judgement:
ivil Appeal No. 32 17 of 1988.
From the Judgment and Order dated 30.5.88 of the Cus toms Excise and Gold (Control) Appellate Tribunal, New Delhi in E/Misc/ 194/87 A & E/A No. 1365/85 A & Order No. 308/88 A. Gauri Shankar, Mrs. H. Wahi, Manoj Arora and section Rajjappa for the Appellant.
Soli J. Sorabjee, Attorney General, V.C. Mahajan, R.P. Srivastava and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by KANIA, J.
This is an appeal preferred by the appellant (assessee) from a judgment of the Central Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter re ferred to as "the said Tribunal"].
As the controversy before us is an extremely limited one, we propose to set out only the facts necessary for appreciating that controversy.
The appellant is a public limited company engaged inter alia in the manufacture of paper and paper boards which were assessable under Tariff Item No. 17 of the First Schedule to the (hereinafter referred to as "the Central Excises Act").
The period with which we are concerned in this appeal is the period September 9, 1979 to July 26, 1983.
The appellant filed several price lists in Part I and Part II in respect of the clearances of paper and 322 paper boards made by the appellant.
Section 4 of the Central Excises Act prescribes the mode of valuation of excisable goods for the purposes of charging of the duty of excise.
Under clause (a) of subsection (1) of section 4, it is provided, in brief, that the duty of excise is chargeable on any excisable goods with reference to value which shall, subject to the other provisions of the Act, be deemed to be the normal price thereof and the normal price, generally speaking, is the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place or removal, where the buyer is not a related person and the price is the sole consideration for the sale.
In the fixation of the normal price of paper and paper boards manufactured by the appel lant for the purposes of levy of excise duty, the appellant claimed several deductions.
One of these deductions was described as "trade discount" and another as "service charge discount".
The trade discount was the discount paid to the purchaser in accordance with the normal practice of the trade.
The appellant had engaged several dealers with a view to promote its sales.
A specimen of the usual agreements entered into by the appellant with its dealers has been taken on record.
The opening part of the said agreement shows that the appellant is referred to in the agreement as the company and the contracting dealer is referred to as the Indentor.
We propose to refer to the dealers engaged by the appellant to promote the sales of its products as "Inden tors" for the sake of convenience.
Clause (3) of the agree ment shows that the Indentor agreed to purchase in his own name or procure acceptable indents from third parties for paper and paper boards manufactured by the company would be of such quantities and varieties as set out in the Schedule A to the agreement.
The Indentors agreed to deposit with the company a certain amount of money as security.
Clause (8) of the agreement shows that the Indentors held themselves responsible for the immediate clearance of the documents relating to the supply of paper on presentation by the bankers and that all bank charges other than discounting charges would be on the consignee 's account.
It is common ground that in the invoices in respect of the paper and paper boards supplied and sold pursuant to the aforesaid agreement with the Indentors, in most cases the name of the dealer concerned was shown as the Indentor and the names of the parties to whom the goods were to be deliv ered were shown as the purchasers but in some cases the Indentors were themselves shown as purchasers.
It was urged by Dr. Gauri Shankar, learned counsel for the appellant, that although the discount allowed to the Indentors in respect of some of the aforesaid sales might have been described as service charge 323 discount that name could not govern the real nature of the transaction and the discount was really a trade discount.
It was submitted by him that this discount should have been allowed as a deduction in the determination of the normal price of the aforesaid goods for the purpose of levy of excise duty.
He relied upon the decision of this Court in Union of India & Ors.
vs Bombay Tyres International Pvt. Ltd., [1984] 17 E.L.T. 329 (S.C) and submitted that the nomenclature given to the discount could not be regarded as decisive of the real nature of the discount.
There can be no quarrel with this proposition.
But it is equally well set tled that in the determination of the normal price for the purposes of levy of excise duty, it is only a normal trade discount which is paid to the purchaser which can be allowed as a deduction and commission paid to selling agents for services rendered by them as agents cannot be regarded as a trade discount qualifying for deduction (Coromandel Ferti lizers Limited vs Union of India and Ors., [1984] 17 E.L.T. 607 (S.C.).
The correctness of this proposition was not disputed by learned counsel for the appellant but it was submitted by him that in several cases where supplies had been effected pursuant to the aforesaid agreements, the Indentors were really themselves the purchasers and hence, the normal trade discount paid to them should have been allowed as a deduction in the determination of the normal price for the purposes of levy of excise duty.
We find from the judgment of the Tribunal and the lower authorities that there is no dispute that wherever the Indentors are shown as the purchasers in the respective invoices, the trade dis count given to them has been allowed as a deduction.
More over, to obviate any controversy in this regard, learned Attorney General who appears for the respondent fairly states that when the matter goes back to the Tribunal, the respondent is agreeable that the normal trade discount may be allowed in those cases where the Indentor is also shown as the purchaser in the concerned invoice.
It is, however, submitted by learned counsel for the appellant that although in some of the cases the Indentor might not be shown as the purchaser and the purchaser shown is the different party, yet the real nature of the transaction was that the Indentor purchased the goods referred to in the said invoice and in turn sold it to a customer whose name was shown as the purchaser in the invoice for the sake of convenience so that the delivery could be directly effected to him.
We are of the view that it is not open to the appellant to raise this contention at this stage.
No case has ever been made out right upto the Tribunal and even before the Tribunal that in respect of any particular invoice although the name of the purchaser was other than that of the Indentor, it was really the Indentor who was the purchaser and he in turn has sold the goods to the third party whose name was shown as 324 purchaser or even that the Indentor had entered into the transaction as the agent of the purchaser.
If such a conten tion had been raised, the factual position could have been examined and different considerations might have been ap plied.
But it is certainly not open to the appellant to raise this contention at this stage, in this appeal, partic ularly keeping in mind that the Tribunal is the final fact finding authority.
No other contention has been raised before us.
In our opinion, there is no merit in the appeal.
There will, however, be one clarification that, as agreed to learned Attorney General, if in any case the purchaser named in the invoice is the same as the Indentor, normal trade discount given to the Indentor will be allowed as a deduc tion in the determination of the normal price for the levy of excise duty subject to other relevant considerations.
In the result, the appeal fails and is dismissed, save to the extent of the aforesaid clarification.
The appellant to pay the costs of the appeal to the respondent.
R.S.S. Appeal dis missed.

summary/full:
The appellant who was engaged in the manufacture of paper and paper boards which were assessable under Tariff Item No. 17 of the First Schedule to the .
engaged several dealers referred to as Indentors, with a view to promote its sales.
In the fixation of the normal price of these items under section 4 of the Act for the purpose of levy of excise duty, the appellant claimed deduction on account of 'service charge discount ' paid to the Indentors, in addition to the 'trade discount ' paid to the purchasers.
Having failed before the assessing authority and the Central Excise and Gold (Control) Appellate Tribunal in respect of the deduction claimed on account of 'service charge discount ' the appellant appealed to this court.
It was contended on behalf of the appellant that al though in some of the sales the discount allowed to the Indentors might have been described as 'service charges discount ', that name could not govern the real nature of the transaction and the discount was really a 'trade discount '.
It was further contended that in several cases the indentors were really the purchasers themselves and hence, the normal trade discount paid to them should have been allowed as a deduction.
Dismissing the appeal, this Court, HELD: (1) The trade discount was discount paid to the purchaser in accordance with the normal practice of the trade.
In the determination of the normal price for the purposes of levy of excise duty, it is only a normal trade discount which is paid to the purchaser which can be allowed as a deduction and commission paid to selling agents for services rendered by them as agents cannot be regarded as a 321 trade discount qualifying for deduction.
[323B C] Union of India & Ors.
vs Bombay Tyres International Pvt. Ltd., [1984] 17 E.L.T. 329 (S.C.) and Coromandel Ferti lizers Limited vs Union of India & Ors., [1984] 17 E.L.T. 607 (S.C.), referred to, (2) If in any case the purchaser named in the invoice 18 the same as the Indentor, normal trade discount given to the Indentor will be allowed as a deduction in the determi nation of the normal price for the levy of the excise duty subject to other relevant considerations.
[324B C]


judgement:
ivil Appeal No. 3804 of 1989.
From the Judgment and Order dated 26.5.89 of the Delhi High Court in SAO No. 84 of 1989.
Dr. Y.S. Chitale, Mrs. and Mr. Rajan Karanjawala, Atul Chitale and H.S. Anand for the Appellant.
