judgement:
Appeals Nos.
48 to 53 of 1963.
Appeals from the judgment and decrees dated May 3, 1960, of the Calcutta High Court in Appeals Nos. 215, 67, 82 & 216 of 1958.
W. section Barlingay, section section Khanduja and Ganpat Rai, for the appellants (in all the appeals).
G. section Pathak and D. N. Mukherjee, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Gajendragadkar, C.J.
The short question which these six ap peals raise relates to the construction of section 30(c) of the Calcutta Thika Tenancy Act, 1949 (W.B. Act No. 11 of 1949) (hereinafter called 'the Act ').
This question arises in this way.
The respondent Sanat Kumar Ganguli is the owner of a plot of land being premises No. 12, Haldar Lane, in Central Calcutta This plot had been let out in several lots to the predecessors in title of the six appellants.
366 On July 24, 1954, the respondent filed six suits Nos. 2240 to 2245 of 1954 against the six appellants respectively on the original side of the Calcutta High Court, claiming decrees for ejectment against them and asking for arrears of ground rent and Municipal taxes.
The appellants contested the respondent 's claim on the ground that the lands in suits had been taken by their predecessors in title from the owner as Thika tenants in or about the year 1900, and they alleged that they were in occupation of the said plots after having built substantial structures on them.
The appellants further claimed that they had themselves let out portions of such structures to their own tenants.
On these allegations, a preliminary objection to the competence of the suits was raised by the appellants on the ground that under section 5 of the Act, claim for ejectment of Thika tenants can be entertained only by the Controller, and so, the learned Judge on the original side of the Calcutta High Court had no jurisdiction to entertain it.
The respondent admitted that the appellants were Thika tenants and did not dispute that normally, a claim for ejecting such Thika tenants could be tried only by the Controller; but he urged that the present suits fell within the scope of section 30(c) of the Act and in consequence, the provisions of section 5 and indeed.
, all other relevant provisions of the Act did not apply to them.
That is how the respondent sought to meet the preliminary objection raised by the appellants.
In appreciating the nature of the controversy thus raised by the pleadings, it is necessary to mention some more facts.
On February 9, 1940 a notice was issued by the Chairman of the Calcutta Improvement Trust under section 43 of the Calcutta Improvement Act, 1911 (Bengal Act V of 191 1) as amended up to 193 1.
This Act will hereafter be called 'the Improvement Act '.
This notice shows that a scheme bearing No. 53 had been framed for the purpose of improvement of Calcutta by a street scheme in Ward No. 10 of the Calcutta Municipality for an area the boundaries whereof were described in the said notice.
This notice gave the particulars of the scheme and was accompanied by a map of the area comprised in the scheme.
It also contained the statement of the land which it was proposed to acquire as well as land on which betterment fee was proposed to be levied.
These plans were open for inspection at the office of the Trust at No. 5, Clive Street, Calcutta.
Along with this notice, another notice was published which gave a list of properties proposed to be acquired under the scheme and contained a statement of the land in regard to which betterment fees were proposed to be levied.
Premises No. 12, Haldar Lane, were included in the latter category of lands.
In July 1952, proceedings were started for settling the betterment fee to be levied in respect of premises No. 12, Haldar Lane, and a letter was addressed by the Chief Valuer of the Calcutta 367 Improvement Trust to the respondent on November 19, 1952.
This letter shows that the Chief Valuer had not received a reply from the respondent, though his advocate had accepted the assessment of betterment fee of Rs. 15,000 in the Land Committee meeting which had been held on August 7, 1952 and confirmed by the Board on August 30, 1952.
On November 19, 1952, however, the respondent recorded in writing that he accepted the said assessment.
The respondent 's case before 'he learned trial Judge was that since betterment fee had been levied by the Board in respect of the suit premises and had been accepted by him, section 30(c) of the Act applied to the present suits.
Section 30(c) provides that "nothing in the Act shall apply to any land which is required for carrying out any of the provisions of the Calcutta Improvement Act, 191 1.
" That is how the respondent sought to repel the application of section 5 of the Act and the exclusive jurisdiction of the Controller to deal with ejectment proceedings in respect of thika tenants ' holdings.
The learned trial Judge held that the plots constituting the land in the six respective suits did not attract the provisions of section 30(c) of the Act, and so, he upheld the preliminary objection raised by the appellants and came to the conclusion that the suits filed by the respondent on the original side of the Calcutta High Court were incompetent and could not be entertained.
In the result, the said suits were ordered to be dismissed with costs.
The respondent challenged these decrees by preferring six appeals before a Division Bench of the High Court.
The learned Judges who heard these appeals have delivered separate, but concurring, judgments and have upheld the respondent 's argument that the land in suits attracted the provisions of section 30(c) of the Act, with the result that the preliminary objection raised by the appellants has been rejected.
Once the preliminary objection was rejected, it was plain that no other point survived, because the appellants had no defence to make on the merits of the respondent 's claim.
That is why the appeals were allowed and decrees, for possession were passed in favour of the respondent.
The claim made by the respondent in respect of arrears of round rent and municipal taxes was also allowed.
It is against these decrees that the appellants have come to this Court with certificates granted by the High Court; and so, the only question which arises for our decision is whether the Division Bench was right in holding that section 30(c) of the Act applied to the present suits.
The answer to this Question depends on a fair construction of the provision prescribed by section 30(c).
Before dealing with this question, it is necessary to refer to the material provisions of the Act.
The Act was passed in 1949 with the object of making better provision relating to the law of landlord and tenant in respect of thika tenancies in Calcutta.
Section 2(5) in Chapter 1 defines a "thika tenant" as meaning any person who holds, whether under a written lease or otherwise, land under another person, and is or but for a special contract would be liable 368 to pay rent, at a monthly or at any other periodical rate, for that land to that another person and has erected or acquired by purchase or gift any structure on such land for a residential, manufacturing or business purpose and includes the successors in interest (if such person.
Sub clauses (a), (b) and (c) of this definition exclude from its purview certain other categories of persons, but we are not concerned with these categories of persons in the present appeals.
It is common ground that the appellants are thika tenants in respect of the plots in their possession.
Chapter 11 of the Act deals with incidents of thika tenancies.
Broadly stated, the object of the Act is to afford special protection to the thika tenants and several provisions have been enacted by the Act to carry out this object.
Section 3 specifies the grounds on which alone a thika tenant may be evicted.
Section 4 prescribes a notice before ejectment proceedings can be taken against a thika tenant; and section 5 provides for proceedings for ejectment.
The important feature of the provisions contained in section 5(1) is that the application for ejectment of a thika tenant has to be made to the Controller in the prescribed manner.
The "controller" is defined by section 2(2) as meaning an officer appointed as such by the State Government for an area to which the Act extends and includes officers of another category therein described.
The remaining provisions of Ch.
11 deal with the procedure which has to be followed by the Controller in dealing with applications for ejectment of thika tenants and make other incidental provisions in that behalf.
The policy of the Act to afford protection to the thika tenants is writ large in all these provisions.
Chapter III contains provisions as to rent of thika tenancies.
Chapter IV deals with appeals and certain special procedures.
Section 27(1), for instance, provides for appeals to the Chief Judge of the Court of Small Causes of Calcutta and District Judge respectively under clauses (a) and (b).
Section 27(6) provides that an order made under sub section
(4) by the Chief Judge or the District Judge or a person appointed under sub section
(2), as the case may be, or, subject to such order, if any, an order made by the Controller under this Act shall, subject to the provisions of sub section
(5) be final and may be executed by the Controller in the manner provided in the Code of Civil Procedure for the execution of decrees.
It is thus clear that the Act has made special provisions for the enforcement of the rights and liabilities of the thika tenants, has constituted hierarchy of special authorities to deal with claims made by landlords against their thika tenants, either in the first instance or at the appellate stage.
The decisions of these special authorities which become final are assimilated to decrees passed under the Code of Civil Procedure and can be executed in the manner prescribed by 0.21 of the Code.
Section 31 provides that restriction or exclusion of the Act by agreement between a landlord and a thika tenant will be invalid, 369 and will not affect the rights conferred on the thika tenants by the provisions of the Act.
