judgement:
Civil Appeal No. 3141 of 1986 829 From the Judgment and Order dated 6.3.1986 of the Central Administrative Tribunal, Madras in Transferred Application No. 479 of 1986.
G. Ramaswamy, Additional Solicitor General, P. Parmeshwaran and R.P. Srivastava for the Appellants.
Harish N. Salve, Rajiv K. Garg, N.D. Garg and Mr. N. Safaya for the Respondent.
The Judgment of the Court was delivered by THAKKAR, J.
'Fails ' in one subject, but 'passes ' the examination.
It is not a tounge in the check remark, for, passing an examination does not mean passing or securing the minimum passing marks in each subject or item of examination provided the candidate secures the minimum passing marks in aggregate, and he is entitled to be declared as having passed the examination according to the Central Administrative Tribunal (Tribunal hereafter), Hyderabad, which has upheld the aforesaid proposition canvassed by the respondent.
The validity of this view is in focus before this Court in the present appeal by Special Leave.
Rule 2 in Appendix III of the Telegraph Engineering Service (Group 'B ') Recruitment Rules, 1981, for limited Departmental Qualifying Examination, in the context of which the controversy has arisen.
reads thus: "2.
Limited Departmental Competitive Examination: (i)(a) Advanced Technical paper .
100 marks General (b) Advanced Technical Paper .
100 marks Special.
(c) General Knowledge and .
50 marks Current Affairs (d) Assessment of .
75 marks Confidential Reports (ii) (a) The minimum pass marks in the examination shall be 50% for general candidates and 45% for Scheduled Castes and Scheduled Tribe candidates.
" 830 This rule was interpreted by the concerned Department as requiring the candidates to secure 50% minimum pass marks for the general candidates and 45% minimum pass marks for Scheduled Castes and Scheduled Tribes in "each" of the four subjects or items.
The Tribunal has taken the view that the Department was wrong in so interpreting the Rule and has formed the opinion that on a true interpretation, the rule requirement as regards securing minimum pass marks in the examination by the candidates concerned is referable to "aggregate" marks and not to each of the four subjects or items of the examination.
It has been overlooked by the Tribunal that the 'Rule ' does not employ the expression 'aggregate ', and that it is impossible to inject the said word in the rule in the disguise of interpretation, as it would lead to absurd results.
An illustration will make the 'obvious ' point 'more obvious '.
The illustration might be viewed in the scenario of a medical degree examination.
Can one who secures zero, say in surgery, but secures high marks in the other papers, so that the minimum aggregate standard is attained, be declared to have passed the examination? Such an interpretation would result in havoc and have catastrophic consequences.
Examining the examination rule in the present context, the nihilist result is equally conspicuous.
Say, a candidate secures zero in the first paper of 'Advanced Technology (general), or second paper of Advanced Technology (Special), but secures full marks in the rest of the subjects (or items).
He would be securing (0 + 100 + 50 + 75) or (100 + 0 + 50 + 75) (= 225 i.e. 56.25%) minimum passing marks and would be entitled to be declared as having passed and having become entitled to the outflowing preferential treatment.
Similar would be the outcome also in a case where a candidate 's Confidential Record is bad and he earns no points in that item.
Such an interpretation would thus be self defeating and lead to absurd results, and accordingly, would be contrary to well established canons of construction, not to speak of a common sense oriented approach.
Since the rule does not specify a different passing standard for 'each ' subject, the prescribed minimum passing standard must be the yardstick to apply to each of the subjects or items.
Minimum must mean minimum in each, as much as, minimum in aggregate.
The Tribunal should not have therefore upset the decision of the concerned Department and imposed on the department the mistaken interpretation propounded by it.
In the result, the decision of the Tribunal must be reversed.
The appeal is, therefore, allowed accordingly.
There will be no order as to costs.
A.P.J. Appeal allowed.

summary/full:
Rule 2 in Appendix III of the Telegraph Engineering Service (Group 'B ') Recruitment Rules 1981 was interpreted by the appellant Department as requiring the candidates to secure 50% minimum pass marks for the general candidates and 45% minimum pass marks for the Scheduled Castes and the Scheduled Tribes in 'each ' of the four subjects or items.
On a challenge made by the respondent to this interpretation by the Department, the Administrative Tribunal took the view that the requirement as regards securing minimum pass marks in the examination by the candidates concerned is referable to 'aggregate ' and not to 'each ' of the four subjects or items of the examination.
Allowing the appeal of the Department, this Court, ^ HELD: 1.
The 'Rule ' does not employ the expression 'aggregate '.
Injection of the word 'aggregate ' in the Rule in the disguise of interpretation would be self defeating and lead to absurd results and accordingly would be contrary to well established canons of construction, not to speak of a common sense oriented approach.
[830E F] 2.
The interpretation propounded by the Tribunal would result in havoc and have a catastrophic consequencs.
[830D] 3.
Since the Rule does not specify a different passing standard for 'each ' subject, the prescribed minimum passing standard must be the yardstick to apply to each of the subjects or items.
Minimum must mean the minimum in 'each ', as much as, minimum in 'aggregate '.
[830F G]


judgement:
ition No. 3832 of 1978 (Under Article 32 of the Constitution of India) 1100 J. Ramamurthi for the Petitioner.
V.J. Francis for the Respondents.
The Judgment of the Court was delivered by KHALID, J.
The petitioner was a Laboratory Attendent in the University Intermediate College (now called Arts College), Trivandrum in the Collegiate Education Department.
He was deputed to the City Improvement Trust as per Government Order dated 24 10 61.
The period of deputation was two years from the date of the Order or from the date of his relief from the College.
He was relieved of his duties with effect from 30 10 61, by the Department of Collegiate Education.
His deputation period was extended for a further period of one year from 1 11 63 and for a further period of two years with effect from 1 11 64.
The extended period expired on 31 10 66.
In the last order extending the period of deputation, it was made clear that no further extension would be allowed.
During the deputation period he was promoted as Upper Division Clerk in the City Improvement Trust.
The Petitioner made a representation on 3 9 66, requesting the State Government to allow him to continue in the City Improvement Trust, terminating his lien in the Collegiate Education Department.
No orders were passed by the Directorate of Collegiate Education or by the Government on this representation.
The petitioner continued in the City Improvement Trust, on deputation.
Meanwhile the City Improvement Trust was merged with the Kerala State Housing Board, respondent No.3 herein.
While so, on 29 3 72, orders were passed terminating the lien of the petitioner in the Department of Collegiate Education in purported exercise of the powers contained in Rule 24 of the Kerala Service Rules.
A show cause notice was issued by the Director of Collegiate Education on 21 3 1973, asking the petitioner to submit his explanation against the proposed removal of his lien in that departament.
The petitioner submitted a representation dated 26 3 1973, stating that he was not at fault in not joining duty in the parent department and that he was retained in foreign service anticipating Government 's orders.
In view of the merger of the City Improvement Trust with the Kerala Housing Board, he was not interested in continuing on deputation.
He further requested that the period after 1 11 1966, may be treated as an exten 1101 sion of the deputation period.
The explanation was not accepted and orders were finally passed terminating the lien of the petitioner.
Hence this writ petition.
It is necessary to state a few facts to understand what happened after the petitioner 's deputation.
The petitioner thought that he was secure in the deputed service and that he would stand to gain therein if he continued there when compared to his parent department.
He had challenged the order passed by the Director of Collegiate Education terminating his lien by filing Original Petition No.3779 of 1973 in the Kerala High Court.
Earlier he had filed on Original Petition No.31 of 1973 in the same High Court against the State of Kerala and the Kerala State Housing Board when he was reverted from the post of Upper Division Clerk to that of Lower Division Clerk in the Housing Board, for not passing the Accounts Test.
He succeeded in this writ petition.
He appears to have been unduly elated over this success and allowed the original petition No.3779 of 1973 to be dismissed as not pressed.
The main ground why he did not press the original petition No.3779 of 1973 was that he had obtained a favourable order in the other original petition.
As ill luck would have it, the matter was taken in appeal by the State Housing Board and the Division Bench of the Kerala High Court reversed that Judgment.
Thus, the petitioner was victim of unfavourable circumstances and fluctuations in fortunes.
Normally we would have dismissed this writ petition on the short ground that the petitioner had invoked the jurisdiction of the High Court under Article 226 of the Constitution to get the order under challenge in this writ petition, to be quashed, and after invoking this jurisdiction had allowed the original petition, wherein the said challenge was made, to be dismissed as not pressed.