K.K Jain, J.P. Gupta, Mrs. Darshan Gupta and P.D. Sharma for the Respondent.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
This appeal is against the order for reinduction of the tenant into the premises under section 19(2) of the Delhi Rent Control Act, 1958 ( 'The Act ').
The facts are these: The appellant filed two eviction peti tions 317 against the respondents; one was under section 14(1)(e) on the ground of personal bona fide requirement for occupation and the other was under section 14(1)(e) for non payment of rent.
The former suit was registered as Suit No. 288/77 and the later as Suit No. 330/77.
On December 24, 1977 Suit No. 288/77 was decreed in favour of the appellant.
The respond ent was granted six months time to evict the premises.
In fact the landlord has no right to evict the tenant for six months when the eviction order is made on the ground speci fied under section 14(1)(e).
Section 14(7) prohibits the landlord from obtaining possession of the premises before the expiration of a period of six months from the date of the eviction order.
On April 17, 1978 the Suit No. 330/77 was compromised as between the parties.
Under the compromise the appellant accepted Rs.6,000 as arrears of rent as against the claim of Rs. 29,000 in the suit.
The respondent tenant in turn agreed to put the appellant in possession of the premises.
Accord ingly, the tenant delivered the possession of the premises, a fact which is not in dispute.
It may be significant to note that when the tenant delivered possession of the premises, six months period provided under section 14(7) did not expire for executing the eviction decree obtained in Suit No. 288/77.
For some reason or the other the appellant could not continue in the premises.
She has to let out the same to a third party.
There then the tenant filed an application under sub section (2) of Section 19 claiming re entry into the premises.
The Rent Controller rejected that application, but upon appeal the Rent Control Tribunal has given relief to the tenant directing the appellant to put back the tenant in possession of the premises.
The High Court has dismissed the Revision Petition in limine.
It will be convenient if at this stage, we read sub section (1) of Section 19 of the Act: "19(1) Recovery of possession for occupation and reentry Where a landlord recovers possession of any prem ises from the tenant in pursuance of an order made under clause (e) of the proviso to sub section (1) of Section 14 (or under Sections 14 A, 14 B, 14 C, 14 D and 21), the landlord shall not, except with the permission of the Con troller obtained in the prescribed manner, re let the whole or any 318 part of the premises within three years from the date of obtaining such possession, and in granting such permission, the Controller may direct the landlord to put such evicted tenant in possession of the premises.
" Sub section (1) refers to recovery of possession of any premises from the tenant in pursuance of an order made under Section 14(1)(e) or under sub section 14 A, 14 B, 14 C, 14 D and 21.
The landlord shall not re let such premises within three years from the date of obtaining possession from the tenant without the permission of the Controller.
Sub section (2) of Section 19 is more important and must be set out in full: "19(2) Where a landlord recovers possession of any premises as aforesaid and the premises are not occupied by the land lord or by the person for whose benefit the premises are held, within two months of obtaining such possession or the premises having been so occupied are, at any time within three years from the date of obtaining possession, re let to any person other than the evicted tenant without obtaining the permission of the Controller under subsection (1) or the possession of such premises is transferred to another person for reasons which do not appear to the Controller to be bona fide, the Controller may, on an application made to him in this behalf by such evicted tenant within such time as may be prescribed, direct the landlord to put the tenant in possession of the premises or to pay him such compensation as the Controller thinks fit." This sub section again operates in favour of the tenant who has suffered an order of eviction under section 14(1)(e) or under Section 14 A to 14 D and 21.
The landlord after recovering possession of the premises does not occupy the same or it is not occupied by the person for whose benefit the premises are held, within 2 months of obtaining such possession, the tenant may move the Controller for a direc tion against the landlord to put him in possession of the premises or to pay him such compensation as the Controller thinks fit.
Not merely that, the tenant has a further right to move the Controller for such reliefs if the landlord has at any time within three years from the date of obtaining possession, re let the premises to third party without obtaining permission of the Controller under sub section (1) of section 19, or the 319 possession of such premises is transferred to another person not bona fide.
This right of the tenant to re enter the premises is, however, restricted only in cases where the tenant is ordered to be evicted either under section 14(1)(e) or under sections 14 A to 14 D and 21.
If the possession is recovered under any order other than those referred to in sub section (1) the tenant has no right to invoke the provisions of sub section (2) of section 19.
With these requirements of the statute, it may now be examined whether the tenant has a right to seek re induction into the premises under sub section (2) of section 19.
From the narration of facts it will be seen that the parties entered into a compromise in Suit No. 330/77 by which the tenant has willingly surrendered possession with payment of Rs.6,000 to the appellant as arrears of rent.
On that day there was no execution of the decree for eviction obtained in Suit No. 288/77.
It was, however, contended that the tenant willingly surrendered possession of the premises without waiting for the execution of the eviction decree in Suit No. 288/77 and there is no such bar for surrendering of possession under section 14(7) of the Act.
We could have accepted this submission if there was only a decree for possession in Suit No. 228/77, but that is not so in the instant case.
The possession was actually delivered to the appellant by the tenant as per the compromise recorded in the suit based on arrears of rent under section 14(1)(a) and delivery of such possession cannot therefore, be referable to the decree for eviction under section 14(1)(e).
In fact, that decree for eviction in Suit No. 288/77 was not put into execution and it was perhaps found unnecessary to execute that decree since the tenant has surrendered possession of the premises as per the compromise in Suit No. 330/77 based on arrears of rent.
The application filed by the tenant under sub section (2) of section 19 of the Act was, there fore, clearly not maintainable.
In the result the appeal is allowed, and in reversal of the order of the Rent Control Tribunal as affirmed by the High Court, we restore the order of the Rent Controller.
In the circumstances of the case, we make no order as to costs.
G.N. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The appellant filed two eviction petitions against the respondent.
The first of these was under section 14(1)(e) of the Delhi Rent Control Act, 1958, on the ground of personal bona fide requirement.
The same was decreed in favour of the appellant, and the respondent was granted six months time to vacate the premises.
This was in accordance with section 14(7) of the Act prohibiting the landlord from obtaining possession before the expiry of six months from the eviction order.
The second eviction petition filed under Section 14(1)(a) of the Act for non payment of rent, was compromised between the parties, and the respondent agreed to put back the appellant in possession of the said premises.
The tenant delivered possession of the premises.
When the possession was delivered, six months period stipulated under Section 14(7) did not expire, for executing the eviction decree obtained in the first suit.
Owing to some reasons, the appellant could not continue in the premises and wanted to let out the premises to a third party.
At that point of time, the erstwhile tenant filed an application under Section 19(2) of the Act claiming re entry into the premises.
The Rent Controller rejected the application.
On appeal, the Rent Control Tribunal directed the appellant to put back the tenant in possession of the premises.
A revision petition was filed by the appellant before the High Court.
It was dismissed in limine.
Appellant has preferred this appeal against the order of the High Court.
Allowing the appeal, this Court, HELD: 1.
Sub Section (2) of section 19 operates in favour of the tenant who has suffered an order of eviction under section 14(1)(e) or under Sections 14 A to 14 D and 21.
The tenant may move the Rent Controller for a direction against the landlord to put him in possession of the 316 premises or to pay him such compensation as the Controller thinks fit, if the premises is not occupied by the landlord after recovering possession, or not occupied within two months by the person for whose benefit the premises are held.
The tenant has a further right to move the Controller for such reliefs if the landlord has at any time within three years from the date of obtaining possession, re let the premises to third party without obtaining permission of the Controller under sub section (1) of Section 19, or the possession of such premises is transferred to another person not bona fide.
If the possession is recovered under any order other than those referred to in sub section (1) the tenant has no right to invoke the provisions of sub section (2) of section 19.
[318F H; 319A B] 2.
In the instant case, the possession was actually delivered to the appellant by the tenant as per the compro mise recorded in the suit based on arrears of rent under section 14(1)(a) and delivery of such possession cannot therefore, be referable to the decree for eviction under section 14(1)(e).
In fact, that decree for eviction in Suit No. 288/77 was not put into execution and it was perhaps found unnecessary to execute that decree since the tenant has surrendered possession of the premises as per the com promise in Suit No. 330/77 based on arrears of rent.
The application filed by the tenant under sub section (2) of section 19 of the Act was, therefore, clearly not maintain able.
[319E F]


judgement:
ivil Appeal No. 1102 of 1990.
From the Judgment and Order dated 7.10.1988 of the Patna High Court in C.W.J.C. No. 2075 of 1988.
A.K. Sen, K.D. prasad, J. Krishna and Mrs. Naresh Bakshi for the Appellant.
