judgement:
ivil Appeal No. 638 of 1980.
From the Judgment and Order dated 18.2.1978 of the Allahabad High Court in First Civil Appeal No. 18 of 1965.
S.N. Kacker, G.C. Mathur and C.P. Lal for the Appellants.
U.R. Lalit, K.K. Gupta, P.H. Parekh and P.K. Manohar for the Respondents.
Soli J Sorabjee, Prithvi Raj, N.B. Sinha and Sanjeev B. Sinha for Respondents No. 10 to 16.
The Judgment of the Court was delivered by SINGH, J.
This appeal by special leave is directed against the judgment of the High Court of Allahabad dated 18th February, 1978 dismissing the appeal preferred by the appellant against the judgment and decree of the Additional Civil Judge, Lucknow, dismissing the suit instituted by him for possession of the property in dispute.
The property in dispute situate at Nawal Kishore Road, Lucknow, consists of buildings and land which have been in the occupation of the Bishun Narain School.
In 1938, certain public spirited persons of Lucknow city formed a society registered as the Progressive Education Society for estab lishing educational institution for imparting education.
Raja Ram Kumar Bhargava who owned considerable property, in the Lucknow city, was elected Chairman of the Society.
He permitted the society to run an English Middle School on rent in his building.
which stood on the site in dispute, the school was commonly known as the "Narhi Middle School".
The school was not recognised by the Education Department of the Government as it had no endowment and no building of its own.
After protected correspondence with the 811 authorities of the Education Department Raja Ram Kumar Bhargava president of the Society by his letter dated Novem ber 26, 1941 (Exhibit C B 6) informed the Inspector of Schools Lucknow that he has given away the premises occupied by the school free of rent which may be considered his permanent contribution to the cause of the school.
In pursu ance to the declaration made by Raja Ram Kumar Bhargava the Education Department of the State Government recognised the institution.
The members of the Committee of Management felt obliged to the Raja for his charitable disposition in donat ing the building to the school, accordingly, they unanimous ly passed a resolution expressing their gratitude to the Raja and they further resolved to change the name of the institution as the "Bishun Narain Anglo Vernacular School" to perpetuate the memory of late Bishun Narain Bhargava, the father of Raja Ram Kumar Bhargava.
This meeting was presided over by Raja Ram Kumar Bhargava himself as the President of the Society.
Thereafter Raja Ram Kumar Bhargava did not realise rent from the school and he allowed the school to occupy the building and the open land attached to it for the use of the school.
With the passage of time the school progressed, it was raised to the status of a High School and then to the status of an Intermediate College which was also named after Bishun Narain Bhargava.
Subsequently, the pri mary section of the institution was separated from the College section and it was given the name as "Bishun Narain Basic School" This school has been occupying the property in dispute, however, the school and the college both were managed by committee of management of which Raja Ram Kumar Bhargava continued to be the President till 1961 and there after his wife Rani Lila Bhargava became the President, which office she continued to occupy since then.
As there was considerable increase in the number of students, the institution felt short of accommodation.
To meet the need for additional accommodation, the management made permanent constructions on the open land attached to the main build ing, to provide three class rooms and other facilities including bath room to the students without any objection by the Raja or any of his family members.
It appears that Raja Ram Kumar Bhargava had taken con siderable amount of money as loan from Central Bank of India and to secure the loan he executed a mortgage deed, on March 27, 1957 mortgaging a number of properties including the property in dispute occupied by the school, in favour of the Central Bank of India.
The loan, however, could not be repaid.
Raja Ram Kumar Bhargava offered to sell the mort gaged property and on negotiations, the Bank agreed to release the property from mortgage to enable Raja Ram 812 Kumar Bhargava to sell the same for raising money to pay off the loan.
The Bank released the property under a written agreement dated 27th June, 1961 and in pursuance thereof Raja Ram Kumar Bhargava along with his three minor sons executed a Sale Deed on 27th June, 1961 transferring the property in dispute occupied by the school along with other property to Ram Sarup Gupta, the plaintiff appellant.
In the registered sale deed the property in dispute was described as Portion II of ITD Block in Hazratganj, Lucknow, bearing house No. C 43/111 in the occupation of Bishun Narain High School.
Ram Sarup Gupta the appellant after purchasing the property served notice on the school and its managing com mittee terminating their license and directing them to restore the possession of the property to him within a specified period.
Since the property was not restored to him, he filed a suit for possession against Bishun Narain Inter College, members of the committee of management of the college and the Progressive Education Society in the court of Civil Judge, Lucknow.
Subsequently under the order of the trial court the members of the committee of the management of the Bishun Narain Basic School were also impleaded as defendants 11 to 17.
The defendants inter alia pleaded that the Raja had donated the property in dispute to the school permanently and the school had made permanent constructions by incurring expenses for that reason license was irrevoca ble.
On the pleading of the parties the trial court framed 8 issues and the parties produced evidence in support of their case.
The trial court recorded findings that the property in dispute belonged to the joint family of which Raja Ram Kumar Bhargava as Karta.
Raja Ram Kumar Bhargava had donated the property in dispute to the school, but no title passed to the school or to any of the defendants as the property being immovable could not be transferred except under a registered deed.
In the absence of transfer deed Raja Ram Kumar Bharga va continued to be owner and he could transfer title in the property to the plaintiff.
The defendants ' plea that the civil court had no jurisdiction to entertain the suit or pass decree for possession was negatived on the findings that under the U.P. Act III of 1947, no allotment could validly be issued in favour of the school as there was no vacancy or likelihood of vacancy.
The trial court recorded findings that Raja Ram Kumar Bhargava had given away the property to the school as his permanent contribution but in the absence of registered deed the transaction amounted to a license only and since the defendants had made permanent constructions on the premises in suit, the license was irrevocable under section 60(b) of the (hereinafter referred to as the Act).
The trial court 813 further held that Raja Ram Kumar Bhargava himself had no power in law to revoke the license, consequently the plain tiff being transferee from him could not acquire any better right, therefore he was not entitled to revoke the license or to obtain possession of the property.
On these findings the trial court dismissed the suit.
The appellant took the matter in appeal before the High Court, the appeal came up for hearing before a Division Bench consisting of P.N. Jha and K.S. Verma.
There was difference of opinion between two learned Judges.
D.N. Jha, J. affirmed the findings of the trial court and opined that since license granted to the school was irrevocable.
the appellant was not entitled to any relief.
K.S. Verma, J. took a contrary view, according to him the defendants had failed to raise requisite plea that the license granted to them was irrevocable as contem plated by Section 60 (b) of the Act and they had further failed to produce any positive evidence to prove the terms and conditions of the license showing that the license was irrevocable.
The learned Judge held that the defendants plea that they had made permanent constructions on the land in pursuance of the license incurring expenses, could not be considered as the defendants had failed to plead the neces sary facts in their written statement, the evidence produced by them could not be considered.
On these findings the learned judge proposed to set aside the trial court 's order and decree the plaintiff 's suit.
Since there was difference of opinion the matter was referred to a third Judge.
The appeal was then heard by T.S. Misra, J. he discussed the questions in respect of which the two judges had disagreed and by a detailed order he concurred with the view expressed by D.N. Jha, J. as a result of which the trial court 's judgment was upheld and the appellant 's suit was dismissed.
The appellant has preferred this appeal by special leave under Article 136 of the Constitution.
S.N. Kacker, learned counsel for the appellant contended that the trial court as well as the High Court both erred in holding that the license was irrevocable under section 60(b) of the Indian Easement Act.
He urged that the defendants had failed to raise necessary pleadings on the question, no issue was framed and no evidence was produced by them.
In the absence of requisite pleadings and issues it was not open to the trial court and the High Court to make out a new case for the defendants, holding the license irrevocable.
He urged that the defendants had failed to produce any evidence to prove the terms and conditions of the license.
In order to hold the license irrevocable, it was necessary to plead and further to prove that the defend ants had made construction, "acting upon the terms of the license".
Shri Kackar further urged that Raja Ram Kumar Bhargava being Karta of 814 joint family, could not alienate the, property permanently to the detriment of the minor co sharers.
U.R. Lalit, appearing on behalf of the defendant respondents supported the findings recorded by the trial court and the High Court and urged that both the courts have recorded findings of facts on appreciation of evidence on record that the license granted by Raja Ram Kumar Bhargava was irrevocable and that acting upon the license the school had made construction for the purposes of running the school and the license was irrevocable.
He took us through the record to show that necessary pleadings had been raised by the defendants and there was sufficient evidence in support of the pleadings.
The question which falls for consideration is whether the respondents in their written statement have raised the necessary pleading that the license was irrevocable as contemplated by Section 60(b) of the Act and, if so, is there any evidence on record to support that plea.
