judgement:
Appeal No. 104 of 1956.
Appeal by special leave from the Award dated December 29, 1958 of the Industrial Tribunal, Delhi in I. D. No. 36 of 1957 published in the Delhi Gazette dated 5th March, 1959.
G. B. Pai and I. N. Shroff, for the Appellant.
M. K. Ramamurthi, B. K. Garg, section C. Agarwala, and D. P. Singh, for the Respondent 1. 1962.
May 2.
The Judgement of the Court was delivered by WANCHOO, J.This appeal by special leave, arises out of an industrial dispute between the Birla Cotton Spinning and Weaving Mills Limited (hereinafter called the appellant) and its workmen.
A large number of matters were referred for adjudication to the industrial tribunal but in the present appeal we are concerned with two, namely, ii) whether the wages require to be increased and standardised, and what directions are necessary in this respect, and (ii) whether any of the workmen doing the work of fancy jobbers should be designated and paid accordingly.
The first point has however been confined to miseries and line jobbers only as the other operatives were covered by another award in another reference (No.1.D. 52 of 1957) between the same parties, which was decided earlier by this tribunal.
That award came in appeal this Court and the decision of this Court is reported in The Management of Birla Cotton Spinning and Weaving Mills Ltd. vs Its workmen (1).
This court had set aside the earlier award and sent the case back to the tribunal to proceed in the manner indicated in the judgment.
We are told that matter has ended in a compromise between the parties.
The claim of the workmen concerned in the present (1) A.I.R. (1961) S.C. 1179.
719 reference (namely, mistries and line jobbers) was that their wages were low and not standardised and in spite of representations made to the appellant, nothing had been done in the matter.
The workmen therefore claimed that the wages should be increased and standardised and incremental pay scales should be introduced so far as mistries and line jobbers, were concerned.
As to fancy jobbers the workmen 'g claim was that they had been wrongly designated recently as assistant fancy jobbers, though they were doing the job of fancy jobbers.
It was therefore contended that they 'should be designated as fancy jobbers and their pay also increased and standardised accordingly.
The appellant resisted the claim on a number of grounds.
It was contended firstly that there was an earlier award in 1951 made by Shri Dulat, which was still in force and therefore the reference was incompetent.
Next it was contended that there was no comparison between the Swatantra Bharat Mills and the Delhi Cloth Mills on the one hand and the appellant mills on the other and therefore the wages prevalent in those mills could not retaken as a standard for fixing wages for the appellant 's workmen.
Thirdly, it was urged that incremental scales were provided nowhere in the textile industry and therefore this claim should be rejected.
Fourthly, the workmen designated as assistant fancy jobbers had been so designated rightly and could not Claim to be fancy jobbers.
And lastly, it was urged that there was no case for applying the Bombay standardisation scheme to the appellant 's workmen for conditions in Bombay and Delhi were in many respect different.
The tribunal rejected the contention that the Dulat award of 1951 bad not been terminated and therefore the present reference was incompetent.
The tribunal further held that though there were difference between the Swatantra Bharat Mills and 720 the Delhi Cloth Mills on the one hand and the appellant on the other, both in the matter of the working of the mills and in the matter of their financial position, they were not of importance as there were bound to be differences between unit and unit of the same industry and thus the wages paid in those two mills were comparable.
As to the claim for ineremntal scale of wages, the tribunal held that no incremental scale had been provided in any standardisation scheme relating to textile industry and rejected this claim.
It further held that the workmen now designated as assistant fancyjobbers were really fancy jobbersandhad been previously designated as such.
Recently, however, they started to be called assistant fancy jobbers and therefore it was ordered that they ' should be designated as fancy jobbers.
And lastly, the tribunal following its earlier award referred to above held that the Bombay standardisation scheme should be adopted for mistries and line jobbers as well as fancy jobbers.
It also directed that "wherever the said existing wages are higher than those fixed under the Bombay Standardisation Scheme, they shall remain and shall not be lowered".
It also directed that where operatives were designated by any other name, either not included in the Bombay list or materially different from the one appearing in the list, they should be paid the same wages as those doing identical work according to the Bombay list and a joint committee consisting of the representatives of the management and the union might be formed to investigate the anomalies, arising out of the application of the Bombay standardisation scheme, and in case of disagreement the matter might be referred to the industrial tribunal either through a regular reference made with mutual consent or as an arbitrator mutually agreed upon.
721 The appellant challenges the award and its main contentions are (i) that the reference was incompetent as the Dulat award of 1951 had not been termi nated; (ii) that the tribunal was wrong in holding that the assistant fancy jobbers should be designated as fancy jobbers; (iii) that the tribunal was wrong in applying the Bombay standardisation ' scheme to the appellant 's workmen without allowing the appellant even a chance of producing evidence with respect to that scheme and showing the difference between the conditions in Bombay and the conditions in Delhi, which would require modification of that scheme in its application to the appellant 's workmen; (iv) that the tribunal by directing the appointment of a joint committee to investigate the anomalies bad not solved the dispute referred to it with the result that there would be further disputes arising out of this direction of the tribunal; and (v) that the tribunal 's direction that ",wherever the said existing wages are higher than those fixed under the Bombay stan dardisation scheme, they shall remain, and shall not be lowered" is against the principle on which the standardisation schemes are based.
The question whether the Dulat award of 1951 stood in ' the way of the present reference 722 being competent was considered by this Court in the earlier case (referred to above) and was rejected.
It was then pointed out that the Dulat award had held that there was no justification for delaying standardisation and had ordered the parties to work out a scheme taking the Bombay award No. 1 as the working model.
In pursuance of that direction, a scheme was worked out and the parties agreed to it on September 29, 1951.
It was urged for the appellant that the agreed scheme of September 1951 thus became in a sense a part of the Dulat award and as it was terminated only in November 1956, while the present reference was made on March 3, 1956, that award stood in the way of the present reference being competent.
This contention was negatived by this Court in, its earlier judgment on two grounds.
In the first place, it was pointed out that this agreement could not be a part of the Dalat award in any sense and therefore the Dulat award could not stand in the way of the competence of the reference even if it was not terminated before the reference.
In the second place, it was pointed that the agreement of 1951 did not amount to a settlement within the meaning of section 2 (p) of the , as it stood in 1951, and therefore section 19 (2) would not apply to 'that agreement.
We were of opinion that on the same reasoning the present argument that the reference when it was made was incompetent because of the Dulat award being still in force, must fail and the contention on this head is rejected.
(ii) We are of opinion that the tribunal was right in holding that it was only shortly before the reference that those workmen who used to be called fancy jobbers began to be designated as assistant fancy jobbers.
The tribunal has considered the entire evidence on this point and we are in 723 agreement with the view expressed by it, namely, that the assistant fancy jobbers should be designa Birl ted as fancy jobbers as before and the recent innovation calling them assistant fancy jobbers was only a device to depress the status of this class of workmen.
The contention therefore on this head must also fail.
(iii).
It appears that the tribunal merely followed its earlier award in ID 52 of 1957 when it proceeded to apply the Bombay standardisation scheme to mistries and line jobbers as well as fancy jobbers.
That award, as we have pointed out, was set aside by this Court in the earlier judgment on various grounds.
It is not necessary for us to repeat the reasons which impelled this Court in the earlier appeal to set aside the award in ID 52 of 1957.
Those reasons in our opinion apply with full force to the present award also in so far as it introduces the Bombay standardisation scheme for the workmen concerned in the present dispute.
In addition we may point out that the appellant wanted to produce evidence with respect to the Bombay standardisation scheme and to summon two witnesses from Bombay and Kanpur with respect to the working of that scheme; but the tribunal by its order dated January 6, 1958, held that it was not necessary to examine those witnesses in view of the conditions obtaining in Delhi, the region with which it was concerned.
But even though the tribunal thus refused to examine evidence with respect to the working of the Bombay standardisation scheme it went on to the adopt that scheme in its entirety without any modification when it came to make its award, in view of its earlier award.
We are of opinion that it was not fair for the tribunal to shut out evidence with respect to the working of the Bombay standardisation scheme which the app ellant wanted to produce and then apply that 724 scheme without any modification to the appellantmill.
Another reason which impelled the tribunal to apply the Bombay standardisation scheme in this case was stated by it to be that the scheme was applicable to this class of workmen in the Delhi Cloth Mills and the Swatantra Bharat Mills.
This statement in our opinion is not borne out by the evidence of the two witnesses produced by the workmen from those two mills.
Manoharlal (W.W. 19), a labour officer of the Bharat Mills, was examined in this connection.
He stated that for workers the Swatantra Bharat Mills had followed the Bombay standardisation scheme in the matter of payment of wages on voluntary basis but not for mistries and jobbers.
This statement was apparently treated by the tribunal as meaning that the Bombay standardisation scheme was applicable to mistries and jobbers though Manohar Lal stated exactly the opposite.
It is true that Manoharlal stated that for certain categories of misitries and jobbers the Swatantra Bharat Mills paid more than the Bombay standardisation scheme gave to such categories; but that does not mean that the Bombay staddardisation scheme as such was applicable to all mistries and jobbers in the Swatantra Bharat Mills.
The second witness was B. L. Saxena, the labour officer in the Delhi Cloth Mills.
He stated that the wages of line jobbers and mistries were more in certain cases and in some cases at par with the wages in the Bombay standardisation scheme.
But he also stated that the line jobbers andmistries in the Delhi Cloth Mills had not been brought under the Bombay standardisation scheme.
