judgement:
ivil Appeal Nos.
4145 46 of 1986.
From the Judgment and order dated 10.7.85 and 11.11.85 of the High Court of Calcutta in Appeal No. 477 of 1984.
Tapas Ray and B.R. Agarwal for the Appellant.
758 V.A. Bobde, Rajiv Dutta and Ms. Mridula Ray for the Respondents.
The Judgment of the Court was delivered: SHARMA, J.
By the impugned judgment the Division Bench of the Calcutta High Court set aside the ex parte decree passed by the Original Side of the Court in favour of the plaintiff Sudha Devi, the present appellant.
The dispute between the parties is in regard to a flat in a building on Lord Sinha Road, Calcutta.
The plaintiff prayed for a decree for Rs.1,44,730 as past mesne profits besides future mesne profits at the rate of Rs.170 per day and for "if necessary, decree as against the third respondent for possession of the flat" described in the plaint.
By way of an alternative relief to the money claimed, an inquiry for determination of the mesne profits was asked for.
None of the defendants appeared.
At the ex parte trial the plaintiff examined one witness and tendered certain documents in evidence.
The learned Single Judge decreed the suit and the defendant No. 3 (present respondent No. 1) filed an appeal therefrom which was allowed on 10 7 1985 by the judgment which is under challenge in Civil Appeal No. 4146 of 1986.
The plaintiff thereafter filed an application with a prayer to modify the judgment and remand the suit for retrial.
The prayer was rejected by the order dated 11 10 1985.
Civil Appeal No. 4145 of 1986 is directed against this order.
According to the plaintiff 's case, the defendant No. 1 Baranagar Jute Factory Company Ltd. was the tenant in respect to the flat in question under the plaintiff.
The Jute Company defaulted in payment of rent and also wrongfully sublet the flat to the second defendant Sadhan Chattopadhyaya, which led to the filing of an eviction suit by the plaintiff.
Both the defendants were impleaded in the suit but they did not appear to contest.
An ex parte decree of eviction was passed on 19 2 1982.
It is further pleaded that subsequent to the decree, either of the two defendants or both wrongfully inducted the third defendant to occupy the demised flat.
The plaintiff was, therefore, entitled to the reliefs mentioned in the plaint.
The third defendant filed an application under the provisions of Order IX, Rule 13 of the Code of Civil Procedure for setting aside the ex parte decree, but later withdrew the same and assailed the decree in appeal on merits.
The Letters Patent Bench allowed the appeal and set aside the decree on the ground that the plaintiff, on the basis of the meagre evidence led by her, failed to establish her case.
759 4.
The fact that the plaintiff obtained an ex parte decree in the earlier suit against the defendant No. 1 and 2 is established by the copy of the decree exhibited in the case.
The allegation in the plaint so far as the third defendant is concerned, is in paragraph 7 in the following words: "7.
Subsequent to the said Decree on a date or dates which the plaintiff is unable to specify until after disclosure by the defendants, the first and/or second defendants wrongfully permitted and allowed the third defendant to occupy the said demised flat.
The first and/or second defendants by themselves and/or by the third defendant are still in wrongful possession of the said demised flat.
" The only evidence relevant to this part of the case is to be found in the oral evidence of the plaintiff 's sole witness Nand Kumar Tibrewal.
The High Court (in appeal) has declined to rely on his evidence mainly on the ground that the witness has not disclosed his concern with the suit property or his relationship with the plaintiff.
He has been rejected as incompetent.
The learned Counsel for the appellant contended that the witness (now deceased) was the husband of the plaintiff appellant and thus he was fully conversant with the relevant facts.
The criticism by the High Court that the witness did not state anything in his evidence which could connect him with the plaintiff or the property and thus make him competent was attempted to be met before us by relying on an affidavit filed in this Court.
We are afraid, the plaintiff cannot be allowed to fill up the lacuna in the evidence belatedly at the Supreme Court stage.
Besides, affidavits are not included in the definition of 'evidence ' in section 3 of the Evidence Act and can be used as evidence only if for sufficient reason court passes an order under Order XIX, Rules 1 or 2 of the Code of Civil Procedure.
This part of the argument of Mr. Tapas Ray must, therefore, be rejected.
The learned counsel next urged that even ignoring the relationship of the witness with the plaintiff, his evidence is adequate to prove the plaintiff 's case which has not been rebutted by any of the defendants either by filing a written statement or cross examining the witness.
Mr. Bobde, the learned counsel representing the defendant No. 3 (respondent No. 1 before us), contended that the witness contradicted the case pleaded in the plaint by positively stating that the defendant No. 3 was in possession of the flat in question from before the date of the decree passed in the earlier suit.
The plaintiff 's assertion in paragraph 7 of the plaint is thus contradicted and the suit 760 cannot be decreed on its basis.
The learned counsel proceeded to analyse the situation arising out of the records of the case to show that if the defendant No. 3 is held to be in possession since before the earlier decree, other issues would arise in the suit, on which the plaintiff will be required to lead further evidence.
The learned counsel strenuously argued that in the facts and circumstances of the case, the prayer of the plaintiff made after the disposal of the appeal before the Letters Patent Bench for remanding the suit to the learned Single Judge (Original Side) for retrial was fit to be allowed and that Civil Appeal No. 4145 of 1986 should be allowed by this Court.
On the failure of the defendants to appear in the suit, the learned trial Judge decided to proceed with the case ex parte.
Even in absence of a defence the court cannot pass an ex parte decree without reliable relevant evidence.
The fact that the plaintiff chose to examine some evidence in the case cannot by itself entitle her to a decree.
The High Court (in appeal) was, therefore, perfectly justified in scrutinising the evidence from this angle.
The suit was filed and the relief was claimed on the basis that the third defendant was inducted in the flat in question by the other two defendants after they had already suffered a decree, and there is not an iota of evidence led by the plaintiff to prove this story.
On the other hand, the evidence of the sole witness disproves this part of the case.
Having regard to the allegations in the plaint, the facts emerging from the documents and the oral evidence, it is clear that several other questions may arise for consideration if the defendant No. 3 is assumed to be in possession from before the earlier decree.
We, therefore, agree with Mr. Bobde that the plaintiff cannot be allowed a decree on the evidence led by her in the suit founded on the plaint as it is.
After hearing the learned counsel for the parties at considerable length, we also agree with Mr. Bobde that in the interest of justice the prayer made on behalf of the plaintiff before the High Court after the disposal of the appeal for remand and retrial of the suit is fit to be allowed.
As nobody is disputing this position before us, we do not consider it necessary to further deal with this aspect.
In view of the prayer made by the plaintiff in the High Court and in Civil Appeal No. 4145 of 1986 before this Court and the concession of the defendant No. 3 before us, we hold that the suit should be sent back to the learned Single Judge for retrial.
The plaintiff may file an application for amendment of her pleading, if so advised, and in that case the learned Single Judge shall dispose it of in accordance with law.
The defendants will thereafter be allowed to file their written statements within a 761 period to be indicated by the Court.
The suit will thereafter be taken up for further trial as expeditiously as may be possible.
The evidence already led by the plaintiff shall continue to be evidence in the suit.
In the result, the judgments of the High Court dated 10 7 1985 and 11 10 1985, passed in Appeal No. 477 of 1984 are set aside and the suit is remanded to the learned Single Judge for disposal in the light of the observations made above.
We feel that the suit ought to be disposed of as expeditiously as possible and we expect and hope that the trial Judge will be able to dispose it of within six months.
The appeals before us are allowed in the above terms.
The parties shall bear their own costs in this Court; but so for the costs in the High Court are concerned they shall abide the final result in the litigation.
P.S.S. Appeals allowed.

summary:
The plaintiff appellant filed a suit for ejectment of the tenant defendant No. 1 for default in payment of rent and also to have wrongfully sublet the flat to the second defendant.
None of the defendants appeared.
At the ex parte trial the plaintiff examined one witness and tendered certain documents in evidence.
The Single Judge decreed the suit.
Subsequently to the decree the two defendants are alleged to have inducted the third defendant (respondent No. 1) to occupy the demised flat.
The plaintiff filed an application for modification of the decree.
The respondent No. 1 first filed an application for setting aside the ex parte decree, but later withdrew it and assailed the decree in appeal.
The Letters Patent Bench allowed the appeal and set aside the decree on the ground that the plaintiff 's sole witness did not disclose his concern with the suit property or his relationship with the plaintiff and that on the basis of the meagre evidence led by her, she had failed to establish her case.
In the appeal to this Court it was contended on behalf of the appellant that the witness was the husband of the plaintiff appellant and thus he was fully conversant with the relevant facts and that the criticism by the High Court was not justified.
Reliance was placed on an affidavit filed in this Court.
It was further contended that even ignoring the relationship of the witness with the plaintiff, his evidence was adequate to prove the plaintiff 's case which has not been rebutted by any of the defendants either by filing a written statement or by cross examining the witness.
757 Allowing the appeals and remanding the suit for retrial.
^ HELD: 1.
