judgement:
l Appeals Nos. 1818 to 1820 of 1968.
Appeals from the judgment and order dated January 22, 1968 of the Rajasthan High Court in D.B. Civil Misc.
Writ Nos.
599 of 1966, 100 and 94 of 1967 respectively.
H.R. Gokhale, D.P. Gupta and B.R. Agarwala, ,for the appellants (in all the appeals).
G.C. Kasliwal, Advacate General, Rajasthan, Vijay Krishna Makhija, I. M. Bhardwaj and K.B. Mehta, for respondents Nos. 1 and 3 (in all the appeals).
K.B. Mehta, for respondents Nos. 2 and 4 (in all the appeals).
The Judgment of the Court was delivered by Dug J.
These three appeals (Civil Appeals Nos. 1818 1819 and 1820 of 1968) with certificate of fitness presented by Dr. Ram Pal Chaturvedi are directed against a common judgment of the Rajasthan High Court and as they, raise common questions, they are being disposed of by one: judgment.
Civil Appeal No. 1818 of 1968 is concerned with the challenge to the appointment of Dr. D.G. Ojha as Principal of Sardar Patel Medical ' College, Bikaner.
He was appointed a Professor of Surgery and Officiating Principal of the said College on March 2, 1964.
At the time of his appointment, he was officiating as Director of Medical and Health Services, Rajasthan at Jaipur.
Civil Appeal No. 1819 of 1968 is concerned with the challenge to the appointment of Dr. P.D. Matbur on July 13, 1965 as Professor of Surgery and Officiating Principal of Rabindra Nath Tagore Medical College, Udaipur.
This order of appointment was subsequently superseded and Dr. Mathur was appointed as Professor of Surgery and Principal of Rabindra Nath Tagore Medical College, Udai 561 pur with effect from the date of his, taking over charge.
It may be pointed out that Dr. Mathur 's appointment as a professor of Surgery was not challenged either in the High Court or before us and his appointment as Principal alone was assailed in this Court Civil Appeal No. 1820 is concerned with the challenge to the appointment of Dr. Rishi dated July 28, 1966 as Principal of Medical College, Jodhpur.
The appointment was made on a purely temporary and ad hoc basis till further orders.
On December 31, 1966, this order was partially modified in so far as Dr. Rishi 's remuneration is concerned, but his appointment as Professor of Surgery and Principal of Medical College was reaffirmed to be on a purely temporary and ad hoc basis.
The challenge to these three appointments by means of writ petitions failed in the Rajasthan High Court and the present appeals are directed against the common order of that Court.
In the High Court, it was common ground between the parties that Dr. Ojha, Dr. Rishi and Dr. Matbur did possess academic qualifications prescribed by the University Ordinance and it was also not disputed there that these respondents had acquired the qualifications prescribed by Rule 30(4) of the Rajasthan Medical Service (Collegiate Branch) Rules, 1962 (hereafter called the Collegiate Branch Rules).
The High Court made the following observations in the impugned order : "We would, however, observe that Rule 30(4) empowers the State Government to make only a temporary ' or officiating appointment and the appointments of Dr. Ojha, and Dr. Rishi will be deemed to be temporary or officiating even though these words may not have been used in the orders of their appointments as Professors of Surgery.
Learned Advocate General has also conceded that the Government cannot make permanent appointments under R. 30(4) and the omission of the words 'temporary ' or 'officiating ' in the orders was by mistake.
It is, therefore, not necessary to pursue the matter any further as these appointments will be considered only as temporary or officiating." These observations deserve to be borne in mind while dealing with the present appeals.
The High Court further took the view that the qualifications relating to teaching experience were directory and not mandatory and in view of the fact that the University was not objecting to the impugned, appointments, that Court did not consider it proper, in its judicial discretion, to interfere in proceedings for quo warranto at the instance of the appellant.
In this connection, it was observed It hat the breach, of the relevant Ordinance No. 65 could have afforded a ground for the University to withdraw affiliation of the Colleges concernd, but it was not open to the appellant to found his claim on this grievance.
562 In this Court the question raised principally centres round the validity and effect of the proviso to sub rule (4 ) of Rule 30 contained in Part 'VIII of the Collegiate Branch Rules.
These rules were made by the Governor of Rajasthan under Article 309 of the Constitution of India and were duly published in the Rajasthan Gazette (Extraordinary) dated November 5, 1962 and came into force with effect from the date of their publication.
The argument canvassed before Us was that these rules could not override the provisions of Ordinance No. 65 made under the University of Rajputana Act of 1946.
This Ordinance lays down the minimum qualifications for teachers of various stages of University Education in the affiliated Colleges.
Part VIII deals with the Faculty of Medicine etc., and according to paragraph (A)(3), teachers in Medical Colleges for M.B.,B.S. and Post graduate Courses must possess the special academic qualifications and teaching experience prescribed therein.
The requisite qualification by way of teaching experience prescribed for professors/Additional Professors/ Associate Professors in Surgery is, to reproduce the language of the Ordinance, "at least five years as Assistant Professor or Reader or Lecturer in a Medical College." The minimum qualifications for Principals of affiliated Colleges in the Faculty of Medicine etc., are prescribed in Part X(B) (3) and they read as under: "Master 's Degree or equivalent Post Graduate qualification or a higher one in one of the branches in which the College is affiliated with a minimum professional experience of 20 years, of which at least 10 years must have been spent as a teacher of Post Graduate Classes and 5 years in administrative work.
" We may now turn to the Collegiate Branch Rules and examine the appellant 's argument.
These Rules framed under article 309 of the Constitution for regulating the recruitment to posts in, and the conditions of service of persons appointed to, the Rajasthan Medical Service (Collegiate Branch) directly govern the impugned appointments and their binding, character is beyond question.
Rule 6 providing for the composition and strength of the Rajasthan Medical Service (Collegiate Branch) lays down that the Service shall consist ' of two wings viz., Clinical and non Clinical and the right of promotion shall be confined to each wing.
The nature of conditions included in each wing ' are as specified in column 2 of the Schedule attached to the Rules.
Procedure for promotion is dealt with in Part V of, these Rules.
Rule 23 provides that the persons enumerated in Column 4 of the SchedUle shall be eligible on the basis of, seniority cum merit, for promotion to posts speci fied in column 2 subject to their possessing minimum qualifications and experience as laid down by the Rajasthan University for the teaching staff in Medical Colleges.
In selecting candidates for 563 promotion, regard is to be had to six factors mentioned in sub rule ( 2 ) which include, inter alia academic qualifications and experience.
In the Schedule in the non Clinical wing, the selection posts consisting of Professors and Additional Professors are to be filled 100 per cent by promotion from Readers.
There is nothing specific in this Schedule in regard to the posts of Principals and these rules do not provide specifically for their appointments.
Rule 30, on the basis 6f which arguments were principally addressed in these three appeals, may now be reproduced in extenso : "30.
Temporary or officiating appointments.
(1) A temporary vacancy in a Senior or Selection post, may be filled by Government by appointing thereto in an officiating ' capacity an officer whose name is included in the ' list prepared under Rule 24(3) or in the lists under Sub Rules (2) ' and (3) of Rule 23: Provided that till the preparation of the first list or in case the list is exhausted, a vacant post may be filled by Government by appointing thereto a member of the Service eligible for appointment to the post by promotion or by appointing thereto temporarily person eligible for appointment by direct recruitment to the service under the provisions of these Rules.
(2) A temporary vacancy in the Junior posts may be filled by Government by appointing thereto temporarily a person eligible for appointment by direct recruitment to the service under the provisions of these Rules.
( 3 ) NO appointment made under Sub Rule ( 1 ) and (2) above, shall be continued beyond a period of six months without referring it to the Commission for their concurrence and shall be terminated immediately on their refusal to concur.
(4) Notwithstanding anything contained in Subrules (1 ) or (3) above or any other provisions in the rules, any selection or senior posts falling vacant may be filled in temporarily by appointment of any Specialist (Jr. or Senior) in the service of the State, who is a postgraduate and has teaching experience and practice in the speciality, for such periods as are required by the University Ordinance for the time being in force on the date of such appointment Provided that : Two years of service rendered in the speciality shall be reckoned as equivalent to one year teaching experience gained in the Speciality.
564 Sub rule (4), it maybe pointed out, was added on August 22, 1966 with retrospective effect during the pendency of the writ petitions in the High COurt, with the result that the writ petitions were allowed to be amended so as to include a challenge to the validity of this amendment.
The amendment was assailed on the grounds of mala hides and unconstitutional discrimination.
