judgement:
Appeal No. 231 of 1954.
Appeal by special leave from the judgment and order dated August 17, 1953, of the Railway Rates Tribunal at Madras in Complaint Case No. 5 of 1952.
section C. Isaacs and R. C. Prasad, for the appellant.
H. N. Sanyal, Additional Solicitor General of India, H. J. Umrigar and R. H. Dhebar, for the respondents.
March 24.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
This is an appeal by special( leave against the order passed by the Railway Rates Tribunal, hereinafter called the tribunal, at Madras dismissing the appellant 's complaint under section 41 of the Indian Railways Act (9 of 1890), to be described hereinafter as the Act.
The appellant, Raigarh Jute Mills Ltd., is a limited company owning jute mills which are ,situated in Raigarh in Madhya Pradesh.
For the production of jute goods, the appellant has to bring raw material, viz., jute from many railway booking stations outside the State of Madhya Pradesh and there is no other means of transport except by rail both for bringing jute to the mills and for carrying the finished products to ports for export to foreign countries.
In its complaint, the appellant has alleged that the railway administration had contravened the provisions of section 28 of the Act and also that the charges levied by the railway administration for the freight of the appellant 's goods were unreasonable and excessive.
According to the appellant, the Assam Railway (now North Eastern Railway) offered special rates for jute from certain stations in its zone to Kanpur and the basis of these rates was cheaper than that of the rates charged between Raigarh and some other stations on the East Indian Railway and the Bengal Nagpur Railway (now the Eastern Railway).
Both the Eastern Railway and the 238 North Eastern Railway are State Railways and as such it was not open to either of them to mete out differential treatment.
The appellant further contended that the other jute ' mills in West Bengal and Madras had facilities for direct shipment of their goods without carriage by rail to the ports, whereas, in the case of the appellant, the railways charged freight up and down in respect of the entire traffic of the appellant ; inevitably the prices of the products of the.
appellant could not be brought down to the competitive level for the purposes of export out of, or sale in, India.
The appellant annexed to its complaint table,, of goods rates of the two railways and urged that the unusual increase in the rates charged to the appellant was telling very heavily on the appellant as compared to other mills.
According to the appellant, ' the freight rates should be on the basis prevailing in the year 1949 as the market had gone down to the level existing in that year.
The appellant 's complaint therefore prayed that, since the prevailing rates were unreasonable and excessive, the tribunal should issue directions for the introduction of fair and reasonable rates.
When the complaint was first filed, both the East Indian Railway with its headquarters at Calcutta and the Bengal Nagpur Railway with its headquarters at Kidderpore were impleaded as respondents.
Subsequently, the railways were reorganized and the complaint was then suitably amended with the result that the Eastern Railway with its headquarters at Calcutta was substituted for both the original respondents.
Later on, the Union of India was impleaded as respondent 2 to the complaint.
Both the respondents denied.
the allegations made in the complaint.
It was alleged on their behalf that the existing tariff rates for the movement of jute were reasonable and not excessive.
It was also alleged by the respondents that, beyond drawing attention to special rates which applied to traffic from certain stations on the Assam Railway section of the NorthEastern Railway to Kanpur, the appellant had not submitted concrete evidence, facts or figures to make out even a prima facie case that the prevailing tariff 239 rates for jute were unreasonable.
The respondents ' case was that the fact that the appellant 's mill was situated far away from the port and as such had to incur additional cost had, no relevance or bearing on the case made out in the complaint and the same cannot be treated as a ground for consideration of any special rates.
The Union of India has specifically ' raised the additional plea that even after reorganization the two railways in question were separate entities and were working in the different regions having more or less divergent local conditions, and so they did not constitute one railway administration within the meaning of the Act and section 28 was therefore inapplicable.
On these contentions four principal issues were framed by the tribunal.
All the three members of the tribunal found that the freight rates for the transport of jute to Kanpur from certain stations in the Katihar section of the North Eastern Railway were lower than those for its transport to Raigarh.
In fact this position was conceded before the tribunal.
On the question as to whether the disparity in the said rates amounted to " undue " preference under section 28 of the Act, the members of the tribunal took different views.
The President Mr. Lokur and Mr. Roy, member, were of the opinion that the two railways constituted one railway administration.
They thought that it was just and equitable to hold that, although a railway administration may mean a manager, yet in this case it also meant the Government.
They were, however, not satisfied that the disparity in the rates justified the appellant 's complaint about " undue " preference.
That is why they rejected the appellant 's grievance that the railway administration had contravened the provisions of section 28 of the Act.
Mr. Subbarao, the third member of the tribunal, was inclined to take the view that, though the final control of both the railways may be with the Government or its representative, viz., the Railway Board, the actual management of the different zones was with the respective managers, and so the two railways in question cannot be said to constitute one railway administration.
Proceeding to deal 240 with the appellant 's complaint on this basis, Mr. Subbarao rejected its argument of " undue " preference on the ground that section 28 was inapplicable in the present case.