S.K. Sinha and U.S. Prasad for the Respondents.
The Judgment of the Court was delivered by: K. JAGANNATHA SHETTY, J.
Special Leave is granted.
This appeal from an order of the Patna High Court raises an important question as to the scope of section 33 B of the ( 'The Act ').
The facts can be quite shortly stated: The appellant company is mainly engaged in construction of coal washeries on contract basis in different collieries and also doing allied and incidental work.
Shivaji Prasad Sinha respondent No. 4 was a Senior Supervisor in the company 's establishment at Dhanbad.
It is said that he was caught red handed when carrying 55 pieces of electromagnetic clutch plates kept concealed in the tool box of his scooter.
The management held domestic enquiry into the incident and found him guilty of committing theft.
He was accordingly dismissed from service.
The dispute arising therefrom was referred under Section 10(1)(c) of the Act to Labour Court Dhanbad for adjudication.
The Labour Court registered the case as refer ence case No. 4 of 1988 and issued notice to the parties.
The parties entered appearance and filed their respective pleadings.
When the matter was thus pending consideration the respondent seems to have written to the Government stating that it would be difficult for him to attend the Labour Court Dhanbad since he has been residing at Hajipur and it would be convenient for him if the case is trans ferred to Labour Court Patna.
That application was made without intimation to the management.
The Government howev er, has acceded to the request of the respondent and without opportunity to 294 the management transferred the case to Labour Court Patna.
The Notification issued in that regard reads as follows: "NOTIFICATION Patna dated 8th August 1988 S.O.
In exercise of powers conferred by sub section (1) of Section 33 B of the (14 of 1947) the Governor of Bihar after careful consideration of the application of the petitioner Shri Shivajee Prasad Sinha wherein he has prayed for the transfer of adjudication proceedings to Patna keeping in view to the difficulties expressed by him to attend the labour court, Dhanbad, regu larly due to his residence at Hajipur is pleased to withdraw the proceeding shown in Annexure 'A ' pending before Labour Court, Dhanbad and transfer the said proceeding to the Labour Court, Patna for speedy disposal from the stage at which the case is transferred.
" The management moved the High Court by way of writ petition under Article 226 of the Constitution to have the Notification quashed.
The High Court did not agree and summarily dismissed the writ petition with an observation: "Since no prejudice is being caused to the petitioner and no allegation of mala fide has been made against the presiding officer, Patna, we are not inclined to interfere with the order under challenge.
This application is dismissed" The management in the appeal challenges the Government notification withdrawing and transferring the pending case from the Labour Court Dhanbad to Labour Court Patna.
Since the impugned notification has been issued under Section 33 B of the Act, we may for immediate reference set out that Section.
Omitting immaterial words, it is in these terms: "33.B. Power to transfer certain proceedings: (1) The appropriate Government may, by order in writing and for reasons to be stated therein, withdraw any proceeding under this Act pending before a Labour Court, 295 Tribunal, or National Tribunal and transfer the same to another Labour Court, Tribunal or National Tribunal, as the case may be, for the disposal of the proceeding and the Labour Court, Tribunal or National Tribunal to which the proceeding is so transferred may, subject to special direc tions in the order of transfer, proceed either de novo or from the stage at which it was so transferred." The Section 33 B provides power to the appropriate Government to withdraw any proceedings pending before a labour court or Tribunal and transfer it for disposal to another labour court or Tribunal.
It could be exercised suo motu or on representations of the parties.
The expression 'may ' in sub section (1) of Section 33 B only makes it discretionary in so far as the appropriate Government taking a decision as to whether the power conferred thereunder has to be exercised or not.
But when once a decision is taken to transfer a pending case then the requirement of giving reasons becomes mandatory.
The authority is under legal obligation to record reasons in support of its decision.
Reasons would be life of the decision.
Failure to give reasons or giving reasons not germane would be fatal to the decision.
In Associated Electrical Industries (P) Ltd. vs Its Workmen, [1961] II LLJ 122, 130 the Government withdrew and transferred a reference from one tribunal to another tribu nal merely stating that expediency required the withdrawal and transfer.
The validity of the order of withdrawal and transfer was challenged inter alia on the ground that no reasons were stated for passing the order.
Gajendragadkar, J., (as he then was) speaking for this Court observed that the requirement about the statement of reasons to be record ed must be complied with both in substance and in letter.
To say that it is expedient to withdraw a case from one tribu nal and transfer it to another does not amount to giving reasons as required by the Section.
In the instant case, the key question for consideration is whether the Government before accepting the representa tion of the workman and transferring the case from the labour court, Dhanbad to labour court, Patna should have given an opportunity to the management? The validity of the reasons given by the Government for transferring the case is another question to be considered.
We will presently consider the question but before doing so a brief survey of some of the High Courts decisions bearing on this aspect may be usefully made.
The Punjab High Court in Workman of Punjab 296 Worsted Spinning Mills Chheharta vs State of Punjab & Ors., [1965] II LLJ 2 18 has expressed the view that the power to transfer pending case under section 33 B is not a mere administrative but quasi judicial power and the appropriate Government cannot transfer a case on the basis of allega tions of one party without giving reasonable opportunity to other party to represent its point of view.
This was also the view recognised by the Madras High Court in Management of Sri Rani Lakshmi Ginning and Weaving Mills Ltd. vs State of Madras, at 167.
It was explained by the Madras High Court that the reasons given by a party who moved for transfer may not be valid or relevant or may not be true at all.
Whether such reasons in fact exist and whether those reasons have any relevance for a transfer could be tested only if the other party has notice of the same.
The High Courts of Calcutta, Andhra Pradesh and Allaha bad have however, taken contrary view.
In Jay Engineering Works Ltd. vs Fourth Industrial Tribunal, Calcutta, [1977] (Lab) 1C 1739 at 1750 the Calcutta High Court has observed that it would be difficult to appreciate how under such circumstances, the Government could be called upon to give a notice to the parties before making an order under section 33 B. There could be no principle involved in giving such a notice.
Nobody 's rights could possibly have been effected in taking such action and there is no question of observing the principles natural justice.
The Andhra Pradesh High Court in Muthe Steels (India) Ltd. vs Labour Court, Hyderabad, [1979] (Lab) IC 325 at 329 has adopted a similar line of reasoning.
It was emphasized that Section 33 B in terms does not con template any notice being given before a transfer is made of any proceeding from one Labour Court to another.
There is no right to any party to have any question decided by a partic ular court.
An arbitrary exercise of power of transfer is adequately safeguarded by the statutory requirement to record reasons for such transfer.
The Allahabad High Court in Pioneer Ltd. vs Labour Court, Gorakhpur, [1983] (Lab) IC 335,338 has also expressed similar views.
After the leading English case of Ridge vs Baldwin,I ; and an equally important case of this Court in A.K. Kraipak & Ors.
vs Union of India, there was a turning point in the development of doctrine of natural justice as applicable to administrative bodies.
Both the authorities laid down that for application of rules of natural justice the classification of functions as 'judi cial ' or 'administrative ' is not necessary.
Lord Reid in Ridge case explained, 'that the duty to act judicially may arise from the very nature of the 297 function intended to be performed and it need not be shown to be super added '.
Hegde, J., in Kraipak case said that under our Constitution the rule of law pervades over the entire field of administration.
Every organ of the State under our Constitution is regulated and controlled by the rule of law.
The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner.
The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously.
The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision.
What is thus important in the modern administration is the fairness of procedure with elimination of element of arbitrariness.
The State functionaries must act fairly and reasonably.
That is, however, not the same thing to state that they must act judicially or quasijudicially.
In Keshav Mills Co. Ltd. vs Union of India, ; Mukherjea, J., said (at 30): "The administrative authority concerned should act fairly, impartially and reasonably.
Where administrative officers are concerned, the duty is not so much to act judicially as to act fairly." The procedural standards which are implied by the duty to act fairly has been explained by Lord Pearson in Pearl berg vs Varty, ,547: "A tribunal to whom judicial or quasi judicial functions are entrusted is held to be required to apply those principles (i.e. the rules of natural justice) in performing those functions unless there is a provision to the contrary.
But where some person or body is entrusted by Parliament with administrative or executive functions there is no presump tion that compliance with the principles of natural justice is required although, as 'Parliament is not to be presumed to act unfairly ', the courts may be able in suitable cases (perhaps always) to imply an obligation to act with fair ness.
" In Mohinder Singh Gill vs Chief Election Commissioner, ; at 434 Krishna Iyer, J. commented that natural justice though 298 varying is the soul of the rule as fair play in action.