The validity of the retrospective operation of this sub rule was not questioned before us by Shri Gokhale, though a lukewarm challenge was suggested before the close of the arguments on the grounds of mala fides.
It may be noted that the requirement of teaching experience as laid down in the University Ordinance also finds place in sub rule (4) of Rule 30 as added in 1966 and it is only the proviso which has the effect of modifying to some extent this condition.
The narrow question requiring consideration therefore is whether the proviso, according to which two years of service rendered in the speciality is to be reckoned as equivalent to one year 's teaching experience gained in the speciality, must, as contended on behalf of the appellant, yield to the requirement in the Ordinance which prescribes the minimum qualification of teaching experience and, therefore, must be ignored.
We are unable to uphold the contention.
The Collegiate Branch Rules having been made pursuant to the power conferred by article 309 of the Constitution, they must be given full effect subject to the provisions of any Act made by the appropriate Legislature regulating the recruitment and conditions of service of persons appointed to the Rajasthan Medical Service (Collegiate Branch).
Such Act need not specifically deal with the aforesaid Medical Services but it must be an Act as contemplated by article 309 by or under which provision is made regulating the recruitment and conditions of service taking within its fold the said Medical Services.
This takes us to the question of scope and effect of Ordinance No. 65.
The University of Rajputana Act of 1946 (hereafter called the Act) under which Ordinance No. 65 was made was enacted to incorporate the University of Rajputana.
The name of the University was changed in 1956 to the University of Rajasthan.
The Syndicate of this University constituted under s.21 of the Act is empowered under s.29 read with s.30 to make ordinances, consistent with the Act and statutes, to provide for the matters listed in s.29.
These matters include in clause VI "emoluments and conditions of service of University ,teachers:." But on this, basis alone it is not easy for us to hold that Ordinance No. 65 is, a provision under an Act, regulating the recruitment and conditions.
of service of persons appointed to Rajasthan Medical Service, as contemplated by article 309 of the Constitution.
Shri Gokhale referred us to entry 41 in List II of 7th Schedule of the Constitution which deals with the subject, inter alia, of "State Public Services" and submitted that the Act fell within this entry and therefore came within the 565 purview of article 309.
We are not impressed by this submission.
In our opinion, on a consideration of the pith and substance of the Act and on a comparison of the language used in the entries Nos. 11 and 49 of List II, the field of legislation of the Act more ' appropriately falls under entry NO. 11 which deals with the subject of "education including university.
" The appointments of Dr. Ojha, Dr. Mathur and Dr. Rishi thus seem to us to be fully justified by the Collegiate Branch Rules and their appointments cannot be held to be invalid by reason merely of ' non compliance with the provisions of Ordinance No. 65 in regard to the condition of teaching experience.
The field of operation of this Ordinance appears to us to be restricted to the question of affiliation of the Colleges concerned with the Rajasthan University.
It is noteworthy that the University has not thought fit to object to these appointments.
If there is violation of a provision of this Ordinance then that may appropriately be taken into account by the Rajasthan Univesity for the purpose of withdrawing or refusing to continue affiliation of the colleges in question.
But clearly that would not render the impugned appointments null and void; a fortiori that cannot confer any right on Dr. Ram Pal Chaturvedi to approach the High Court by means of petition for writ of Quo warranto to challenge the appointments of these three persons.
We are unable to hold that these persons are usurpers and are holding the posts of Principals without the sanction of authority.
On the view that we have taken on the scope and effect of the Collegiate Branch Rules it is unnecessary to consider the argument strongly pressed by Shri Gokhale that the provisions of Ordinance No. 65 are mandatory and we refrain from expressing any opinion either way.
The appellants challenge on the ground of mala fides is also unsustainable, Except for the bald assertion at the Bar nothing convincing has been said to persuade us to hold that r. 30 '(4) added in 1966 was made for a collateral purpose in colourable exercise of the rule making power.
The appeals must, therefore, fail and are dismissed with costs, One set of costs.
R.K.P.S. Appeals dismissed.

summary/full:
The appellant filed writ petitions in the High Court of Rajasthan challenging the appointment of the Principals of three Medical Colleges affiliated to the University of Rajasthan on the ground that the persons appointed did not have the teaching experience necessary for ,these posts as laid down in Ordinance No.65 made by the Senate of the University under the University of Rajputana Act, 1946.
The appointments were defended on the basis of the proviso to sub r.
(4) of R 30 of the Rajasthan Medical Service (Collegiate Branch) Rules, 1962 made by the Governor of Rajasthan under article 309 of the Constitution.
Suh r.
(4) was added to R. 30 of the, Collegiate Branch Rules with retrospective effect during the pendency of the appellant 's writ petitions.
and provided that two years ' service rendered in lathe speciality would be reckoned as equivalent to one year 's teaching experience.
In view of this sub rule the High Court dismissed the appellant 's writ petitions.
In appeals to this Court by ocruficate it was contended on behalf of the appellants that (i) Ordinance No. 65 must prevail over R. 30(4) in the matter of teaching experience required; (ii) the retrospective amendment of R. 30 by the addition of Sub Jr.
(4) was mala fide; (iii) the provision in Ordinance 65 as regards teaching experience was mandatory.
HELD: Dismissing the appeals, The contention that the proviso to sub r.
(4) must yield to the Ordinance could not be accepted.
The Collegiate Branch Rules having been made pursuant to the power under article 309 of the Constitution must be given full effect subject to the provisions of any Act made by the appropriate Legislature regulating the recruitment and conditions of service of persons appointed to the Rajasthan Medical Service (Collegiate Branch).
Such Act need not specifically deal with the State Medical Service but it must be an Act as contemplated by article 309 by or under which provision is made regulating the recruitment and conditions of service taking within its fold the said Medical services.
[564 D E] Ordinance 65 made under the University of Rajputana Act and dealing inter alia with "emoluments and conditions of service of University teachers" was not a provision under an Act regulating the recruitment and conditions of service of persons appointed to Rajasthan Medical Service as contemplated by article 309 ' of the Constitution.
The University of Rajputana Act falls under Entry 11 List II which deal 's with the subject 560 education including universities ' and not under entry 41 List II dealing with 'State Public services '.
The field of operation of the Ordinance is restricted to the question of affiliation of the Colleges concerned with the Rajasthan University. ' If there is any violation of a provision of the Ordinance, then that may appropriately be taken into account by the Rajasthan University for the purpose of withdrawing or refusing to continue affiliation of the colleges in question.
No such action had been taken by the University in the present case.
The personsl appointed could not be said to be holding their posts without authority of law.
The appellant had no right to challenge their appointments.
[564 G, 565 D] (ii) The plea of mala fide was unsustainable.
There was noting to show that r. 30(4) was made for a collateral purpose in colourable exercise of the rule making power.
[565 F] [In view of the above findings no opinion was expressed on the question whether the powers of Ordinance No. 65 were mandatory].


judgement:
Appeal No. 810 of 1967.
Appeal by special leave from the judgment and order dated August 3, 1966 of the Kerala High Court in Income tax Referred Case No. 49 of 1965.
K. Javaram, for the appellant.
S.T. Desai, R.N. Sachthey and B.D. Sharma for the respondent.
Sardar Bahadur Saharya. ,for the Intervener.
The Judgment of the Court was delivered by Shah, J.
In computing the income of the appellant 's father to tax for the assessment year 1959 60 the Income tax officer included Rs. 75,000 received under an agreement for cutting and removing trees from 500 acres of Mangayam Katchithode forest.
The Appellate Assistant Commissioner after calling ,for a report on certain facts confirmed the order.
But the Tribunal held that the receipt was of a capital nature and deleted it from the taxable income.
At the instance of the Commissioner of Income tax, the Tribunal referred the following question to the High Court of Kerala: "Whether on the ,facts and in the circumstances of the case, the Income tax Appellate Tribunal was correct in holding that Rs. 75,000/ being income from felling of trees from forests is not subject to income tax ?" The High Court answered the question in the negative.
We are of the view that the facts found by the Tribunal are not sufficient to enable us to record an answer to the question referred.
The Income tax officer held that the income was taxable because 500 acres of forest land was leased for "clear felling" by the father of the appellant and this fetched an income of Rs. 75,000/ .
What the expression "clear falling" meant was not investigated by the Income tax officer.
The Appellate Assistant Commissioner in dealing with the contention raised by the appellant that the receipt was of the nature of a Capital, observed: "The claim is based on the reasoning that the clear felling of ' forest trees amounts to sterilisation of a capital asset.
In other words clear felling is said to involve total destruction of the 549 forest.