In the result, the issue about " undue " preference was held against the appellant by all the.
members of the tribunal.
In regard to the appellant 's case that the increase in the freight for the transport of jute to Raigarh was unreasonable and excessive, the President Mr. Lokur and Mr. Sabbarao found that the plea had not been proved by any evidence.
On the other hand, Mr. Roy made a finding in favour of the appellant and held that the rates in question were shown to be unreasonable and excessive.
Since the majority decision, however, was against the appellant on this point, the appellant 's complaint was dismissed.
It is against this order of the tribunal dismissing its complaint that the appellant has come to this Court in appeal by special leave.
Before dealing with the merits of the contentions raised by the appellant, it would be convenient to refer briefly to the provisions of the Act in regard to the constitution of the tribunal as they were in operation at the material time.
Section 26 bars jurisdiction of ordinary courts in regard to acts or omissions of the railway administration specified in the section.
Section 34 deals with the constitution of the Railway Rates Tribunal.
According to this section, the tribunial consists of a President and two other members appointed by the Central Government.
The tribunal had to decide the complaint filed before it with the aid of a panel of assessors as prescribed under section 35 of the Act.
Section 46 lays down that the decision of the tribunal shall be by the majority of the members sitting and shall be final.
It is obvious that this provision about the finality of the tribunal 's decision cannot affect this Court 's jurisd iction under article 136 of the Constitution.
Let us now set out the material provisions of the Act on which the appellant 's complaint is founded.
Section 28 provides: " A railway administration shall not make or give any undue or unreasonable preference or advantage to, 241 or in favour of, any particular person or railway administration, or any particular description of traffic, in any respect whatsoever, or subject any particular person or railway administration or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever." A breach of the provisions of section 28 by the railway ' administration may give rise to a complaint under section 41 (1) (a).
This section provides for complaints against a railway administration on five different grounds enumerated in cls.
(a) to (e) and it requires that the tribunal to which such complaints may be made shall hear and decide them in accordance with the provisions of ch.
In the present case, we are concerned with cls.
(a), (b) and (c) of section 41, sub section
Clause (a) covers cases of alleged contravention of the provisions of section 28; el.
(b) deals with cases where it is alleged that the administration is charging station to station rates or wagon load rates which are unreasonable; and cl.
(c) deals with cases where the railway administration is levying charges which are unreasonable.
Then section 41, sub section
(2) (i) lays down that, as soon as it is shown that the railway administration charges one trader or class of traders or the traders of any local area lower rates for the same or similar goods than it charges to other traders or class of traders or to the traders in another local area, the burden of proving that such lower charge does not amount to " undue" preference shall lie on the railway administration; and section 41 (2) (ii) lays down that, in deciding the question of " undue " preference, the tribunal may, in addition to any other considerations affecting the case, take into consideration whether such lower charge is necessary in the interest of the public.
The decision of the questions raised by the appellant before us will depend upon the scope and the effect of the provisions contained in sections 28 and 41 of the Act.
Section 28 is obviously based on the principle that the power derived from the monopoly of railway carriage must be used in a fair and just manner in respect of all persons and all descriptions of traffic 31 242 passing over the railway area.
In other words, equal charges should normally be levied against persons or goods of the same or similar kinds passing over the same or similar area of the railway lines and under the same or similar circumstances; but this rule does not mean that, if the railway administration charges unequal rates in respect of the same or similar class of goods traveling over the same or similar areas, the inequality of rates necessarily attracts the provisions of section 28.
All cases of unequal rates cannot necessarily be treated as cases of preference because the very concept of preference postulates competition between the person or traffic receiving preference and the person or traffic suffering prejudice in consequence.
It is only as between competitors in the same trade that a complaint of preference can be made by one in reference to the other.
If there is no such competition then no complaint of preference can be made even though the charges levied against similar goods may not be equal.
It may be possible to assume that there is competition between similar commodities put on the market in the same area for domestic consumption; but no such competition can be assumed between traffic of goods for export and traffic of similar goods for home consumption.
It is only when goods or persons can be said to be _pari passu that a question of preference arises and so it is where the competition between two persons or classes of goods is either admitted or proved that the question of the application of section 28 would ever arise.
Then again, even as between competing goods or persons, it would not be enough to prove mere preference to attract the provisions of section 28, for theoretically every case of preference may not necessarily be a case of " undue " preference.
It is only when the tribunal is satisfied that the railway administration has shown " undue " preference in favour of a particular class of goods that a complaint can be successfully entertained under section 41 (1) (a).
The position under section 28 thus appears to be clear.
Whoever complains against the railway administration that the provisions of section 28 have been contravened must establish that 243 there has been preference between himself and his goods on the one hand and his competitor and his goods on the other; and where it appears to the tribunal that such preference is " undue " preference, the complainant would be entitled to adequate relief under section 41 (1) (a) of the Act.