But, as indicated above, the petitioner at that time did not anticipate what was in store for him in future.
It was as per a Government order that he was deputed on foreign service.
It is true that when the deputation was extended, it was made clear that the deputation would expire on 31 10 1966, finally.
The petitioner was put on notice that there would not be any further extension.
There was some indifference on his part.
But, there was greater in action on the part of respondent also.
The petitioner had made a representation on 3 9 1966 to the respondents on which no orders were passed till 29 3 1972.
When the petitioner realised that his prospects were not bright in the Kerala State Housing Board as he anticipated 1102 earlier, he was left with no option but to press his case that the order terminating his lien was bad in law.
We do not think that the petitioner should be faulted for this in action, when we find that the respondents also contributed in a large measure to the unhappy state of affairs.
Rule 19(a) in part I, Chapter III of the Kerala Service Rules reads as follows: "An officer 's lien on a post may in no circumstances be terminated even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post.
" This rule mandates that an officer 's lien on a post shall not be terminated even with his consent if the consequence is to leave him without a lien or a suspended lien upon a permanent post.
The State of Kerala, The Director of Collegiate Education and the Kerala State Housing Board are parties to this writ petition.
None of these parties have filed counter affidavits.
We do not know the service conditions of the petitioner in the Housing Board.
We do not know whether he occupies a permanent post there or not.
Nor do we know whether he has a lien or a suspended lien in the Housing Board.
Without being apprised of these details, the order of termination of lien cannot be allowed to stand as it would work great injustice against the petitioner.
Rule 24 of the Kerala Service Rules is the next rule which is attracted in this case, which reads as follows: "Unless the Government, in view of the special circumstances of the case, otherwise determine, after five years ' continuous absence from duty, an officer shall be removed from service after following the procedure laid down in the Kerala Civil Services (Classification, Control and Appeal) Rules, 1960.
" This rule speaks of removal from service when an officer has been continuously absent from duty for five years.
This rule speaks of the existence of special circumstances which will enable the department concerned to save an officer from its vice.
This rule also speaks of the necessity to follow the procedure laid down in the Kerala Civil Services (Classification, Control and Appeal) Rules, 1960, for removal of an officer from service.
The assumption on the part of the department in this case is that the petitioner 's continuance in the service of 1103 the Housing Board constituted absence from duty.
We cannot subscribe to this view in the absence of compelling materials.
It was not a case of his absenting from duty after he was asked by the parent department to join it.
At no time was he asked to join duty in the parent department.
Without specific orders, the petitioner could not abandon the deputed foreign service and join the parent department.
There should be a clear finding of continuous absence from duty by the department to attract Rule 24.
The department also has to satisfy the Court whether the special circumstances of this case would not rescue the petitioner from the rigour of Rule 24.
It is also necessary for this Court to be satisfied that the procedure laid down in the Kerala Civil Services (Classification, Control and Appeal) Rules, 1960, is complied with.
The order terminating his lien is passed on the specious plea that his explanation is not satisfactory.
The order should have been more articulate in its content.
To sustain the order would virtually mean to deny the petitioner his service in the parent department and throwing him to the mercies of the Housing Board.
In this case, we are concerned more with consideration of justice than with mere technicalities of law.
The Petitioner has filed this writ petition as early as in 1978.
It would be unfair and unjust to treat the period after 31 10 1986, to be one of continuous absence from duty.
For an effective adjudication of the claim of the petitioner, his position in the deputed foreign service, the service conditions there, his position there, etc., will have to be considered in detail.
That has not been done.
Under these circumstances, we hold that the petitioner is entitled to succeed.
Accordingly, we quash the order No. B.5 38127/66 dated 29th May, 1973, issued by the Director of Collegiate Education, Trivandrum, terminating the lien of the petitioner herein and direct the second respondent to issue a fresh show cause notice, give the petitioner an opportunity to make his explanation had also an opportunity of being heard and pass orders strictly in compliance with Rule 19(a) and Rule 24 of the Kerala Service Rules and in accordance with law, if the second respondent still feels that his lien should be terminated.
N.V.K. Petition allowed.

dataset_name: IN-Abs

summary/full:
The petitioner a Laboratory Attendant in an Arts College under the Department of Collegiate Education was deputed to the City Improvement Trust, for a period of two years.
He was relieved of his duties with effect from 30.10.61, by the Department of Collegiate Education.
His deputation period was extended for a further period of one year from 1.11.63 and for a further period of two years with effect from 1.11.64.
In the last order extending the period of deputation it was made clear that no further extension beyond 31.10.66 would be allowed.
While the petitioner was on deputation he was promoted as Upper Division Clerk in the City Improvement Trust.
He made a representation on 3.9.66 requesting the State Government to allow him to continue in the City Improvement Trust, terminating his lien in the Collegiate Education Department.
No orders were passed by the Directorate of Collegiate Education or by the Government on this representation.
While the petitioner was continuing on deputation in the City Improvement Trust, the Trust was merged with the State Housing Board, respondent No.3.
On 29.3.72 orders were passed under Rule 24 of the Kerala Service Rules terminating the lien of the petitioner in the Department of Collegiate Education.
1099 A Show cause notice was issued by the Directorate of Collegiate Education on 21.3.73 asking the petitioner to submit his explanation against the proposed removal of his lien in that department.
The petitioner submitted a representation stating that he was not at fault in not joining duty in the parent department, and that he was retained in foreign service anticipating Government 's orders, and that he was not interested in continuing on deputation, and that the period after 1.11.66 may be treated as an extension of the deputation period.
The explanation was not accepted and orders were passed terminating the lien of the petitioner.
The petitioner assailed the aforesaid order terminating his lien in a Writ Petition to this Court.
Allowing the Writ Petition, ^ HELD: 1.
The Order terminating the petitioner 's lien in the instant case is passed on the specious plea that his explanation is not satisfactory.
The order should have been more articulate in its content.
[1103C] 2.
Rule 19(a) of the Kerala Civil Services (Classification, Control and Appeal) Rules 1960 mandates that an officer 's lien on a post shall not be terminated even with his consent if the consequence is to leave him without a lien or a suspended lien upon a permanent post.
Rule 24 speaks of removal from the service when an officer has been continuously absent from duty for five years, of special circumstances which will enable the department concerned to save an officer from its vice, and of the necessity to follow the procedure laid down in the Rules for removal of an officer from service.
[1102B C; F H] 3.
Without specific orders, the petitioner could not abandon the deputed foreign service and join the parent department.
There should be a clear finding of continuous absence from duty by the Department to attract Rule 24.
The department also has to satisfy the Court whether the special circumstances of this case would not rescue the petitioner from the rigour of Rule 24, and that the procedure laid down in the Kerala Civil Services (Classification, Control and Appeal) Rules, 1960 is complied with.
[1103B C]


judgement:
Appeal No. 246 of 1954.
Appeal by special leave from the judgment an order dated October 6, 1952, of the Bombay High Court in Income tax Reference No. 1 of 1952.
N. A. Palkhivala, J. B. Dadachanji, section N. Andley Rameshwar Nath and P. L. Vohra, for the appellant.
O. N. Joshi and R. H. Dhebar, for the respondent.
May 22.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
'This is an appeal by special leave against the judgment of the Bombay High Court passed in a reference under section 66(1) of the Indian Income tax Act, 1922 (hereinafter referred to as the Act) and sections 21 and 19 of the Excess Profits Tax Act, 1940, and of the Business Profits Tax Act, 1947, respectively read with section 66(1) of the Act.
The dispute between the parties relates to the assessment of income tax for the assessment years 1946 47, 1947 48 and 1948 49 and of excess profits tax for the chargeable accounting periods, September 3, 1945, to March 31, 1946, April 1, 1946, to March 31, 1947 and April 1, 1947, to March 31, 1948, and it arises out of the same facts and involves the same points for determination, 67 On June 15, 1945, three brothers Sir Padampat Singhania, Lala Kailashpat Singhania and Lala Lakshmipat Singhania who were carrying on business under the name of Juggilal Kamlapat, executed a deed of trust, exhibit A, whereby they settled a sum of Rs. 1,00,000 on various charities specified therein and called the J. K. Trust, Bombay, and appointed themselves and two other persons Lala Ramdeo Podar and Sir Chunnilal Mehta as its trustees.