It is admitted that the trees are of spontaneous growth and it has not been established that removal of trees has in any way affected the value of the property.
As a matter of fact, _clear felling is resorted to make the land more productive and more valuable.
At any rate the claim has not been substantiated beyond doubt and hence there is no scope for any relief.
" The Tribunal relying upon the observation of the Income tax officer "that the trees were not cut together with the roots but only 6" above the ground and that they were later on destroyed" held that there was "nothing to show that there was a diminution of capital assets".
On the other hand, the Income tax officer had given a clear finding that this was a case of "clear felling".
After making 'an extensive quotation from the Judgment of the High Court of Bombay in Commissioner of Income tax vs
N. Patwardhan(1), the Tribunal stated that the observations applied to the facts in the case before them, and on that account they upheld the claim of the 'appellant.
The High Court observed that "it was agreed that the Mangayam Katchithode forest was within the ambit of the Madras Preservation of Private Forests Act, 1949, and the statutory rules on the subject and that the expression "clear feeling" is an expression with a definite and specific meaning as far as such forests are concerned".
They then proceeded to quote r. 7 framed under the Madras Preservation of Private Forests Act, 1949, and after setting out conditions (b) & (c) observed that "the felling of the trees under the "clear felling" method will not permit a removal of the trees along with their roots.
On the other hand, the clear indications were that the felling of the trees under the clear indications were that the felling of the trees under the regeneration and future growth of the trees concerned.
In other words, what is contemplated by the clear felling method is not sterilisation of an asset but the removal of a growth ,above a particular height, leaving intact the roots and the stumps in such a manner as to ensure regeneration, future growth, further felling and subsequent income.
" On that view the Court held that the receipt of Rs. 75,000/ was a revenue receipt and not a capital receipt as held by the Appellate Tribunal.
The departmental authorities.
the Tribunal and the High Court have expressed different views on the import of the expression "clear ,felling" and about the true effect of the agreement.
The Income tax officer taxed the amount of Rs. 75,000/ on the footing that the 500 acres of forest lands were leased for clear felling.
The Appellate Assistant Commissioner held that the trees being of spontaneous growth and the falling of the trees not having (1) 550 affected the value of the property as a result of the clearance, the lands became more productive and the receipt was a revenue income.
The Tribunal held that the case being one of "clear felling" and the trees having been cut 6" above the ground and "that they were later on destroyed" it was a case of clear felling 'and the receipt was of capital nature.
The High Court was of the view that the "clear felling" of forest lands meant cutting trees and not removal of the roots so that there would be regeneration, future growth of the roots and the stumps and on that account the receipt was of revenue nature.
It appears that before the Income tax Officer the agreement dated Sept. 11, 1957 was not produced.
After the Appellate Assistant Commissioner remanded the case to the Income tax Officer the latter submitted the "remand report" and at that time the agreement was produce.
The Tribunal in support of its conclusion referred to the preamble of the document and the conditions thereof.
The learned Judges of the High Court observed that they did not place any reliance on the extracts in the lease given in paragraph 2 of the statement of the case for coming to the conclusion they had reached.
Why the High Court thought it fit to discard the recitals, is not clear from the record.
The facts found being not clear, it is difficult to record any conclusion whether the receipt was of a revenue nature or of a capital nature.
We therefore call upon the Tribunal to submit to this Court a supplementary statement setting out the terms of the agreement between the father of the appellant relating to the rights conveyed to, the lessees in the forest lands and especially about the import of the term relating to "clear felling".
The Tribunal will submit the supplementary statement of the case only on the basis of the evidence on the record and will not take any additional evidence.
The report to be submitted within three months from the date on which the papers reach the Tribunal.
Shah, J.
By our order dated February 13, 1969, we called for a supplementary statement of the case setting out the terms of the agreement conveying the rights in the forest trees to the lessees, and the true import of the expression "clear felling".
The Income tax Appellate Tribunal has submitted a supplementary statement o,f the case.
The Tribunal has set out the relevant terms of the agreement and has also observed that the import of the expression "clear felling" is that "all trees except casuring are to be felled at 'a height not exceeding six inches from the ground, the barks being left intact on the stump and adhering to it all round the stump without being torn off or otherwise changed".
There is no suggestion that there were any casurina trees in the forest lands let out to the lessees.
It is common ground also that the trees in the forest were of spontaneous growth.
The 551 Tribunal has found that by the use of the expression "clear felling" it was stipulated that the trees are to be cut so that 6" of the trunk with the barks intact and adhering to it all round the stump is left.
This is with a view to permit regeneration of the trees.
The question whether receipts from sale of trees by an owner of the land who is not carrying on 'business in timber may be regarded as income liable to tax has given rise to.
some difference of opinion in the High Courts.
In Commissioner of Income tax, Madras vs
T. Manavedan Tirumalpad,(1) a Full Bench of the Madras High Court held that the receipts ,from sale of timber trees by the owner of unassessed forest lands in Malabar were revenue and not capital.
The Court observed that if income from the sale of coal from a coal mine or stone won from a quarry or from the sale of paddy grown on land be regarded as income, but for the special exemption granted under the Income tax Act, there is no logical reason for holding that income from sale of trees is not income liable to tax.
In re Ram Prasad(2) a Division Bench of the Allahabad High Court held that receipt from sale of timber is income liable to be taxed and is not a capital receipt.
The case arose under the Government Trading Taxation Act 3 of 1926.
In Maharaja of Kapurthala vs Commissioner of Income tax, C.P. and U.P.(3) the Oudh Chief Court held that net receipt from the sale of forest trees is income liable to income tax, eventhough the ,forest may be gradually exhausted by fellings.
The Court further observed that income from the sale of forest trees of spontaneous growth growing on land which is assessed to land revenue is not agricultural income within the meaning of section 2(1 ) (a) of the Income tax Act and is not exempt from income tax under section 4(3)(viii) of the Act.
In Raja Bahadur Kamakshya Narain Singh vs Commissioner of Income tax, Bihar and Orissa(4) a similar view was expressed by the Patna High Court.
In Fringford Estates Ltd., Calicut vs Commissioner of Income tax, Madras(b) it was held that profits realised from the sale of timber were trade profits and were liable to income tax.
In that case the assessee Company formed with the object of purchasing, clearing and improving of estates and the cultivation and sale of tea, coffee etc.
in such estates, purchased a tract of land part of which had already been cultivated with tea and the rest was a jungle capable of being cleared and made fit for plantation.
The (1) I.L.R. 54 Mad.21.
(2) I.L.R.52 All.
(3) (4).
(5) 552 Company entered into an agreement with a timber merchant for clearing a part of the forest of all trees and for sale of the trees m the market.
This was held to be a part of the business activity of the Company.
The cases on the other side of the line are to be found in Commissioner of Income tax, Bombay South vs N.T. Patwardhan(1) in which a Division Bench of the Bombay High Court held that when old trees which stood on the land of the assessee were disposed of with their roots "once and for all", the receipts were capital.
The Court observed (p. 318): "The asset of the man was the land with the wild growth of trees on it.
If the land with the trees had been sold, there could have been no doubt that the sale was a realisation of capital and it would not have been possible to argue that the transaction in so far as it involved a sale of the trees was a sale producing income and the remaining part of the transaction was a capital sale.
In the present case the land is retained by the assessee but a part of the asset is disposed of in its entirety by selling the trees with roots once and for all.
" In State of Kerala vs Karimtharuvi Tea Estate Ltd.(2) the Kerala High Court held in a case arising under the Kerala Agricultural Income tax Act, 1950, that the amount realised by sale as firewood of old and useless gravelia trees grown and maintained in tea gardens for the purpose of affording shade to tea plants is capital receipt and not revenue receipt.
The Court observed: "The gravelia trees were grown and maintained for the sole purpose of providing shade to the tea bushes in the tea estates of the assessee.
That such shade is essential for the proper cultivation of tea cannot be disputed and the trees should hence be considered to be as much a part of the capital assets of the company as the tea bushes themselves or the equipment in its ,factories.
Some of the gravelia trees became old and useless with the efflux of time and they naturally had to be cut down and sold.
The sale proceeds of such trees cannot possibly amount to a revenue receipt." In Commissioner of Income tax, Mysore V.H.B. Van Ingen(3) the Mysore High Court held that the assessee who had purchased a coffee estate of which a part had been planted with coffee plants and the rest was jungle, and had cleared the jungle (1)41 I.T.R. 313.
(2) 5 I.T.P 129.
