JUDGMENT <NAME>, J.

1. This first appeal by the vendee <NAME> is directed against the judgment and decree of the Additional District Judge No. 2, Jaipur City dated September 20, 1973 decreeing the suit of the respondent <NAME> for pre-emption.

2. The dispute relates to a portion of the residential house situated in Mohalla Chowkari Ghat Darwaza, near Math Ka Kuwa, Jaipur City described in para 1 of the plaint. This entire house was owned by vendor <NAME> and the respondent pre-emptor <NAME>. In pursuance of the agreement executed by <NAME> on 22-3-1970 in favour of the appellant's husband <NAME> (<NAME> 4), <NAME> sold her share in the house for Rs. 18,601 in favour of the appellant vendee <NAME> vide registered sale deed dated June 18, 1970.

3. It is common ground between the parties that before the sale of the disputed property, the vendor <NAME> did not give any notice as prescribed under Section 8 of the Rajasthan Pre-emption Act, 1966 (hereinafter referred to as the Act) to the pre-emptor. It is, however, admitted by the parties that before the sale actually took place a general notice in the name of the appellant's husband <NAME> was published in a newspaper showing <NAME>'s intention to purchase the disputed property.

4. The respondent <NAME> instituted a suit on Dec. 19, 1970 against the vendee <NAME> and the vendor <NAME> claiming right of pre-emption in respect of the disputed property on the basis of his being a co-sharer with the vendor and also on the basis of enjoyment of certain easementary rights and amenities in the property in question. The respondent <NAME> alleged in the plaint that though ostensible price for which the property in dispute was shown as sold by the vendor to the vendee appellant was Rupees 18,601, in fact and reality the actual price paid was only Rs. 12,000. It was further alleged in the plaint that though the vendor had earlier agreed to sell the property to the pre-emptor <NAME> for a consideration of Rs. 12,006, but later on the vendor at the instance of the vendee changed her mind and sold away the property to the vendee.

5. The suit was resisted by the appellant-vendee as also by the vendor-respondent No. 2 on the ground that the respondent pre-emptor has waived his right of pre-emption. In this connection it was pleaded that offers were made to the respondent by the vendor to purchase the disputed house in the first week of March, 1970 as also before the sale deed was registered in favour of the appellant, but respondent declined to purchase the same. It was further pleaded that the appellant purchased the disputed property only after the respondent had approved the transaction of sale in favour of the appellant. The appellant and the vendor both averred that the disputed property was sold for Rs. 18,601 and not for Rs. 12,000 as pleaded by the plaintiff-pre-emptor. It was further pleaded that the appellant had spent a sum of Rs. 17,000 on repairs of the disputed property and a decree for possession of the house in dispute can only be passed in favour of the pre-emptor on payment of Rs. 17,000 over and above the amount of the sale price namely Rs. 18,601. The defendant however did not specifically deny the plaintiff's preferential right to pre-empt the disputed property.

6. On the pleadings of the parties the lower court framed the following 6 issues:--

1½ vk;k izfroknh ua- 2 ekpZ 1970 ds izFke lIrkg esa fookn xzLr edku dks 18601½ :i;s esa oknh dks cspus dk vkQj fd;k Fkk A vkSj oknh us [kjhnus ls bUdkj dj fn;k rFkk vius gd'kqQk dh can dj fn;k \ 2½ vk;k oknh gd 'kqQk ds vk/kkj ij edkukr fookn xzLr 12000½ :i;ksa es [kjhnus dk vf/kdkjh gS \ 3½ vk;k jktLFkku fiz,Ei'ku ,DV dh /kkjk;sa lafo/kku esa fn;s x;s ewy vf/kdkjksa ds fo:) gksus ds dkj.k voS/k rFkk csvlj gS \ 4½ vk;k izfroknh ua- 1 us edku fooknxzLr [kjhnus ds ckn mlesa 17]000½ :i;s ejEer esa yxk fn;s gaSa vkSj bl dkj.k izha&,sEV djus dh lwjr esa izfroknh ua- 1 mDr jde vykok dher edku ikus dk vf/kdkjh gS \ 5½ vk;k oknh dks izfroknh }kjk rkehj fd;s tkus dk bYe Fkk vkSj mlus dksbZ ,rjkt ugha fd;k A vr% og gd&'kqQk dk gd can dj pqdk rFkk ml ij LVksiy ykxw gksrk gS \ 6½ nknjlh**

7. The learned counsel for the defendant vendee in the lower court did not press issue No. 3 which was decided against the defendant-vendee. As regards the other issues the trial court, on consideration of the evidence led by the parties, recorded the following findings:--

(l) That there was no waiver of the right of pre-emption on the part of the plaintiff inasmuch as there existed no reliable evidence to prove that the suit house was offered for sale to the plaintiff for Rs. 18,601 and that the plaintiff refused to purchase the same.

(2) That the sale price agreed and really paid to the vendor by the vendee was Rs. 18,601 and not Rs. 12,000 as pleaded by the plaintiff-pre-emptor.

(3) That though the defendant-vendee carried out repairs and improvements on the disputed property there was no reliable evidence to prove how much amount was spent by her (vendee).

(4) That the defendant-vendee was not entitled to claim any amount spent by her on repairs and improvements inasmuch as she carried out repairs with undue haste and in spite of the warning given by the plaintiff pre-emptor not to carry out any repairs. The question of waiver or estoppel in these circumstances did not arise.

8. The trial court on the basis of the above findings passed a decree for preemption in favour of the plaintiff on the condition that the plaintiff shall deposit in the court Rs. 18,601 upto October 31, 1973. It further ordered that on such deposit of the amount the vendee <NAME> shall deliver possession of the suit property to the plaintiff <NAME>. Dissatisfied with the said judgment and docree the defendant-vendee <NAME> has preferred this appeal to this Court

9. I have heard Mr. <NAME> the learned advocate for the appellant-vendee and Mr. <NAME> the learned advocate for the plaintiff pre-emptor <NAME> and gone through the entire record of the case.

10. It is not in dispute that the plaintiff had a proferential right to purchase the property in dispute under the Act. The main contention of Mr. <NAME> is that the plaintiff had waived his right of pre-emption, and is therefore, no more entitled to a decree for pre-emption in respect of the disputed property. In this connection my attention has been drawn to para No. 2 of the plaint wherein the plaintiff admitted that the vendor had consulted him in connection with the sale of the disputed property and she (vendor) also agreed to sell the same to the plaintiff for Rupees 12,000. According to the learned counsel, if in the light of the above admission of the plaintiff, the oral evidence produced by the defendant vendee is judged, there exists ample evidence on the record to show that the plaintiff was consulted not only before the agreement to sell was executed between the vendor and the vendee, but also, before the actual sale took place in favour of the vendee. It is urged that the plaintiff <NAME> was offered to purchase the property in question and that it is only when he declined to do so, the defendant vendee purchased the same. This sort of conduct on the part of the plaintiff according to Mr. <NAME>, tantamounts to waiver and abandonment of his right of pre-emption so far as the purchase of the property in question by the appellant <NAME> is concerned.

11. On the other hand it is contended by Mr. <NAME> learned counsel for the plaintiff-respondent that there is no reliable evidence on record to show that after the agreement of sale was entered into between the purchaser and the seller on 22-3-1970 any offer was made either by the vendee or the vendor to purchase the suit property. He therefore, contends that no question of waiver arises in the present case. Mr. <NAME> also invited my attention to the notice, given by the plaintiff to the appellant and also to her husband <NAME> and the replies received from them. Learned counsel pointed out that in none of the replies given by the vendee or her husband <NAME>, there exists any averment as to the waiver of the right of pre-emption on the part of the plaintiff on the ground that the plaintiff had refused to purchase the property on being offered to him at any time before or after the agreement for sale was executed between the vendor and the vendee. Mr. <NAME> has further argued that there exists no documentary evidence to show, even remotely, that the vendor or her husband ever approached the plaintiff and made any offer to purchase the property either before or at the time or after the sale took place. Mr. <NAME> further pointed out that the oral evidence produced in the case by the defendant-vendee is wholly unreliable being afterthought and consists of the persons who are either relatives of the vendee or are highly interested in the success of the vendee. Mr, <NAME> also contended that the right of preemption can be lost only by giving a notice under Section 8 of the Act by the seller and not by anyone else and if such notice has not been given then the plea cannot be taken by the purchaser that the right of pre-emption was lost to the pre-emptor because he did not show his intention to purchase the property after the general notice was published in the newspaper by the purchaser signifying his intention to purchase the suit property.