It is true that, while enquiring into the complaint ' made under section 41, as soon as the complainant shows inequality of rates and proves that the competing goods are charged less than his own, the onus shifts on to the railway administration to prove that such lower charge does not amount to " undue " preference.
The initial burden to prove preference is on the complainant; but when the said burden is discharged by the proof of unequal rates as between the complainant and his competitor, it is for the railway administration to prove that the preference is not " undue ".
In the absence of satisfactory evidence adduced by the railway administration in justification of unequal rates, the tribunal may hold that the unequal rates complained against by the complainant amounts to " undue " preference.
If, on the other hand, the railway administration leads evidence to show justification for the inequality of the rates, then notwithstanding the existence of unequal rates, the tribunal need not necessarily find that the administration has contravened the provisions of section 28, because it is only where " undue " preference by the administration is shown that it can be said to have contravened the said section.
In considering the question as to whether the alleged preference amounts to " undue " preference or not, the tribunal may also be entitled to consider whether the lower charge levied by the administration in respect of the competing class of goods was necessary in the interest of the public.
That is the result of the provisions of section 41, sub section
(2)(i) and (ii).
In this connection we may refer to some of the English decisions to which our attention was invited.
In Lever Brothers, Limited vs Midland Railway Company (1), it was held that the railway was not called upon to justify the disparity of rates on which the (1) (1909) XIII Railway and Canal Traffic Cases, 301.
244 complaint by Lever Brothers, Limited, was based because the applicants had failed to establish that Messrs. J. W. & Sons, Limited, in respect of whom the lower rate was charged, were the competitors of the applicants.
Referring to the fact that the rates charged to the two respective companies were different, Vaughan Williams L. J. observed that he did not think that the difference in rates itself constituted any undue preference by the Midland Railway Company of Watsons as competitors of Levers.
One of the reasons why the complaint made by Lever Brothers, Limited, failed was that it was not shown that Messrs. J. W. & Sons, Limited, were competitors of Lever Brothers ' Limited, and that eliminated the application of section 27 (1) of the Railway and Canal Traffic Act of 1888.
Similarly in Lancashire Patent Fuel Company Limited vs London and North Western Railway Company (1), it was held that no competition existed between coal carried for shipment, and that carried for the trader and so the application made on the ground of undue preference was incompetent.
It was proved in this case that the applicant 's slack was carried by the railway companies at a higher rate than that for slack carried for shipment; but the complaint based on this unequal charges was rejected on the ground that " it cannot be said that the slack carried by the railway companies for the applicants ever comes into competition with the slack which is carried by the railway companies for ordinary shipment ".
On the other hand, in The Nitshill and Lesmahagow Coal Company vs The Caledonian Railway Company (2), it was held that the railway administration had shown undue preference because it was proved that the goods unequally charged were commercially and substantially of the same description and there was competition between them.
Whether or not the goods were commercially and substantially of the same description was the point in issue between the parties; but the complainant 's case was accepted and it was found that, on the whole, the two articles (1) (1904) XII Railway and Canal Traffic Cases, 77, 79.
(2) (1874) 11 Railway and Canal Traffic Cases, 39, 45.
245 were substantially of the same description " and cannot but be regarded as competitive and that there ought not to be any difference in the rates at which they are carried ".
This decision shows that if unequal rates are charged for the carriage of similar or same goods travelling over similar or same areas, then the, inference as to " undue " preference can be drawn unless the preference alleged is otherwise shown to be justified by valid reasons.
In Denaby Main Colliery Company vs Manchester, Sheffield, and Lincolnshire Railway Company (1), the Earl of Selborne, in his speech, observed that he did not think it possible to hold (looking at the context in which the material words stand) that " the mere fact of inequality in the rate of charge when unequal distances are traversed can constitute a preference inconsistent with them ".
It may be pointed out incidentally that the provisions of section 2 of the Railway and Canal Traffic Act, 1854 (17 & 18 Vict. c. 31) are substantially similar to the provisions of section 28 in our Act.
Thus it is clear on these authorities that a complaint made under section 41(1)(a) can succeed only if it is shown that preference has been shown by the railway administration to the complainant 's competitor and the administration has failed to adduce evidence in justification of the said preference.
It will now be necessary to consider the merits of the appellant 's case in the light of this legal position.
The application made by the appellant does not in terms allege any "undue" preference at all.
Mr. Isaacs, for the appellant, conceded that the application had not been happily worded; but his comment was that the pleadings of both the parties are far from satisfactory.
That no doubt is true; but if the appellant wanted to make out a case against the railway administration under section 41(1)(a), it was necessary that he should have set up a specific case of "undue" preference.
The application does allege that the mills at Kanpur are able to carry raw jute at a lower rate but there is no allegation that between the goods of the Kanpur mills and the goods (1) ,114.
246 of the appellant there is any competition in the market.
On the other hand, the application refers to the advantage enjoyed by the jute mills in West Bengal and ' Madras over the appellant.
Reading the complaint filed by the appellant as a whole, it would .appear that the complaint by necessary implication refers to the competition between the goods of West Bengal and Madras mills on the one hand and the ap pellant 's goods on the other.
