That word has therefore to be understood in its ordinary sense. It is clear to me that <ORG> is an hotel however the word may be understood. It was never contended in these proceedings that <ORG> was not an " hotel " within the Act. Indeed, <ORG> is one of the best known hotels of New Delhi. It also seems to me plain that the spaces are "rooms ", for, this again has not been disputed in the Courts below and I have not found any reason to think that they are not rooms.

The language used in the Act is " room in a...... hotel". The word " hotel " here must refer to a building for a room in an hotel must be a room in a building. That building no doubt must be an hotel, that is to say, a building in which the business of an hotel is carried on. The language used in the Act would include an room in the hotel building. That is its plain meaning. Unless there is good reason to do otherwise, that meaning cannot be departed from. This is the view that the learned District Judge took. Is there then any reason why the words of the statute should be given a meaning other than their ordinary meaning? The Rent Controller and <ORG> found several such reasons and these I will now consider.

The learned Rent Controller took the view that a room in an hotel would be a room normally used for purposes of lodging and not any room in an hotel. He took this view because he thought that if, for example, there was a three storeyed building, the ground floor of which was used for shops and the two upper floors for an hotel, it could not have been intended to exclude the entire building from the operation of the Act, and so the rooms on the ground floor would not have been rooms in an hotel. I am unable to appreciate how this illustration leads to the conclusion that a room in an hotel contemplated is a room normally used for lodging. The learned Rent Controller's reasoning is clearly fallacious. Because in a part of a building there is a hotel, the entire building does not become a hotel. Under the definition, a part of a building may be a premises and there is nothing to prevent a part only of a building being a hotel and the rest of it not being one. In the illustration imagined the ground floor is not a part of the hotel. The shoprooms in the ground floor cannot for this reason be rooms in a hotel at all. No question of these rooms being rooms in an hotel normally used for lodging, arises. We see no reason why a room in an hotel within the Act must be a room normally used for lodging. The Act does not say so. It would be difficult to say which is a room normally used for lodging for the hotel owner may use a room in an hotel for any purpose of the hotel, he likes. Again, it would be an unusual hotel which lets out its lodging rooms; the usual thing is to give licences to boarders to live in these rooms.

I now pass on to the judgment of <ORG>. <NAME>, J., who delivered the judgment, thought that a room in an hotel would be within the definition if it was let out to a person to whom board or other service was also given. It would seem that according to the learned Judge a room in an hotel within the Act is a room let out to a guest in an hotel, for only a guest bargains for lodging and food and services in an hotel. But the section does not contain words indicating that this is the meaning contemplated. In defining a room in an hotel it does not circumscribe the terms of the letting. 'If this was the intention,' the tenant would be entirely unprotected. Ex hypothesi he would be outside the protection of the Act. Though he would be for all practical purposes a boarder in an hotel,the would also be outside the protection of the cognate Act, The Bombay Rents, Hotels and Lodging House, Rates Control Act, 1947 (Bom. 57 of 1947), which has been made applicable toDelhi, for that Act deals with lodging rates in an hotel which are entirely different from rents payable when hotel rooms are let out. A lodger in an hotel is a mere licensee and not a tenant for " there is involved in the term "lodger" that the man must lodge in the house of another "; see Foa on Landlord and Tenant (8th Ed.) p. 9. It could hardly have been intended to leave a person who is practically a boarder in an hotel in that situation. As I have earlier said, it would be a most unusual hotel which lets out its rooms to a guest, and the Act could not have been contemplating such a thing.

<NAME>, J., also said that the room in a hotel need not necessarily be a bed room but it must be so intimately connected with the hotel as to be a part and parcel of it, that it must be a room which is an essential amenity provided by an hotel e.g., the dining room in an hotel. I am unable to agree. I do not appreciate why any room in an hotel is not intimately connected with it, by which apparently is meant, the business of the hotel. The business of the hotel is carried on in the whole building and therefore in every part of it. It would be difficult to say that one part of the building is more intimately connected with the hotel business than another. Nor do I see any reason why the Act should exempt from its protection a part which is intimately connected as it is said, and which confess I do not understand, and not a part not so intimately connected. I also do not understand what is meant by saying that a part of an hotel supplies essential amenities. The idea of essentiality of an amenity is so vague as to be unworkable. This  test would introduce great uncertainty in the working of the Act which could not have been intended. Nor do I see any reason why the Act should have left out of its protection a room which is an essential amenity of the hotel and not other rooms in it.

Though it is not clear, it may be that <NAME> was thinking that in order that a room in an hotel may be within the definition it must be let out for the purposes of the hotel. By this it is apparently meant that the room must be let out to supply board or give other services to the guests, to do which are the purposes of an hotel. Again, I find no justification for the view. There is nothing in the definition about the purposes of the letting out. Nor am I aware that hotel proprietors are in the habit of letting out portions of the hotel premises to others for supplying board and services to the guests in the hotels. It may be that an hotel proprietor grants licences to contractors to use parts of his premises to provide board and services to the guests in the hotel. This however is a different matter and with such licences we are not concerned. Again, a proprietor of a different kind of business who lets out a portion of his business premises for the purposes of his business does not get an exemption from the operation of the Act. I am unable to see why the proprietor of an hotel business should have special consideration. The Act no doubt exempts a room in an hotel but it says nothing about the purposes for which the room must be let out to get the exemption. Further, not only a room in an hotel is exempted by the definition but at the same time also a room in a dharamsala. If a room in an hotel within the Act is a room let out for the purposes of the hotel so must therefore be a room in a dharamsala, It would however be difficult to see how a room in a dharamsala can be let out for the purposes of the dharamsala for a dharamsala does not as a rule supply food or give any services, properly so called.

Having given the matter my best consideration I have not been able to find any reason why the words used in the definition should not have their plain meaning given to them. I therefore come to the conclusion that a room in an hotel within the definition is any room in a building in the whole of which the business of an hotel is run. So understood, the definition would include the spaces in the cloak rooms of <ORG> with which we are concerned. These spaces are, in my view, rooms in an hotel and excluded from the operation of the Act. The Rent Controller had no power to fix any standard rent in respect of them.

The appellant also contended that <NAME> was not a tenant of the spaces but only a licensee and so again the Act did not apply. The question so raised depends on the construction of the written agreement under which <NAME> came to occupy the spaces and the circumstances of the case. I do not consider it necessary to express any opinion on this question for this appeal must in my view be allowed as the spaces are outside the Act being rooms in an hotel. In the result I would allow the appeal and dismiss the application for fixing standard rent. I do not propose to make any order for costs.

<NAME> I have had the advantage of perusing the judgment of my learned brother, <NAME>, <NAME>, and I regret my inability to agree with him.

The facts material to the question raised are in a narrow compass. The appellants, <ORG>, are the proprietors of <ORG>, New Delhi. The respondent, <NAME>, since deceased, was in occupation of two rooms described as ladies' and gentlemen's cloak rooms, and carried on his business as a hair-dresser. He secured possession of the said rooms under a deed dated May 1, 1949, executed by him and the appellants. He got into possession of the said rooms, agreeing to pay a sum of Rs. 9,600 a year, i.e., Rs. 800 per month, but later on, by mutual consent, the annual payment was reduced to Rs. 8,400, i.e., Rs. 700 per month. On September 26, 1950, the respondent made an application to <ORG>, Delhi, alleging that the rent demanded was excessive and therefore a fair rent might be fixed under the Delhi and Ajmer-Merwara Rent Control Act, 1947 (19 of 1947), hereinafter called If the Act . The appellants appeared before <ORG> and contended that the Act had no application to the premises in question at they were premises in a hotel exempted under s. 2 of the Act from its operation, and also on the ground that under the aforesaid document the respondent was not a tenant but only a licensee. By order dated October 24, 1950, <ORG> held that the exemption under s. 2 of the Act related only to residential rooms in a hotel and therefore the Act applied to the premises in question. On appeal the District Judge, Delhi, came to a contrary conclusion; he was of the view that the rooms in question were rooms in a hotel within the meaning of s. 2 of the Act and therefore the Act had no application to the present case. Further on a construction of the said document, he held that the appellants only permitted the respondent to use the said two rooms in the hotel, and; therefore, the transaction between the parties was not a lease but a licence. On the basis of the aforesaid two findings, he came to the conclusion that <ORG> had no jurisdiction to fix a fair rent for the premises. The respondent preferred a revision against the said order of the District Judge to <ORG> at Simla, and <NAME>, J., held that the said premises were not rooms in a hotel within the meaning of s. 2 of the Act and that the document executed between the parties created a lease and not a licence. On those findings, he set aside the decree of the learned District Judge and restored the order of <ORG>. The present appeal was filed in this <ORG> by special leave granted to the appellants on January 18, 1954.