It is in the light of these provisions that we have to construe section 30 of the Act.
Section 30 reads thus: "Nothing in this Act shall apply to (a) Government lands, (b) any land vested in or in the possession of (i) the State Government, (ii) a port authority of a major port, or (iii) a railway administration, or (iv) a local authority, or (c) any land which is required for carrying out any of the provisions of the Calcutta Improvement Act, 1911.
" The perusal of section 301 clearly shows that the provisions of the Act are excluded in regard to lands specified in clauses (a), (b) and (c), so that claims made for ejectment of thika tenants from these lands will not be governed by the provisions of the Act and can be made and entertained in ordinary civil courts of competent jurisdiction.
The question which we have to consider in the present appeals is whether the land which is the subject matter of the six suits is land which is required for carrying out any of the provisions of the Improvement Act.
That takes us to the relevant provisions of the Improvement Act itself.
The Improvement Act was passed in 1911 and has been amended from time to time.
Let us consider broadly the material provisions of this Act, as they stood prior to the amendment of 1955, which would assist us in construing section 30(c) of the Act.
This Act was passed, because it was thought expedient to make provision for the improvement and expansion of Calcutta by opening up congested areas, laying out or altering streets, providing open spaces for purposes of ventilation or recreation, demolishing or constructing buildings, acquiring land for the said purposes ,,]Id for the rehousing of persons of the poorer and working classes displaced by the execution of improvement schemes, and otherwise as hereinafter appearing.
It was further thought expedient to constitute a Board of Trustees and invest it with special powers for carrying out the objects of this Act.
Section 2(1a) of this Act defines a "betterment fee" as the fee prescribed by section 78A in respect of an increase in value of land resulting from the execution of an improvement scheme.
Chapter III of this Act deals with improvement schemes and re housing schemes.
Section 36 provides when general improvement schemes may be framed.
It is only where the conditions specified by clauses (a) & (b) of section 36 are satisfied that general schemes can be framed.
Under this section, the Board has to pass 370 a resolution to the effect that the general improvement scheme should be framed on the ground that the area comprised in the scheme is an unhealthy area and that it was necessary to frame a general improvement scheme in respect of such area.
Section 40 deals with matters which have to be considered while framing improvement schemes.
It provides that when framing an improvement scheme in respect of any area, regard shall be had to (a) the nature and the conditions of neighboring areas and of Calcutta as a whole , (b) the several directions in which the expansion of Calcutta appears likely to take place , and (c) the likelihood of improvement schemes being required for other parts of Calcutta.
Section 41 deals with matters which must be provided for in improvement schemes; it reads thus: "Every improvement scheme shall provide for (a) the acquisition by the Board of any land, in the area comprised in the scheme, which will, in their opinion be required for the execution of the scheme, (b) the laying out or re laying out of the land in the said area; (c) such demolition, alteration or reconstruction of buildings, situated on land which it is proposed to acquire in the said area, as the Board may think necessary; (d) the construction of any buildings which the Board may consider it necessary to erect for any purpose other than sale or hire; (e) the laying out or alteration of streets (including bridges, causeways and culverts), if required; and (f) the leveling, paving, metalling, flagging, channelling, sewering and draining of the said streets, and the provision therein of water, lighting and other sanitary conveniences ordinarily provided in a Municipality.
" Section 42 deals with matters which may be provided for in dealing with improvement schemes.
It is necessary to read this section as well: "Any improvement scheme may provide for (a) the acquisition by the Board of any land, in the area comprised in the scheme which will, in their opinion, be affected by the execution of the scheme , (b) raising, lowering or leveling any land in the area comprised in the scheme; 371 (c) the formation or retention of open spaces .
and (d) any other matters, consistent with this Act, which the Board may think fit." Under section 47, the Board is required to consider objections, representations and statements of dissent received under the relevant provisions of sections 43, 44 and 45; and it provides that as a consequence of considering the said objections, representations and statements of dissent, the Board may either abandon the scheme or apply to the State Government for sanction to the scheme, with such modifications, if any, as the Board may consider necessary.
Section 47(2)(e) lays down that every application submitted under sub section
(1) shall be accompanied by a list of the names of all persons, if any, who have dissented, under section 45, clause (b), from the proposed acquisition of their land or from the proposed recovery of a betterment fee, and a statement of the reasons given for such dissent.
The rest of the Chapter deals with the subsequent stages of the framing of the improvement schemes to which it is unnecessary to refer.
Chapter IV deals with acquisition and disposal of land.
Three sections out of this Chapter are relevant for our purpose.
Section 78 deals with the abandonment of acquisition in consideration of special payment.
Section 78(1) is relevant; it reads thus: "In any case in which the State Government has sanctioned the acquisition of land, in any area comprised in an improvement scheme, which is not required for the execution of the scheme, the owner of the land, or any person having an interest therein, may make an application to the Board, requesting that the acquisition of the land should be abandoned in consideration of the payment by him of a sum to be fixed by the Board in that behalf.
" The other sub sections of section 78 lay down a procedure for dealing with applications made under sub section
With the details of these provisions we are not concerned.
The only point which is relevant for our purpose is that an application for abandonment can be made in respect of land which is not required for the execution of the scheme.
In other words, if it appears that the piece of land which is comprised in the scheme already sanctioned by the Government is in fact not required for the execution of the scheme, an application may be made for abandonment of acquisition in respect of such a land.
The basis for making such an application is that though the land was comprised in the scheme, it is found that it is not required for the execution of the scheme,, That takes us to section 78A which has a bearing on the construction of section 30(c) of the Act.
Section 78A(1) is material for our purpose; it reads thus "When by the making of any improvement scheme, any land in the area comprised in the scheme which is not B(N)3SCI 11 372 required for the execution thereof will, in the opinion of the Board, be increased in value, the Board, in framing the scheme, may in lieu of providing for the acquisition of such land, declare that a betterment fee shall be payable by the owner of the land or any person having an interest therein in respect of the increase in value of the land resulting from the execution of the scheme." Section 78A(2) provides for the determination and calculation of the betterment fee.
The last section in this Chapter is section 81.
It confers power on the Board to dispose of land vested in or acquired by their under this Act.
Section 81(1) lays down that the Board may retain, or may let on hire, lease, sell, exchange or otherwise dispose of any land vested in or acquired by them under this Act.
How this power can be exercised is specified by sub sections (2) and (3) of section 81 Before we part with the Improvement Act, it would be useful to mention that sections 120 to 126 which occur in Ch.
VI of this Act deal with the accounts of the Board.
Section 122 provides for credits to capital account and lays down, inter alia, that all sums, except interest, received by way of special payments for betterment fees in pursuance of sections 78, 78A or 79, shall be credited to the capital account.
Section 123 deals with the question of the application of the capital account, and it proceeds on the basis that the moneys credited to the capital account shall be held by the Board in trust, and by clauses (a) to (h), it specifies the objects or purposes for which the said amount can be applied.
Section 124 refers to items which have to be included in the revenue account; and section 125 requires that like the moneys credited to the capital account, those credited to the revenue account must also be held by the Board in trust, and the same shall be applied for the purposes specified in clauses (a) to (g) of section 125(1).
Let us now revert to the question about the construction of section 30(c) of the Act.
Before answering this question, we would like to recall the material facts which are not in dispute.
The land if question has been included in the boundaries of the area comprised in the scheme.
After the Board framed scheme No. 53, it has issued a notice under section 43(1) of the Improvement Act, and as required by section 43(7)(b), while mentioning the boundaries of the area com prised in the scheme, it has clearly been shown that the laid in question is comprised in the said scheme.
In respect of this land, proceedings have been taken under section 78A of the Improvement Act and betterment fee has been levied and accepted.
Mr. Pathak for the respondent contends that as soon as it is shown that the land in question was comprised in the scheme and in respect of it betterment fee has been levied and accepted, section 30(c) of the Act is attracted.
His argument is that such a land is required for carrying out the provisions of the Improvement Act.