The plaintiff cannot be allowed a decree on the evidence led by her in the suit founded on the plaint as it is.
Even in absence of a defence the Court cannot pass an ex parte decree without reliable relevant evidence.
The fact that the plaintiff chose to examine some evidence in the case cannot by itself entitle her to a decree.
The Letters Patent Bench was, therefore, justified in scrutinising the evidence from that angle.
[760B D] 2.
The suit was filed and the relief was claimed on the basis that the third defendant was inducted in the flat in question by the other two defendants after they had suffered a decree.
There is not an iota of evidence led by the plaintiff to prove this story.
On the other hand, the evidence of the sole witness, who positively stated that the defendant No. 3 was in possession of the flat in question from before the date of the decree passed in the earlier suit, disproves this part of the case.
If the defendant No. 3 is assumed to be in possession from before the earlier decree several other issues would arise for consideration on which the plaintiff will be required to lead further evidence necessitating retrial.
[760D E] 3.
Affidavits are not included in the definition of 'evidence ' in section 3 of the Evidence Act and can be used as evidence only if for sufficient reasons Court passes an order under Order XIX, Rules 1 or 2 of the Code of Civil Procedure.
The plaintiff appellant cannot be allowed to fill up the lacuna in the evidence belatedly at the Supreme Court stage.
[759E F] 4.
In view of the prayer made by the plaintiff in the High Court and in C.A. No. 4145 of 1986 before this Court for remanding the suit for retrial and the concession of defendant No. 3 before this Court, the judgments of the High Court are set aside and the suit is remanded to the Single Judge for retrial and disposal in accordance with law expeditiously.
[761B]


judgement:
Civil Appeal No. 750 of 1973.
From the Judgment and Order dated 22.9.1972 of the High Court of Bombay in First Appeal No. 540 of 1969.
T.S. Krishnamurthy Iyer, K. Rajendra Chowdhary and K. Shivraj Chowdhary for the Appellants.
V.M. Tarkunde and Mrs. J. Wad for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
This appeal by special leave is at the instance of the defendants in a suit for redemption of two mortgages and is directed against the judgment and decree of the Bombay High Court affirming those of the Joint Civil Judge, Senior Division, Kolhapur, decreeing the suit.
On June 16, 1925, the predecessors in interest of the respondents executed a possessory mortgage bond for Rs.5,000 in favour of the predecessor in interest of the appellants.
The mortgage bond contained a recital that the mortgagee should appropriate the income of the property consisting of some plots of land towards the sum of Rs.3,000 and was entitled to interest @ 9% per annum for the balance sum of Rs.2,000.
By a second mortgage bond, which was by way of a simple mortgage executed on September 3, 1928, the mortgagors mortgaged the same property to the same mortgagee to secure repayment of a further loan of Rs.2,000 with interest @ 9% per annum.
The respondents filed a suit for redemption of the two mortgages 693 in the court of the Subordinate Judge, First Class, Ichalakaranji, being Suit No. 3 of 1947.
A preliminary decree for redemption was passed on September 20, 1948 and it was declared that the amount of Rs.12,125 and odd and a further amount of Rs.236 being the cost of the suit, were due from the mortgagors to the mortgagee.
The mortgagors were directed to pay the amount within six months and on such payment to get the property redeemed; failing which liberty was given to the mortgagee to apply for a final decree for sale.
As the mortgagors failed to make payment within the specified period, on an application made by the mortgagee, a final decree for sale was passed in the suit on March 21, 1952.
The decretal dues, as declared in the final decree, were Rs.12,361 and odd plus cost amounting to Rs.41 for which the mortgaged property or sufficient portion thereof was directed to be sold.
In other words, a preliminary decree and a final decree in accordance with the provision of Order XXXIV, Rules 7 and 8 were passed.
Although the final decree for sale of the mortgaged property was passed, the mortgagee did not execute the final decree and allowed the same to be time barred.
The mortgagee and after him, his heirs and legal representatives, however, continued to be in possession of the mortgaged property.
The respondents, who are the successors in interest of the original mortgagors filed a second suit for redemption of the mortgages, being Special Civil Suit No. 6 of 1968 in the Court of the Joint Civil Judge, Senior Division, Kolhapur, on January 9, 1968 against the appellants, who are the heirs and legal representatives of the original mortgagee.
It was claimed by the respondents that in spite of the passing of the final decree for sale in the earlier suit, being Suit No. 3, 1947, the mortgage still subsisted, and that they were entitled to redeem the same and get possession of the mortgaged property.
Accordingly, they prayed for a decree for redemption, accounts and possession of the mortgaged property from the appellants.
The appellants contested the suit by filing written statement.
It was contended by them that as the mortgagors did not pay the decretal dues under the decree passed in the previous suit, their right of redemption had been extinguished.
They denied the respondents ' claim for accounts.
It was claimed by the appellants Nos. 3, 4 and 5 that their predecessors in title were tenants of the suit land from before 1925 and, as such, they had become protected tenants under the Bombay Tenancy and Agricultural Lands Act.
Alternatively, it was contended that even if the respondents were held to be entitled to 694 redeem the mortgages, they were not entitled to obtain physical possession of the mortgaged property, as the appellants had become protected tenants.
The learned Joint Civil Judge came to the findings that notwithstanding the preliminary decree or the final decree passed in the previous suit, being Suit No. 3 of 1947, the mortgagors ' right of redemption remained alive and was not extinguished and that, accordingly, the respondents were entitled to redeem the mortgages.
The plea of protected tenancy, as raised by the appellants, was negatived by the learned Joint Civil Judge.
On the above findings, the learned Joint Civil Judge held that the respondents were entitled to redeem the mortgages on payment of a sum of Rs.13,551 and odd including interest to the appellants.
In arriving at the amount, he applied the rule of Damdupat in calculating the interest on the principal amount up to the date of the suit.
A usual preliminary decree for redemption was passed by the learned Joint Civil Judge under Order XXXIV, Rule 7 of the Code of Civil Procedure declaring the aforesaid amount as being due from the respondents to the appellants under both the mortgage bonds up to the date of the suit and a period of six months was granted to pay the aforesaid amount and costs of the suit and future interest on the aforesaid amount @ 6% per annum from the date of the suit till realisation.
It was further directed that on payment of the amount in court, the appellants would deliver actual possession of the mortgaged property to the respondents and that in default of payment as aforesaid, liberty was given to the appellants to apply to the court for a final decree for foreclosure.
Being aggrieved by the judgment and decree of the learned Joint Civil Judge, the appellants preferred an appeal to the High Court.
At the hearing of the appeal, it was contended by the appellants that the second suit for redemption was not maintainable; that the rule of Damdupat was not applicable to mortgages and that the appellants had become protected tenants by virtue of the Bombay Tenancy and Agricultural Lands Act.
It was held by the High Court that in spite of the fact that in the earlier suit a preliminary decree and a final decree were passed and the mortgagors did not redeem the mortgages by depositing the decretal dues, still the right of redemption was not extinguished.
As to the applicability of the rule of Damdupat to mortgages, the High Court took the view that the learned Joint Civil Judge was justified in applying the rule following certain decisions of the Calcutta, Bombay and Nagpur High Courts, which will be referred to presently.
Regarding the plea of the appellants that they had become 695 protected tenants under the Bombay Tenancy and Agricultural Lands Act, it was held that as the plea was raised by the appellants Nos. 3, 4 and 5, the amount of land which happened to be in possession of the said appellants Nos. 3, 4 and 5, would be referred to the Mamlatdar and excepting such land the learned Joint Civil Judge was right in decreeing delivery of actual possession of the rest of the land in suit in favour of the respondents.
Subject to this modification, the High Court affirmed the decree of the learned Joint Civil Judge and dismissed the appeal with costs.
Hence this appeal by special leave.
In this appeal, the appellants have challenged the findings of the High Court as to the maintainability of the second suit for redemption out of which this appeal arises and the applicability of the rule of Damdupat.
The finding and direction of the High Court in respect of the plea of the appellants that they had become protected tenants under the Bombay Tenancy and Agricultural Lands Act have not been challenged before us.
Mr. Krishnamurthy, learned Counsel appearing on behalf of the appellants, has urged that in view of the fact that a preliminary decree and a final decree were passed in the earlier suit in accordance with the provisions of Order XXXIV, Rules 7 and 8 of the Code of Civil Procedure, the present suit for redemption of the selfsame mortgages, out of which this appeal arises, is not maintainable.
It is submitted by him that after a preliminary and a final decree for redemption are passed in accordance with the provisions of Order XXXIV, Rules 7 and 8 of the Code of Civil Procedure, the mortgage debt merges in the decretal debt and the right of redemption is extinguished.
In support of his contention, the learned Counsel has placed much reliance upon a decision of the Patna High Court in Sheo Narain Sah vs Mt. Deolochan Kuer, AIR 1948 Patna 208.
In that case, the appellant had purchased a share in the equity of redemption and one of the questions was whether the right of partial redemption acquired by the appellants would survive under Order XXXIV, Rule 5 of the Code of Civil Procedure until confirmation of the same in the execution proceedings.