12. In the present case as already pointed out above it is not in dispute that notice under Section 8 of the Act was not given by the seller to the plaintiff. Sections 8 and 9 of the Act run as under:--

"Section 8.-- Notice to pre-emptors:--(1) When any person proposes to sell, or to foreclose the right to redeem, any immovable property, in respect of which any persons have a right of pre-emption, he shall give notice to all such persons as to the price at which he is proposing so to sell or as to the amount due in respect of the mortgage proposed to be foreclosed, as the case may be.

(2) Such notice shall be given through the civil court within the local limits of whose jurisdiction the property concerned is situated, shall clearly describe such property, shall state the name and other particulars of the purchaser or the mortgagee and shall be served in the manner prescribed for service of summons in civil suits."

"Section 9.-- 'Loss of right of preemption on transfer.-- Any person having a right of pre-emption in respect of any immovable property proposed to be sold shall lose such right unless within two months from the date of the service of such notice, he or his agent pays or tenders the price specified in the notice given under Section 8 to the person so proposing to sell:

Provided that the right of pre-emption shall not be so lost if the immovable property in question is actually sold for an amount smaller than that mentioned in the notice or to a person not mentioned in the notice as purchaser."

13. The main object of these sections appears to be to safeguard the interest of the prospective purchaser as well as to avoid litigation by allowing the pre-emptor to purchase the property at an initial stage. These provisions in the Act provide that if the seller serves a notice in writing in the manner prescribed under Sub-section (2) of Section 8 of the Act intimating, his desire to sell the property for a specified sum mentioned therein then if the pre-emptor does not exercise his right of pre-emption within the period prescribed under Section 9 of the Act the sale would not be challenged on the ground that the pre-emptor had better title to purchase the property. These sections safeguard the interest of all concerned viz., the purchaser, the pre-emptor and the vendor so that after the sale has taken place nobody thereafter can claim a preferential right to purchase the property. Another purpose of such a notice under Section 8 is that it discloses to the prospective purchaser the name or names of those persons who have a preferential claim to the property by invoking their right of pre-emption. In order to ensure that the notice under Section 8 has been served on the pre-emptor, the legislature has prescribed foolproof method in order to avoid any controversy thereafter about the sale price fixed and the description of the property to be sold. If this procedure is adopted by the vendor and if no steps are taken by the pre-emptor to purchase the property mentioned in the notice then the pre-emptor forfeits his right of preemption. It must, however, be remembered that the steps to be taken under Section 8 are available to the vendor only, and not to the vendee. It is, therefore, argued by Mr. <NAME> that in case of a prospective purchaser who cannot avail the provisions of Section 8 to curtail the pre-emptor's right, the doctrine of waiver would still be available to the vendee if the pre-emptor after notice from the vendee does not come forward to purchase the property and allows the vendee to complete the sale in his favour. In the present case it is contended by Mr. <NAME> that the husband of the vendee published a general notice in a newspaper before the property was actually sold by the vendor and therefore in such circumstances it should be held that the piaintiff-pre-emptor had forfeited his right of pre-emption.

14. In my opinion, there is no substance in the above center on. The preferential right to purchase the property enjoyed by the pre-emptor can only be curtailed or forfeited if the provisions of Section 8 of the Act are resorted to by the seller. The right which the legislature has vested in the seller by virtue of the provisions of the Act cannot be exercised by the purchaser of the property. A general notice issued in the present case by the husband of the vendee in a newspaper signifying his intention to purchase the property and inviting objections, if any, does not cast any duty on the pre-emptor to give any response to such a notice and put forth his preferential right to purchase the property and negotiate with the purchaser to purchase the property. The failure on the part of the pre-emptor in the present case, to pay any heed to such a general notice issued by the husband of the vendee therefore, does not tantamount to waiver of the right of pre-emption on the part of the pre-emptor; 'but the matter would be different if the pre-emptor enters into an agreement with the prospective purchaser that he would not enforce his right of pre-emption if the property was purchased by him. In that event it is open to the purchaser to put forth the plea that the pre-emptor has waived his right of pre-emption in his favour. The question, therefore, arises whether in the present case the plaintiff forfeited or abandoned or waived his right of preemption by any agreement with the vendee or her representatives. There is no documentary evidence in proof of the above fact. The case on the point of waiver solely rests on the oral testimony of <NAME> <NAME> (vendee), D.W. 2 <NAME>, <NAME> <NAME> (husband of the vendee), <NAME> <NAME> (father of the vendor) and <NAME> <NAME>.

15. Before dealing with the evidence of the above witnesses, I would like to point out the material incidents of the right of pre-emption. Their Lordships of <ORG> in <CITATION> , AIR 1958 SC 838 observed:--

"To summarise: (1) The right of preemption is not a right to the thing sold, but a right to the offer of a thing about to be sold. This right is called the primary or inherent right. (2) The pre-emptor has a secondary right or a remedial right to follow the thing sold. (3) It is a right of substitution but not of re-purchase i.e. the pre-emptor takes the entire bargain and steps into the shoes of the original vendee.''

16. The primary right claimed by the pre-emptor as explained by <ORG> undoubtedly resides in the pre-emptor even before the sale takes place. The question however, arises whether the pre-emptor can waive his right of pre-emption even before an agreement between the seller and the purchaser to sell the property had actually taken place. In <NAME> v. Mst. <NAME>, Civil First Appeal No. 92/73* Hon'ble V.P. <NAME> (as he then was) relying upon the decision of <ORG> in <CITATION> , AIR 1926 Lah 243 and the decision of <ORG> in <CITATION> , AIR 1958 Madh Pra 412 held that to support the plea of waiver it is incumbent on the vendor and the vendee to establish that they had concluded an agreement for sale and that the plaintiff was approached and asked to purchase the property for the consideration for which the vendee was going to purchase the property. I respectfully agree with the view taken by Hon'ble <NAME> (as he then was) in <NAME>'s case.

17. Bearing in mind the above principle, I now deal with the evidence of the witnesses mentioned above. The recital in para No. 2 of the plaint on which considerable stress has been laid by Mr. <NAME> is, in my opinion, wholly irrelevant on the point of waiver. In para No. 2, the plaintiff alleged that the vendor agreed to sell the property to the plaintiff for Rs. 12,000. In para No. 3 of the plaint the plaintiff alleged that the vendee by exercising her power over the vendor and with a view to harm the plaintiff somehow obtained her willingness to sell the property in question to the vendee for the amount which was offered by the plaintiff. A reading of these two paras clearly goes to show that the agreement between the plaintiff and the vendor, if at all it took place, must have taken place long before March 22, 1970 on which date the vendor executed agreement to sell the property in question in favour of the vendee. In this view of the matter no inference of waiver on the part of the plaintiff-pre-emptor can arise from the allegation contained in para 2 of the plaint. There is thus no substance in the argument of Mr. <NAME> that the admission contained in para No. 2 is relevant on the question of deciding waiver on the part of the plaintiff.

18. I now turn to the evidence produced by the defendant vendee to prove waiver of the right of pre-emption by the plaintiff <NAME>. The first important witness in this connection is the defendant <NAME>. She has appeared in the witness box as D.W. 1. The relevant portion of her statement in exami-nation-in-chief runs as under:--

^^edku [kjhnus ds igys jk/kkfd'ku ls iwNk Fkk fd vkidksa dksbZ ,rjkt rks ugha gS bl ij jk/kkfd'ku us dgk dksbZ ,rjkt ugha gS A** On being cross-examined she stated as under:-- ^^eSaus jk/kkfd'ku ls eqUukyky] tkudh yky ds lkeus iwNk Fkk fd vki dks ,rjkt rks ugha gS A ,xzhesUV ds 10&15 fnu igys iwNk Fkk A**

Even if the statement of D.W. 1 <NAME> is accepted on its face value it does not support the plea of waiver as the offer according to her was made by her to the plaintiff long before the agreement of sale was executed between her and the vendor. Apart from that her statement to my mind is clearly an afterthought and has no truth in it. Had <NAME> enquired from the plaintiff and had the plaintiff not objected to the purchase of the property by her, these facts would have found place in her reply Ex. 13 dated 21-7-70 to the plaintiff's notice Ex. 1'2. Omission to mention these important facts in reply Ex. 13 leads to a reasonable inference that the story about consulting the plaintiff to purchase the property and his not objecting to it is clearly afterthought and concocted.