It appears from the evidence of both these witnesses that there is no fixed grade for mistries and jobbers and each one gets what may be called his own pay.
Therefore in some cases the pay which a jobber or a misery gets may be higher or may be 725 equal to the wages in the standardisation scheme.
But this does not mean that the Bombay standardisation scheme as such has been applied to mistries and jobbers in the other two mills in Delhi.
The tribunal was therefore wrong even on a comparison of the other two mills in Delhi to hold that the Bombay standardisation scheme should be applied to the appellant mills also.
The tribunal 's award with respect to fancy jobbers would also show how the manner in which the tribunal dealt with the application of the Bombay standardisation scheme to the appellants has resulted in unfairness.
After having rightly held that the assistant fancy bobbers should be designated as fancy jobbers, the tribunal went on to award that the fancy jobbers so designated should be paid according to the Bombay standardisation scheme without apparently examining that scheme.
A copy of that scheme has been produced before us and it shows that the Bombay scheme envisages three categories of workers in what is called fancy work, namely, head fancy jobber, fancy jobber and assistant fancy jobbers.
Therefore before the tribunal decided to apply the Bombay standardisation scheme it was necessary to compare the work done by the fancy jobbers in the appellantmills with the work done by either the fancy jobber or assistant fancy jobber in the Bombay standardisation scheme and then decide whether they would come under 'the designation of fancy jobbers or assistant fancy jobbers under the Bombay standardisation scheme or some under one and some under the other.
We are therefore of opinion that the manner in which the case has been dealt with by the tribunal show, as was pointed out in the earlier case also, that it was dealt with in a ever functory way, though in this case the tribunal had the excuse to follow its own award in the earlier case.
We are 726 however of opinion that if the Bombay standardisation scheme is to be applied to the appellantmills with respect to the workmen concerned in the present appeal, the ' tribunal should go into the matter carefully again on the lines indicated by this Court in its earlier judgment and then decide whether the Bombay standardisation scheme as a whole should be applied to the appellant mills with respect to the workmen concerned in the present dispute or whether there should be any modification of that scheme in view of differences between the conditions in Bombay and the conditions in Delhi.
This applies to all the workmen concerned in this appeal,i.
e. the line jobbers, mistries and fancy jobbers.
We are therefore of opinion that this appeal must be allowed and the case sent back to the tribunal for reconsideration on the lines indicated above and in accordance with the earlier judgment of this Court.
As to the direction by the tribunal that a joint committee should be appointed to go into what is called,anomalies, it is enough to refer to what was said by this Court in the earlier judgment where a similar direction had been made.
It was pointed out there that by making the direction the tribunal had left a part of the dispute to be resolved by the parties themselves, so that the tribunal had not done what it was expected to do itself under the terms of reference.
We set aside this direction and order that the tribunal should go into this ' matter itself with the assistance of assessors, if it considers that necessary, before it applies the Bombay standardisation scheme either in its entirety or with modification to the workmen concerned in the appellant mills.
This brings US to the last point.
The direction in the present award by the tribunal is that 727 " wherever the said existing wages are higher than those fixed under the Bombay standardisation scheme, they shall remain, and shall not be lowered".
Objection is taken to this direction by the appellant.
There was a similar direction in the earlier award also and in that connection this Court observed as follows at p. 1182 : "It cannot be disputed that when a stand ardisation scheme comes into force it is an integrated whole and may sometime result in some categories of workmen getting less than what they were getting before.
The whole purpose of a standardisation scheme is to standardise wages and where they are low to raise them to the standardised level.
Similarly where the wages are high they have to be reduced in order to fit them in the standardised scheme.
The tribunal therefore was clearly wrong in acting against the basic principle of a standardised scheme when it ordered that the wages should be increased according to the standardised scheme where they were low but should not be decreased where they were high.
This principle of standardisation is clear and even the learned counsel for the workmen had to admit it.
" It is urged on behalf of the respondents that these observations are liable to be misunderstood and may give rise to the impression that it is not open to a tribunal to protect the wages of individual workmen who may be getting more than the wages fixed under the standardisation scheme, at the time when such a scheme comes into force, The respondents do not dispute that the basic principal behind the standardisation scheme is what has been stated by this Court; but they contend that though after a standardisation scheme has been brought into force it may not be open 728 even to the management to give more wages than those provided in the standardisation scheme, that principal does not require necessarily that the wages of individuals who might be drawing more at the date the standardisation scheme comes into force should also be reduced and should not be protected for those individuals only.
It is urged that it is open to the tribunal to protect the wages of such workmen who might be drawing more than the wages fixed in the standardisation scheme, though it may not be open to the management after the standardisation scheme comes into force to pay more wages than fixed in the standardisation scheme to any one employed thereafter.
On the other hand, it is contended for the appellant that when a standardisation scheme comes into force even the wages of individuals who are getting more than what is provided in the standardisation scheme must be reduced and the tribunal cannot protect the wages even of such individuals.
Reliance in this connection has been placed on behalf of the appellant on Daru vs Ahmedabad Spinning and Manufacturing Company limited.
(1) In that case the principles governing a standardisation scheme were considered by the Bombay High Court considering the report of the Textile Labour Inquiry Committee and also the book of Dr. D. R. Gadgil on " 'Regulation of wages and other Problems of Industrial Labour in India".
It was pointed out that when in an industry divergent wages were being paid and there was considerable difference between the top wage and the lowest wage, it was very difficult to standardise these wages and therefore the first thing to be done was to fix a minimum wage which is generally somewhere between the top and bottom; but where wages in a particular occupation are not very divergent and are more or less uniform, that is (1) (1955) 1 L. L. G. 355, 729 the time and the stage when a labour tribunal may well standardise those wages because in standardising them although it may result in some workers being paid less than what they are being paid, the loss to them would not be considerable and if it is in the interest of labour that all workers should be paid the same wages who are doing the same work then the standardisation would result in benefit to the cause of labour.
There can be no dispute as to the validity of these principles and their soundness will be clear from the facts of that case.
In that case a standardisation scheme had been brought into force in 1948.
In 1951, one of the mills governed by the standardisation scheme introduced a new section the wages in which were covered by the standar disation scheme.
However, the wages in the new section fixed by the said mill were higher than those fixed by the standardisation scheme.
Later in 1953, the mills gave notice to the workmen reducing the wages fixed in 1951 so as to conform to the wages laid down in the standardisation scheme.
This was objected to by the workmen whose wages were reduced and that is how the dispute arose.
The High Court held in those circumstances that in view of the fact that the standardisation scheme was in force from 1948, it was not open to the employer to give higher wages than those fixed in the standardisation scheme in 1951 because it was of the essence of the standardisation scheme that the wages for the same work should be equal and that where higher wages had been paid than those fixed in the standardisation scheme they should be reduced to that level.
That case however was not concerned with protection of the wages of individuals who might be getting more than what is provided in the standardisation scheme at the time when it is 730 brought into force.
It is in this context that the observations made by the High Court have to be understood and in that context the observations laying down the principles behind a standardisation scheme are, if we may say so with respect, sound.
It is however urged on behalf of the respondents that the protection given by the tribunal in this case is no more than protection for individual workmen who may be getting more wages than those fixed in the standardisation scheme when it comes into force and this direction is correct and that there is nothing in law which prevents the tribunal from giving such a direction for the protection of individuals who might be getting more wages at the time the standardisation scheme is brought into force.
It seems to us that it would not be against the basic principle of standardisation to which this Court referred in the earlier case to protect the wages of individual workmen who might be getting more than the wages fixed in the standardisation scheme at the time when such a scheme is brought into force.
It will be for the tribunal to decide whether it will protect these individual workmen or not.
If it gives no direction for protection to individual workmen, they will not be protected and their wages will have to be lowered in case they are higher than those fixed in the standardisation scheme.
But if the tribunal considers that it will be more in consonance with justice to protect the wages of individual workmen it may give a direction to that effect, even though they may be 'more than the wages fixed in the standardisation scheme.
In such a case three conditions will always have to be borne in mind.
In the.
first place, there can be no further raising of the wages of these protected workmen by the management after the standardisation scheme comes into force, for any such further rise will be against the principle of standardisation.
In the second 731 place, if the standardisation scheme fixes incremental scale of wages and if the protected workman is getting a wage which is between the minimum and the maximum and he is not entitled in accordance with the length of his service to that wage but something less in the grade, the extra amount that he may be getting will have to be absorbed in future increments till he is properly fitted in the incremental scale according to the length of service.
Thirdly, when any workman 's service come,% to an end for any reason whatsoever, no other employee whether new or old would be entitled to claim the pay which the outgoing employee Was getting on the ground that a vacancy with that higher pay has arisen.
Subject to these three conditions it may be open to a tribunal to protect the wages of individual workmen even though he may be getting higher wages than those fixed in a standardisation scheme at the time when the scheme is introduced.
Now let us see what the tribunal has done in this matter.
It directs that "wherever the said existing wages are higher than those fixed under the Bombay standardisation scheme, they shall remain, and shall not be lowered." This in our opinion is not protection of individual workmen but protection of wages, which may be higher than those fixed in the standardisation scheme.
This in our opinion cannot be done as it is against the basic principles of a standardisation scheme as observed in the earlier case.
The result of this direction by the tribunal would be that a particular post carrying with it higher wages will remain protected so that when the individual who may be getting that pay at the time the standardisation scheme comes into force is no more employed, the other workmen may be able to claim wages on the ground that the wages have been protected.