It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered.
It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and mate rial facts should be pleaded by the party in support of the case set up by it.
The object and purpose of pleading is to enable the adversary party to know the case it has to meet.
In order to have a fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise.
The pleadings however should receive a liberal construction, no pedantic approach should be adopted to defeat justice on hair split ting technicalities.
Sometimes, pleadings are expressed in words which may not expressly make out a case in accordance with strict interpretation of law, in such a case it is the duty of the Court to ascertain the substance of the plead ings to determine the question.
It is not desirable to place undue emphasis on form, instead the substance of the plead ings should be considered.
Whenever the question about lack of pleading is raised the enquiry should not be so much about the form of the pleadings, instead; the court must find out whether in substance the parties knew the case and the issues upon which they went to trial.
Once it is found that in spite of deficiency in the pleadings parties knew the case and they proceeded to trial on those issues by producing evidence, in that event it would not be open to a party to raise the question of absence of pleadings in appeal.
In Bhagwati Prasad vs Shri Chandramaul, a Constitution Bench of this Court considering this question observed: "If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea 815 was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon if it is satisfactori ly proved by evidence.
The general rule no doubt is that the relief should be founded on pleadings made by the parties.
But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case.
What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter.
To allow one party to reply upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another.
" Before we examine the pleas raised by the defendants in their written statement it is necessary to keep in mind that the plaintiff himself stated in paragraph 4 of the plaint that the property in dispute has been in occupation of the school as licensee under the permission of Raja Ram Kumar Bhargava erstwhile owner of the property.
Defendant Nos.
11 to 17 in paragraph 10 to 16 of their written statement while dealing with the question of license expressly stated that the school had made pucca constructions and had been making various substantial additions and alterations in the build ing without any objection.
Raja Ram Kumar Bhargava had given away the premises in dispute permanently to the school and they have been in occupation of the premises for the last 20 years and during that period they have been making substan tial additions and alterations in the building including replastering, re flooring etc.
by incurring heavy expenses.
In paragraph 18 of their written statement they pleaded that the license was coupled with a grant and in any case it was a permanent and irrevocable license in favour of the school and the same could not be revoked by the plaintiff.
The pleadings so raised make it apparently 816 clear that the defendants had raised a specific plea that the license was coupled with grant, it was a permanent and irrevocable license and in pursuance of the licence the licensee had carried out work of permanent character incur ring expenses for the advancement of the purpose for which the license had been granted.
In fact, issue numbers 4, 5 and 6 framed by the trial court relate to the question whether license was irrevocable.
The issues so framed in volved the question of irrevocability of the license under both the clauses (a) and (b) of the Section 60 of the Act.
The plaintiff went to trial knowing fully well that defend ants claim was that the license was irrevocable, on the ground that they had made permanent constructions and in curred expenses in pursuance of the license granted for the purpose of school.
The plaintiff knew the case he had to meet, and for that purpose he produced Raja Ram Kumar Bhar gava in evidence in support his plea that the license was a simple license and it was not irrevocable as pleaded by the defendants.
This question has been considered in great detail by T.S. Misra, J. and we are in agreement with the view taken by him.
Mr. Kacker, then contended that mere execution of work of a permanent character and incurring expenses by the licensee is not sufficient to make the license irrevocable instead licensee must plead and prove by positive evidence that the licensee "acting upon the license", executed work of a permanent character and incurred expenses in its execu tion.
The defendants tailed to raise any such plea before the trial court that they had executed the work of permanent character and incurred expenses "acting upon the license" and they further failed to produce any evidence in support thereof.
He urged that by making constructions and incurring expenses a licensee could not make the license irrevocable as the law requires that constructions, if any, and expenses incurred thereon must be shown to have been made "acting upon the license".
He placed reliance on the Privy Council decision in Gujarat Ginning and Manufacturing Co. Ltd. Ahmedabad vs Moti Lal Hirabhai Spinning and Manufacturing Co. Ltd. Ahmedabad, and also on a decision of this Court in Shankar Gopinath Apte vs Gangabai Harihar rao Patwardhan; , In addition to these cases he referred to a number of High Court decisions in support of his submissions that benefit of Section 60 (b) of the Act could not be granted to the respondent school.
Similar grievance had been raised by the appellant before the High Court on the ground on absence of requisite pleadings with regard to the respondents ' claim for the license being irrevocable under section 60 (b) of the Act.
The majority of the Judges of the High Court repelled the appellants ' sub mission on a detailed scrutiny of the plead 817 ings.
We have already referred to the pleadings raised by the defendants which contain necessary facts to sustain the pleading of the license being irrevocable under section 60 (b) of the Act.
It is well settled that the pleadings need not reproduce the exact words or expressions as contained in the statute, nor the question of law is required to be pleaded.
The substance of the respondents ' pleadings clearly informed that their case was that they had made construc tions on the land acting upon the licence which substantial ly met the requirement of law.
Before we discuss the author ities cited by the appellants ' counsel we consider it neces sary to briefly refer to the provisions of the Act regulat ing the grant, revocation of license and other allied mat ters and also the evidence available on record.
License as defined by Section 52 of the Act means grant of permission, by a person to the other, a right to do or continue to do, in or upon, the immovable property of the grantor, something which would, in the absence of such right, be unlawful.
Such right does not amount to an ease ment or any interest in the property.
The rights so con ferred is license.
The grant of license may be express or implied which can be inferred from the conduct of the gran tor.
Section 60 provides that a license may be revoked by the grantor unless; (a) it is coupled with a transfer of property and such transfer is in force; (b) the licensee, acting upon the license, has executed a work of permanent character and incurred expenses in the execution.
Revocation of license may be express or implied.
Section 62 enumerates circumstances on the existence of which the license is deemed to be revoked.
One of such conditions contemplate that where license is granted for a specific purpose and the purpose is attained, or abandoned, or if it becomes imprac ticable, the license shall be deemed to be revoked.
Section 63 and 64 deal with license 's right on revocation of the license to have a reasonable time to leave the property and remove the goods which he may have placed on the property and the licensee is further entitled to compensation if the license was granted for consideration and the license was terminated without any fault of his own.
These provisions indicate that a license is revocable at the will of the grantor and the revocation may be expressed or implied.
Section 60 enumerates the conditions under which a license is irrevocable.
Firstly, the license is irrevocable if it is coupled with transfer of property and such right is enforced and secondly, if the licensee acting upon the license exe cutes work of permanent character and incurs expenses in execution.
Section 60 is not exhaustive.
There may be a case where the grantor of the license may enter into agreement with the licensee making the license irrevocable, even though, none of the two clauses 818 as specified under section 60 are fulfilled.
Similarly, even if the two clauses of section 60 are fulfilled to render the license irrevocable yet it may not be so if the parties agree to the contrary.
In Muhammad Ziaul Hague vs Standard Vacuum Oil Company, 55 Calcutta Weekly Notes 232 the Calcut ta High Court held that where a license is prima facie irrevocable either because it is coupled with a grant or interest or because the licensee erected the work of perma nent nature there is nothing to prevent the parties from agreeing expressly or by necessary implication that licence nevertheless shall be revocable.
On the same reasoning there is nothing to prevent the parties agreeing expressly or im pliedly that the license which may not prima facie fall within either of the two categories of license (as contem plated by section 60) should nevertheless be irrevocable.
The same view was taken by Das, J. (as he then was) in Dominion of India vs Sohan Lal, AIR 1950 EP 40.
Bombay High Court has also taken the same view in H.F. De Souza vs Childrens Education Uplift Society, AIR 1959 Bombay 533.
The parties may agree expressly or impliedly that a license which is prima facie revocable not failing within either of the two categories of license as contemplated by Section 60 of the Act shall be irrevocable.
Such agreement may be in writing or otherwise and its terms or conditions may be express or implied.
A license may be oral also in that case, terms, conditions and the nature of the license, can be gathered from.
the purpose for which the license is granted coupled with the conduct of the parties and the circum stances which may have let to the grant of the license.
In their pleadings the defendants had invoked the pro tection of both the clauses of Section 60 of the Act, first ly, they pleaded that the license was coupled with the transfer of property inasmuch as the school had been realis ing rent from third parties who were permitted to use a portion of the land.
Secondly, they pleaded that the licen see, namely, the school had executed permanent constructions and incurred expenses in execution thereof acting on the license.
The trial court as well as the High Court both rejected the respondents ' claim of license being irrevocable under section 60(a) of the Act.
But they upheld the respond ents plea of license being irrevocable under clause (b) of Section 60 of the Act.
It is true that the pleadings raised in the written statement of defendants did not expressly use the expression that the school had executed work of perma nent character "acting upon the license".