(3) 553 for the purpose of planting coffee and had sold the trees felled, price realised by the sale of the trees was a capital and not a revenue receipt, because the trees had grown spontaneously, and the assessee had purchased the estate including the trees.
It is not necessary for the purpose of this case to enter upon a detailed analysis of the principle underlying the decisions and to resolve the conflict.
On the finding in the present case it is clear that the trees were not removed with roots.
The stumps of the trees were allowed to remain in the land so that the trees may regenerate.
If a person sells merely leaves or fruit of the trees or even branches of the trees it would be difficult (subject to the special exemption under section 4(3)(viii) of the Income tax Act, 1922) to hold that the realization is not of the nature of income.
Where the trunks are cut so that the stumps remain intact and capable of regeneration, receipts from sale of the trunks would be in the nature of income.
It is true that the tree is a part of the land.
But by selling a part of the trunk, the assessee does not necessarily realise a part of his capital.
We need not consider whether in case there is a sale of the trees with the roots so that there is no possibility of regeneration, it may be said that the realisation is in the nature of capital.
That question does not arise in the present case.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
In computing the income of the appellant 's father for the assessment year 1959 60 the Income tax Officer included Rs. 75,000 received under an agreement for cutting and removing trees from 500 acres of forest land in Madras State.
The Income tax Officer held that the income was taxable because the land was leased for clear felling by the father of the appellant.
What the expression 'clear felling ' meant was not investigated by the Income tax Officer.
The Appellate Assistant Commissioner confirmed the assessment order.
But the Tribunal held that the receipt was of a capital nature and deleted it from the taxable income.
In reference the High Court differed from the Tribunal.
In appeal 'against the High Courts order this Court directed the Tribunal to submit to this Court a supplementary statement of case setting out the terms of the agreement between the father of the appellant relating to the rights conveyed to the lessees and especially about the import of the ' term relating to 'clear felling.
The Tribunal in its supplementary statement of case set out the relevant terms of the agreement and observed that the import of the expression 'clear felling ' is that 'all trees except casurina are to be felled at a height not exceeding six inches from the ground, the barks being left intact on the stump and adhering to it all round the stump without being torn off or otherwise changed.
" It was not suggested that there were any casurina trees in the forest land let out to the lessees and it was common ground that the trees in the forest were of spontaneous growth.
HELD: The appeal must be dismissed.
the finding in the present case it was clear that the trees were not removed with roots.
The stumps of the trees were allowed to remain in the land so that the trees may regenerate.
If a person sells merely leaves or fruit of the trees or even branches of the trees it would be1 difficult (subject to the special exemption under section 4(3)(viii) of the Income tax Act, 19 '22) to hold that the realisation is not of the nature of income.
It is true that the tree is a part of the land.
But by selling a part of the trunk, the assessee does not necessarily realise a part of his capital.
[553 B C] Commissioner of Income tax, Madrs, vs
T. Manavedan Tirumalpad, I.LR. , In re: Ram Prasad, I.L.R. 52 All.
419, Maharaja of Kapurthala vs Commissioner of Income tax, C.P. & U.P. , Raja Bahadur Kamkshya Narain Singh vs Commissioner of Income tax, Bihar & Orissa, , Fringford Estate Ltd., Calicut vs Commissioner of Income tax, Madras, , Commissioner of Income tax, Bombay South vs
N.T. Patwardhan, ,State of Kerala vs Karimtharuvi Tea Estate Ltd. and Commissioner of Income tax, Mysore vs
H.B. Van Ingen, , referred to.
548 [Question whether in case of sale of trees with the roots so that there is no possibility of regeneration the realisation may be said to be, in the nature of capital, left open.] [553 D]


judgement:
Appeal No. 444 of 1966.
Appeal by special leave from the judgment and order dated October 9, 1963 of the Allahabad High Court in F.A.F.O. No. 268 of 1957.
N.D. Karkhanis and O.P. Rana, for the appellant.
R. Gcpalakrishnan, for respondents Nos. 1 (i), to (iv), (vii) and (xi), The Judgment of the Court was delivered by Shah, J.
One Radhey Lal instituted Suit No. 4 of 1950 in the Court of the Civil Judge, Jaunpur, for a declaration that he was the "owner in possession" of the estate left by Dhan Devi.
To that suit Ram Krishan Burman was impleaded as a party defendant.
This suit was decreed ex parte.
Ram Krishan then filed Suit No. 14 of 1956 in the Court of the Civil Judge, Jaunpur, against the heirs of Radhey Lal (who had died since the passing of the decree in Suit No. 4 of 1950), claiming that he was "appointed an heir by Dhan Devi" of properties described in lists B, J & D in the plaint, that the dispute concerning the inheritance to the estate left by Dhan Devi was settled between him and Radhey Lal, that Radhey Lal admitted his title to the properties in Lists B, J & D and it was agreed that in the properties in Lists A, B, J & D Radhey Lal had 11/16th share and that he had 5/16th share, that a memorandum was drawn up in that behalf, and that Radhey Lal represented to him that a compromise decree will be obtained in that suit, but thereafter taking advantage of his ignorance Radhey Lal obtained a decree ex parte.
The following substantive reliefs were claimed by the plaintiff: "(a) that a declaratory decree in favour of the plaintiff and against the defendants declaring the plaintiff as the owner of the properties in Lists, A, B, J & D be passed; (b) in case in the opinion of the Court prayer (a) cannot be granted, then, alternatively, declaration declaring the plaintiff as the owner of properties in B, J and D being the stridhana of Rani Dhan Dai Kaur be 590 issued, decree in Suit No. 4 of 1950 has no adverse effect on the rights of the plaintiff;" The plaintiff valued the properties in dispute at Rs. 5,99,503/6/3, but on the footing that he had claimed a mere declaration paid Rs. 18/12/0 as.
court fees as in a claim under Sch.
II el. 17(iii) of the Court Fees Act.
The Inspector of Stamps reported to the Civil Judge that in his view the case fell within section 7(vi A) as incorporated by the U.P. State Legislature, and court fee was chargeable according to the value of the subject matter, and the plaintiff was liable to pay Rs. 3,528/8/ as court fee on the plaint.
The Civil Judge ordered the plaintiff to amend the plaint and to pay the court fee remaining due.
The plaintiff appealed against the order of the Civil Judge to the High Court of Allahabad.
The High Court held that the court fee paid by the plaintiff was proper, and set aside the order holding that the case did not fall within section (iv A) of the Court Fees Act.
The State of U.P. has appealed to this Court with special leave.
Section 7 (iv A) of the Court Fees Act as enacted by the U.P. State Legislature, insofar as it is relevant, reads: "In suits for or involving cancellation of or adjudging void or voidable a decree for money or other property having a market value, or an instrument securing money or other property having such value.
(1) where the plaintiff or his predecessor in title, was a party to the decree or the instrument, according to the value of the subject matter, and There is no dispute that the plaintiff claimed a declaration adjudging void the decree in Suit No. 4 of 1950 declaring Radhey Lal box be the "owner in possession of the estate of Dhan Devi".
The plaintiff by his plaint had claimed two declarations in the alternative, and prima facie, the plaint was of the description in Sch.
II CL 17(iii) of the Court Fees Act.
But counsel for the State of U.P. contends that the reliefs claimed fell within section 7(iv A) of the Court Fees Act.
Counsel says that the expression "decree for money or other property" does not mean a decree awarding money or other property, but a decree concerning or relating to money or other property, and he says that where the Court declares the plaintiff 's title to money or property simpliciter, the decree is one for money or for other property.
We are unable to 591 agree with that contention.
The expression "for" occurs twice in the opening part of the clause.
Evidently the expression "for" when it occurs for the first time means "for obtaining a decree ordering (payment or recovery of)".
The expression "for" also occurs in several other clauses of the Court Fees Act.
In section 7 of the Court Fees Act as amended by the U.P. Legislature which deals with computation of court fee payable in certain classes of suits, following clauses occur: "(i) In suits for money (ii) (a) In suits for maintenance and annuities or other sums payable periodically : (b) In suits for reduction or enhancement of maintenance and annuities or other sums payable periodically (iii) In suits for movable property other than money, where the subject matter has a market value (iv) In suits (b) for accounts (iv) B.
In suits (a)for a right to some . to arise out of land.
(iv) C.
In suits (a) for the restriction of conjugal fights, (b)for establishing or annulling or dissolving a marriage, (c) for establishing a fight to the custody or guardianship of any person.
(v) A.
In suits for possession . (v) B.
In suits for possession between rival tenants.
(vi) A.
In suits for partition.
(vii) In suits for the interest of an assignee of land: ' revenue.