In that context, it was observed that the mortgage debt had merged in the decretal debt and after the passing of the final decree for sale neither the right of total redemption nor the right of partial redemption, conferred on the mortgagor by section 60 of the Transfer of Property Act, survived the final decree for sale; all that remained thereafter was a different right of redemption conferred by Order XXXIV, Rule 5.
The observation regarding the merger of the mortgage debt in the decretal debt is, in our opinion, to some extent obiter.
696 Section 60 of the Transfer of Property Act confers a right of redemption on the mortgagor.
The proviso to section 60 reads as follows: "Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court.
" It is thus manifestly clear that the right of redemption will be extinguished (1) by the act of the parties or (2) by the decree of a Court.
We are not concerned with the question of extinguishment of the right of redemption by the act of the parties.
The question is whether by the preliminary decree or final decree passed in the earlier suit, the right of the respondents to redeem the mortgages has been extinguished.
The decree that is referred to in the proviso to section 60 of the Transfer of Property Act is a final decree in a suit for foreclosure, as provided in sub rule (2) of Rule 3 of Order XXXIV and a final decree in a redemption suit as provided in Order XXXIV, Rule 8(3)(a) of the Code of Civil Procedure.
Sub rule (2) of Rule 3, inter alia, provides that where payment in accordance with sub rule (1) has not been made, the court shall, on an application made by the plaintiff in this behalf, pass a final decree declaring that the defendant and all persons claiming through or under him are debarred from all right to redeem the mortgaged property and also, if necessary, ordering the defendant to put the plaintiff in possession of the property.
Thus, in a final decree in a suit for foreclosure, on the failure of the defendant to pay all amounts due, the extinguishment of the right of redemption has to be specifically declared.
Again, in a final decree in a suit for redemption of mortgage by conditional sale or for redemption of an anomalous mortgage, the extinguishment of the right of redemption has to be specifically declared, as provided in clause (a) of sub rule (3) of Rule 8 of Order XXXIV of the Code of Civil Procedure.
These are the two circumstances (1) a final decree in a suit for foreclosure under Order XXXIV, Rule 3(2); and (2) a final decree in a suit for redemption under Order XXXIV, Rule 8(3)(a) of the Code of Civil Procedure when the right of redemption is extinguished.
In the instant case, the earlier suit was not a suit for foreclosure nor was either of the mortgages, a mortgage by conditional sale or an anomalous mortgage and, accordingly, there was no declaration in the final decree passed in the earlier suit for redemption that the respondents would be debarred from all right to redeem the mortgaged property.
Rule 5(1) of Order XXXIV expressly recognised the right of the 697 mortgagor to redeem the mortgage at any time before the confirmation of a sale made in pursuance of a final decree passed in a suit for sale.
Similarly, Rule 8(1) of Order XXXIV permits the mortgagor to redeem the mortgaged property before the confirmation of the sale held in pursuance of a final decree in a redemption suit, unless such final decree debars the mortgagor from all right to redeem the mortgaged property which, as noticed earlier, is provided for in sub rule (3)(a) of Rule 8 of Order XXXIV relating to a mortgage by conditional sale or an anomalous mortgage.
Thus, the provisions of Order XXXIV have laid down in clear terms the circumstances when the right of redemption of the mortgagor would stand extinguished.
It is also clear that in a suit for redemption, a mortgage other than a mortgage by conditional sale or an anomalous mortgage, the mortgagor has a right of redemption even after the sale has taken place pursuant to the final decree, but before the confirmation of such sale.
In view of these provisions, the question of merger of mortgage debt in the decretal debt does not at all arise.
We are, therefore, of the view that the decision in Sheo Narain 's case (supra), in so far as it lays down the merger of the mortgage debt in the decretal debt and the consequent extinguishment of the right of redemption of the mortgagor after the passing of the final decree in a suit for redemption, is erroneous.
In this connection, we may refer to a decision of the Privy Council in Raghunath Singh vs Mt. Hansraj Kunwar, AIR 1934 PC 205 where it has been held by their Lordships that the right to redeem is a right conferred upon the mortgagor by enactment, of which he can only be deprived by means and in manner enacted for that purpose, and strictly complied with.
It is manifestly clear from the said observation that the right of redemption will stand extinguished only under the circumstances as mentioned in the proviso to section 60 of the Transfer of Property Act, that is to say, (1) by the act of party or (2) by a decree of Court.
We have already discussed above the circumstances when by a decree of Court the right of redemption is extinguished.
The Federal Court had also occasion to consider whether a second suit for redemption was barred.
Kania, C.J. speaking for the Court observed as follows: "The right of redemption is an instance of a subsisting mortgage and it subsists so long as the mortgage itself subsists.
As held by the Privy Council in Raghunath Singh 's case, 61 IA 362 the right of redemption can be extinguished as provided in section 60, T.P. Act, and when it is alleged to 698 have been extinguished by a decree, the decree should run strictly in accordance with the form prescribed for the purpose.
Unless the equity of redemption is so extinguished, a second suit for redemption by the mortgagor, if filed within the period of limitation, is not therefore barred.
" Therefore, the contention made on behalf of the appellants that as a final decree was passed in the earlier redemption suit, there was a merger of the mortgage debt in the decretal debt and, as such, the second suit for redemption is barred, is without any substance and is rejected.
We may now consider the second question as to whether the rule of Damdupat is applicable to a mortgage transaction.
Admittedly, it is an equitable rule debarring the creditor to recover at any given time the amount of interest which is in excess of the principal amount due at that time.
It is urged by the learned Counsel appearing on behalf of the appellants that the rule is applicable only to a simple loan transaction and not to a transaction of mortgage.
We are unable to appreciate this contention.
In every mortgage there are two aspects, namely (i) loan and (2) transfer of interest in immovable property.
As mortgage is principally a loan transaction, we do not find any reason why the rule of Damdupat which is an equitable rule should not apply also to mortgage.
It has, however, been held in Madhwa Sighanta Onahini Nidhi vs Venkataramanjulu Naidu, ILR 26 Madras 662 that the rule of Damdupat is inapplicable to cases of mortgage governed by the Transfer of Property Act.
The principal reason for the decision is that in section 2 of the Transfer of Property Act, before it was amended by the Amending Act 20 of 1929, it was provided "and nothing in the second chapter of this Act shall be deemed to affect any rule of Hindu law.
" It was inferred that as the rules of Hindu law were saved only with regard to transfer of property as contained in the Second Chapter, it was not saved with regard to the mortgages of immovable property and charges as contained in Chapter IV of the Transfer of Property Act.
A contrary view was expressed by the Bombay High Court in Jeewanbai vs Monordas Lachmondas, ILR In that case, it has been held that it is not proper to infer that because it has been expressly enacted that nothing in Chapter II of the Transfer of 699 Property Act shall be deemed to affect any rule of Hindu law, the Legislature has deprived a Hindu mortgagor of the protection afforded to him by the rule of Damdupat.
The Calcutta High Court in Kunja Lal Banerji vs Narasamba Debi, ILR has refused to follow the decision in Madhwa Sidhanta 's case (supra), clearly pointing out that in that High Court the uniform rule has been to disallow as between Hindus ' interest larger that the amount of principal in making up a mortgage account.
In Bapurao vs Anant Kashinath, AIR 1946 Nagpur 210, a Division Bench of the Nagpur High Court has held that the rule of Damdupat is applicable to a mortgage, and that it does not in any way affect the provisions of the Transfer of Property Act inasmuch as it merely prevents recovery of interest on the loan in excess of the principal.
Admittedly, the rule of Damdupat was never applicable to Madras.
It has been already noticed that in Madhwa Sidhanta 's case (supra), the principal reason to hold that the rule was inapplicable to mortgages governed by the Transfer of Property Act was that in view of section 2 of the Transfer of Property Act, before it was amended by Act 20 of 1929, the rules of Hindu law were not saved with regard to mortgages of immovable properties and charges as contained in Chapter IV of the Act.
By the Amending Act 20 of 1929, section 2 has been amended and after such amendment it reads "and nothing in the second chapter of this Act shall be deemed to affect any rule of Muhammadan law.
" The inference that was drawn in Madhwa Sidhanta 's case (supra), from the provision of section 2 about the non applicability of the rules of Hindu law including the rule of Damdupat to mortgages cannot now be drawn from the amended provision with regard to any rule of Hindu law.
Moreover, we are of the view that the law was not correctly laid down in Madhwa Sidhanta 's case (supra), and the Calcutta, Bombay and Nagpur High Courts have rightly held in the decisions mentioned above that the rule of Damdupat is applicable to mortgages.
No other point has been urged on behalf of the appellants.
For the reasons aforesaid, the judgment and decree of the High Court are affirmed and this appeal is dismissed with costs quantified at Rs.3,000.
S.L. Appeal dismissed.

dataset_name: IN-Abs

summary:
A suit for redemption of two mortgages was filed in the Court of Subordinate Judge by the respondents, the successors in interest of the original mortgages.