19. The next important witness is <NAME>. He is the husband of the defendant <NAME> In his examination-in-chief he deposed as under:--

^^jk/kkfd'ku ls [kjhnus ds igys iwNk Fkk mlus dgk eq>s dksbZ ,rjkt ugha gS A** In cross-examination he stated as follows:--

^^jk/kkfd'ku ls blfy;s iwNk fd bldk bdjkiu iMrk Fkk A ,xzhesUV ls ,d g¶rs igys jk/kkfd'ku us dgk fd eq>s ,rjkt ugha gS A tkudhyky] ijrwey] eqUukyky o dyk nsoh ds lkeus ckr gqbZ fooknxzLr edku ds pkSd esa ;g ckr gqbZ A** It may be stated at once that the testimony of this witness is no better than D.W. 1 Kala Devi. According to the witness the plaintiff did not object to the sale of the property in favour of the vendee before the agreement for sale was executed between the vendor and the vendee. Not a word has been said by him if the plaintiff was consulted after the agreement for sale was executed on March 22, 1970. Besides that, the plaintiff sent a notice Ex. 8 to D.W. 4 Vishan Das on 6-7-1970 claiming preferential right to purchase the property in dispute. But, it is significant to note that he in his reply Ex. 11 did not mention this important fact viz., that the plaintiff had waived his right of pre-emption by expressly agreeing that he would have no objection if the property was purchased by She defendant-vendee. His testimony like that of D.W. 1 Kala Devi is clearly afterthought and concocted.

20. The next important witness is D.W. 2 Manna Lal. He is a neighbour and he happens to be present at the time when the vendor's father <NAME> settled the deal to sell the property to the defendant vendee. He says that at that time the plaintiff <NAME> was also present. He further says that <NAME> asked <NAME> in his presence to sell the property in dispute to him (<NAME>) for Rs. 12,000, but <NAME> replied that he was prepared to sell the property to him if he paid Rs. 18,601. The witness then says that thereafter he left for his house and no agreement to sell was executed before him. On being cross-examined he showed his inability to mention the date or month when the aforesaid talk took place between <NAME> and <NAME>. He however, stated that the said talk took place in the year 1970 at 10-30 or 11 a.m. and at that time <NAME> and <NAME> were also present. From his testimony it does not follow that the alleged talk between <NAME> and <NAME> took place after March 22, 1970. His evidence in my opinion does not prove waiver on the part of the plaintiff. Besides that, he appears to be a chance witness. I have carefully gone through his statement and I have no hesitation to say that he is not a reliable witness.

21. The next, witness is <NAME>, the father of the vendor <NAME>. In his examination-in-chief he totally denied having any talk with <NAME> about the sale of the property in dispute. But on being cross-examined he pointed out the presence of <NAME> at the time he had a talk with <NAME> about the sale of the property. He goes on saying that at that time he asked <NAME> to purchase the property in dispute but <NAME>' replied that he possessed no money to purchase the property. On being further cross-examined he showed his inability to point out the date and month when he offered to sell the property to <NAME>. It is apparent from his statement that in cross-examination he did not stick to his statement which he made in his examination-in-chief. He being the father of the vendor is highly interested person. If the property in dispute had in fact been offered to <NAME> and if he had declined to purchase on account of paucity of money, <NAME> or his daughter <NAME> would not have failed to take steps under Section 8 of the Act. As already stated above no such step was taken by the vendor or her father <NAME>. His testimony is not at all convincing and deserves to be discarded as unreliable.

22. The last witness examined on the point of waiver is that of <NAME>. He is a broker. According to the witness, the transaction of sale between the vendor and the vendee was settled through him and the agreement to sell Ex. 1-A dated 22-3-1970 was executed in his presence. The witness has also showed his presence at the time the sale deed was registered in the Sub-Registrar's Office. According to the witness, <NAME> in his presence and in the presence of <NAME> asked <NAME> to purchase the property in dispute but <NAME> declined to do so and also allowed <NAME> to purchase the property in dispute. The witness on being cross-examined deposed as follows:--

^^jk/kkfd'ku ls ckr ekpZ 1970 esa gqbZ Fkh A jftLVªh fnukad 18&6&70 dks gqbZ rhu ekg dk E;kn ,xzhesUV esa Fkh A

ekpZ ds ckn jk/kkfdlu ls dksbZ ckr ugha gqbZ A ,d ckj eSa vdsyk Hkh ekpZ esa gh jk/kkfdlu ls feyk Fkk A jk/kkfdlu ls eS ,xzhesUV ds 5&7 fnu igys feyk Fkk A vdsyk feyk Fkk A fc'kunkl oxSjk ls ckr ,xzhesUV ds ,d fnu igys gqbZ Fkh A jk/kkfdlu ls blfy, iwNk D;ksafd mudk dejk blh gosyha es Fkk A lqcg 10&11 cts dh ckr gS ml oDr rd dyknsoh xhrknsoh ds chp lkSnk tckuh iDdk gks x;k Fkk A 22&3&70 ls 2&3 fnu igys iDdk gks pqdk Fkk A jk/kkfdlu ls tc iwNk rks esjs lkeus :i;ksa dk ftØ ugha vk;k fd fdrus :i;ksa esa [kjhnus cspus dh ckr gS A lkSnk iDdk gksuk Hkh ¼xhrk o dyk nsoh dk½ jk/kkfdlu dks ugh crk;k x;k A** It follows from his statement that he had a talk with <NAME> on two occasions. Once he met <NAME> 5 or 7 days before the agreement was executed between the vendor and the vendee. The second time he met <NAME> 2 or 3 days before March 22, 1970. On the second occasion the vendor <NAME> and the vendee <NAME> were also present. According to the witness <NAME> was not informed who was the purchaser of the property and for how much amount the property was being sold. The above statement of the witness is thus materially different from the statements of other witnesses. According to <NAME>, <NAME> on being consulted did not object to the purchase of the property by <NAME>. But according to D.W. 6 <NAME> neither the name of the purchaser nor the amount for which the property was to be sold was disclosed to <NAME>. Besides that, had there been any truth in the statement of <NAME>, <NAME> would not have omitted to mention this fact in her reply Ex. 13. The oral testimony of D.W. 6 <NAME> is therefore, neither convincing nor reliable.

23. It is significant to note that the vendor <NAME> did not appear in the witness box. On the other hand, the plaintiff <NAME> in his statement as P.W. 1 and P.W. 5 has totally denied that he had any talk with <NAME> or <NAME> or <NAME> at any time before or after the sale and that he agreed not to object if the property was purchased by <NAME>. His statement also shows that he never refused to purchase the property in dispute. There is thus no reliable evidence to prove that after the agreement for sale between the vendor and the vendee was concluded and the price was fixed between them, an approach was made to the plaintiff to purchase the property in dispute for the price settled between the vendor and the vendee. In absence of such evidence it cannot be said that the pre-emptor waived his right of pre-emption in favour of the vendee. The plea of waiver raised by the defendant vendee, therefore, cannot be accepted.

24. The next question that has been agitated before me relates to the payment of the amount spent by the defendant-vendee in carrying out repairs and improvements on the disputed property. In the written statement it was pleaded by the defendant-vendee that she had spent Rs. 17,000 on repairs etc. It may be said at the outset that so far as the fact of carrying out the repairs and improvements on the suit property is concerned there is no denying the fact that the defendant-vendee did carry out repairs and improvements. Even <NAME> admitted that the defendant-vendee had carried out repairs and improvements. The relevant portion of his statement as P.W. 1 runs as under:--

^^[kjhnus ds ckn ¶ys'k ysVªhu eqnkrus cukbZ gS 2 ysVªhu ,d ckFk:e cuk;k gS Aeqnkrus dqN dejksa esa fpIl dqN esa lheUV djokbZ gS A fr;kfjes ijnh yxkbzZ gS A irk ugha fdrus dk fpIl dk fd;k A f[kMfd;ksa dejksa esa ¼ikap dejksa esa½ nwljh yxkbZ gS A fctyh dk dusD'ku o fQfVax djkbZ gS A uy yxok;s gS A nwljh eafty dh eqa<sj maph ugha djkbZ A 5&6 njokts ij yxk;s gS A dejksa ds lQsnh djkbZ gS A** The learned Additional District Judge disallowed the claim of the defendant in respect of repairs and improvements on two-fold grounds. Firstly that the defendant did not spend money on repairs and improvements in good faith; and secondly, that the defendant failed to prove by reliable evidence the amount which he had spent on repairs and improvements of the property in dispute.