The learned Solicitor-General and Mr. <NAME>, who followed him, contended that the Rent Controller had no jurisdiction to fix a fair rent under the Act in regard to the said premises for the following reasons: (1) The document dated May 1, 1949, created a relationship of licensor and licensee between the parties and not that of lessor and lessee as held by <ORG>; and (2) the said rooms were rooms in a hotel within the meaning of s. 2 of the Act, and, therefore, they were exempted from the operation. of the Act. Unfortunately, the legal representative of the respondent was ex parte and we did not have the advantage of the opposite view being presented to us. But we have before us the considered judgment of <ORG>, which has brought out all the salient points in favour of the respondent, The first question turns upon the true construction of the document dated May, 1, 1949, whereunder the respondent was put in possession of the said rooms. As the argument turns upon the terms of the said document it will be convenient to read the relevant portions thereof. The document is described as a deed of licence and the parties are described as licensor and licensee. The preamble to the document runs thus :

" Whereas the Licensee approached the Licensor through their constituted, Attorney to permit the Licensee to allow the use and occupation of space allotted in the Ladies and Gents Cloak Rooms, at the Hotel Imperial, New Delhi, for the consideration and on terms and conditions as follows:-"

The following are its terms and conditions:

1. In pursuance of the said agreement, the Licensor hereby grants to the Licensee, Leave and License to use and occupy the said premises to carry on their business of <ORG> from 1st May, 1949 to 30th April, 1950.

2. That the charges of such use and occupation shall be Rs. 9,600 a year payable in four quarterly installments i.e., 1st immediately on signing the contract, 2nd on the 1st of August, 1949, 3rd on the 1st November, 1949 and the 4th on the 1st February, 1950, whether the Licensee occupy the premises and carry on the business or not.

3. That in the first instance the Licensor shall allow to the Licensee leave and license to use and occupy the said premises for a period of one year only.

4. That the licensee shall have the opportunity of further extension of the period of license after the expiry of one year at the option of the licensor on the same terms and conditions but in any case the licensee shall intimate their desire for an extension at least three months prior to the expiry of one year from the date of the execution of this DEED.

5. The licensee shall use the premises as at present fitted and keep the same in good condition. The licensor shall not supply any fitting or fixture more then what exists in the premises for the present. The licensee will have their power and light meters and will pay for electric charges.

6. That the licensee shall not make any alterations in the premises without the prior consent in writing from the licensor.

7. That should the licensee fail to pay the agreed fee to the licensor from the date an d in the manner as agreed, the licensor shall be at liberty to terminate this DEED without any notice and without payment of any compensation and shall be entitled to charge interest at 12% per annum on the amount remaining unpaid.

8. That in case the licensee for reasons beyond their control are forced to close their business in Delhi, the licensor agrees that during the remaining period the license shall be transferred to any person with the consent and approval of the licensor subject to charges so obtained not exceeding the monthly charge of Rs. 800."

The document no doubt uses phraseology appropriate to a licence. But it is the substance of the agreement that matters and not the form, for otherwise clever drafting can camouflage the real intention of the parties. What is the substance of this document ? Two rooms at the Hotel Imperial were put in possession of the respondent for the purpose, of carrying on his business as hair-dresser from May 1, 1949. The term of the document was, in the first instance, for one year, but it might be renewed. The amount payable for the use and occupation was fixed in a sum of Rs. 9,600 per annum, payable in four instalments. The respondent was to keep the premises in good condition, He should pay for power and electricity. He should not make alterations in the premises without the consent of the appellants. If he did not pay the prescribed amount in the manner agreed to, he could be evicted therefrom without notice, and he would also be liable to pay compensation with interest. He could transfer his interest in the document with the consent of the appellants. The respondent agreed to pay the amount prescribed whether he carried on the business in the premises or not. Shortly stated, under the document the respondent was given possession of the two rooms for carrying on his private business on condition that he should pay the fixed amount to the appellants irrespective of the fact whether he carried on his business in the premises or not.

There is a marked distinction between a lease and a licence. Section 105 of the Transfer of Property Act defines a lease of immoveable property as a transfer of a right to enjoy such property made for a certain time in consideration for a price paid or promised. Under s. 108 of the said Act, the lessee is entitled to be put in possession of the property. A lease is there-' fore a transfer of an interest in land. The interest, transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease, and it follows from it that the lessee gets that right to the exclusion of the lessor. Whereas s. 52 of the Indian Easements Act defines a licence thus :

"Where one person grants to another, or to a definite number of other persons, a right to do or continue to do in or upon the immoveable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence."

Under the aforesaid section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose'. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest n the property. There is, therefore, cleat distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infalliable and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in <NAME> v. <NAME> (1), wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p. 155:

"The result of all these cases is that, although a person who is let into exclusive possession is prima facie, to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy."

<ORG> again in <NAME> v. <NAME> (2) considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document. At p. 1201, <ORG>, stated :

"................ the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties."

Denning, L. J., said much to the same effect at p. 1202:

"The question in all these cases is one of intention: Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land ?"

The following propositions may, therefore, be taken as well-established: (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form ; (2) the real test is the intention of the parties-whether they intended to create a lease or a licence; (3) if the document creates an interest in the property, it is a lease;

(1) [1952] 1 All E.R. 149. (2) [1952] 1 All E.R. 1199.

but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document a party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease. Judged by the said tests, it is not possible to hold that the document is one of licence. Certainly it does not confer only a bare personal privilege on the respondent to make use of the rooms. It puts him in exclusive possession of them, untrammelled by the control and free from the directions of the appellants. The covenants are those that are usually found or expected to be included in a lease deed. The right of the respondent to transfer his interest under the document, although with the consent of the appellants, is destructive of any theory of licence. The solitary circumstance that the rooms let out in the present case are situated in a building wherein a hotel is run cannot make any difference in the character of the holding. The intention of the parties is clearly manifest, and the clever phraseology used or the ingenuity of the document- writer hardly conceals the real intent. I, therefore, hold that under the document there was transfer of a right to enjoy the two rooms, and, therefore, it created a tenancy in favour of the respondent.

The next ground turns upon the construction of the provisions of s. 2 of the Act. Section 2(b) defines the term " premises and the material portion of it is as follows:

" " Premises means any building or part of a building which is, or is intended to be, let separately.

............................................ .............................................. but does not include a room in a, dharmashala, hotel or lodging house."