It extends to both the fields of judicial and administrative.
The administrative power in a democratic set up is not allergic to fairness in action and discretionary executive justice cannot degenerate into unilateral injustice.
Good administration demands fair play in action and this simple desideratum is the fount of natural justice.
Fairness is flexible and it is intended for improving the quality of government by injecting fairplay into its wheels.
In Maneka Gandhi vs Union of India, [1978] 2 SCR 621 Bhagwati, J., expressed similar thought that audio alteram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
In Swadeshi Cotton Mills vs Union of India, Sarkaria, J., speaking for himself and Desai, J., said that irrespective of whether the power conferred on a statu tory body or tribunal is administrative or quasi judicial, a duty to act fairly, that is, in consonance with the funda mental principles of substantive justice is generally im plied.
The presumption is that in a democratic polity wedded to the rule of law, the State or the Legislature does not intend that in the exercise of their statutory powers its functionaries should act unfairly or unjustly.
In the same case, Chinnappa Reddy, J., added (at 2 12) that the princi ples of natural justice are now considered so fundamental as to be 'implicit in the concept of ordered liberty '.
They are, therefore, implicit in every decision making function, call it judicial, quasi judicial or administrative.
The learned Judge went on to state that where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice.
The implication of natural justice being presumptive, it should be followed by the authorities unless it is excluded by express words of statute or by necessary implication.
Citations could be multiplied since there is fairly abundant case law has come into existence: See, for example, Royappa vs State of Tamil Nadu, ; and Union of India vs Tulsi Ram, [1985] (Supp.) 2 SCR 13 1.
More recently in a significant judgment in Charan Lal Sahu & Ors.
vs Union of India, JT learned Chief Justice Sabyasachi Mukharji has referred to almost all the authori ties of this Court on this aspect and emphasized that the principles of natural justice are fundamental in the consti tutional set up of this country.
No man or no man 's right should be affected without an 299 opportunity to ventilate his views.
The justice is a psycho logical yearning, in which men seek acceptance of their view point by having an opportunity before the forum or the authority enjoined or obliged to take a decision affecting their right.
It may be noted that the terms 'fairness of procedure ', 'fair play in action ', 'duty to act fairly ' are perhaps used as alternatives to "natural justice" without drawing any distinction.
But Prof. Paul Jackson points out that "Such phrases may sometimes be used to refer not to the obligation to observe the principles of natural justice but, on the.
contrary, to refer to a standard of behaviour which, in creasingly, the courts require to be followed even in cir cumstances where the duty to observe natural justice is inapplicable" (Natural Justice by Paul Jackson 2nd ed.
p. 11).
We share the view expressed by Professor Jackson.
Fair ness, in our opinion, is a fundamental principle of good administration.
It is a rule to ensure the vast power in the modern state is not abused but properly exercised.
The State power is used for proper and not 'for improper purposes.
The authority is not misguided by extraneous or irrelevant consideration.
Fairness is also a principle to ensure that statutory authority arrives at a just decision either in promoting the interest or affecting the rights of persons.
To use the time hallowed phrase "that justice should not only be done but be seen to be done" is the essence of fairness equally applicable to administrative authorities.
Fairness is thus a prime test for proper and good adminis tration.
It has no set form or procedure.
It depends upon the facts of each case.
As Lord Pearson said in Pearlberg vs Varty, (at 547), fairness does not necessarily require a plurality of hearings or representations and counter repre sentations.
Indeed, it cannot have too much elaboration of procedure since wheels of administration must move quickly.
A case with a not dissimilar problem was in Pannalal Binjraj and Anr.
vs Union of India, There the Commissioner of Income Tax by the power vested under section 5(7A) of Income Tax Act, 1922, transferred an asses see 's case from one Income Tax Officer to another without hearing the assessee.
Section 5(7A) of the Income Tax Act, 1922 provided: "The Commissioner of Income Tax may transfer any case from one Income Tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income Tax Officer to another.
Such 300 transfer may be made at any stage of the proceedings, and shall not render necessary the re issue of any notice al ready issued by the Income tax Officer from whom the case is transferred.
" This Section did not provide for affording an opportuni ty to the assessee before transferring his case from one Income Tax Officer to another.
The assessee challenged the constitutional validity of the Section.
This Court upheld its validity on the ground that it is a provision for admin istrative convenience.
N.H. Bhagwati, J., speaking for this Court, however remarked (at 589): " . . it would be prudent if the principles of natural justice are followed, where circumstances permit, before any order of transfer under section 5(7A) of the Act is made by the Commissioner of Income Tax or the Central Board of Revenue, as the case may be, and notice is given to the party affected and he is afforded a reasonable opportunity of representing his views on the question and the reasons of the order are reduced however briefly to writing .
There is no presumption against the bona fide or the honesty of an assessee and normally the income tax authorities would not be justified in refusing to an assessee a reasonable oppor tunity of representing his views when any order to the prejudice of the normal procedure laid down in section 64(1) and (2) of the Act is sought to be made against him, be it a transfer from one Income Tax Officer within the State to an Income Tax Officer without it, except of course where the very object of the transfer would be frustrated if notice was given to the party affected.
" Section 5(7A) was replaced by Section 127 of the Income Tax Act, 1961, which now makes it obligatory to record reasons in making the order of transfer after affording a reasonable opportunity of being heard to the assessee in the matter.
In Ajantha Industries vs Central Board of Taxes, ; this Court considered the validity of a transfer order passed under Section 127 and it was held that merely recording of reasons on the file was not sufficient.
It was essential to give reasons to the affected party.
The order of transfer in that case was quashed for not communi cating reasons to the assessee.
In the present case, the State has withdrawn the pending refe 301 rence from the Labour Court, Dhanbad and transferred it to another Labour Court at the distant District of Patna, on the representation of the workman, without getting it veri fied from the management.
The State in fairness ought to have got it verified by giving an opportunity to the manage ment which is a party to the pending reference.
Denial of that opportunity is a fatal flaw to the decision of the Government.
The management need not establish particular prejudice for want of such opportunity.
In S.L. Kapoor vs Jagrnohan, ; at 765 Chinnappa Reddy, J., after referring to the observation of Donaldson, J., in Altco Ltd. vs Suth erland, said that the concept that justice must not only be done but be seen to be done is basic to our system and it is concerned not with a case of actual injustice but with the appearance of injustice or possible injustice.
It was emphasized that the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been observed.
The non observance of natural justice is itself prejudice to any man and proof of prejudice independ ently of proof of denial of natural justice is unnecessary.
This takes us to the reasons given by the Government in support 'of the order of transfer.
The Government has stated that the workman is having his residence at Hajipur and it would be therefore, inconvenient for him to attend the labour court regularly at Dhanbad.
However, most of the factors do not point that way.
The workman and his family members seem to be still residing in colony quarter at Dhanbad (Annexure C).
His two sons are studying in De Nobili School at Mugma which is a nearby village.
Reference may be made to a letter dated September 8, 1988 (Annexure D) of the Headmaster of the School in which the children of the work man are studying.
Reference may also be made to a letter (Annexure E) from the Assistant Electrical Engineer in proof of the electricity supplied to the quarter occupied by the workman at Dhanbad.
As against these material, the workman has not produced any proof in support of his allegation that he has been residing in a village home near Patna.
In fact, in the counteraffidavit, he has not denied the documents annexed to the Special Leave Petition, and not seriously disputed the factum of his residence in the colony quarter at Dhanbad.
Even the alleged recommendation of the Ward Commissioner referred in his counter affidavit has not been produced.
We have, therefore, no hesitation in holding that the Government was misled by the representation of the workman. 302 In the result, we allow the appeal and quash the notifi cation dated August 8, 1988 by which the Government of Bihar transferred the case from the Labour Court, Dhanbad to the Labour Court, Patna.
The Labour Court, Dhanbad shall now proceed to dispose of the matter as expeditiously as possi ble.
In the 'circumstances of the case, we make no order as to costs.
P.S. S Appeal allowed.

summary/full:
Sub section (1) of section 33 B of the provides that the appropriate Government may, by order in writing and for reasons to be stated therein, withdraw any proceedings pending before a Labour Court or Tribunal and transfer it for disposal to another Labour Court or Tribunal.
Respondent No. 4, a workman of the appellant company at Dhanbad, was caught red handed while stealing certain goods.
The domestic enquiry found him guilty of committing theft.
Consequently,.
he was dismissed from service.
