judgement:
Civil Appeal No. 217 of 1956.
Appeal by special leave from the decision date 880 December 7, 1953, of the Labour Appellate Tribunal of India, Madras, in Misc.
Case No. 111 C. 387 of 1953.
A. V. Vishwanatha Sastri and section Subramanian for the appellants.
M. section K. Sastri, for the respondents.
November 5.
The following Judgment of the Court was delivered by GAJENDRAGADKAR J. These three appeals arise out of two industrial disputes Nos. 24 and 26 of 1951 between the appellants and their workmen.
Dispute No. 24 of 1951 had arisen between the management and workers of the Sree Meenakshi Mills Ltd., Madurai, whereas dispute No. 26 of 1951, was between the management and workers of the Thiakesar Alai Manapparai.
Both the disputes were in respect of bonus claimed by the workmen for the year 1950 51.
The workmen claimed bonus for the year 1950 51 on the allegation that the two mills constituted one unit and had made profits during the relevant year.
On the other hand, the appellants contended that the two mills were two different units and the claims for bonus made by the workmen against them should not be considered together.
According to the appellants, during the relevant year there was a trading loss and as such no bonus was payable to the workers.
The Industrial Tribunal rejected the pleas raised by the appellants and held that the two mills formed part of the same unit.
It also came to the conclusion that for the year in question there was a surplus of Rs. 2,87,676 against which the workmen 's claim for bonus was justified.
That is why the tribunal awarded three months ' bonus to the workmen.
Against this decision the appellants preferred two appeals Nos. 133 and 134 of 1952 to the Labour Appellate Tribunal of India at Madras.
In these appeals the appellants challenged the findings made by the tribunal against them and urged that bonus was not payable during the relevant year.
The workmen also preferred an appeal, No. 168 of 1952, and in this appeal they claimed a larger bonus than what had been awarded by the tribunal below.
The 881 appellate tribunal confirmed the finding of the tribunal that the two mills formed part of the same unit.
According to the appellate tribunal, the net surplus available for distribution as bonus came to Rs. 2,57,496.
The claim made by the appellants in respect of various deductions was examined by the appellate tribunal and deductions were substantially, disallowed in respect of three items.
In respect of an amount of Rs. 8,43,927 claimed by the appellants as depreciation on machinery and buildings the appellate tribunal concurred with the industrial tribunal in holding that the claim only for a sum of Rs. 4,00,000 was admissible; in other words, a claim for deducting the balance of Rs. 4,43,927 was disallowed.
It is this finding in particular with which we are directly concerned in the present appeals.
it may be pointed out at this stage that in determining the amount of net surplus available for distribution as bonus, the appellate tribunal agreed with the industrial tribunal that the provision for taxation made by the appellants to the extent of Rs. 1,75,000 was adequate.
In the result, the appeals preferred by the appellants as well as the respondents failed and were dismissed by the appellate tribunal.
Against the order dismissing their appeals, the appellants have preferred to this Court by special leave the present Civil Appeals Nos. 218 and 219 of 1956.
The appellants had also preferred an application for review before the Labour Appellate Tribunal, Misc.
Case No. III C 387 of 1953 (Review) on the ground that the order passed by the Labour Appellate Tribunal was patently erroneous inasmuch as there was a mistake apparent on the face of the record which should be corrected under the appellate tribunal 's powers of review.
The appellate tribunal hold that it had no power of review and that, even if it bad such a power, no case had been made out for the exercise of such power because there was no mistake apparent on the face of the record which could not have been discovered whet) the order was made in the presence of the parties.
Against this decision, the appellants have preferred to this Court by special leave the present Civil A peal No. 217 of 1956.
882 In appeals Nos. 218 and 219 of 1956, the main point which has been urged before us on behalf of the appellants is that the appellate tribunal erred in law in disallowing the appellants ' claim in respect of depreciation debited by the appellants to the extent of Rs. 4,43,927.
In the appeal preferred against the order passed by the appellate tribunal refusing to review its decision, it has been urged before us by the learned counsel for the appellants that the appellate tribunal was in error in holding that it had no jurisdiction to review its decision under 0.
47 of the Code of Civil Procedure.
It has also been argued that on the merits it was wrong to have held that the appellants had failed to make out a case for the exercise of the said jurisdiction.
It may be relevant at this stage to set out the financial position of the appellants during the relevant year as summed up in the judgment of the appellate tribunal: "Net Profit as per exhibit M. 1 .
Rs. 2,40,302 Add the sum wrongly debited as cost of repairs etc.
(Rs. 2,57,793 minus Rs. 1,00,000) .
Rs.1,57,793 Add bonus for the year 1949 50 wrongly debited to 1950 51. .Rs.1,49,920
Add bonus paid to clerical staff for 1950 51 .
Rs.37,896 Add depreciation debited by the company: .
Rs.8,43,927 Add provision for taxation: . .Rs.1,75,000
Add donation to a College: . .Rs.40,000 Total .
Rs. 16,44,838 Thus the gross total profit comes to Rs. 16,44,838.
From this the following deductions have to be made: Depreciation allowed : Rs.4,00,000 Bonus for the year 1950 51 paid to clerical staff: Rs.37,896 Provision for taxation; Rs.1,75,000 883 Return on capital (preference and ordinary shares) :.
Rs. 2,94,500 Return on the reserve used as working capital at 4 per cent.
: Rs. 2,23,946 Provision for rehabilitation (Rs. 6,56,000 minus Rs. 4,00,000): Rs. 2,56,000 Total .
Rs 13,87,342 Thus the net surplus available fordistribution as bonus comes to Rs. 16,44,838 minusRs.
13,87,342.
Rs. 2,57,496.
" Since in the present appeals we areconcerned only with the amount of depreciation debited by the appellants, it would be useful to set out the depreciation analysis as explained by the representative of the appellants in the Court of the Industrial Tribunal.
The depreciation analysis, according to this statement, is made thus as per the Income tax Act: Normal.
Extra.
Initial. "(245 days) Madurai.
3,17,331 38,465 2,87,250 (250 days) Usil 2,23,206 Including ampatti extra.
16,077.
" It would be noticed that the total of these amounts comes to Rs. 8,82,329.
The true nature and character of the workmen 's claim for bonus against their employers is now well settled.
Bonus is not, as its etymological meaning would suggest, a mere matter of bounty gratuitously made by the employer to his employees ; nor is it a matter of deferred wages.
It has been held by this Court in Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur (1) that " the term 'bonus ' is applied to a cash payment made in addition to wages.
It generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained.
" This decision is based on the view that both labour and capital contribute to the earnings of the industrial concern and so it is but fair that labour should derive some benefit if there is (1) [1955] I S.C.R. 991.
112 884 surplus available for that purpose.
Even go, the claim for bonus cannot be effectively made unless two conditions are satisfied; the wages paid to workmen fall short of what can be properly described as living wages; and the industry must be shown to have made profits which are partly the result of the contribution made by the workmen in increasing production.