On the 373 other hand, Dr. Barlinge contends that the land in respect of which betterment fee has been levied cannot be said to be required for carrying out any provisions of the Improvement Act, though it may be that the betterment fee would assist the Board in discharging its functions under the Improvement Act.
In deciding the merits of these competing claims, it is necessary to remember that the dispute in the present proceedings is not between the Board on the one hand and the landlord or the thika tenant on the other ', the dispute is between the landlord and the thika tenants, and in the decision of this dispute, the Board is not interested.
Whatever be the decision of the Court in the present dispute will not affect the Board in the discharge of its duties and functions and will have no impact on the scheme as such.
The words used in section 30(c) of the Act are, in a sense, simple enough; but it must be conceded that the problem of their construction is not very easy, and so, we might attempt to resolve this problem by considering what our approach should be in construing the relevant provision.
Normally, the words used in a statute have to be construed in their ordinary meaning; but in many cases, judicial approach finds that the simple device of adopting the ordinary meaning of words does not meet the ends or a fair and a reasonable construction.
Exclusive reliance on the bare dictionary meaning of words may not necessarily assist a proper construction of the statutory provision in which the words occur.
Often enough, in interpreting a statutory provision, it becomes necessary to have regard to the subject matter of the statute and the object which it is intended to achieve.
That is why in deciding the true scope and effect of the relevant words in any statutory provision, the context in which the words occur, the object of the statute in which the provision is included, and the policy underlying the statute assume relevance and become material.
As Halsbury has observed, the words "should be construed in the light of their context rather than what may be either strict etymological sense or their popular meaning apart from that context(1)".
This position is not disputed before us by either party.
There has, however, been a sharp controversy before us on the question as to what is the context to which recourse should be had in interpreting section 30(c).
Mr. Pathak contends that in construing section 30(c) of the Act, the key words are "required for carrying out any of the provisions of the Improvement Act", and he has urged that the task of interpretation of this key clause should he attempted by having re. lard to the context, the object and the policy of the Improvement Act.
In interpreting this clause, the court should ask itself: what is the purpose of the provisions of the Improvement Act which the land is required to serve, before section 30(c) of the Act can be invoked? And in finding an answer to this question, the court must bear in mind the historical evolution of the legal (1) Halabury 's Laws of England Vol.
36, p. 394, para 593.
374 principles relating to the powers and functions of Improvement Boards.
In this connection Mr. Pathak has relied on the decision of the House of Lords in R. H. Galloway vs The Mayor and Commonality of London(1).
In that case a contrast was drawn between the special powers conferred on persons by Parliament for effecting a particular purpose, and those conferred on the Mayor and Commonality of the City of London to make certain public improvements in the City.
It was held that where a company was authorised to take compulsorily the lands of any person for a definite object, it would be restrained by injunction from any attempt to take them for any other object.
On the other hand, where the Mayor and Commonalty of the City of London had been entrusted with powers to make certain public improvements in the City, and for that purpose had been authorised compulsorily to take land, to raise money on the credit of it, and to sell superfleous land to pay off the debt, the Act which gave them those powers did not expressly center on the authorities to acquire more land than was absolutely necessary to effect the desired improvements; nevertheless the material provisions of the said Act ought to be construed favorably to them, and ought to be interpreted to confer on them the power to take lands "for the purposes of the Act", even though they may not be abso lutely necessary for the improvement scheme as such.
In other words, this decision shows that where the Board is entrusted with the work of improving the City and is constituted for that purpose by a statute, its power to acquire lands for the purpose of the improvement scheme would include the power to acquire a land which is comprised in the scheme, though it may not be absolutely necessary for the scheme as such; and in such a case, it would be compe tent to the Board first to acquire the land and then to dispose of it, thereby putting itself in possession of the necessary funds to discharge its functions and obligations.
The same principle has been emphasised by the Privy Council in the Trustees for the Improvement of Calcutta vs Chandra Kanta Ghosh (2).
We have already referred to sections 41 and 42 of the Improvement Act.
Section 41 enumerates matters which must be provided for in the improvement schemes, whereas section 42 deals with matters which may be provided for in the improvement schemes.
Section 42(a) lays down that any improvement scheme may provide for the acquisition by the Board of any land, in the area comprised in the scheme, which will, in their opinion, be affected by the execution of the scheme.
The question which arose before the Privy Council in the case of the Trustees for the Improvement of Calcutta(1) was whether under section 42(a), it was competent to the Board to acquire, for the purpose of recoupment, land which is not required for the execution of the scheme, but the trustees are of opinion that the said land would, by virtue of the scheme, be increased in value.
The (1) [1866] 1 Eng & Ir A.C. 34.
(2) [1919] L.R. 47 I.A. 45.
375 decision of this question depended, inter alia, on the meaning of the word "affected" used in section 42(a).
The argument which was urged before the Privy Council was that in order that land can be acquired by the Board under section 42(a), it must appear that the land falls in the area comprised in the scheme and would be affected by the execution of the scheme.
If the land does not become a part of the scheme itself but remains outside the scheme, it cannot be said to be affected by the scheme; and so, the Board may have no power to acquire it avowedly for the purpose of securing recoupment money.
The Privy Council rejected this contention and held that the Board was empowered to acquire land which is comprised in the scheme and would be competent to sell it and thereby raise funds if it is satisfied that the value of the land will be enhanced by virtue of the scheme.
"There would appear to be nothing", said Lord Parmoor speaking for the Board, "either in the general scheme of the Act or in the special context which is inconsistent with giving the word "affected" its ordinary and normal sense; but it was suggested in the argument on behalf of the respondent that the Act did not authorise the Board to acquire land unless it was either physically affected by the execution of the scheme, or injuriously affected, whether by severance or in some other manner" (p. 54).
In rejecting this argument, Lord Parmoor observed that "in the opinion of their Lordships, none of the suggested limitations to the usual and normal meaning of the word "affected" in section 42 are admissible, and that there is no reason, either in the general purpose of the Act or the special context, that the word should not be construed in its ordinary sense, and that, as so construed, section 42 authorises the acquisition of the land of the respondent, which was inserted in the scheme, because in the opinion of the Board, it would be enhanced in value by its execution".
Section 78 and section 78A which has been inserted in the Improvement Act in 19 3 1, in a sense give statutory recognition to the principle evolved by the Privy Council while interpreting section 42 of the Improvement Act.
Basing himself on this aspect of the matter, Mr. Pathak con tends that where a land is comprised in the improvement scheme originally notified and betterment fee is levied later in respect of it under section 78A, the Board can be deemed to have taken two steps,, it may be said that the Board acquired the land and later, sold it to the owner on the terms and conditions authorised by section 78A. In other words, the argument is that the levy of betterment fee is another way of bringing the land within the purview of the improvement scheme and it is, in fact, an alternative way of acquiring it.
If that is so, section 30(c) which obviously includes lands acquired for the purposes of the scheme, cannot be said to exclude land which is not directly acquired, but is indirectly placed in the same category of lands, because recovery of the recoupment fee is one way of acquiring the land.
It is on these grounds that Mr. Pathak has strenuously contended that the key clause in section 30(c) should receive a liberal 376 construction and the land in question in the present proceedings should be held to be required for carrying out the relevant provisions of the Improvement Act.
On the other hand, Dr. Balinge has emphasised the fact that the section which we are construing occurs in the Thika Tenancy Act and it is the context of this Act as well as the object which it seeks to achieve that are relevant and material.
There is no doubt that the provisions of the Act are intended to serve the purpose of social justice.
The Legislature realised that the relations between the landlord and the tenants in respect of holdings let out to thika tenants under the Act needed to be regulated by statute and it thought that thika tenants deserved some special protection.
The Act is thus a measure which can be described as social welfare measure, and so, the argument is that section 30 which provides for an exception to the material provisions of the Act, should be strictly construed, so that the beneficent purpose of the Act should not be unduly narrowed down or restricted.