The proper way of giving protection, if the tribunal thinks that justice demands that individuals who 732 are _getting higher wages then those fixed under a standardisation scheme should be protected, is to direct that the wages of such individuals should be fixed according to the standardisation scheme, and the difference, if any, between their wages and the standardised wages should be paid to them as personal pay so long as they are in service.
As soon as such an individual goes out of ,service, another coming in his place will not be entitled to the personal pay the outgoing workman was getting, and will be fixed in the standardisation scheme.
The direction however of the tribunal in this case is capable of being read not for the protection of individuals but for the protection of wages, and this in our opinion cannot be done in view of the basic principles governing a standardisation scheme.
We are therefore of opinion that the direction for the protection of existing wages given in the form in which it has been given by the ' tribunal must be set aside.
At the same time we leave it to the tribunal to decide if it considers it just when the matter goes back to it for reconsideration whether individual workmen should be protected, even in case a standardisation scheme is introduced, in the manner we have indicated above.
We therefore allow the appeal and set aside partly the order of the tribunal with respect to certain matters with which we have dealt in the course of this judgment and direct that the tribunal should rehear the reference and reconsider in the light of this judgment and the earlier judgment what should be its award with respect to miseries, line jobbers and fancy jobbers in connection with the following term of reference : "Whether the wages require to be increased and standardised, and what directions are necessary in this respect.
" 733 Parties will be at liberty to lead such further evidence on all matters sent back for reconsideration as they think fit.
In the circumstances we order parties to bear their own costs.
Appeal allowed.

summary/full:
The dispute between the respondents and the appellants regarding ministries and line jobbers was referred to the Tribunal regarding the increase and standardisation of wages and regarding the designation of workmen doing the work of fancy jobbers and their pay.
The appellant contended that an earlier award of 1951 had not been terminated and that the reference was incompetent.
The Tribunal directed standardisation on the basis of the Bombay Scheme.
The Tribunal 717 acceded to the claim regarding fancy jobbers.
Finally the Tribunal directed that "whereever the said existing wages are higher than those fixed under the Bombay Standardisation Scheme, they shall remain and shall not be lowered" and that regarding operatives who were designated differently from Bombay list, they should be paid what those described by any other name but doing identical work were being paid in Bom bay and that the adjustment of anomalies that might arise in this matter should be decided by A Committee consisting of the representatives of the Management and the Union.
Held, that the agreement following the earlier award %as not a settlement within the meaning of section 19(2) of the Industrial Disputes Act and the reference was Competent.
Held, further, that the Tribunal ought to have considered the applicability of the Bombay Standardisation Scheme to the condition in Delhi by examining evidence and that the Tribunal ought not to have shut out evidence in respect of the working of the Bombay Standardisation Scheme in Delhi and that the Tribunal had not considered the matter carefully and made such modifications as might be necessary.
The Tribunal ought not to have delegated the determination and adjustment of the anomalies in applying the Bombay standardisation scheme to a joint committee by it should have considered and determined those matters itself.
Held, further, that in the event of standardisation it may be necessary if justice demanded it to give some measure of protection to such individual workmen as were getting higher wages than what they would get under standardisation scheme.
But the matter will have to be considered by the Tribunal subject to three conditions: viz., (1) there can be no further rise in wages of those protected by the operation of the standardisation of scheme, (2) if there is an incremental scales fixed by the standardisation scheme and the protected workmen are getting between the minimum and the maximum but are not entitled thereto according to the length of their service, future increments should be adjusted till the protected workmen find their proper place in the scale according to the length of service, and (3) the category of protected workmen should in due course exhaust by the termination of service of such workmen by retirement or otherwise.
Held, that the direction of the Tribunal could be read to mean the protection of existing higher wages generally rather than the higher wages of particular workmen and such a thing was not consistent with the principles of standardisation 718


judgement:
Appeal Nos. 282 & 283 of 1959.
Appeals by special leave from the judgment and decree dated December 18, 1956, of the Bombay High Court at Bombay in Second Appeals Nos. 233 and 185 of 1955 respectively.
G. section Pathak, O. C. Mathur, J. B. Dadachanji and Ravinder Narain, for the appellants.
section G. Patwardhan and K, R. Choudhri, for the respondents.
May 2.
The Judgment of the Court was delivered by SINHA, C.J.
These two appeals, by special leave, directed against the judgment and decree of a single Judge of the Bombay High Court, raise a common question of law, and have. therefore, been heard together.
This judgment will govern both the cases.
The appellants were plaintiff landlords, 710 and the respondents were tenants in possession of certain lands which were situate in the erstwhile State of Baroda before it became part of the State of Bombay, by merger.
The Bombay Tenancy and Agricultural Lands Act (Bombay Act LXVII of 1948) which hereinafter will he referred to as the Act was extended to Baroda on August 1, 1949.
The suits out of which these appeals arise had been instituted by the appellants on the basis that the tenants respondents had become trespassers on the service of notice in March 1950, with effect from the beginning of the new agricultural section in May 1951.
As the defendants did not comply with the terms of the notice and continued in possession of the lands, to which they had been inducted, the landlords instituted suits for possession in the Civil Court.
The Trial Courts and the Court of Appeal decreed the suits for possession.
But on second appeal by the tenants, the learned Single Judge.
who heard the second appeals, allowed the appeals and dismissed the suits with costs throughout.
It is not disputed that if the provisions of the Act were applicable to the tenancies in question, the plaintiffs ' suits for possession must fail, because these were instituted in the Civil Courts, which have Jurisdiction to try the suits only if the dependents were trespassers.
It is equally clear that if the tenants could take advantage of the provisions of the Act, any suit for possession against a tenant would lie in the Revenue Courts and not in the Civil Courts.
But reliance was placed upon the notification issued by the Bombay Government on April 24, 1951, to the following effect : "In exercise of the powers conferred by clause (d) of sub section (1) of Section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay LXVII of 1948) the Government of Bombay is pleased to specify the area 711 within the limits of the Municipal Borough of Baroda City and within the distance of two miles of the limits of the said Borough, as being reserved for Urban, non agricultural or industrial development".
The learned Judge of the High Court, in disagreement with the Courts below,, held that under provisions of section 3A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant would be deemed to be a protected tenant from August 1, 1950, ' and that vested right could not be affected by the notification aforesaid, issued by the Government under section 88 (1)(d) which had the effect of putting the lands in question out of the operation of the Act.
In other words, the learned Judge held the notification had no retrospective effect so as to take away the protection afforded to the tenants by a. 3A, aforesaid.
The learned counsel for the appellants contended.
in the first instance, that the notification, set out above, under section 88 (1)(d) operated with effect from December 28, 1948, when the Act came into force.
In this connection, reliance was placed upon the decision of this Court, pronounced by me sitting in a Division Court, in the case of Sakharam vs Manikchand Motichand Shah, (1) in these words : "The provisions of a. 88 are entirely pro spective.
They apply to lands of the descrip tion contained in cls.
(a) to (d) of section 88(1) from the date on which the Act came into operation, that is to say, from December 28, 1948.
They are not intended in any sense to be of a confiscatory character.
They do not show an intention to take away what had already accrued to tenants acquiring the status of 'protected tenants".
712 It is necessary, therefore, to make some observations explaining the real position.
In that case, the question then in controversy had particular reference to section 88(1)(c), which is the only provision quoted at page 2 of the blue print of the judgment.
That case had nothing to do with el.
(d) of section 88(1).
In that case, the lands in dispute lay within two miles of the limits of Poona Municipality.
It is clear, therefore, that the inclusion of el.
(d) of section 88(1) was a slip and certainly was not relevant for consideration in that case.
The provisions of section 88(1) are as follows : "Nothing in the foregoing provisions of this Act shall apply: (a) to lands held on lease from the Govern ment a local authority or a co operative society; (b) to lands held on lease for the benefit of an industrial or commercial undertaking; (c) to any area within the limits of Greater Bombay and within the limits of the Municipal boroughs of Poona City and Suburban, Ahmedabad, Sholapur, Surat and Hubli and within a distance of two miles of the limit,% of such boroughs; or (d) to any area which the State Government may, from time to time, by notification in tile Official Gazette, specify as being reserved for urban non agricultural or industrial development.
It will be noticed that cls.
(a), (b) and (c) of section 88(1) apply to things as they were at the date of the enactment, whereas el.
(d) only authorised the State Government to specify certainareas as being reserved for urban non agricultural or industrial development, by notification in the Official Gazette, 713 from time to time.
Under cls.
(a) to (c) of a. 88(1) it is specifically provided that the Act, from its inception did not apply to certain areas then identified; whereas el.
(d) has reference to the future.
Hence, the State Government could take out of the operation of the Act such areas as it would deem should come within the description of urban non agricultural or for industrial development.
Clause (d), therefore, would come into operation only upon such a notification being issued by the State Government.
The portion of the judgment, quoted above, itself makes it clear that the provisions of section 88 were never intended to divest vested interests.
To that extent the decision of this Court is really against the appellants.
It is clear that the appellants cannot take advantage of what was a mere slip in so far as cl.
(d) was added to the other clauses of s.88(1), when that clause really and did not fall to be considered with reference to the controversy in that case.
In other words, this Court never intended in its judgment in Sakharam 's case`e(1) to lay down that the provisions of cl.(d) of s.88 (1) aforesaid were only prospective and had no retrospective operation.