In determining the question as to whether the industry has made profit, and, if so, how much is the net surplus in a given year, provision has first to be made in respect of prior charges.
This principle has been recognized by what is often described as the Full Bench formula as laid down in the matter of The Mill Owners Association, Bombay vs The Rashtriya Mill Mazdoor Sangh, Bombay (1).
According to this formula, distributable surplus has to be ascertained after providing from the gross profits for (1) depreciation, (2) rehabilitation, (3) return at 6% on the paid up capital, (4) return on the working capital at a lesser but reasonable rate, and (5) for an estimated amount in respect of the payment of income tax.
It is common ground before us that the question as to whether the workmen 's claim for bonus is justified or not must be decided in the light of this Full Bench Formula.
The appellants concede that in determining the question as to whether they have made a trading profit during the relevant year the industrial tribunal is not required to adopt the same basis as under the Income tax Act.
It is, however, urged that in dealing with this question there is no justification for not giving effect to the relevant provisions of the Incometax Act in respect of depreciation.
Section 10 of the Income tax Act provides for three kinds of allowances in respect of depreciation.
Section 10 (vi) deals with allowances in respect of depreciation of buildings, machinery, plant or furniture used for the purposes of the business, being the property of the assessee, of a sum equivalent to such percentage on the original cost thereof to the assessee as may in any case or class of cases be prescribed and in any other cases, to such percentage on the written down value thereof as may in (1)(1950) 885 any case or class of cases be prescribed.
This allowance is in respect of what is described as normal depreciation.
Section 10 (vi) further provides for what is described as initial depreciation in cases where the buildings have been newly erected or the machinery or plant being new, (not being machinery or plant entitled to the development rebate under el.
(vi b)), has been( installed after March 31, 1945, a further sum (which shall however not be deductible in determining the written down value for the purpose of this clause) in respect of the year of erection or installation as prescribed by cls.
(a), (b) and (c) of section 10 (vi).
Then section 10 (vi a) provides for allowances of what is described as additional depreciation.
This is in respect of depreciation of buildings newly erected or of machinery or plant being new which has been installed after March 31, 1948.
Section 10 (vi b) also provides for allowance "in respect of machinery or plant being new, which has been installed after the 31st day of March, 1954, and which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of installation equivalent to twenty five per cent.
of the actual cost of such machinery or plant to the assessee: Pro vided that no allowance under this clause shall be made unless the particulars prescribed for the purpose of clause (vi) have been furnished by the assessee in respect of such machinery or plant." The question which arises for decision is whether, in determining the question as to whether net surplus is available for distribution by way of bonus or not, it is obligatory on the industrial tribunals to allow the whole of the depreciation admissible under the said provisions of the Income tax Act.
Before dealing with this question, it may be relevant to mention one fact on which both the tribunals below have placed emphasis in the present case.
It appears that, when the proceedings were pending before the industrial tribunal, an application was made by the workmen requesting the tribunal to direct the appellants to allow the workmen inspection of accounts.
The Tribunal passed an order for inspection and inspection 886 was allowed.
Thereupon an application was made on behalf of the workmen on February 28, 1952, for particulars relating to the amount of Rs. 8,44,000 claimed by the appellants by way of depreciation.
The appellants promised to supply the information on March 8, 1952 ; but ultimately, on behalf of the appellants, it was stated to the tribunal that the appellants were not able to give the details called for.
The industrial tribunal and the appellate tribunal have both adversely commented on this conduct of the appellants and they were presumably disposed to draw an adverse inference against the appellants in respect of the amount of depreciation in question.
Mr. Viswanatha Sastri, for the appellants, however, contended before us that though the tribunals below may have been justified in commenting on the default of the appellants to supply the particulars, that itself would not justify a drastic reduction in the amount of depreciation claimed by the appellants.
He argues that the balancesheet of the appellants has been duly audited and it was not reasonable for the tribunals to have disallowed such a large amount as Rs. 4,43,927 under the claim of depreciation.
It is fairly conceded by him that if the tribunals below were not bouns to grant claims for depreciation on what is described as initial and additional depreciations, then he could not challenge the propriety or correctness of the decision of the tribunals in disallowing the items appearing in the depreciation account in respect of these depreciations.
It is in the light of these facts that the question raised by the appellants must be considered.
This question has been decided by a Full Bench of the Labour Appellate Tribunal in U.P. Electric Supply Co. Ltd. vs Their Workmen (1).
It is true that the question of bonus had to be considered in this case in the light of the provisions of the U. P.
Nevertheless the Full Bench has dealt with this matter on general considerations and has set at rest the divergence of views expressed by different Benches of the tribunal on this point.
According to this decision, the initial depreciation and additional depreciation (1) 887 are in a sense abnormal additions to the income tax depreciation and they are designed to meet particular contingencies 'and for a limited period.
It would, therefore, not be fair to the workmen that these two depreciations are rated as prior charges before the available surplus is ascertained.
It is likely that, in many cases, if these two depreciations are allowed as prior charges no surplus would be left even though workmen may have laboured during the year to the best of their ability and the concern was for all purposes prosperous.
In other words, according to this decision, considerations on which the grant of additional depreciation may be justified under the Income tax Act are different from considerations of social justice and fair apportionment on which the original Full Bench formula in regard to the payment of bonus to the workmen is based.
That is why, in the result, this subsequent Full Bench held that only normal depreciation including multiple shift depreciation, but not initial or additional depreciation, should rank as prior charge in applying the Full Bench formula as to the payment of bonus.
If it cannot be disputed that in industrial adjudication it is not obligatory to adopt the very same procedure as prescribed by the Income tax Act for ascertaining gross profits and then determining the amount of net surplus available, it is not easy to accept the appellants ' argument that in respect of depreciation alone industrial tribunals must necessarily and in every case follow the relevant provisions of the Income tax Act.
If that be the true position, then we see no reason why, in respect of one item of debit only the technical provisions of the Income tax Act must be followed in industrial adjudications in respect of workmen 's claim for bonus.
On the whole, the reasons given by the appellate tribunal in the case of The U.P. Electric Supply Co. Ltd. (1) appear to us to be satisfactory ; and so we are not prepared to accept the appellant 's argument that the appellate tribunal in the present case has erred in law in not allowing the appellant 's claim for initial and additional depreciations.
In our opinion, therefore, the main point urged by the appellants in Appeals Nos. 218 and 219 of 1956 (1) 888 cannot succeed.
That takes us to the two other points raised by the appellants in Appeal No. 217 of 1956.
The first point which has been raised in this appeal by the appellants about the jurisdiction of the appellate tribunal to review its own orders in appropriate cases under O. 47 of the Code of Civil Procedure.
This Court has recently had occasion to consider the question about the applicability of the Code of Civil Procedure to the proceedings before the Labour Appellate Tribunal in Mills.