25. The claim of the defendant-vendee in respect of repairs and improvements is based on the provision contained in Section 51 of the Transfer of Property Act. The relevant portion of Section 51 of the T. P. Act reads as follows,--

"When the transferee of immovable property makes any improvement on the property, believing in good faith that he is absolutely entitled thereto and he is subsequently evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell his interest in the property to the transferee at the then market value thereof, irrespective of the value of such improvement, The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of the eviction."

In order that this section may apply it is essential that (i) the person claiming relief is a transferee of immovable property, (ii) that he has made improvement believing in good faith that he is absolutely entitled to the property and (iii) that he is evicted therefrom by a person with better title. So far as conditions Nos. 1 and 3 are concerned they stand fully satisfied in the present case. The controversy however, revolves round the question whether the vendee spent the amount on repairs in good faith believing himself to be absolutely entitled to the property. It is well settled that the question whether or not a transferee believed in good faith that he was absolutely entitled to the property could not be the subject of any hard and fast rules but should be decided on the merits according to the circumstances of each case. (See AIR 1933 Lah 540 and AIR 1930 PC 297). In the present case there is no room for any doubt that the defendant-vendee knew it very well from the very beginning that the plaintiff being a co-sharer and having other rights had a right of pre-emption under the Act. In fact the defendant-vendee in her written statement did not even challenge the right of pre-emption of the plaintiff. On consideration of the evidence on record I have further come to the conclusion that neither the vendee nor the vendor took steps to be sure that the plaintiff would not pre-empt. It, therefore, cannot be said in the present case that the vendee believed in good faith at the time of sale in her favour that she was absolutely entitled to the property in <CITATION> , AIR 1928 All 41 it was held that the belief in good faith includes not only acting honestly but includes due enquiry. Again, It has been laid down by <ORG> in <NAME> v. <NAME>, AIR 1965 SC 1812 that:--

"No man who spends money on improving property knowing fully that he has no title to it can be permitted to deprive the original owner of his right to possession of the property except upon the payment for the improvements which were not affected with the consent of that person. The doctrine of acquiescence is of no help to such a man, for he who knows the true state of affairs cannot say that any mistaken belief was caused in his mind by reason of what the owner said or did."

Under the circumstances I am not prepared to hold that the vendee can be said to have made the improvements believing in good faith that she was an absolute owner of the property in dispute. Consequently she is not entitled to any amount spent on account of repairs and improvements.

26. There is yet another aspect of the case. The sale deed in the present case was executed in favour of the vendee on June 8, 1970. The plaintiff served a notice to the vendee's husband <NAME> on 1-7-70. That notice is Ex. 5 on the record. In this notice it was specifically mentioned that the plaintiff has preferential right to purchase the property by way of pre-emption. It was further mentioned that the work of electric fitting is going on in the disputed house. The plaintiff specifically called upon <NAME> to stop work of electric fitting failing which he would himself be responsible for it. A similar notice was issued by the plaintiff to the defendant <NAME> on 12-7-1970. This is Ex. 12 on the record. The relevant portion of this notice reads as under:--

^^vki bl edku esa dqN rkeksjkr oxSjg dj jgh gS eqofDdy dk izFke ntsZ dk gd 'kq: gksus ds dkj.k vkidks lwfpr fd;k tkrk gS fd mDr edku dk csukek eqofDdy ds uke ls djkos vkSj fdlh fdle dh rkeksjkr ;k fjis;lZ o fctyh o ikuh dk fQfVax ugha djkos vU;Fkk mu lcds [kpsZ ds tqEesokj vki Lo;a gksxh A** The reply of the said notice by <NAME> is Ex. 13. In para No. 1 of Ex. 13 she mentioned that she "has incurred expenses to the tune of Rs. 1,000 apart from the sale price." In the same notice in para No. 5 she mentioned that "she has invested about Rs. 5,000 in making construction of latrine, bath room, surface and other repairs." The reply given by <NAME> to the notice Ex. 5 is Ex. 11. It is dated 10-7-70. In para No. 2 of this notice <NAME> has stated that his wife "has incurred expenses to the tune of Rs. 2,000 apart from the sale price above mentioned." It further appears from the statement of <NAME>, that the plaintiff <NAME> objected to carrying out of repairs even before any notice was sent to <NAME> or her husband <NAME>. A perusal of the statement of <NAME> shows that he being the close relative of the vendee used to look after the work of repairs in the disputed house. He has deposed that once <NAME> objected to carrying out the work of repairs on the ground that he has right of pre-emption. The witness however, told <NAME> that the defendant <NAME> has purchased the house. <NAME> then replied that he would serve a notice in this connection. The relevant portion of his statement runs as under:--

^^ejEer ds oDr eS jkst vkrk tkrk Fkk D;ksafd eSa fj'rsnkj gwa jk/kkfd'ku dks ejEer ds oDr eSaus ogka ns[kk Fkk ,d ckj jk/kkfd'ku us ,rjkt fd;k Fkk ¼[kjhnus ds ckn½ fd eSa gdnkj gw¡ vki ejEer er djkvks geus dgk ge [kjhn pqds gS A jk/kkfd'ku us dgk fd eSa dkuwuh uksfVl nwaxk A geus dgk rc ns[k ysaxs A**

27. From the foregoing discussion it can safely be said that the plaintiff objected to carrying out of the work of repairs and improvements verbally as well as by notices at an early stage, but in spite of that, the defendant vendee did not stop the work of repairs and improvements. According to <NAME> the repairs and improvements continued for 6 months. According to <NAME> the work of repairs continued for about 7 to 8 months. There is thus no doubt that the defendant-vendee did not stop the work of repairs and improvements even after it was objected to by the plaintiff respondent. The learned Additional District Judge in the circumstances rightly held that the repairs and improvements made by the vendee were not made in good faith and on the contrary, she showed "undue haste in taking up the work of repairs in spite of the warning given by the plaintiff pre-emptor." The defendant-appellant, in the circumstances, was rightly held not entitled to the amount spent by her on repairs and improvements.

28. Before parting with the case, I would like to mention that from the evidence of <NAME> and Ex. A-5, the estimate prepared by him it stands proved satisfactorily that the defendant vendee had spent on repairs and improvements a sum of Rs. 13,795.70. In this connection I would like to mention Section 51 of the Transfer of Property Act wherein it has been provided that the amount to be paid in respect of improvements "shall be the estimated value thereof at the time of the eviction". The learned Additional District Judge discarded the testimony of <NAME> mainly on the ground that he did not prepare the estimate Ex. A-5 according to the P.W.D. rates prevailing at the time when the improvements were effected i. e. in the year 1970 taut on the rates prevailing in the year 1971. Since the estimated value of the improvements has to be considered on the date of eviction the estimate Ex. A-5 prepared by <NAME> cannot be discarded on the ground that it was prepared on the basis of P.W.D. rates, prevailing in the year 1971.

29. In the result the appeal fails and is dismissed with costs with the modification that the defendant shall be entitled to remove such of the improvements carried out by her which could easily and conveniently be removed without injuring the property in dispute.


JUDGMENT <NAME>, J.

1. This appeal by the State of Kerala is against the order dt. 14-8-1986 made in O.P. (ARB) No. 332/85 by the Principal Sub Judge, Thiruvananthapuram. By the impugned order, the learned trial Judge (a) dismissed the appellant's petition No. 332/85 for setting aside the award in favour of the respondent Contractor and (b) made a decree in terms of the award of the Arbitrator which granted to the respondent a sum of Rs. 3,64,986.00 under various claims made by him.

2. The appellant awarded to the respondent contract for the construction of <ORG> --RBC formation of Sasthamkotta branch canal. Under this contract dt. 26-2-1982, the work was to be completed within 12 months from 17-4-1982. Certian differences arose between the parties. The disputes in the terms of claims made by the respondent were referred to the arbitration of <NAME>, retired Chief Engineer, P.W.D. The appointment of the Arbitrator was made in accordance with Clause 52 of the contract styled as "local competitive bidding" in respect of "<ORG>."

3. Clause 52 of the contract provides, inter alia, the mode of appointment of the sole arbitrator. Mr. <NAME>, Chief Engineer, <ORG>, was appointed the sole arbitrator in accordance with Clause 52 of the contract. However, Mr. <NAME> subsequently retired from service of the <ORG>. Nevertheless the parties proceeded with the arbitration, the Arbitrator completed the proceedings and made the award.