A preliminary decree for redemption was passed with a declaration of the amount due from the mortgagors to the mortgagee.
The mortgagors were directed to pay the amount within six months to get the property redeemed, failing which the mortgagee could apply for a final decree for sale.
On failure of the mortgagors to make the payment, a final decree for sale was passed.
Although the final decree for sale of the mortgaged property had been passed, the mortgagee did not execute the decree which became time barred.
The mortgagee and after him his heirs and legal representatives, however, continued to be in possession of the mortgaged property.
The respondents filed a second suit for redemption of the mortgages in the Court of the Joint Civil Judge against the appellants the heirs and legal representatives of the original mortgagee.
The Joint Civil Judge came to the findings that notwithstanding the preliminary decree or final decree passed in the previous suit, the mortgagors ' right of redemption was not extinguished and the respondents were entitled to redeem the mortgages.
The plea of protected tenancy of the appellants was negatived by the Judge.
The Joint Civil Judge held that the respondents were entitled to redeem the mortgages on payment to the appellants of a sum including interest calculated by application of the rule of Damdupat, and a preliminary decree for redemption was passed under Order XXXIV, rule 7 of the Code of Civil Procedure in respect of both the mortgages, with directions regarding payment of the amount and delivery of actual possession of the mortgaged property, etc to the respondents as also for a final decree for foreclosure in case of default of payment, etc.
690 Aggrieved by the judgment of the Joint Civil Judge, the appellants preferred an appeal to the High Court.
The High Court dismissed the appeal with a modification.
Aggrieved by the decision of High Court appellants appealed to this Court for relief by Special leave.
The appellants challenged the findings of the High Court as to the maintainability of the second suit for redemption out of which this appeal arose and the applicability of the rule of Damdupat.
Dismissing the appeal, the Court, ^ HELD: Sec.
60 of the Transfer of Property Act confers a right of redemption on the mortgagor.
The right of redemption will be extinguished (1) by the act of the parties or (2) by the decree of a Court.
The Court was concerned in this case with the question whether by the preliminary decree or final decree passed in the earlier suit, the right of the respondents to redeem the mortgages had been extinguished.
The decree referred to in the proviso to section 60 of the Transfer of Property Act is a final decree in a suit for foreclosure, as provided in sub rule (2) of Rule 3 of Order XXXIV and a final decree in a redemption suit as provided in Order XXXIV, Rule 8(3)(a) of the Code of Civil Procedure.
Sub rule (2) of rule 3 inter alia provides that where payment in accordance with Sub rule (1) has not been made, the Court shall on an application made by the plaintiff in this behalf, pass a final decree declaring that the defendant and all persons claiming through or under him are debarred from all right to redeem the mortgaged property and also, if necessary, ordering the defendant to put the plaintiff in possession of the property.
Thus, in a final decree in a suit for foreclosure on the failure of the defendant to pay all amounts due, the extinguishment of the right of redemption has to be specifically declared.
Again, in a final decree in a suit for redemption of mortgage by conditional sale or for redemption of an anomalous mortgage, the extinguishment of the right of redemption has to be specifically declared, as provided in clause (a) of sub rule (3) of Rule 8 of Order XXXIV of the Code of Civil Procedure.
These are the two circumstances (1) a final decree in a suit for foreclosure under Order XXXIV Rule 3(2) and (2) a final decree in a suit for redemption under Order XXXIV, Rule 8(3)(a) of the Code of Civil Procedure when the right of redemption is extinguished.
[696A G] In this case, the earlier suit was not a suit for foreclosure nor was either of the mortgages a mortgage by conditional sale or an anomalous mortgage and, accordingly, there was no declaration in the final decree 691 passed in the earlier suit for redemption that the respondents would be debarred from all right to redeem the mortgaged property.
In a suit for redemption, a mortgage other than a mortgage by conditional sale or an anomalous mortgage, the mortgagor has a right of redemption even after the sale has taken place pursuant to the final decree but before the confirmation of such sale.
In view of the provisions of Order XXXIV, the question of merger of mortgage debt in the decretal debt does not arise at all.
The decision of the Patna High Court in Sheo Narain Sah vs Mt. Deolochan Kuer, AIR 1948 Patna 208, relied upon by the appellants, is erroneous in so far as it laid down the merger of the mortgage debt in the decreta debt and the consequent extinguishment of the right of redemption of the mortgagor after the passing of the final decree in a suit for redemption.
The right of redemption will stand extinguished only under the circumstances mentioned in the proviso to section 60 of the Transfer of Property Act, that is, (1) by the Act of party of (2) by a decree of Court, as aforementioned.
The contention of the appellants that as a final decree was passed in the earlier redemption suit, there was a merger of the mortgage debt in the decretal debt and as such the second suit for redemption was barred, was without any substance.
[696G H;697A D] The appellants contended that the rule of Damdupat was applicable only to a simple loan transaction and not a transaction of mortgage.
The Court could not appreciate this contention.
[698D] It is an equitable rule debarring the creditor to recover at any given time the amount of interest which is in excess of the principal amount due at that time.
In every mortgage, there are two aspects, namely, (1) loan and (2) transfer of interest in immovable property.
As mortgage is principally a loan transaction there is no reason why the rule of Damdupat, which is an equitable rule should not apply also to a mortgage.
On the application of the rule of Damdupat, law was not correctly laid down in Madhwas Sidhanta Onahini Nidhi vs Venkataramanjulu Naidu, ILR 26 Madras 662.
The decisions in Kunja Lal Banerji vs Narsamba Debi, ILR ; Jeewan Bai vs Monordas Lachmondas, ILR and Bapurao vs Anant Kashinath, AIR 1946 Nagpur 210, rightly held that the rule of Damdupat is applicable to mortgages.
[698C E;699F G] The Judgment and decree of the High Court were affirmed.
[699G] Raghunath Singh vs Mt. Hansraj Kunwar, AIR 1934 P.C. 205 referred to.
692 Madhwa Sidhanta Onahini Nidhi vs Venkataramanjulu Naidu, I.L.R. 26 Madras 662, disapproved.
Sheo Narain Sah vs Mt. Deolochan Kuer, A.I.R. 1948 Patna 208, held erroneous on the question of merger of the mortgage debt in decretal debt and the consequent extinguishment of the right of redemption of mortgagor after the final decree.
[697D] Kunja Lal Banerji vs Narsamba Debi, I.L.R. ; Jeewanbai vs Monordas Lachmondas, I.L.R. and Baburao vs Anant Kashinath, A.I.R. 1946 Nagpur 210, approved.


judgement:
ition (Civil) No. 305 of 1988.
(Under Article 32 of the Constitution of India).
Soli J. Sorabjee, Harish, N. Salve, Vasant Mehta, Atul Tewari and Miss Bina Gupta for the Petitioners.
Satish Chandra, Anil B. Divan, Dr. Y.S. Chitale, P.V. Kapur, Anil Kumar Sharma, P.P. Malhotra, Naresh Sharma, (Solicitor General) T.V.S.N.
Chari, Badri Nath, Ms. V. Grover, (Attorney General), A. Subba Rao, Miss A. Subhashini, K.J. John, section Swarup and Miss Naina Kapur for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
By the order passed by us on 741 29th March, 1988, we had dismissed this petition under Article 32 of the Constitution.
We had, further, observed that we will indicate our reasons by a separate judgment.
We do so herein.
This petition under Article 32 of the Constitution challenges the constitutional validity of the Swadeshi Cotton Mills Limited (Acquisition and Transfer of Undertakings) Act, 1986 (hereinafter called 'the Act ').
It appears that there was an order made by the Central Government under Section 18AA(1)(a) of the Industries (Development & Regulation) Act, 1951 (hereinafter called 'the IDR Act ') for taking over the management of the six undertakings of Swadeshi Cotton Mills, namely, (i) Swadeshi Cotton Mills, Kanpur, (ii) Swadeshi Cotton Mills, Pondicherry, (iii) Swadeshi Cotton Mills, Naini, (iv) Swadeshi Cotton Mills, Maunath Bhanjan, (v) Udaipur Cotton Mills, Udaipur and (vi) Rae Bareli Textile Mills, Rae Bareli for a period of five years.
There were several proceedings in the High Court of Delhi and in other High Courts.
It is not necessary in view of the judgment of this Court in SLP (Civil) Nos.
4826 & 7045 of 1987, M/s. Doypack Systems Pvt. Ltd. vs Union of India and others, dated 12th February, 1988 to set out in extenso all these facts.
By the aforesaid judgment it was held that the 10,00,000 shares in Swadeshi Polytex Limited and 17,18,344 shares in Swadeshi Mining and Manufacturing Company Limited held by the Swadeshi Cotton Mills vested in the Central Government and National Textile Corporation (hereinafter called 'NTC '), under sections 3 and 4 of the Act.
It was further held that in view of the amplitude of the language used, the immovable properties, namely, the Bungalow No. 1 and the Administrative Block, Civil Lines, Kanpur had also vested in N.T.C. Directions were given by this Court in the said judgment to enter the name of the NTC in its register of members of the said Companies and to treat the NTC as their shareholder instead of other erstwhile shareholders.