Martin Burn Ltd. vs R. A. Banerjee (Civil Appeal No. 92 of 1957).
Section 9(1) and section 10 of the Industrial Disputes (Appellate Tribunal) Act, 1950, as well as the relevant rules and orders framed under the Act were considered and it was held that the Code of Civil Procedure applies to the proceedings before the appellate tribunal with the result that the appellate tribunal can exercise its powers under O. 41, r. 21 as well as under section 151 of the Code.
It is true that in this case there was no occasion to consider the applicability of the provisions of O. 47 of the Code but that does not make any difference.
If the Code of Civil Procedure applies to the proceedings before the Labour Appellate Tribunal, it is clear that the provisions of O. 47 would apply to these proceedings as much as s.151 of the Code or the provisions of O. 41.
We must accordingly hold that the appellate tribunal erred in law in coming to the conclusion that it bad no jurisdiction to review its own order under the provisions of O. 47 of the Code.
As we have already pointed out, the appellate tribunal has also held that even if it had jurisdiction to review its decision or judgment, in the present case it would not grant the appellants ' request because it had not been shown that the order or decision suffered from any mistake which could not have been known when the order was pronounced in open court in the presence of both the parties in the present proceedings.
Mr. Viswanatha Sastri, for the appellants, argues that this view is obviously wrong and should be reversed.
In support of his argument, the learned counsel has invited our attention to the fact that, when the appeal 889 was pending before the appellate tribunal, a statement had been filed by the appellants showing that the provision for income tax had to be revised in view of the findings recorded by the industrial tribunal.
According to this statement, no surplus was available for payment of bonus to workmen even on the assumption that the findings recorded by the tribunal were correct.
The appellants pointed out in this statement that if an amount of Rs. 4,43,927 was disallowed by way of depreciation that would necessarily add to the amount of gross profits and in consequence the provision for income tax would have to be proportionately increased.
The appellants 'case was that instead of Rs.1,75,000 which had been allowed by the industrial tribunal by way of provision for income tax, it would be necessary to allow an amount of Rs. 4,75,582 in that behalf.
The appellants ' grievance is that though this statement was filed before the appellate tribunal, the appellate tribunal has not considered it at all.
On the other hand, it appears from the judgment of the appellate tribunal that this point was not raised by the appellants before it in their arguments.
No grievance was made and no higher amount was claimed by them to be reserved for taxation.
The appellate tribunal has also observed that the point raised by the appellants in their review petition did not show that any new and important matter had been discovered which, after the exercise of due diligence, would not have been discovered by the parties at the time of the hearing of the appeal.
Besides, the appellate tribunal also held that there was no mistake apparent on the face of the record.
Technically there may be some force in the observations made by the appellate tribunal; but we cannot overlook the fact that a written statement had been filed before the appellate tribunal expressly and specifically raising this point.
That is why we propose to deal with the merits of the argument and not to reject it on the ground that this argument had not been urged at the proper stage.
On the merits, the argument is that, if out of the total amount of Rs. 8,43,927 debited by the appellants to depreciation, an amount of Rs. 4,43,927 is disallowed, 890 that must inevitably add to the total amount of gross profits and if the total amount of ' gross profits is increased, logically provision for a higher amount of income tax must be made.
Thus presented the argument is simple and at first blush appears to be attractive; but the difficulty in accepting the argument is that the total amount of gross profits determined by Industrial Tribunals in these proceedings is not and cannot necessarily be the taxable gross profits of the employer.
We have already observed that in determining the trading profits of the employer in such disputes, the method adopted by the industrial tribunals does not conform to all the requirements and provisions of the Income tax Act, and so it would be fallacious to assume that the gross profits determined by the industrial tribunal should be taken to be gross profits that would be necessarily taxable under the Income tax Act.
Besides, it would be relevant to remember that the provision for taxation in question has been made by the appellants themselves and presumably it is based on the appellants anticipation as to how much approximately they will have to pay by way of income tax.
But, apart from this consideration, there can be no doubt that the appellants would get exemption from the payment of income tax in respect of the amounts of initial and additional depreciation also as shown in their books of accounts.
That is a right which has been conferred on the appellants by the relevant provisions of section 10 of the Income tax Act; and the benefit which the appellants are entitled to get under the said section cannot be ignored in deciding whether or not the provision of the sum of Rs. 1,75,000 for taxation purposes is adequate or not.
We think it is not open to the appellants to contend that though for the amounts covered by the normal and additional depreciations they would not be required to pay income tax, nevertheless they should be allowed to provide for the payment of income tax in respect of these two items merely on the ground that they are disallowed by the industrial tribunal and have thus added to the total of gross profits as determined by the tribunal.
The adequacy 891 or otherwise of the provision for income tax must necessarily be judged in the light of the income tax Act since it is under the said Act that the liability to pay tax would ultimately be determined.
Besides, if the appellants ' argument is accepted and an amount notionally payable by way of income tax in respect of disallowed items of depreciation is added to the estimated amount of income tax provided by the appellants, the very object of disallowing the two items of depreciation would be substantially defeated.
On the other hand, the rejection of the appellants ' argument would not mean any hardship because the additional amount sought to be added by them in the provision for income tax would definitely not have to be paid by them.
We are, therefore, satisfied that the grievance made by the appellants against the order passed by the appellate tribunal on the ground that it suffers from a mistake apparent on the face of the record is not well founded.
It would now be necessary to refer briefly to the decisions of industrial courts to which our attention has been drawn by the learned counsel for the appellants.
In Model Mills, etc.
Textile Mills Nagpur vs Rashtriya Mill Mazdoor Sangh (1), the implications of the Full Bench formula for ascertainment of bonus have been explained.
It is observed that " the formula did not purport to direct what a concern should do or should not do with its own moneys.
In evolving the formula the rights and liabilities of the parties inter se in notional satisfaction of their legitimate claims as two co operating units in the venture were tried to be equated.
Opinions might differ as to the weightage to be attached to the various components constituting the formula.
But the formula has to be taken as a whole in order that an equitable balance between the rights of capital and labour might be achieved for the ascertainment of bonus.
" It may incidentally be pointed out that this decision recognizes that income tax calculated on the trading (I) (1955) I L. L. J. 534. 113 892 profits for the year must be deducted as a prior charge from the profits even though exemption under the Income tax Act is granted for the year in question taking into consideration the past year 's losses.
The same view has been expressed by the appellate tribunal in Mahalaxmi Wollen Mills Ltd. vs 'Their Work Workmen(1) In this case, it has been held that "even if a concern is allowed exemption from the levy of incometax because of prior losses or unabsorbed depreciation, etc., that by itself is no ground for preventing the concern from claiming the amount of income tax it would have been liable to pay if the profits made in the relevant year alone had been taken into account.