What is the construction of the words " a room in a hotel " ? The object of the Act as disclosed in the preamble is " to provide for the control of rents and evictions, and for the lease to <ORG> of premises upon their becoming vacant, in certain areas in the 49 Provinces of Delhi and Ajmer-Merwara". The Act was, therefore, passed to control exorbitant rents of buildings prevailing in the said States. But s. 2 exempts a room in a hotel from the operation of the Act. The reason for the exemption may be to encourage running of hotels in the cities, or it may be for other reasons. Whatever may be the object of the Act, the scope of the exemption cannot be enlarged so as to limit the operation of the Act. The exemption from the Act is only in respect of a room in a hotel. The collocation of the words brings out the characteristics of the exempted room. The room is part of a hotel. It partakes its character and does not cease to be one after it is let out. It is, therefore, necessary to ascertain the meaning of the word "hotel". The word " hotel " is not defined in the Act. A hotel in common parlance means a place where a proprietor makes it his business to furnish food or lodging, or both to travellers or other persons. A building cannot be run as a hotel unless services necessary for the comfortable stay of lodgers and boarders are maintained. Services so maintained. vary with the standard of the hotel and the class of persons to which it caters; but the amenities must have relation to the hotel business. Provisions for heating or lighting, supply of hot water, sanitary arrangements, sleeping facilities, and such others are some of the amenities a hotel offers to its constituents. But every amenity however remote and unconnected with the business of a hotel cannot be described as service in a hotel. The idea of a hotel can be better clarified by illustration than by definition and by giving examples of what is a room in a hotel and also what is not a room in a hotel. (1) A owns a building in a part whereof he runs a hotel but leases out a room to B in the part of the building not used as hotel; (2) A runs a hotel in the entire building but lets out a room to B for a purpose unconnected with the hotel business; (3) A runs a hotel in the entire building and lets out a room to B for carrying on his business different from that of a hotel, though incidentally the inmates of the hotel take advantage of it because of its proximity; (4) A lets out a room in such a building to another with an express condition that he should cater only to the needs of the inmates of the hotel; and (5) A lets out a room in a hotel to a lodger, who can command all the services and amenities of a hotel. In the first illustration, the room has never been a part of a hotel though it is part of a building where a hotel is run. In the second, though a room was once part of a hotel, it ceased to be one, for it has been let out for a non-hotel purpose. In the fifth, it is let out as part of a hotel, and, therefore, it is definitely a room in a hotel. In the fourth, the room may still continue as part of the hotel as it is let out to provide an amenity or service connected with the hotel. But to extend the scope of the words to the third illustration is to obliterate the distinction between a room in a hotel and a room in any other building. If a room in a building, which is not a hotel but situated near a hotel, is let out to a tenant to carry on his business of a hair-dresser, it is not exempted from the operation of the Act. But if the argument of the appellants be accepted, if a similar room in a building, wherein a hotel is situated is let out for a similar purpose, it would be exempted. In either case, the tenant is put in exclusive possession of the room and he is entitled to carry on his business without any reference to the activities of the hotel. Can it be said that there is any reasonable nexus between the business of the tenant and that of the hotel. The only thing that can be said is that a lodger in a hotel building can step into the saloon to have a shave or haircut. So too, he can do so in the case of a saloon in the neighbouring house. The tenant is not bound by the contract to give any preferential treatment to the lodger. He may take his turn along with others, and when he is served, he is served not in his capacity as a lodger but as one of the general customers. What is more, under the document the tenant is not even bound to carry on the business of a hair-dresser. His only liability is to pay the stipulated amount to the landlord. The room, therefore, for the purpose of the Act, ceases to be a part of the hotel and becomes a place of business of the respondent. As the rooms in question were not let out as part of a hotel or for hotel purposes, I must hold that they are' not rooms in a hotel within the meaning of s. 2 of the Act.

In this view, the appellants are not exempted from the operation of the Act. The judgment of <ORG> is correct. The appeal fails and is dismissed.

ORDER In accordance with the opinion of the majority, the appeal is allowed. No order as to costs.


<NAME>, J.

1. <ORG> at Bombay refused to call upon <ORG> to state a case and to submit questions of law arising out of the order of the <ORG>. The assessee appeals to this court with special leave.

2. In November, 1947, the assessee migrated from Pakistan to India and set up a money-lending business in Bombay. The assessee opened a set of books in the name of his wife <NAME>, and made credit entries therein totalling Rs. 7,85,712 between 1947 and 1952. In proceedings for assessment of income-tax, the Income-tax Officer accepted the claim of the assessee that out of the amount credited, Rs. 4,51,843 represented the value of assets brought by the assessee when he migrated to India and rejected his claim for the balance. The Income- tax Officer, in proceedings for reassessment commenced under section 34 of the Income-tax Act, brought to tax Rs. 79,989 in the assessment year 1948-49, Rs. 1,89,800 in the year 1949-50 and Rs. 64,880 in the year 1952-53. The Appellate Assistant Commissioner accepted the case of the assessee that the three amounts were part of the assets brought with him either in cash or as jewellery when the assessee migrated to India. <ORG> confirmed the order of the Appellate Assistant Commissioner in so far as it related to the assessment years 1948-49 and 1949-50. But the <ORG> held that the assessee had failed to prove the claim that Rs. 55,293, out of the amount of Rs. 64,880 assessed to tax in 1952-53, represented the value of ornaments, which the assessee claimed were sold by him after the death of his wife, <NAME>. The <ORG> accepted the claim of the assessee that the balance of Rs. 9,537 represented cash gifts received by <NAME>. The <ORG> accordingly set aside the order of the Appellate Assistant Commissioner and directed that Rs. 55,293 be brought to tax in the assessment year 1952-53.

3. The assessee then applied to the <ORG> praying that a statement of the case be drawn up and the following questions arising out of the order of the <ORG> be submitted to <ORG> :

"(a) Whether there was evidence before the Tribunal to hold that the credit of Rs. 55,293 in the account of the wife of the assessee did not represent the sale proceeds of her gold ornaments ?

(b) If the answer to question No. 1 is in the affirmative, whether the sum of Rs. 55,293 could be held as the 'undisclosed income' of the assessee himself ?"

4. The <ORG> rejected the application holding that they had not accepted the case of the assessee about the sale of the ornaments of <NAME>.

5. The assessee then applied to <ORG> for an order under section 66(2) of the Indian Income-tax Act directing the <ORG> to state a case and refer the questions of law arising out of the order of the <ORG>. <ORG> rejected the application.

6. It appears from the order of the Appellate Assistant Commissioner that the assessee had produced considerable documentary evidence in support of his case that in May, 1947, a quantity of gold jewellery was given by him to a refinery for melting the that 518 tolas of gold were sold by him on May 17, 1951. It was the case of the assessee that gold jewellery melted was out of the "outmoded ornaments" of <NAME>, his first wife. The Appellate assistant Commissioner, in dealing with the claim for excluding Rs. 55,293 from the amount brought to tax on reassessment observed :

"....... the appellant has filed a copy of the voucher for the sale proceeds of 518 tolas of gold sold after the refinement to <NAME> of Bombay on May 17, 1951. The sale proceeds are duly supported with vouchers as also with the melting charges paid and also with a list of the ornaments received by her from several relatives....... On the face of the overwhelming evidence produced by the appellant, I am unable to understand the Income-tax Officer's contentions that the credits did not represent the sale proceeds of gold or that the account was a 'benami' account of the appellant."

7. In determining whether the "version" of the assessee was true, the <ORG> was impressed by the improbability of the claim : the <ORG> did not consider the documentary evidence produced by the assessee. In rejecting the application for a reference under section 66(1) the <ORG> observed that there was no "conclusive proof of the assessee's version that gold ornaments were melted and sold."

8. <ORG> performs a judicial function under the Indian Income-tax Act : it is invested with authority to determine finally all questions of fact. The <ORG> must, in deciding an appeal, consider with due care all the material facts and recorded its finding on all the contentions raised by the assessee and the Commissioner in the light of the of the evidence and the relevant law.