The appellant no doubt also avers that the rate charged for the transport of the goods are unreasonable and excessive but that is another part of the complaint which we will consider separately.
It would, therefore, be difficult to accept Mr. Isaaes argument that the appellant 's complaint should be read as including an allegation about competition between the appellant and the Kanpur mills.
If no such allegation has been made by the appellant in his complaint, it would not be fair to criticise the respondents for not denying the existence, of any such competition.
But apart from this technical difficulty, the appellant cannot even refer to any evidence on which it would be possible to base a conclusion as to the competition between the goods produced by the Kanpur mills and the appellant 's goods.
Mr. Isaacs has taken us through the evidence of Amritlal Bannerjee, Mustafi and Paul; but we have not been able to see any statement made by any of these witnesses which would show that there was a competition between the two sets of goods.
On the other hand, such meagre evidence as is available on the record would seem to suggest that the goods produced by the Kanpur mills are sent to local markets for domestic consumption and do not enter the field of competition with the appellant 's goods at all.
That presumably is the reason why the appellant could not allege any competition between its goods and the goods of the Kanpur mills and none of the witnesses could speak to it.
Mr. Isaacs was thus constrained to refer to the statement (R 18) filed by the respondents for the purposes of showing that the appellant 's goods travelled to some centres in India which may be covered by the goods of the Kanpur 247 mills.
In our opinion, this is an argument of desperation and it cannot help the appellant.
One of the questions which was apparently raised before the tribunal was in respect of the volume of traffic and it is in connection with this particular part of the dispute that relevant statements were prepared by the respondents and filed before the tribunal.
It would, we think, be unreasonable to make use of some of the statements contained in these documents for the purpose of deciding whether the appellant 's goods and the goods produced by the Kanpur mills enter into competition in the markets in India.
If the appellant had attempted to lead evidence on this point the respondents would naturally have had an opportunity to rebut that evidence.
It is too late now to make out a case of this alleged competition and seek to prove it by stray statements contained in the document filed by the respondents before the tribunal for a wholly different purpose.
That being the position of the evidence on the record we have no difficulty in accepting the view of the tribunal that competition between the goods of the Kanpur mills and the appellant 's goods has not been alleged or proved in the present proceedings.
If that be the true position, then the mere fact that the goods of the Kanpur mills are transported at more favourable rates would not attract the provisions of section 28 of the Act.
The next question which remains to be considered is whether the appellant has proved that the rates charged by the administration in respect of the goods transported by the appellant are per se unreasonable.
On this point the appellant has led no evidence at all.
In its complaint it has no doubt averred that there has been an undue increase in the freight charges but no allegation is made as to why and how the, actual charges are unreasonable.
It appears that the appellant is under a disadvantage because its mills are situated at Raigarh in Madhya Pradesh far away from the shipping centres of transport and the competing mills in West Bengal and Madras are very near the export centres: but the fact that by its geographical location the appellant has to incur, additional 248 expenses of transport would not be relevant in considering the reasonableness of the freight charges.
It is common ground that the freight charges are levied at the same rate by the railway administration in respect of either raw jute or jute products against all the mills.
There is no inequality of rates so far as the mills in this zone are concerned.
The appellant appears, to have argued before the tribunal that the rates of freight leviable by the railway administration should have some relation to the costs incurred by the appellant in producing the jute goods as well as the commodity prices prevailing in the market.
This argument has been rejected by the tribunal and we think rightly.
It seems to us clear that the costs incurred by the appellant which are partly due to the appellant 's geographical position can have no relevance whatever in determining the reasonableness or otherwise of the railway freight charged by the railway administration.
Nor can the railway freight move up and down with the rise and fall of the commodity prices.
In dealing with the question about the reasonableness of the railway freight, it would naturally be relevant to consider mainly the working costs of the railway administration and other material circumstances.
When a complaint is made against the railway administration under section 41(1)(b) or (c), the onus to prove the alleged unreasonableness of the freight rests on the complainant and if the complainant makes no effort to discharge this onus his plea that the rates are unreasonable must inevitably fail.
It appears that Mr. Roy, one of the members of the tribunal, was inclined to take the view that the special rates given to the Kanpur mills in Katihar area should be regarded as normal and reasonable rates; and since the rates charged to the appellant were higher than the said rates, he held that the rates charged against the appellant are unreasonable per se.
In our opinion, this view is entirely erroneous.
The rates charged to the Kanpur mills are admittedly special rates.
Whether or not these concessional or special rates should have been granted to the Kanpur mills is a matter with which the present enquiry is 249 not concerned.
There may be reasons to justify the said concessional rates; but it is plain that the special or concessional rates charged by the railway administration in another zone cannot be treated as the sole basis for determining what rates should be charged by the railway.
administration in other zones, and so we do not see how the appellant can successfully challenge the majority finding of the tribunal that the rates charged against the appellant 's goods are not shown to be unreasonable per se.