This petition under Article 32 of the Constitution has been filed by the petitioners who claim to be shareholders of respondent No. 4, Swadeshi Cotton Mills Company Limited as they have an interest in the business, affairs and properties of the Swadeshi Cotton Mills Company Limited and Swadeshi Mining and Manufacturing Company Limited.
It was contended that the effect of the aforesaid decision was to take away valuable assets of respondent No. 4, namely, Swadeshi Cotton Mills Limited without paying any compensation whatsoever therefore and further it imposed upon respondent No. 4 liabilities without any corresponding assets available to discharge the liabilities.
It was the contention in this writ petition that the said acquisition 742 virtually amounted to confiscation of the shares of respondent No. 5 and respondent No. 6 held by respondent No. 4 and substantially damaged the rights of the shareholders of respondent No. 4.
In the premises, it was submitted that they have the locus to challenge the vires and constitutional validity of sections 3 and 4 of the said Act in so far as these seek to divest respondent No. 4 of the shares in respondent No. 5 and respondent No. 6 and certain other excluded assets.
It was submitted that so far as the said Act provided for the vesting of shares held by respondent No. 4 in respect of respondent Nos. 5 and 6 it constituted a fraud on legislative power.
It was submitted that there was no public purpose in such acquisition.
It is taxation and appropriation and not nationalisation.
It was further urged that it was contrary to the preamble to the Act because according to the preamble it was to ensure continuance of the manufacture, production and distribution of different varieties of cloth and yarn which were vital to the needs of the country.
The industrial undertaking of respondent No. 5 produces sugar.
The industrial undertaking of respondent No. 6 produces synthetic fibre.
Therefore, both these companies or undertakings are producing neither cloth nor yarn.
Therefore, it was submitted that in any event, the stated public purpose has no nexus with the acquisition of shares of respondent No. 5 and respondent No. 6 and as such, the acquisition of the shares of respondent Nos. 5 and 6 is without there being any public purpose.
It was submitted that if the Act was so read then it was violative of Article 14 and Article 19(1)(g) of the Constitution.
It was submitted that the acquisition must be for a public purpose and there must be some compensation paid for that acquisition.
It was submitted that implicit in the concept of acquisition which is akin to the power of eminent domain is the concept of payment of compensation.
It was urged that after the legislative change made by the Constitution (Seventh Amendment) Act, 1956, the power of the State as well as of the Union to enact any law governing acquisition of property must necessarily be governed by the provisions of Entry 42 in List III of the Seventh Schedule to the Constitution.
After the amendment, there was no specific Entry in List III which empowered the Union or the States to enact law for payment of compensation, so it is now implicit in the concept of acquisition and requisition of property.
It was further urged that under Article 300 A of the Constitution, no person could be deprived of his property save by the authority of law.
It was further submitted that the law contemplated by this Article was obviously a law providing for acquisition of property and, therefore, it was inter linked with Entry 42 of List III of the Seventh Schedule to the Constitution.
All these contentions, in our opinion, are not tenable because all these contentions were directly or indirectly dealt with in 743 the aforesaid judgment.
The preamble to the Act provides as follows: "An Act to provide for the acquisition and transfer of certain textile undertakings of the Swadeshi Cotton Mills Co. Ltd., with a view to securing the proper management of such undertakings so as to sub serve the interests of the general public by ensuring the continued manufacture, production and distribution of different varieties of cloth and yarn and thereby to give effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Constitution and for matters connected therewith or incidental thereto.
WHEREAS the Swadeshi Cotton Mills Co. Ltd. has, through its six textile undertakings, been engaged in the manufacture and production of different varieties of cloth and yarn; AND WHEREAS the management of the said textile undertakings was taken over by the Central Government under section 18AA of the Industries (Development and Regulation) Act, 1951; AND WHEREAS large sums of money have been invested with a view to making the said textile undertakings viable; AND WHEREAS further investment of very large sums of money is necessary for the purpose of securing the optimum utilisation of the available facilities for the manufacture, production and distribution of cloth and yarn by the said textile undertakings of the Company; AND WHEREAS such investment is also necessary for securing the continued employment of the workmen employed in the said textile undertakings; AND WHEREAS it is necessary in the public interest to acquire the said textile undertakings of the Swadeshi Cotton Mills Company Ltd. to ensure that the interests of the general public are served by the continuance by the said undertakings of the Company of the manufacture, production and distribution of different varieties of cloth and yarn which are vital to the needs of the country; 744 AND WHEREAS such acquisition is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Constitution.
It is not correct that no public purpose was served by acquisition.
The reason for the taking over had been canvassed and discussed in the aforesaid judgment.
It was observed in the aforesaid judgment as follows: "It appears to us that sections 3 and 4 of the Act evolve a legislative policy and set out the parameters within which it has to be implemented.
We cannot find that there was any special intention to exclude the shares in this case as seen from the existence of at least four other Acquisition Acts which used identical phraseology in sections 3 and 4 and in other sections as well.
Reference was made to the Aluminium Corporation of India Limited (Acquisition and Transfer of Aluminium Undertakings) Act, 1984, the Amritsar Oil Works (Acquisition and Transfer of Undertakings) Act, 1982, the Britannia Engineering Company Limited (Mohameh Unit) and the Arthur Butler and Company (Muzaffarpore) Limited (Acquisition and Transfer of Undertakings) Act, 1978 and the Ganesh Flour Mills Company Limited (Acquisition and Transfer of Under takings) Act, 1984.
In the present case we are satisfied that the shares in question were held and utilised for the benefit of the undertakings for the reasons that (a) the shares in Swadeshi Polytex Limited were acquired from the income of the Kanpur Unit.
Reference may be made to page 23 of Compilation D III, (b) the shares held in Swadeshi Mining and Manufacturing Company were acquired in 1955.
Originally there were four companies and their acquisition has been explained fully in the Compilation D III with index, (c) the shares held in SPL were pledged or attached for running the Kanpur undertakings, for payment of ESI and Provident Fund dues for the workers of the Kanpur undertaking, for wages and payment of electricity dues of the Kanpur undertaking, (d) the shares held in SMMC were pledged for raising monies and loans of Rs.150 lakhs from the Punjab National Bank for running the Kanpur undertaking.
745 These loans fall in category II of Part I of the Schedule which liabilities have been taken over by the Government, (e) the shares held in SPL were offered for sale by SCM from time to time and to utilise the sale proceeds thereof by ploughing them back into the textile business for reviving the textile undertakings acquired under the Act.
It appears to us that the expression "forming part of" appearing in section 27 cannot be so read with section 4(1) as would have the effect of restricting or cutting down the scope and ambit of the vesting provisions in section 3(1).
The expression "pertaining to" does not mean "forming part of".
Even assuming that the expression "pertaining to" appearing in the first limb of section 4(1) means "forming part of", it would mean only such assets which have a direct nexus with the textile mills as would fall under the first limb of section 4(1).
The shares in question would still vest in the Central Government under the second limb of section 4(1) of the Act since the shares were bought out of the income of the textile mills and were held by the company in relation to such mills.
The shares would also fall in the second limb of section 3(1) being right and title of the company in relation to the textile mills.
On the construction of sections 3 and 4 we have come to the conclusion that the shares vest in the Central Government even if we read sections 3 and 4 in conjunction with sections 7 and 8 of the Act on the well settled principles which we have reiterated before.
The expression 'in relation to ' has been interpreted to be the words of widest amplitude.
See National Textile Corporation Ltd. and others vs Sitaram Mills Ltd. (supra).
Section 4 appears to us to be an expanding section.
It introduces a deeming provision.
Deeming provision is intended to enlarge the meaning of a particular word or to include matters which otherwise may or may not fall within the main provisions.
It is well settled that the word 'includes ' is an inclusive definition and expands the meaning.
See: The Corporation of the City of Nagpur vs Its Employees, ; and Vasudev Ramchandra Shelat vs Pranlal Jayanand Thakar and others, [1975] 1 S.C.R. 534.
The words 'all other rights and interests ' are words of widest amplitude.
Section 4 also uses the words "ownership, possession, 746 power or control of the Company in relation to the said undertakings".
The words 'pertaining to ' are not restrictive as mentioned hereinbefore.
" It was further held that section 8 provides for payment of compensation in lumpsum and the transfer and vesting of whatever is comprised in section 3.
The compensation provided in section 8 is not calculated as a total of the value of various individual assets.
It is a lumpsum compensation.
It was observed in the said judgment as follows: "Section 8 provides for payment of compensation is lumpsum and the transfer and vesting of whatever is comprised in section 3.
As section 4 expands the scope of section 3, the compensation mentioned in section 8 is for the property mentioned in section 3 read with section 4.
The compensation provided in section 8 is not calculated as a total of the value of various individual assets in the Act.
It is a lumpsum compensation.
See in the connection the principles enunciated by this Court in Khajamian Wakf Estates etc.
vs State of Madras and another, (supra).