Hence, in calculating the amount of available surplus, the amount of income tax payable for that trading year is to be deducted irrespective of the fact whether the company in fact pays tax for the year or not ".
Similarly in Bennett Coleman and Company, Ltd. vs Their Workmen(2) the Labour Appellate Tribunal has held that " unabsorbed depreciation and loss incurred during prior years are allowed under section 24 (2) of the Income tax Act to be adjusted against the profits of a future year.
Where the company claim, , either to adjust this amount against gross profits or to deduct such amount of income tax as would be payable on the profits if the said two items are not to be adjusted, labour cannot be permitted to refuse relief resting on unabsorbed loss and depreciation and at the same time try to get benefit for itself by refusing provision for tax resting on those very items which are permitted to be adjusted by the income tax authorities which will result in reduced income tax or no tax at all.
" It would thus appear from the decisions cited before us that industrial tribunals have consistently taken the view that income tax calculated on the trading profits for the relevant year must be deducted as a prior charge from the gross profits even though the employer may be entitled to claim exemption under the Income tax Act in view of the fact that he had suffered losses during the previous year.
Prima (1)(1956) I L. L. J. 305.
(2)(1955) 893 facie it may be said that, if the essential basis for deciding the workmen 's claim for bonus in a given year is the existence of the net surplus available for that year, it may not be permissible to question the propriety for the provision for income tax made by the employer solely on the ground that in view of his previous year 's losses he may not be called upon to pay income tax during the year in question.
After all, in this connection the calculations are made by reference to the financial position of the employer during the particular year only and in these calculations considerations relevant under the Income tax Act in regard to the financial losses of the employer in the previous year would not be allowed to enter.
However, in the present appeals we are not called upon to consider the correctness of the view taken by the Appellate Tribunal in these oases and so we need not pursue the matter any further.
Mr. Viswanatha Sastri has strongly relied on two labour decisions reported in B. E. section T. Workers ' Union vs Bombay Suburban Electric Supply Ltd. (1), and Greaves Cotton and Crompton Parkinson, Ltd. vs Its Workmen (2).
These two decisions no doubt support the appellants ' arguments before us but, for the reasons which we have already given, we must hold that these decisions are not sound or correct.
The last case to which our attention has been drawn by Mr. Viswanatha Sastri is the decision of the Labour Appellate Tribunal in Bengal Chemical & Pharmaceutical Works, Ltd. vs Their Workmen (3).
This case decides that " in providing for income tax the tax payable by the concern on its income earned in the year for which bonus is claimed must be ascertained.
The amount of income tax actually paid during the year which is the tax of the income of the previous year should not be taken into account.
" In this case, the tribunal has observed that "for the purpose of ascertaining the income tax which may be payable by the employer for the year in question, the figures (1) (1957) 2L. J. II 2. (3) (2) 894 appearing on the expenditure side of the profit and loss account of that year have to be marshalled and examined.
" This case is not of much help in deciding the point with which we are concerned.
In the result, the appeals fail on the merits and must be dismissed with costs.
There will, however, be one set of costs in all these appeals.
Appeals dismissed.

summary/full:
The workmen demanded bonus for the year 1950 5, on the allegation that the employers had made profits during the relevant year.
The employers resisted the demand on the ground that 879 there was a trading loss in the year and as such no bonus was payable.
To determine the available surplus out of which bonus was to be paid, the employers deducted out of their gross profits an amount for depreciation admissible under the Income tax Act.
The industrial tribunal disallowed a portion of the depreciation and found that there were profits in the relevant year and awarded three months bonus to the workmen.
The employers preferred appeals to the Labour Appellate Tribunal but they were dismissed.
The employers then applied to the Appellate Tribunal for a review and the Tribunal dismissed the application holding that it had no power to review its own decision and that even if it had the power it would not grant the review as no case for review had been made out.
Held, that the whole of the depreciation admissible under the Income tax Act is not allowable in determining the available surplus.
The initial depreciation and the additional depreciation are abnormal additions to the income tax depreciation and it would not be fair to the workmen if these depreciations are rated as prior charges before the available surplus is ascertained.
Considerations on which the grant of additional depreciation may be justified under the Income tax Act are different from considerations of social justice and fair apportionment on which the original Full Bench formila in regard to the payment of bonus to the workmen is based.
That is why only normal depreciation including multiple shift depreciation should rank as prior charges.
U.P. Electric Supply Co. Ltd. vs Their Workmen, , approved.
The Labour Appellate Tribunal had the power to review its own orders.
M/s. Martin Burn Ltd. vs R. N. Banerjee, [1958] S.C.R .5I4, followed.
The method adopted by the industrial tribunals in deter mining the trading profits of the employer is an industrial dispute, does not conform to the requirements and provisions of the Income tax Act, and it would, therefore, be fallacious to assume that gross profits determined by the industrial tribunal can be taken to be gross profits that would necessarily be taxable under the Income tax Act.
In determining the available surplus for payment of bonus provision for a higher amount of incometax cannot be made merely because the claim to initial and additional depreciation has been disallowed which increase the amount of gross profits.


judgement:
ivil Appeal No. 2991 of 1986.
From the Judgment and Order dated 13.1.
1986 of the Madras High Court in Civil Revision Petition No. 3599 of 1983.
Ms. Shyamala Pappu, Ms. Dhaneshwari and R. Vasudevan for the Appellant.
section Srinivasan for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal by special leave from the judgment and order of the High Court on 13th January, 1986 ordering eviction under Section 10(3)(c) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, hereinafter called the Act.
This is an appeal by the tenant.
A room in the front portion of the building had been leased out to the tenant for non residential purposes.
The landlord resides in the other portion.
The landlord needed additional accommodation for residential purposes due to marriages in the family.
Was the portion let out as such separate and distinct unit for the purpose of Section 10(3)(c) of the Act? It was not and as such the landlord was entitled to seek eviction of the tenant under section 10(3)(c) of the Act.
It has been so held clearly by this Court in Shri Balaganesan Metals vs
M.N. Shanmugham Chetty and Ors., [1987] 2 1148 SCC 707 wherein the section has been analysed and explained.
Ms. Shyamala Pappu, learned counsel for the appellant sub mits that the decision needs reconsideration as the residen tial and the nonresidential part of the building covered as separate units and the requirements of the two separate parts have not been properly assessed therein.
We are unable to accept this criticism.
A building may consist of separate parts if the context so warrants.
In the instant case as in Shri Balaganesan Metal 's case the context and the user did not warrant treatment of the portion let out for non resi dential user either as a separate or distinct unit.
It was only a small part of the residential building and not a separate part.
It was secondly submitted that the expression "as the case may be", in the section has not been properly appreci ated.
We are unable to agree.
The difference between resi dential part and the nonresidential has been borne in mind by my learned brother in the judgment aforesaid.