In construing section 30(e), it would, therefore, be relevant to remember whether it could not have been the intention of the Legislature to permit a private land holder whose land has not been acquired and does not form part of the improvement scheme, to claim immunity from the application of the relevant provisions of the Act which give protection to the thika tenants; and so, Dr. Barlinge 's contention is that it would be unreasonable to introduce a liberal approach in construing the clause "required for carrying out any of the provisions of the Improvement Act" as suggested by Mr. Pathak.
In our opinion, while construing section 30(c) it would be necessary to bear in mind the context of the Act in which the section occurs.
We have already noticed the broad features of the Act, and the object of the Act to help the thika tenants is writ large in all the material provisions.
In the case of such a statute, if an exception is provided, the provision prescribing the exception and creating a bar to the application of the Act to certain cases must, we think, be strictly construed.
Take the other clauses of section 30: they clearly indicate that it is only lands vested in Government or other special bodies or authorities that are excepted from the application of the Act.
Prima facie, it is not easy to assume that a private land] ,older like the respondent would be within the protection of section 30, because there is no consideration in his case.
as in the case of other authorities or bodies covered by clauses (a) and (b) of section 30, which would justify the exclusion of the Act to 'his case.
That is one aspect of the matter which we cannot ignore.
That takes us to the crux of the problem: can the land in question be said to be required for carrying out any of the provisions of the Improvement Act? It is significant that it is the land which must be required, and not any fee or charges that may be levied against it.
What section 30(c) of the Act seems to require is direct 377 connection between the land as such and the requirements of the provisions of the Improvement Act.
The other ingredient of section 30(c) is that the land must be required for carrying out the provisions of the Improvement Act.
In the context, this second ingredient of the section seems to suggest that the land must be necessary for carrying out the provisions as such of the Improvement Act; in other words, we should be able to say about the land in question that it was necessary for carrying out a particular provision of the Improvement Act.
The third and the last ingredient of s.30(c) is that the necessity must be established for carrying out the provisions of the Improvement Act and not the policy of the said provisions or the object which they are intended to achieve.
Having regard to these ingredients of section 30(c), the question which calls for an answer is it shown that the land in question is necessary to carry out any specific provision of the Improvement Act '? It is difficult to answer this question in favour of the respondent.
It is true that the betterment fee which is levied goes to constitute an important item in the capital account under section 122 of the Improvement Act.
It is also true that the Board 'has the power to levy betterment fee in order that it should secure enough funds to carry out its obligations under the Improvement Act.
Such a power has always vested in the Board and has now been statutorily conferred on it by section 78A.
Under section 81, the Board can acquire more land than is absolutely necessary for the purpose of the scheme as such, and may later dispose of superfluous land.
The existence of these powers cannot be disputed.
But would it be consistent with the fair construction of section 30(c) to hold that because the land in question can be made liable to pay betterment fee and the betterment fee thus realised from the land serves the purpose of section 122 of the Improvement Act, the land itself is required for carrying, out the provisions of section 122? In order that section 30(c) should be applicable, the respondent must point out a specific provision of the Improvement Act for the carrying out of which the land as such is required.
The provisions of section 122 of the Improvement Act do not he help the respondent, because it is not possible to bold that for carrying out the provisions of section 122, the land in question is directly required.
There is another aspect of the question to which we ought to refer Section 78A, like section 78, deals with lands which in terms are not required for the execution of the scheme.
These two sections provide for two categories of lands, both of which were originally comprised in the scheme, but are later found to be not required for the scheme.
Now, when section 78A expressly says that the and in respect of which betterment fee can be levied, is not required for the scheme, it is not easy to accept the argument that such a land is nevertheless required for carrying out the provisions of section 78A.
In construing section 30(c), it is necessary to distinguish between the carrying,, out the provisions of the Improvement Act, and the achieve 378 ment or the accomplishment of the objects of the said provisions.
In one sense, the land in question does serve the purpose of the Improvement scheme, because the betterment fee which is levied on it swells the funds of the Board and the funds are utilised by the Board for the purposes of carrying out the scheme; but the requirement of the land for carrying out the provisions of the Improvement Act which alone can invoke section 30(c), cannot be said to be satisfied by this indirect connection between the land and the general purpose of the Improvement Act.
There is one more aspect of this problem which is not irrelevant.
Betterment fee is levied against a land, because its value is increased as a result of the improvement scheme, and so, section 78A authorises the Board to levy betterment fee presumably on the ground that the Board is justified in recouping itself by such levy in respect of unearned increment in the value of the land of which the land holder gets a benefit.
If the land holder pays betterment fee for such unearned increment in the value of the land, he may apply under section 25 of the Act for enhancing the rent payable by the thika tenants to him.
But there appears to be no reason why a landlord, the value of whose land has increased by the improvement scheme introduced in the area in which his land is situated, should get the additional benefit of exemption from the application of the provisions of the Act which give protection to the tenants.
Having carefully considered the question of construing s.30(c), we have come to the conclusion that the words used in section 30(c) do not justify the conclusion that a private landholder is intended to be equated with Government or with the other special bodies or authorities whose lands are exempted from the operation of the Act by section 30.
We do not think that the Legislature intended that the provisions of the Act should cease to apply to all lands which ore comprised in the scheme, because such a provision would appear to be inconsistent with the categories of cases covered by clauses (a) & (b) of section 30.
Besides, if that was the intention of the Legislature in enacting section 30(c), it would have been easy for the Legislature to say that lands comprised in the improvement schemes should be exempted from the application of the Act.
Section 30, as we already emphasised, provides for an exception to the application of the beneficent provisions of the Act, and it would, we think.
not be unreasonable to bold that even if section 30(c) is reasonably capable of the construction for which Mr. Pathak contends, we should prefer the alternative construction which is also reasonably possible.
In construing the provisions which provide for exceptions to the applicability of beneficent legislation, if two constructions are reasonably possible, the Court would be justified in preferring that construction which helps to carry out the beneficent purpose of the Act and does not unduly expand the area or the scope of the exception.
Therefore, we are satisfied that the Court of Appeal was in error in 379 reversing the conclusion of the trial Judge that the present suits filed on the original side of the Calcutta High Court were incompetent.
There is, however, one more point to which we ought to refer before we part with these appeals.
Both the learned Judges in the Court of Appeal have observed that if section 30(c) is held not to apply to the land in question on the ground that it is not required for carrying out any of the provisions of the Improvement Act, section 30(c) would, in substance, become redundant.
The argument which was thus urged before the Court of Appeal and has been accepted by it.
assumes that the Board is a local authority within the meaning of 30(b)(iv) and as such, the land which has vested in the Board is already excepted from the operation of the Act by the said provision; and that means that the lands acquired by the Board under the provisions of the Improvement Act have already been provided for by section 30(b)(iv).
If that is so, there would be no cases to which section 30(c) can apply.
Since this point arises incidentally in construing section 30(c), we do not propose to decide in the present appeals whether the Board is a local authority within the meaning of section 30(b)(iv).
In dealing with this particular argument, however, we are prepared to assume that the Board is such a local authority.
Even so, it is possible to hold that section 30(c) does not become redundant, because though section 30(b)(iv) may include lands acquired by the Board, there may still be some other lands which are not acquired by the Board but which, nevertheless, may be required for carrying out some provisions of the Improvement Act.
Take, for instance, section 42 of the Improvement Act.
Section 42(b) lays down that any improvement scheme may provide for raising, lowering, or levelling any land in the area comprised in the scheme.
Section 42(c) provides for the formation and retention of open spaces.
Similar provisions are made by section 35C(1)(i) and (j) as introduced by the Amending Act 32 of 1955.
It is possible to take the view that the lands required for the purposes specified in these provisions of section 42 or section 35C of the Improvement Act are required within the meaning of section 30(c) of the Act, though they may not have been acquired.
But apart from this consideration, the argument that section 30(c) would become redundant cannot, we think, be treated as decisive, because it is not unknown that the Legislature sometimes makes provisions out of abundant caution.
When section 30(c) was enacted in 1949, the Legislature may have thought that in order to avoid any doubt, dispute or difficulty in regard to the question as to whether the Board would be a local, authority or not, it would be better to make a specific provision in respect of lands which are acquired by the Board as well as those which would be required for the purpose of carrying out the provisions of the Improvement Act.