An important stipulation in Clause 52 relevant to this appeal is this :

"All awards shall be in writing and in the case of awards amounting to Rs. 1 lakh and above, such awards shall State the reasons for the amount awarded".

4. The appellant wants us to set aside the award. Therefore, it is necessary to bear in mind the grounds on which a court can set aside awards made by arbitrators. Section 30 of the Arbitration Act provides the grounds on which an award of the Arbitrator can be set aside. It lays down that an award shall not be set aside except on one or more of the grounds set out therein. One of such grounds is that the arbitrator or umpire has "misconducted himself of the proceedings". The appellant urged that the arbitrator "misconducted ............ the proceedings". An arbitrator misconducts the proceedings (i) when there is a defect in the procedure followed by him (ii) commits breach and neglect of duty and responsibility (iii) acts contrary to the principles of equity and good conscience (iv) acts beyond the reference (vi) proceeds on extraneous circumstances (vii) ignores material documents (viii) bases the award on no evidence. While it is difficult to give an exhaustive list of acts which constitute misconduct of the proceedings, the above stated grounds broadly cover such grounds. These acts constitute legal misconduct.

5. According to learned counsel for the appellant the misconduct of the proceedings has occurred for this reason. The contract between the parties enjoins the Arbitrator to "state the reasons for the amount awarded." The award of various amounts under Items Nos. 17(a), 17(b), 17(c), 17(g), 170 and 17(1) of the statement of claims are not based on proper and adequate reasons. In other words, the grounds stated in support of the award do not constitute reasons. It is true that under Clause 52 of the contract the Arbitrator is bound to state reasons, not generally, but "for the amount awarded". The literal meaning of "reason" is "a ground or motive for a belief or a course of action, a statement in justification or explanation of belief or action"'. It is in this sense that the award must state reasons for the amount awarded.

The rationale of the requirement of reasons is that reasons assure that the Arbitrator has not acted capriciously. Reasons reveal the grounds on which the Arbitrator reached the conclusion which adversely affects the interests of a party; The contractual stipulation of reasons means, as held in <NAME> and <NAME>' Arbitration In Re (1963) 2 QB 467 "proper, adequate reasons". Such reasons shall not only be intelligible but shall be "a reason connected with the case which the court can see is a proper". While the court is empowered to set aside the award on the ground of misconduct of proceedings, the limitations of this power should not be lost sight of.

In the context of clause 52 of the contract, failure to state reasons for the amount awarded does constitute misconduct of the proceedings . It follows that if reasons are unconnected with the case they are not reasons. We will in the course of this judgment analyse the award and consider whether the award furnishes reasons for the amount awarded. But before we do so, we wish to remind ourselves of the basic limitations of the judicial interference in arbitration award.

The need to confine to the limitations was placed in perspective by <ORG> in <CITATION> AIR 1989 SC 1263 and <CITATION> AIR 1989 SC 268. The propositions emerging from these decisisons are summarised below :

(i) While the functions of the courts of law is to oversee that the arbirators act within the norms of justice, the courts should as far is possible give effect to the award, and if the arbitrator acts within the norms of justice, the courts should compel obedience to the decision of the chosen adjudicator.

(ii) Where reasons have been given for the award, the challenge to the award cannot be sustained unless, the arbitrator has taken a view of the matter which could not be sustained on any view of the matter.

iii) judicial interference with the arbitrator's award is justified only if it is shown that the arbitrator has reached a decision which no reasonable arbitrator could have done.

iv) If the conclusion of the arbitrator is based on a possible view of the matter the court should not interfere with the award.

6. The limits of judicial interference were highlighted again in <CITATION> ., AIR 1989 SC 973, where it was laid down this :

i) even where the arbitrator is required to assign reasons, he is not bound to deliver a detailed judgment

ii) the award should be read reasonably as a whole and it is enough if short intelligible indications of the grounds in the mind of the arbitrator are discernible,

iii) the <ORG> does not sit in appeal over the award and review the reasons.

7. In the light of the principles enunciated by <ORG>, we will now endeavour to discover whether the award is based on a possible view of the matter, whether a reasonable arbitrator could have reached the decision impugned in the appeal and whether the view of the arbitrator could not be sustained on any view of the matter. The arbitrator has examined in a span of five pages the grounds on which compensation was sought by the respondent. We will examine each item of the claim granted by the award.

8. In paragraph 17 of the claim petition, claims have been made under Clauses (a) to (p). But in view of the fact that certain claims were rejected and therefore the award in respect of them not appealed from and also the fact that certain claims have been conceded before us, the scope of this appeal is considerably narrow one. There is no controversy about the award in respect of items 17(d), 17(i), 17(h), 17(i), 17(k), 17(m), 17(o) and 17(p) because these claims were rejected by the Arbitrator. The claims in respect of 17(e) relates to the grant of Rs. 13,800/-to the claimants towards excess costs of gelatine. Mr. <NAME>, counsel for the appellant conceded this claim. Therefore, the appeal in regard to this claim is hereby dismissed.

The claim under 17(g) is for compensation at the rate of 300 per day of 132 days, during which period, the respondent's workers were on strike. Learned counsel for the respondent, Mr. <NAME>, rightly did not press this claim because the appellant could not be responsible for a strike by the respondent's workers. Therefore, to this extent we allow the appeal and dismiss the respondent's claim under Clause 17(g) of the claim petition.

The claims under Clause 17(1) of the claim petition was for compensation of Rupees 1,20,136/- for loss due to enhanced cost and labour charges resulting from the delay by the appellants in handing over possession of the site. The Arbitrator has awarded Rupees 1,20,136/- on this account. Learned counsel for the respondent Mr. <NAME> did not press this claim also. We, therefore, allow the appeal so far as the claim No. 17(1) is concerned.

9. In view of what we have stated in the last paragraph this appeal is confined to claims under Clauses 17(a), 17(b), 17(c), 17(j) and 17(n).

10. The claim under Clause 17 (a) arises in this manner: The respondent-contractor, hired a bull dozer for the purpose of carrying out the work. The bull dozer remained idle for 40 days from 30-4-1982 to 28-5-1982, and from 14-9-1982 to 6-10-1982. The local workers unconnected with the work of the contractor, prevented the use of the bull dozer. The appellant could not provide the site free from obstruction for carrying out the work. Therefore, compensation for loss caused by payment of hire charges of Rs. 3,500/ - per day for 40 days was claimed. The arbitrator awarded Rs. 1 lakh at the rate of Rs. 2,500/- per day.

11. The reason for the grant of compensation on account of idling of the bull dozer is this :

The work had to be performed within 12 months which necessarily implied the use of the bull dozer. The correspondence with the Government and the discussions held in regard to the obstruction of the work caused by the local people proved that only the police protection by the appellant could enable the respondent to carry out the contract. Since the appellant could not provide the site free of hindrance and obstruction, the contractor was prevented from using the bull dozer resulting in loss of money awarded as compensation.

12. The Arbitrator knew that the work had to be completed within 12 months, necessarily implying the use of the bull dozer and exclusion of manual work. The use of the bull dozer implies that conditions necessary for the use of the bull dozer existed. In the circumstances of this case, the contractor alone could not have removed the obstruction caused by the local workers who did not approve of the use of the bull dozer. For this purpose the fact that the appellant failed to remove the obstruction by use of police received importance in this thinking of the Arbitrator. The correspondence between the parties, the discussions held and the request for police protection made by the respondent highlighted the need for assistance by police, so as to enable the contractor to use the bull dozer. In the circumstances, the Arbitrator considered that the contractor had lost money for no fault of his. The loss could have been avoided had the appellants taken steps to remove the obstruction. Therefore, he concluded that the appellants were liable to pay compensation.

13. It is an accepted principle of law of contracts that no man can complain of another's failure to do something which he himself made imposible. It is implied in the contract that the contractor had to use the bull dozer if he was to complete the work within 12 months. The implication follows not only from the stipulation of time limit but also from the magnitude of the work. The prevention of work, envisaged by this principle need not be direct or forcible prevention. It is enough if the appellant neglected doing or providing anything which he ought to do or provide and without which the respondent could not perform the part. Section 53 of the Contract Act enacts the principle of English Law that prevention by one party is constructively tantamount to fulfilment of the contract by the other. The party aggrieved by such prevention of fulfilment of one particular term is entitled to insist on payment.

If the award finds support from valid rules, of law, it cannot be impeached, as unreasonable. Application of these principle to contracts of work is not unknown to case law. At page 383 <NAME> and <NAME> refer to English cases where these principles were applied7.