But reading the entire written statement one cannot escape the conclusion that the defendants had raised the plea that Raja Ram Kumar Bhargava the grantor of the license had granted license for running the school in the building and for using the open land for 819 the purpose of school and in pursuance of the license, so granted, the school had executed work of permanent character and incurred expenses in making the same.
The defendants further pleaded that no objection had been raised by the grantor of the license or by anyone else against the school in making the constructions.
Repeated assertions have been made in their written statement that Raja Ram Kumar Bharga va, had granted a permanent license which was irrevocable.
Substance of the pleading was clear that defendants had raised a specific plea that the school had in pursuance of the license executed work of permanent character and in curred expenses in execution and that no objection was raised by the licensor therefore the license was irrevoca ble.
The license had been granted to the school for the purpose of running school and imparting education to the students, the license was not merely in respect of building alone but it was also in respect of open land attached to the building.
Additional accommodation was required to provide class rooms for the students which was an integral part of the purpose for which the license had been granted and the school carried out works on the open land which was appurtenant to the main building, with the knowledge of the licensor as has been found by the trial court and the High Court.
In view of the licensor 's donation of the property to the school, and his subsequent conduct, the licensee could reasonably entertain a belief that the licensor had permit ted the construction on the land, and in pursuance thereof, the licensee made constructions and incurred expenses.
The result is that the respondents "acting upon the license" had executed works by incurring expenses which rendered the license irrevocable.
As regard evidence we have perused the statement of Ganga Prasad Dhayani, DW 1, Shanker Dutt, DW 2, and Bhola, DW 3.
Their testimony fully established that the school had constructed three class rooms, latrin and urinals and incurred expenses.
Raja Ram Kumar Bhargava in his testi mony claimed that the aforesaid constructions had been made by a trust constituted by his family members, but no account books were filed in support of the statement, although it was admitted that the trust maintained accounts on the other hand vouchers were produced on behalf of the defendants showing that the management had spent money for making constructions.
Raja Ram Kumar Bhargava who was examined as a witness on behalf of the plaintiff admitted in his testimony that he continued to be the president of the school since 1938 to 1961 and thereafter his wife has continued to be the president, it is therefore difficult to believe that he had no knowledge of the constructions.
If the license did not permit the school to execute any permanent constructions, Raja Ram Kumar Bhargava would have certainly raised objec tions.
His conduct of acquiescence to the raising of 820 constructions, is eloquent enough to show that the license was irrevocable.
No doubt Raja Ram Kumar made attempts to support the plaintiff 's case by saying that he had not given the property to the school permanently but the trial court and the High Court both have discarded his testimony and we find no good reason to take a different view.
In Gujrat Ginning and Manufacturing Co. Ltd. Ahmedabad vs Moti Lal Hirabhai Spinning and Manufacturing Co. Ltd. Ahmedabad, protection of Section 60(b) of the Act was in voked by a party who had made constructions on his own land and not on the land of the licensor and in that factual backdrop the Privy Council held that the expression "acting upon the license" must mean acting upon a fight granted to do upon the land of the grantor something which would be unlawful in the absence of such right.
A man does not "acting upon a license" executes works and incurs expense upon his own property as that he can do without any one 's license.
These observations do not support the appellant on the other hand they show that if a man executes work of permanent character and incurs expense on the property of other person under a license he may have done so "acting upon the license".
In Shanker Gopinath Apte vs Gangabhai Hariharrao Patwardhan the plaintiff had raised plea of tenancy failing which he claimed to be in possession of the land, in part performance of an agreement for sale.
On the rejection of both the pleas the plaintiff appellant therein raised a further plea that he was protected under section 60(b) of the as he had executed works of permanent character on the land incurring heavy expenses.
This Court rejected the submissions on the ground of absence of pleadings, issues and evidence.
While rejecting the appellant 's submissions the Court observed that even assum ing that the appellant had executed work of a permanent character on the land it could not be said that he had done so "acting upon the license" as required by Section 60(b) of the Easements Act.
The Court observed that the appellant improved the land by executing work c f a permanent charac ter, he did so, in the belief that being a tenant he would become statutory purchaser of the land or that the oral agreement of sale will one fine day be implemented.
The execution of the work was done either in the capacity as a tenant or as a prospective purchaser but not as a licensee.
The decision has no application to the facts of the present case as admittedly the school was a licensee and in that capacity it executed works of a permanent character, by incurring expenses and this plea was raised at the initial stage before the trial court.
821 Reference was made to a number of decisions of the High Court in support of the proposition that a license is irrev ocable under section 60(b) of the Act only if three condi tions are fulfilled, namely, (i) the licensee executed work of a permanent character, (ii) he did so acting upon the license, and (iii) he incurred expenses in doing so.
The onus of proving these facts lie upon the licensee and in the absence of any evidence on these questions the license could not be irrevocable under section 60(b) of the Act.
Decisions relied are Raghbir Saran vs Param Kirti Saran, AIR 1962 All. 444; Deep Chand vs Kasturi Devi, AIR 1975 Pat.
17, Karan Singh vs Budh Sen, AIR 1938 All. 342; Mohammad Ali vs Ahmad Husain, AIR 1932 Oudh.
264; Babulal Choukhani vs Caltex (India) Ltd., AIR 1967 Cal. 205; Hashmat Jahan vs Sheo Dularey, AIR 1942 Oudh.
180; Brun Daban Jena vs Ram Chandra Misra, ; Banamali Dalbehura vs Ratnam ani Dei, We do not consider it neces sary to discuss these authorities in detail as in our opin ion all the three conditions as required by Section 60(b) of the Act have been made out to show that the license was irrevocable.
The respondents placed reliance on the deci sions of Lahore High Court had Oudh High Court in Jagat Singh and others vs District Board Amritsar, AIR 1940 Lahore 18 and Thakur Prasad vs
J. Thomkinson, AIR 1927 Oudh 206.
In these decisions the Court held that where a license was granted to a school in respect of a land, and in pursuance thereof the licensee constructed work of permanent character on the land, the license was irrevocable under section 60(b) of the .
In our view the Court rightly held that where license is granted for the purpose of run ning school without reserving any right to revoke the li cense and if the licensee erected works of permanent nature, the grantor of license is not entitled to recover land, as the execution of work was for the purpose of school and it falls within the expression "acting upon the license".
Learned counsel for the appellant urged that in the absence of any document containing the terms and conditions of the license, the courts below committed error in holding that license was irrevocable.
Since no written document was executed by the parties containing the terms and conditions of the license, the terms and conditions could be inferred from the attending circumstances and the conduct of the parties.
Raja Ram Kumar Bhargava was the President of the Society which was running the Narhi Middle School, but it was not recognised by the Education Department of the State of U.P.
The correspondence which is on record shows that the Education Department insisted that there should be some endowment and school should own building 822 and land before it could be granted recognition.
Raja Ram Kumar Bhargava gave away the disputed property donating the building and the land in favour of school by his letter dated November 26, 1941 (Ex C B 6) addressed to the Inspec tor of Schools, Lucknow.
In that letter Raja Ram Kumar stated "I have given my building free of rent to the Narhi Middle School.
I now write to inform you that the premises at present in the occupation of the school free of rent which may be considered my permanent contribution to the cause of the school.
" On the receipt of that letter the Education Department granted recognition to the school.
The proceedings of the Managing Committee of the school held on January 6, 1942 (Ext.
B 16) show that a meeting of the Managing Committee was held on that day president over by Raja Ram Kumar Bhargava and in that meeting the Managing Committee expressed its deep sense of appreciation and grateful thanks to Raja Ram Kumar Bhargava for donating the building to the school for procuring the recognition to the school from the U.P. Government, and it further resolved to name the school as the Bishun Narain Anglo Vernacular School to perpetuate the memory of Shri Bishun Narain Bhargava father of Raja Ram Kumar Bhargava.
These documents clearly indicate that Raja Ram Kumar Bhargava had permanently donat ed the property in dispute to the school and in lieu thereof the institution was named after his father to perpetuate his memory.
The purpose of the grant was to enable the school to carry on its activity of imparting education to the stu dents.
The school progressed and it required additional building, Management of the school which was headed by Raja Ram Kumar himself, constructed additional buildings to provide for class rooms and other amenities to the students.
Raja Ram Kumar Bhargava himself never raised any objection against the school making additional constructions on the disputed land.
These facts and circumstances point out the terms and conditions of the license, that the school was permitted to occupy and enjoy the land permanently for the purpose of education.
In this background, it would be rea sonable to infer, an implied condition that the license was irrevocable and the school was permitted to occupy and use the premises so long as it continued the purpose of impart ing education to the students.