Justice Morris in Bluston & Bramley Ltd. vs Leigh (Euler and Another, Third Parties), [1950] 2 A.E.R. page 29 at page 35 explained that the phrase "as the case may be" meant in the events that have happened.
Our attention was also drawn to the expression "as the case may be" as appearing in the Words and Phrases Permanent Edition 4 Page No. 596.
The meaning of the expression "as the case may be" is what the expression says, i.e., as the situation may be, in other words in case there are separate and distinct units then concept of need will apply accordingly.
Where, however, there is no such separate and distinct unit, it has no significance.
There is no magic in that expression.
The expression "as the case may be" has been properly construed in the judgment mentioned hereinbefore.
It was lastly contended that comparative hardship in the instant appeal has not been properly considered.
It appears that there is nothing in this point.
The appellant is an affluent businessman and it is not difficult for him to get alternative accommodation.
On the other hand, the respond ents have no other residential house than the one in ques tion will find it extremely difficult to get residential accommodation in the same locality and as such they will be put to immense hardship if they are not allowed to occupy the additional portion in their house which has been leased out to the tenant.
The Court has observed that there is no question of balance of convenience.
In that view of the matter this appeal must fail and is, therefore, dismissed.
There will, however, be no order as to costs.
P.S.S. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The appellant was sought to be evicted under section 10(3)(c) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 from a room leased out to him for non residential purposes in a residential building.
The landlord needed additional accommodation for residential purposes due to marriages in the family.
The High Court ordered eviction.
In the appeal by special leave, it was contended for the appellant that the portion let out to him was a separate and distinct unit for the purposes of section 10(3)(c) of the Act, that the expression 'as the case may be ' in the section has not been properly construed, and that the requirement and comparative hardship of the parties were not properly appre ciated.
Dismissing the appeal the Court, HELD: 1.
A building may consist of separate parts if the context so warrants.
In the instant case, the context and the user did not warrant treatment of the portion let out for non residential user either as a separate or distinct unit.
It was only a small part of the residential building and not a separate part.
The landlord was, therefore, enti tled to seek eviction of the tenant.
[1148B] Shri Balaganesan Metals vs
M.N. Shanmugham Chetty & Ors., ; , referred to.
The meaning of the expression 'as the case may be ' in 1147 section 10(3)(c) is what the expression says, i.e., as the situa tion may be, in other words, in case there are separate and distinct units then concept of need will apply accordingly.
Where, however, there is no such separate and distinct unit, as in the instant case, it has no significance.
[1148E] Bluston & Bramley Ltd. vs Leigh (Euler and Another, Third Parties) [1950] 2 A.E.R. page 29 at page 35, referred to.
The appellant is an affluent businessman and it is not difficult for him to get alternative accommodation.
On the other hand, the respondents who have no other residen tial house than the one in question will find it extremely difficult to get residential accommodation in the same locality and as such they will be put to immense hardship if they are not allowed to occupy the additional portion in their house which has been leased, out to the tenant.
There is no question of balance of convenience.
[1148FG]


judgement:
ivil Appeal No. 2935 of 1981.
From the Judgment and Order dated 5.5.
1981 of the Delhi High Court in S.A.O. No. 366 of 1980.
Shankar Ghosh and B.P. Maheshwari for the Appellants.
A.B. Rohtagi, C.L. Sahu, Jose Verghese and O.P. Verma for the Respondents.
The Judgment of the Court was delivered by OZA, J.
This appeal has been filed after grant of spe cial leave in this Court by the tenant appellant challenging a decree for eviction.
It appears that the respondent landlord filed an appli cation for eviction before the Rent Controller, Delhi on various grounds.
The Rent Controller who heard the petition of the respondent rejected the petition on other grounds but only granted an order for eviction under Section 14(1)(e) i.e. the premises were bona fide required by the respondent landlord for their own residence.
It is not disputed that these premises are residential and the courts below, the trial court and the appellate court both came to the conclusion that the respondent landlord has established his bona fide requirement and on these findings the order of eviction on the ground of bona fide requirement under Sec.
14(1)(e) of the Delhi Rent Control Act, 1958 has been main tained.
Before the Tribunal a contention was advanced that the appellant tenant had come to know that the Delhi Development Authority ( 'DDA ' for short) has cancelled the lease in favour of the respondent landlord and therefore the respond ent ceased to be the owner of the property and as such is not entitled to a decree for eviction under Sec.
14(1)(e).
The landlord respondent, on the other hand, contended that as a small portion of the premises in occupation of the appellant tenant is on another plot which under the condi tions 1078 of the DDA was meant for non residential purposes and in this view of the matter a notice for cancellation of the lease was given but on representation made by the respond ent landlord the DDA has stayed further action and it there fore could not be contended that the lease has been termi nated by the DDA or that the respondent has ceased to be the owner of the property in question.
The learned Tribunal therefore repelled the contention advanced by the tenant appellant before it and maintained the order of the Rent Controller for eviction.
Before the High Court the contention advanced on behalf of the appellant was that as the lease of the plot on which the building stands is cancelled by the DDA the landlord i.e. the respondent ceases to be the owner thereof and in this view of the matter,it was contended that the require ment of Sec.
14(1)(e) of the Act is not satisfied and there fore the respondent is not entitled to the decree for evic tion.
The High Court after considering circumstances and the affidavit filed by one of the appellants that the lease was cancelled but the proceedings for taking possession have been stayed on a representation made by the landlord, con sidered the question and felt that the landlord whose lease has been terminated but is in possession as possession has not been taken, he continues to be a tenant holding over and on that basis came to the conclusion that it could not be held that he ceases to be the owner and did not accept the contention advanced by the appellant and maintained the decree for eviction.
Before us on the basis of language of Section 14(1)(e) the learned counsel for the appellant contended that in order to get a decree for eviction on the ground of bona fide requirement the landlord must establish that he is the owner of such property and learned counsel attempted to contend that where the property is built up on a plot of land taken on lease from the Delhi Development Authority it could not be said that the landlord is the owner of the property and on this basis an attempt was made to contend that no eviction could be sought on the ground of bona fide requirement.
Although learned counsel had to concede that in the Act itself the word 'owner ' has not been defined and in the modern context it could not be contended that merely because the property situated on a plot of land taken on long lease that the landlord could not be said to be the owner.
The other contention advanced on behalf of the appel lant was that as there was a notice from the DDA cancelling the lease of the respondent landlord and as the lease has been cancelled of the plot of land on which part of the premises in dispute stands the landlord respondent is not entitled to this decree for eviction.
1079 It is admitted that this question was not raised in the trial court and the parties had no opportunity to lead evidence.
It is only based on two papers and an affidavit which has been considered by the High Court.
On the basis of these papers what appears to be, is that notice was issued to the landlord for cancellation of the lease and later on their representation the further proceedings have been stayed and it has been further observed in the subsequent paper from the DDA that the Authority is considering the restoration of the lease on the basis of payment of penalty or other dues that may ultimately be settled.