There, it was held that even if it was assumed that no compensation was provided for particular item, the acquisition of the 'inam ' is valid.
In: the instant case section 8 provides for compensation to be paid to the undertakings as a whole and not separately for each of the interests of the company.
Therefore, it cannot be said that no compensation was provided for the acquisition of the undertaking as a whole.
" Therefore, it is incorrect to state that there was no compensation for taking over of the shares and the reasons for providing no separate compensation have been explained in the aforesaid judgment as follows: "Section 7 of the Act, in our opinion, neither controls sections 3 and 4 of the Act nor creates any ambiguity.
It was highlighted before us and in our opinion rightly that this sum of Rs.24.32 crores paid by way of compensation comes out of the public exchequer.
The paid up shares in its equity capital can necessarily have a face value only of the amounts so paid, irrespective of whatever may be contended to be the value of the assets and irrespective of whether any asset or property in relation to the undertak 747 ings, was taken into account.
After providing for compensation of Rs.24.32 crores to be paid to the Commissioner for payment to discharge Part I liabilities, Government has to undertake an additional 15 crores at least for discharging these liabilities.
To leave a company, the net wealth of which is negative at the time of take over of the management, with the shares held by it as investment in other company, in our opinion, is not only to defeat the principles of Article 39(b) and (c) of the Constitution but it will permit the company to reap the fruits of its mismanagement.
That would be an absurd situation.
It has to be borne in mind that the net wealth of the company at the time of take over, was negative, hence sections 3 and 4 can be meaningfully read if all the assets including the shares are considered to be taken over by the acquisition.
That is the only irresistible conclusion that follows from the construction of the documents and the history of this Act.
We have to bear in mind the Preamble of the Act which expressly recites that it was to ensure the principles enunciated in clauses (b) and (c) of Article 39 of the Constitution.
The Act must be so read that it further ensures such meaning and secures the ownership and control of the material resources to the community to subserve the common good to see that the operation of the economic system does not result in injustice.
We therefore, reiterate that the shares vested in the Central Government.
Accordingly the shares in question are vested in NTC and it has right over the said 34 per cent of the shareholdings.
" It was found by the said judgment that the net wealth of the company was negative and therefore, sections 3 and 4 could be meaningfully read if all the assets including the shares were considered to be taken over by the acquisition.
That was the only irresistible conclusion that followed from the construction of the documents and the history of the Act.
The Act in question was passed to ensure the principles enunciated in clauses (b) and (c) of Article 39 of the Constitution.
In that context, it was held that to leave a company, the net wealth of which was negative at the time of take over of the management with the shares hold by it as investment in other company, was not only to defeat the principles of Article 39(b) and (c) of the Constitution but it would permit the company to reap the fruits of its mismanagement.
748 That would be an absurd situation.
In this context, in our opinion, the contentions now sought to be urged are no longer open to the petitioners.
Shri Sorabjee drew our attention to the observations of this Court in The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and others, He relied on the observations of Mahajan, J., as the learned Chief Justice then was at page 929 of the report.
He said: "Shorn of all its incidents, the simple definition of the power to acquire compulsorily or of the term 'eminent domain ' is the power of the sovereign to take property for public use without the owner 's consent.
The meaning of the power in its irreducible terms is, (a) power to take, (b) without the owner 's consent, (c) for the public use.
The concept of the public use has been inextricably related to an appropriate exercise of the power and is considered essential in any statement of its meaning.
Payment of compensation, though not an essential ingredient of the connotation of the term, is an essential element of the valid exercise of such power.
Courts have defined 'eminent domain ' so as to include this universal limitation as an essential constituent of its meaning.
Authority is universal in support of the amplified definition of 'eminent domain ' as the power of the sovereign to take property for public use without the owner 's consent upon making just compensation.
It is clear, therefore, that the obligation for payment of just compensation is a necessary incident of the power of compulsory acquisition of property, both under the doctrine of the English Common Law as well as under the continental doctrine of eminent domain, subsequently adopted in America." He also drew our attention to the observations of Mahajan, J. at pages 934 and 935 to the effect that the existence of a "public purpose" is undoubtedly an implied condition of the exercise of compulsory power of acquisition by the State, but the language of Article 31(2) of the Constitution does not expressly make it a condition precedent to acquisition.
It assumes that compulsory acquisition can be for a "public purpose" only, which is thus inherent in such acquisition.
It 749 was further observed at page 935 of the report that public purpose is an essential ingredient in the very definition of the expression "eminent domain" as given by Nichers and other constitutional writers, even though obligation to pay compensation is not a content of the definition but has been added to it by judicial interpretation.
The exercise of the power to acquire compulsorily is conditional on the existence of a public purpose and that being so, this condition is not an express provision of Article 31(2) but exists aliunde in the content of the power itself and that in fact is the assumption upon which this clause of the Article proceeds.
Our attention was drawn by Shri Sorabjee to the observations of Chandrasekhara Aiyar, J. at pages 1008 and 1009 of the aforesaid report, where the learned Judge observed as follows: "The payment of compensation is an essential element of the valid exercise of the power to take.
In the leading case of Attorney General vs De Keyser 's Royal Hotel Ltd.; , Lord Dunedin spoke of the payment of compensation as a necessary concomitant to the taking of property.
Bowen L.J. said in London and North Western Ry.
Co. vs Evans, & 18: The Legislature cannot fairly be supposed to intend, in the absence of clear words showing such intention, that one man 's property shall be confiscated for the benefit of others, or of the public, without any compensation being provided for him in respect of what is taken compulsorily from him.
Parliament in its omnipotence can, of course, override or disregard this ordinary principle . if it sees fit to do so, but it is not likely that it will be found disregarding it, without plain expressions of such a purpose.
" The learned Judge further observed that this principle is embodied in Article 31(2) of the Constitution.
Our attention was also drawn by Shri Sorabjee to the observations of Chandrasekhara Aiyar J. at pages 1018 and 1019 of the report.
Reliance was also placed on the observations of this Court in State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 where Sinha, CJ at pages 433 and 434 of the report observed as follows: "In Kavalappara Kottarathil Kochuni vs State of Madras, 750 it was held that cls.
(1) and (2) of Article 31 as amended grant a limited protection against the exercise of different powers.
By cl.
(2) of Article 31 property is protected against compulsory acquisition or requisition.
The clause grants protection in terms of widest amplitude against compulsory acquisition or requisition of property, and there is nothing in the Article which indicates that the property protected is to be of individuals or corporations.
Even the expression 'person ' which is used in cl.
(1) is not used in cls.
(2) and (2A), and the context does not warrant the interpretation that the protection is not to be available against acquisition of State property.
Any other construction would mean that properties of municipalities or other local authorities which would admittedly fall within the definition of State in Part III either cannot be acquired at all or if acquired may be taken without payment of compensation.
Entry 42 in List III and cl.
(2) of Article 31, operate in the same field of legislation; the former enunciates the content of legislative power, and the latter restraints upon the exercise of that power.
For ascertaining whether an impugned piece of legislation in relation to acquisition or requisition of property is within legislative competence, the two provisions must be read together.
The two provisions being parts of a single legislative pattern relating to the exercise of the right which may for the sake of convenience be called of eminent domain the expression 'property ' in the two provisions must have the same import in defining the extent of the power and delineating restraints thereon.
In other words Article 31(2) imposes restrictions on the exercise of legislative power under Entry 42 of List III.
Property vested in the State may not therefore be acquired under a statute enacted in exercise of legislative power under Entry 42 unless the Statute complies with the requirements of the relevant clauses of Article 31.
" As mentioned hereinbefore these contentions are not open to the petitioners in the instant case.
It was held by the judgment of this Court in M/s. Doypack Systems Pvt.
Ltd. (supra) that there was a public purpose.
The public purpose was analysed and spelled out from the different provisions of the Act.
Secondly, there was compensation for the acquisition of the property.
Reference may be made to the observations of the said judgment to the following effect: 751 "Shri Nariman referred us to the Statement of Objects and Reasons appended to the Bill and urged that it was not intended that the shares were included in the undertaking.
He submitted that the Statement of Objects and Reasons showed that the acquisition of the undertaking had to be resorted to since the order of taking over the management of the company issued under section 18AA of the IDR Act could not be continued any further.
The preamble to the Act, however, reiterated that the Act provided for the acquisition and transfer of textile undertakings and reiterated only the historical facts that the management of the textile undertakings had been taken over by the Central Government under section 18AA of the IDR Act and further that large sums of money had been invested with a view to making the textile undertakings viable and it was necessary to make further investments and also to acquire the said undertakings in order to ensure that interests of general public are served by the continuance of the undertakings.
The Act was passed to give effect to the principles specified in clauses (b) and (c) of Article 39 of the Constitution.
In our opinion, this was indicative of the fact that shares were intended to be taken over.
" The contention of Shri Nariman that there was no public purpose for acquiring these shares had been noted in the judgment at pages 85 and 86 of the paper book.