9. The judgment of the <ORG> suffers from a manifest infirmity. The <ORG> has not adjudicated upon the truth of the case of the assessee on the light of the evidence adduced by the assessee in support of his case. The infirmity becomes more pronounced when regard is had to fact that, relying upon the documentary evidence tendered by the assessee, the Appellate Assistant Commissioner had accepted the claim of the assessee relating to the sale of <NAME> ornaments. The <ORG> was undoubtely competent to disagree with the view of the Appellate Assistant Commissioner. But in proceeding to do so, the <ORG> had to act judicially, i.e. to consider all the evidence in favour of and against the assessee. An order recorded on a review of only a part of the evidence and ignoring the remaining evidence cannot be regarded as conclusively determining the questions of fact raised before the <ORG>.

10. It is for the income-tax authorities to prove that a particular receipt is taxable. In deciding whether an item of receipt is taxable as income, the <ORG> may consider the evidence in the light of the statements made by the assessee, his conduct and the probabilities, but in arriving at its conclusion there must be a fair and reasonably full review of the evidence.

11. In our view, questions of law set out in the application of the assessee under section 66(1) did arise out of the order of the <ORG>.

12. The order passed by <ORG> is set aside and the Tribunal is directed to draw up a statement of the case to submit the two questions which we have set out earlier to <ORG> of Bombay. Costs in this appeal will be the costs in <ORG>.

13. Appeal allowed


PETITIONER: STATE OF MADHYA PRADESH Vs. RESPONDENT: M. V. NARASIMHAN DATE OF JUDGMENT15/07/1975 BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA UNTWALIA, N.L. CITATION: 1975 AIR 1835 1976 SCR (1) 6 1975 SCC (2) 377 CITATOR INFO : R 1982 SC 697 (15) APL 1989 SC 222 (3,8) APL 1989 SC 516 (50) ACT: Prevention of Corruption Act , 1947, Section 2- Incorporation of provisions of s. 21 of Penal Code in the definition of public servant-Amendment to s. 21 including employee of Government company-Definition of public servant in s. 2 of the Act, if unaffected. HEADNOTE: Section 2 of the Prevention of Corruption Act, 1947, provides that, for the purposes of this Act, "Public servant" means a public servant as defined in s. 21 of the Indian Penal Code. Before the Criminal Law (Amendment) Act , 1958 (Act No. 11 of 1958) was passed adding clause 12 to this section, s. 21 of the Penal Code consisted only of eleven clauses and an employee under the <ORG> or a Government Company did no. fall within the purview of any of the clauses of s. 21 of the Penal Code. Clause 12 was further amended by the Anti-Corruption Laws (Amendment) Act , 1964 (Act No. XL of 1964) enlarging the definition of "public servant". The respondent who was an employee in <ORG>, which is a Government Company, was convected by the Special Judge <NAME>, under s. 420 I.P.C. and s. 5(2) read with s. 5(1)(d) of the Act and was sentenced to one year rigorous imprisonment on each count. The appeal filed by the respondent before <ORG> was allowed mainly on the ground that as the respondent was not a public servant as contemplated by the provisions of the Act, his trial under the Act was without jurisdiction. <ORG> took the view that as the Act had incorporated the definition of the Penal Code prior to its amendment, it became an integral and independent part of the Act and would remain unaffected by any repeal or change in the previous Act, namely, the Penal Code . This appeal has been preferred on the basis of the certificate granted by <ORG>. . Allowing the appeal, ^ HELD: (i) It is well-settled that, after the provision of the previous Act is incorporated in the subsequent Act, the off-spring, namely, the incorporated provisions, survives even if the previous Act is repealed, amended, declared a nullity or erased from the statute book. But the Act being a social legislation its provisions must be construed liberally so as to advance the object of the Act. Though the Act and the Penal Code are not statutes in pari materia there can be no doubt that the evidence Act and the Prevention of Corruption Act form part of one system, because the rules of Evidence Act , with minor exceptions, apply to trials of offences created under the Act. The Act , no doubt, contains a penal flavour but it is in effect a piece of social legislation directed towards eradication of the evil of corruption amongst the services alone. In other words, the public servants alone fall within the mischief of the Act and no one else. [11E; 12A-C] <NAME> v. <NAME>,  8 Q.B.D. 63,69, <CITATION> and other  3 S.C.R. 858, 868-869, In re Wood's Estate, Ex parte Her Majesty's Commissioners of Works and Buildings, [18861 31 Ch. D. 607, 615-616, Secretary of <ORG> for India in Council v. <ORG> L.R. 58 I.A. 259. 266-267. referred to. <ORG> of Madras v. <NAME>, A.I.R. 1958 S.C. 61, relied on. (ii) The object of the Act is to eradicate corruption from various levels either in Government services or in service under the <ORG> or Government Companies. The Penal Code no doubt creates offences like those mentioned in ss. 161 and 165 of the Code but they were not found sufficient to cope with the present situation and the expending needs of the nation. In these circumstances, 7 it was considered necessary to evolve a quick, expeditious and effective machinery to destroy the evil of corruption existing in any form. If, therefore, the Penal Code with the same object enlarged the definition of s. 21 by adding the twelfth clause by virtue, of the Criminal law (Amendment) Act , 1958 and the Anti-corruption Laws (Amendment) Act , 1964, there is no reason why the extended meaning to the provision of s. 2 of the Act ns borrowed from s. 21 of the Penal Code be not given lo that section. Otherwise the Act would become wholly unworkable. [12D-F] Secretary of <ORG> for India in Council v. <ORG> L.R. 58 I.A. 259, 266- 267. <CITATION> ,  1 S. C. R. 290 and <CITATION> , [1963 Supp. 2 S.C.R. 724. referred to. (iii) Even if s. 2 of the Act had not applied the provisions of the Penal Code and had not defined public servant, then the provisions of the Penal Code would have come into operation by implied reference because the Act was a supplemental Act to the Penal Code . It was only by way of abundant caution that s. 2 of the Act incorporated the definition of "public servant" as mentioned in s. 21 of the Penal Code and in that sense alone the Act can be treated as being pari meteria with the Penal Code . [15A-B] JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 284 of 1974.

From the judgment and order dated the 12th April, 1973 of <ORG> in Criminal Appeal No. 43 of 1971.

<NAME>, Addl. Solicitor General of India, <NAME> and <NAME>, for the appellant.

The respondent appeared in person.

The Judgment of the Court was delivered by <NAME>, J. This is an appeal by State of M.P. by certificate granted by <ORG> under Art. 134(1)(c) of the Constitution against its judgment and order dated April 12, 1973 by which the respondent who was convicted by the Special Judge, <NAME>, under s. 220 I.P.C. and s.5(2) read with s. 5(1)(d) of the Prevention of Corruption Act, 1947 and sentenced to one year rigorous imprisonment on each count, was acquitted by <ORG>. Briefly put, the prosecution case against the respondent was that he was an employee in <ORG>, Bhopal which is a Government company and was working at the relevant time as Personal Assistant to <NAME>, Manager, Purchasing & Main Stores of the Company. Mr. <NAME> was allotted a new <ORG> Car at Bombay on priority basis and the respondent and Mr. <NAME> had arrived at Bombay to take delivery of the car on March 14, 1965 and they stayed there till March 13. 1965. Mr. <NAME>, however, left on the morning of March 13, 1965 directing the respondent to obtain delivery of the <ORG> Car on March 14, 1965 and then proceed to <NAME>. Ultimately the car was brought to Bhopal on March 16, 1965 at about 2-30 P.M. On March 23, 1965 the respondent submitted his T.A. bill Ext. P-21 showing his departure from Bombay on March 16, 1965 by car at 2-00 P.M.

and arrival at Bhopal on March 17, 1965 at 6-30 P.M. and claimed daily allowance at the rate of Rs. 12/- per day for halt at Bombay. The respondent accordingly received the full amount of the T.A. Bill on April 3, 1965. The allegation against the respondent was that he had prepared a false T.A. Bill and had cheated <ORG> and was guilty of serious criminal misconduct as envisaged by the Prevention of Corruption Act . The learned Special Judge, <NAME>, accepted the prosecution case and convicted the respondent as indicated above. The respondent then filed an appeal before <ORG> which allowed appeal, mainly on the ground that as the respondent was not a public servant as contemplated by the provisions of the Prevention of Corruption Act , his trial under the said Act was without jurisdiction. <ORG>, however, left it open to the Government to prosecute the respondent under the relevant law, if necessary. It is against this order of <ORG> that the State of M.P. has filed this appeal before us after obtaining certificate of fitness from <ORG>.