In the result we must hold that the tribunal was justified in rejecting the complaint made by the appellant.
The appeal therefore fails and must be dismissed with costs.
Before we part with this case, we would like to mention two points which were sought to be argued before us by the learned Additional Solicitor General on behalf of the respondents.
He challenged the correctness of the majority view of the tribunal that the two railways operating in two different zones in question constituted one railway administration within the meaning of section 3, sub section
Alternatively, he argued that, even if the two railways were held to constitute one railway administration and that the disparity in charges amounted to the granting of " undue " preference to the Kanpur mills, section 46 of the Act was a complete answer to the complaint under section 41(1)(a).
Since we have held in favour of the respondents on the points urged before us by Mr. Isaacs on behalf of the appellant, we do not propose to deal with the merits of these contentions.
Appeal dismissed.

summary/full:
The appellant company owned jute mills situated in Raigarh in the State of Madhya Pradesh, and it had to bring raw material from many railway booking stations outside the State as there was no other means of transport both for bringing jute to the mills and for carrying the finished products to ports for export to foreign countries; the jute mills in West Bengal and Madras had facilities for direct shipment of their goods without carriage by rail to the ports, and so the prices of the products of the appellant could not be brought down to the competitive level for the purposes of export out of, or sale in, India.
The appellant filed a complaint before the Railway Rates Tribunal under section 41 of the Indian Railways Act, 1890, on the allegations that the Railway administration had contravened the provisions of section 28 of the Act in that it had offered special rates for certain stations in its zone to Kanpur which were cheaper than those that were charged between Raigarh and some other railway stations, and that the charges levied for the freight of the appellant 's goods were unreasonable and excessive.
The Tribunal found that competition between the goods of the Kanpur mills and the appellant 's goods had not been alleged or proved in the present case Held, that the mere fact that the goods of the Kanpur mills are transported at more favourable rates would not attract the provisions of section 28 of the Act, unless there is competition between the goods of the Kanpur mills and the appellant 's goods, and undue preference has been shown by the railway administration to the appellant 's competitor.
Nitshill and Lesmahagow Coal Company vs The Caladonian Railway Company, (1874) 11 Railway and Canal Traffic Cases, 39, Denaby Main Colliery Company vs Manchester, Sheffield and Lincolnshire Railway Company, , Lancashire Patent Fuel Company Limited vs London and North Western Railway Company, (1904) XII Railway and Canal Traffic Cases, 77 and Lever Brothers, Limited vs Midland Railway Company, (1909) XIII Railway and Canal Traffic Cases, 301, relied on.
Held, further, that in considering the question as to the reasonableness of the railway freight the relevant factors would mainly be the working costs of the railway administration and 237 other material circumstances, and neither the geographical location of the appellant on account of which it has to incur additional expenses of transport, nor the cost incurred in producing the jute goods nor the commodity prices prevailing in the market, have any relevance.


judgement:
ivil Appeal No. 3129of 1988 From the Judgment and Order dated 7.7.1987 of the Patna High Court in Civil Revision No. 128 of 1987 (R).
R.K. Jain, Rakesh K. Khanna and R.P. Singh for the Appellant.
R.N. Sachthey and Anip Sachthey for the Respondents.
The following Order of the Court was delivered: ORDER Special leave granted.
The appellant is an employee in the Balihari Colliery of the Respondent No. 1 and in 1986 was working as an electrical helper.
On the allegation that he physically assaulted a supervising officer by name S.K. Mandal, he was subjected to disciplinary proceedings as also a criminal prosecution.
Since the disciplinary proceeding as also the criminal trial were taken simultaneously, the appellant filed a civil action in the court of Munsif at Dhanbad asking for injunction against the disciplinary action PG NO 823 pending criminal trial.
On 6.12.1986, the Munsif made an order staying further proceedings in the disciplinary action till disposal of the criminal case.
The appeal of the Respondent No. 1 against the order of learned Munsif was dismissed on 31st March, 1987, by the appellate court.
Thereupon the Respondent No. 1 moved the High Court in its revisional jurisdiction.
The High Court by its order dated 7.7.1987 held: "First information report was lodged against the opposite party (appellant) and the same was pending before the competent court.
Meanwhile the petitioners (respondents) started departmental proceeding against the opposite party.
The opposite party filed a suit before the trial court for declaration that appointment of the Enquiry Officer was illegal and for restraining the petitioners permanently from continuing with the departmental proceeding during the pendency of the criminal case.
That was allowed by the trial court and confirmed by the lower court.
There is no bar for an employer to proceed with the departmental proceeding with regard to the same allegation for which a criminal case is pending.
I am, therefore, of the opinion that the courts below were wrong in granting injunction in favour of the opposite party.
In the result, this application is allowed and the order impugned is set aside.
" According to Mr. Jain for the appellant, the legal position settled by this Court supported the stand that the disciplinary action had to be stayed till the criminal case was over.