It read as follows: "Shri Nariman further submitted that Swadeshi Polytex Limited and Swadeshi Mining and Manufacturing Company Limited were two separate undertakings distinct from the six textile undertakings belonging to Swadeshi Cotton Mills Company Limited.
Acquisition of these shares having controlling interests in the said two companies was never intended and could never be said to be within the scope of the Act.
The expression "in relation to the six textile undertakings" appearing in sections 3 and 4 of the Act, was an expression of limitation, according to him, indicative of the intention of acquiring of only the textile undertakings and no other.
There existed no public purpose, according to Shri Nariman, for acquiring these shares.
The public purposes mentioned in the Act with 752 reference to Article 39(b) and (c) related to the acquisition of only the textile undertakings of Swadeshi Cotton Mills and not acquisition of the synthetic fibre undertakings of Swadeshi Polytex or sugar undertakings of Swadeshi Mining and Manufacturing Company Limited.
" These contentions were dealt with and repelled as mentioned in the passages set out hereibefore.
We reiterate the said reasons.
It has further to be borne in mind that the shares held in the Swadeshi Polytex Limited themselves were the subject matter of both pledge and attachment to secure loans from the U.P. State Government of about Rs.66 lakhs for payment of wages to workers of the Kanpur undertaking and Rs.95 lakhs being electricity dues of the Kanpur undertaking owing to the U.P. State Electricity Board.
From all these, it would appear that the acceptance of the petitioners ' case, would mean that the State would pump in Rs.15 crores of public money to release the shares from its liabilities and thereafter hand over the shares free from such liability back to the company when the net worth of the company at the time of take over of management was negative and in the teeth of the present financial liabilities built up by the company the shares would inevitably have been sold in discharge of its liabilities and in any event the shares stood charged with the very liabilities which related to the undertakings of the company which were taken over by the Government.
Therefore, it is incorrect to say that there was no public purpose for taking over these shares.
It would be absurd to say that there was no compensation paid for the said acquisition.
The relevant observations in the judgment dealing with this contention have been set out hereinbefore.
Learned Attorney General drew our attention to the observations of this Court in Smt.
Somavanti and others vs The State of Punjab and others, where at page 792 of the report, this Court analysed the submissions based on the observations of this Court in State of Bihar vs Maharajadhiraja Sir Kameswarsingh of Darbhanga (supra) that the exercise of power to acquire compulsorily is conditional on the existence of public purpose and that being so this condition is not an express provision of Article 31(2) but exists aliunde in the content of the power itself.
That, however, was not the view of the other learned Judges who constituted the Bench.
According to Mukherjea, J. as the learned Chief Justice then was, the condition of the existenc of a public purpose is implied in Article 31(2).
See the observations in Maharajadhiraja Sir Kameswarsingh 's case at pages 957 and 958.
Das, J. as the learned Chief Justice then was, was 753 also of the same view.
See the observations in the aforesaid decision at pages 986 and 988.
Similarly, Patanjali Sastri C.J. had also taken the view that the existence of public purpose is an express condition of clause (2) of Article 31.
This Court reiterated in Somavanti 's case (supra) at page 792 of the report that the Constitution permitted acquisition by the State of private property only if it is required for a public purpose.
Furthermore, we are of the opinion that the law as declared by this Court in Doypack Systems Pvt.
Ltd. is binding on the petitioners and this question is no longer res integra in view of Article 141 of the Constitution.
See the observations of this Court in M/s. Shenoy and Co. represented by its partner Bele Srinivasa Rao Street, Bangalore and others vs The Commercial Tax Officer, Circle II Bangalore and others; , where this Court observed that the judgment of this Court in Hansa Corporations ' case reported in ; is binding on all concerned whether they were parties to the judgment or not.
This Court further observed that to contend that the conclusion therein applied only to the parties before this Court was to destroy the efficacy and integrity of the judgment and to make the mandate to Article 141 illusory.
In that view of the matter this question is no longer open for agitation by the petitioners.
It is also no longer open to the petitioners to contend that certain points had not been urged and the effect of the judgment cannot be collaterally challenged.
See in this connection the observations of this Court in T. Govindaraja Mudaliar etc.
vs The State of Tamil Nadu and others, [1973] 3 S.C.R. 222 where this Court at pages 229 and 230 of the report observed as follows: "The argument of the appellants is that prior to the decision in Rustom Cavasjee Cooper 's case it was not possible to challenge Chapter IV A of the Act owing to the decision of this Court that article 19(1)(f) could not be invoked when a case fell within article 31 and that was the reason why this Court in all the previous decisions relating to the validity of Chapter IV A proceeded on an examination of the argument whether there was infringement of article 19(1)(g), and clause (f) of that Article could not possibly be invoked.
We are unable to hold that there is much substance in this argument.
Bhanji, Munji and other decisions which followed it were based mainly on an examination of the inter relationship between Article 19(1)(g) and Article 754 31(2).
There is no question of any acquisition or requisition in Chapter IV A of the Act.
The relevant decision for the purpose of these cases was only the one given in Kochuni 's case after which no doubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by article 19(1)(f).
It was, therefore, open to those affected by the provisions of Chapter IV A to have agitated before this Court the question which is being raised now based on the guarantee embodied in article 19(1)(f) which was never done.
It is apparently too late in the day now to pursue this line of argument, in this connection we may refer to the observations of this Court in Mohd. Ayub Khan vs Commissioner of Police Madras & Another, according to which even if certain aspects of a question were not brought to the notice of the court it would decline to enter upon re examination of the question since the decision had been followed in other cases.
In Smt.
Somavanti & others vs The State of Punjab and others, [1963] 2 S.C.R.774 a contention was raised that in none of the decisions the argument advanced in that case that a law may be protected from an attack under Article 31(2) but it would be still open to challenge under Article 19(1)(f), had been examined or considered.
Therefore, the decision of the Court was invited in the light of that argument.
This contention, however, was repelled by the following observations at page 794: "The binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided.
" In view of the preamble to the Act which states and proclaims that the Act was passed to carry out the object of Article 39(b) and (c) of the Constitution and in view of the scheme of the Act as analysed before us and as also apparent from the aforesaid judgment, it is clearly manifest that the Act in question was passed for a public purpose and for the acquisition of shares there was a public purpose.
The acquisition subserved the object of the Act.
The compensation in the manner indicated above and in the manner indicated in the 755 aforesaid judgment for such acquisition have been provided for.
No separate compensation need be provided in the circumstances of the case for these shares.
The factual basis for the legal challenge made in this writ petition was, therefore, incorrect in the facts of this case.
It is apparently too late in the day to contend that there was no compensation for the shares or that the acquisition of the shares amounted to confiscation or there was no public purpose in the Act.
The petition, in our opinion, is wholly devoid of any merit.
For these reasons, this writ petition fails and is accordingly dismissed.
S.L. Petition dismissed.

summary:
This writ petition challenged the constitutional validity of the Swadeshi Cotton Mills Ltd. (Acquisition and Transfer of Undertakings) Act, 1986.
The Central Government had passed an order for taking over the management of six undertakings of the Swadeshi Cotton Mills, in respect whereof there were proceedings in the High Court, and this Court by its judgment dated the 12th February, 1988, in M/s. Doyarpack Systems Pvt. Ltd. vs Union of India & Ors.
SLPs (Civil) Nos. 4826 & 7405 of 1987 had disposed of the matter.
The petitioners, claiming to be shareholders of the respondent No. 4 Swadeshi Cotton Mills Co. Ltd. and to have interest in its business, affairs and properties, filed this writ petition, contending that the effect of the decision of this Court above said was to take away valuable assets of the respondent No. 4, without paying any compensation therefor and to impose on respondent No. 4 liabilities without any corresponding assets available to discharge the liabilities, and further, that the acquisition virtually amounted to confiscation of the shares of respondent No. 5 and respondent No. 6 held by respondent No. 4, and that the rights of the shareholders of the respondent No. 4 were substantially damaged.
The petitioners challenged the vires and constitutional validity of sections 3 and 4 of the Swadeshi Cotton Mills Ltd. (Acquisition and Transfer of Undertakings) Act 1986 ( 'The Act ') in so far as those sought to divest respondent No. 4 of the shares in respondent No. 5 and respondent No. 6 and certain excluded assets, contending that the Act was violative of Articles 14 and 19(1)(g) of the Constitution.
Dismissing the petition, the Court, ^ HELD: The petitioners ' contentions were not tenable because all the contentions had been directly or indirectly dealt with in the judgment of this Court afore said.
It was not correct that no public 739 purpose was served by acquisition.
It was held that section 8 provides for payment of compensation in lumpsum and the transfer and vesting of whatever is comprised in section 3.
It was incorrect to state that there was no compensation for taking over of the shares.
It was found by the said judgment that the net wealth of the company was negative and, therefore, sections 3 and 4 could be meaningfully read if all the assets including the shares were considered to be taken over by the acquisition.
That was the only irresistible conclusion that followed from the construction of the documents and the history of the Act.
The Act in question was passed to ensure the principles enunciated in clauses (b) and (c) of Article 39 of the Constitution.