The trust deed provided inter alia that "the trustees may with the help of the trust fund, for and on behalf of and for the benefit of the trust, carry on such business including the taking up and conducting the managing agency or selling agency of any company in such name or names as they in their absolute discretion may think fit and proper and may close and re start such business and utilise the profits for all or any of the objects aforesaid.".
Large powers were conferred on them in the conduct of the business, and they were also authorised to "raise or borrow money required for the purpose of the trust".
At this time, Messrs. E. D. Sassoon and Co., Ltd. were the managing agents of a public Company called the Raymond Woollen Mills Ltd. The firm of Juggilal Kamlapat of which the three Singhania brothers were the partners, acquired a controlling interest in the said Mills by purchase of the shares of Messrs. E. D. Sassoon and Co. therein; and following on this, the shareholders passed a special resolution on September 3, 1945, appointing the trustees of the J. K. Trust as managing agents of the Company in the place of Messrs. E. D. Sassoon and Co ', Lid., who resigned.
On September 10, 1945, a memorandum of agreement, exhibit B, was duly executed by the Company constituting the trustees of the J. K. Trust, Bombay, as its managing agents on the terms and conditions set out therein.
It is to be noted that the five persons named as trustees under exhibit A were appointed as managing agents in their character as trustees, and it is expressly provided therein that the expression 'managing agents ', "unless excluded by or repugnant to the context shall include the Trustees for the time being of the said Trust or 68 any other Trust with which the same may be amalgamated".
The agency was to be for a period of 20 years; but it was open to the trustees to throw it up on giving three months ' notice.
The managing agents were to get a remuneration of 10 per cent.
of the net annual profits subject to a minimum of Rs. 50,000 and an office allowance of Rs. 1,000 per mensem.
Clause 7 of the agreement provided that, " During the continuance of this agreement, the Managing Agents shall maintain with the Company a deposit of Rs. 1,00,000 (Rupees one lack only) in cash by way of security for due fulfilment of their obligations as specified therein and shall be entitled to charge interest at 3 1/2 per cent.
per annum on the amount of such deposit in addition to their remuneration.
" Clause 8 laid an obligation on the managing agents "to arrange loans and advances to the Company as and when required up to and not exceeding Rs. 10 lacs at any time and if necessary to guarantee such loans or advances from time to time".
Under el. 14, "Notwithstanding anything herein contained, all the terms and conditions of this Agreement including the period of appointment of the Managing Agents may be varied or abrogated by mutual agreement.
" The trustees entered on their duties as managing agents under this agreement, and by an agreement dated May 14, 1946, they appointed one Tej Narain Khaitan, son in law of one of the three Singhania brothers as their representative to carry on the managing agency work on a remuneration of 30 per cent.
of the annual income which would be payable to them under exhibit B.
Before the Income tax authorities, the appellant claimed that the income derived from the managing agency was income derived from property held under trust to be applied wholly for charitable purposes, and was, in consequence, exempt from taxation under section 4 (3) (i) of the Act.
The Income tax authorities held that the income in question was remuneration for services rendered, and was not derived from any property, and that, therefore, it did not fall within section 4 (3) (i) of the Act.
They further held 69 that even if the managing agency business could be regarded as property within section 4 (3) (i), it was governed by the special provision contained in section 4 (3) (ia), and as the conditions laid down therein had not been satisfied, no exemption could be claimed.
In this view, they allowed a sum of Rs. 30,000 per annum for remuneration of Mr. Khaitan as a deduction under section 10 (2) (x) of the Act, and held that the balance of the income, Rs. 23,287 in 1946 47, Rs. 36,786 in 1947 48 and Rs. 2,16,460 in 1948 49 was liable to be taxed under the provisions of the taxing statutes.
On applications made by the assessee under a. 66(1) of the Act and the corresponding provisions in the Excess Profits Tax Act and the Business Profits Tax Act, the Tribunal referred the following questions for the decision of the High Court of Bombay: 1. " Whether on the facts of the case the commission earned by the managing agents for managing.
the Raymond Woollen Mills was income earned by the managing agents for services rendered and not income derived from property held under trust or for other legal obligations and therefore not exempt under section 4 (3) (i) of the Income tax Act? 2.
Whether on the facts of the case the business carried on by the Trustees falls to be considered under section 4 (3) (i) or section 4 (3) (ia) of the Income tax Act?" The reference was heard by Chagla, C.J., and Tendolkar, J., who held that no part of the sum of Rs. 1,00,000 which was the only property settled on trust under exhibit A was actually invested in the managing agency business, which could not, therefore, be regarded as trust property, and that the income received from that business was 'not within the exemption enacted in section 4 (3) (i).
They accordingly answered the first question against the appellant.
As regards the second question, the learned Judges held that it was unnecessary to express any opinion thereon, as it was common ground that even if section 4 (3) (ia) applied, neither of the conditions laid down in sub cl.
(a) or (b) had been fulfilled, and that accordingly no relief could be granted thereunder.
70 The points that arise for determination in this appeal are (1) whether the income received by the trustees of J.K. Trust, Bombay, as managing agents of Raymond Woollen Mills, Ltd., is income derived from property held on trust or on an obligation in the nature of trust; and (2) whether the claim for exemption in respect of such income is to be determined under section 4 (3) (i) or section 4 (3) (ia).
With reference to the first question, the contention of Mr. Palkhivala is that managing agency is business and therefore it is property, and that it is property held on trust because it is conducted by the trustees on behalf of the trust with the help of trust properties and in accordance with the directions contained in the trust deed.
He also contends that even if the business is not held on trust, it is at least held, on the principle laid down in section 88 of the Trusts Act, on an obligation in the nature of trust, and that section 4 (3) (ii) is, in consequence, attracted.
For the respondent, Mr. Joshi does not dispute that managing agency is to be regarded as business, but he contends that there can be no trust of such agency, because it really involves rendering of services and cannot be said to be property in respect of which alone trust can be created, and further because managing agency is an office, and that again is not property.
He also contends that, in any event, ,the managing agency created under exhibit B could not be held to be trust property, because it could be terminated at any time, if the trustees so desired, on three months ' notice and that there could be no trust of ' such a precarious, ephemeral or evanescent kind of property, if indeed it could be held to be property.
He also contends that section 88 was inapplicable, as there was no property which was held on an obligation in the nature of a trust.
Whether a managing agency could be regarded as business was considered by this Court in Lakshminarayan Ram Gopal and Son Ltd. vs The Government of Hyderabad (1), where the question arose with reference to assessment of excess profits tax on the remuneration received by managing agents, tax being leviable under (1) 71 that Act only on business income and it was held that it was business, and that the profits therefrom were rightly assessed to tax under the Act.
The law must therefore be taken to be settled beyond controversy that managing agency is itself business.
Then the question is whether that business can be held to be property within section 4(3)(i) of the Act.
Now 'property ' is a term of the widest import, and subject to any limitation or qualification which the context might require, it signifies every possible interest which a person can acquire, hold and enjoy.
Business would undoubtedly be property, unless there is something to the contrary in the enactment.
Section 4(3)(i) of the Act under which exemption is claimed runs as follows: "4.
(3) Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them (i) any income derived from property held under trust or other legal obligation wholly for religious or charitable purpose, and in the case of property so held in part only for such purposes, the income applied, or finally set apart for application thereto." Now, confining ourselves solely to the language of section 4 (3)(i), there is nothing in it which restricts in any manner the normal and accepted meaning of the word property ', and excludes business from its connotation.
There is also authority in support of the view that business is property within the intendment of section 4(3)(i).
In In re The Tribune (1), the question was whether a trust created over the Tribune press and newspaper was for a charitable purpose as defined in section 4 (3) (i) of the Act.
The majoritv of the learned Judges of the High Court took,the view that the object of the trust was not wholly religious or charitable, and that accordingly the exemption under that section could not be claimed.
This decision was taken in appeal to the Privy Council, which held reversing the judgment of the High Court that the object of the trust was in its entirety charitable and that it came within the exemption enacted in section 4 (3) (i).
Vide In re The Trustees of the Tribune (2).
That is a question with (1) [ 1035] (2) ; L.R. 66 I.A. 72 which we are not concerned in this appeal, and the actual decision of the Privy Council does not bear on the present controversy.