It is nobody 's case that ultimately the matter has been disposed of and it is also not in dispute that the landlord respondent 's pos session has not been taken by the DDA.
It is also.
not in dispute that although the land beneath the property is of the DDA given on lease to the landlord but the structure thereupon is of the ownership of the respondent landlord.
It is also not in dispute that the portion of the premises only stands on the plot of land the lease of which is alleged to have been cancelled but later on the proceedings for resto ration are pending and the matter has been stayed.
Nothing further has taken place.
Arguments were advanced at length on behalf of appellant that as the lease has been terminated and therefore the landlord could not claim to be the owner of the property and therefore the decree for eviction on the ground of bona fide requirement could not be maintained.
Learned counsel for the respondent, on the other hand, contended that although some notice appears to have been issued but subsequently the matter remains stayed and admittedly the respondent landlord continues to be in possession and therefore it could not be said that the respondent ceases to be the owner of the property.
It was also contended on behalf of the respondent that unless and until the respondent 's possession is taken it could not be said that he ceases to be the owner as possession is substantially the ownership of the property.
It was also contended by learned counsel for the re spondent that even if the lease of the respondent landlady is terminated by the DDA, DDA has to file a suit for posses sion and so long as she continues to be in possession, it could not be said that she is not the owner of the property.
It was also contended that the premises in question do not stand on the plot the lease of which has been cancelled but it is only a small portion of the premises standing on that plot as apparently the plot Nos.
34 & 35 are both allotted to the respondent and the property in dispute stands on these two plots, the major part of the premises in question stands on No. 34 whereas a small portion stands 1080 on No. 35 and it is alleged that the proceedings or the notice for termination of the lease pertain to plot No. 35 and on this basis it was contended that as the major part of the plot on which the premises stand continues to be on lease in favour of the respondent the contention that re spondent ceases to be the owner of the property is of no avail to the appellant.
It was also contended on behalf of the respondent that the tenant is estopped from challenging the title of the landlord and as the relationship of landlord and tenant is admitted, it is not open to the tenant to contend that the respondent landlord has no title to the property.
Counsel for parties also referred to some decisions on the question of Transfer of Property Act, ownership and also on the question of estoppel.
14(1)(e) of the Delhi Rent Control Act reads as under: "14(1) xxx xxx xxx Provided that the Controller, may, on an application made to him in the pre scribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely: (a) to (d) xxx xxx xxx (e) that the premises let for residential purposes are required bona fide by the land lord for occupation as a residence for himself or for any member of his family dependent on him, if he is the owner thereof, or for any person for whose benefit the premises are held and that the landlord or such person has no other reasonably suitable residential accommo dation; Explanation For the purposes of this clause "premises let for residential purposes" include any premises which having been let for use as a residence are, without the consent of the landlord, used incidentally for commercial or other purposes; xx xxx xxx ' ' The phrase used in this provision is "if he is the owner thereof" and it 1081 is on the basis of these words that the present controversy has been raised and it appears to be the only point on the basis of which the learned counsel for the appellant had argued this appeal.
As regards the first contention that the word 'owner ' thereof indicates absolute ownership and where property stands on a plot of land taken on long lease from the DDA, it could not be said that he is the owner thereof and there fore the eviction on the ground of bona fide requirement under Section 14(1)(e) could not be granted.
Admittedly if this contention of the learned counsel for the appellant is accepted in Delhi more than 50% of the properties stand on leasehold plots and therefore it would not be possible for any landlord to seek an order or decree for eviction on the ground of bona fide requirement.
It appears that it is therefore clear that if the Legislature had this narrow meaning of ownership in mind.
it would not have used it, as it could not be contended that the Legisla ture did not keep in view that in most of the modern town ship in India the properties stand on plots of land leased out either by the Govt.
or the Development Authorities and therefore it was not contemplated that for a11 such proper ties the landlord or the owner of the property used in common parlance will not be entitled to eviction on the ground of bona fide requirement and it is in this context that we have to examine this contention.
The word 'owner ' has not been defined in this Act and the word 'owner ' has also not been defined in the Transfer of Property Act.
The contention of the learned counsel for the appellant appears to be is that ownership means absolute ownership in the land as well as of the structure standing thereupon.
Ordinarily, the concept of ownership may be what is contended by the counsel for the appellant but in the modern context where it is more or less admitted that all lands belong to the State, the persons who hold properties will only be lessees or the persons holding the land on some term from the Govt.
or the authorities constituted by the State and in this view of the matter it could not be thought of that the Legislature when it used the term 'owner ' in the provision of Sec.
14(1)(e) it thought of ownership as abso lute ownership.
It must be presumed that the concept of ownership only will be as it is understood at present.
It could not be doubted that the term 'owner ' has to be under stood in the context of the background of the law and what is contemplated in the scheme of the Act.
This Act has been enacted for protection of the tenants.
But at the same time it has provided that the landlord under certain circumst 1082 ances will be entitled to eviction and bona fide requirement is one of such grounds on the basis of which landlords have been permitted to have eviction of a tenant.
In this con text, the phrase 'owner ' thereof has to be understood, and it is clear that what is contemplated is that where the person builds up his property and lets out to the tenant and subsequently needs it for his own use, he should be entitled to an order or decree for eviction, the only thing necessary for him to prove is bona fide requirement and that he is the owner thereof, In this context, what appears to be the meaning of the term 'owner ' is vis a vis the tenant i.e. the owner should be something more than the tenant.
Admittedly in these cases where the plot of land is taken on lease the structure is built by the landlord and admittedly he is the owner of the structure.
So far as the land is concerned he holds a long lease and in view of the matter as against the tenant it could not be doubted that he will fall within the ambit of the meaning of the term 'owner ' as is contemplated under this Section.
This term came up for consideration before the Delhi High Court and it was also in reference to Section 14(1)(e) and it was held by the Delhi High Court in T.C. Rekhi vs Smt.
Usha Gujral, [1971] Rent Control Journal Page 322 at 326 as under: "The word "owner" as used in this clause, has to be construed in the background of the purpose and object of enacting it.
The use of the word 'owner ' in this clause seems to me to have been inspired by the definition of the word 'landlord ' as contained in section 2(e) of the Act which is wide enough to include a person receiving or entitled to receive the rent of any premises on account of or on behalf of or for the benefit of any other person.
Construed in the context in which the word "owner" is used in clause (e), it seems to me to include all persons in the position of Smt.
Usha Gujaral who have taken a long lease of sites from the Government for the purpose of building houses thereon.
The con cept of ownership seems now to be eclipsed by its social and political significance and the idea of ownership, in case like the present is one of the better right to be in possession and to obtain it.
To accede to the contention raised by Shri Kapur would virtually nullify the effect of clause (e) and would render all such landlords remedyless against tenants however badly they may need the premises for their own personal residence.