The short point taken by the respondent before <ORG> was that as the word "public servant" has not been expressive defined in the Prevention of Corruption Act , 1947, it has borrowed the definition from s. 21 of the Indian Penal Code, such a definition amounts to legislation by incorporation, and therefore any subsequent amendment, addition or alteration in the Indian Penal Code would not at all affect the incorporated provision in the Prevention of Corruption Act . <ORG> seems to have readily accepted this contention and has accordingly held that as the various amendments to s. 21 of the Indian Penal Code cannot apply to the provisions of the Prevention of Corruption Act , and therefore the respondent being only an employee of <ORG> does not fall within the ambit of public servant as defined in s. 21 of the Indian Penal Code prior to the amendment. In order of appreciate this point, it may be necessary to set out the scheme of the Prevention of Corruption Act -hereinafter referred to as 'the Act'-with particular reference to s. 21 of the Indian Penal Code-hereinafter referred to as 'the Penal Code '-which has been incorporated in the Act. To begin with, the preamble to the Act clearly shows that the Act has been passed for more effective prevention of bribery and corruption, bribery being a form of corruption. Section 2 of the Act runs thus:

"For the purpose of this Act, "Public servant" means a public servant as defined in section 21 of the Indian Penal Code."

It would be seen that s. 2 of the Act completely incorporates the provision of s. 21 of the Penal Code in order to define a "public servant". The <ORG> in its wisdom did not think it necessary to give a separate definition of "public servant" in the Act, but in order to achieve brevity in legislation incorporated the provision of s. 21 of the Penal Code into it. before the Criminal Law (Amendment) Act , 1958 (Act No. 11 of 1958) was passed s. 21 of the Penal Code consisted only of eleven clauses and an employee under the <ORG> or a Government Company did not fall within the purview of any of the clauses of s. 21 of the Penal Code. Thus when the <ORG> incorporated the provisions of s. 21 of the Penal Code in the Act in the year 1947, cl. 12 was not there at all on the statute book of the Penal Code . <ORG> took the view that as the Act had incorporated the definition of the Penal Code prior to its amendment, therefore, it became an integral and independent part of the Act and would remain unaffected by any repeal or change in the previous Act, namely the Penal Code . It appears, however, that by virtue of the Criminal Law (Amendment) Act , 1958, twelfth clause was inserted in s. 21 of the Penal Code , which runs as follows:

"Twelfth.-Every officer in the service or pay of a local authority or of a corporation engaged in any trade or industry which is established by a Central, Provincial or State Act or of a Government company as define in section 617 of the Companies Act, 1956."

This Act also amended certain provisions of the Prevention of Corruption Act , 1947 in enlarging the concept of criminal misconduct but it did not at all amend any portion of s. 2 of the Act, perhaps the reason being that in view of the enlargement of the definition of "public servant" in s. 21 of the Penal Code express amendment of s. 2 of the Act was not necessary.

By virtue of the Anti-Corruption Laws (Amendment) Act , 1964 (Act No. XL of 1964), clause 12 of s 21 of the Penal Code was substituted as follows:

"Twelfth.-Every person-

(a) in the service or pay of the <ORG> or remunerated by fees or commission for the performance of any public duty by the <ORG>;

(b) in the service or pay of a local authority, a corporation established by or under a Central, Provincial or State Act or a Government company as defined in section 617 of the Companies Act, 1956,"

It would thus appear that by virtue of these two amendments the <ORG> sought to enlarge the definition of "public servant" so as to include even an employee of a <ORG> company or a corporation with the avowed object of stamping out corruption at various levels prevailing in the country.

The question that arises for consideration is whether the sub sequent amendments to s. 21 of the Penal Code after its incorporation in the Act would have to be read into the Act or not. It is true that if the doctrine of legislation by incorporation is strictly applied in this case, then the definition of s. 21 of the Penal Code prior to its amendment by Act 11 of 1958 and Act XL of 1964 would alone stand and, if this is so, the respondent would not be a public servant within the meaning of s. 21 of the Penal Code. It is well settled that where the subsequent Act incorporates a provision of the previous Act, the position is that the borrowed provision is bodily lifted from the previous Act and placed in the subsequent Act and becomes an integral and independent part of it so as to remain unaffected by any repeal, change or amendment in the previous Act. In <NAME> v. Bradlaugh,(1) <NAME>, L.J., observed as follows:

"..... but there is a rule of construction that, where a statute is incorporated by reference into a second statute the repeal of the first statute by a third does not affect the second."

These observations were noticed and approved by this Court in <CITATION> (1), where this Court made the following observations:

"Where the provision of an Act are incorporated by reference in a later Act the repeal of the earlier Act has, in general, no effect upon the construction or effect of the Act in which its provisions have been incorporated. The effect of incorporation is stated by <NAME>, L.J., in <NAME> v. <NAME>:

"Where a statute is incorporated, by reference into a Second statute the repeal of the first statute by a third does not affect the second."

In the circumstances, therefore, the repeal of the Punjab Alienation of Land Act of 1900 has no effect on the continued operation of the Pre-emption Act and the expression 'agricultural land' in the later Act has to be read as if the definition in the Alienation of Land Act had been bodily transposed into it." F The doctrine of incorporation by reference to earlier legislation has been very aptly described by Lord <NAME>, M. R., in In re Wood's Estate, Ex parte Her Majesty's Commissioners of Works and Building(3) where he observed as follows:

"If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had been actually written in it with the pen, or printed in it, and, the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all For all practical purposes, therefore, those sections of the Act of 1840 are to be dealt with as if they were actually in the Act of 1855."

Craies on Statute Law, (7th Edition), while referring to the observations of <NAME>, L.J., observed at p. 361 as follows "There is a rule of construction that where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third does not affect the second, as the incorporated provisions have become part of the second statute." <ORG> in Secretary of State for India in Council v. <ORG> (1), while amplifying this doctrine, observed as follows:

"Their Lordship regard the local Act as doing nothing more than incorporating certain provisions from an existing Act, and for convenience of drafting doing so by reference to that Act, instead of setting out for itself at length the provisions which it was desired to adopt.. The independent existence of the two Acts is therefore recognized; despite the death of the parent Act, its offspring survives in the incorporating Act. Though no such saving clause appears in the General Clauses Act , their Lordships think that the principle involved is as applicable in India as it is in this country."

Thus, the position is that after the provision of the previous Act is incorporated in the subsequent Act, the off- spring, namely the incorporated provisions, survives even if the previous Act is repealed, amended, declared a nullity or erased from the statute book. <ORG> appears to have relied on all these decisions in order to come to its conclusion that as the Act has incorporated the provisions of s. 21 of the Penal Code in s. 2 thereof, any amendment in the previous Act, namely the Penal Code , will not affect the subsequent Act, namely the Prevention of Corruption Act .

It was argued before <ORG> as also before us that the Act and the Penal Code are statutes in pari materia and form part of one system and they should, therefore, be interpreted as enforcing each other. Thus any change in the definition of s. 21 of the Penal Code would have to be implicitly read into s.2 of the Act. The Additional Solicitor General Mr. <NAME> appearing for the <ORG>, however, conceded later on, and in our opinion rightly. that it may not be possible to hold that the Act and the Penal Code were statutes in pari materia. It would appear that the Act is a completely self contained statute with its own provisions and has created a specific offence of criminal misconduct which is quite different from the offence of bribery as defined in the Penal Code .