What is relevant to our purposes is that before the High Court, a contention was raised that the word 'property ' must bear the same meaning both in sections 9 and 4 (3) (i), that in section 9 it was used in contradistinction to business which was dealt with under section 10, and that therefore 'property ' in section 4 (3)(i) could not include business.
This contention was repelled by the High Court, which held that the meaning of the word 'property ' in section 4 (3) (i) could not be controlled by the connotation of that word in section 9.
Vide In re The Tribune (1).
Before the Privy Council, however, the question whether business of the Tribune press and newspaper was property was not raised, the Board merely observing that in the letter of reference there was "no suggestion that the income under assessment is not derived from property held under trust declared in the 20th and 21st paragraphs of the will".
The point, however, arose directly for decision in All India Spinners ' Association vs Commissioner of Income tax, Bombay (2).
There, the assessee was an unregistered association called the All India Spinners ' Association, and it was formed for the purpose of development of the village industries of handspinning and handweaving.
The Association collected subscriptions from its members and also donations and invested them in the purchase of raw cotton which was supplied to poor labourers for being spun into yarn, the yarn being.
then supplied to them for being woven into cloth, which was then sold and the sale proceeds appropriated to the funds of the Association for the purposes aforesaid.
The assessee claimed exemption under section 4(3) (i) on the ground that its income was derived from property held under trust.
The High Court was of the opinion that the yarn and the cloth the sale of which yielded the income, could not be regarded as property held in trust, and that, in consequence, section 4(3) (i) did not apply.
In reversing this judgment, the Privy Council held that "the property consisted of the Organisation and the undertaking as well as in the (1) (2) ; L.R. 71 I.A. 159, 73 fluctuating stock of yarn and cloth", and that the exemption in section 4(3)(i) applied.
This is direct authority in support of the contention of the appellant.
As against these authorities, the respondent relied on the decision in Eggar vs Commissioner of Incometax (1).
There, a certain professor agreed to hand over the remuneration which would be payable to him by the University for lectures to be delivered by him, for certain charitable purposes, but, in fact, no deed of trust was executed.
The question was whether the amounts actually paid to him by the University were exempt from taxation, and it was held that they were not, and that the income in question was at the time of the receipt the private property of the assessee being remuneration for services rendered by him.
There could be no question in this case of any source of income being dedicated to trust, and the decision accordingly has no bearing on the point, which falls to 'be decided here.
The weight of authority is therefore clearly in favour of the view that business would be 'property ' for purposes of section 4(3)(i) of the Act.
It is next contended for the respondent that even if business could in general be held to be property within section 4(3) (i), managing agency cannot be so regarded, because having regard to sections 2(9A), 87A and 87B of the Indian Companies Act, it is merely an office which consists in the performance of services and discharge of certain obligations, and that that could not be regarded as property, which could be the subject matter of trust.
We are unable to accede to this contention.
In Angurbala Mullick vs Debabrata Mullick (2), and The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur MUtt (3), even an office of trusteeship was held to be property especially when emoluments were attached to it, and that must a fortiori be the position in the case of office of managing agency, which is clearly one of profit and even alienable under certain circumstances.
The office requires no doubt the performance of services; but there is no antithesis between service (1) (2) [195I] S.C.R. 1125.
(3) ; , 1019.
10 74 and business, as there are several kinds of business, which involve the performance of services, such as insurance and commission agency.
The true test is whether the services are a regular source of income.
And if managing agency is business, as was held in Lakshminarayan Ram Gopal and Son Ltd. vs The Government of Hyderabad (1), then there is no reason why it should not be property for purposes of section 4(3)(i) of the Act.
Nor is it an accurate statement of the true position to describe trust of the managing agency as a trust of an obligation.
It is in truth a trust of property, which carries with it certain obligations, and in law, there is no objection to creating a trust over property burdened with obligations, though, if it is onerous by reason of such obligations, the trustee may be entitled to disclaim it.
It is then contended that even if managing agency could be the subject of trust, the managing agency created by exhibit B must be held to be incapable of being held on trust because it is of the essence of public, as distinguished from private, charity that it must be permanent and incapable of being revoked or put an end to at the option of the trustee, whereas the managing agency created by exhibit B could be terminated by the trustees by giving three months ' notice.
This is to confuse charity with properties devoted to charity.
It is true that a public charity is perpetual in character, and that means that it is capable of enforcement, so long as there is any property left which can be appropriated for its objects.
And even if some or all of the objects become incapable of fulfilment, the trust properties will be devoted to the performance of similar or allied charitable purposes on the doctrine of cy pres.
But so far as the trust properties themselves are concerned, they will be held only on the incidents to which they are subject under the law.
Thus, if the property is a leasehold interest, it must cease on the termination of the lease.
Likewise, if trust property is alienated under circumstances binding on the trust, it will go out of the trust.
But that does not operate (1) [1955] I S.C.R. 393.
75 as an extinction of the trust, unless there is no property at all left, with which the trust could be carried out.
That is the principle enacted in section 77(c) of the , which in terms, however, applies only to private trusts.
We must therefore hold that the fact that the trustees have the option at any.
time to throw up the managing agency is no legal ' impediment to its being property which could be held on trust.
Lastly, it is contended that on the terms of exhibit A, the properties which the trustees are " to hold and stand possessed of " are " the sum of Rupees One Lao and any donations or contributions received by the Trustees and all accretions thereto and thereof and the investments in securities for the time being and from time to time representing the same ", that on the terms aforesaid, the managing agency cannot be held to be property held in trust, as no part of the sum of Rs. 1,00,000 was utilised in the acquisition of the business so as to impress it with the character of accretion.
It is argued that though the sum of Rs. 1,00,000 was given as security by the trustees under exhibit B, that was only for the due performance of their obligations as managing agents, and that the amount itself was not actually thrown into the business.
But it is to be observed that cl. 3 of the trust deed expressly provides for the acquisition of the business of managing agency on behalf of the trust and " with the help of the trust fund", and that precisely is what has happened and indeed, reading together Exs.
A and B, it is impossible to resist the conclusion that both the documents formed part of an integral scheme, and that what the settlors had in view in cl. 3 of exhibit A is the very managing agency, which was acquired under exhibit B.
There is considerable authority in England that when trustees carry on business with the aid of trust fund, the position in law is the same as if they actually employed it in the business, though, in fact, it be not actually invested therein.
Thus, in Rocke vs Hart (1), Sir William Grant observed: (1) ; ; , 1010.
76 a trader lodges money at his banker 's, he has in effect a benefit from that.
As he must generally keep a balance in his banker 's, it answers the purpose of his credit; as if it was his own money; and I should hold that to be employment in his trade.
" There are similar observations by Lord Gifford, in Moons vs De Bernales (1).
In the result, we are of opinion that the word I property ' in section 4(3)(i) of the Act is of sufficient amplitude to comprehend 'business ', and if the question fell to be decided solely on the terms of that sub section, the managing agency constituted under exhibit B must be treated as property held on trust within section 4(3)(i) of the Act.
This conclusion, however, is not sufficient to dispose of the appeal in favour of the appellant, because there is still the question raised by the respondent that even if under the general law, the word I property ' is wide enough in its significance to include business, in its context in section 4(3)(i) read along with section 4(3)(ia) it bears a more restricted sense as meaning only property other than business.
And it is this contention that forms the subject matter of the second question under reference.
In order to understand this question, it is necessary to state that in the Act as originally passed, the only provision for exemption from taxation of income derived from property dedicated to religious or, charitable trust was contained in section 4(3)(i).
On this section, the question arose whether when a business was carried on for and on behalf of a trust, the profits derived therefrom were exempt from taxation.
It was held in Commissioner of Income tax, Madras vs Arunachalam Chettiar (2), following a decision of the House of Lords in Coman vs Governors of the Rotunda Hospital, Dublin(3), that they were not.
That was also the view taken by the Allahabad High Court in Lachhman Das Narain Das, In re (4).
Then came the decision in In re The Tribune (5) already referred to, wherein the Lahore High Court held that 'property ' in section 4(3)(i) was (1) ; ; (3) [1021] A.C. 1.
(2) I.L.R. (4) I.L.R. (1925) 47 All.
(5) 77 sufficiently comprehensive to include business, and that profits from business carried on by trustees would be exempt from taxation.
As already stated, though the matter was taken in appeal to the Privy Council this question was not raised.