He relied upon the decisions in The Delhi Cloth and General Mills Ltd. vs Kushal Bhan, ; and Tata Oil Mills Co. Ltd. vs Its Workmen, ; He also referred in the course of his submission to the decisions of different High Courts in support of his propositions.
Two cases out of the several ones of the High Courts he relied upon are Khusi Ram vs Union of India, and Project Manager, ONGC vs Lal Chand Wazir Chand Chandna, Pathak CJ., as he then was, In the Himachal case indicated that fair play required the postponing of the criminal trial and Thakkar J. as our learned brother then was in the Gujarat case had also taken a similar view.
PG NO 824 We would like to point out that there are also authorities in support of the position that there is nothing wrong in parallel proceedings being taken one by way of the disciplinary proceeding and the other in the criminal court.
Reference may be made to decision of this Court in Jang Bahadur Singh vs Baij Nath Tiwari, [1969] I SCR 134 and some decisions of High Courts such as Rama P.C. vs Superintendent of Police, Kolar & Anr., AIR ; Ali Mohd. & Ors.
vs Chairman T.A. & C. Udhampur, ; Moulindra Singh vs The Deputy Commissioner & Ors., l564 and Shaikh Kasim vs Superintendent of Police Office, Chingletut, Mr. Jain contended that we should settle the law in a straight jacket formula as judicial opinion appeared to be conflicting.
We do not propose to hazard such a step as that would create greater hardship and individual situations may not be available to be met and thereby injustice is likely to ensue.
In the Delhi Cloth & General Mills ' case (supra), it was pointed out by this Court: "It is true that very often employers stay enquiries pending the decision of the criminal trial courts and that is fair; but we cannot say that principles of natural justice require that an employer must wait for the decision at least of the criminal trial court before taking action against an employee.
In Shri Bimal Kanta Mukherjee vs M/s. News man`s Printing Works, [l956l LAC 188, this was the view taken by the Labour Appellate Tribunal.
We may, however, add that if the case is of a grave nature or involves questions of fact or law, which are not simple, it would be advisable for the employer to await the decision of the trial court, so that the defence of the employee in the criminal case may not be prejudiced . " .
In Tata Oil Mills ' case (supra), Gajendragadkar, CJ, spoke for a three Judge Bench thus: "There is yet another point which remains to be considered.
The Industrial Tribunal appears to have taken the view that since criminal proceedings had been started against Raghavan, the domestic enquiry should have been stayed pending the final disposal of the said criminal PG NO 825 proceedings.
As this Court has held in the Delhi Cloth and General Mills Ltd. vs Kushal Bhan, it is desirable that if the incident giving rise to a charge framed against a workman in a domestic enquiry is being tried in a criminal court, the employer, should stay the domestic enquiry pending the final disposal of the criminal case . .".
In Jang Bahadur 's case (supra) this Court said: "The issue in the disciplinary proceedings is whether the employee is guilty of the charges on which it is proposed to take action against him.
The same issue may arise for decision in a civil or criminal proceeding pending in a court.
But the pendency of the court proceeding does not bar the taking of disciplinary action.
The power of taking such action is vested in the disciplinary authority.
The civil or criminal court has no such power.
The initiation and continuation of disciplinary proceedings in good faith is not calculated to obstruct or interfere with the course of justice in the pending court proceeding.
The employee is free to move the court for an order restraining the continuance of the disciplinary proceedings.
If he obtains a stay order, a wilful violation of the order would of course amount to contempt of court.
In the absence of a stay order the disciplinary authority is free to exercise its lawful powers.
The view expressed in the three cases of this Court seem to support the position that while there could be no legal bar for simultaneous proceedings being taken.
yet, there may be cases where it would be appropriate to defer disciplinary proceedings awaiting disposal of the criminal case In the latter class of cases it would be open to the delinquent employee to seek such an order of stay or injunction from the Court.
Whether in the facts and circumstances of a particular case there should or should not be such simultaneity of the proceedings would then receive judicial consideration and the Court will decide in the given circumstances of a particular case as to whether the disciplinary proceedings should be interdicted, pending criminal trial As we have already stated that it is neither possible nor advisable to evolve a hard and fast, straight jacket formula valid for all cases and of general application without regard to the particularities of the individual situation.
For the disposal of the present case, we do not think it necessary to say, anything more, particularly when we do not intend to lay down any general guideline.
PG NO 826 In the instant case, the criminal action and the disciplinary proceedings are grounded upon the same set of facts.
We are of the view that the disciplinary proceedings should have been stayed and the High Court was not right in interfering with the trial court 's order of injunction which had been affirmed in appeal.
The appeal is allowed and the order of the High Court is vacated and that of the trial court as affirmed in appeal is restored.
The appellant shall be entitled to costs.
Hearing fee is assessed at Rs.2,000.
We would like to point out that for the first time in this Court, the enquiry report in the disciplinary proceedings was produced.
We express no view about it.