Both these statutes have different objects and create offences with separate ingredients. No authority has been cited before us in support of the proposition that the Act, namely, the Prevention of Corruption Act , and the Penal Code are statutes in pari materia so as to form one system.

In the State of Madras v. <NAME>, (1) this Court while construing the meaning of the phrase 'it shall be presumed' appearing in s. 4 of the Act utilised the construction placed on the phrase shall presume' in the Evidence Act by holding that the Evidence Act was a statute in pari materia with the Prevention of Corruption Act . There can be no doubt that the Evidence Act and the Prevention of Corruption Act form part of one system, because the rules of the Evidence Act , with minor exceptions, apply to trials of offences created under the Act. This principle, however, cannot apply to the present case, where, as we have already stated the areas of the two statutes, namely the Act and the Penal Code are entirely different. Secondly, while the Indian Penal Code is essentially a penal statute of a much wider scope than the Act, the Act no doubt contains a penal flavour but it is in effect a piece of social legislation directed towards eradication of the evil of corruption amongst the services alone In other words, public servants alone fall within the mischief of the Act i.e.. the Prevention of Corruption Act , and no one else.

Mr. <NAME> then argued that having regard to the preamble and the object of the Act and the Penal Code there can be no doubt that the Act was undoubtedly a statute supplemental to the Penal Code and that being the position any amendment in the definition of s. 21 of the Penal Code would have to be read into s. 2 of the Act, because once the definition of s.21 of the Penal Code was incorporated in the Act it had to be imported into the other Act and considered pari passu the Penal Code . In our opinion, this argument is well founded and must prevail. We have already indicated that the object of the Act was to eradicate corruption from various levels either in Government services or in services under the Corporations or Government companies. The Penal Code no doubt creates offences like those mentioned in ss. 161 and 165 of the Code but they were not found sufficient to cope with the present situation and the expanding needs of the nation. In these circumstances, it was considered necessary to evolve a quick, expeditious and effective machinery to destroy the evil of corruption existing in any from. If, therefore, the Penal Code with the same object enlarged the definition of s.21 by adding the twelfth clause by virtue of the Criminal Law (Amendment) Act , 1958 and the Anti-corruption Laws (Amendment) Act , 1964, there is no reason why the extended meaning to the provision of s.2 of the Act as borrowed from s. 21 of the Penal Code be not given to that section.

This Court in <CITATION> (2) while interpreting s. 2 of the Prevention of Corruption Act, that the accused were public servants within the meaning of the Act, being employees of <ORG>, which was managed and owned by <ORG>, observed as follows:

"The East Indian Railway which has employed the appellants was at the material time owned by <ORG> and managed and run by it, and so if the status of the appellants had to be judged at the material date solely by reference to s.21 of the Code there would be no difficulty in holding that they are public servants as defined by the said section."

Even while discussing the exact ambit and scope of the Prevention of Corruption Act , this Court observed in <CITATION> (1) as follows:

"The preamble indicates that the Act was passed as it was expedient to make more effective provision for the prevention of bribery and corruption. The long title as well as the preamble indicate that the Act was passed to put down the said social evil i.e. bribery and corruption by public servant....... It also aims to protect honest public servants from harassment by prescribing that the investigation against them could be made only by police officials of particular status and by making the sanction of the <ORG> or other appropriate officer a pre-condition for their prosecution. As it is a socially useful measure conceived in public interest, it should be liberally construed so as to bring about the desired object, i.e. to prevent corruption among public servants and to prevent harassment of the honest among them."

These observations regarding the object of the Act obviously were based on the footing that the Act must be read as supplemental to the Penal Code , and therefore the definition borrowed from the Penal Code must be read into s. 2 of the Act not only at the time when it was borrowed but even at the material date when the offence is committed. This being the position it is manifest that by virtue of the amendments referred to above in the Penal Code which inserted twelfth clause to s.21 of the Penal Code the respondent clearly comes within the meaning of "public servant" and <ORG> was in error in taking a view to the contrary. Further the Prevention of Corruption Act being a social legislation its provisions must be liberally construed so as to advance the object of the Act. This can only be done if we give extended meaning to the term "public servant" as referred to in s. 2 of the Act by applying the enlarged definition contained in clause 12 inserted in the Penal Code by the two amendments referred to above.

There is yet another aspect of the matter which is spelt out from the decision of <ORG> in <ORG> case (supra) which has been relied upon by <ORG> itself. While reiterating the principle that after certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act can be made, their Lordships of <ORG> made it clear that this principle would not apply where the subsequent Act is rendered unworkable or is not able to function effectually. In this connection their Lordships observed. as follows:

"It seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition "

On a consideration of these authorities, therefore, it seems that the following proposition emerges:

Where a subsequent Act incorporates provisions of a previous Act then the borrowed provisions become an integral and independent part of the subsequent Act and are to tally unaffected by any repeal or amendment in the previous Act. This principle, however, will not apply in the following cases:

(a) where the subsequent Act and the previous Act are supplemental to each other;

(b) where the two Acts are in pari materia;

(c) where the amendment in the previous Act, if not imported into the subsequent Act also, would render the subsequent Act wholly unworkable and ineffectual; and

(d) where the amendment of the previous Act, either expressly or by necessary intendment, applies the said provisions to the subsequent Act.

The Additional Solicitor General vehemently contended that if the enlarged definition by the insertion of clause 12 in s. 21 of the Penal Code is not imported into s. 21 of the Act, then the Act would become wholly unworkable. For instance, if two persons are serving under a <ORG> company and have committed an offence of accepting illegal gratification, and if one is prosecuted under s. 161 of the Penal Code and the other under the Act, it is obvious that the prosecution against the employee under the Penal Code would succeed on proof of facts, whereas the employee of the same company who is prosecuted under the Act will fail because such an employee will not be a public servant, according to the extended meaning given by the amendments to s. 21 of the Penal Code . This will, therefore, defeat and frustrate not only the object of the Act but will render it absolutely unworkable. In view of these circumstances, therefore, we are inclined to hold that in the facts and circumstances of the present case and having regard to the nature and scope or the Prevention of Corruption Act , the extended definition of s.21 of the Penal Code would have to be imported into s. 2 of the Act. That being the position there can be no doubt that the respondent was a public servant within the meaning of s. 2 of the Act and his conviction by the learned Special Judge, <NAME>, did not suffer from any legal infirmity.

There is yet another aspect of the matter. <NAME> seems to us that even if s. 2 of the Act had not applied the provisions of the Penal Code and had not defined public servant, then the provisions of the Penal Code would have come into operation by implied reference because the. Act was a supplemental Act to the Penal Code . It was only by way of abundant caution that s. 2 of the Act incorporated the definition of public servant" as mentioned in s. 21 of the Penal Code and in that sense alone the Act can be treated as being pari materia with the Penal Code . For these reasons therefore for are clearly of the opinion that the judgment of <ORG> holding that the respondent was not a public servant is legally erroneous and cannot be allowed to stand.

The other point is regarding the question of sentence. <ORG> has itself pointed out that the respondent had been forced under duress exercised by his superior officer in drawing the inflated travelling allowance. <ORG> has also expressed the view that having regard to the fact that as the accused had to face a trial for a numher of years, the Government will consider the desirability of not prosecuting him again. In view of these circumstances, therefore, we feel the respondent has committed only a technical offence and a token sentence is called for We, therefore, allow the appeal, set aside the judgment of <ORG> dated April 12, 1973, acquitting the respondent. We convict the respondent under s. 420 I.P.C. and s. 5(2) read with s. 5(1)(d) of the Prevention of Corruption Act but reduce his sentence to the imprisonment already served.

V.M.K. Appeal allowed.


JUDGMENT <NAME>, J.