The appellant 's submission that Raja Ram Kumar Bhargava being Karta of joint family could not create a permanent license in favour of the school without the consent of other co sharers, tO the detriment of his minor sons, is devoid of any merit.
No co sharer or member of the joint family ever raised any objection to the donation of the property to the school by Raja Ram Kumar Bhargava nor they 823 raised any objection at any stage of construction of the additional buildings by the school.
There is no evidence on record to show that his three minor sons, on whose behalf he executed sale deed on 27th June 1961 in appellant 's favour were born prior to 1941.
Moreover title in the property was not transferred to the school instead a permanent license was granted, in which every member of the joint family, must have been interested, as the school perpetuated the memory of the common ancestor Shri Bishun Narain Bhargava father of Raja Ram Kumar Bhargava.
The question of any legal necessity did not arise and the grant of permanent license in favour of the school ' could not be rendered void merely because Raja Ram Kumar Bhargava was Karta of the joint family.
No co sharer has challenged the validity of the license, on that ground.
On the other hand they have acquiesced to it.
There is thus no merit in the appellant 's contention.
In view of the above discussion we are of the opinion that the pleadings, evidence and the circumstances available on record, have fully established that Raja Ram Kumar Bhar gava had granted license to the school in respect of the building and the land attached to it for the purpose of imparting education and the school in furtherance of that purpose constructed additional buildings and it further incurred expenses in carrying out modification and extensive repairs in the existing buildings during the period, Raja Ram Kumar Bhargava continued to be the President of the Managing Committee of the school.
He never raised any objec tion to it and there is nothing on record to show that licensor had retained right to revoke the license.
If a person allows another to build on his land in the further ance of the purpose for which he had granted license, sub ject to any agreement to the contrary cannot turn round, later on, to revoke the license.
This principle is codified is Section 60(b) of the Act.
Moreover, conduct of the par ties has been such that equity will presume the existence of a condition of the license by plain implication to show that license was perpetual and irrevocable.
That being so, Raja Ram Kumar Bhargava could not revoke the license or evict the school and the appellant being transferee from him could not and did not acquire any better right.
The appellant there fore has no right to revoke the license or to evict the school, so long the school continues to carry on the purpose for which the license was granted.
The trial court and the High Court have therefore rightly dismissed the suit.
Before concluding, we would like to observe that the appellant purchased the property in dispute from Raja Ram Kumar Bhargava for valuable consideration and he continues to be the owner of the 824 property, his desire to get the possession of the property is quite natural but at the same time we cannot shut our eyes to the hard reality that Raja Ram Kumar Bhargava erst while owner of the property had granted an irrevocable license in favour of the school.
On 27th June 1961 when Raja Ram Kumar Bhargava executed the sale deed in appellant 's favour the property in dispute was in possession of the school under an irrevocable license.
The appellant should have known that the institution was occupying the property and it was rendering public service in imparting education to the students and it would be difficult to get possession, in spite of that, the appellant purchased the property.
The school has been occupying the property since 1939 and it has made permanent constructions without any demur from any quarter, in this situation it is not possible to grant any relief to the appellant.
To evict the school may result into closure of the institution and that would certainly be against public interest.
Having regard to these facts and circumstances, we gave opportunity to the parties to evolve settlement to adjust equities without disturbing the cause of education.
We regret to say that the parties could not settle the matter, we have therefore decided the appeal on merits.
In view of the above discussion we do not find any merit in the appeal it is accordingly dismissed.
In the circum stances of the case parties shall bear their own costs.
N.P.V. Appeal dis missed.

summary:
The property in dispute was under the occupation of a school managed by a Registered Education Society.
The Socie ty was managing the respondent college also.
The school was not recognised and had no endowment and building of its own.
In order to secure recognition for the school, the President of Society, who owned the property in dispute, informed the Inspector of Schools by a letter dated November 26, 1941, that he had given away the premises occupied by the school free of rent, which may be considered as his permanent contribution to the cause of the school.
Pursuant to this, the school was recognised.
To meet the need for additional accommodation the management made permanent constructions on the open land attached to the building without any objection by the donor or any of his family members.
The donor had taken a considerable amount of loan and mortgaged the property in dispute, alongwith a number of properties on March 27, 1957.
In order to pay off the loan the property in dispute was got discharged and the donor alongwith his three minor sons executed a sale deed trans ferring the property in dispute to the plaintiff appellant.
The plaintiff appellant served a notice on the school and its managing committee terminating their license and directing them to restore the possession of property to him and upon their failure to do so, 806 filed a suit for possession.
The defendants pleaded that the property in dispute had been donated to the school perma nently and the school had made permanent constructions by incurring expenses and, therefore, their license was irrevo cable.
The trial court dismissed the suit after recording findings to the effect that the property in dispute belonged to the joint family of which the donor was Karta, that though the property was donated to the school no rifle passed to it or to any of the defendants as the property being immovable could not be transferred except under a registered deed, and that in the absence of the transfer deed, then donor continued to be the owner and could trans fer title in the property to the plaintiff, that under the U.P. Act.
III of 1947 no allotment could validly be issued in favour of the school as there was no vacancy or likeli hood of vacancy, that though the property had been given away to the school by the donor as permanent contribution, but in the absence of the registered deed, the transactions amounted to a license only, and since the defendants had made permanent constructions on the premises in suit, li cense was irrevocable under Section 60(b) of the and as the donor himself had no power in a law to revoke the license, the plaintiff being transferee from him could not acquire any better right and, therefore, he was not entitled to revoke the license or to obtain possession of the property.
In the appeal before the High Court there was difference of opinion between the two Judges who constituted the Division Bench and the matter was re ferred to a third Judge.
By majority, the High Court af firmed the findings of the trial court and held that the license granted to the school was irrevocable and the appel lant was not entitled to any relief.
In the appeal to this Court, it was submitted that the trial court as well as the High Court both erred in holding that the license was irrevocable under Section 60(b) of the Indian Easement Act, that the defendants had failed to raise necessary pleadings on the question, no issue was framed and no evidence was produced by them, that in the absence of requisite pleadings and issues, it was not open to the trial court and the High Court to make out a new case for the defendants holding the license irrevocable, and that the defendants had failed to produce any evidence to prove the terms and conditions of the license and that the donor being Karta of the Joint family could not alienate the property permanently to the detriment of the minor co sharers.
It was contended on behalf of the defendants respondents that both the courts had recorded findings of fact on appreciation of evidence on record, that the license granted by the donor/grantor was irrevocable and that 807 acting upon the license, the school had made construction for the purposes of running the school and the license was irrevocable and that necessary pleadings had been raised and there was sufficient evidence in support of the pleadings.
Dismissing the appeal, this Court, HELD: 1.
Where license is granted for the purpose of running the school without reserving any right to revoke license and if the licensee erected works of permanent nature, the grantor of license is not entitled to recover land, as the execution of work was for the purpose of school and it fails within the expression "acting upon the licence".
[821E F] 2.
If a person allows another to build on his land in furtherance of the purpose for which he is granted license, subject to any agreement to the contrary, he cannot turn round, later on, to revoke the license.
This principle is codified in Section 60(b) of the .
[823E F] In the instant case, all the three conditions, viz. (1) the licensee executed work of a permanent character, (ii) he did so acting upon the license, and (iii) he incurred ex penses in doing so, as required by Section 60(b) of the Act have been made out.
[821A B] 3.1 License, as defined in section 52 of the Easements Act means grant of permission, by a person to the other, a right to do or continue to do, in or upon, the immovable property of the grantor, something which would, in the absence of such right, be unlawful.
Such a right does not amount to an easement or any interest in the property.
The rights so conferred is license.
The grant of license may be expressed or implied which can be inferred from the conduct of the grantor.
[817C D] 3.2 Section 60 of the Act enumerates the conditions under which a license is irrevocable; firstly the license is irrevocable if it is coupled with the transfer of property and such right is enforced, and secondly, if the licensee acting upon the license executes work of permanent character and incurs expenses in execution.
But Sec. 60 is not exhaus tive.
According to Section 62, a license is revocable at the will of the grantor and the revocation may be expressed or implied.
Where license is granted for a specific purpose, and the purpose is attained, or abandoned, or if it becomes impracticable, the license shall be deemed to be revoked.
[817G H; E F] 3.3 The parties may agree expressly or impliedly that a license 808 which is prima facie revocable not falling within either of the two categories of license as contemplated by section 60 of the Act shall be irrevocable.
Such agreement may be in writing or otherwise, and its terms or conditions may be express or implied.
A license may be oral also, in that case, terms, conditions and the nature of the license, can be gathered from the purpose for which the license is grant ed implied with the conduct of the parties and the circum stances which may have let to the grant of license.