Unlike cls.
(a), (b) and (c) of s.88(1), which this Court held to be clearly prospective, those of cl.(d) would in the context have retrospective operation in the sense that it would apply to land which could be covered by the notification to be issued by the Government from time to time so as to take those lands out of the operation of the Act of 1948, granting the protec tion.
So far as cls.
(a), (b) and (e) are concerned, the Act of 1948 would not apply at all to lands covered by them.
But that would not take away the rights conferred by the earlier Act of 1939 which was being repealed by the Act of 1948.
This is made clear by the provision in s.89(2) which preserves existing rights under the repealed Act.
Sakharam 's case, (1) was about the effect of cl.
(c) on (1) ; 714 the existing rights under the Act of 1939 and it was in that connection that this Court observed that s.88 was prospective.
But el.
(d) is about the future and unless it has the limited retrospective effect indicated earlier it will be rendered completely nugatory.
The intention of the legislature obviously was to take away all the benefits arising out of the Act of 1948 (but not those arising from the Act of 1939) as soon as the notification was made under el.
This is the only way to harmonise the other provisions of the 1948 Act, conferring certain benefits on tenants with the provisions in el.
(d) which is meant to foster urban and industrial development.
The observations of the High Court to the contrary are, therefore, not correct.
But the matter does not rest there.
The notification of April 24, 1951, was cancelled by the State Government by the following notification dated January 12, 1953 "Revenue Department, Bombay Castle, 12th, January, 1953.
Bombay Tenancy and Agricultural Landis Act, 1948.
No.9361/49 : In exercise of the powers conferred by clause (d) of sub section (1) of Section 88 of the Bombay Tenancy and Agri cultural Lands Act, 1948 (Bombay LXVII of 1948).
The Government of Bombay is pleased to cancel Government Notification in the Revenue Department No.9361/49 dated the 24th/25th April, 1951".
It would thus appear that when the matter was still pending in the Court of Appeal, the judgment of the lower Appellate Court being dated September 27, 1954, the notification cancelling the previous notification was issued.
The suit had, therefore, to be decided on the basis that there was no notification in existence under s.88(1)(d), which could take the disputed lands out of the operation 715 of the Act.
This matter was brought to the notice of the learned Assistant Judge, who took the view that though, on the merger of Baroda with Bombay in 1949, the defendants had the protection of the Act, that protection had been taken away by the first notification ' which was cancelled by the second.
That Court was of the opinion that though the Appellate Court was entitled to take notice of the subsequent events, the suit had to be determined as on the state of facts in existence on the date of the suit, and not as they existed during the pendency of the appeal.
In that view of the matter, the learned Appellate Court held that the tenants defendants could not take advantage of the provisions of the Act, and could not resist the suit for possession.
In our opinion, that was a mistaken view of the legal position.
When the judgment of the lower Appellate Court was rendered, the position in fact and law was that there was no notification under cl.(d) of s.88(1) in operation so as to make the land in question immune from the benefits conferred by the Tenancy Law.
In other words, the tenents could claim the protection afforded by the law against eviction on the ground that the term of the lease had expired.
But it was argued on behalf of the appellants that the subsequent notification, cancelling the first one, could not take away the rights which had accrued to them as a result of the first notification.
In our opinion, this argument is without any force.
If the landlords had obtained an effective decree and had succeeded in ejecting the tenants as a result of that decree, which may have become final between the parties, that decree may not have been re opened and the execution taken thereunder may not have been recalled.
But it was during the pendency of the suit at the appellate stage that the second notification was issued canceling the first.
Hence, the Court was bound to 716 apply the, law as it was found on the date of its judgment.
Hence, there is no question of taking away any vested rights in the landlords.
It does not appear that the second notification, canceling the first notification, had been brought to the notice of the learned Single Judge, who heard and decided the second appeal in the High Court.
At any rate, there is no reference to the second notification.
Be that as it may, in our opinion, the learned Judge came to the right conclusion in holding that the tenants could not be ejected, though for wrong reasons.
The appeals are accordingly dismissed, but there would be no order as to costs in this Court, in view of the fact that the respondents had not brought the second notification cancelling the first to the pointed attention of the High Court.
Appeal dismissed.

dataset_name: IN-Abs

summary/full:
Certain lands were situated in the erstwhile State of Baroda before it became a part of the State of Bombay by merger.
The Bombay Tenancy and Agricultural Lands Act, 1948, was extended to Baroda on August 1, 1949.
Suits were filed in the Civil Court by appellants landlord , against the respondents who were their tenants on the ground that the latter became trespassers with effect from the beginning of the new agricultural season in May, 1951.
Decrees for possession were passed by the Civil Court in favour of landlords and the same were confirmed by the first appellate court.
However, the High ' Court accepted the appeals and dismissed the suits.
It was held that under the provisions of section 3 A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant would be deemed to be a protected tenant from August 1, 1950 and that vested right could not be affected by the notification dated April 24, 1951 issued under section 89 (1) (d) of the Act of 1948 by which the land in suit was excluded from the operation of the Act.
The notification dated April 24, 1931 had no retrospective effect and did not take away the protection 708 afforded to tenants by section 3A.
The landlords came to this Court by special leave.
It was conceded that the appellants ' suits for possession would fail if the Act applied to the tenancies in question, because in that case only revenue courts had jurisdiction to try them.
However, reliance was placed on notification dated April 24,1951 which excluded the land in suit from the operation of the Act.
It was also contended on behalf of appellants that the subsequent notification cancelling the first one, could not take away the rights which had accrued to them as a result of the first notification.
Held, that the notification dated April 24, 1951 was cancelled by another notification dated January 12, 1953.
The second notification was issued when the matter was still pending in the first court of appeal.
The suits had therefore to be decided on the basis that there was no notification in existence which would take the disputed lands out of the operation of the Act.
The first appellate court was wrong in holding that the suits had to be decided on the basis of facts in existence on the date of filing of the suits.
Held, further, that the second notification cancelling the first one did not take away any rights which had accrued to the landlords.
If the landlords had obtained an effective decree and had succeeded in ejecting the tenants as a result of that decree which may have become final between the parties, that decree may not have been re opened and the execution taken thereunder may not have been recalled.
However, it was during.
the pendency of the suit at the ap pellate stage that the second notification was issued cancelling the first and the court was bound to apply the law as it was on the date of its judgment.
Held, also, that clauses (a), (b) and (c) of section 88(1) applied to things as they were on the date of the commence ment of the Act of 1948 whereas clause (d) authorised the State Government to specify certain areas as being reserved for urban non agricultural or industrial development, by notification in the Official Gazette, from time to time.
It was specifically provided in clauses (a) to (c) that the Act, from its inception, did not apply to certain areas then identified, whereas clause (d) had reference to the future.
The State Government could take out of the operation of the Act such areas as in its opinion should be reserved for urban nonagricultural or 'industrial development.
Clause (d) would come into operation only upon such a notification being issued by the State Government.
In Sukharam 's case, this Court never intended to lay down that the provisions of 709 clause (d) were only prospective and had no retrospective operation.
Unlike clauses (a) to (c) which were clearly prospective, clause (d) had retrospective operation in the sense that it would apply to land which would be covered by the notification to be issued by the Government from time to 2 time so as to take that land out of the operation of the Act of 1948, granting the protection.
So far as clauses (a) to (c) were concerned, the Act of 1948 would not apply at all to lands covered by them, but that would not take away the rights conferred by the Act of 1939 which was repealed by the Act of 1948.
Section 89(2) specifically preserved the existing rights under the repealed Act.
Sukharam 's case was about the effect of clause (c) on the existing rights under the Act of 1939 and it was in that connection that this Court observed that section 88 was prospective.
However clause (d) is about the future, and unless it has the limited retrospective effect indicated earlier, it will be rendered completely nugatory.
The intention of the legislature obviously was to take away all the benefits arising out of the Act of 1948 (but not those arising from the Act of 1939) as soon as the notification was made under clause (d).
Sakharam vs Manikchand Metichand Shah, ; , explained.


judgement:
Appeals Nos.
5 1 2 and 513 of 1960.
Appeal from the judgment and order dated March 27, 1956, of the Madras High Court, in Writ Petition Nos. 326 of 1955 and 107 of 1956.
M. K. Nambiyar and P. Ram Reddy for the appellant.
B. Ganapathy Iyer and P. D. Menon, for the respondents.
R. Gopatakrishnan, for the Intervener No. 1.
K. Bhimsankaran, B. R. G. K. Achar and P. D. Menon, for the intervener No. 1962.
May 2.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
The principal question which arises in these two appeals is related to the validity of s.24 of the Madras Electricity 750 Supply Undertakings (Acquisition) Act, 1954 (XXIX of 1954) (hereinafter called the Act).
That question arises in this way.
The appellant, the West Ramnad Electric Distribution Co. Ltd., Rajapalayam, was incorporated in 1935 to carry on, within the State of Madras and elsewhere, the business of an electric light and power company, to construct, lay down and establish and carry on all necessary installations, to generate, accumulate, distribute and supply electricity under a licence granted under the Indian Electricity Act of 1910.
On the 24th January, 1950, the Madras Legislature passed an Act (XLIII) of 1949) for the acquisition of undertaking supplying electricity in the Province of Madras.