The dispute arising therefrom was referred to the Labour Court, Dhanbad under section 10(1)(c) of the Act for adjudication.
When the matter was pending consideration the respondent sought transfer of the case to the Labour Court at Patna on the plea that since he was residing at his village near Patna it would be difficult for him to attend the proceedings at Dhanbad.
That application was made without intimation to the management.
The Government, however, without giving opportu nity to the management transferred the case to Patna by a notification dated August 8, 1988 issued under section 33B of the Act.
The writ petition filed by the management seeking to quash the notification was dismissed by the High Court on the view that no prejudice was being caused to the manage ment and no allegation of mala fide had been made against the presiding officer.
Allowing the appeal by special leave, the Court.
HELD: 1.1 The power to transfer a pending case under section 33B of the is not a mere administra tive but quasijudicial power and the appropriate Government cannot transfer a case on the basis of allegations of one party without giving a reasonable opportunity to the other party to represent its point of view.
Such 291 allegations may not be valid or relevant or may not be true at all.
That could be tested only if the other party has notice of the same.
[296A C] Punjab Worsted Spinning Mills, Chheharta vs State of punjab & Ors., [1965] II LLJ 218 and Management of Sri Rani Lakshmi Ginning & Weaving Mills Ltd. vs State of Madras, , referred to.
Jay Engineering Works Ltd. vs Fourth Industrial Tribu nal, Calcutta, [1977] (Lab) I.C. 1739; Muthe Steels (India) Ltd. vs Labour Court, Hyderabad, [1979] (Lab) I.C. 325 and Pioneer Ltd. vs Labour Court, Gorakhpur, [1983] (Lab) I.C. 335, overruled.
1.2 What is important in the modern administration is the fairness of procedure with elimination of element of arbitrariness, for fairness is a fundamental principle of good administration.
It is a rule to ensure that vast power in the modern State is not abused but properly exercised.
The State power is used for proper and not for improper purposes.
The authority is not misguided by extraneous or irrelevant consideration.
Fairness is also a principle to ensure that statutory authority arrives at a just decision either in promoting the interest or affecting the rights of persons.
The concept that 'justice should not only be done but be seen to be done ' is the essence of fairness and is equally applicable to administrative authorities.
Fairness is thus a prime test for proper and good administration.
It has no set form or procedure.
It does not necessarily re quire a plurality of hearings or representations and counter representations.
It depends upon the facts of each case.
[297C, 299C E] Ridge vs Baldwin, ; ; A.K. Kraipak & Ors.
vs Union of India, ; Keshav Mills Co. Ltd. vs Union of India; , ; Pearlberg vs Varty, , 547; Mohinder Singh Gill vs Chief Election Com missioner; , ; Maneka Gandhi vs Union Of India, [1978] 2 SCR 621; Swadeshi Cotton Mills vs Union of India, ; Royappa vs State of Tamil Nadu, ; ; Union of India vs Tulsi Ram, [1985] (Supp.) 2 SCR 131; Charan Lal Sahu & Ors.
vs Union of India, JT ; Natural Justice by Paul Jackson, 2nd ed.
p. 11 and Pannalal Binjraj & Anr.
vs Union of India, , referred to.
1.3 In the instant case, the State had withdrawn the pending reference from the Labour Court, Dhanbad and trans ferred it to another Labour Court at the distant District of Patna, on the represen 292 tation of the workman without getting it verified from the management.
The State in fairness ought to have got it verified by giving an opportunity to the management which was a party to the pending reference.
The management was not required to establish particular prejudice for want of such opportunity.
The non observance of natural justice was itself prejudice to the management and proof of prejudice independently of proof of denial of natural justice was unnecessary.
Denial of the opportunity to the management was thus a fatal flaw to the decision of the Government.
[300H 30 IA, B D] S.L. Kapoor vs Jagmohan, ; and Altco Ltd. vs Sutherland, , referred to.
The expression 'may ' in Sub section
(1) of section 33B of the Act only makes it discretionary in so far as the appropriate Government taking a decision as to whether the power con ferred thereunder has to be exercised or not.
But when once a decision has been taken to transfer a pending case then the requirement of giving reasons becomes mandatory.
The authority would be under legal obligation to record reasons in support of its decision.
Failure to give reasons or giving reasons not germane would thus be fatal to the deci sion.
[295C D] Associated Electrical Industries (P) Ltd. vs Its Work men, [1961] II LLJ 122 and Ajanta Industries vs Central Board of Taxes, ; , referred to.
2.2 In the instant case, the Government has stated that the workman was having his residence at his village near Patna and it would be, therefore, inconvenient for him to attend the Labour Court regularly at Dhanbad.
Most of the factors, however, do not point that way.
The workman and his family members seem to be still residing in the colony quarter at Dhanbad.
His two sons are studying in a school at a nearby village.
The letter dated September 8, 1988 of the Headmaster of the said school speaks of that fact.
The letter from the Assistant Electrical Engineer in proof of the electricity supplied to the quarter occupied by the workman at Dhanbad is also relevant.
As against these mate rials, the workman has not produced any proof in support of his allegation that he has been residing in a village home near Patna.
He has not denied the documents annexed to the special leave petition and not seriously disputed the factum of his residence in the colony quarter at Dhanbad.
The Government was, therefore, misled by the representation of the workman.
[301E H] 293 3.
The notification dated August 8, 1988 is quashed.
The Labour Court, Dhanbad shall proceed to dispose of the matter as expeditiously as possible.
[302A]


judgement:
ivil Appeal No. 1201 of 1990 From the Judgment and Order dated 5.6.87 of the Punjab and Haryana High Court in C.R. No. 556/87.
Mukul Mudgal for the Appellant.
S.S. Javali, Y.P. Rao and Raju Ramachandran for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special leave granted.
Food Corporation of India filed a suit for recovery of Rs.2 lacs against the appellant and respondents 2 to 7 on the basis of an agreement between the parties.
After service of notice, the appellant entered appearance on December 10, 1984.
On January 4, 1985, the appellant filed an application stating as follows: "That the photostat copy of the original agreement and other documents which have been produced by the plaintiff 355 in their evidence are not visible and clear, and it is very difficult for the defendants to inspect and give the written statement.
That it is very essential to get the original documents produced in the court which are in possession of the plain tiff so that the defendants may file the written statement.
It is, therefore, respectfully prayed that the plaintiff may kindly be ordered to produce the original agreement and other documents which has been filed with the plaint.
" On January 21, 1985, the appellant moved the Court under Section 34 of the for stay of the proceeding of the suit on the ground that there exists an arbitration clause in the suit agreement covering the matter in dispute.
The Food Corporation of India contended that the appellant had taken steps in the proceedings of the suit since an adjournment was taken for filing written statement.
It was however, admitted the existence of the arbitration agreement covering the matter in dispute in the suit.
The Trial Court accepted the request of the appellant and stayed the suit inter alia observing: ". .
This application did not contain any prayer for adjournment of the case for filing the written statement.
The prayer contained in this application was that the plain tiff be directed to produce the original agreement and other documents so that the defendants may file the written state ment . .
In the present case, the prayer of the defendants that the plaintiff be directed to file the original agreement and other documents in the court before they could file the written statement cannot be said to be a step in the pro ceedings because it was not a prayer for adjournment of the case for filing written statement.
" But the Additional District Judge, in the appeal pre ferred by the Food Corporation of India has reversed the order of the trial court.
He was of the view that a written request made by the defendants by their application dated January 4, 1985 for an adjournment to enable them to file the written statement was a step in the proceedings and the trial court was not justified in staying the suit.
Accord ingly, he accepted the 356 appeal and vacated the stay order and directed the trial court to proceed with the suit in accordance with law.
The High Court of Punjab and Haryana has dismissed the revision petition of the appellant.
The High Court has also observed that the defendants having moved the application dated January 4, 1985 for production of original documents and seeking an adjournment of the suit to enable them to file written statement would certainly be construed as a step taken in the proceedings.
Section 34 of the has received the consideration of this Court in State of Uttar Pradesh vs Janki Saran Kailash Chandra, [1974] 1 SCR 31, (ii) Food Corporation of India vs Yadav Engineer, ; and more recently in General Electric Co. vs Renusagar Power Co., ; It may be noted that the expression "a step in the proceeding" which would disentitle the de fendant from invoking section 34 of the is not every step taken by him in the suit.
It should be a step to abandon the right to have the suit stayed.
It should be a step in aid of the progress of the suit.
The step must have been consciously taken with a view to submit to the juris diction of the Court for the purpose of adjudicating the controversy on the merits.