[818D E] 3.4 License had been granted to the school for the purpose of running the school and imparting education to the students, the license was not merely in respect of building alone but it was also in respect of open land attached to the building.
Additional accommodation was required and the school carried out works on the open land which was appurte nant to the main building, with the knowledge of the licen sor, as has been found by the trial court and the High Court.
In view of the licensor 's donation of the property to the school, and his subsequent conduct, the licensee could reasonably entertain a belief that the licensor had permit ted the construction on the land and in pursuance thereof, the licensee made constructions and incurred expenses.
The result is that the respondents "acting upon the license" had executed works by incurring expenses which rendered the license irrevocable.
[819C E] 3.5 If the licensee did not permit the school to exe cute any permanent constructions, the grantor would have certainly raised objections.
His conduct of acquiescence to the raising of constructions, is eloquent enough to show that the license was irrevocable.
[819H; 820A] 3.6The pleadings, evidence and circumstances available on record, have fully established that the donor had granted license to the school in respect of building and the land attached to it for the purpose of imparting education and the school, in furtherance of that purpose constructed additional building and it further incurred expenses in carrying out modifications and extensive repairs in the existing building during the period the donor continued to be the President of the Managing Committee of the school and he never raised any objection to it and there is nothing on record to show that licensee had retained right to revoke the license.
[823D E] 3.7 The conduct of the parties has been such that equity will presume the existence of a condition of the license by plain implication to show that license was per petual and irrevocable.
That being so, the grantor could not revoke the license or evict the school and the appel 809 lant being transferee from him could not and did not acquire any better right.
The appellant.
therefore, has no right to revoke the license or to evict the school, so long as the school continues to carry on the purposes for which the license was granted.
[823F G] 4.1 In the absence of pleadings, evidence, if any, produced by the parties cannot be considered.
No party should be permitted to travel beyond its pleadings and all necessary and material facts should be pleaded by the party in support of the case set up by it.
The object and purpose of pleading is to enable the adversary party to know the case it has to meet.
In order to have a fair trial it is imperative that the party should state the essential materi al facts so that other party may not be taken by surprise.
The pleadings, however, should receive a liberal construc tion, no pedantic approach should be adopted to defeat justice on hair spliting technicalities.
Sometimes pleadings are expressed in words which may not expressly make out a case in accordance with strict interpretation of law.
In such a case, it is the duty of the Court to ascertain the substance of the pleadings, to determine the question.
It is not desirable to place undue emphasis on form; instead, the substance of the pleadings should be considered.
[814C F] 4.2 Whenever the question about lack of pleadings is raised, the enquiry should not be so much about the form of the pleadings; instead, the court must find out whether in substance the parties knew the case and the issues.
Once it is found that inspite of deficiency in the pleadings parties knew the case and they proceeded to trial on those issues by producing evidence, it would not be open to a party to raise the question of absence of pleadings in appeal.
[814F H] In the instant case, the plaintiff knew the case he had to meet.
and for that purpose he produced the donor in evidence in support of his plea and that the license was a simple license and it was not irrevocable as pleaded by the defendants.
[816C D] Bhagwati Prasad vs Shri Chandramaul, ; ; Gujarat Ginning and Manufacturing Co. Ltd. Ahmedabad vs Moti Lal Hirabhai Spinning and Manufacturing Co. Ltd., Ahmedabad ; Shankar Gopinath Apte vs Gangabai Harihar rao Patwardhan; , ; Muhammad Ziaul Haque vs Standard Vaccum Oil Company, 55 Calcutta Weekly Notes 232; Dominion of India vs Sohan Lal, AIR 1950 EP 40; M.F. De Souza vs Childrens Education, Uplift Society AIR 1959 Bombay 533; Raghbir Saran vs Param Kirti Saran, AIR 1962 All. 444; Deep Chand vs Kasturi Devi, AIR 1975 Pat. 17; 810 Karan Singh vs Budh Sen, AIR 1938 All. 342; Mohammad Ali vs Ahmad Husain, AIR 1932 Oudh.
264, Babulal Choukhani vs Caltex (India) Ltd., AIR 1967 Cal.
205; Hasmat Jahan vs Sheo Dularev, AIR 1942 Oudh.
180; Brun Daban Jena vs Ram Chandra Misra, ; Banamali Dalbehura vs Ratnam ani Dei, ; Jagat Singh and Others vs District Board Amritsar, AIR 1940 Lahore 18 and Thakur Prasad vs
J. Thomkinson, AIR 1927 Oudh 206, referred to.


judgement:
ivil Appeal No. 1463 of 1986 etc.
From the judgment and Order dated 26.3.1985 of the Bombay High Court in Appeal No. 264 of 1985.
F.S. Nariman, A. Sande, section Sukumaran, S.C. Sharma, Miss Godbole and D.N. Mishra for the Appellant.
Dr. Y.S. Chitale, N.B. Shetye, P.H. Parekh, Dr. B.Y. Chandrachud and P.K. Manohar for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal by special leave is filed against the judgment of the High Court of Bombay in Appeal No. 264 of 1985 dated March 26, 1985 affirming the decision of the learned Single Judge of that Court in Writ Petition No. 867 of 1980 dated January 18, 1984.
The appellant is a company engaged in the business of manu 830 facturing barrels and drums at its factory in Bombay.
In the year 1971 it had engaged about 1100 workmen about 600 permanent workmen and 500 temporary workmen.
It is alleged that since 1968 the factory was working intermittently and that the situation had worsened on account of non availabil ity of raw materials and other compelling circumstances.
By 1971 the company could see no other alternative but to close down its factory and accordingly it issued a 'closure no tice ' dated September 30, 1971 which was duly displayed on the Notice Board and that it also intimated all its workmen that their services would stand terminated due to the clo sure of the factory with effect from November 1, 1971.
The workmen also were informed that they would be paid compensa tion under section 25 FFF of the (hereinafter referred to as 'the Act ').
The appellant alleges that soon after the display of the 'closure notice ' dated September 30, 1971 the workmen indulged in go slow tactics and various acts of sabotage rendering the running of the factory and office virtually impossible.
The whole work was paralysed.
It is alleged that during the month of October there were meetings of workmen and an atmosphere of terror, intimidation and vilification prevailed.
On October 30, 1971 with the commencement of the first shift i.e. practically on the eve of the effective date of the closure on November 1, 1971 in terms of the 'closure notice a very grave and tense atmosphere prevailed on the premises of the factory of the appellant and by the afternoon all the work ers and members of the staff became more and more aggressive and after threatening the managerial staff resorted to acts of rioting, hooliganism and destroyed considerable part of the appellant 's properties.
The situation further aggravated by the workmen of the second shift joining the said workmen of the first shift.
The workmen of the first shift continued to remain in the precincts of the factory and squatted in the passage leading to the office of the appellant where the directors and senior officers were present and thus blocked the passage.
The union leaders addressed the workers using inflammatory and defamatory language against the directors and officers.
At that stage the management requested the assistance of the police.
The police force arrived accord ingly.
The Assistant Commissioner of Police S.N. Minocher Homji appealed to the workers not to prevent the directors and senior officers from leaving the factory.
Ignoring the said appeal, the union leaders "gheraoed" the directors and senior officers and when the police tried to assist the directors and senior officers to leave, the workers pounced upon the police party and tried to attack them.
When the police tried to resist the workers became more violent and threw missiles like nuts, grinding wheels, soda water bot tles, stones, brick bats etc.
at the police and the 831 directors and officers including their cars and the police van.
One sharp missile struck the eye of the Assistant Commissioner of Police and he lost his eye.
About 26 Police Officers and constables were injured.
A grinding wheel thrown at the car of the director would have caused fatal injury but only the car was badly damaged.
Machinery to the tune of Rs.6,50,000 was damaged.
The police then arrested 183 workers while the rest of them fled away.
In view of the grave law and order situation, the compa ny decided to terminate the services of the workmen with immediate effect by its notice dated October 30, 1971 is sued ' under the Standing Orders applicable to the employees of the appellant.
The 'said notice was duly published on the Notice Board as well as in the daily newspaper 'Navshakti ' and 'Free Press Journal ' both dated November 1, 1971.
Thereafter the workmen raised an industrial dispute and the Government of Maharashtra by its order of reference dated November 9, 1971 referred the dispute for adjudication by the Industrial Tribunal of Shri G.K. Patankar.
The terms of reference were: "(i) Whether the nature of closure declared by the company by its notice dated September 30, 1971 is for temporary period and to defeat the pending claims of the workmen before the various authorities.