M.L.A. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The appellant, an employee of Respondent No. 1, was subjected to disciplinary proceedings as also a criminal prosecution simultaneously on the allegation that he physically assaulted a supervising officer.
He filed a civil action in the trial court asking for injunction against the disciplinary action pending criminal trial.
The trial court stayed further proceedings in the disciplinary action till disposal of the criminal case.
In appeal, the appellate court affirmed the aforesaid order.
However, the High Court allowed the Revision Application of the Respondent and set aside the impugned order on the ground that there is no bar for an employer to proceed with the departmental proceeding with regard to the same allegation for which a criminal case is pending.
Allowing the appeal to this Court, HELD: l.
The order of the High Court is vacated and that of the trial court as affirmed in appeal is restored.
The criminal action and the disciplinary proceedings were grounded upon the same set of facts.
The disciplinary proceedings should have been stayed and the High Court was not right in interfering with the trial court 's order of injunction which had been affirmed in appeal.
[826A B] 2(i) While there could be no legal bar for simultaneous proceedings being taken, yet, there may be cases where it would be appropriate to defer disciplinary proceedings awaiting disposal of the criminal case.
In the latter class of cases it would be open to the delinquent employee to seek such an order of stay or injunction from the court.
[825E F] 2(ii) Whether, in the facts and circumstances of a particular case, there should or should not be such simultaneity of the proceedings would then receive judicial consideration and the Court will decide in the given circumstances of a particular case as to whether the PG NO 821 PG NO 822 disciplinary proceedings should be interdicted, pending criminal trial.
[825F G] The Delhi Cloth and General Mills Ltd. vs Kushal Bhan, ; ; Tata Oil Mills Co. Ltd. vs Its Workmen, ; and Jung Bahadur Singh vs Baij Nath Tiwari, ; , relied upon.
Rama P. C. vs Superintendent of Police, Kolar & Anr., AIR ; Ali Mohd. & Ors.
vs Chairman T.A. & C. Udhampur, ; Moulindra Singh vs The Deputy Commissioner & Ors., 1564; Shaikh Kasim vs Superintendent of Post Office, Chingletut, AIR 1965 Mad. 502; Khusi Ram vs Union of India, and Project Manager, ONGC vs Lal Chand Wazir Chand Chandna, , referred to.
It is neither possible nor advisable to evolve a hard and fast, straight jacket formula valid for all cases and of general application without regard to the particularities of the individual situation.


judgement:
ivil Appeal Nos.
3159 3170 of 1988.
From the Judgment and Order dated 30.12.1985 of the Andhra Pradesh High Court in Appeal No. 2578 to 2583 of 1985.
K. Rajendra Chowdhary and A. Subba Rao for the Appellants.
P.A. Choudhary, T.V.S.N. Chari, Mrs. Sunita Rao, Badrinath and K. Ram Kumar for the Respondent.
The Judgment of the Court was delivered by JAGANNATHA SHETTY, J.
We grant Special Leave and proceed to dispose of these appeals.
These appeals are from a judgment dated 3() December, 1985 of the High Court of Andhra Pradesh in a batch of appeals arising out of land acquisition proceedings.
The lands in question are situated in Hasanapur of Karimnagar Taluk.
The lands are acquired for the purpose of submergence under Lower Manair Dam Reservoir project.
SeCtion 4(1) notification was issued on 24 March, 1977.
The land acquisition officer by his award dated 15 July, 1978 awarded compensation ranging from Rs.1320 to 4,000 per acre depending upon the nature of the land and the crop grown PG NO 855 thereon.
The District Judge on a reference under section 18 of the Act enhanced the compensation to Rs.85,000 per acre regardless of categorisation.
The High Court by the Judgment under appeals herein has remanded the matter for fresh disposal with liberty for both parties to adduce additional evidence.
The high Court has specifically observed that the District Judge should exclude exhibit A. 4 and exhibit A. 5 from consideration.
exhibit A. 4 and exhibit A. 5 are the awards pertaining to acquisition of certain lands situated in Karimnagar.
Thereunder, compensation at the rate of Rs. 85,000 per acre under exhibit A.4 and Rs.70,000 under exhibit A.5 were given.
The High Court has observed that the lands concerned in those awards are not comparable lands.
Hence these appeals.
The first question that arises for consideration is whether exhibit A.5 should be altogether excluded or it should be kept open for being considered by the District Judge on merits.
This is the specific question on which this Court issued notice on the Special Leave petition.
If first part of the question is answered in the negative, then the second question for consideration is whether the matter should go back to District Judge for fresh disposal.
We heard counsel on both sides on the merits of the entire matter.
The claimants have alleged that the lands acquired are fit for residential houses as they are adjacent to industrial estate.
MARKFED factory, Vanaspathi complex, diary farm and Padmanagar colony.
The lands have potentiality of being used as house sites and the like of which was sold for Rs.5,000 per gunta prior to the present acquisition.
The lands are near to Karimnagar town The town is developing into a modern town in Andhra Pradesh, with a lot of industrial, commercial, educational activities.