It is true that the lands which are required within the meaning of section 30(c) would include lands which are actually acquired as well as those which might not have been acquired but are, nevertheless, required for carrying out the provisions of the Improvement Act.
But having specified respective 380 authorities or bodies in clause (a) & (b) of section 30, the Legislature may have thought that it would be better to refer to the Improvement Act and lands required for carrying out its provisions, specifically and expressly.
Having regard to the considerations on which our interpretation of section 30(c) is based, we are not prepared to attach undue significance to the argument based on the assumption that the Board is a local authority within the meaning of section 30(b)(iv) and that would make the provisions of section 30(c) either superfluous or would deprive the said provision of any significance or importance.
The result is, the appeals are allowed, the decrees passed by the Division Bench are set aside and those of the trial Judge restored with costs throughout.
Appeals allowed.

summary:
The appellants were thika tenants under the respondent in respect of the suit land.
Under the Calcutta Improvement Trust Act, 1911, a scheme had been framed for improvement of an area within which the suit land was situate and the suit land was shown among the properties, in regard to which betterment fees were proposed to be levied.
The respondent accepted the betterment fee assessed and levied under section 78A of the Act.
Thereafter, he filed suits for the ejectment of the appellants.
The suits were dismissed as not maintainable because of section 5 of the Calcutta Thika Tenancy Act, 1949, under which an application for the ejectment of a thika tenant could be filed only before the Controller under that Act.
On appeal, it was held, that the suits were governed by the provisions of section 30(c) of the Thika Tenancy Act, under which, nothing in the Act applied to any land which was required for carrying out any of the provisions of the Improvement Trust Act, and therefore, the appeals were allowed.
In the appeal to this Court by the tenants on the question as to whether section 30(c) applied to the suits; HELD: Because the land was liable to pay betterment fee and the fee thus realised served the purpose of section 122 of the Improvement Trust Act by swelling the funds of the Improvement Trust Board and such fund could be utilised by the Board for the purposes of carrying out the scheme, it cannot be said that the land itself was required for carrying out the provisions of the improvement Trust Act.
The requirement of section 30(c) of the Thika Tenancy Act could not be said to be satisfied by such an indirect connection between the land and the general purpose of the Improvement Trust Act.
[378 A B] In construing the words of a statute the context in which the words occur, the object of the statute in which the provision is included and the policy underlying the statute assume relevance and become material.
[373 F] In the instant case, the object of the Thika Tenancy Act to help thika tenants is writ large in all the material provisions of the Act In construing section 30, which provides for an exception to the applicability of beneficent legislation, if two constructions are reasonably possible, the Court would be justified in preferring that construction which helps to carry out the beneficent purpose of the Act and does not unduly expand the area or the scope of the exception, that is, the exception must be strictly construed.
Under the section, it is the land which must be required and not any fee or charges that may be levied against it.
Further, there must be a direct connection between the land as such and the requirements of the provisions of the improvement Trust Act, and not with the policy of the provisions or the object which they are intended to achieve.
In order that section 30(c) should be applicable, the respondent must point 365 out a specific provision of the Improvement Trust Act for the carrying out of which the land as such was required.
Section of that Act would not help the respondent, because, it would not be possible to hold that for carrying out its provisions the land was directly required.
H 377 C, G; 378 H] Moreover, when section 78A of the Improvement Trust Act, expressly says that the land in respect of which betterment fee can be levied, is, not required for the scheme, the argument that such a land is, nevertheless, required for carrying out the provision of section 78A, cannot be accepted.
[377 H] Betterment fee is levied against a land, because its value is increased as a result of the improvement scheme and the Board is justified in recouping itself by such levy in respect of the unearned increment in the value of the land, and, if the landholder pays the fee, he may apply under section 25 of the Improvement Trust Act for an enhancement of the rent payable by the tenants; but there is no reason why such a landlord should get the additional benefit of exemption from the application of the provisions of the Thika Tenancy Act.
Clauses (a) and (b) of section 30 of that Act indicate that it is only lands vested in Government or other special bodies or authorities that are excepted from the application of the Act.
The words used in cl.
(c) do not justify the conclusion that a private landholder is intended to be equated with Government or with such other special bodies or authorities.
[378 C, D, F] Though lands acquired by the Board may be covered by section 30(b) (iv), on the assumption that the Board is a local authority, section 30(c) would not become redundant if it was held not to apply to the suit land, because, there may still be some other lands which are not acquired by the Board but which may.
nevertheless, be required for carrying out some provisions of the Improvement Trust Act, as for example under sections 35C and 42 of that Act.
Or, the legislature might have made, by way of abundant caution, a specific provision in respect of lands which are acquired by the Board as well as those which would be required for the purpose of carrying out the provisions of the Improvement Trust Act.
[379 D H]


judgement:
Appeal No. 672 of 1964.
Appeal by special leave from the judgement and decree dated October 1962 of the Madhya Pradesh High Court in First Appeal No. 8 of 1960.
C. B. Agarwala, W. section Barlingay and A. G. Ratnaparkhi, for the appellant.
M. Adhikari, Advocate General for the State of Madhya Pradesh, B. sen, M. section K. Sastri, M. N. Shroff, R. P. Kapur for 1.
N. Shroff, for the respondent No. 1.
The judgment of the Court was delivered by Raghubar Dayal, J.
This appeal, by special leave, arises out of a suit instituted by the appellant for a declaration that he was not liable to pay a certain amount originally due from defendant respondent No. 2 and for the issue of a permanent injunction restraining the State Government, Madhya Pradesh, defendant respondent No. 1 from continuing the proceedings for the recovery of the amount or for starting any fresh proceedings.
The suit was decreed by the Trial Court but, on appeal, the High Court reversed the decree and dismissed the appellant 's suit.
The admitted facts of the case are that on December 24, 1956, respondent No. 2 purchased at the public auction sale held by the Divisional Forest Officer, Harda, the cut timber and arkat trees of coupe No. 9 Eastern, East Kalibhit Range, in Harda Forest 383 Division, for Rs. 70,200.
The appellant stood surety for the purchaser, viz., respondent No. 2.
The purchase price was to be paid in four instalments, according to para 4 of the deed of contract.
Rs. 17,600 were to be paid at once and were so paid.
The other instalments were due on March 1, May 15 and December 15, 1957.
These instalments were not paid by respondent No. 2 and hence respondent No. 1 took proceedings against the appellant for the recovery of the amount.
According to the terms of the contract, the contractor, res pondent No. 2, was to commence his work of collecting and removing the cut timber within 1 month after furnishing a copy of the boundary certificate.
This certificate, Exhibit D 1, was furnished on February 5, 1957 and stated that the respondent No. 2 had clearly understood the boundaries of the areas covered by the lease and that he had taken possession of the standing/felled/ collected material in the aforesaid coupe as announced at the auction and described in the said lease and that he was satisfied that the quantity delivered to him agreed substantially with that announced at the auction.
The appellant Badri Prasad signed this certificate as a witness.
The work could continue upto June 30, 1958.
Interest was to be charged at 6 1/4 per cent per annum in respect of the instalments not paid on the due dates.
The removal of the forest produce purchased from the contract areas was to be according to specified routes and, after they had been examined at the depots specified in clause 5 of the contract deal.
Clauses 5A and 5B of the contract made it incumbent on the forest contractor respondent No. 2 to set apart certain timber for certain purposes to the agriculturists and the residents of the villages till three months before the expiry of the contract.
The Forest Contract Rules were deemed to be part of the contract entered into between respondent No. 2 and the State, by clause 6 of the contract.
The formal deed of contract was signed by the Chief Conser vator of Forests on May 3, 1957 and the preamble of the deed gives the date of the making of the contract to be May 3, 1957.
The First Schedule to the Contract states: "The forest produce sold and purchased consists of: All standing trees bearing hammer mark of marginally shown device at base and breast height.
All felled trees marked at the butt end and stumps with the device shown in the margin".