1. This is a reference under section 256(1) of the Income-tax Act, 1961, made at the instance of the assessee. The question referred to us for our determination in the reference is as follows :

"Whether, on the facts and in the circumstances of the case, in computing the income of the assessee, the sum of Rs. 4,400 was rightly added ?"

2. The relevant facts lie within a narrow compass. The relevant assessment year is 1962-63, for which the relevant previous year is the accounting year March 25, 1961, to March 31, 1962. The assessee is a registered firm doing business mainly in cloth. The assessee secured a licence for importing automobile spare parts. The assessee then entered into a contract to import and sell to <ORG> 3,100 capacitors at a profit of 50 per cent. on C. I. F. value. There was a further condition in the contract that the purchaser was to bear all the expenses, including customs duty, etc. Pursuant to this agreement, the assessee placed an order for capacitors with a foreign exporter and the goods, namely, capacitors, were eventually imported. But it was found that the goods did not conform to some of the specifications in the licence and the customs authorities confiscated the goods but gave an option to the assessee to pay a penalty of Rs. 4,400 and clear the goods. The assessee exercised that option and cleared the goods by paying the penalty. The assessee debited the amount of the penalty to the trading account. In valuing the closing stock, the penalty was included. It was in the next year that the sale of the goods to <ORG> took place. The penalty was paid in the accounting year relevant to the assessment year. The Income-tax Officer concerned disallowed the claim of the assessee for deduction of the amount of penalty and added back the amount of penalty. The Income-tax Officer found, on verification, that the penalty as such had not been recovered by the assessee from <ORG> but the amount of penalty, it appears, was taken into account in determining the price at which the said goods were sold to <ORG>. On an appeal by the assessee to the Appellate Assistant Commissioner, he held that the penalty was levied on the appellant and the mere fact that the appellant had billed the vendee in such a manner that the penalty was recovered from the vendee did not change the character of a disallowable item into an allowable one. The Appellate Assistant Commissioner further pointed out that the bill sent to <ORG> did not specifically mention the basis on which it was prepared. The Appellate Assistant Commissioner agreed with the view of the Income-tax Officer that the assessee's claim in respect of penalty was not one which could be allowed under section 28 of the Income-tax Act, 1961. The assessee then preferred a second appeal to <ORG>. The <ORG> came to the conclusion that the assessee had contravened some of the conditions or specifications of the licence and the penalty was levied upon the assessee and not the purchaser. The assessee had rightly debited the penalty to the trading account and the assessee was not right in contending that the debit in respect of the penalty in the trading account was wrongfully made by the assessee. What the purchasers, <ORG>, had paid to the assessee was not the penalty but the sale price of the goods purchased by them which had been fixed by taking into account the amount of penalty. In view of these findings, the <ORG> agreed with the conclusion of the Appellate Assistant Commissioner that the amount of penalty could not be allowed as a deduction and upheld the order passed by the Income-tax Officer. The question set out above has been referred to us from the decision of the <ORG>.

3. The submission of Mrs. <NAME>, learned counsel for the assessee, is that in this case, on the facts found, the assessee must be regarded as a mere nominal licence-holder and the penalty was really levied on <ORG> to whom the goods had been sold as aforesaid. It was argued by her that, in these circumstances, the assessee should be allowed to claim the amount of penalty paid by the assessee as a deduction in the computation of profits under section 28 of the Income-tax Act, 1961. She placed strong reliance on the decision of a Division Bench of this court in <CITATION> .  67 ITR 667. We shall deal with this case after setting out our own views. In the present case, the facts found by the <ORG> clearly show that it was the assessee who had got the import licence. It was the assessee who imported the goods in question, and it was the fault of the assessee if the goods in question imported did not conform to the specifications of the licence. In these circumstances, there is no escaping the conclusion that the penalty was levied on the assessee for the default of the assessee itself and not on the ground of any other person's default. Nor is this a case in which the assessee can be regarded in any sense as a nominal licence-holder. It is not as if the assessee gave its licence to <ORG> for importing the goods in question and <ORG> imported the goods. The licence was utilised by the assessee-firm itself and that fact cannot be altered by the circumstance that they had agreed to sell the goods to be imported by them to <ORG>. It is well settled that if an assessee has to pay a penalty to the customs authorities in respect of goods imported by the assessee on account of its own default, the amount of that penalty cannot be deducted in the computation of taxable profits of the assessee.

4. Coming to the case of Pannalal Narottamdas & Co. [1968] 67 ITR 667 (Bom) cited by Mrs. <NAME>, the facts in that case were altogether different. In that case, in the course of its business, the assessee had purchased bills of lading and other shipping documents from certain parties in respect of some consignments of goods imported by them from a foreign country. When the goods arrived in India and were sought to be cleared through the customs by the assessee on the basis of the documents purchased by it, it was found that the imports were unauthorised and the goods were liable to be confiscated and a penalty was liable to be imposed under section 167(8) of the Sea Customs Act, 1878. The assessee paid the penalty for saving the goods from being confiscated. The <ORG> took the view that the assessee was entitled to plead that it had purchased the documents of title in good faith and had paid consideration thereon, and, thereafter, it had to pay the penalties in order not to lose the goods which had become its property and, in these circumstances, the penalty could be legitimately regarded as part of the cost of the goods. It was held by <ORG> that, on the facts and circumstances, the actual cost of the goods to the assessee was not only what it had paid to the importers but in addition thereto what it had to pay by way of penalty in order to save the goods from being confiscated and lost to it. It is significant that the observations of <ORG> set out at page 672 of the aforesaid report show that <ORG> clearly took the view that in cases where penalty had to be incurred because of the fault of the assessee himself, as for instance, by reason of his having carried on his business in an unlawful manner or in contravention of certain rules and regulations, the penalty paid by the assessee for such conduct thereof could not be regarded as wholly laid out for the purpose of the business, and, in support of this conclusion, the decision of <ORG> in <ORG> v. CIT [196l] 41 ITR 350, was cited. This decision, in our view, does not advance the argument of Mrs. <NAME>, and, in fact, the aforesaid observations pointed out by us lend considerable support to the view which we have taken.

5. The question referred to us is, therefore, answered in the affirmative and in favour of the <ORG>.

6. The assessee to pay the costs of this reference to the Commissioner.


JUDGMENT <NAME>, J.

The dispute in this case relates to the shebaitship of a Hindu temple belonging to the Ballavacharya Gossains situated at a place called Jatipura in the Muttra district of the United Provinces of India.

2. The <NAME> cult, in reality an offshoot of Vaishnavism, was founded in the 16th century of the Christian Era by one <NAME>, who is usually designated among his followers and disciples as <NAME>. He and his descendants, who constitute the <NAME> Gossain Kul, are held in great veneration by the members of the sect and regarded as the incarnation of the famous and favourite Hindu deity <NAME>, whom in common with other Vaishnavs (Vishnuvites) they worship. The cult established by <NAME> differed in several particulars from the practices in vogue among other votaries of <NAME>, the principal point of difference consisting in the fact that he repudiated the practice of celibacy and asceticism practiced by the other Gossains.

3. The <NAME>acharya Gossains, in other works, the descendants of <NAME>, possess several principal temples, each of which in presided over by a member of his <ORG> or family, who is styled a Tikait.

4. The defendant <NAME> is in possession of one of the most important of these temples, if not the most important, which is situated at Nathdwara in the Odeypore State.

5. In order to make the contentions of the parties intelligible, it is necessary to state in this connection certain admitted facts relating to the customs and usages in vogue among the Ballavacharya Kul.

6. In the first place the Ballavacharyas do not intermarry in their own <ORG>, as the members belong to the same gotra. They take wives from among the Bhats, a well-known Brahmanical caste, and marry their daughters to Bhats.