It was in this state of the law that the Legislature intervened, and enacted a new provision, section 4(3)(ia), which is as follows: " 4(3) Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them: (ia) Any income derived from business carried on on behalf of a religious or charitable institution when the income is applied solely to the purposes of the institution and (a) the business is carried on in the course of the carrying out of a primary purpose of the institution, or (b) the work in connection with the business is mainly carried on by beneficiaries of the institution.
" Under this provision, the profits of business would be exempt only if the conditions laid down therein are satisfied.
It is the contention of the Department that as this is a special provision dealing with the topic of exemption in respect of business carried on for and on behalf of a trust, any claim for exemption as regards profits derived from any such business can be made only under that provision, and when the conditions laid down therein are not satisfied, it is not open to the assessee to fall back upon the general provision contained in section 4(3)(i) and claim exemption thereunder on the ground that business is property.
The basis of this contention is the well known maxim, Generalia specialibus non derogant.
In Charitable Gadodia Swadeshi Stores vs Commissioner of Income tax, Punjab(1), this question came up for consideration before the Lahore High Court.
It was held by the learned Judges that the fact that the business failed to satisfy the two conditions laid down in section 4(3)(ia) was no reason why it should not be exempt from taxation if it fell within 1) 78 section 4(3) (i), and the main ground of the decision was that the two categories mentioned in section 4(3) (i) and section 4(3) (i)(a) having been enacted as two different clauses, it must be taken that the one did not exclude the other.
It was this decision that was relied upon by the appellant before the Tribunal, which, however, considered it distinguishable.
A reading of its order, however, shows that it was not really satisfied about its correctness.
Accordingly, when the appellant applied for reference under section 66 (1) of the Act, the Tribunal referred the second question also for the decision of the High Court.
But in the view which the learned Judges of the Bombay High Court took that business was not property within section 4(3)(i), it became unnecessary for them to express an opinion on that question.
Now that we have held that the word property in section 4 (3) (i), standing by itself, is susceptible of a wider connotation so as to include business, it becomes necessary to consider the second question under reference.
Learned counsel on both sides agree that it would be more satisfactory that this question should be remitted to the High Court for determination.
In the result, we remand the case to the High Court of Bombay for a fresh disposal of the reference on a consideration of the second question.
As for costs, we direct that the respondent do pay the appellant the costs of this appeal as also the costs of the hearing before the High Court.
The costs of the further hearing which we have directed will be dealt with by the High Court on remand.
Appeal allowed.
Case remanded.

summary/full:
A deed of trust whereby a sum of Rs. 1 lac was settled on various charities specified therein provided for the acquisition of the business of managing agency on behalf of the trust and with the help of the trust fund.
The trustees of the said trust (appellant) became the managing agents of a public company.
The agreement for the agency provided, inter alia, that the agency was for a period of twenty years but that it was open to the trustees to give up the agency on giving three months ' notice and that the managing agents were to get a remuneration of 10 per cent. ' of the net annual profits subject to a minimum of Rs. 50000 and an office allowance of Rs. 1,000 per mensem.
The appellant claimed that the income derived from the managing agency was income from property held under trust to be applied wholly for charitable purposes, and was, in consequence, exempt from taxation under section 4(3)(i) of the Indian Income tax Act, 1922.
It was contended on behalf of the Income tax authorities (1) that the income in question was remuneration for services rendered and was not derived from any property, as a managing agency could not be considered to be property, and that, therefore, it did not fall within section 4(3)(i) of the Act, (2) that on the terms of the deed of trust the managing agency could not be property held on trust, as no part of the sum of Rs. 1 lac was utilised in the acquisition of the business so as to impress it with the character of accretion, and (3) that even if the managing agency business could be regarded as property within section 4(3)(i), it was governed by the special provision contained in section 4(3)(ia), and as the conditions laid down therein had not been satisfied, no exemption could be claimed.
Held: (1) A managing agency is business which would be property within section 4(3)(i) of the Act.
Lakshminarayan Ram Gopal and Son Ltd. vs The Government of Hyderabad, (1955) I.S.C.R. 393, followed.
All India Spinners ' Association vs Commissioner of Income tax,, Bombay , relied on, 66 (2)Though the office of managing agency carries with it certain obligations, in law there can be no objection to creating a trust over property burdened with obligations, though, if it is onerous by reason of such obligations, the trustee may be entitled to disclaim it.
(3)When trustees carry on business with the aid of trust fund the position in law is the same as if they actually employed it in the business, though, in fact, it be not actually invested therein and, taking the provisions of the deed of trust and the agreement of agency together, the managing agency must be held to be property held on trust.
Rocke vs Hart, ; and Moons vs De Bernales, ; , relied on.
The case was remanded to the High Court for a decision on the question whether profits from business would be exempt from taxation under section 4(3)(i) of the Act when the conditions laid down in section 4(3)(ia) were not satisfied.


judgement:
ivil Appeal No. 1947 (N) of 1972.
From the Judgment and order dated 4.10.1971 of the Gujarat High Court in S.A. No. 313 of 1963.
V.M. Tarkunde and M.V. Goswami for the Appellants.
section Seth and section Sukumaran for the Respondents.
The Judgment of the Court was delivered by G RAY, J.
This appeal on special leave is against the judgment and decree made on October 4, 1971 in S.A. No. 313/63 by the High Court of Gujarat whereby it was held that in view of the retrospective effect given by virtue of the notification issued under Sec.
88(1)(b) of the Bombay Tenancy and Agricultural Lands Act, 1948 the provisions of the said Tenancy Act was not applicable in respect of lands within the 796 municipal limits of the city of Baroda and as such the civil court was competent to determine the reasonable rent in respect of the lands in question taken settlement of by the defendent on the basis of the Kabuliyat executed on 2nd June, 1956 for a period of three years from 1956 to 1958.
The admitted facts of this case are that the defendant Kashiram Jaiswal, since deceased, took possession of the lands measuring 20 acres 27 gunthas in section No. 707 of Baroda Kasba situated behind Kirti Mandir in the city of Baroda from the respondent by executing a Kabuliyat dated June 2, 1956 for a period of three years from 1956 to 1958 at an annual rent of Rs.2225.
The said Kabuliyat was however not registered.
The defendant paid in total a sum of Rs.970.31 in respect of arrears of rent of the said years 1956 57 and 1957 58.
The plaintiff who is a trustee of the temple Kirti Mandir instituted a regular suit No. 143/59 in the court of 3rd Joint Civil Judge, Baroda for recovery of arrears of rent at Rs.3479.69 setting off the amount paid already.
The defence was that the suit was not entertainable in the civil court in as much as even though the Tenancy Act ceased to apply on the issue of the notification under Sec.
88(1)(b) of the said Act in respect of lands within the municipal limits of city of Baroda yet the rights of the tenant in respect of the suit land which acrued before the said notification subsisted or in other words the same was not affected by the said notification.
It has been further contended that since the Mamlatdar has determined the fair rent in accordance with the provisions of section 8 and 9 of the said Act at Rs.375 and 5 annas lawfully payable in respect of the said land the plaintiff could not recover any amount in excess of the said sum.
The trial court held that the Tenancy Act was applicable to this case and since the Mamlatdar has already deter mined the reasonable rent in respect of the lands in question the civil court was not competent to determine the same once again.
The suit was accordingly dismissed.
On appeal the District Judge, Baroda dismissed the appeal and affirmed the judgment and decree of the court below.
Against this judgment and decree S.A. No. 313/63 was preferred in the High Court of Gujarat.
The High Court on considering the decision of this Hon 'ble Court in S.N. Kamble 's case ; held that in view of the notification issued under Sec.
88(1)(b) of the said Act the provisions of the Tenancy Act will not apply retrospectively in view of the notification issued under Sub Section (1) (b) of Sec. 88 of the Act XIII of 1956 issued on May 21, 1958.
The High Court, therefore, framed the following issue: "At what rate is the plaintiff entitled to claim rent in respect 797 of the land in occupation of deceased defendant Surajmal Kashiram for the two years 1956 57 and 1957 58 having regard to the rent that may be considered reasonable in the light of the evidence that may be adduced before the court. " And sent the records to the trial court for determination of the said issue on allowing the parties to adduce evidence.
The trial court was also directed to return the evidence together with its findings thereon to the High Court of Gujarat.
The trial court after considering the evidence adduced by both the parties held that the reasonable rent of the land in question was Rs.2225 per annum.