(ii) Whether the said closure is legal and bonafide, if not what further relief be given to the workmen in addition to wages for the period of enforced unemployment? (iii) In case the closure is legal and bonafide whether the workmen are entitled to compensation in accordance with the provi sions of section 25 F of the Industrial Dis putes Act, 1947 or under the provisions of section 25 FFF." 0 The above reference was numbered as I.T. No. 325 of 1971.
It is alleged by the management that the factory was completely closed down from November 1, 1971 and there was no production till May, 1972.
During this period there used to be meetings of the workmen and skirmishes near the facto ry.
In may, 1972 the High Court of Delhi by its order dated May 19, 1972 in a writ petition filed by the appellant directed M/s Hindustan Steel Ltd. to resume forthwith supply of steel sheets to the appellants.
In view of this order the appellant put up a 832 notice dated June 7, 1972 both on the Notice Board in the office as welt as at the main gate of the factory advising the ex workers who desired to offer themselves for employ ment to intimate the same to the appellant.
It also stated that preference would be given to such of the exemployees who may abide to work peacefully.
This notice was followed by two more such notices dated August 10, 1972 and October 13, 1972.
Many workmen rejoined the factory.
Now, we shall revert to the reference made to the Tribu nal in I.T. No. 325 of 1971.
In that case although various pleas were taken by the parties in their pleadings at the hearing it was the case of the union that the services of the workers were terminated due to closure whereas the company contended that they were discharged before the alleged closure became operative (Page 147 of the Paper Book).
On behalf of the workmen it was contended "that the services of the workers stand terminated due to closure and although the Tribunal cannot go into the question of legali ty or illegality of the closure, yet when the services of the workers are terminated due to closure they would be entitled to compensation under section 25 FFF of the ID Act" (P. 150 of the Paper Book).
The management reiterated before the Tribunal that it was not liable to pay compensation under section 25 FFF of the Act as the workmen had been discharged on October 30, 1971 under Standing Order 21.
In the above situation the Tribunal was required to decide whether the workmen continued to be in employment till the closure took effect on November, 1, 1971 or whether they ceased to be the employees of the management on October 30, 1971 or October 31, 1971 by virtue of the notice of dis charge issued under Standing Order 21.
On the above question the Tribunal recorded its findings.
We shall state them in its own words.
The Tribunal observed: "It would then follow that the workers were discharged before their services could be terminated due to closure.
The workers, therefore, cannot be said to have been retrenched due to closure in the exist ing circumstances" (Page 155 of the Paper Book).
"The said ruling is applicable and the workers ' services, therefore, stand to have been terminated at least from 10.30 a.m. on October 31, 1971 due to the order of discharge" (Page 155 of the Paper Book).
"The discharge order, therefore, in any case became effective from 10.30 a.m. on October 31, 1971.
The workers, therefore (were) not in service of the company thereafter and also were not in service at the time of the alleged closure" (Page 159 of the Paper Book).
"The fact remains that the services of the workers were terminated because they were validly discharged and hence as mentioned above, they would not be entitled for any relief due to closure even if it is assumed that there was closure 833 as alleged" (underlining by us) (Page 159 of the Paper Book).
"The point as to whether the workers would have been entitled to compensation under section 25 FFF . .
The same was argued for the union by Shri Kamerkar and I agree with the fact that if the services of the workers had been terminated due to closure, then they would have been entitled for compensation under section 25 FFF of the ID Act, 1947.
It has however already been found that the serv ices of the workers were not terminated due to closure and hence question of compensation would not arise" (Page 162 of the Paper Book).
"It would then be evident that all the workers of the company were discharged by the company on the 30th October, 1971 before the closure could become effective (Page 164 of the Paper Book). "Since the termination of services of the workers is not connected with the closure the workers would not be.
entitled to any compensation due to closure" (Page 165 of the Paper Book).
With these find ings the reference was rejected by the Industrial Tribunal by its order dated October 30, 1974.
The above Award made in I.T. No. 325 of 1971 remained unchallenged and became final.
Thereafter at the instance of 440 workers only another reference was made by the Government of Maharashtra on July 10, 1975 to the same Industrial Tribunal Shri G.K. Patankar under section 10(1)(d) of the Act which was numbered as reference (I.T.) 245 of 1975 and this time the points of dispute referred were as follows: "(1) All employees whose names are mentioned at Annexure 'A ' be reinstated with full back Wages and continuity of service, restoring their status, rights and privileges as if there was no break in service.
(2) These employees should be paid one year 's wages as an interim relief till the final disposal of the case.
" In the Schedule to the reference the names of 440 work men, who were employees prior to their discharge on October 30, 1971/October 31, 1971 were included.
They were workmen on whom the earlier Award passed in I.T. No. 325 of 1971 was binding.
By the time the second reference, reference (I.T.) 245 of 1975, was disposed of the membership of the Tribunal had changed and Shri M.A. Deshpande had been appointed in the place of Shri G.K. Patankar.
Shri M.A. Deshpande passed his Award on March 20, 1980.
He held that the workmen in cluded in the Schedule to the reference should be deemed to have been retrenched on March 20, 1980 i.e. the date of the Award, that they were entitled to the retrenchment compensa tion as laid down in section 25F of the Act and that they were entitled to recover 75% of 834 their back wages from October 31, 1971 till March 20, 1980.
The above Award was passed by the Tribunal rejecting the contention that the present case was barred by the principle of res judicata and holding that the termination of the services of workers under the notice of discharge dated October 31, 1971 was invalid.
It is not necessary to refer to all other findings at this stage since the only point which requires to be examined in this case is whether the decision on the question of res judicata is correct or not.
Aggrieved by the latter Award dated March 20, 1980 the management filed a writ petition before the High Court in Writ Petition No. 867 of 1980.
The learned Single Judge who heard the said petition dismissed it on January 18, 1984 and an appeal filed against his decision in Appeal No. 264 of 1985 was dismissed by the Division Bench of the High Court on March 26, 1980.
This appeal by special leave is filed by the management against the said decision of the High Court.
The principal question which is urged before us by the management is that the latter Industrial Tribunal (Shri M.A. Deshpande) was in error in treating the workmen in question as being in the employment of the management until it made the Award even though the first Tribunal (Shri G.K. Patan kar) had held that the workmen had been validly discharged by the notice dated October 30, 1971 issued under Standing Order 21 and the enquiry into the very same question between the same parties was barred by the principle of res judica ta.
That the rule of res judicata applies to proceedings before the Industrial Tribunals is beyond question.
In Burn & Co., Calcutta vs Their Employees, ; at pages 789 90 this Court has observed thus: "Are we to hold that an award given on a matter in controversy between the parties after full hearing ceases to have any force if either of them repudiates it under section 19(6), and that the Tribunal has no option, when the matter is again referred to it for adjudication, but to proceed to try it de novo, traverse the entire ground once again, and come to a fresh decision.
That would be contrary to the well recognised principle that a decision once rendered by a competent au thority on a matter in issue between the parties after a full enquiry should not be permitted to be re agitated.
It is on this principle that the rule of res judi 835 cata enacted in section 11 of the Civil Proce dure Code is based.
That section is, no doubt, in terms inapplicable to the present matter, but the principle underlying it, expressed in the maxim "interest rei publicae ut sit finis litium", is founded on sound public policy and is of universal application.
(vide Broom 's Legal Maxims, Tenth Edition, page 218).
"The rule of res judicata is dictated" observed Sir Lawrence Jenkins, C.J. in Sheoparsan Singh vs Ramnandan Prasad Singh, [1916] L.R. 43 I.A. 91.
"by a wisdom which is for all time".
And there are good reasons why this principle should be applicable to decisions of Industri al Tribunals also.
Legislation regulating the relation between Capital and Labour has two objects in view.
It seeks to ensure to the workmen who have not the capacity to treat with capital on equal terms, fair returns for their labour.
It also seeks to prevent dis putes between employer and employees, so that production might not be adversely affected and the larger interests of the society might not suffer.
Now, if we are to hold that an adjudi cation loses its force when it is repudiated under section 19(6) and that the whole contro versy is at large, then the result would be that far from reconciling themselves to the award and settling down to work it, either party will treat it as a mere stage in the prosecution of a prolonged struggle, and far from bringing industrial peace, the awards would turn out to be but truces giving the parties breathing time before resuming hostile action with renewed vigour.
On the other hand, if we are to regard them as intended to have long term operation and at the same time hold that they are liable to be modified by change in the circumstances on which they were based, both the purposes of the legislature would be ' served.
That is the view taken by the Tribu nals themselves in The Army & Navy Stores Ltd., Bombay vs Their Workmen, [1951] 2 L.L.J. 31 and Ford Motor Co. of India Ltd. vs Their Workmen.[1951] , and we are of opinion that they lay down the correct princi ple, and that there were no grounds for the Appellate Tribunal for not following them.