(ix) In suits against a mortgage for the recovery of the property mortgaged.
(x) In suits for specific performance 592 (xi) In the following suits between landlord and tenant (a)for the delivery by a tenant of the counter part lease, (c) for the delivery by a landlord of a lease, (cc) for the recovery of immovable property from a tenant.
(f) for abatement of rent, (g) for commutation of rent, In all these clauses the expression "for" is used as meaning "for obtaining a decree ordering (payment or recovery of)".
If the expression "for" occurring for the first time in section 7 (iv A) means in the context in which it occurs obtaining a decree for cancellation of or adjudging void or voidable a decree, it would be difficult to hold that the expression "decree for money or other property" has a wider connotation and means a decree which concerns or relates to money or other property.
A decree for declaration of title to money or other property is not a decree for money or other property.
In our judgment the expression "decree for money or other property" means only a decree for recovery of money or other property.
It does not include a decree concerning title to money or other property.
It was urged that in any event the plaintiff had sued for adjudging void or voidable an "instrument" securing money or other property having market value.
But a decree in invited is not an instrument securing money or other property: such a decree is a record of the formal adjudication of the Court relating to a right claimed by a party to a suit.
It does not by its own force secure money or property.
A consent decree in certain cases may be regarded as an instrument securing money or other property, where the decree proceeds upon a contract which had that effect, but that is only because a consent decree is a record of the contract between the parties to which is superadded the seal of the Court.
In our view the High Court was right in holding that the court fee paid on the plaint was proper.
It may be pointed out that the plaintiff had claimed nothing more than a declaration with regard to certain properties.
593 We are also unable to accept the contention of counsel for the State that the relief for declaration was a mere device or subterfuge intended to conceal the true purport of the claim.
It iS evident that the District Magistrate, Jaunpur was in possession of the property in dispute and if the civil court declared the title of the plaintiff, he would be entitled to secure recognition of his rights.
Before parting with the case we must observe that we have felt greatly perturbed by the course which this litigation has taken.
The suit was filed in 1956.
And after 13 years only the question of court fee payable on the plaint is decided.
In the meanwhile the original plaintiff died.
The delay is largely attributable to the rigid attitude of the State which has by insisting upon a comparatively small claim, held up the proceedings for all these long years by raising contentions which had no merit.
We trust the Court of First Instance will take up this suit for hearing with the least practicable delay and dispose of the suit according to law.
The State to pay in this appeal the costs of the heirs of the original plaintiff.
G.C. Appeal dismissed.

summary/full:
As the reversioner of a Hindu widow 's estate one 'R ' instituted suit No. 4 of 1950 in the court of the Civil Judge Jaunpur, for a declaration that he was the 'owner in possession ' of the said estate. 'B ' who claimed to be an heir of the widow was impleaded as a party defendant.
The suit was decreed ex parte. 'B ' then filed suit No. 14 of 1956 in the same court against the heirs of 'R ' who died after the, passing of the decree in his suit.
In suit No., 14 of 1956 'B ' claimed that as heir of the said widow he was entitled to her stridhuna properties.
He averred that in suit No. 4 of 1950 'R ' had arrived at an oral compromise with him promising him 5/16th share in the, whole estate.; that the oral compromise was later reduced into a memorandum; that 'R ' had represented to him that a compromise decree would be obtained in the suit; and that taking advantage of his ignorance 'R ' had obtained an ex parte decree against him.
On these allegations 'B ' prayed that he be declared the owner of all the properties left by the widow, and in the alternative he be declared owner of her stridhan properties, the decree in suit No. 4 of 1950 having no adverse effect on his rights.
On the footing that he had claimed a mere declaration 'B ' paid Rs. 18/12/ as court fees as in a claim under Sch.
II cl.
17(iii) of the Court Fees Act.
The Inspector of Stamps, however, reported to the Civil Judge that in his view the case fell within section 7(iv A) of the Act as incorporated therein by the U.P. State Legislature and court fee was payable on the value of the subject matter of the suit.
The Civil Judge ordered the plaintiff to amend the plaint and pay the court fee remaining due.
In appeal the High Court decided in favour of the respondent.
The State of U.P. appealed.
It was contended on behalf of the appellant: (i) that the plaintiff sought a declaration adjudging void the decree in suit No. 4 of 1950 which was a decree "for money or other property" within the meaning of section 7(iv A) since that expression must include a decree concerning or relating to money or other property, (ii) that in any case the decree in suit No. 4 was an 'instrument ' securing money or other property having market value and section 7(iv A) was therefore attracted; (iii) that the relief for declaration was a mere device intended to conceal the true purport of the claim.
HELD: The appeal must be dismissed.
(X) A decree for declaration of title to money or other property is not a decree for money or property.
The expression "decree for money or other property" means only a decree for recovery of money or other property.
It does not include a decree concerning title to money or other property.
[592 E F] (ii) A decree ad invitum is not an instrument securing money or other property: such a decree is a record of the formal adjudication of the 589 court relating to a right claimed by a party to the suit.
It does not by its own force secure money or property.
[592 G] (iii) The relief for declaration was not a mere device or subterfuge intended to conceal the true purport of the claim for the property in dispute was in the possession of the District Magistrate, and if the Civil Court declared the plaintiff 's title he would be entitled to secure recognition of his rights by the District Magistrate.
[593 A B]


judgement:
Appeals Nos.
2416 and 2417 of 1966.
Appeals from the judgment and order dated March 19, 1963 of the Punjab High Court in Regular First Appeal No. 281 of 1960.
Rameshwar Nath and Mahinder Narain, for the appellants (in C.A. No. 2416/1966) and Respondents Nos. 1, 2 and 4 (in C.A. No. 2417 of 1966).
N.C. Chatterjee and H.P. Wanchoo, for the respondent No. 1 (in C.A. No. 2416 of 1966) and the appellant (in C.A. No. 2417 of 1966).
The Judgment of the Court was delivered by Hidayatullah, C.J.
These are appeals by certificate granted by the Punjab High Court against the judgment and decree dated March 19, 1963.
The property in dispute is a building in Jullundur City in which there is located a cinema.
It was formerly ' called 'Chitra Talkies ' and now is known as 'Odeon Cinema '.
The building was constructed in 1933 on land measuring 3 kanals and 17 marlas.
The original owner one Azim Baksh migrated to 583 Pakistan in 1947 and this property was declared evacuee property.
Before migration Azim Baksh had dealt with this property in several ways.
On January 21, 1946 he had mortgaged the building with possession for Rs. 70,000/ with Malawa Ram and Gamda Mal.
On January 22, 1946 Azim Baksh took the building on leaseon a rent of Rs. 162.8 annas for 11 months from the mortgagees.
He executed a rent note.
On February 8, 1946 this rent note was cancelled.
An endorsement was made on the rent note to the following effect: "With the consent of Lal Gainda Ram and Malawa Ram, the said rent deed has been cancelled.
Rent for one month may be included in the mortgage amount.
The mortgagees are entitled to carry on the aforesaid cinema in any way they like or may give the same on lease to any body else.
I shall have no objection".
Previously Azim Baksh had rented this building to Sant Ram and Sita Ram on Rs. 150/ per month.
After the release of the property the mortgagees leased it to Sita Ram and Sohan Lal on Rs. 200/ per month.
This lease was terminated on July 26, 1950.
On August, 1951 the mortgagees leased it to 'the All India Film Corporation Ltd., appellant No. 1 (defendant No. 2), on Rs. 250/ per month vide exhibit D.2 W.2/1.
The lease was for 5 years in the first instance from September 15, 1951 to September 14, 1956.
It was, however, renewable for 10 years by yearly renewals.
There was a condition that renewal on the same terms was not to be refused.
By this lease, the lessee was given full right to use the property whether by itself or through agents or in partnership or by sub leasing.
Malawa Ram and Gainda Mal partitioned their property and this house fell to the share of Gainda Mal.
The lessee company in its turn sub let the premises to defendants 3 to 9 on a monthly rent of Rs. 1,250/ .
This was on May 16, 1952.
Before subleasing the premises, the head lessee company had equipped the house with cinema machinery etc.
and the sub lease included the use of machinery etc.
Gainda Mal applied under Evacuee Interest Separation Act, 1951 for separation of his interest.
The Competent Officer by his order, August 25, 1955, determined the mortgage charge as Rs. 90,807.4 annas and ordered sale of the building and land together with another plot.
The respondent in this appeal Raja Gyan Nath purchased the cinema with the land (3 kanals 17 marlas) for Rs. 65,000/ on December 3, 1955.