Under the said Act, the Government was empowered to acquire any electrical undertaking on payment of compensation according to the relevant provisions of the s aid Act.
In pursuance of the provisions of s.4(1) of the said Act, the respondent, State of Madras, passed on Order C.O. Ms. No.2059 on the 17th May, 1951, declaring that the appellant undertaking shall vest in the respondent from the 21st September, 1951.
Thereafter, the respondent appointed the Chief Electrical Inspector as the Acquisition Officer, and on the appointed day, the said Officer took over possession of the appellant and all its assets, records and account books.
The appellant then appointed the liquidator as its Accredited Representative for the purposes of the Act in order to claim compensation under the Act.
The respondent then paid over to the appellant Rs. 6 lakhs on the 24th October, 1952 and Rs. 2,34,387 1 0 on the 5th July, 1953, as compensation.
According to the appellant , Rs. 98,876 15 0 still remained to be paid to it by way of compensation under the Act, whereas the respondent suggested that only Rs. 6000/was the balance due to the appellant.
That is how the appellant undertaking went into possession of 751 the respondent and the appellant was paid partial compensation.
It appears that owners of some of the electrical undertakings in Madras which had been taken over by the respondent in accordant e with the provisions of s.4(1) of the 1940 Act, filed writ petitions in the High Court of Madras impugning the validity of the said Act.
These writ petitions however, failed and by its judgment in Narasaraopeta Electric Corporation Ltd. vs State of Madras(1) the Madras High Court upheld the validity of the impugned Act in so far as it related to the licensees other than municipalities.
The said licenses then moved this Court and their appeal succeeded.
By its decision in the Rajamundry Electric Supply Corporation Ltd. vs The State of Andhra (2), this Court held that the impugned Act of 1949 was ultra vires.
This decision was based on the ground that the Act was beyond the legislative competence of the Madras Legislature inasmuch as there was no entry in any of the three Lists of the Seventh schedule of the Government of India Act, 1935 relating to compulsory acquisition of any commercial or industrial undertaking.
This Court ohservel that although s.299(2) of the said Constitution Act contemplated a law authorising compulsory acquisition for public purposes of a commercial or industrial undertaking, a corresponding entry had not been included in any of the three Lists and so.
, the Madras Legislature was not Competent to pass the impugned Act.
This decision was pro nounced on the 10th February, 1954.
Meanwhile, the Constitution came into force on the 26th January, 1950, and the position of the legislative competence of the Madras Legislature in respect of the compulsory acquisition of commercial or industrial undertakings for public purposes has been materially altered.
Entry 36 in List 11 of (1) (2) ; 752 the Seventh Schedule to the Constitution refers to acquisition or requisitioning of property, except for the purposes of the Union, subject to the provisions of entry 42 of List 111, whereas entry 42 of List III deals with the principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to 'De given.
That is how the two entries read at the relevant time.
After the decision of this Court was pronounced in the case of Rajamundry Electric Supply Corpn.
Ltd. (1), the Madras Legislature passed the Act and it received the assent of the President on the 9th October, 1954, and was published in the Government Gazette on the 13th October, 1954.
The Act incorporated the main provisions of the earlier Act of 1949 and purported to validate action taken under the said earlier Act.
After the Act was passed, the respondent issued a new Government Order No. 4388 on the 14th December, 1954, appointed the Chief Electrical Inspector to be the Acquisition Officer of the appellant concern for purposes of the Act.
As a result of this order, the appellant undertaking which had been taken over by the respondent on the 21st September, 1951, continued, to be in the possession of the respondent.
It is under these circumstances that the appellant filed its writ petition No. 326 of 1955 on the 26th April, 1955.
In its writ petition, the appellant alleged that to the extent to which the Act purports to validate acts done under the earlier Act of 1949, it is ultra vires, ineffectual and inoperative.
It was further urged that the three bases of compensation as laip (1) , 753 down by the Act are inconsistent with the requirements of article 31 of the Constitution and so, the operative provisions of the Act are unconstitutional.
On these grounds, the appellant prayed for a writ of Certiorari or any other appropriate writ, or order or direction calling for the records relating to G.O. Ms. No. 2052 issued on the 17th May 1951 and quashing the same.
Later, the appellant filed an other writ petition No. 107 of 1956 on the 31st January, 1956, and it added a prayer that a writ of Mandamus or any other writ, or order, or direction should be issued directing the respondent to restore possession of the appellant undertaking with all its assets along with masne profits from 21st September, 1951 or pay the market value of the said undertaking as on 21st September 1951 and interest thereon @ 6 per cent.
per annum, and to direct payment of costs and pass such other orders as may be appropriate and just in the circumstances of the case.
The claim thus made by the appellant was denied by the respondent.
The respondent 's case was that the Act is valid and s.24 which operates retrospectively has validly and effectively validated actions taken under the earlier Act, with the result that the possession of the appellant undertaking which was taken on the 21st September, 1951, must be deemed to have been taken under the provisions of the Act and so the claim made by the appellant either for a writ of certiorari or mandamus could not be granted It was also urged that it would not be open to the appellant to claim possession of the undertaking or to ask for mesne profits in writ proceedings.
Mr. Justice Rajagopalan who beard the two writ petitions, rejected the contentions raised by the appellant and dismissed the said petitions.
He held that having regard to the fact that the 754 appellant had accepted compensation under the earlier Act, no real relief could be granted to it even if its contention that section 34 of the Act was invalid in uphold.
In other words, the learned Judge took the view that even if the challenge made by the appellant to the validity of section 24 was found to be justified, in the present writ proceedings he would not be prepared to grant it the relief either of possession or of mesne profits.
Even so, the learned Judge proceeded to examine the several points urged by the appellant in support of its contention that section 24 was invalid, and rejected them.
In his opinion, the Act was valid and section 24 being retrospective in operation, validated the actions taken by the respondent under the earlier Act.
The argument that the Compensation awardable under the Act was inconsistent with article 31(1) and 31(2) was not accepted, inter alia, on the ground that so material had been placed before the Court on which the appellant 's plea could be sus tained.
The learned Judge has also recorded his conclusions on some other points urged before him, but it is unnecessary y to refer to them.
After this decision was pronounced, the appellant moved the learned Judge for a certificate under article 132(1) of the Constitution and it is with the certificate thus granted to it under the said Article that the present appeals have been brought to this Court.
The first point which Mr. Nambiar has raised before us on behalf of the appellant is that section 34 which purports to validate action taken under the earlier Act is, in law, ineffective to sustain the order issued by the respondent on the 17th May, 1951.
It would be recalled that by this order, the respondent obtained possession of the appellant undertaking for the first time under the relevant provisions of the earlier Act.
The argument is that there is no specific or express provision in the Act which makes the Act retrospective and no, s 24 755 even if it is valid, is ineffective for the purpose of sustaining the impugned order by which possession of the appellant concern was obtained by the respondent.
The impugned order had recited that the appellant concern shall west in the Government on the 21st September, 1951, and it directed that under section 4(2) of the earlier Act the said order shall be published in the Gazette.
Under the said order a further direction had been issued appointing the Chief Electrical Inspector to the respondent to be the Acquisition Officer, and the appellant was requested to take action for the appointment of an accredited respresentative in accordance with section 8 of the earlier Act and to submit the inventories and all particulars required under 'section 17 of the said Act.
Mr. Nambiar contends that this order amounts to a notification which must be held to be a law under article 13 of the Constitution.
For the purpose of the present appeals, we will assume that the said order is notification amounts to a law under article 13.
Mr. Nambiar further contends that this notification was invalid for two reasons; it was invalid because it had been issued under the Provisions of an Act which was void as being beyond the legislative competence of the Madras Legislature, and it was void for the additional reason that before it was issued, the Constitution of India had come into force and it offended against the provisions of article 31 of the Constitution, and so, article 13(2) applied.
Section 24 of the Act, no doubt, purported or attempted to validate this notification, but the said attempt has failed because the Act being prospective, section 24 cannot have retrospective operation.
That, in substance, is the first contention raised before us.
Before dealing with this argument, it would be necessary to examine the broad features of the Act and understand its general scheme.
The Act was passed because the Madras Legislature thought 756 it expedient to provide for the acquisition of under takings other than those belonging to and under the control of the State Electricity Board constituted under section 5 of the in the State of Madras engaged in the business of supplying electricity to the public.
It is with that object that appropriate provisions have been made by the Act to provide for the acquisition of undertakings and to lay down the principles for paying compensation for them.
It is quite clear that the scheme of the Act was to bring within the purview of its material provisions under ' takings in respect of which no action bad been taken under the earlier act and those in respect of which action had been so taken.
In fact, as we will presently point out, several provisions made by the Act clearly referred to both types of undertakings and leave Do room for doubt that both types of undertakings are intended to be governed by it.
The definition of an 'accredited representative ' prescribed by section 2(b) shows that the accredited representative means the representative appointed or deemed to have been appointed under section 7.
Similarly, section 2(j) which defines a licensee provides that in relation to an undertaking taken over or an undertaking which has vested in the Government under section 4, it shall be the person who was the licensee at the time when the undertaking was taken over or vested is the Government as the case may be, or his successor in interest.
Section 2 (e) defines an undertaking taken over as meaning an undertaking taken over by the Government after the 1st January, 1951 and before the commencement of this Act.
The ,vesting date ' under section 2 (m) means in relation to an undertaking, the date fixed under section 4 (1) as the date on which the undertaking shall vest in the Government or in the case of an undertaking taken over, the date on which it was taken over.