" Same view is expressed in Workmen of the Straw Board Manufacturing Company Limited vs M/s Straw Board Manufactur ing Company Limited; , This Court has observed this at page 717: 836 "It is now well established that, although the entire Civil Procedure Code is not applicable to industrial adjudication, the principles of res judicata laid down under section 11 of the Code of Civil Procedure, however, are applica ble, wherever possible, for very good reasons.
This is so since multiplicity of litigation and agitation and re agitation of the same dispute at issue between the same employer and his employees will not be conducive to indus trial peace which is the principal object of all labour legislation bearing on industrial adjudication.
But whether a matter in dispute in a subsequent case and earlier been directly and substantially in issue between the same parties and the same had been heard and final ly decided by the Tribunal will be of perti nent consideration and will have to be deter mined before holding in a particular case that the principles of res judicata are attracted".
We would hasten to add that the above observations do not mean that a question which is once decided can never be re agitated.
There are certain classes of cases like dis putes regarding wage structure, service conditions etc.
which arise as circumstances change and new situations arise which may not be barred by the rule of res judicata.
The disputes which arose for consideration in Workmen of Balmer Lawrie and Co. vs Balmer Lawrie and Co., ; and in Associated Cement Staff Union and another vs Associ ated Cement Company and others, [1964] Vol.
belong to this category of cases.
In the instant case we are concerned with the question whether the workmen concerned were entitled to retrenchment compensation under section 25F of the Act as on the date of the Award and payment Of back wages from October 31, 1971 to March 20, 1980.
This question depends upon their right to be in service from the date on which they ceased to work in the factory upto the date of the Award.
In the first reference I.T. No. 325 of 1971 the workmen specifically prayed for payment of compensation under section 25FFF of the Act on the ground that the factory had been closed with effect from November 1, 1971 as per notice of closure thereby accepting the position that they had at any rate ceased to be the employees of the management of November 1,1971.
That claim was resisted by the management on the footing that the workmen had been discharged pursuant to the notice of dis charge dated October 30, 1971.
Even though in the course of its Award the 1st Tribunal had observed that it had consid ered the question of discharge as an "incidental question in view of the defence 837 taken by the company" the case was decided only on the basis of its finding that the workmen had been validly discharged by the notice dated October 30, 1971.
It is true that the said Tribunal had observed "that there is nothing on the record to show at this stage that the discharge order is not proper.
" But it did not mean that the validity of the dis charge order could be re agitated later on because in the very next sentence the 1st Tribunal observed: "It would then be evident that all the workers of the company were dis charged by the company on 30th October, 1971 before the closure could become effective.
" The one and the only ground on which the claim of the workmen for compensation under section 25FFF of the Act was rejected was that the workmen had ceased to be employees of the appellant by reason of the notice of discharge dated October 30, 1971.
The validity of that notice of discharge was directly and substantially in issue in the first reference.
The above observations of the 1st Tribunal on which the learned Single Judge has relied, therefore, do not carry the case of the workmen any further.
Before the 1st Tribunal it was open to the workmen to urge that the discharge was invalid and, therefore, the workmen continued to be in the service till November 1, 1971 and hence were entitled to compensation under section 25FFF of the Act.
Their case that they were entitled to compensation under section 25FFF of the Act was negatived by the 1st Tribunal on its firm conclusion that the workmen had been validly discharged by the notice dated October 30, 1971.
It may be that the decision of the 1st Tribunal was erroneous and could have been set right if its Award had been chal lenged before Higher Courts.
But it was allowed to become final.
The decision of the 1st Tribunal was not one rendered without jurisdiction.
Nor can it be characterised as a nullity on any ground known to law.
The question whether a person was or was not an employee under a management after a particular date is one which cannot be re agitated in a subsequent case in the circumstances which are referred to above if it has already been decided finally by an Industri al Tribunal of competent jurisdiction in an earlier case where the said question necessarily arose for decision.
This case falls within the scope of the decision in Burn & Co. 's case (supra) and in the case of Straw Board Manufacturing Co. Ltd. (supra).
We have extracted above the several pas sages from the Award of the 1st Tribunal which leave no scope for re agitating the issue relating to the validity of the notice of discharge dated October 30, 1971.
It is sig nificant that the workmen did not claim before the 1st Tribunal the relief of reinstatement or compensation under section 25F of the Act even though the factory had been reopened in 1972 before the first Award was passed but only confined their relief to compensation under section 25FFF of the Act.
The workmen could 838 not have, therefore, been permitted to re agitate the said matter before the Second Tribunal which decided the second reference and to contend that they had continued to be employees of the management on the ground that the notice of discharge and the notice of closure were both invalid.
The Second Tribunal should have rejected the said contentions by holding that the validity of notice of discharge dated October 30, 1971 was not open to question before it.
The second Tribunal was in error in re examining the issue relating to the validity of the notice of discharge and in expressing a contrary view.
The Award dated March 20, 1980 passed by the second Tribunal Shri M.A. Deshpande is there fore liable to be quashed and it is accordingly quashed.
Before concluding we should refer to a concession made by the management before us.
When the writ petition filed against the Award dated March 20, 1980 was pending before the High Court, the workmen proceeded to enforce it under section 33 C(i) of the Act before the Assistant Commissioner of Labour.
He issued a certificate for recovery of Rs.96,98,492.48 against the management.
When the Collector took steps to recover the above amount, the appellant filed a writ petition before the High Court in Writ Petition No. 2081 of 1983 against the order passed under section 33 C(1) of the Act.
That petition was dismissed in limine.
An appeal filed against that order before the Division Bench in Appeal No. 394 of 1984 was dismissed on June 27, 1984.
Against that order the management filed a special leave petition before this Court in Special leave Petition (Civil) No. 9337 of 1984.
When that petition came up for hearing, this Court issued notice on the petition and also issued an order or stay of recovery of the amount for which a certificate had been issued on August 27, 1984 subject to the appellant depositing Rs.48,00,000 (Rupees Forty eight lakhs) in in stalments on the dates specified in that order.
The manage ment deposited the entire sum of Rs.48,00,000 though not on the dates specified above and the said sum ultimately came into the possession of the Commissioner of Labour, Commerce Centre, Tardeo Bombay.
Out of the said sum, some amount has already been distributed amongst some of the workmen (or their legal representatives, wherever the workman was dead) at whose instance the second reference was made as per interim order passed by this Court.
The learned counsel for the appellant management has submitted before us that it would give up its right to claim the refund of the said amount of Rs.48,00,000 even though the Award is set aside and that the said amount of Rs.48,00,000 (less expenses, if any,) may be distributed ex gratia amongst the 440 workmen involved in the second reference 839 equally.
He also prayed that the sum of Rs.1,63,000 recov ered separately by the Collector may be refunded to the appellant.
We very much appreciate the submission made on behalf of the management.
This brings substantial relief to the workmen concerned since the sum of Rs.48,00,000 now offered is equivalent to a little more than three times the amount which the workmen would have got under section 25FFF of the Act, if they had succeeded in the 1st Reference.
It is stated that under section 25FFF of the Act they would have been entitled to get in 1971 about Rs.14,00,000 and even if interest calculated at a reasonable rate till today on that sum is added, the total amount payable would be less than Rs.48,00,000.
The amount of Rs.48,00,000 now offered is, therefore, on the liberal side.
We, therefore, direct that the sum of Rs.48,00,000 which is with the Commissioner of Labour shall be distributed equally amongst the 440 workmen.
If any of the workmen or their legal representa tives have already received any amount out of it, that amount shall be adjusted against the amount due to them.
If any workman has received the whole of the amount due to him under this order then nothing more need be paid to him.
There appears to be some dispute about the identity of the workmen.
The Commissioner of Labour shall publish the names of all the 440 workmen in a local newspaper informing that they would be entitled to the amounts to be distributed under this order and he shall disburse the amount after fully satisfying himself about the identify of the workmen as ordered by this Court on March 13, 1986 in C.M.P. No. 7068 of 1986.
He shall meet the cost of publication in the newspaper from the amount available with him and only the balance shall be equally distributed as directed above.
If the entire amount is not distributed as per this order on account of the non availability of the concerned workmen, the amount shall not be refunded to the management.
The Commissioner of Labour shall seek directions of this Court as to how the balance of the amount should be appropriated.
In any event the management shall not get back any part of it.
This order is passed in full settlement of all the claims of all the workers who were employed before October 30, 1971.
Nobody else shall be permitted to raise any dis pute of this kind.
The amount of Rs.1,63,000 realised by the Collector shall, however, be refunded to the appellant.