The sale certificate was issued on March 3, 1956.
The mortgage charge was paid off on April 19, 1958.
584 The purchaser Raja Gyan Nath then filed a suit for possession of this property from the head lessee and the sub lessees on August 5, 1959 and for mesne profits at the rate of Rs. 1,250/ per month.
The sub lessees claimed the benefit of the East Punjab Urban Rent Restriction Act (3 of 1949).
Later the plaintiff gave up his claim to the cinema machinery, furniture and fittings.
The trial Judge decreed the claim in full except that mesne profits were reduced to Rs. 500/ per month and half of the costs were disallowed.
Defendants 2, 4, 10 and 11 appealed against the decree to the High Court.
The plaintiff cross objected asking for mesne profits at Rs. 1,250/ with interest at 6% per year and the remaining costs.
The High Court affirmed the decree, but reduced mesne profits further from Rs. 500/ to Rs. 250/ per month.
The mesne profits were to run from the date of suit till possession with interest at 6% per annum.
The High Court granted a certificate to both sides and they have filed their respective appeals.
In the High Court only three points were urged: (1) Whether the defendants were protected by the East Punjab Urban Rent Restriction Act (3 of 1949) ? (2) What were the mesne profits ? and (3) Whether plaintiff was entitled to possession before the expiry of the full term of the lease with right to renewals ? These are the only points which have been urged before us in these appeals.
The first question to consider is this: Did the tenancy created by the mortgagee in possession survive the termination of the mortgagee interest so as to be binding on the purchaser ? A general proposition of law is that no person can confer on another a better title than he himself has.
A mortgage is a transfer of an interest in specific immovable property for the purpose of securing repayment of a loan.
A mortgagee 's interest lasts only as long as the mortgage has not been paid off.
Therefore on redemption of the mortgage the title of the mortgagee comes to an end.
A derivative title from him must ordinarily come to an end with the termination of the mortgagee 's title.
The mortgagee by creating a tenancy becomes the lessor of the property but his interest as lessor is coterminous with his mortgagee interest.
Section 111 (c) of the Transfer of Property Act provides that a lease of immovable property determines where the interest of the lessor in the property terminates on, or his power to dispose of the same, extends only to the happening of any event by the happening of such 585 event.
The duration of the mortgagee 's interest determines his position as the lessor.
The relationship of lessor and lessee cannot subsist beyond the mortgagee 's interest unless the relationship is agreed to by the mortgagor or a fresh relationship is recreated.
This the mortgagor or the person succeeding to the mortgagor 's interest may elect to do.
But if he does not, the lessee cannot claim any rights beyond the term of his original lessor 's interest.
These propositions are well understood and find support in two rulings of this Court in Mahabir Gope and others vs Hatbans Narain Singh(1) and Asaram and others vs Mst.
Ram Kali(2).
To the above propositions there is, however, one exception.
That flows from section 76(a) which lays down liabilities of a mortgagee in possession.
It is provided there that when during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he must manage the property as a person of ordinary prudence would manage it if it were his own.
From this it is inferred that acts done bona fide and prudently in the ordinary course of management, may bind even after the termination of the title of the mortgagee in possession.
This principle applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes.
To this again there is an exception.
The lease will continue to bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it.
Applying these principles to the facts of this case, we find that the property, the subject of the lease, was a house in the city of Jullundur suitable for a cinema theatre.
This was leased for five years on a rent of Rs. 250/ p.m.
This sum included the use of a passage for which the rent was Rs. 100/ p.m.
In effect the rent of the building was Rs. 150/ .
This was lower rent than the rent it had fetched before.
The mortgagee further agreed to renewal of the lease on the same terms for a further period of 10 years.
It is in evidence that a plot only 8 marlas formed the passage and the rent was Rs. 100/ and on that basis land of 3 kanals and 17 marlas with a building fit for cinema ought to have fetched much more.
Such a building in a growing city ought not to have been tied down for a period of fifteen years, to a rent of Rs. 150/ or even Rs. 250/ p.m.
The learned subordinate Judge pointed out that the annual rent of the building was assessed at Rs. 10,800/ for the years 1950 55.
This shows how low was the actual rent.
The history of the building in the hands of the head lessee shows that after an investment of Rs. 60,000/ the rent went upto Rs. 1,250 p.m. with additional rights (1) ; (2) 586 to the head lessee.
The building without the fittings and the land of the passage fetched Rs. 65,000/ .
Therefore a tenant willing to pay a better rent could easily have been found.
The case is thus not covered by the exception because we cannot hold that such a long lease on such a small rent was an act of prudence, whether it was a bona fide act or not, and whether the exception can apply to urban property.
This brings us to the next question.
It is whether the tenants could take advantage of the provisions of the East Punjab Urban Rent Restriction Act, 1949 ? The answer to this question deFends on whether we can say that there was a tenancy to protect.
We have shown above that the lease came to an end with the mortgagee 's interest in the property.
Although this was not a ,case of a redemption plain and simple because a straight redemption was refused, the property was put to sale and the purchaser paid off the mortgage in full.
The interests of the mortgagor and mortgagee united in the person of the purchaser anti the mortgage ceased to subsist.
In this view of the matter the purchaser, ,speaking in his character as a mortgagor, could claim that the mortgagee 's action came to an end and there did not subsist any relationship between him and the tenants.
The respondents attempted to argue that the Rent Restriction Act defines landlord and tenant with reference to the payment of rent.
A landlord means a person entitled to receive rent and a tenant means any person by whom or on whose account rent is payable.
These definitions apply if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage.
The scheme of section 10 of the is that in the case of a mortgagor or a mortgagee, (a) the Competent Officer may pay to the Custodian or the claimant the amount payable under the mortgage debt and redeem the property, or (b) the Competent Officer may sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof, or (c) the Competent Officer may partition the property between the mortgagor and the mortgagee proportionate to their shares, or (d) adopt a combination of any of these measures.
It is obvious that method Co) was followed.
The property was sold and the mortgage was satisfied.
This led to the extinction of the mortgagees ' interest and the purchaser acquired full title to the property.
The termination of the mortgagee interest terminated the relationship of landlord and tenant and it could not, in the circumstances, be said to run with the land.
There being no landlord and no tenant, the provisions of the Rent Restriction Act could not apply any further.
Nor could it be said that when the mortgagor cancelled the rent note and autho 587 rised the mortgagee to find any other tenant, the intention was to allow expressly a tenancy beyond the term of the mortgage.
In this view of the matter the decision of the High Court and the court below cannot be said to be erroneous.
There remains to consider the question of mesne profits.
The High Court reduced the mesne profits to Rs. 250/ p.m. which was the actual rent paid for the building and the passage.
There is some doubt as to whether this sum included Rs. 100/ for the use of the passage.
However, we think that the matter is between the purchaser and the head lessee.
The rent of Rs. 250/ , although on a low side, was the actual rent on which the premises were held.
The High Court was, therefore, not wrong in limiting mesne profits to that figure.
The result is that both the appeals fail and will be dismissed with costs.
There will be a right to set off the costs and the resulting difference alone will be payable.
Y.P. Appeals dismissed.

summary/full:
The mortgagee of a property in which a cinema was run.
leased it to the first appellant on a monthly rental of Rs. 250/ for a period of 5 years renewable for 10 years by yearly renewals on the same terms.
The lessee was given the full right to use the property whether by itself or through.
agents or in partnership or by sub leasing.
The lessee sublet the premises after equipping the house with cinema machinery on a monthly rental of Rs. 1,250/ .
The property had been declared evacuee property, and the lessee applied under the for separation of his interest.
The Competent Officer ordered sale of the property, which was purchased for Rs. 65,000/ by the respondent.
Then (before the expiry of the term of the lease) the respondent filed a suit against the head lessee and the sub lessee for possession of the property.
On the questions (i) whether the respondent was entitled to possession before the expiry of the full term of the lease; and (ii) whether the subleases were protected under the East Punjab Urban Rent Restriction Act, 1949.
HELD: (i) No person can confer on another a better title than he himself has.
A mortgage is a transfer of an interest in specific immovable property for the purpose of securing repayment of a loan.
A mortgagee 's interest lasts only as long as the mortgage has not been paid off.
Therefore on redemption of the mortgage the title of the mortgagee comes to an end.
A derivative title from him must ordinarily come to an end with the termination of the mortgagee 's title.
The mortgagee by creating a tenancy becomes the lessor of the property, but his interest as lessor is coterminous with his mortgage interest.