In General Electric Co. 's case this Court after considering the previous decisions observed (at 155 56): . thus a step in the proceeding which would disentitle the defendant from invoking Section 34 of the should be a step in aid of the progress of the suit or submission to the jurisdiction of the court for the purpose of adjudication of the merits of the controversy in the suit.
The step must be such as to manifest the inten tion of the party unequivocally to abandon the right under the arbitration agreement and instead to opt to have the dispute resolved on merits in the suit.
The step must be such as to indicate an election or affirmation in favour of the suit in the place of the arbitration.
The election or affirmation may be by express choice or by necessary impli cation by acquiescence.
The broad and general right of a person to seek redressal of his grievances in a court of law is subject to the right of the parties to have the disputes settled by a forum of mutual choice.
Neither right is insub stantial nor the right can be allowed to be defeated by any manner of technicality.
The right to have the dispute adju dicated by a civil court cannot be allowed to be defeated by vague 357 or amorphouse mis called agreements to refer to 'arbitra tion '.
On the other hand, if the agreement to refer to arbitration is established, the right to have the dispute settled by arbitration cannot be allowed to be defeated on technical grounds.
" In the application filed by the defendants in this case, they only sought a direction to the plaintiff to produce the original agreement and other documents so that they may file written statement.
It was not stated that they would file the written statement.
They never took any other step sub mitting to the jurisdiction of the court to decide the case on merits.
The right to have the dispute settled by arbitra tion has been conferred by agreement of parties and that right should not be deprived of by technical pleas.
The Court must go into the circumstances and intention of the party in the step taken.
The Court must examine whether the party has abandoned his right under the agreement.
In the light of these principles and looking to the substance of the application dated January 4, 1985, we cannot form an opinion that the defendants have abandoned their right to have the suit stayed and took a step in the suit to file the written statement.
In the result the appeal is allowed in setting aside the order of the High Court and restoring the order of the High Court.
In the circumstances of the case, we make no order as to costs.
G.N. Appeal allowed.

summary/full:
In a suit filed by the Respondent for recovery of a certain amount from the appellants and others, on the basis of an agreement between the parties, appellant entered appearance and prayed for the production of original docu ments, since photostat copies were not clear, so that writ ten statement may be filed.
Thereafter the appellant moved the Court under Section 34 of the for stay of the suit on the ground that there was an arbitration clause in the suit agreement covering the matter in dispute.
Though the Re spondent Corporation admitted the existence of such a clause, it opposed the prayer for stay of the proceedings on the plea that the appellant had taken steps in the proceed ings of the suit, in that an adjournment was taken for filing written statement.
Staying the proceedings, the trial court observed that there was no prayer for adjournment of the case for filing the written statement.
On appeal by the Respondent Corporation, the First Appellate Court vacated the stay order passed by the trial court.
The Revision petition filed by the appellant was dismissed by the High Court.
This appeal, by special leave, is against the High Court 's order.
Allowing the appeal, this Court, HELD: 1.1 The expression "a step in the proceeding" which would disentitle the defendant from invoking section 34 of the is not every step taken by him in the suit.
It should be a step to abandon the right to have the suit stayed.
It should be a step in aid of the progress of the suit.
The step must have been consciously taken with a view to submit to the jurisdiction of the Court for the purpose of adjudicating the controversy on merits.
[356C D] 354 1.2 Before the trial court, the defendants only sought a direction to the plaintiff to produce the original agreement and other documents so that they may file written statement.
It was not stated that they would file the written state ment.
They never took any other step submitting to the jurisdiction of the court to decide the case on merits.
The right to have the dispute settled by arbitration has been conferred by agreement of parties and that right should not be deprived of by technical pleas.
The Court must go into the circumstances and intention of the party in the step taken.
The court must examine whether the party has aban doned his right under the agreement.
In the light of these principles and looking to the substance of the application dated January 4, 1985, one cannot form an opinion that the defendants have abandoned their right to have the suit stayed and took a step in the suit to file the written statement.
[357B D] State of U.P. vs Janki Saran Kailash Chandra, [1974] 1 SCR 31; Food Corporation of India vs Yadav Engineer, ; and General Electric Co. vs Renusagar Power Co., ; , relied on.


judgement:
ivil Appeal No. 263 of 1983.
From the Judgment and Order dated 4.1.1983 of the Punjab and 281 Haryana High Court in Civil Revision No. 3243 of 1982.
M.K. Ramamurthi and S.K. Agarwal for the Appellants.
S.K. Mehta, Aman Vachher, Atul Nanda and K.L. Verma for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
The appeal concerns the scope and construction of Section 13 sub section 2(i) proviso of the East Punjab Urban Rent Restriction Act, 1949 (called shortly as 'The Act ').
The point at issue relates to the validity of the arrears of rent deposited by the tenant under the proviso.
Milkhi Ram the respondent in this appeal is the landlord of the premises consisting of a shop at Ludhiana.
In Febru ary 1958 the shop was taken on rent by Amar Chand.
The rent agreed was Rs.45 per month.
In December 1975 Amar Chand died.
His brother Diwan Chand succeeded to the tenancy rights.
In November 1976 he also died leaving behind his widow Pushpa Devi and his minor son Yashpal.
They are appel lants 1 and 2 in this appeal.
The landlord brought an action for eviction under section 13 of the Act on the ground of arrears of rent, sub letting etc.
His case was that appel lants 1 and 2 inducted Saligram appellant No: 3 as a sub tenant and delivered exclusive possession of the shop prem ises.
The eviction was also sought on the ground that the tenant has made alterations resulting in material impairment in the value and utility of the premises.
The appellant 's case was that the shop was taken on lease by Amar Chand as partner of the firm M/s Amar Chand in which Amar Chand, Diwan Chand and Saligram were all partners in the business from the very commencement of tenancy.
They denied that Saligram was inducted as subtenant.
They also refuted the allegations as to material alterations affecting the value and utility of the premises.
Before the Rent Controller the respondents on the first date of hearing tendered the arrears of rent, with interest and cost determined by the Controller.
The amount was ren dered evidently under the proviso to Section 13 sub section (2)(i) of the Act.
Mr. Satpal Singh the common counsel for all the respondents tendered the amount alongwith his state ment, which reads as follows: "I tender Rs.2025 as arrears of rent from 1.12.1975 to 282 31.8.
1979, Rs.240 as interest and Rs.25 as costs as as sessed on behalf of all the respondents, total amounting to Rs.2290.
" The landlord did not accept the amount but made the following endorsement: "1 do not accept the tender as it is neither legal nor valid.
The respondent No. 3 Saligram, is a sub tenent." The Rent Controller at that stage did not state whether the objection of the landlord was legal and justified.
Since the eviction was also based on other grounds, he allowed the parties to lead evidence on all the questions.
After consid ering the evidence adduced by the parties, the Controller found no substance in the allegations that the tenant has made any material alteration impairing the utility of the building.
On the question of original tenancy agreement, he found that the original tenant was not in the partnership firm of which Amar Chand was partner, but Amar Chand took the premises in his personal name and the tenancy was there fore personal to him.
He also accepted the case of unautho rised sub letting and held that respondent No. 3 was a sub tenant inducted into the premises without consent of the landlord.
On the validity of the amount tendered on behalf of all respondents including Saligram it was held that the tender was not legal and valid since Saligram was not a tenant.
In other words, he held that the rent tendered by counsel for and on behalf of all the respondents was not a legal tender in terms of Section 13 sub section (2)(i) proviso and the undisputed tenant alone ought to have ten dered the rent.
With these findings the Controller accepted the eviction petition and directed the tenant 's eviction from the premises.
The appeal preferred by the tenant was disposed of on a preliminary point, that is, on the validity of the amount deposited by the common counsel for the parties on the first date of hearing of the case.
The appellate authority held that the amount deposited on behalf of the three respondents was not valid since Saligram was a stranger.
On this aspect, the appellate authority had little discretion in view of the two decisions of the Punjab & Haryana High Court Ram Gopal & Ors.
vs Ram Prakash and Ors., [1963] RLR 1112 and Punjab Rajasthan Goods Carriers & Ors.
vs Onkar Mal, [1977] RLR 1 195.
In both the cases, the High Court has held that the tenant as defined under the Act could deposit or tender the amount under the proviso and not a stranger.
Following those decisions, the appellate authority confirmed 283 the eviction and dismissed the appeal without examining whether Saligram was also a tenant, or whether the original tenancy was in favour of the partnership firm of which Amar Chand was a partner.