7. In the Ballavacharya Gossain temples, besides the principal image, which is directly or indirectly a presentment of <NAME>, there are subsidiary images not enjoying the same worship or veneration but nevertheless regarded as representations of <NAME>. They are almost invariably images of one or other of the descendants of Maha Pirbhuji.

8. Another fact necessary to bear in mind is that the ministrations in the <NAME> temples are entirely in the hands of the direct descendants of the founder, and the Gossains of his Kul are the preceptors of the cult taught by him.

9. The temple which forms the subject-matter of dispute in the present case is stated to have been built about the time of the Indian Mutiny, by one <NAME>, a descendent of <NAME> and thus a member of his <NAME>. The worship he set up in this new temple was of the image of Sri <NAME>, which is proved to have been brought from the <NAME> defendant's temples at Nathdwara. This was one of the subsidiary images that were worshipped there along with the principal deity.

10. <NAME> remained in possession of the temple built by him and of the worship performed there until his death in 1883. He left a widow, <NAME>, and two daughters, <NAME> and <NAME>. After the death of <NAME>, his widow, <NAME>, carried on the worship until 1888 when she died, and the charge of the temple devolved on <NAME> and <NAME>. <NAME> died in 1896 and <NAME> in 1902. Both <NAME> and <NAME> were married, according to the custom of the sect, to <NAME> husbands and their sons are accordingly called <NAME>s. The plaintiffs, <NAME> and <NAME>, are the sons of <NAME>, whilst the defendant, <NAME>, is the surviving son of <NAME>, and <NAME> is her husband.

11. On the death of <NAME>, these two, together with <NAME>, another of her sons, who was alive at the time, appear to have taken possession of the temple. In 1904 a suit was instituted by the defendant <NAME>, against <NAME> and his two sons to establish his title to the shebaitship, and for possession of the temple. This suit was referred to arbitration, and an award was made in his favour under which he obtained possession.

12. During the pendency of that suit, the plaintiffs, the sons of <NAME>, brought the present action against <NAME> and his two sons for joint possession of the temple and its appurtenances. On the 25th of August, 1905, <NAME> was added as a defendant to the suit of Mumsamat <NAME>'s sons.

13. The plaintiffs' claim against <NAME> is for ejectment; whilst against the other defendants it is for joint possession. They allege that <NAME>, their maternal grandfather, was the owner of the temple with all its appurtenances; that on his death his widow came into possession of the same by right of inheritance; and that upon her death their mother and their aunt "became the owners of the temple." And they claim to be entitled on the death of <NAME> to joint possession with her husband and sons to an equal share as "owners." It will be noted that they based their right on the ordinary right of inheritance under the Hindu Law.

14. The <NAME>, the real contesting defendant, denied the title put forward by the plaintiffs. He urged that the temple was not the personal property of <NAME> and that the right of inheritance did not attach to it. He further alleged that, according to the custom in force among the Ballavacharyas, daughter's sons did not belong to their <ORG> and were debarred from taking part in the ministrations at the temple for the benefit of the worshippers; and he claimed that, as a collateral relative of <NAME> in the male line, he was entitled to succeed him as <NAME>.

15. He also alleged that the temple was built by <NAME> on land belonging to his (the defendant's) father with his permission, and that on <NAME>'s death without leaving any lawful heir the right to the possession devolved on him by virtue of an agreement executed by <NAME>.

16. On these respective allegations of the parties the Trial Judge framed a number of issues, only four of which need attention. The second and third put in issue the incapacity alleged by the defendant of daughter's sons succeeding to their maternal grandfathers or taking part in the worship at a Ballav temple. The fourth raised the question whether the property was debuttur. The fifth dealt with the claim of the defendant to succeed to the shebaitship by right of heirship to <NAME>.

17. The Subordinate Judge, on an exhaustive review of the evidence, held on all the issues against the plaintiffs and accordingly dismissed the suit. His decision has been affirmed on appeal by <ORG>.

18. From the decree of <ORG> the plaintiffs have appealed to His Majesty in Council. They, or rather their advisers, abandoned, if not in the first court, certainly in <ORG>, their contention that the temple in suit with the appurtenances formed the private property of Muttuji subject to the ordinary law of inheritance. In <ORG> the case was discussed and decided on the admission of the plaintiffs' counsel that the property in suit was debuttur. In fact, in their Lordships' judgment, the evidence left no room for the opposite contention, for, apart from positive testimony directly bearing on the point, the performance of the worship in accordance with the rites of the sect for whose benefit it was held may be treated as good evidence of dedication. That being so, the ordinary rule of Hindu Law relating to the descent of private property is not applicable to the particular right in controversy in this case.

19. Stress, however, is laid on the principle enunciated in <NAME> v. <NAME> (1889) I.L.R., 17 Calc., 3; L.R., 16 I.A., 137, where Lord <NAME>, delivering the judgment of this <ORG>, said as follows:

According to Hindu Law, when the worship of a thakoor has been founded, the shebaitship is held to be vested in the heirs of the founder, in default of evidence that he has disposed of it otherwise, or there has been some usage, course of dealing, or some circumstances to show a different mode of devolution.

20. This rule must, from the very nature of the right, be subject to the condition that the devolution in the ordinary line of descent is not inconsistent with or opposed to the purpose the founder had in view in establishing the worship. This qualification is in fact covered by the words used by Lord <NAME>.

21. Starting from this point, the first question to determine is whether the plaintiffs suing for the joint exercise of the right of shebaitship to the temple in suit, have established their competency for the office. The duties which are imposed on the person in charge of the temple and of its worship are to be found very comprehensively set forth in Professor <NAME>'s "Religious Sects of the Hindus." Both the courts in India have found that the plaintiffs, being Bhats, and not belonging to <ORG>, cannot perform the diurnal rites for the deity worshipped by the sect; they cannot wash, dress or adorn the image or perform the arti (one of the most important rites) which seems to consist in waving the light before the image of the deity. They cannot touch the food offerings placed before the idols, which are afterwards distributed among the Vaishnav votaries. Nor can they communicate the mantras to the disciples for purposes of initiation. It is to be noted in this connection, that whilst the daughters of the Ballav Gossains married to Bhat husbands continue to live in their father's houses and remain within their father's <ORG>, their sons do not acquire that status; as sons of Bhats they are Bhats, and not Ballavacharya Gossains who are by virtue of their descent entitled to act as ministers of the cult established by <NAME>.

22. Another fact is equally clear on the evidence that Bhat girls married into <ORG> receive the mantras and become thenceforth members of the <ORG>. It is not surprising, therefore, that after <NAME>'s death his widow and daughters remained in charge of the temple and its worship. But to allow the plaintiffs' claim to an admittedly Ballav temple, where the rites are performed according to Ballav ritual, which, it is clearly established, they cannot perform, would, in their Lordships' judgment, defeat the purpose for which the worship was established.

23. In an action of ejectment the conclusion at which their Lordships have arrived would be sufficient for the affirmance of the decree appealed against dismissing the plaintiffs' suit.

24. But their Lordships are of opinion that the <NAME> defendant has succeeded in establishing an independent title of his own to the temple in suit. He appears to be the nearest male relative of <NAME>, both being descendants of two full brothers; there can be little doubt, also, that the image installed at <ORG> was brought from his temple at <ORG>, and that the worship founded by <NAME> was an off-shoot of the worship in <ORG>. The temple, again, was built on land belonging to the <NAME> defendant, with the permission of his ancestor, who held the office of <NAME> at the time.

25. It seems to their Lordships that, apart from the statements contained in <NAME>'s letter, on which the defendant relied in his written statement, he has a clear title, according to the customs and usages of <ORG>, to the shebaitship of the temple in suit.

26. On the whole their lordships are of opinion that the judgment and decree of <ORG> are right, and that this appeal must be dismissed. And they will humbly advise His Majesty accordingly.

27. The appellants will pay the costs.