14. At this stage, a brief reference to the contents of the award which reveal the arbitrator's mind may be made. He observes "the fact that the labourers object to the use of the bull dozer has been admitted by the respondent also". Then he invites attention to the responsibility of the appellant in connection with the removal of the obstruction, in this sentence "..........that there was acute labour problem which could not be solved by the respondent himself". Finally after referring to the documents, the arbitrator fixes the responsibility for the delay in these words. "The respondent, alone is responsible for the delay

7. <CITATION> (1869) L.R. 5 C.P. 300 Mackay v. <NAME> (1881) 6 App Cas 251.

in creating an atmosphere for coming to a settlement". The conclusion of the arbitrator that the appellant was responsible for the situation, is founded on numerous letters in which the appellants, the State of Kerala, realising their responsibility insisted on assistance from the police -- their own wing ---which never come forth, to remove the impediment caused by local labour.

It is these reasons which bring into operation the principle of justice and fair play set out by us in paragraph 12 of this judgment. The award is based on these reasons : (i) that the appellants were under an implied obligation to provide obstruction-free site (ii) that the appellant conceded this by repeatedly asking police help (iii) that they did not fulfil the implied obligation and (iv) were therefore bound to compensate the contractor.

In our opinion, the arbitrator's award finds support from the principles set out in paragraph No. 12 above and his reasons summarised above.

15. The arbitrator has concluded that the appellants were responsible for the loss to the respondent. The reason discernible from his award is that the appellants, armed with the <ORG>'s power, failed to create conditions in which the contractor could fulfil the contract. This view of the matter is a possible view. The conclusion that the appellants by their failure to remove obstruction by local workers caused the loss in a finding of fact based on evidence. Our jurisdiction is limited by considerations laid down in Section 30 of the Arbitration Act which have been amplified by <ORG> in the judgments referred to earlier. We are of the opinion that the approach of the arbitrator was fair, just and based on common sense. He has given reasons for the payments awarded by him. It cannot be said that the view of the arbitrator is a view "which could not be sustained on any view of the matter" or that "no reasonable arbitrator could have taken such a view". We hold that the arbitrator's view that the appellant was liable to compensate the respondent contra-tor, for the loss sustained by keeping the bull dozer idle, is a possible view of the matter. The reasons given by him for the amounts awarded are connected with the claim and are adequate. This applies to all items of the claim granted by the arbitrator.

We wish to caution that we should not be understood to have laid down as a general principle that in every case of the Government's contract, the Government has the obligation to provide police assistance to create conditions in favour of the contractor. We have discussed the general principles underlying Section 53 of the Contract Act for the limited purpose of ascertaining whether the award is reasonable and fair.

16. The claim under item No. 17(b) proceeds on the same basis as item No. 17(a). During the 156 days between 3-4-1982 and 6-10-1982 when work under the contract was disrupted the respondent had to keep his supervisory staff in his employment. He could not discharge the staff as it would have been difficult to get the staff if and when the obstruction was removed. The inability of the appellant to create conditions in which the bull dozer could be used and the work under the contract proceeded with induced the arbitrator to award compensation at the rate of Rs. 150 per day for the loss caused.

The reason assigned by the arbitrator is the same as under Clause 17(a). It is the appellant, State of Kerala who failed to create conditions necessary for fulfilment of the contract. The respondent could not have discharged the supervisory staff. He expected that the negotiations which the appellant initiated would bring police help and the work would start. These are the indications of the thinking of the arbitrator in this matter. In the circumstances, the arbitrator chose to grant compensation to the respondent. For the reasons stated while dealing with claim under item No. 17(a) we hold that the arbitrator was right.

17. The award is right so far as claim No. 17(c) is concerned. The amount of-work found to have been done at the stage of the final bill was much less than the amount of work measured and found at the stage of the third bill. The claimant had been paid only in respect of 17,294 m3 whereas the work done by him was in the region of 23,000 m3. He claimed at the rate of 25,000 m3. The appellants act in withholding the payment is based on the final measurement taken without inviting the contractor to remain present when the work was measured. The arbitrator considered that since the measurement up to the third bill were admitted and since the respondent was not invited to remain present, when the final measurement was taken, the contractor should be paid at the rate of the third bill. While the appellants have the right to contest the award in this respect, we do not think that the view of the arbitrator is not based on reason. We do not think that the arbitrator acted unreasonably. Another arbitrator might have taken a different view. But the decision of this arbitrator is based on reason and is a possible view of the matter.

18. Item No. 17(j) relates to payment for excess work in respect of 13 items. Out of these items, the contractor agreed to accept payment at agreed rates in respect of items 6 and 7. There was no agreement as to the rates forexcess work in respect of items 1 --5and8 -- 13. The arbitrator awarded payment in respect of excess work specified as items Nos. 1 -- 5 and 8 -- 13. A sum of Rs. 19,199/-was granted in respect of these items. The appellant urged under Clause 32 of the Contract, the rate of payment for extra work had to be fixed by mutual agreement. This is no doubt true. But the arbitrator decided it because there was dispute about these items. But the submission of the appellant that since the rates had to be fixed by mutual agreement, the arbitrator had no authority to award the payment for excess work is unfounded. It is not the case of the appellant that different rates for excess payment in respect of items Nos. 1 to 5 and 8 to 13 were agreed upon. The arbitrator acted within his authority and has assigned reasons for the grant of Rs. 19,199/-. No error justifying judicial interference is discernible.

19. In respect of item No. 17(n) no error has been pointed out.

20. The arbitrator has awarded interest at the rate of 6% p.a. payable with effect from three months after the date of the award. The correctness of this decision is challenged.

Having regard to the decision of <ORG> of this Court in <CITATION> , (1990) 2 Ker LT 735, we hold that the arbitrator was in error in awarding interest for the period after the award. To this extent the appellants are right. Therefore, the award directing payment of the interest after the award by the arbitrator is set aside.

21. It was argued by learned counsel for the respondent that the misconduct of the proceedings by the arbitrator has not been pleaded in the grounds of appeal. We are urged to dismiss the appeal on this ground alone. Having regard to the provisions of the Rule 2 of Order 41 of the Civil P.C. this <ORG>'s authority is not confined to the grounds of objection set forth in the memorandum of appeal by taken by the leave of the <ORG> under that rule. We have expressly granted to the appellants leave to urge the point of misconduct of the proceedings by the arbitrator. The appeal was therefore argued on all points. In view of this the judicial decisions in Chevalier Iyyappan v. <ORG>, AIR 1966 SC 1017, <NAME> v. <NAME>, AIR 1967 SC 1193, and <CITATION> , AIR 1966 Kerala 96 (FB), are of no assistance to the appellants.

22. We set out below a summary of the amounts awarded by the arbitrator and confirmed by <ORG> item No. 17(a) ... Rs. 1,00,000.00 17(b) ... Rs. 23,400.00 17(c) ... Rs. 68,651.00 17(d) ... rejected 17(e) ... Rs. 13,800.00 17(f) ... rejected 17(g) ... Rs. 19,800.00 17(h) ... rejected 17(i) ... rejected 17(j) ... Rs. 19,199.00 17(k) ... rejected 17(l) ... Rs. 1,20,136.00 17(m) ... rejected 17(n) ... security refund ordered 17(o) ... rejected 17(p) ... rejected _______________ Total ... Rs. 3,64,986.00 ________________

In view of what we have stated in paragraph 8 of the judgment, the claim in respect of item No. 17 (g) was erroneously allowed. The amount of Rs. 19,800/- representing this claim shall be deducted from the amount awarded. Similarly, the claim in respect of item No. 17 (1) of Rs. 1,20,136/- was erroneously allowed by the arbitrator. This amount too will have to be deducted from the total amount awarded. Therefore, the appeal is allowed only in respect of item Nos. 17(g) and 17 (1). The amounts awarded were respectively Rs. 19,800/- and Rs. 1,20,136/-which total up to Rs. 1,39,936/-. Out of the total amount of Rs. 3,64,986/- awarded, the sum of Rs. 1,39,936/- will have to be deducted. The amount awarded shall now be Rs.2,25,050/-.

23. For the reasons stated in this judgment we make the following order. The order of the Principal Sub Judge, Thiruvanathapuram is confirmed in so far as item Nos. 17(a), 17(b), 17(c), 17(e), 17(j) and 17(n) are concerned. The award is set aside and the order of the learned Principal Sub Judge is reversed in respect of the amounts awarded under item Nos. 17(g) Rs. 19,800/- and 17(1) Rs. 1,20,136/-. The award in favour of the respondents is confirmed only in respect of a sum of Rs. 2,25,050/-subject to the modification of interest as stated in paragraph 20. The O.P. (Arb) 332/1985 made by the State of Kerala is allowed to the extent of the amount of Rs. 1,39,936/- is concerned. Subject to this, the appeal is disposed of.