The relationship of lessor and lessee cannot subsist beyond the mortgagee 's interest unless the relationship is agreed to by the mortgagor or a fresh relationship is recreated.
This the mortgagor or the person succeeding to the mortgagor 's interest may elect to do.
But if he does not, the lessee cannot claim any rights beyond the term of his original lessor 's interest.
[584 F] The exception to the above propositions is the one that flows from section 76(a) which lays down liabilities of a mortgagee in possession.
It is provided there that when during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he must manage the property as a person of ordinary prudence would manage it if it were his own.
From this it is inferred that acts done bona fide and prudently in the ordinary course of management, may bind even after the termination of the title of the mortgagee in possession.
This principle applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes.
To this again there is an exception.
The base will continue to bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it.
[585 C] 582 The present case was not covered by the exception because such a long lease on a small rent could not be said to be an act of prudence, whether it was a bona fide act or not, and whether the exemption can apply to urban property.
Mahabir Gope and Ors.
vs Harbans Narain Singh, [1952] S.C.F. 775 and Asaram & Ors.
vs Mst.
Ram Kali, [1958] S.C.R: 986, followed.
(ii) A landlord means a person entitled to receive rent and a tenant means any person by whom or on whose account rent is payable.
These definitions apply if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage.
The scheme of section 10 of the is that in the case of a mortgagor or a mortgagee, (a) the Competent Officer may pay to the Custodian or the claimant the amount payable under the mortgage debt and redeem the property or (b) the Competent Officer may sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof, or (c) the Competent Officer may partition the property between the mortgagor and the mortgagee proportionate to their shares, or (d) adopt a combination of any of these measures.
It is obvious that method (b) was followed.
The property was sold and the mortgage was satisfied.
This led to the extinction of the mortgagee 's interest and the purchaser acquired full title to the property.
The termination of the mortgagee interest terminated the relationship of landlord and tenant and it could not, in the circumstances, be said to run with the land.
There being no landlord and no tenant, the provisions of the Rent Restriction Act could not apply any further.
Nor could it be said that when the mortgagor cancelled the rent note and authorised the mortgagee to find any other tenant, the intention was to allow expressly a tenancy beyond the term of the mortgage.
[586 E]


judgement:
Appeal No. 445 of 1966.
Appeal by special leave from the judgment and order dated March 9, 1964 of the Andhra Pradesh High Court in Letters Patent Appeal No. 2 of 1963.
M. C. Chagla and T. Satyanarayana, for the appellants.
P. Ram Reddy and K. Jayaram, for the respondents.
The Judgment of the Court was delivered by Shah, J.
One Appanna died on March 12, 1953, leaving him surviving no wife or lineal descendant.
Subba Rao claiming to be the father 's sister 's son of Appanna instituted suit No. 64 of 1953 in the Court of the Subordinate Judge, Eluru.
for partition and separate possession of his half share in the properties described in Schs.
A, B, C, D & E. The plaintiff claimed that Appanna died intestate, and that he and his brother Venugopala Rao were the nearest heirs entitled to the entire estate of Appanna.
To this suit were impleaded Pothana Apparao (husband of the sister of Mangamma wife of Appanna), his children, certain relations of Mangamma and the tenants on the lands in suit.
Venugopala Rao was impleaded as the 24th defendant.
The suit was defended by Pothana Apparao and others contending, inter alia, that Appanna had made and executed a will on July 14, 1948, devising his property in favour of various legatees and the plaintiff 's suit for a share in the property was on that account not maintainable.
The, Trial Court held that Appanna of his free will and while in a sound state of mind had executed the will on July 14, 1948, whereby he disposed of his properties described in Schs.
A, B, C, D & E, but the Court held that the disposition of the property in Schs.
C & E lapsed because Mangamma who was a legatee of the properties died before the testator, and that the direction in the will that whatever remained out of the Sch.
E property after the life time of Mangamma shall pass to Venkataswamy and Seshagirirao defendants Nos. 3 & 2 respectively or their descendants was void and incapable of taking effect.
The learned Judge accordingly passed a decree in favour of the plaintiff and the 24th defendant for possession of properties described in Schs.
C & E. 30 In appeal to the High Court of Andhra Pradesh, Chandrasekhar Sastry, J., allowed the appeal filed by Pothana Apparao and his two sons Venkataswamy and Seshagirirao, and dismissed the claim of the plaintiff in respect of Schs.
C & E properties.
An appeal under the Letters Patent filed by the plaintiffs against the judgment of Chandrasekhar, J. was dismissed.
It has been concurrently found by all the Courts that when he was in a sound and disposing state of mind Appanna executed on July 14, 1948, the will set up by the defendants.
In an appeal with special leave this Court will not ordinarily allow a question about due execution to be canvassed, and our attention is not invited to any exceptional circumstances which may justify a departure from the rule.
The only question which survives for consideration relates to the true effect of the dispositions made by the will in respect of Sch.
C and Sch.
E properties.
The relevant provisions of the will may first be set out: "I am now about forty years of age.
I do not have male or female issue.
My wife is alive.
and with the fear that I may not survive I have made the following Provisions in respect of my immovable and movable properties to be given effect to.
I have given power to my wife Mangamma to sell the immovable property mentioned in the C Schedule hereunder and utilise the amount for celebrating the marriage and other auspicious functions of Tholeti Narsimha Rao 's daughter Seetharatnam mentioned in the B Schedule and for constructing a Ramamandiram in Rajavaram village in my name.
"The immovable property mentioned in the E Schedule hereunder shall be enjoyed by my wife Mangamma with all powers of disposition by way of gift, sale, etc.
, Whatever remains out of the said E Schedule mentioned immovable property after her life time, (the said property) shall pass either to the said Ven kataswamy and Seshagiri or their descendants. .
In the event of my wife taking a boy in adoption the property mentioned in the E schedule hereunder shall pass to the said adoptee with all powers of disposition by way of gift, sale etc.
after her life time. . .
If, for any reason, the properties and rights do not pass to the individuals mentioned in the aforesaid 31 paras, such properties and rights shall be enjoyed by my wife Mangamma with absolute rights.
" Appanna had directed his wife Mangamma to sell the pro perties described in Sch.
C and to utilise the proceeds for two purposes, "celebrating the marriage and other auspicious functions" of Seetharatnam, and "for constructing a Ramamandiram in Rajavaram village" in his name.
But the marriage of Seetharatnam was celebrated during the lifetime of Appanna, and expenses in that behalf were defrayed by Appanna, and no expenses remained to be incurred after the death of Appanna.
Mangamma had no beneficial interest in Sch.
C property.
She was merely appointed to sell the property and to utilise the proceeds for the purposes specified in the will.
The Trial Judge clearly erred in holding that the estate lapsed because Mangamma died during the lifetime of Appanna.
In the view of Chandrasekhar Sastry, J., since there was a joint bequest for two purposes, and one of the purposes for which the Sch.
C properties were devised was accomplished by Appanna the bequest in its entirety must enure for the remaining purpose i.e. constructing a Ramamandiram, and the plaintiffs ' claim for possession of the C Schedule properties must fail.
The learned Judges of the High Court agreed with that view.
But there was no "joint bequest" of the properties.
In the absence of allocation of the amounts to be utilised for "celebrating the marriage and other auspicious functions" of Seetharatnam and for constructing a Ramamandiram, it must be presumed that the fund was to be utilised in equal moieties for the two purposes.
Failure of one of the purposes will result in a moiety of the amount devised falling into the residue.
In Jogeswar Narain Dea vs Ram Chund Dutt and Others(1) a devise under the will of a Hindu testator who had given a fouranna share of his estate to his daughter and her son for their maintenance with power of making alienation thereof by sale or gift fell to be construed.
The Judicial Committee held that on a true construction of the will each took an absolute interest in a two anna share in the estate.
In dealing with the contention that there was a joint estate granted to the daughter and her son the Judicial Committee observed : ". .
Mr. Branson. maintained upon the authority of Vydinada vs Nagammal (ILR that,.
by the terms of the will the Rani and the appellant became, in the sense of English law, joint tenants of the 4 annas share of Silda, and not tenants in common; and that her alienation of her share before it was severed, and without the consent of the other (1) L. R. 23 1.
A. 37,43.
32 joint tenant,, was ineffectual.
The circumstances of that case appear to be on all fours with the circumstances which occur here, and, if well decided, it would be a precedent exactly in point.
There are two substantial reasons why it ought not to be followed as an authority.
In the first place, it appears to their Lordships that the, learned Judges of the High Court of Madras were not justified in importing into the construction of a Hindu will an extremely technical rule of English conveyancing.