I do not think such a result was intended by the Legislature and I repel the appellant 's contention.
I consider it proper before passing on to the next challenge to point out that the word 1083 "owner" as used in clause (e) in Section 14(1) does not postulate absolute ownership in the sense that he has an absolutely unrestricted right to deal with the property as he likes.
To describe some one as owner, and perhaps even as an absolute owner, of property is to say two things: it is to assert that his title to the property is indisputable and that he has all the rights of ownership allowed by the legal system in question.
Rights of ownership may, therefore, be limited by special provi sions of law and include in those provisions such as are in force in New Delhi according to which citizens are granted long leases of sites for constructing buildings thereon.
Now, the words of a statute, though normally con strued in their ordinary meaning, may contain inherent restrictions due to their subject matter and object and the occasion on which and the circumstances with reference to which they are used.
They call for construction in the light of their context rather than in what may be either their strict etymological sense or their popular meaning part from the context (See Halsbury 's Laws of England Third Edition Vol.
36 Paragraph The meaning of the word "owner" in clause (e) is influenced and controlled by its context and the appel lant 's construction is unacceptable because it seems to be quite clearly contrary to the reasonable operation of the statutory provi sion.
" Learned counsel for the appellant also frankly conceded that it will not be possible for him to contend that the term 'owner ' should be so construed that all those persons who have their houses standing on the leasehold plots will be deprived of the benefit of Section 14(1)(e).
The next contention advanced on behalf of the appellant is that as there is a notice addressed to the respondent landlord about the cancellation of the lease of a plot over which a small portion of the premises stands he ceases to be an owner thereof and therefore will not be entitled to the decree for eviction.
In this connection the two documents, on which reliance has been placed are: one is a notice purporting to be of some date in Sept. 1981 which reads as under: "DELHI DEVELOPMENT AUTHORITY Regd.
A.D. Old Scheme Branch Process Server 9th Floor, Vikas Minar, New Delhi, the Sept. 81 1084 NOTICE It is notified for information of all concerned that the lease of the Plot No. 35, Block No. 15 A, W.E.A. scheme stands cancelled since 28.8.74.
The action under PP.
Act 197 1 is being taken for taking over physical possession of the plot and building standing thereon.
The occupants of the plot and building are, therefore, advised not to deal with any person except the D.D.A. who is now the lawful owner of the premises and not to pay rent, if anybody deals with any other person, he will be doing so at his own risk and cost.
Sd/ (S.L. JAIN) EXECUTIVE OFFICER (VI) 17.9.81 To: All tenants: 1.
M/S Nanik Ram and Sons, 15 A/135, W.E.A. 2.
M/s Modern Centre, 15 A/35, W.E.A, Karol Bagh" The other document is a letter to Smt.
Ved Prabha and purporting to have been issued by the Deputy Director, DDA.
This document apparently is dated October 30.
1981 and the relevant portion of this reads as under: "I am directed to inform you that your uncon ditional request for the purpose of being considered and necessary penalities for the past misuse and the continuing misuse till the date of its vacation by the tenants of the said premises under restoration of charges etc. are being worked out and the same will be communicated to you in due course.
" It is further stated in this letter that "after the neces sary dues on this account are recovered and requisite for malities like submission of Indemnity Bond etc.
are complet ed and accepted by the DDA, the lease of the plot would be restored in the name of the legal representatives of late R.S. Dinanath.
" A perusal of these documents therefore 1085 clearly indicates that about plot No. 35 same notice was issued which is understood to mean that the lease was can celled and later on on a representation made by the landlord to the legal representatives of the original allottees the further proceedings are suspended and it is clearly stated that the question of penalty and other dues is being worked out and on them being worked out and paid and Indemnity Bond being filed, the lease will be restored.
It is also apparent that nothing further has happened and therefore it could not be said that the lease has come to an end even what is attempted to be contended on the basis of the first document that the lease is cancelled.
The second document, reference to which has been made above, clearly goes to show that has been suspended and at present it could not be said that the lease has come to an end.
Admittedly nothing has been start ed for taking possession.
Under these circumstances there fore it is only on these facts that all these contentions have been advanced by learned counsel for the appellant.
Before going into the legal questions as to whether this question could be raised at this stage and also as to the question of estoppel or whether the tenant has a right to challenge the title of the landlord, as quoted above from the two documents which are the basis of all this controver sy if are carefully examined, it appears to be certain that a notice for determination of the lease appears to have been issued by the DDA sometime before 198 1.
The document which is purporting to be a notice in 1981 shows that this notice is issued showing the cancellation of the lease and the subsequent letter from the DDA addressed to the legal repre sentatives of the original allottee i.e. the present re spondents indicates that on their representation the DDA is working out the penalities and details of payment which have to be recovered and on the payment being made and Indemnity Bond being filed the restoration of the lease will be con sidered and no further steps are being taken either for dispossession of the allottee or for any other purpose.
In view of these two documents what appears to be clear is that although there were some proceedings for the cancellation of the lease but at present it could not be contended that the lease has come to an end.
It is also clear that no steps have been taken for dispossession and the second document which has been quoted above clearly shows that only the formality of depositing the penalities which are being worked out in the Office of the DDA and the filing of the Indemnity Bond remains thereupon the lease will be restored in the name of the legal representatives.
Under these cir cumstances at the best what could be contended is that so far as plot No. 35 is concerned some shadow was cast on its title.
That shadow also appears to by very thin.
1086 Apart from it the subsequent letter from the DDA indicates that what remains is only a formality of depositing the penalities and the Indemnity Bond.
It is also clear that so far as the structure in the building is concerned it is not disputed that that is one of the ownership of the respond ent.
It is also not in dispute that the premises mainly stand on plot No. 34 about which there is not even a shadow of doubt about its title either of the property or of the land and in this view of the matter, on the basis of the two documents put together in the context of the circumstances as they stand it could not be said that the respondent landlord has ceased to be the owner thereof, in view of broad meaning of term 'owner ' as has been discussed and considered above.
In our opinion, it could not be said that the landlord is not the owner of the premises and therefore we see no substance in the contention advanced by learned counsel for the appellant.
No other question was raised.
We therefore see no reason to entertain this appeal.
It is, therefore, dismissed.
The respondents shall be entitled to the costs of this appeal.
N.P.V. Appeal dis missed.

summary/full:
An application was filed seeking eviction of the tenant appellant by the landlord respondent on various grounds.
The Rent Controller granted an order for eviction only under Section 14(1)(e) of the Delhi Rent Control Act for bona fide use and occupation.
The order of the Rent Controller for eviction was confirmed in appeal by the Tribunal.
Before the High Court, it was contended on behalf of the appellant that as the lease of the plot on which the build ing stood was cancelled by the DDA, the landlord respondent ceased to be the owner thereof and, therefore, the require ment of Section 14(1)(e) was not satisfied and the respond ent was not entitled to the decree for eviction.