PETITIONER: M/S. SASA MUSA SUGAR WORKS (P) LTD. Vs. RESPONDENT: SHOBRATI KHAN AND OTHERS DATE OF JUDGMENT: 29/04/1959 BENCH: <NAME>, K.N. BENCH: <NAME>, K.N. SINHA, BHUVNESHWAR P. GAJENDRAGADKAR, P.B. CITATION: 1959 AIR 923 1959 SCR Supl. (2) 836 CITATOR INFO : R 1959 SC1111 (7) R 1959 SC1342 (17,18,19) E 1963 SC1756 (8) R 1964 SC 708 (29,30) R 1965 SC1803 (11) R 1972 SC 136 (33) RF 1972 SC1031 (51) D 1976 SC1760 (7,12) RF 1979 SC1652 (18) RF 1980 SC1896 (152) ACT: Industrial Dispute-Go-slow-Employer's application for Per- mission to dismiss workmen-<ORG>'s power-Perverse finding Grant of Permission-Industrial Disputes Act, 1947 (14 Of 1947),s. 33. HEADNOTE: Pending an adjudication proceeding between the workmen and the <ORG>, the management of the appellant <ORG> served notices on thirty-three of its workmen and thereafter suspended them for taking a leading part in a protracted go- slow in contravention of the Industrial Disputes Act . For similar reasons, a few days later, it again served similar notices on fifteen others and suspended them. Thereafter the management made two applications under s. 33 Of the Industrial Disputes Act for permission to dismiss the said workmen. The forty-eight workmen in their turn applied under s. 33A of the Act alleging breach of s. 33 by the management in suspending them by way of punishment. <ORG> found that the suspension was not by way of punishment and that there was a deliberate resort to go- slow by the workmen which was unjustified; it refused the permission with respect to sixteen of the workmen on the ground of want of evidence but granted leave to the management to suspend the rest for seven days, thus disallowing the prayer for dismissal. It also rejected the workmen's application under s. 33A of the Act. Appeals were filed by both the parties and when they came up for hearing, <ORG> allowed the workmen to withdraw their appeal so far as it related to their application under S. 33A of the Act, with the result that the finding of the <ORG> that the suspension was not a punishment but only pending enquiry by the management and proceedings before the <ORG>, stood confirmed. While agreeing with all other findings of the <ORG>, <ORG> took the view that the suspension ordered by the-management was substantive punishment since the notices did not state that it was pending enquiry, and the subsequent application for permisson to dismiss the workmen was, therefore, mala fide and dismissed the appeal of the management. Held, that the material findings arrived at by the Industrial <ORG> not having been upset by <ORG>, the only possible order on the applications of the management under s. 33 of the Act was to permit it to dismiss the workmen provided there was evidence against them all. It was not open to the Industrial <ORG> to substitute some other form of punisliment and give permission therefor. 837 The Appellate <ORG> was clearly in error in holding that suspension, in the instant case, was not an interim order pending .enquiry and proceedings before the <ORG> under S. 33, but substantive punishment, contrary to the finding of the Industrial <ORG> which stood confirmed by its own order permitting the withdrawal of the appeal against it by the workmen. The finding of the Industrial <ORG> that there was no evidence against sixteen workmen was, on the face of it, perverse, since the evidence against them was the same as against the thirty-two others. As go-slow was serious misconduct, insidious in nature and could not be countenanced, and since the workmen were found guilty of such misconduct, the management must be granted the permission to dismiss them. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 746 and 747 of 1957.

Appeals by special leave from the judgments and orders dated June 3, 1955, and May 21, 1956, of <ORG>, Calcutta, in Appeal No. Cal. 366/52 and Misc. Case No. 145 of 1955 respectively, arising out of an Award dated September 22, 1952, of <ORG>, Bihar, and published in <ORG> on October 21, 1952.

<NAME>, Attorney-General for India and <NAME>, for the appellant.

The respondent did not appear.

1959. April 29. The Judgment of the Court was delivered by WANCHOO, J.-These are two appeals by the management by special leave in an industrial matter arising out of two applications under s. 33 of the Industrial Disputes Act (hereinafter called the Act). The facts of the case are briefly these : The appellant, Messrs. <ORG> is a sugar factory in District Saran (Bihar). The factory was established in 1932. In June 1942, a trade union was formed in this factory. In July 1943, trouble arose between the workmen and the management resulting in the discharge of three office-bearers of the union, including one <NAME>, who was then the joint secretary. That matter ",as referred to adjudication and the discharged workmen were ordered to be reinstated in the beginning of 1944. In December 1944, there was trouble again and a large number of workmen were dismissed, including <NAME>, who had by now become the president of the union. This dispute was again referred to <ORG>, which again ordered reinstatement of the dismissed workmen in August 1947. There was peace for some time after this. But in June 1951, the management again discharged seventeen workmen, including <NAME>, who was at that time secretary of the union. The trouble continued up to December 1951, when an agreement was arrived at between the union and the management, as a result of which twelve of the workmen were reinstated but five, including <NAME>, were not and their cases were to be referred to adjudication. It appears, however, that another reference between the management and its workmen was already pending since September 8, 1951, before <ORG>, when this agreement was arrived at. Thereafter the work in the factory proceeded smoothly for some time. But on January 1, 1952, a notice was issued by the union to the management enlisting as many as 40 demands and it was threatened that if the demands were not met within seven days, the union would have to advise the work-men to adopt go-slow and call upon them to offer passive resistance with effect from January 9, 1952, and take all legitimate means to see that the decision of go-slow was carried out till the demands of the union were fulfilled. This notice was received by the management on January 4, which immediately contacted the officers of <ORG> as well as the Sub-Divisional Magistrate at Gopalganj. On January 8, the Deputy Labour Commissioner wrote to the union that as the conciliation officer was busy in the general elections, the status quo should be maintained till the elections were over, so that the matter might be looked into by the conciliation officer. The union, however, gave no heed to this advice and go-slow began from January 9 and was continued till January 12, 1952. Then the Labour Commissioner himself came to the factory on January 12 and advised <NAME> who was the s moving spirit behind all this to call off the go-slow, as it was proposed to start conciliation proceedings at Patna on January 17, 1952. Conciliation proceedings then began on January 17 and an agreement was arrived at as to some of the demands on January 23, and it was decided that further conciliation proceedings would be held in February. But in spite of this agreement go-slow was again resorted to from January 24 to January 31. In the meantime, the Labour Officer had arrived at the factory on January 28, 1952, and further talks took place. The workmen, however, did not pay heed to the advice of the Labour Officer. He, therefore, reported on January 31 to the Labour Commissioner that go-slow was still continuing. The Labour Commissioner then ordered the Labour Officer to tell the workmen that no further conciliation proceedings would take place until the goslow was called of. The Labour Officer then informed the management that it could take disciplinary action against the workmen concerned with the permission of <ORG>. Consequently, the management suspended thirty-three workmen by a notice given on the night of January 31 as from February 1. It was said in the notice that these thirty- three workmen had been found taking a leading part in the unjustified go-slow which was in contravention of the Act and they were therefore suspended from service until further orders. This notice had some good effect and work improved for four days; but from February 5 goslow was started again. Consequently, the management suspended seven more workmen from February 6 and eight more from February 7 by giving notice to them in the same terms in which the notice had been given to the thirty-three workmen, on January 31. As adjudication proceedings were pending since September 1951 between the management and its workmen, the former applied on February 6, 1952, under s. 33 of the Act for permission to dismiss the thirty-three workmen and on February 11, 1952, for permission to dismiss the remaining fifteen workmen who had been suspended later. The forty-eight workmen in their turn applied on March 29, 1952, under s. 33-A of the Act to <ORG> and their case was that they had been suspended as a measure of punishment and that as this was done without the sanction of <ORG>, the management had committed a breach of s. 33 .

The three applications were tried together by <ORG> and the contentions raised before it were these : (1) The management's applications under s. 33 had not been preceded by any enquiry into the misconduct of the workmen and were, therefore, liable to be rejected ; (2) The order of suspension in this case amounted to punishment and therefore s. 33 had been contraven- ed; and (3) There was an unjustified go-slow by the workmen in January and February 1952.