This is signed by the contractor, respondent No. 2 and by the Divisional Forest Officer, Harda Division, dated December 24, 1956.
The trace of the coupe sold was signed by respondent No. 2 and the Divisional Forest Officer on November 29, 1956, prior to the actual auction sale.
The Third Schedule relating to the out.
384 turn register was also signed by respondent No. 2 and, by the appellant who stood surety and the Divisional Forest Officer, on December 24, 1956.
The security bond was signed by the appellant on December 29, 1956 and by the Divisional Forest Officer on March 30, 1957 and was countersigned by the Chief Conservator on May 3, 1957.
The entire coupe whose cut timber was sold to the respondent was divided into four sections A, B, C and D. This was done in accordance with r. 18 of the Forest Contract Rules.
This rule provides that the operations carried out in the contract area under a forest contract for the sale of standing trees are divided into two stages (a) cutting and (b) carting.
Cutting operations include felling and all processes of conversion etc.
without removing it further from the place where it was felled than may be necessary to carry out such processes.
Carting operations include all operations for the removal of a felled tree, or its converted products from the place where the tree was felled, whether such removal be to a depot or to a saw mill or other destination.
Sub r.
(2) of r. 18 authorizes the Divisional Forest Officer to divide the contract area, shortly termed a coupe, into such number of sections, not exceeding,, eight, as he may think fit.
The Divisional Forest Officer can regulate and confine the operations of the forest contract in accordance with the provisions mentioned in clauses (a) to (c) of that sub rule.
Clause (b) provides that a forest contractor can be allowed to carry out cutting operations first in sections 1 and 2 of the coupe only and as soon as he begins cutting operations in section 3 he shall be deemed to have surrendered all his rights to the standing trees in section 1 and similar would be the result on his beginning cutting operations in section 4 and so on, till all the sections of the coupe are completed.
Clause (c) authorises the forest contractor to begin carting operations from the sections whose trees he has begun to cut and provides that his rights to the forest produce in section 1 cease when he starts cutting operations in section 4, and so on.
The provisions of r. 20 apply to contracts where the trees have been felled by the Forest Department and the felled trees only were sold to the forest contractor.
Sub r.
(3) makes rules 18 and 19 applicable to such contracts in so far as they be applicable.
Sub r.
(2) of r. 20 provides that a forest contractor who has purchased felled trees shall remove all the trees purchased by him under his contract.
Respondent No. 2, the contractor, began his operations in section A of the coupe in the last week of February, 1957.
He defaulted in the payment of the second instalment which was due on March 1, 1957 and did not pay that amount till April 25, 1957, 385 though it was demanded several times from him.
On March 23, 1957 a notice.
Exhibit P4, was issued to him.
It stated: "You are being informed through this notice that the removal of goods from the coupe by you is already in excess of the amount deposited by you in the treasury.
So please send the challan of the second instalment as soon as possible by the return load carrier, otherwise your removal of goods would be stopped and a report would be made to the higher authority within two days".
This was duly served on respondent No. 2.
On April 25, 1957 the appellant was told by the forest authorities that no further removal of the forest produce would be allowed in view of the default of payment of the second instalment.
The licence book and the transit pass were taken back by the Government Forester, Madanlal Pagare.
Fire broke out in the forest and the cut timber sold to res pondent No. 2 was burnt.
The report about the loss from fire is Exhibit D2 dated April 29, 1957 and is signed by the contractor and Sheoprasad Parashar.
the Forest Guard.
As a result of the fire the goods purchased by respondent No. 2 and not removed by then, ceased to exist.
He did not pay the amounts due for the 2nd, 3rd and 4th instalments.
The appellant sought to avoid his liability as surety for the non payment of the amount inter alia on the round that the contractor respondent No. 2 had not been put in possession 'of the cut timber sold to him except of such timber which had been in section A of coupe No. 9, that therefore there had been no transfer of property in the timber sold to him and that he was therefore not liable for paying the amounts due on the 2nd, 3rd and 4th instalments.
It was averred by the appellant in paragraph 5(A) of the plaint: "Thus it was clearly understood on both sides and also explained by the Forest Department officials of defendant No. 1 and which has been all along implicit in the contract as per usual practices of the forest department that the possession of the goods of each respective section will be delivered to the Contractor on payment of each instalment as stated above.
It was only on due payment of each instalment that the contractor was to become entitled to remove the goods in pursuance of the licence book supplied to him by the forest department of defendant No. 1.
In paragraph 5(B) it was stated: "That the contractor or his licensee had no right to remove the goods until the same was duly hammer marked by the representative of the said forest department 386 and until the licence and the transit pass were duly checked and signed by the Coupe Guard or such other representative as may be present on the spot".
Para 5(C) mentioned: "That the contractor or his men were further liable to carry the forest produce for check and examination of forest Depot officers of Ziri, Rahetgaon and Timarni established for that purpose and after the cut wood was checked by the Depot Officers, the same used to be marked with a special hammer mark, and unless that was done it was not lawful for any person to remove timber brought to the depot".
Respondent No. 1 admitted what was stated in paras 5(B) & (C) of the plaint.
It denied the understanding as averred in para 5(A) and what was alleged in para 5(D) to the effect that it was after the processes mentioned earlier that delivery of the goods was deemed to be given to the forest contractor and was to be at his disposal.
The main question urged before us is that the property in the cut timber sold and existing in sections B, C and D 'of the coupe had not passed to the contractor before the fire broke out in the last week of April 1957 and this contention is based on the facts that the goods sold were not specific goods as they had not been hammer marked, that the goods in sections B, C and D could not be delivered till the 2nd, 3rd and 4th instalments had been paid and that the deed of contract was signed after the fire had taken place.
We may now consider the points urged in support of the contention that the property in the timber of sections B, C and D had not passed to respondent No. 2.
The first schedule to the contract describes the property, forest produce sold and purchased, thus: " All standing trees bearing hammer mark of marginally shown device at base and breast height.
All felled trees marked at the butt end and stumps with the device shown in the margin".
It is the case of the plaintiff appellant that cut trees timber or cut trees were sold.
Para 2(A) of the plaint describes the property purchased as 'the cut timber and arkat trees of coupe No. 9 '.
Clause (1) of para 2 'of the statement of the case filed on behalf of the appellant makes this further clear as it is stated therein that the contract was for the purchase of 'the cut timber and cutarkat trees '.
It appears therefore that the expression about 'all standing trees bearing hammer mark ' in the description of forest produce sold was inadvertently omitted to be struck out from the deed of contract though there was no sale of standing trees to respondent No. 2.
387 Chapter XX of Part IV of Vol.
1 of the Central Provinces & Berar Forest Manual (hereinafter shortly termed Forest Manual) gives the rules for the disposal of forest produce.
Rule 5 states that before forest produce is disposed of it shall be properly marked.
The standing trees are marked with hammer at two places, at the butt end and at the lower part, a little above the stem. 'the trees are to be felled so as to leave the lower hammer mark in the un cut portion.
The felled tree sold is subject to further processes of cutting etc.
The portions so cut have to be hammer marked, as only one such portion will have the hammer mark which was first put at the butt end of the tree.
A second special hammer mark is placed on these cut portions at the time of checking at the depot.
The two hammer marks necessary to be put on the cut portions of the felled tree before they could be actually taken away from the forest area were not made on the cut timber existing in sections B, C and D and sold to respondent No. 2, as the felled trees in those areas had not been cut further by the contractor.
The omission to put such marks does not make the goods sold unascertained.
The felled trees sold to the respondent No. 2 had a butt mark at the butt end.
A similar hammer mark existed on the stem near which the felled tree must have lain, it being presumed that the rules for the felling of trees were properly complied with by the forest authorities, mentioned above.
The goods sold therefore were specified goods.
There is nothing in the contract that possession would not be delivered over the cut timber in sections B, C and D till the 2nd, 3rd and 4th instalments have been paid.
The relevant provisions of r. 18 of the Forest Contract Rules, extracted earlier, do not contain any such restriction.
It only provides that the operations necessary to be conducted by the contractor had to start with section A or the first section and that the rights of the contractor to the material purchased would be deemed to be surrendered in certain circumstances.