These 757 definitions thus clearly point out that the Act was intended to apply to undertakings of which possession would be taken after the Act was passed as well as undertakings of which possession had already been taken under the relevant provisions of the earlier Act.
Section 3 which deals with the application of the Act, provides that it shall apply to all undertakings of licensees including : (a) undertakings in respect of which notice for compulsory purchase has been served under section 7 of the Electricity Act, such undertakings not having been taken over before the commencement of this Act; and (b) undertakings taken over.
Similarly, section 4 which gives powers to the respondent to take over any undertaking clearly" says that that 'power can be exercised in respect of any 'undertaking which had already not been taken over.
In dealing with the appointment of sole representative, section 7, sub sections
(3) and (5) bring out the same distinction between undertakings already taken over and those which had yet to be taken over.
The same distinction is equally clearly brought out in section 10 (3), 11 sub s,(2), (5) and (1 1), and section 14 (3).
It is thus clear that the Act, in terms, is intended to apply to undertakings of which possession had already been taken, and that obviously means that its material and operative provisions are retrospective.
Actions taken under the provisions of the earlier Act are deemed to have been taken under the provisions of the Act and possession taken under the said earlier provisions is deemed to have been taken under the relevant provisions of the Act.
This retrospective operation of the material provisions of the Act is thus writ large in all the relevant provisions and is an essential part of the scheme of the Act.
Therefore, Mr. Nambiar is not right when he assumes that the rest of the Act is intended to be prospective and so, section 24 should be construed 758 in the light of the said prospective character of the Act.
On the contrary, in construing section 24, we have to bear in mind the fact that the Act is retrospective in operation and is intended to bring within the scope of its material provisions undertakings of which possession had already been taken.
Let us then construe s.24 and decide whether it serves to validate the impugned notification issued by the respondent on the 21st September, 1951.
Section 24 reads thus: "Orders made, decisions or directions given, notifications issued, proceedings taken and acts of things done, in relation to any under taking taken ever, if they would have been validly made, given, issued, taken or done, had the Madras Electricity Supply Undertakings (Acquisition) Act,, 1949 (Madras Act XLIII of 1949), and the rules made thereunder been in force on the date on which the said orders, decisions or directions, notifications, proceeding, acts or things were made given, issued, taken or done are hereby declared to have been validly made, given, issued, taken or done, as the case may be, except to the extent to which the said orders, decisions, directions, notifications, proceedings, acts or things are repugnant to the provisions of this Acts.
" The first part of the section deals, inter alia", with notifications which have been validly issued under the relevant provisions of the earlier Act.
and it means that if the earliar Act had been valid at the relevant time; it ought to appear that the notifications in question could have been and had.
in fact been made properly under the said Act.
In other words, before any notification can claim the benefit of section 24, it must be shown that it was issued properly under the relevant provisions of the earlier Act, 759 assuming that the said provisions were themselves valid and in force at that time.
The second part of the section provides that the notifications covered by the first part are declared by this Act to have been validly issued; the expression "hereby declared" clearly means "declared by this Act" and that shows that the notifications covered by the first part would be treated as issued under the relevant provisions of the Act and would be treated as validly issued under the said provisions.
The third part of the section provides that the statutory declaration about the validly of the issue of the notification would be subject to this exception that the said notification should not be inconsistent with or repugnant to the provisions of the Act.
In other words, the effect of this section is that if a notification had, been issued properly under the provisions of the earlier Act and its validity could not have been impeached if the said provisions were themselves valid, it would be deemed to have been validly issued under the provisions of the Act, provided, of course, it is not inconsistent with the other provisions of the Act.
The section is not very happily worded, but on its fair and reasonable construction, there can be no doubt about its meaning or effect.
It is a saving and validating provision and it clearly intends to validate actions taken under the relevant provisions of the earlier Act which was invalid from the start. ' The fact that section 24 does not use the usual phraseology that the notifications issued under the earlier Act shall be deemed to have been issued under the Act, does not alter the position that the second part of the section has and is intended to have the same effect.
No doubt, Mr. Nambiar suggested that section 24 does not seem to validate actions taken under the earlier Act on the basis that the 'earlier Act was void and honest and in support of this argument, he ralies on the 760 fact that the notification following under the first part of section 24 are referred to as validly made and the earlier Act and the rules made thereunder are assumed to have been in force on the date on which the said notification was issued.
He also relies on the provisions of section 25 which purports to repeal the said Act and that, no doubt, gives room for the argument that the Legislature did not recognise that the said Act was nonest and dead right up from the start.
It is not easy to understand the genesis of section 25 and the purpose which it is intended to achieve.
The only explanation given by Mr. Ganpati Aiyer on behalf of respondent is that since the earlier Act was in fact on the statute book, the legislature may have thought that for the sake of form, it may have to be repealed formally and so, section 25 was enacted.
But even if the enactment of the said section be held to be superfluous or unnecessary, that cannot assist the appellant in the construction of section 24.
We have no doubt that section 24 was intended to validate actions taken under the earlier Act and on its fair and reasonable construction, it must be held that the intention has been carried out by the legislature by enacting the said section.
Therefore, the argument that section 24, even if valid, cannot effectively validate the impugned notification, cannot succeed.
Mr. Nambiar then contends that the impugned notification is invalid and inoperative because it contravenes article 31 (1) of the Constitution.
Article 31 (1) provides that no person shall be deprived of his property save by authority of law.
It is urged that this provision postulates the existence of an antecedent law, before a citizen is deprived of his property.
The notification was issued on the assumption that there was an antecedent law, viz., the earlier Act of 1949 ; but since the said Act was nonest, the notification is not supported by the authority of any pre existing law 761 and so, it must be held to be invalid and ineffective.
In our opinion, this argument is not wellfounded.
If the Act is retrospective in operation and section 24 has been enacted for the purpose of retrospectively validating actions taken under the provisions of the earlier Act, it must follow by the very retrospective operation of the relevant provisions that at the time when the impugned notification was issued, these provisions were in existence.
That is the plain and obvious effect of the retrospective operation of the statute.
Therefore in considering whether article 31(1) has been complied with or Dot, we must assume that before the notification was issued, the relevant provisions of the Act were in existence and so, article 31(1) must be held to have been complied with in that sense.
In this connection, it would be relevant to refer to the provisions of article 20 (1).
because the said provisions illustrate the point that where the ' Constitution desired to prevent the retrospective operations of any law, it has adopted suitable Phraseology to carry out that object.
article 30 (1) provides that no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the , lime of the commission of the offence.
By using the expression ",law in force" in both the parts of article 20 (1), the Constitution has clearly indicated that even if a criminal law was enacted by any legislature retrospectively, its retrospective operations would be controlled by article 30(1).
A law in force at the time postulates actual factual exis tence of the law at the relevant time and that excludes the retrospective application of any subsequent law.
article 31(1), on the other hand, does not use the expression ',law in force at the time".
It 762 merely says "by authority of law", and so if subsequent law passed by the legislature is retrospective in its operation would satisfy the requirement of Art 31 (1) and would validate the impugned notification in the present case.
Therefore, we are not satisfied that Mr. Nambiar is right in contending that the impugned notification is invalid for the reason that at the time when it was issued there was no law by whose authority it could be sustained.
That takes us to the larger issue raised by Mr. Nambiar in the present appeals.
He contends that the power of the legislature to make laws retrospective cannot validly be exercised so as to care the contravention of fundamental rights retrospectively.
His contention is that the earlier Act of 1949 being dead and non existent, the impugned notification contravened article 31(1) and this contravention of a fundamental right cannot be cured by the legislature by passing a subsequent law and making it retrospective.
In support of this argument, he has relied on the decision of this Court in Deep Chand vs The State of Uttar Pradesh (1).
In that case, one of the questions which arose for decision was whether the doctrine of eclipse applied to a law which was found to be invalid for the reason that it contravened the fundamental rights, and the majority decision held that it did not apply to such a law.
In feeling with a question as to the applicability of the doctrine of eclipse, a distinction was drawn between a law which was void either for want of legislative power at the time when it was passed, or because it contravened fundamental rights on the one hand, and the law which was valid when it was passed but subsequently became invalid because of supervening circumstances on the other.
In the latter case, the law was valid when it was passed and became invalid because a cloud was cast on its validity by supervening (1) (1959) Supp.
2 S.C.R. 8. 763 circumstances.
That being so, if the constitutional amendment subsequently made removes the cloud, the validity of the law is revived.
That is the effect of application of the doctrine of eclipse; but there can be no scope for the application of the said doctrine to a law which is void and nonest either for want of legislative competence or because it contravenes fundamental rights.
That, in substance, is the effect of the majority decision in Deep Chand 's case.
In the present appeals it is not disputed that the earlier Act of 1949 was dead and void from the start, and that no doubt, is consistent with the majority decision in Deep Chand 's case.
But the question as to whether the legislature can retrospectively validate actions taken under a void law did not arise for consideration in Deep Chand 's case.
The only point which was decided was that the removal of the cloud by a subsequent constitutional amendment will not automatically revive a law which was void from the start, but that obviously is not case before us.
What we are called upon to decide is the present appeals is whether or not it is competent to the legislature to pass a law retrospectively to validate actions taken under a void Act, and in deciding this question, Deep Chand 's case would not afford ue any assistance.