With these findings of the trial court the records were returned to the High Court of Gujarat.
On 4.10.1971 the High Court of Gujarat allowed the appeal setting aside the judgment and decree passed by the courts below decreeing the suit for a sum of Rs.3479.69 paisa as rent to be recovered from the legal heirs of the defendants respondents.
The sole question that poses itself for consideration before this court is whether the issuance of notification under sub Section (1)(b) of Sec. 88 of Act No. XIII of 1956 on May 21, 1958 making the provisions of the Bombay Tenancy and Agricultural Lands Act, 1948 inapplicable to the lands reserved for non agricultural or industrial development in the municipal limits of the city of Baroda retrospectively.
Or in other words whether the said Act will not at all apply to lands within the Baroda Municipality which have been reserved for non agricultural or industrial development by the aforesaid notification dated May 21, 1958 published in the official gazette.
If the Act does not at all apply then the determination of rent of the suit land as made by the Mamlatdar under the provisions of Sections 8 and 9 of the said Act will be of no avail and the civil court will be competent to determine the rent payable by the defendant tenant in respect of these lands in question to the respondent on the basis of the Kabuliyat by the defendant appellant or in case the Kabuliyat is held to be inadmissible in evidence because of non registration the reasonable rent payable in respect of the said land is to be determined.
To determine this question it is pertinent to refer to the provision of Sec. 88 (1)(b) which is quoted herein below: Sec.
88(1) Save as otherwise provided in sub section (2), nothing in the foregoing provisions of this Act shall apply 798 (b) to any area which the State Government may, from time to time, by notification in the official Gazette, specify as being reserved for non agricultural or industrial development .
On a plain reading of the provisions of Sec.
88(1) it is crystal clear that the issuance of the notification under Sec.
88(1)(b) on May 21, 1958 reserving the land within the municipal limits of the city of Baroda for non agricultural or industrial development the provisions of the Tenancy Act were made inapplicable retrospectively subject to the exception provided in sub section (2) of Sec. 88.
Another section very relevant to be considered in this connection is Sec. 89 of the said Act.
Sub Section (2)(b) of the said section further provides that Save as expressely provided in this Act nothing in this Act or any repeal effected thereby shall be deemed to affect any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act.
It was tried to be contended before us on behalf of the appellant that in view of this provision the right of the defendant tenant to pay rent as determined by the Mamlatdar under the provisions of Sections 8 and 9 of the Bombay Tenancy and Agricultural Lands Act, 1948 will not be affected by the retrospective effect given by Sec. 88 of the said Act.
It has been further urged that the reasonable rent in respect of the lands in question has already been determined by the Mamlatdar and the Civil Court is not competent to decide reasonable rent once again and the determination made by the Civil Court is ineffective.
It was urged on behalf of the respondent that in view of the notification issued under Sec.
88(1)(b) of the Bombay Tenancy and Agricultural Lands Act, 1948 the provisions of the Tenancy Act are not applicable to lands within municipal limits of Baroda city at all as retrospective effect was given to the said provisions and as such the rights that had accrued to a tenant in respect of a land within municipality will automatically go.
As already held before that on a plain reading of the provisions of Sec. 88 of the Act it is quite clear and apparent that the provisions of the said Tenancy Act are not applicable to any area notified by the State Government as being reserved for non agricultural or industrial development.
In the instant case, there has been a notification by the Government on May 21, 1958 under Sub section (1)(b) of Sec. 88 of the Act No. XIII of 1956 declaring that the lands within municipal 799 limits of the City of Baroda are reserved for non agricultural or industrial development.
The consequence that falls is that the provisions of Bombay Tenancy and Agricultural Lands Act, 1948 are not applicable to the land in question as the same is situated within municipal limits of the city of Baroda and as a result these rights acquired under the said Act automatically becomes non est.
It has been tried to be urged by referring to the provisions of the Sec.
89(2)(b) of the said Act that right, title and interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act will not be affected by the retrospective effect given to the provisions of Sec. 88 of the said Act.
This argument, in our considerable opinion, is totally devoid of any merit.
In view of specific provision in the said sub Section (2)(b) of Sec. 89 to the affect "shall, save as expressely provided in this Act, affect or deemed to be affected".
It follows from this provision that in the absence of an express provision in the Act any right, title, interest, obligation or liability already acquired or accrued before the commencement of this Act shall not be affected by the Act of 1948.
Section 88(1)(b) of the said Act has specifically provided that on the issue of a notification in the official Gazette specifying areas reserved for non agricultural or industrial development the provisions of the Tenancy Act, 1948 shall not apply.
Therefore, reading these two provisions together the only reasonable conclusion that follows is that the provisions of the Act will not be applicable to the lands notified by the Government in the official Gazette as being reserved for nonagricultural or industrial development.
This has been expressely provided in Sec.
88(1)(b) of the Act.
The argument that the retrospec tive affect given to the provisions of Sec.
88(1)(b) will not affect the rights or interest acquired or accrued under the said Act prior to the commencement of the 1948 Act is of no substance and as such it cannot be sustained.
It may be pertinent to refer to the provisions of Sec.
89A of the Act wherein it has been expressly provided that notwithstanding repeal of the 1939 Act the provisions of Sections 3, 3A and 4 of the Bombay Tenancy Act, 1939 as set out in Schedule I to this Act shall always be deemed to be extended to and to be in force in, those areas on the dates on which this Act was extended to and brought into force.
Therefore, express provisions has been made for the preservation of the rights accrued under Sections 3, 3A and 4 of the Bombay Tenancy Act, 1939 inspite of the repeal of 1939 Act by the Bombay Act No. LXVII of 1948, that is, the Bombay Tenancy and Agricultural Lands Act, 1948.
This very question about the effect of the provisions of Sec.
88(1)(b) and the provisions of Sec.
89(2)(b) of the Act fell for consideration in the case of Sakharam @ Bapusaheb Narayan Sanas and Anr.
vs Manikchand Motichand Shah and Anr.
, In that case the only question arose for determination was whether the 800 defendant appellants were "protected tenants" within the meaning of the Bombay Tenancy Act, 1939 (Bombay) Act 29 of 1939).
It was held that the provision of Sec. 88 of the Bombay Tenancy and Agricultural Lands Act, 1948 were entirely prospective and it would apply to such lands as prescribed in clauses (a) and (d) of Sec.
88(1) from the date on which the Act came into operation i.e., December 28, 1948 and are not of a confiscatory nature so as to take away from the tanant the status of a protected tanant already accrued to him.
It has been further observed that Sec.
89(2)(b) of the Act clearly intents to conserve such right as were acquired or accrued before its commencement and that any legal proceeding in respect of such rights was to be disposed of in terms of the Act of 1939.
It is to be noticed in this case that the question as of effect of a notification published in the official Gazette by the Government under Sec.
88(1)(b) of the said Tenancy Act of 1948 did not arise for consideration.
Furthermore, as we have said already hereinbefore that Sec.
89A read with Schedule I to the said Act clearly preserves the rights acquired or accrued under the provisions of Sections 3, 3A and 4 of the Bombay Tenancy Act, 1939.
This case, therefore, strictly speaking does not deal with the question that specifically has arisen in the instant case.
This Court in the case of Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli; , has held that a notification issued under clause (d) of Sub section (1) of Sec. 88 of the Bombay Tenancy and Agricultural Lands Act, 1948 declaring lands within municipal area as reserved for urban non agricultural or industrial development were clearly retrospective in operation and the intention of the legislature obviously was to take away all the benefits arising out of the Act of 1948 and not those arising out of the Act of 1939 that is under Sections 3, 3A and 4 of the said Act as soon as the notification was made under clause (d).
In other words, it has been observed specifically that the rights acquired under the Tenancy Act, 1939 except rights acquired under Sections 3, 3A and 4 will be no longer in existence after the issuance of notification under Sec.
88(1)(b) of the Act of 1948.
In a later decision in Sidram Narsappa Kamble vs Sholapur Borough Municipality & Anr., ; this question came to be considered by a larger bench of this Court and it was held that the plain effect of the provisions contained in Sections 31, 88 and 89(2)(b) is that in view of the express provision contained in Sec.
88(1)(a), the appellant could not claim the benefit of Sec. 31 nor could it be said that 801 his interest as a protected tenant was saved by section 89(2)(b) of the said Act.