This has nothing to do with the payment of the instalments by the contractor.
He can proceed to operate on the entire property purchased, according to his inclination in accordance with the procedure, as regulated by the rules.
There is therefore no force in the submission that there could have been no delivery of possession over the produce sold and existing in section B, C and D till the various instalments had been paid.
The fact that the contract was signed by the Chief Conser vator of Forests on May 3, 1957, after fire had broken out has no effect on the question of delivery of possession of the produce sold and consequently on the passing of property in the goods to the contractor respondent No. 2.
The Chief Conservator who was the proper authority for entering into the contract of sale of property worth over Rs. 70,000/ had necessarily to sign the deed of contract subsequent to the actual auction sale and in view of the L/B(N)3SCI 12 388 exigencies of the procedure to be followed may have to sign after a substantial period of time.
The bid of respondent No. 2 at the auction sale had been provisionally accepted by the Divisional Forest Officer who is authorized under the rules to conduct the auction sale.
The Divisional Forest Officer and respondent No. 2 thereafter signed the deed of contract on December 24, 1956 the date on which the auction sale took place.
The appellant, as surety, also signed the third schedule on December 24, and the security bond on December 24.
Practically all the formalities necessary for the execution of the deed except for the signatures of the Chief Conservator, authorised to enter into a contract of this magnitude, had been completed.
His formal signature on the deed of contract relates back the contract to the date of auction when the bid of respondent No. 2 was provisionally accepted and he and the Divisional Forest Officer signed the contract.
In this connection, reference may be made to certain rules and the instructions issued by Government to the various officers for complying with those rules.
Executive instructions on the preparation of forest contract agreements are printed at p. 125 of Vol.
11 of the Forest Manual.
Instruction No. 9 provides that if the parties have signed the deed on the same date, that date should be entered in the preamble, but if they had signed on two different dates, then the later of those two dates should be entered in the preamble.
It was in accordance with this instruction that May 3, 1957, the date on which the Chief Conservator signed the contract was mentioned in the preamble of the contract deed.
That date therefore had not any real effect on the actual date on which the sale of the forest produce took place in favour of respondent No. 2.
Instruction 10 directs that the dates in clause 2 of the prescribed deed of contract should be very carefully entered as they have an important bearing on the deed and show the period during which the contract will remain in force.
Such a period in the deed of contract Exhibit D is the period 'from the date the forest contractor furnishes the necessary coupe boundary certificate after inspection of the contract area to the 30th day of June 1958, both days inclusive '.
The coupe boundary certificate was furnished on February 5, 1957.
It follows that the period for the operation of the contract was from February 5, 1957 to June 30, 1958.
This is a clear indication that the date in the preamble has no real effect and that the contract, after its being duly signed by the competent authority, relates back to the date of sale.
Instruction 16 deals with the execution of the deed of contract.
Clause (i) provides for the drawing up of the contract in triplicate.
Clause (iii) requires the Divisional Forest Officer to initial the 389 contract after checking it before the lessee is asked to sign it.
Clause (iv) provides that where the Divisional Forest Officer himself is empowered to execute the agreement he and the lessee should execute it together and clause (v) provides that where the Divisional Forest Officer is not empowered to execute the agreement, it should be executed by the lessee and his signature should be attested and that the agreement should then be sent as soon as possible to the Forest Officer empowered to execute it, for his signature and attestation.
These instructions about the execution of the deed of contract plainly take into consideration the lapse of time between the execution by the lessee and by the competent forest authority.
Instructions Nos. 38 to 48 are with regard to the auction of forest contracts.
It is the Divisional Forest Officer who is directed to take certain steps.
Instruction No. 45 provides that Divisional Forest Officers should ordinarily allow themselves more than one day for the conduct of the auction sales.
Instruction No. 47 provides that where the agreements are to be signed by the Conservator or higher authority, the first instalments must still be paid and the duplicate agreements signed by the contractor and his surety, if any, and sent to the Conservator immediately.
The Conservators should sign the duplicate agreements in token of acceptance and return them to the Divisional Forest Officers as soon as possible.
The reason for this is that it is obviously only fair to a forest contractor that he should be in possession of his signed agreement before he starts work on his contract, i.e., before July 1.
In case the Conservators are not competent to sign the contract deeds such deeds will have to be sent by them to the Chief Conservator who is competent in view of r. 102A of Vol.
1 of the Forest Manual (under Chapter XIX) and the relevant orders of the Government to execute contracts for the sale of forest produce upto an amount of Rs. 1,00,000 when payment is received in full at the time of delivery and upto Rs. 10,000 or upto Rs. 50,000 with the previous sanction of the Provincial Government when payment is not received in full at the time of delivery.
The exercise of this power by the Chief Conservator and other officers is subject to the rules given in the Government Notification and rule 1(a) of these rules relating to contracts for forest produce reads: "No timber or other forest produce may be ordinarily sold except on cash payment in full at the time of delivery.
Payment in instalments may, however, be considered as payment in full at the time of delivery provided that there is a clause in the agreement to the effect that when Divisional Forest Officer considers that the value of any forest produce removed by the purchaser equals or exceeds the amount of purchase money paid by him upto 390 that time, the Divisional Forest Officer may stop further removal until the purchaser has paid such further sum, as in the opinion of the Forest Officer, may be sufficient to cover the excess value of the forest produce removed or to be removed".
In view of this rule it would be deemed that the payment of the purchase price had been made in full at the time of delivery, though the actual payment was to be made in four instalments.
We are therefore of opinion that the sale of the forest pro duce to respondent No. 2 was finalised on the date of sale subject of course to the acceptance of his bid by the competent authority, the Chief Conservator of Forests and that the fact that the Chief Conservator signed the deed on May 3, 1957, does not make the sale effective from the date of his signature.
His signatures do not ratify any action of the Divisional Forest Officer which he took beyond his competence, but simply completes the execution of the deed of contract and relate back its execution to the date on which the sale took place and the contractor and the Forest Officer had signed the document.
We may now refer to the approach of the High Court to this question of the deed of contract operating from the date of its execution by respondent No. 2.
It was of opinion that respondent No. 2, and the Divisional Forest Officer, had made the contract in December 1956 long before April 28, 1957 and even if the Divisional Forest Officer was not competent to enter into the contract, his act had been subsequently ratified by the competent authority and that therefore the ratification related back to the date of the contract and had the same effect as if the Divisional Forest Officer had performed the act by the authority of the Chief Conservator of Forests.
With respect, we do not consider this approach to be correct.
The Divisional Forest Officer had authority under the statutory rules for holding the auction and for provisionally accepting the bid.
All that he did was within his authority.
He did not actually enter into the contract with respondent No. 2.
He simply signed the standard form of the contract for the satisfaction of the competent authority to the effect that its accepting the bid and entering into the contract would be correct as is the usual official procedure where subordinates have to put up or forward papers to the superior officers for approval, sanction or orders.
The right view of the entire procedure adopted in the case has been already stated by us above.
The other point urged by Mr. Agarwala, for the appellant, is that in view of r. 8 of the Forest Contract Rules which empowered the Divisional Forest Officer to stop the removal of forest produce sold on his finding that the value of the forest produce already removed by the contractor exceeded the amount of the instalments already paid by him, the seller in this case had reserved the right 391 of disposal of the forest produce until certain conditions were fulfilled and that therefore section 25(1) of the Indian (Act III of 1930 applies to the facts of the case and that therefore, notwithstanding, delivery of the forest produce to respondent No. 2 in February 1957, the property in it did not pass to respondent No. 2 until the conditions imposed by the seller were fulfilled.
There is nothing in the deed of contract 'or in the Forest Contract Rules which reserved such a right of disposal in the State.
Right given to the Government under r. 8 is the right to stop the removal of forest produce when the value of the forest produce already removed exceeded the amount of the instalments paid.
This is to regulate the compliance with the conditions of the auction one of which was that ordinary forest produce was to be sold on payment in full at the time of delivery.
The contractor had therefore to pay full price he had bid at the date of the sale or any day prior to the delivery of the goods to him in February 1957.