The High Court held that the landlord, whose lease had been terminat ed, but was in possession, continued to be a tenant holding over and, therefore, he continued to be the owner, and maintained the decree for eviction.
In the appeal before this Court, it was contended on behalf of the appellant that in order to get a decree for eviction on the ground of bona fide requirement, the land lord must establish that he was the owner of such property, that where the property was built up on a plot of land taken on lease from the Delhi Development Authority, it could not be said that the landlord was the owner of the property and that as the lease had been terminated, the landlord could not claim to be the owner of the property, and, therefore, the decree for eviction on ground of bona fide requirement could not be maintained.
1076 On behalf of the respondent it was contended that al though notice was issued, but subsequently the matter re mained stayed and the respondent landlord continued to be in possession and did not cease to be the owner of the proper ty, that whole of the premises in question did not stand on the plot, lease of which had been cancelled by DDA and a major part of.
the premises stood on another plot which continued to be on lease in favour of the respondent, and that the tenant was estopped from challenging the title of the landlord, as the relationship of the landlord and tenant was admitted and it was not open to the tenant to contend that the respondent landlord had no title to the property.
Dismissing the appeal, this Court HELD: The word "owner" has not been defined in the Delhi Rent Control Act.
[1081E] The term "owner" has to be understood in the context of the background of the law and what is contemplated in the scheme of the Act.
The Act has been enacted for protection of the tenants.
But, at the same time, it has provided that the landlord under certain circumstances will be entitled to eviction and bona fide requirement is one of such grounds.
[1081G H; 1082D] Ordinarily, the concept of the ownership may be abso lute ownership in the land as well as of the structure standing thereon.
But in the modern context, where all lands belong to the State, the persons who hold properties will only be lessees or the persons holding the land on some term from the Government or the authorities constituted by the State.
The legislature, when it used the term "owner" in section 14(1)(e), did not think of ownership as absolute ownership.
[1081F G] The meaning of the term "owner" is vis a vis the tenant i.e. the owner should be something more than the tenant.
In cases where the plot of land is taken on lease, the struc ture is built by the landlord and he is the owner of the structure.
So far as the land is concerned, he holds the long lease and as against the tenant he will fail within the ambit of the meaning of the term "owner" as contemplated under section 14(1)(e).
[1082B C] In the instant case, although there were some proceed ings for the cancellation of the lease, the lease had not come to an end.
No steps have been taken for dispossesion and only the formality of depositing the penalities and filing of the Indemnity Bond remained to be done, on ful filling which the lease would he restored in the name of the legal 1077 representatives.
Therefore, it could not be said that the respondent landlord had ceased to be the owner of the prem ises.
[1085G H, 1086B] T.C. Rekhi vs Smt.
Usha Gujaral, [1971] Rent Control Journal Page 322 at 326, referred to.


judgement:
ivil Appeal No. 2 189 of 1987.
From the Judgment and order dated 21st January, 1985 of the Madhya Pradesh High Court in Misc.
Petition No. 1657 of 1984.
V.A. Bobde, and D.N. Mishra for the Appellant.
74 T.C. Sharma for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
This is an appeal against the judgment and order of the High Court of Madhya Pradesh which in accordance with the well settled principle of this Court as also the High Court held that in the absence of any statutory rule of executive memorandum or order laying down the rule for determination of seniority in a grade, the normal rule applicable would be to determine the seniority on the basis of length in service.
Counsel for the appellant contends that in the instant case there were two rules being 12(b) and 12(c) of the M.P. Civil Services (General Conditions of Services) Rules 1961 governing the case.
These rules read as follows: "(b).
Promoted Government Servants: A promoted Government servant shall count his seniority from the date of his confirmation in the service to which he has been promoted and shall be placed in the gradation list immediately below the last confirmed member of that service but above all the probationers.
Provided that where two or more promoted Government servants are confirmed with effect from the same date the appointing authority shall determine their inter se seniority in the service in which they are confirmed, with due regard to the order in which they were included in the merit list, if any prepared for determining their suitability for promotion, and their relative seniority in the lower service from which they have been promoted.
(c) Officiating Government Servants: The inter se seniority of Government servants promoted to officiate in a higher service or a higher category of posts shall during the period of their officiation, be the same as that in .
their substantive service or grade irrespective of the dates on which they began to officiate in the higher service or grade; Provided that 75 (i) If they were selected for officiation from a list in which A the names of Government servants considered suitable for trial in or promotion to the higher service or grade were arranged in order of merit.
Their inter se seniority shall be determined in accordance with the order of merit in such list; (ii) the seniority of a permanent servant appointed to officiate in another service or post by transfer shall be determined adhoc by the appointing authority; Provided that the seniority proposed to be assigned to such Government servant shall be determined and intimated to him in the order of appointment; C (iii) where a permanent Government servant is reduced to a lower service, grade or category of posts, he shall rank in the gradation list of the latter service, grade or category of posts above all the other in that gradation list unless the authority ordering such reduction by a special order indicates a different position in the gradation list for such reduced Government servant, (iv) where an officiating Government servant is reverted to this substantive service or posts he shall revert to his position in that gradation list relating to his substantive appointment which he held before he was appointed to officiate in the other service or post." In the proper perspective these two rules do not apply in this matter.
In that view of the matter we are of the opinion that the High Court was right.
We are unable in this connection to sustain the reasoning and the view expressed by the learned Single Judge of the said High Court in Civil Misc.
Petition No. 181 of 1983 Umeshnaryan Mishra & ors.
vs The State of M. P. & ors.
In the aforesaid view of the matter we are of the opinion that the High Court is right in dismissing the petition under appeal and the view it took was correct.
In view of the short length of service of the appellant, if the appellant makes a representation, the respondent in the light of the principles of law and equity will consider such representation.
The appeal is disposed of accordingly.
S.L. Appeal disposed of.

summary/full:
This was an appeal against the judgment and order of the High Court of Madhya Pradesh, which in accordance with the well settled principle laid down by this Court as also the High Court, held that in the absence of any statutory rule or executive memorandum or order laying down the rule for determination of seniority in a grade, the normal rule applicable would be to determine the seniority on the basis of length of service.
Disposing of the Appeal, the Court, HELD: Counsel for the appellant contended that there were two rules in the case being Rules 12 (b) and 12 (c) of the M.P. Civil Services (General Conditions of Services) Rules, 1961, which governed the case.
In the proper perspective, these two rules did not apply in this case.
The High Court was right in the view it took in the matter.
This Court was unable to sustain the reasoning and view of the Single Judge of the Madhya Pradesh High Court in Umeshnarayan Mishra & ors.
vs The State of M.P. & Ors.
in Civil Misc.
Petition No. 181 of 1983.
[74C; 75F] In view of the short length of service of the appellant, if the appellant made a representation, the respondent would consider the same in the light of the principles of law and equity.