It was further observed that Sections 3, 3A and 4 of 1939 Act were continued in a modified form in Schedule I of the 1948 Act only for the purpose of Sec. 31 of the 1948 Act.
It is obvious that the consequence follows that protected tenants are only those tenants specified in those three sections aforesaid and that no new protected tenant could come into existence under the 1948 Act.
The intention from the express words of Sec. 88(1)(a) is also the same.
It has been observed that the intention from the express words of Sec.
88(1) is that there will be no protected tenant after the 1948 Act came into force in regard to lands held on lease from a local authority in view of the express provision contained in section 88(1)(a).
We have already held hereinbefore that the effect of the notification dated 21st May, 1958 issued under Section 88(1)(b) of the Tenancy Act of 1948 specifying the lands within the municipal limits of Baroda city within the municipal limits of Baroda city reserved for nonagricultural and industrial development is that all rights, title, obligation etc.
accrued or acquired under the Said Act ceased to exist as the said section expressly states that the provisions of the Tenancy Act of 1948 will not apply to such lands.
Section 88(1) is given retrospective effect.
The provision of Section 89(2)(b) are not applicable to protect the right, title, interest already accrued before the commencement of this Act except as provided in Section 89A owing to express provisions made in section 88 of the said Act.
In view of our findings referred to hereinbefore the irresistable conclusion follows that the determination by Mamlatdar under Ss. 8 and 9 of the Tenancy Act automatically becomes ineffective and nonest by virtue of section 88(1)(b) of the said Act and the notification made thereunder.
The Civil Court is legally competent to determine the reasonable rent payable by the defendent tenant and this determination has been duly made by the Civil Court and same has been affirmed by the High Court of Gujarat.
There is, therefore, no merit in this appeal which is dismissed without any order as to costs.
P.S.S. Appeal dismissed.

summary/full:
When Baroda became Borough Municipality on 1st May 1950, the provisions of the Bombay Tenancy Act, 1939 were applicable to the lands situated within its municipal limits.
That Act was repealed by the Bombay Tenancy and Agricultural Lands Act, 1948 which was made applicable to the Baroda Municipality with effect from August 1, 1956 by the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1955 (Bombay Act No. XIII of 1956).
Section 88(1)(b) of the 1948 Act, as substituted by section 48 of the Act of 1956, provided that nothing in the Act shall apply to any area which the state Government may, by notification in the official gazette, specify as being reserved for non agricultural or industrial development.
Section 89(2)(b) further laid down that nothing in that Act or any repeal effected thereby, shall affect or be deemed to affect, any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act.
Section 89A recited that notwithstanding the repeal of the 1939 Act, the provisions of ss.3, 3A and 4 or that Act, as set out in Schedule I to the 1948 Act, shall always be deemed to be extended to and to be in force in those areas on the dates on which the 1948 Act was extended to and brought into force.
The Government by a notification dated May 21, 1958 issued under section 88(1)(b) of the 1948 Act reserved the lands within the municipal limits of the city of Baroda for non agricultural and industrial development.
Appellant 's husband defendant, took possession of certain lands situated in the city of Baroda, from the respondent trustee of a temple for a period of three years from 1956 to 1958 at an annual rent of 794 Rs.2225 by executing a Kabuliyat dated June 2, 1956, which was not registered.
As he fell into arrears of rent for the said years, the respondent plaintiff filed a suit for its recovery.
The defence was that the suit was not maintainable in a civil court inasmuch as even though the Tenancy Act ceased to apply on the issue of the notification under section 88(1)(b) in respect of lands within the municipal limits of the city of Baroda, yet the rights of the tenant in respect of the suit land, which had accrued before the said notification, subsisted.
The trial court held that the Tenancy Act was applicable to the case and since the Mamlatdar had already determined the reasonable rent in respect of the lands in question, the civil court was not competent to determine the same once again.
The appeal preferred was dismissed by the District Judge.
On further appeal, the High Court held that in view of the notification issued under section 88(1)(b) of the said Act the provisions of the Tenancy Act will not apply retrospectively and directed the trial court to redetermine the issue.
On receipt of the findings of the trial court, the High Court allowed the second appeal, setting aside the judgment and decree passed by the courts below.
In the Appeal by special Leave to this Court it was contended for the appellant that in view of the provisions of section 89(2)(b) the right of the defendant to pay rent as determined by the Mamlatdar under sections 8 and 9 of the 1948 Act was not affected by the retrospective effect given to the provisions of section 88 of the Act.
Dismissing the Appeal, the Court, ^ HELD: The specific provision in section 89(2)(b) of the Bombay Tenancy and Agricultural Lands Act, 1948 to the effect that nothing in the Act or any repeal affected thereby shall, save as expressly provided therein, affect or be deemed to affect any right, title, interest, ob ligation or liability already acquired, accrued or incurred before the commencement of the Act, read with the specific provision of section 88(1)(b) that on issue of a notification specifying areas reserved for non agricultural or industrial development the provisions of the Act shall not apply to the lands so notified, make it apparent that the Act will not be applicable to the lands notified.
[799 B; D E] The issuance of the notification dated 21st May, 1958 under section 88(1)(b) of the Tenancy Act, 1948 specifying the lands within the municipal limits of Baroda city reserved for non agricultural and industrial development in the instant case made the provisions of the 795 Act inapplicable retrospectively, subject to the exception provided in sub section
(2) of section 88, and with it all rights, title, obligation etc.
accrued or acquired under the said Act ceased to exist.
The provisions of section 89(2)(b) are, therefore, not applicable to protect such right, title or interest, except as provided in section 89A owing to express provision made in section 88 of the Act.
[801 C E] Protected tenants are only those tenants specified in sections 3, 3A and 4 of the 1939 Act and no new protected tenant could come into existence under the 1948 Act.
[801 B C] In the instant case, therefore, the civil court was legally competent to determine the reasonable rent payable by the defendent tenant.
The determination by Mamlatdar under sections 8 and 9 of the Tenancy Act 1948 automatically becomes ineffective and non est by virtue of section 88(1)(b) of the said Act and the notification made there under.
[801E F] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; and Sidram Narsappa Kamble vs Sholapur Borough Municipality and Anr, ; , referred to.
Sakharam @, Bapusaheb Narayan Sanas and Anr.
vs Manikchand Motichand Shah and Anr., ; , distinguished.


judgement:
Special Leave Petition (Civil) No. 7309 of 1986 From the Judgment and Order dated 16.4.1986 of the Punjab and Haryana High Court in Civil Revision No. 571 of 1986.
Harbans Lal and G.K. Bansal for the Petitioners.
The Order of the Court was delivered by VENKATARAMIAH, J.
The petitioners were plaintiffs.
They instituted a suit in a representative capacity under Order 1 rule 8 of the Code of Civil Procedure in the Court of the Additional Senior Sub Judge, Barnala for a declaration that they were the owners in posses 833 sion of the suit land along with some others, that the Gram Panchayat, Mehal Kalan, Tehsil Barnala, District Sangrur in the State of Punjab (hereinafter referred to as 'the Panchayat ') had no sort of right in the suit land and that the suit land had been wrongly shown as belonging to the Panchayat by the entries made in the revenue records which were not binding on the plaintiffs and for an injunction restraining the Panchayat from interfering their possession.
The Panchayat in the course of its written statement inter alia pleaded that the Court before which the suit had been instituted had no jurisdiction to try it by virtue of the provisions of section 13 of the Punjab Village Common Lands (Regulation) Act, 1961 (Punjab Act No. 18 of 1961) (hereinafter referred to as 'the Act ').
The trial court framed an issue relating to its jurisdiction and tried it as a preliminary issue.
It held that since the question involved in the suit was simply one of title to the suit land and it was not necessary to decide whether the suit land was shamlat deh or not and whether the land had validly vested in the Panchayat or not being shamlat deh, it had jurisdiction to try the suit.
Aggrieved by the said finding recorded by the trial court, the Panchayat filed a revision petition before the High Court of Punjab and Haryana in Civil Revision Petition No. 571 of 1986.
The learned Judge who heard the Revision petition came to the conclusion that the issues involved in the suit were not triable by a civil court by virtue of section 11 read with section 13 of the Act and accordingly he held that the suit was not maintainable before the civil court.
The plaintiffs have preferred this petition before this Court under Article 136 of the Constitution of India requesting the Court to grant leave to prefer an appeal against the decision of the High Court.