The order Of the appellate authority has been confirmed by the High Court by dismissing the tenant 's revision in limine.
The tenant alongwith Saligram by obtaining leave have preferred this appeal.
Since the validity of the deposit made by the tenant under the proviso to sub section (2)(i) of Section 13 is in question and which in turn depends upon the principle laid down by the High Court in the said two authorities, it is convenient at this stage to have those cases properly analy sed.
In Ram Gopal case the arrears of rent were tendered by Chetan Ram, the tenant, his son Ram Bhagat alongwith Banarsi Das and Dhani Ram who were said to be the strangers.
The landlord refused to accept that amount on the ground that the tenant was Chetan Ram alone and as the amount was ten dered by persons other than Chetan Ram as well, there was no proper tender.
The trial court accepted the contention of the landlord.
Before the High Court it was contended for the tenant that the tender was valid since one of the tenderers was the tenant himself and the mere fact that he has joined the other persons who are strangers would not make any difference.
The tender must be deemed to be by the tenant and his associates should be ignored.
The High Court did not accept the submission.
By following some of the previous cases, it held that under the proviso the payment or tender must be made exclusively by or on behalf of the tenant and on his account.
The payment or tender made by the tenant alongwith the strangers and also on their account would be in contravention of the proviso and invalid.
The High Court accordingly affirmed the order of eviction.
Onkar Mal is also a case of eviction based on arrears of rent as one of the grounds.
The action was brought against Gulab Chand and Bhanwar Lal, the original tenants and Sohan Lal, Jagan Nath and Balkar Singh alleged to be the sub tenants inducted into the premises without consent of the landlord.
The undisputed tenant did not attend the court despite due service of notice and was proceeded ex parte.
The alleged sub tenants in their written statement claimed that they shared the tenancy since they had entered into partnership with the tenant for carrying on theft business.
They tendered the arrears of rent together with interest and costs of the proceedings on the first date of 284 hearing of the case.
The question arose whether the tender was valid and whether the alleged sub tenants could deposit the arrears of rent on their own account and also on behalf of the undisputed tenant.
The landlord however, refused to accept the amount on the ground that those who deposited the arrears were not his tenants and they had no authority to tender the rent on behalf of Bhanwar Lal and Gulab Chand.
The Rent Controller did not make any specific order on that contention.
He proceeded to consider the question of sub letting.
After considering the evidence produced by the parties he recorded a finding that there was sub letting by the tenant and consequently ordered eviction.
The appellate authority and also the High Court concurred with that opin ion.
The High Court further held that it is only the persons who fall within the definition of 'tenant ' could tender the rent under the proviso and not a third party or sub tenant inducted into the premises without consent of the landlord.
In the instant case, the appellate authority being bound by those two authorities has rejected the amount tendered by counsel as being invalid.
The correctness of that view has been challenged in this appeal.
We may begin with the relevant provisions of the Act.
The Act provides inter alia to restrict the increase of rent of certain premises situated within the limits of urban areas, and the eviction of tenants therefrom.
Section 13 sets out the grounds for eviction and prohibits eviction of tenants except in accordance with the provisions contained therein.
Sub section (2) provides that a landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
Clause (i) to (v) set out the grounds of eviction.
Clause (i) nonpayment of rent; clause (ii) sub letting without the consent of the landlord or misusing the building for a purpose other than that for which it was leased; clause (iii) committing such acts as are likely to impair materially the value or utility of the building or rented land; clause (iv) tenant has been guilty of such acts and conduct as are a nuisance to the occupiers of buildings in the neighbourhood; and clause (v) tenant not occupying the building for a continuous period of four months without reasonable cause where the building is situ ated in a place other than a hill station.
If the landlord establishes any one of these grounds against the tenant, the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied, he shall make an order rejecting the application.
285 Although the Act makes default in payment of rent as a ground for eviction, yet, the efficacy of the ground is different.
In this context.
Section 13 sub section (2)(i) is more important and it is, therefore.
fully extracted hereun der: "13(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (i) that the tenant has not paid or tendered the rent due by him in respect of the building or rented land within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable.
Provided that if the tenant on the first hearing of applica tion for ejectment after due service pays or tenders the arrears of rent and interest at six per cent per annum on such arrears together with the cost of application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid.
" This is a special provision made for the benefit of the tenant who has defaulted to pay the agreed rent.
Various Rent Control Acts provide protection from evic tion to the tenant with provisions similar to the proviso in question.
Reference may be made to Section 13 sub section 2(i) proviso of the Haryana Act, (ii) Section 12 Sub section 3(b) of the Bombay Rent Act, 1947, (iii) Section 14 sub section 2(j) proviso of the Himachal Pradesh Act.
Mr. Mehta learned counsel for the landlord respondent sought to justify the view taken by the High Court of Punjab in Ram Gopal and Onkar Mal Cases.
His argument went on the literal construction or strict construction based on the word 'tenant ' defined under section 2(h)(i) of the Act.
He urged that the word 'tenant ' referred to in the proviso must carry the same meaning as given to it under the definition and 'tenant ' as defined thereunder is alone entitled to avail of the benefit of the proviso and no others.
286 We recognise that Section 13 sub section (2)(i) proviso refers to the tenant and his obligation to pay or tender the arrears of rent, interest and costs if he wants to save himself from eviction.
We also recognise that under section 2(h)(i) the word 'tenant ' is defined to mean "any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after the termination of the tenancy in his favour but does not include a person placed in occupation of a building or rented land by its tenant unless with the consent in writing of the landlord . .
But the law in the Court 's keeping is just not a system of logical abstraction.
Nor it is a bucket of ready made answers determined by any general formula or principle in advance.
In a famous passage Mr. Justice Holmes said: "All rights tend to declare themselves absolute to their logical extreme.
Yet all in fact are limited by the neigh bourhood of principles of policy which are other than those on which the particular right is rounded, and which becomes strong enough to hold their own when a certain point is reached . .
The boundary at which the conflicting inter ests balance cannot be determined by any general formula in advance, but points in the line, or helping to establish it, are fixed by decisions that this or that concrete case falls on the nearer or farther side." (Hudson County Water Co. V. MeCarter; , ,355 356).
It true when a word has been defined in the interpretation clause, prima facie that definition governs wherever that word is used the body of the Statute unless the context requires otherwise.
"The context" as pointed out in the book Cross Statutory Interpretation (2nd ed.
48) is both inter nal and external".
The internal context requiers the inter preter to situate the disputed words within the section of which they are part and in relation to the rest of the Act.
The external context involves determining the meaning from ordinary linguistic usage (including any special tech nical meanings) from the purpose for which the provision was passed, and from the place of the provisions within the general scheme of statutory and common law rules and princi ples.
The opening sentence in the definition of the Section states unless mere is anything repugnant in the subject or context".
In view of this qualification, the Court has not only to look at the words but also to examine the context and collocation in the light of the object of the Act and the purpose for which a particular provision was made by 287 the Legislature.
Reference may be made to the observations of Wanchoo, J., in Vanguard Five and General Insurance Co. Ltd. vs M/s Fruser and Ross & Anr., at 863 where the learned Judge said that even where the definition is exhaustive in as much as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or context.
In that case, the learned judge examined the construction of the word 'insur er ' as used in Section 33(1) and 2 D of the , in the light of the definition of that word under Section 2(9) thereof.
The by Section _(9) defines an 'insurer ' as a person carrying on the business of insurance '.
The question arose whether sections 33(1) and 2 D did not apply to an insurer who had closed his business completely as the definition of the word insurer in section 2(9) postulates actual carrying on of the business.
It was pointed out that in the context of sections 33(1) and 2 D and taking into account the policy of the Act and the pur poses for which the control was imposed on insurers, the word 'Insurer ' in the said sections also refers to insurers who were carrying on the business of insurance but have closed it.
Great artistry on the Bench as elsewhere is, therefore, needed before we accept, reject or modify any theory or principle.
Law as creative response should be so interpreted to meet the different fact situations corning before the court.
For, Acts of Parliament were not drafted with divine prescience and perfect clarity.
It is not possible for the legislators to foresee the manifold sets of facts and con troversies which may arise while giving effect to a particu lar provision.
Indeed, the legislators do not deal with the specific controversies.
When conflicting interests arise or defect appears from the language of the statute, the Court by consideration of the legislative intent must supplement the written word with 'force and life '.
See, the observation of Lord Denning in Seaford Estate Ltd. vs Asher, at 498.
The apparent purpose of the proviso was to relieve the defaulting tenant from extreme penalty of eviction.