On the first point, <ORG> found that Do enquiry had been held by the management before the two applications, under s. 33 were made; but it held that all the evidence which could have been taken in the enquiry by the management had been led before it and it was in full possession of the facts, and no question of any prejudice to the workmen arose, as it would be open to it on a review of the entire evidence before it to decide whether the applica- tions for permission to dismiss should be granted or not. On the second point, it held that the order of suspension was not as a measure of punisment in the circumstances of this case and that it was an order pending enquiry by the management and proceedings under s. 33 before the tribunal and that, as there were no Standing Orders as to suspension in this factory, the management's liability to pay the workmen their wages during the period of suspension remained. On the third point, <ORG>, after an elaborate discussion of the evidence, came to the' conclusion that there was a deliberate go-slow resorted to by the workmen in January and February 1952 and that it was unjustified as it took place while conciliation proceedings were pending.

Having given these findings, <ORG> had then to decide what orders it should pass on the applications under s. 33 and s. 33-A . It held that there was no evidence to show that of the forty-eight workmen concerned, sixteen workmen named by it had taken part in the go-slow or instigated it. It therefore refused the application under s. 33 with respect to these sixteen workmen. As to the remaining thirtytwo workmen it held that as some Standing Orders which were under contemplation at the time provided either dismissal or suspension for seven days in case of misconduct, it was proper to grant leave to the management to suspend the workmen for seven days, in view of some opinion expressed by <ORG> appointed some time before by <ORG>. In effect, therefore, it rejected the prayer of the management for dismissal with respect to these thirty-two workmen also. Finally, it rejected the application under s. 33-A .

This award led to two appeals before <ORG>; one was by the management against the entire award so far as it related to its applications under s. 33 , and the other by the workmen against the dismissal of their application under s. 33-A and against the award relating to the applications of the management under s. 33 . When the matter came up for hearing before <ORG>, the workmen withdrew their appeal with respect to their application under s. 33-A and it was consequently dismissed. The result of the dismissal of the appeal of the workmen was that the finding of <ORG> that the suspension was not a punishment and was only pending enquiry by the management and the proceedings before the tribunal, stood confirmed.

As to the *appeal by the management with respect to the applications under s. 33 , it was contended on its behalf before <ORG> that <ORG> had gone wrong on two substantial questions of law, namely- (1) <ORG> could either grant or  refuse permission to dismiss on an application for such permission under s. 33 and it could not substitute its own judgment about the quantum of punishment; and (2) it was wrong in rejecting the applications against sixteen workmen on the ground that there was no evidence. <ORG> was of the opinion that the contention of the management on both these points was correct and that the appeal involved substantial questions of law. It also found that <ORG>'s finding that the workmen had resorted to go-slow was not perverse and could be the only finding on the evidence. It then went on to say that go-slow was insidious in nature and could not be countenanced, and that it was serious misconduct normal punishment for which was dismissal. It also held that <ORG> was not right in relying upon the recommendations of <ORG> and the contemplated Standing Orders which were not till then in force. Having said all this, we should have expect- ed that <ORG> would set aside the order of <ORG> and grant permission to the management to dismiss the workmen for what was serious misconduct of an insidious nature which could not be countenanced. But it went on to say that it was well settled that where an employer could not punish a workman without obtaining permission from the tribunal under s. 33 , an application for permission would be mala fide if it was made after any punishment had already been meted out to the workman. It held that in the present case, the suspension of the workmen by the management was substantive punishment, because the notice did not in so many words state that it was pending enquiry and therefore the applications for permission having been made after punishment had been meted out were mala fide. In coming to this conclusion, <ORG> seems to have forgotten that it had already dismissed the appeal of the workmen from the order of <ORG> on their application under s. 33- A, which in effect amounted to confirming the order of <ORG> that the suspension was not a punishment but was rightly made pending enquiry by the management and proceedings before the tribunal. <ORG> supported its decision on this question of punishment by stating that the mala fides of the management were clear from the fact that though the suspensions had been made between January 31 and February 7, 1952, the application was filed by the management on March 29, 1952, after the application by the workmen under s. 33- A had been filed. This observation was clearly wrong, for the applications under s. 33 were filed on February 6 and 11 by the management, and it was the application of the workmen under s. 33-A which was filed on March 29. Having thus inverted the order in which the applications were made to <ORG>, <ORG> late Tribunal held that the applications of the management under s. 33 were Dot bona fide. It then dismissed the appeal of the management, thus upholding the order of <ORG> so far as the suspension of thirty-two workmen for seven days was con- cerned on the ground that the workmen had withdrawn their appeal, though in the earlier part of the judgment all that

-was said was that the workmen had withdrawn their appeal against the order under s. 33-A .

As <ORG> had obviously made a mistake and inverted the order in which the applications under ss. 33 and 33-A had been made, a review application was filed by the management. It, however, held that though the dates had been wrongly mentioned by accident, it saw no reason to review its order. That is how the management filed two special leave petitions in this <ORG>.

We are of opinion that on the findings of <ORG> on the three points formulated by it which have not been upset by <ORG>, the only order possible on the applications of the management under s. 33 was to permit it to dismiss the forty -eight workmen, provided there was evidence against them all. It was not open to <ORG> when it was asked to give permission to dismiss to substitute some other kind of punishment and give permission for that. <ORG> was satisfied that there was misconduct and that finding has been upheld by <ORG>. As such if there was evidence that these forty-eight workmen were guilty of misconduct, <ORG> was bound to accord permission asked for. We cannot agree with <ORG> that the suspension in this case was substantive punishment and was not an interim order pending enquiry and proceedings before <ORG> under s. 33. We have already pointed out that the Labour Officer told the management on January 31, 1952, that it was free to take disciplinary action with the permission of <ORG>. It was thereafter that thirtythree workmen were suspended on January 31 and the notice clearly said that the suspension was pending further orders, thus intimating to the workmen that the order of suspension was an interim measure. This notice of January 31 was followed by an application on February 6 to <ORG> for permission to dismiss the thirty-three workmen involved in it, and this also clearly shows that the suspension was pending enquiry (if any) by the management and proceedings before <ORG>. Similarly, the suspension notices of February 5 and 6 relating to fifteen workmen said that they were suspended till further orders and were followed on February II by an application under s. 33 to <ORG> for permission to dismiss them. In the circumstances it is quite clear that suspension in this case was not a punishment but was an interim measure pending enquiry and proceedings before the tribunal. We have already pointed out that this was the finding of <ORG> on the basis of which the application under s. 33-A was dismissed and this finding stood confirmed when the workmen withdrew their appeal with respect to their application under s. 33-A . <ORG> therefore was clearly in error in holding . that the suspension was punishment.

The only question that remains is about the sixteen workmen about whom <ORG> held that there was no evidence to connect them with the go-slow. <ORG> view in this matter was that the contention of the management that <ORG> was wrong in holding that there was no evidence against these sixteen workmen was correct. It has been shown to us that evidence against these sixteen workmen is of exactly the same witnesses and of the same kind as the evidence against the remaining thirty-two. The finding, therefore, of <ORG> that there was no evidence against the sixteen workmen is patently perverse, for there was the same evidence against them as against the remaining thirty-two. It follows, therefore, that all the forty-eight workmen (two of whom are since said to have died) are exactly in the same position. As held by <ORG>, go-slow is serious misconduct which is insidious in its nature and cannot be countenanced. In these circumstances as these fortyeight workmen were taking part in the go-slow and were thus guilty of serious misconduct, the management was entitled to get permission to dismiss them. But as the management held no enquiry after suspending the workmen and proceedings under s. 33 were practically converted into the enquiry which normally the management should have held before applying to <ORG>, the management is bound to pay the wages of the workmen till a case for dismissal was made out in the proceedings under s. 33 ; (see the decision of this Court in the <CITATION> (1) ). As already pointed out, this is the view taken by <ORG> while dealing with the application under s. 33-A which stood confirmed by the dismissal of the appeal by the workmen in that behalf. The management will therefore have to pay the wages during the period of suspension till the award of <ORG>.

We therefore allow the appeals and set aside the orders of the two <ORG> so far as the applications under s. 33 are concerned and grant the appellant the permission sought for by it in these applications subject to the workmen being paid all their wages during the period of suspension up to the date of the award of <ORG>, i. e., 22- 9-1952. As the workmen did not appear to contest these appeals, we pass no order as to costs.

Appeals allowed.

(1) [1959] Suppl. 2 S.C.R. 719.