The appeal is accordingly allowed and the Award dated March 20, 1980 in reference (I.T.) 245 of 1975, the judgment of the Single Judge and of the Division Bench of the High Court are set aside subject to the above directions.
No costs.
840 Special Leave Petition (Civil) No. 9337 of 1984 referred to above is also disposed of by this judgment.
It is, howev er, evident that the recovery proceedings pursuant to the certificate issued by the Assistant Commissioner of Labour cannot be proceeded with since the Award itself has been quashed by this judgment.
A.P.J. Appeal allowed.

dataset_name: IN-Abs

summary:
In the factory of the appellant Company there were about 1100 permanent as well as temporary workmen.
On account of non availability of raw materials and other compelling circumstances the appellant Company issued a 'closure no tice ' dated September 30, 1971 intimating all its workmen that their services would stand terminated due to the clo sure of the factory with effect from November 1, 1971 and that they would be paid compensation under section 25FFF of the .
Thereafter, the workmen indulged in go slow tactics and various acts of sabotage rendering the running of factory and office virtually impos sible and an atmosphere of terror, intimidation and vilifi cation prevailed.
On October 30, 1971 the workers and mem bers of the staff became more and more aggressive and after threatening the managerial staff resorted to acts of riot ing, hooliganism and destroyed considerable part of the Company 's properties.
To control the situation police had to be summoned.
The workers became more violent and prevented the Directors and Senior Officers from leaving the factory and threw missiles on them and the police.
A good number of Police Officers and Constables were injured and the police then arrested about 183 workers.
The Company terminated the services of the workmen with immediate effect by its notice dated October 30, 1971 issued under the Standing Orders applicable to its employees and the notice was duly published.
Thereafter, the workmen raised an industrial dispute which was referred for adjudication to the Industrial Tribu nal being I.T. No. 325 of 1971.
826 The factory was completely closed down from November 1, 1971 and there was no production till May, 1972.
Pursuant to notice dated June 7, 1972 by the appellant, many workmen rejoined the factory.
Before the Tribunal the case of the Union and the work ers was that the services of the workers were terminated due to closure and although the Tribunal cannot go into the question of legality or illegality of the closure, yet they would be entitled to compensation under section 25 FFF of the .
The contention of the appel lant company was that the workers were validity discharged on October 30, 1971 under Standing Order 21 i.e. before the alleged closure became operative and that it was not liable to pay compensation under section 25 FFF.
The question before the Tribunal was whether the workmen continued to be in employment till the closure took effect on November 1, 1971 or whether they ceased to be the employ ees of the appellant on October 30, 1971 or October 31, 1971 by virtue of the notice of the discharge issued under Stand ing Order 21.
The Tribunal held that the workers were validly dis charged on 30th October, 1971 before their services could be terminated due to closure and, therefore, could not be said to have been retrenched due to closure; that the workers ' services stand to have been terminated at least from 10.30 a.m. on October 31, 1971 when the order of discharge became effective; that thereafter the workers were not in service of the company and also were not in the service at the time of the alleged closure and that since the termination of services of the workers is not connected with the closure, they would not be entitled to any compensation due to clo sure.
The reference was rejected by the Tribunal by its order dated October 30, 1974.
The award remained unchal lenged and became final.
Thereafter at the instance of 440 workers another refer ence being IT No. 245 of 1975 was made.
The Tribunal held that the workmen included in the Schedule to the reference should be deemed to have been retrenched on March 20, 1980 i.e. the date of the Award, that they were entitled to retrenchment compensation under section 25 F of the Act and they were entitled to recover 75% of their back wages from Octo ber 31, 1971 till March 20, 1980.
The Tribunal rejected the contention of the management that the present case was barred by the principle of res judicata and held that the termination of the services of workers under the notice of discharge dated October 30, 1971 was invalid.
827 The management challenged the latter award in a writ petition before the High Court.
The petition was dismissed by a Single Judge.
The Division Bench dismissed the appeal.
In the appeal, to this Court on behalf of the appellant management it was submitted that the latter Industrial Tribunal was in error in treating the workmen in question as being in the employment of the management until it made the Award even though the first Tribunal had held that the workmen had been validly discharged by the notice dated October 30, 1971 issued under Standing Order 21 and the enquiry into the very same question between the same parties was barred by the principle of res judicata.
Allowing the Appeal and disposing of the Special Leave Petition, HELD: 1.
That the rule of res judicata applies to pro ceedings before the Industrial Tribunals is beyond question.
However, it is not that a question which is once decided can never be re agitated.
There are certain classes of cases like disputes regarding wage structure, service conditions etc.
which arise as circumstances change and new situations arise which may not be barred by the rule of res judicata.
[834F; 836D E] Burn & Co., Calcutta vs Their Employees, [1956] S.C.R. 781; Workmen of the Straw Board Manufacturing Company Limit ed vs M/s Straw Board Manufacturing Company Limited; , ; Workmen of Balmer Lawrie and and Co. vs Balmer Lawrie and Co. ; and Associated Cement Staff Union and another vs Associated Cement Company and others, [1964] Vol. , followed.
The question whether the workmen concerned were entitled to retrenchment compensation under section 25F as on the date of the Award and payment of back wages from October 31, 1971 to March 20, 1980 depends upon their right to be in service from the date on which they ceased to work in the factory upto the date of the Award.
In the first reference the workmen specifically prayed for payment of compensation under section 25 FFF on the ground that the factory had been closed with effect from November 1, 1971 as per notice of closure thereby accepting the position that they had ceased to be the employees of the management on November 1, 1971.
That claim was resisted by the management on the footing that the workmen had been discharged pursuant to the notice of discharge dated October 30, 1971.
Even though the first Tribunal had observed that it had considered the question of 828 discharge as an "incidental question in view of the defence taken by the Company" the case was decided only on the basis of its finding that the workmen had been validly discharged by the notice dated October 30, 1971.
Though the said Tribu nal had observed "that there is nothing on the record to show at this stage that the discharge order is not proper", it did not mean that the validity of the discharge order could be reagitated later on because the first Tribunal further observed, "it would then be evident that all the workers of the Company were discharged by the Company on 30th October, 1971 before the closure could become effec tive".
[836F H; 837A B] 3.
The one and the only ground on which the claim of the workmen for compensation under section 25 FFF was rejected was that the workmen had ceased to be employees of the appellant by reason of the notice of discharge dated October 30, 1971.
The validity of that notice of discharge was directly and substantially in issue in the first reference.
[837B C] 4.
Before the first Tribunal the workmen could have urged that the discharge was invalid and, therefore, they continued to be in service till November, 1, 1971 and hence were entitled to compensation under section 25 FFF.
The case of the workmen that they were entitled to compensation under section 25 FFF was negatived by the first Tribunal holding that the workmen had been validly discharged by the notice dated October 30, 1971.
The decision of the first Tribunal may be erroneous and could have been set right if its Award had been challenged but it was allowed to become final.
The decision of the first Tribunal was not one rendered without jurisdiction nor can it be characterised as a nullity on any ground known to law.
[837D F] 5.
The question whether a person was or was not an employee under a management after a particular date is one which cannot be re agitated in a subsequent case if it has already been decided finally by an industrial Tribunal of competent jurisdiction in an earlier case where the said question necessarily arose for decision.
[837F] Buran & Co., Calcutta vs Their Employees, [1956] S.C.R. 781 and Workmen of the Straw Board Manufacturing Company Limited vs M/s Straw Board Manufacturing Company Limited, ; , followed.
The workmen did not claim before the first Tribunal the relief of reinstatement or compensation under section 25F even though the factory had been reopened in 1972 before the first Award was passed but only 829 confined their relief to compensation under section 25 FFF.
The workmen could not have, therefore, been permitted to re agitate the said matter before the second Tribunal which decided the second reference and to contend that they had continued to be employees of the management on the ground that the notice of discharge and the notice of closure were both invalid.
The second Tribunal should have rejected the said contentions by holding that the validity of notice of discharge dated October 30, 1971 was not open to question before it.
The second Tribunal was in error in re examining the issue relating to the validity of the notice of dis charge and in expressing a contrary view.
The Award dated March 20, 1980 passed by the second Tribunal is, therefore, liable to be quashed.
[837G H; 838A C] [The Court appreciated and accepted the submission of the appellant management that it would give up its right to claim the refund of Rs.48,00,000 lying with the Commissioner of Labour even though the Award is set aside and the same may be distributed ex gratia amongst the 440 workmen in volved in the second reference equally and issued necessary directions in that behalf.
The Court also directed that the amount of Rs.1,63,000 realised by the Collector shall be refunded to the appellant.]