The provision for allowing payment by instalments is a concession for the convenience of the contractor and it is provided in the rule that payment in instalments may however be considered as payment in full at the time of delivery provided there be a clause in the agreement in accordance with the provisions of r. 8 of the Forest Contract Rules.
Reference may here be made to the provisions of section 83 of the (Act XVI of 1927).
Subsection (1) provides that when any money is payable for or in respect of any forest produce, the amount thereof shall be deemed to be a first charge on such produce, and such produce may be taken possession of by a Forest Officer until such amount has been paid.
Rule 8 of the Forest Contract Rules is therefore in pursuance of the statutory provisions of section 83 of the Forest Act which creates a lien on forest produce for the money payable to Government.
Action which the Divisional Forest Officer can take for stopping the removal of the forest produce sold is in pursuance of the statutory authority conferred on him and not in pursuance of any terms of the contract between respondent No. 2 and the Government.
When a contractor is deemed to have paid in full the price there could be no occasion for the Government to reserve a right of disposal of the property even when its delivery had been made to the purchaser.
As already stated, it is section 20 of the Sale 'of Goods Act which will apply to this case.
This section provides that where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment 'of price or the time of delivery of the goods or both is postponed.
The contract was unconditional, the goods sold were specific.
They were in a deliverable state and therefore the property in the goods did pass at the time when the contract was made.
This section would have applied even if the time of payment 392 of price hand been postponed.
In the present case, as already stated, the payment allowed by instalments is to be deemed payment in full at the time of the delivery of the goods sold.
The last contention raised for the appellant is that as the contract was signed by the Chief Conservator about a week after the goods lying in sections B, C and D had been burnt by fire, the contract must be deemed to have been not made at all by the Chief Conservator who could not have contracted to sell goods which did not exist.
The contention really is that there could be no ratification of the act of the Divisional Forest Officer, who had no authority to enter into the contract, after the goods had ceased to exist and reliance is placed in support of this contention on what is stated at para 415 at p. 177 'of Halsbury 's Laws of England, Vol. 1, III Edn.
It is stated there: "As to the time within which ratification may take place, the rule is that it must be either within a period fixed by the nature of the particular case, or within a reasonable time, after which an act cannot be ratified to the prejudice of a third person".
This is the general proposition and will not be applicable to this case as no third person is being prejudiced on account of the signing of the contract by the Chief Conservator on May 3, 1957, a week after the fire had destroyed certain goods purchased.
Further, it is stated in the same paragraph: "But by an anomalous rule limited to marine insurance a contract of marine insurance made by an agent on the principal 's property may be ratified by the principal after notice of loss".
This proposition is well settled in England.
In Williams vs North China Insurance Co.(1) this proposition was sought to be reviewed.
Cockburn C.J. said at p. 764: "The existing authorities certainly show that when an insurance is effected without authority by one person on another 's behalf, the principal may ratify the insurance even after the loss is known.
Mr. Benjamin asked us, as a Court of Appeal, to review those authorities.
Where an agent effected an insurance subject to ratification, the loss insured against is very likely to happen before ratification, and it must be taken that the insurance so effected involves that possibility as the basis of the contract.
It seems to me that, both according to authority and the principles of justice, a ratification may be made in such a case".
These observations would fully apply to the facts of the present case, even if we were of the view that the Chief Conservator ratified the unauthorised act of the Divisional Forest Officer on May (1) 393 3, 1957, after the fire had taken place.
The provisional acceptance of the bid and the signing of the deed by the Divisional Forest Officer must.
in the circumstances, be held to be subject to ratification.
It was within the realm of possibility that the forest produce might be lost on account of fire or any other risk mentioned in r. 32 of the Forest Contract Rules before the deed of contract was formally signed by the Chief Conservator.
The contract entered into therefore involved the possibility of the loss of goods by fire as the basis of the Contracts Lastly, reference may be made to r. 32 of the Forest Contract Rules which provides that a forest contractor shall not be entitled to any compensation whatever for any loss that may be sustained by reason of fire etc.
This is not a suit for compensation by the contractor respondent No. 2, but in essence the basis 'of the suit is that the forest contractor did not get possession of the forest produce in sections B, C and D, that such produce was lost by fire and that therefore he was not to pay the second, third and fourth instalments and cannot be said to be in default in payment of those instalments.
The loss of such goods by reason of fire therefore does not in any way give support to the claim of the appellant.
We are therefore of opinion that the appellant 's suit has been rightly dismissed by the High Court.
We accordingly dismiss the appeal.
There will be no order as to costs.
Appeal dismissed.

dataset_name: IN-Abs

summary:
The 2nd respondent purchased on 24th December 1956, at a public auction sale held by the Divisional Forest Officer, the cut timber of a coupe and paid the first installment of the purchase price immediately.
The appellant stood surety for the payment of the remaining three instalments.
The coupe was divided into 4 sections according to the rules which were deemed to be part of the contract and the boundary certificates was furnished to the 2nd respondent on 5th February 1957.
He began operations in the 1st section on the last week of February, but defaulted in the payment of the 2nd instalment which was due on 1st March 1957, and so, on 25th April the appellant and 2nd respondent were informed by the forest authorities, that no further removal of the timber would be allowed, as the value of timber already removed exceeded the amount paid.
On 28th April a fire broke cut and the timber sold to the 2nd respondent ceased to exist.
On 3rd May 1957, the formal deed of con tract, which was signed by the 2nd respondent and the Divisional Forest Officer on 24th December, was signed by the Chief Conservator of Forests, as required by the rules.
Since the 2nd respondent had not paid the later instalments proceedings were commenced by the 1st respondent against the appellant, whereupon he filed a suit for restraining the 1st respondent from continuing the proceedings.
The suit was decreed by the trial court, but dismissed on appeal, by the High Court.
In his appeal to this Court, the appellant contended that the 2nd respondent had not been put in possession of the timber sold, except the portion in the 1st section of the coupe, that there was no transfer of property in the timber and therefore he was not liable to pay the amounts due on the other 3 instalments, the transfer of property in the timber being a condition precedent to his liability.
HELD: There was an unconditional contract for the sale of specific goods in a deliverable state, the property in the timber passed to the 2nd respondent when the contract was made on 24th December 1956 under s 20 of the , and possession was also given on 5th February 1957.
Therefore, the appellant 's suit was rightly dismissed by the High Court [391 H] The timber was sufficiently identifiable and was therefore specified goods and there was nothing in the contract postponing possession till the other instalments have been paid.
The fact that the contract was signed by the Chief Conservator, after fire had broken out has no effect on the validity of the contract, or on the question of delivery of possession or on the passing of property in the timber.
The instructions in the Forest Manual about execution of contracts plainly take into consideration the lapse of time between the execu 382 tion by the lessee and by the competent forest authority, and therefore, the date on which the Chief Conservator signed had not any real effect on the actual date on which the sale of the timber took place.
It was also within the realm of possibility that the timber might be lost on account of fire or other risk, before the contract was formally signed.
The sale of the timber to the 2nd respondent was therefore final on 24th December, the date of sale, subject to the acceptance of his bid by the competent authority.
[387 E H; A B] Williams vs North China Insurance Co., L.R. (1876)1 C.P.D. 757, applied.
Rule 8 of the Forest Contract Rules empowers the Divisional Forest Officer to stop the removal of the timber on his finding that the value of the timber already removed exceeded the amount of instalments paid.
But, that would not amount to reserving a right of disposal in the State, because, the rules provide that though Ordinarily the timber should be sold for cash payment in full, payment in instalments could be considered as payment in full, if a right in accordance with r. 8 is reserved.
When a contractor is deemed to have paid in full the price, there could be no occasion for the Government to reserve a right of disposal.
The provision in r. 8 is only in pursuance of the statutory provision in section 83 of the Forest Act.
1927, which provides that when any money is payable for or in respect of any forest produce, the amount thereof shall be a first charge on such produce, and that such produce may be taken possession of by a Forest Officer, until such amount has been paid.
[390 H 391 D]