Mr. Nambiar did not dispute the position that in enacting laws in respect of topics covered by appropriate entries in the relevant Lists of the 7th Schedule to the Constitution, the legislatures would be competent to make the provisions of the laws passed by them retrospective.
He, however, seeks to import a limitation on this legislative power where the contravention of fundamental rights is involved.
No authority has been cited in support of the plea that the legislative power of the legislature is subject to any such limitation even where the contravention of fundamental rights is involved.
On principle, it is difficult to appreciate how such 764 a limitation on the legislative power can be effectively pleaded.
If a law is invalid for the reason that it has been passed by a legislature without legislative competence, and action is taken under its provisions, the said action can be validated by a subsequent law passed by the same legislature after it is clothed with the necessary legislative power.
This position is not disputed.
If the legislature can by retrospective legislation cure the invalidity in actions taken in pursuance of laws which were void for want of legislative competence and can validate such action by appropriate provisions, it is difficult to see why the same power cannot be equally effectively exercised by the legislature in validating actions taken under law which are void for the reason that they contravened fundamental rights.
As has been pointed out by the majority decision in Deep Chand 's case, the infirmity proceeding from lack of legislative competence as well as the infirmity proceeding from the contravention of fundamental rights lead to the same result and that is that the offending legislation is void and honest.
That being so, if the legislature can validate actions taken under one class of void legislation, there is no reason why it cannot exercise its legislative power to validate actions taken under the other class of void legislation.
We are, therefore, not prepared to accept 'Jr. Nambiar 's contention that where the contravention of fundamental rights is concerned, the legislature cannot pass a law retrospectively validate actions taken under a law which was void because it contravened fundamental rights.
In this connection, it may be useful to refer to some decisions which deal with the legislature 's power to pass retrospective laws.
in the United Provinces vs Mst.
Atiqabegum (1) Gwyer C.J. observed that "the validation of doubtful executive acts is (1) 136. 765 not so unusual or extraordinary a thing that little surprise would be felt if Parliament had overlooked it, and it would take a great deal to persuade me that the legislative power for the purpose has been denied to every Legislature, including the Central or Federal Legislature, in India.
" It is true, ",he added," that validation of executive orders or any entry even remotedly analogous to it is not to be found in any of the three lists; but I am clear that legislation for that purpose must necessarily be regarded as subsidiary or ancillary to the power of legislating on the particular subjects in respect of which the executive orders may have been issued." The same principle was stated by Speans C. J. in Piare Dusadh vs The King Emperor.(1) This question has been considered by this Court in several decisions to some of which we will now briefly refer.
In the Union of India vs Madan Gopal Kabra this Court had occasion to consider the validity of certain amendments made in the Income Tax Act by section 3 of the Finance Act (XXV of 1950).
These amendments had the effect of applying retrospectively the charging sections of the Taxing Act and their validity was impeached.
In rejecting the argument that the levy authorised to be imposed by the amendments was ultra vires, Patanjali Sastri, C. J., observed that "while it is true that the Constitution has no retrospective operation, except where a different intention clearly appears, it is not correct to say that in bringing into existence new Legislatures and conferring on them certain powers of legislation, the Constitution operated retrospectively.
The legislative powers conferred upon Parliament under Articles 245 and 246 read with List I of the, Seventh Schedule could obviously be exercised only after (1) , 105.
(2) ; , 554.
766 the Constitution came into force and no retrospective operation of the Constitution is involved in the conferment of these powers.
But it is a different thing to say that Parliament in exercising, the powers thus acquired is precluded from making a retrospective law," and so, the conclusion was that Parliament was content to make a law imposing a tax on the income of any year prior to the commencement of the Constitution.
In M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh (1), the validity of the Sales Tax laws Validation Act, 1956 (7 of 1956) was questioned and the majority of the Court held that the said Act was in substance one lifting the ban on taxation of inter State sales and within the authority conferred on the Parliament under article 286(2) and further that under that provision, it was competent to the Parliament to enact a law with retrospective operation.
This conclusion also proceeded on the basis that the Power of a legislature to pass a law included a power to pass it retrospectively, and so, the argument that the impugned Act was ban on the ground that it was retrospective in operation was rejected.
The same principle has been again enunciated by this Court in M/s. J. K. Jute Mills Co. Ltd. vs State of Uttar Pradesh (2).
it has been held in this case that the power of the legislature to enact a reference to a topic entrusted to it is unqualified, subject only to any limitation imposed by the Constitution in the exercise of such a power, and that I it would be competent for the Legislature to enact a law which is either prospective or retrospective, vide also Mt. Jadao Bahuji vs The Municipal Committee, Khandwa, Jadab Singh vs The Himanchal Pradesh Administration and Raghubar Dayal Jai Prakash vs The Union of India(5).
Therefore, there is no doubt about (2) (1962) 2 S C.R. I. (3) ; (4) (5) ; 767 the competence of the Legislature to enact a law and 'make it retrospective in operation in regard to topics included within the relevant Schedules of the Constitution.
Our conclusion, therefore, is that the appellant 's contention that it was beyond the competence of the Madras Legislature to make the Act retrospective so as to validate the impugned notification, cannot be accepted.
That takes us to the last argument raised by Mr. Nambiar before us.
He contends that section 5 of the Act which provides for the payment of compensation to the licensees whose undertakings are taken over, is invalid because it is inconsistent with article 31(2).
It is common ground that the provisions of article 31(2) with which we are concerned in the present appeals are those as they stood before the 4th Constitutional Amendment came into force.
article 31(2) then provided, enter alia, that no property shall be compulsorily acquired save for the public purpose and save by authority of law which provides for compensation for the property so acquired and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given.
In support of his argument, Mr. Nambiar has relied on the decision of this Court in the State of West Bengal vs Mrs. Bala Banerjee (1).
In dealing with the question about the scope and effect of the provisions of article 31(2) in so far as they referred to the payment of compensation, this Court observed that though entry 42 of List III conferred on the Legislature the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner of the property acquired, article 31 (2) required that such principles must ensure that what is determined as (1) ; 768 payable must be "compensation ', that is, a just equivalent of what the owner has been deprived of.
That is why in considering the validity of any statute is the light of article 31(2) it would be open to the Court to enquire whether all the elements which make up the true value of the property acquired have been taken into account in lying down the principles for determining compensation.
It appears that section 8 of the West Bengal Land Development and Planning Act, 1948 (XXI of 1948) which was impugned in that case limited the amount of compensation so as to not to exceed the market value of the land on December, 31, 1946, no matter when the land was acquired.
This part of section 8 was struck down as invalid because it was hold that in fixing the market value on December 31, 1946, as the ceiling on Compensation, the legislature had patently ignored the fact that prices of lands had considerably risen after the said date and that tended to show that the compensation awardable under the said provision could not be said to be just equivalent of what the owner would be deprived of.
Mr. Nambiar, therefore, contends that since section 5 does not authorise the payment of compensation which can be treated as just equivalent of the property which would be taken over under its provisions, it must be struck down as inconsistent with article 31 (2).
It may be conceded that the 4th Constitution amendment which substantially changed the provisions of article 31 (2) would be inapplicable in the present case, and that the High Court was in error in making a contrary assumption.
In support of this argument, Mr. Nambiar has also referred us to section 7A of the (No. 9 of 1910) as it then stood.
Section 7A (2) of the said Act lays down 769 that in purchasing undertakings under section 7A (1), the value of such lands, buildings, works, materials, and plant shall be deemed to be their market E value at the time of purchase, due regard being had to the nature and condition for the time being of such lands, buildings, materials and plant and the state of repair thereof and to the circums tance that they are in such position as to be ready for immediate working and to the suitability of the same for the purpose of the undertaking.
The proviso to a. 7A lays down that to the value determined under sub section
(2) shall be added such percentage, if any, not exceeding twenty per centum of that value as may be specified in the license on account of compulsory purchase.
Mr. Nambiar suggests that the provisions made in section 7A (2) and the proviso to a. 7A of this Act give a fair picture of what could be regarded as a reasonable compensation that should be paid to the undertakings before they are acquired.
Before dealing with this argument, it is necessary to examine the scheme of s.5 which provides for the compensation to be paid to the licensees.
Section 5 provides that the compensation payable to a licensee on whom an order has been served under s.4 or whose undertaking has been taken over before the commencement of the act, shall be determined under any one of the Bases A, B and C specified by the section as may be chosen under a. 8.
Then follow detailed provisions about the three Bases A, B and C. Under Basis A, the compensation payable shall be an amount equal to twenty times the average not annual profit of the undertaking during a period of five consecutive account years immediately preceding the vesting date.
The explanation makes it clear that the net annual profit shall be determined in the manner laid down in Part A or Part B, as the case may be, of Sch. 1.
It is also clear that this basis shall 770 not apply to an undertaking which has not been supplying electricity for five consecutive account years immediately preceding the vesting date.
Under Basis B, the compensation payable shall be the aggregate value of all the shares constituting the share capital of the undertaking, reckoned as indicated in (a), (b), (c), and (d) 'thereof.
These respective clauses have reference to the dates on or before which the shares of the undertaking have been issued, for instance, cl.
(a) provides that in the case of shares issued on or before the 31st March, 1946, the value of each share shall be reckoned at its average value as arrived at from the quotations for the shares as given in the official list of the Madras share Market on the 15th day of each month and where such market was closed on that day, the quotations on the next working day during the period of there years commencing on the 1st April, 1946, and ending on the 31st March, 1949.