The principle of joint tenancy appears to be unknown to Hindu law, except in the case of coparcenary between the members of an undivided family." That principle applies here.
The fund was devised for the construction of a Ramamandiram at Rajavaram village and for "celebrating the marriage and other auspicious functions"of Seetharatnam.
Since no part of the fund was needed forthe benefit of Seetharatnam, the legacy failed pro tanto and fell into the residue.
Under the will Mangamma was made the owner of the residue, but by her death during the lifetime of Appanna the residuary bequest lapsed and vested as on intestacy in the plaintiff and the 24th defendant.
The devise of a moiety of the fund to be applied for the construction of a Ramamandiram however stands good and the trust must be carried out.
Mangamma is dead, but on that account the charitable trust is not extinguished The Trial Court must give appropriate directions for utilisation of that moiety for constructing a temple according to the direction of Appanna in the will.
The testator gave to his wife Mangamma an absolute interest in the E Schedule properties, for she was invested with all powers of disposition "by way of gift, sale etc.
" The will then proceeded to direct that whatever remained out of the E Schedule properties after her death shall pass to Venkataswamy and Seeshagirirao.
If Mangamma had survived Appanna, probably the devise in favour of Venkataswamy and Seshagirirao may have failed, but that question does not arise for consideration.
Section 105 of the , which applies to the wills of Hindus provides : "(1) If the legatee does not survive the testator, the legacy cannot take effect, but shall lapse and form part of the residue of the testator 's property, unless it appears by the will that the testator intended that it should go to some other person.
. " 33 Mr. Chagla for the plaintiffs contends that the estate in the E Schedule properties devised in favour of Mangamma lapsed, for, there was nothing in the will which expressly provided that in the event of Mangamma dying during the testator 's lifetime, the devise in favour of Venkataswamy and Seshagirirao shall be accelerated.
Counsel relies upon the judgment of Wickens, V. C., in Browne vs Hope(1) and contends that a legacy does not lapse, if the testator does two things he, in clear words, excludes lapse; and he clearly indicates the person who is to take the legacy in case the legatee should die in his lifetime.
In Browne 's case(1) the testator gave, by his will, the residue of his estate to trustees to pay and transfer the same to seven named legatees in equal shares as tenants in common, and their respective executors, administrators and assigns; and he declared that such shares shall be vested interests in each legatee immediately upon the execution thereof, and that the shares of the married women shall be for their separate use.
It was held that the share of one of the legatees a married woman who died after the date of the will but before the testator, did not belong to her husband, who was her legal personal representative, and it lapsed.
Counsel says that the rule of interpretation as enunciated by Vice Chancellor Wickens is incorporated in section 105 of the .
He submits that a legacy will not lapse only if the testator by express direction excludes lapse, and indicates clearly the person who shall take the legacy if the legatee dies during his lifetime.
We are concerned to construe the provisions of section 105 of the .
That section enacts that a legacy shall lapse and form part of the residue of the testator 's property if the legatee does not survive the testator except where it appears by the will that the testator intended that the legacy shall on the legatee not surviving him go to some other person.
We are unable to agree that the intention of the testator that a legacy shall not lapse may be given effect to only if the testator expressly directs that if the legatee dies during his lifetime the legacy shall go to some other person, and that intention to exclude lapse cannot be inferred.
Section 105(1) does not say, nor does it imply, that the testator must have expressly, envisaged the possibility of lapse in consequence of the legatee dying during his lifetime and must have made a provision for that contingency.
In In re.
Lowman Devenish vs Pester (2 ) a testator, who under a settlement was absolutely entitled to a moiety of the proceeds of a certain real estate under a trust for sale, by his will devised,, (1) L. R. 14 Equity Cases, 343.
(2) 34 that real estate by its proper description, together with certain real estate of his own, to trustees, to the use of H. for life, with remainder to trustees to preserve the contingent remainders, with remainder to the use of the first and other sons of H successively in tail male, with remainder to the use of the first and other sons of his niece E successively in tail male, with remainder to the use of the first and other sons of his niece M successively in tail male, with remainder to the use of the first and other sons of his niece F successively in tail male, with remainder over.
H survived the testator and died a bachelor.
M also survived the testator and died unmarried.
E was still alive but unmarried and seventy years of age.
F had two sons, the eldest of whom died before the testator.
It was held that when there are in a 'Will successive limitations of personal estate in favour of several persons absolutely, the first of those persons who survives the tes tator takes absolutely, although he would have taken nothing if any previous legatee had survived and had taken : the effect of the failure of an earlier gift is to accelerate, not to destroy, the later gift.
This rule was applied in In re.
Dunstan, Dunstan vs Dunstan(1).
A testatrix by her will gave freeholds absolutely to A, subject to the bequest that whatever out of the freeholds should remain after A 's death shall be given to a named charity.
It was held that if A had survived the testatrix the gift to the charity would have been repugnant and void, and A would have taken the freeholds absolutely.
But since A died in the lifetime of the testatrix, the doctrine of repugnancy did not apply, and the gift to charity was accelerated and took effect.
Mangamma died during the lifetime of the testator : thereby the estate in Sch.
E properties granted to Venkataswamy and his brother Seshagirirao was accelerated.
The plaintiffs are therefore not entitled to any share in Sch.
E properties.
The decree of the High Court is modified.
It is declared that there is intestacy in respect of a half share in the fund arising by sale of Sch.
C properties, and the plaintiff and the 24th defendant are entitled to take that half share in the fund.
It is directed that the Trial Court will issue appropriate directions for application of the other half of the fund arising by sale of Sch.
C properties for constructing Ramamandiram at Rajavaram village as directed by the testator in his will.
Subject to this modification the appeal will be dismissed.
The appellant will pay 3/4th of the costs of the contesting respondents in this Court.
Y.P. Appeal dismissed.

summary/full:
A Hindu executed a will directing his wife to sell, Sch.
C property and utilise the amount for celebrating the marriage of one Sitharathnam and for constructing a Ramamandiram in his name, and further devised that his wife shall enjoy Sch.
E property absolutely and after her life time whatever remained out it, it will pass to two named persons.
The wife predeceased the testator, and the marriage of Sitharathnam was celebrated in the testator 's life time and expenses in that behalf were defrayed by the testator.
The appellants who were the testator 's nearest heirs, claimed the properties contending that the disposition of the Sch.
C & E properties lapsed, because the wife who was the legatee of the properties died before the testator and that there was nothing in the will providing for the acceleration of Sch.
E property in case of the legatee 's dying in the testator 's life time.
HELD : (i) The wife had no beneficial interest in Sch.
C property.
She was merely appointed to sell the property and to, utilise the proceeds for the purposes specified in the will.
There was no "joint bequest" of Sch.
C properties.
In the absence of allocation of the amounts to be utilised for celebrating the marriage of Sitharathnam and for constructing a Ramamandiram, it must be presumed that the fund was to be utilised in equal moieties for the two purposes.
Failure of one of the purposes will result in a moiety of the amount devised falling into the residue.
Since no part of the fund was needed for the marriage of Sitharathnam the legacy failed pro tanto and fell into the residue.
Under the will the wife was made the owner of the residue, but by her death during the life time of testator the residuary bequest lapsed and vested as on intestacy in the nearest heirs of the testator.
The devise of a moiety of the fund to be applied for the construction of a Ramomandiram however stood good and the trust had to be carried out.
The wife died during the life time of the testator but on that account the charitable trust was not extinguished.
[31 E; 32 D] Jogeshwar Narain Deo vs Ram Chund Dutt and Others, L.R. 23 I.A. 37, 43, referred to.
(ii) The wife died during the life time of the testator : thereby the estate in Sch.
E properties granted to the named persons was accelerated.
The nearest heirs of the testators were therefore not entitled to any share in Sch.
E properties.
Section 105 of the , enacts that a legacy shall lapse and form part of the residue of the testator 's property if the legatee does not survive the testator except where it appears by the will that the testator intended that the legacy shall, on the legatee not surviving him, go to some other person.
It could not be said that the intention 29 of the testator that a legacy shall not lapse may be given effect to only if the testator expressly directs that if the legatee dies during his life time the legacy shall go to some other person, and that intention to exclude lapse cannot be inferred.
Section 105(1) does not say, nor does it imply, that the testator must have expressly envisaged the possibility of lapse in consequence of the legatee dying during his life time and must have made a provision for that contingency.
[33 F] Browne vs Hope, L.R. 14 Equity Cases 343; Lowman Devenish vs Pester, ; Dunstan, Dunstan vs Dunstan, , referred to.