Section 2(g) of the Act defines the expression 'Shamlat deh ' as under: "2(g) 'shamlat deh ' includes (1) lands described in the revenue records as shamlat deh excluding abadi deh; (2) shamlat tikkas; (3) lands described in the revenue records as shamlat, tarafs, patties, pannas and tholas and used according to revenue records for the benefit of the village community or a part thereof or for common purposes of the villages; 834 (4) lands used or reserved for the benefit of village community including streets lanes, playgrounds, schools, drinking wells, or ponds within abadi deh or gorah deh; and (5) lands in any village described as banjar qadim and used for common purposes of the village according to revenue records: Provided that shamlat deh at least to the extent of twenty five per cent of the total area of the village does not exist in the village; . . . " The Act was amended by the Punjab Village Common Lands (Regulation) (Amendment) Act, 1976.
Section 7 of the above Amending Act substituted the original sections 11, 12 and 13 of the Act by new sections.
After the amendment sections 11, 12 and 13 read as follows: "11.
Decision of claims of right, title or interest in shamlat deh. (1) Any person claiming right, title or interest in any land vested or deemed to have been vested in a Panchayat under this Act, or claiming that any land has not so vested in a Panchayat, may submit to the Collector, within such time as may be prescribed, a statement of his claim in writing and signed and verified in the prescribed manner and the Collector shall have jurisdiction to decide such claim in such manner as may be prescribed.
(2) Any person or a Panchayat aggrieved by an order of the Collector made under sub section (1) may, within sixty days from the date of the order, prefer an appeal to the Commissioner in such form and manner as may be prescribed and the Commissioner may after hearing the appeal, confirm, very or reverse the order appealed from and may pass such order as he deems fit.
Finality of orders.
Save as otherwise expressly provided in this Act, every order made by the Collector or the Commissioner shall be final and shall not be called in question in any court by way of appeal or revision or in any original suit, application or execution proceedings.
835 13.
Bar of jurisdiction of civil courts.
No civil court shall have jurisdiction (a) to entertain or adjudicate upon any question whether any property or any right to or interest in any property or is not shamlat deh vested or deemed to have been vested in a Panchayat under this Act; or (b) to question the legality of any action taken by the Commissioner or the Collector or the Panchayat under this Act; or (c) in respect of any matter which the Commissioner or the Collector is empowered by or under this Act to determine" Section 11 of the Act provides that any person claiming right, title or interest in any land vested or deemed to have been vested in a Panchayat under the Act, or claiming that any land has not so vested in a Panchayat, may submit to the Collector, within such time as may be prescribed, a statement of his claim in writing and signed and verified in the prescribed manner and that the Collector shall have jurisdiction to decide such claim in such manner as may be prescribed.
Any person aggrieved by the decision of the Collector is entitled to prefer an appeal to the Commissioner.
Under section 12 of the Act every order made by the Collector or by the Commissioner, as the case may be is final save as otherwise expressly provided in the Act and such order cannot be called in question in any court by way of appeal or revision or in any original suit, application or execution proceedings.
Section 13 of the Act provides that no civil court shall have jurisdiction to entertain or adjudicate upon any question whether any property or any right to or any interest in any property is or is not shamlat deh vested or deemed to have been vested in a Panchayat under the Act or to question the legality of any action taken by the Commissioner or the Collector or the Panchayat under the Act or in respect of any matter which the Commission or the Collector is empowered by or under the Act to determine.
The contention of the Panchayat before the trial court was that the land in question was shamlat deh and it had been vested in it.
It is no doubt true that the plaintiffs who claimed to be the owners along with some others of the suit land had avoided to seek a 836 declaration that the suit land was not shamlat deh.
They had, however, questioned the correctness of the entries in the revenue records which showed that the Panchayat was entitled to the suit land.
The plaintiffs cannot by drawing their plaint cleverly by not claiming a declaration that the land in question was not shamlat deh confer jurisdiction on the civil court when by virtue of section 13 of the Act the jurisdiction of civil courts to try such suits had been taken away.
In the instant case the suit had been filed against the Panchayat and the Panchayat had expressly claimed that the land in question belonged to it as shamlat deh.
It will not be possible in the circumstances for the civil court to make a declaration in favour of the plaintiffs without deciding the question whether the property in question was shamlat deh or not and whether it belonged to the Panchayat or not.
Reliance was however placed by the learned counsel for the petitioners on a decision of the Punjab and Haryana High Court in Bhagu and Ors., vs Ram Sarup and Ors., [1985] Punjab Law Journal Page 366 in which the suit had been held to be maintainable in a civil court even though the defendant had contended that the land involved in that suit was shamlat deh.
The High Court found that plaintiff in that case had only stated in the plaint that the land in question was 'Gali Sheh re aam ' or a throughfare belonging to the Gram Panchayat which was being used by the plaintiff as an approach to his house for about 30 years and had prayed for an injunction restraining the defendant from interfering with his right.
The Gram Panchayat in question had not been impleaded as a defendant.
The plaintiff in that case had not claimed that the suit land belonged to him or that it did not belong to the Gram Panchayat.
The crucial issue which had been framed in that case was whether the land in question over which the plaintiff had asserted his right was a street or not and whether the defendant had blocked the said street.
The High Court held in the circumstances of that suit that the jurisdiction of the civil court had not been taken away by virtue of section 13 read with sections 13A and 13B of the Act which had been inserted by the Haryana Legislature into the Act.
We are of the view that the above decision is clearly distinguishable from the present case since in this case the Panchayat which had been impleaded as a defendant had raised the plea that the suit land was a part of shamlat deh and that the plaintiffs had no right or title in it.
This question has to be decided by the Collector only under section 11 of the Act and not by the Civil court.
We do not, therefore, find any ground to interfere with the judgment of the High Court of Punjab and Haryana against which this petition is filed.
The petition is dismissed.
P.S.S. Petition dismissed.

summary/full:
Section 11 of the Punjab Village Common Lands (Regulation) Act, 1961 conferred jurisdiction on the Collector to decide cases of persons claiming right, title or interest in any land vested or deemed to have been vested in a Panchayat, or claiming that any land has not so vested in a Panchayat and against such order an appeal was provided to the Commissioner.
Under section 12 every order of the Collector or Commissioner was final and such order could not be called in question in any Court by way of appeal or revision or in any original suit, application or execution proceedings.
Section 13 of the Act provided that no civil court shall have jurisdiction to entertain or adjudicate upon any question whether any property or any right to or interest in any property is or is not shamlat deh vested or deemed to have been vested in a Panchayat under the Act.
The petitioners instituted a civil suit under O. 1, r. 8 of the Code of Civil Procedure for a declaration that they were the owners in possession of the suit land, that the Gram Panchayat had no sort of right in the suit land, that the suit land had been wrongly shown as belonging to the Panchayat by entries made in the revenue records which were not binding on the plaintiffs, and for an injunction restraining the Panchayat from interfering with their possession.
The respondent Panchayat contended in its written statement that the civil court had no jurisdiction to try the suit by virtue of the provisions of section 13 of the Act.
The trial court, however held that since the question involved in the suit was 832 simply one of title to the suit land and it was not necessary to decide whether the suit land was shamlat deh or not and whether the land had validly vested in the Panchayat or not being shamlat deh, it had jurisdiction to try the suit.
Allowing the revision petition of the Panchayat the High Court held that the suit was not maintainable before the Civil Court since the issues involved in it were not triable by such court by virtue of section 11 read with section 13 of the Act.
Dismissing the appeal by special leave, the Court, ^ HELD: The High Court was right in holding that the suit was not maintainable before the civil court.
The plaintiffs who claimed to be the owners of the suit land had avoided to seek a declaration that the suit land was not shamlat deh.
They cannot by drawing their plaint cleverly be not claiming a declaration that the land in question was not shamlat deh confer jurisdiction on the civil court when by virtue of the Act the jurisdiction of civil court to try such suits had been taken away.
The suit had been filed against the Panchayat and the Panchayat had raised the plea that the suit land was a part of the shamlat deh and that the plaintiffs had no right or title to it.
The civil court cannot make a declaration in favour of the plaintiffs without deciding the question whether the property in question was shamlat deh or not and whether it belonged to the Panchayat or not.
That question has to be decided by the Collector only under section 11 of the Act and not by the civil court.
[835H; 836A C; 836G] Bhagu & Ors.
vs Ram Sarup & Ors., , distinguished.