Under clause (b) it is provided that in the case of shares issued on or before the 31st March, 1946, if clause (a) does not apply but there have been bonafide transfers in each of the different classes of shares in every one of the three years aforesaid, and such transfers have been duly registered in the appropriate books of the licensee, the value of each share of each such class shall be reckoned at one third of the aggregate of its three annual average values for the three years, the average value for each year being determined ' from the transactions in that year.
It is not necessary to set out clauses (c) and (d).
The explanation to this Basis provides that it shall not apply unless clause (a) or clause (b) is applicable.
Under Basis C, the compensation payable shall be the aggregate value of the amounts specified in cls.
(i) to (viii).
These clauses refer respectively to the book Value of all completed works in beneficial 771 use pertaining to the undertaking and handed over to the Government less depreciation as specified; the book value of all works in progress: the book value of all other fixed assets; the book value of all other fixed assets; the book value of all plant and equipment; the book value of all intangible assets to the extent such value has not been written off in the books of the licensee; the amount due from consumers as specified in cl.
(vii); and any amount paid actually by the licensee in respect of every contract referred to in section 6 (2) (a) (iii).
Where basis C is applied, an additional sum by way of solatium.
is required to be paid as specified in cls.
(a) and (b) to cl.
The explanation to Basis C explains how the book value of any fixed assets has to be ascertained.
That, in broad outlines, is the nature of the three Bases prescribed by section 5 for assessing the compensation to be paid to a licensee.
It is true that in none of the three bases does the Legislature refer to the market value of the undertaking, but that itself cannot justify the argument that what is intended to be paid by way of compensation must necessarily mean much less than the market value.
The failure of the legislature to refer to the fair market value cannot, in our opinion, be regarded as conclusive or even presumptive evidence of the fact that what is intended to be paid under section 5 does not amount to a just equivalent of the undertaking taken over.
After all, in considering the question as to whether compensation payable under one or the other of the Bases amounts to just equivalent.
We must try to assess what would be payable under the said basis.
On this point, the real difficulty,, in the way of the appellant is that it has produced no material before the Court on which its plea can be sustained.
As the High Court has pointed out, in the absence of any satisfactory material it would be difficult 772 for the Court to come to any definite conclusion on the question as to whether just equivalent is provided for by section 5 or not.
Mr. Nambiar, no doubt, attempted to suggest that in the Madras High Court oral evidence is not allowed to ' be adduced on questions of fact in writ proceedings.
That may be so; but it is quite clear that the affidavit made by the appellant in support of its petition could have easily set forth all relevant facts showing that the compensation payable under section 5 was so inadequate that it could not be regarded as a just equivalent of the property acquired.
In the absence of any material, we do not see how we can assess the validity of Mr. Nambiar 's contention that section 5 contravenes article 31 (2) of the Constitution.
It is true that in its petition, the appellant made a general allegation that the market value of its assets at the relevant time would be Rs. 16,49,350/ , but no satisfactory material was placed in the form of proper affidavits made by competent persons to show how this market value was deter mined.
In fact, the appellant did not state before the High Court and was unable to state even before this Court what principles should have been laid down by the legislature in determining a just equivalent for the undertaking taken over by the respondent.
The general argument that s.5 does not provide for the payment of market value cannot, in the absence of material, help the appellant at all in challenging the validity of section 5.
In this connection, it must be borne in mind that 8 of the Act leaves it to the opinion of the licensee to intimate to the Government in writing which basis of compensation it wants to be adopted, and so, it is not as if the choice of the basis is left to the Government in every case.
Take, for instance, Basis A; the compensation payable under this Basis is: an amount equal to twenty times the aver ag 773 net annual profit of the undertaking during a period of five consecutive account years preceding the vesting date.
Now, in determining the fairness A or otherwise of the compensation awardable under basis A, it cannot be ignored that what is acquired is an undertaking which is a going commercial concern and so, it would, prima facie, be inappropriate to attempt to determine its value safely or mainly by reference to the buildings it owns or the machin ery it works.
It would also be relevant to remember that undertakings of this kind cannot claim a general market in the sense in which lands can claim it.
That being so, if the legislature thought that giving the undertaking twenty times the average not annual profit would amount to a just equivalent, prima facie it would be difficult to hold that the basis adopted by the legislature is such as could be held to be inconsistent with article 31 (2).
The Basis B may or may not be satisfactory, but Basis C may prima facie be satisfactory in respect of new undertaking and in any case, the option in most cases would be with the undertaking itself.
Therefore, in the absence of any material, we are unable to hold that on looking at the scheme adopted by section 5 by itself, the appellant 's argument that what is offered by way of compensation is not a just equivalent, can be accepted.
It may be that in some oases basis B may work hardship and conceivably even basis A or basis C may not be as satisfactory as it should be; but, when a party challenges the validity of a statutory provision like section 5, it is necessary that the party must adduce satisfactory and sufficient material before the Court on which it wants the Court to hold that the compensation which would be paid under everyone of the three Bases under the inpugned statutory provision does not amount to a just equivalent.
Looking merely at the scheme of the section itself, it is impossible to arrive at such a conclusion.
That is the view 774 taken by the Madras High Court and we see no reason to differ from it.
Therefore, the challenge to the validity of the Act on the ground that its important provisions contained in section 5 offend against article 31 (2) must be rejected.
That being our view, we must held that the High Court was right in rejecting both the writ petitions filed by the appellant.
On that view, it is, unnecessary to consider whether appellant would have been entitled to get the relief of possession or mesne profits which it purported to claim by its two petitions.
The appeals accordingly fail and are dismissed with costs.
One set of hearing fees.
Appeals dismissed.

summary/full:
By an order dated May 17, 1951, the appellant undertaking vested in the respondent from September 21, 1951, under the provisions of section 4(1) of the Madras Electricity apply Undertakings Act 1949.
Thereafter the respondent appointed the Chief Electrical Adviser as the Acquisition Officer who took over possession on the appointed date, and a part of the compensation payable under the Act was paid.
The validity of the said Act was challenged by some other electrical undertakings in Madras and in Raja Chaudhry Electric Supply Corporation Ltd. vs State of Andhra Pradesh, the Supreme Court held that the Act of 1 949 was ultra vire8.
After the said decision was pronounced, the Aadras Legislature passed the impugned Act, the Madras Act ' 29 of 1954.
The Act incorporated the main provisions of earlier Act of 1949 and purported the validate action taken under the said earlier Act.
A new Government order was issued and the Chief Electrical Adviser was appointed the Acquisition Officer of the appellant concerned.
As a result of this order, the appellant undertaking which had been taken over by the respondent earlier in 1951, continued to be in the possession of the Respondent.
The appellant filed two writ petitions and alleged that to the extent to which the Act purported to validate acts done under the earlier Act of 1949 it was ultra vires, ineffectual and inoperative, It was further urged that the three basis of compensation laid down by the Act were inconsistent with the requirements of ' 748 article 31 of the Constitution, and so; the operative provisons of the Act were unconstitutional.
The question was also raised whether or not it was competent to the Legislature to pass a law restrospectively to, validate action taken under a void Act.
Held, that it was within the competence of the Madras Legislature to enact a law and make it retrospective in operation.
The Madras Act, 29 of ' 1954, in terms is intended to apply to undertakings of which possession had already been taken, and that obviously means that its material and opera tive provisions are retrospective.
The effect of section 24 is that if a notification had been issued properly under the provisions of the earlier Act and validity could not have been impeached if the said provisions were themselves valid, it would be deemed to have been validly issued under the provisions of the Act, provided, of course it is not inconsistent with the other provisions of the Act.
It is a saving and validating provision and it clearly intends to validate action taken under the relevant provisions of the earlier Act which was invalid from the start.
Held, further, that article 31(1), of the Constitution, unlike Art;, 20(1), does not use the expression "law in force at the time it merely says "by authority of law" and so, if a subsequent law passed by the Legislature is retrospective in its operation, it would satisfy the requirement of article 31(1) and would validate the impugned notification in the present case.
The Legislature can pass a law retrospectively validating action taken under a law which was void because it contravened fundamental rights, If the Legislature can by retrospective legislation cure the invalidity of action taken in pursuance of laws which were void for want of legislative competance and can validate such action by appropriate provisions, the same power can be equally effectively exercised by the Legislature for validating actions taken under laws which are void for the reason that they contravened fundamental rights.
Held, also, that the failure of the Legislature to refer to the fair market value cannot, be regarded as conclusive or even presumptive evidence of the fact that what is intended to be paid under section 5 does not amount to a just equivalent of the undertaking taken over.
After all, in considering the 749 question as to whether compensation payable under one or the other of the bases amounts to a just equivalent, the court must try to assess what would be payable on the said basis of market value.
It may be that in some basis B may work hardship and conceivably evert basis A or basis C may not be as satis factory as it should be ; but when a party challenges the validity of a statutory provisions like section 5, it is necessary that the party must adduce satisfactory and sufficient material before the Court on which it wants the court to hold that the compensation which would be paid under everyone of the three bases under the impugned statutory provisions does not amount to a just equivalent.
Looking merely at the scheme of the section itself, it is impossible to arrive at such a conclusion.
Narasaraopeta Electric Corporation Ltd. vs State Of Madras, , Rajamundru Electric Supply Corporation Ltd. vs State of Andhra, ; , and Deep Chand vs State of U. P., (1959) Supp.
2 section C. R. 8, referred to.