There cannot be any doubt on this purpose.
The provision seems to be analogous to Section 114 of the Transfer of Property Act, 1892 which confers discretion to the Court to grant relief against forfeiture for non payment of rent.
But the proviso goes a step further and leaves no such discretion to the controller or court even if the tenant is a constant de faulter.
If the arrears and other amounts specified are paid or tendered on the first date of hearing, the default as a ground for eviction disappears and the Controller is pre cluded from passing a decree for eviction.
The 288 governing principle of the proviso is that the tenant could pay and stay in an action for eviction on default.
At the same time, the landlord is ensured payment of arrears, interest and the costs that he has incurred without the necessity of going to civil court to recover it.
This seems to be the will and intention of the legislature in the shape and scope or ' the proviso.
Against this backdrop, we have to construe the word 'tenant used in the proviso.
Mr. Ramamurthy, learned counsel for the appellants urged for liberal construction of the word so as to include a person claiming to be a tenant.
Reference was made to the observation of this Court in Mangat Rai vs Kidarnath, There Fazal Ali, J., said that the proviso in question affords a real and sanctified protection to tenant against eviction on the ground of default.
It should not be given a hypothetical or literal construction, but should be meaningfully construed.
We agree with this observation.
The legislative protection concerning the tenants should not be narrowly tailored.
Indeed, it should be given wider meaning and broader con cept.
We should try to understand the spirit of the text and not be bound by letter.
The argument of counsel for the landlord however, was that the proviso was intended to protect the tenant as defined under the statute and not a person claiming to be a tenant.
The persons who are not tenants could not, there fore, be given the benefit of the proviso.
This submission or the interpretation suggested by counsel does not provide a square answer for all problems coming before the court.
If there are proceedings for eviction with persons claiming tenancy along with the undisputed tenant or to his exclu sion, the acceptance of that submission may lead to arbi trary and unjust result.
Take for instance, the landlord brings an action for eviction on default against A and B where A is recognised as the tenant, but not B. B however claims that he shares the tenancy with A and joins A in tendering the arrears on the first date of hearing of the case.
A also does not dispute that claim.
But if the conten tion of the landlord that the tenant as defined under the Act is alone entitled to tender the amount is accepted, the court could make an order of eviction by discarding the deposit.
That would be repugnant to our notions of justice.
Take another hypothetical case whose occurrence is more probable and which often arises for decision.
The landlord brings an action for eviction against A on the ground of default and also on sub letting to B.
But B denies sub letting and contends that he was 289 inducted into the premises with the consent of the landlord.
A remains absent, perhaps he is not interested in the prem ises.
B however, tenders the rent on his own account, but the landlord refuses to accept it on the plea that B has no right to tender the rent since he is not a recognised ten ant.
The acceptance of that view may result in ejectment of A and B before determining the controversy between the parties.
Both of them may have to be thrown out without deciding the issue raised in the pleadings.
We cannot have "Sentence first verdict afterwards".
That is possible only by the demand of Queen in "Alice 's Adventures in Wonderland" (By Lewis Carroll p. 186).
We must construe the proviso so as to effectuate the twin considera tions which we discussed earlier.
We must eliminate the construction which is productive of injustice.
arbitrary result and undesirable consequence.
It is time for us to be explicit.
Taking into account of the intention of the legislature and the purposes for which the proviso was enacted, we are of the opinion that the obligation to tender the rent under the proviso on the first hearing date does not depend upon the existence of admitted jural relationship of landlord and tenant.
When an action for eviction is brought by the landlord on the ground of default, the proviso stands attracted.
The benefit of the proviso could be availed of by the tenant and also by those who claim to be the tenant.
The view to the contrary ex pressed by the High Court of Punjab and Haryana in Ram Gopal and Onkar Mal cases is likely to be of greater mischief to the tenants than a protection for them and is therefore overruled.
In the result, the appeal is allowed, the judgment of the appellate authority as affirmed by the High Court is reversed.
The matter stands remitted to the appellate au thority for disposal in the light of the observations made and in accordance with law.
In the circumstances of the case, we make no order as to costs.
N.V.K. Appeal allowed.

summary/full:
The respondent landlord filed an eviction petition against the appellants under section 13 of the East Punjab Urban Rent Restriction Act, 1949 on the grounds of arrears of rent, sub letting and making material alterations impair ing the utility of the building.
On the first date of hear ing before the Rent Controller the appellants tendered the arrears of rent but the respondent landlord refused to accept it on the ground that the tender of rent was not valid since it included rent on behalf of a disputed tenant.
Accepting the case of unauthorised subletting the Rent Controller allowed the eviction petition holding that the rent tendered was not in terms of the proviso to sub section (2)(i) of section 13 because only the undisputed tenant alone ought to have tendered the rent.
The appellate authority dismissed the appeal on the preliminary point of validity of tendering of rent, holding that the rent deposited by the appellants was not valid, since one of the appellants was a stranger.
The High Court confirmed the order of the appellate authority by dismissing the tenant 's revision in limine.
In the appeal to this Court on the question, whether the word 'tenant ' included a person claiming to be a tenant, allowing the appeal, this Court, 279 HELD: 1.
When a word has been defined in the interpreta tion clause, prima facie that definition governs wherever that word is used in the body of the Statute unless the context requires otherwise.
The context is both internal and external.
The internal context requires the interpreter to situate the disputed words within the section of which they are part and in relation to the rest of the Act.
The exter nal context involves determining the meaning from ordinary linguistic usage (including any special technical meanings) from the purpose for which the provision was passed, and from the place of the provisions within the general scheme of statutory and common law rules and principles.
[286E G] Cross: Statutory Interpretation, 2nd ed.
p. 48, referred to.
1.1 Even where the definition is exhaustive in as much as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or context.
[287B] Vanguard Fire and General Insurance Co. Ltd. vs M/s Fraser and Ross & Anr., , followed.
The opening sentence in the definition of Section 2 of the East Punjab Urban Rent Restriction Act, 1949 states "unless there is anything repugnant in the subject or con text".
In view of this qualifications, the Court has not only to look at the words but also to examine the context and collocation in the light of the object of the Act and the purpose for which a particular provision was made by the Legislature.
[286G H] 3.
The apparent purpose of the proviso to Section 13(2)(i) was to relieve the defaulting tenant from the extreme penalty of eviction.
The provision is analogous to Section 114 of the which confers discretion on the Court to grant relief against forfeiture for non payment of rent.
But the proviso goes a step further and leaves no such discretion to the controller or Court even if the tenant is a constant defaulter.
If the arrears and other amounts specified are paid or tendered on the first date of hearing, the default as a ground for eviction disappears and the Controller is precluded from passing a decree for eviction.
The governing principle of the proviso is that the tenant could pay and stay an action for eviction on default.
At the same time, the landlord is ensured payment of arrears, interest and the costs that he has incurred without the necessity of going to civil court to 280 recover it.
The proviso affords a real and sanctified pro tection to tenant against eviction on the ground of default.
It should not be given a hypothetical or literal construc tion, but should be meaningfully construed.
The legislative protection concerning the tenants should not be narrowly tailored.
Indeed, it should be given wider meaning and broader concept.
[287G H; 288A; D] Court should try to understand the spirit of the text and not be bound by letter.
[288D] Mangat Rai vs Kidarnath, ; , followed.
Hudson County Water Co. vs Me Carter, ; , referred to.
Taking into account the intention of the legislature and the purposes for which the proviso was enacted, it is clear that the obligation to tender the rent under the proviso to Section 13(2)(i) on the first hearing date does not depend upon the existence of admitted jural relationship of landlord and tenant.
When an action for eviction is brought by the landlord or the ground of default, the provi so stands attracted.
The benefit of the proviso could be availed of by the tenant and also by those who claim to be the tenant.
[289D E] Ram Gopal & Ors.
vs Ram Prakash & Ors., [1963] RLR 1112 and Punjab Rajasthan Goods Carriers & Ors.
vs Onkar Mal, [1977] RLR 1195, overruled.
Law as creative response should be so interpreted to meet the different fact situations coming before the Court.
For, Acts of Parliament were not drafted with divine pres cience and perfect clarity.
It Is not possible for the legislators to foresee the manifold sets of facts and controversies which may arise while giving effect to a particular provision.
Indeed, the legislators do not deal with the specific controversies.
When conflicting interests arise or defect appears from the language of the Statute, the Court by consideration of the legislative intent must supplement the written word with 'force and life '.
[287E F] Seaford Estate Ltd. vs Asher, , referred to.