In that context, it was held that to leave a company, the net wealth of which was negative at the time of take over of the management with the shares held by it as investment in other company, was not only to defeat the principles of Article 39(b) and (c) of the Constitution but it would permit the company to reap the fruits of its mismanagement.
That would be as absurd situation.
In this context, the contentions now sought to be urged were no longer open to the petitioners.
It was held by the judgment of this Court aforementioned that there was a public purpose which was analysed and spelled out from the different provisions of the Act.
There was compensation for the acquisition of the property.
The contentions of the petitioners had been dealt with and repelled by the said judgment of this Court.
The Court reiterated the reasoning of that judgment.
[744B;746B;747F H] The acceptance of the petitioner 's case would mean that the State would pump in Rs.15 crores of public money to release the shares from its liabilities and then hand over the shares free from such liability back to the company when the net worth of the company at the time of take over of management was negative, and in the teeth of the present financial liabilities built up by the company the shares would inevitably have been sold in discharge of its liabilities and in any event the shares stood charged with the very liabilities which related to the undertakings of the company which were taken over by the Government.
Therefore, it was incorrect to say that there was no public purpose for taking over these shares.
It would be absurd to say that there was no compensation paid for the acquisition.
The law as declared by this Court in Doypack Systems Pvt.
Ltd. (supra) is binding on the petitioners and the question was no longer res integra in view of Article 141 of the Constitution.
See the observations of this Court in M/s. Shenoy and Co. represented by its partner Bele Srinivasa Rao Street, Bangalore, and others vs The Commercial Tax Officer, Circle II, Bangalore and Ors., ; [752C E;753B C] 740 In view of the preamble of the Act which states and proclaims that the Act was passed to carry out the object of Article 39(b) and (c) of the Constitution, and in view of the scheme of the Act as analysed before the Court and as apparent from the judgment of this Court aforesaid, it is clearly manifest that the Act was passed for a public purpose, and for the acquisition of shares there was a public purpose.
The acquisition subserved the object of the Act.
Compensation for such acquisition has been provided for.
No separate compensation need be provided for in the circumstances of the case for these shares.
The factual basis for the legal challenge made in this writ petition was incorrect in the facts of this case.
It was too late to contend that there was no compensation for the shares or that the acquisition of the shares amounted to confiscation or there was no public purpose in the Act.
The petition was wholly devoid of any merit.
[754G H; 755A B] M/s.
Doypack Systems Pvt. Ltd. vs Union of India & Ors.
, SLPs (Civil) Nos. 4826 and 7045 of 1987 decided by Supreme Court on 12.2.88; The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Ors., ; ; State of West Bengal vs Union of India, [1964] 1 SCR 371; Smt.
Somvanti & Ors.
vs The State of Punjab and Ors., ; M/s. Shenoy and Co. represented by its partner Bele Srinivasa Rao Street, Bangalore and Ors.
vs The Commercial Tax Officer, Circle II Bangalore and Ors., ; and T. Govindraja Mudalier, etc. etc.
vs The State of Tamil Nadu and Ors., ; , referred to.


judgement:
Civil Appeal No. 3946 of 1987.
349 From the Judgment and Order dated 22.7.1983 of the High Court of Delhi in L.P.A. No. 141 of 1982 (M).
P.N. Misra for the Appellant.
Krishan Kumar and Vimal Dave for the Respondent.
The Judgment of the Court was delivered by OZA, J.
Leave granted.
This appeal arises out of SLP(Civil) No. 14149/83 filed by the petitioner husband against the judgment of High Court of Delhi in Letters Patent Appeal No. 141/82 decided on 22.7.83.
The present appellant husband filed a petition in the trial court for decree of divorce on the ground of cruelty and desertion.
The trial court granted the decree of divorce but on appeal by the respondent wife learned Single Judge of High Court of Delhi reversed the decision and dismissed the petition filed by the appellant husband.
It is against this that a Letters Patent Appeal under clause 10 of the Letters Patent was filed before the High Court wherein it was heard by a Division Bench of the High Court and the appeal filed by the appellant was dismissed.
It is against this that the present special leave petition was filed.
Considering the circumstances of the case and the age of the parties we issued notice and also directed the parties to appear before us in chambers and in spite of our best efforts it is unfortunate that no reconciliation was possible.
It is one of those unfortunate cases where the husband and wife are of mature age not only that but they have a grown up son who is maturing into a lawyer as he is studying in law and unfortunately even these circumstances were not able to bring about an amicable settlement in the matter.
The parties to these proceedings were married at Delhi in accordance with the Hindu customs on February 7, 1961.
It seems that there was disagreement and disharmony from the very beginning.
A male child, however, was born out of this wedlock on August 30, 1964.
The parties by and large lived together till February 1971.
They have lived separately ever since except for a short duration in the middle of 1975 when they were together.
The main allegation of the appellant was that from the very beginning the respondent wife did not like to 350 live in the joint family and she used to behave in a peculiar manner A always created ugly scenes, indulged in quarrels and taunting and ultimately forced the appellant to shift to a government allotted quarter and live separately away from other members of the family but according to him even then her behaviour continued to be the same and it was also alleged that because of her behaviour ultimately the appellant suffered a nervous break down and had to be admitted in the Willingdon Hospital New Delhi for about 45 days.
The Division Bench of the High Court came to the conclusion that from perusal of all the facts alleged it appears that there may have been a few incidents prior to the birth of the child on August 30, 1964 but after that there was no such incident pleaded or proved till 1966 except for the allegation that the wife got the pregnancy terminated sometime in 1966 against the wishes of the appellant and on this basis the learned Judges of the Division Bench came to the conclusion that the early part before August 1964 probably was a period of inexperience and lack of adjustment between the husband and wife but ultimately after the birth of the son in 1964 there appears to be nothing serious and in this view of the matter the learned Judges came to the conclusion that between 1963 and 1968 there appears to be no incident or problem which really deserves consideration.
A small matter about her describing herself Mrs. Veena Vohra instead of Mrs. Veena Nanda the learned Judges have considered and have accepted the explanation of the wife as plausible.
The learned Judges of the Division Bench have considered all the circumstances and have also referred to the correspondence and the letters wherein regrets have been expressed in some matters by the respondent.
Considering all these facts, the Division Bench came to the conclusion that although it is unfortunate that they have not been keeping good relations but it could not be said to be a case of cruelty entitling the appellant to a decree for divorce.
Having heard learned counsel for the parties and also having heard the parties themselves we come to the same conclusion as was reached by the learned Judges of the Division Bench of the High Court while disposing of the appeal filed by the appellant against the judgment of the learned Single Judge.
It is no doubt an unfortunate state of affairs but it could not be held that the respondent was behaving with the appellant in a manner which could be termed as cruelty which would entitle the appellant to a decree for divorce.
Sometimes the temperament of the parties may not be conducive to each other which may result in petty quarrels and troubles although it was contended by the appellant that he had to suffer various ailments on account of this kind 351 of behaviour meted out to him by the wife but it could not be held on A the basis of any material that ailment of the appellant was the direct result of her (respondent 's) conduct.
The Division Bench therefore was right in coming to the conclusion that there is no material to come to the conclusion that the respondent treated the appellant with such cruelty as would entitle him to a decree for divorce.
In view of the facts and circumstances, therefore, the appeal is devoid of merit.
It is therefore dismissed.
The judgment of the High Court of Delhi is maintained.
In the circumstances of the case respondent shall be entitled to costs of this appeal.
The counsel 's fee is quantified at Rs.3,000.
S.L. Appeal dismissed.

summary:
% The appellant and the respondent, husband and wife, were married under the Hindu Customs in February, 1961.
Disagreement and disharmony between the two ensued from the very beginning after the marriage.
The parties by and large lived together till February, 1971, and separately ever since thereafter except for a short period in 1975.
The respondent wife, as alleged by the appellant, did not like to live in the joint family and always created ugly scenes by quarrels, etc.
The appellant was forced to live separately from the joint family, but even then, according to him, the conduct of the wife continued to be the same bad.
The appellant alleged that he suffered a nervous breakdown because of her behaviour and had to be hospitalised.
He, therefore, filed a petition for a decree of divorce on the grounds of cruelty and desertion.
The trial Court granted the divorce.
On appeal by the respondent, the High Court reversed the decision of the trial Court and dismissed the petition for divorce.
A Letters Patent Appeal by the appellant was dismissed by the High Court.
The appellant appealed to this Court for relief by special leave.
Dismissing the appeal, the Court, ^ HELD: It could not be held that the respondent was behaving with the appellant in a manner which could be termed as cruelty, which entitled the appellant to get a decree of divorce.
Sometimes, the temperament of the parties may not be conducive to each other, resulting in petty quarrels, but it could not be held on the basis of any material that the ailment of the appellant was the direct result of the respondent 's conduct.
The High Court was right in coming to the conclusion that there was no material to prove that the respondent treated the appellant with such a cruelty as would entitle the appellant to a decree of divorce.
The judgment of the High Court maintained.
[350G H; 351A B]