They have claimed compensation at Rs.1,60,000 per acre for dry lands and a little more for wet lands.
The evidence in support of their claim consists of the testimony of one of the claimants (PW 1).
He has given a rosy picture of the location and value of the lands.
Another witness (PW 2) has corroborated the version of PW 1.
Besides we have the evidence of a Commissioner.
Mr. G. Santosh Reddy Advocate was appointed as Commissioner in this case.
He has filed his report exhibit A.7 and Plan.
PG NO 856 The High Court appears to have brushed aside all that evidence.
The High Court compared the combined map of karimnagar and Hasnapur village (exhibit A.3) with the sketch map (exhibit A.8) prepared by the Commissioner.
The High Court was of opinion that the lands concerned in exhibit
A.5 are abutting Karimnagar town.
They are close to MARKFED and other industrial institutions and buildings, but not the lands in question.
The High Court said: "whereas admittedly the lands in question are 3 kms from Karimnagar town".
This statement has been seriously disputed before us.
It is said that the claimants or their counsel did not admit, and indeed could not have made that admission suicidal to their case.
Be that as it may, the distance determined by the High Court whether on admission or by comparison of village maps makes little difference.
The distance from Karimnagar town should not be a ground to reject exhibit A.5.
If the lands are suitable for house sites, exhibit A.5 would still be relevant.
The location of lands will have to be borne in mind while ascertaining the market value.
As to the nature of lands we have the evidence of the Commissioner.
He is an Advocate of the local Bar.
He had gone to the spot.
He had a topographic surveying.
According to his evidence, the lands in question are similar in nature and of value as the lands covered under the Award exhibit A.5.
The lands are nearer to collectorate complex, RTC Bus stand and other housing complex.
He has stated that the lands are more suitable for house sites than for agriculture.
There is no reason to discard this evidence.
We cannot therefore, reject exhibit A.5 altogether.
The next question for consideration is whether it is now necessary to keep the remand order undisturbed.
Counsel for the claimants ' is totally against the matter being sent back to the District Judge.
He urged that the claimants are small holders and agriculturists.
they are hard pressed and unable to fight another round of litigation.
I hey are prepared to accept any compensation which this Court may think fit to award.
This plea of the counsel has an appealing simplicity.
It reflects the facts of life and problems of litigation.
We can very well appreciate the anxiety and need of claimants to get compensation here and now.
No matter what it is.
The lands were acquired as far back in 1977.
One decade has already passed.
Now the remand means another round of litigation.
There would be further delay in getting the compensation.
After all money is what money PG NO 857 buys.
What the claimants could have bought with the compensation in 1977 cannot do in 1988.
Perhaps, not even one half of it.
It is a common experience that the purchasing power of rupee is dwindling.
With rising inflation, the delayed payment may, lose all charm and utility of the compensation.
In some cases, the delay may be detrimental to the interests of claimants.
The Indian agriculturists generally have no avocation.
They totally depend upon land.
If uprooted, they will find themselves nowhere.
They are left high and dry.
They have no savings to draw.
They have nothing to fall back upon.
They know no other work.
They may even face starvation unless rehabilitated.
In all such cases, it is of utmost importance that the award should be made without delay.
The enhanced compensation must be determined with out loss of time.
The appellate power of remand, at any rate ought not to be exercised lightly.
It shall not be resorted to unless the award is wholly unintelligible.
It shall not be exercised unless there is total lack of evidence.
If remand is imperative, and if the claim for enhance I compensation is tenable, it would be proper for the appellate court to do modest best to mitigate hardships.
The appellate court may direct some interim payment to claimants subject t o adjustment in the eventual award.
Counsel for the State argued that there is no material on record for this Court to determine compensation and the remand may be useful for the claimants themselves.
He however.
reluctantly indicated his own estimate of the market value in the event of this Court giving a quietus to the litigation.
It seems to us that this is not a case ot no evidence.
This is a case of both relevant and irrelevant evidence mixed up together.
We must exclude the irrelevant and exaggerated claim.
The claimants have not justified the award generously given by the District Judge.
Rs. 85,000 per acre appears to be on the high side as against the award exhibit A.5.
In the first place, Section 4 notification concerned in that Award was dated 16 February l978.
It was almost a year after the notification in these cases.
Secondly, the lands therein were close to the town of Karimrtagar.
The situation is not similar in this case.
Here the lands are 3 kms awy from Karimnagar town.
It is in this background I we have carefully considered the rough estimates given by counsel on both sides.
We have also examined the relevant material.
A distance of 3 kms from a growing town of District headquarters should not however.
make a world of difference.
We are of opinion that the compensation at the rate of Rs.25,000 per acre regardless of categorisation would be sufficient to meet the ends of justice.
It is needless to state that the claimants are entitled to mandatory solatium PG NO 858 at 30 per cent and also statutory interest.
In the result, we allow these appeals and set aside the judgments of the High Court and District Judge.
There shall be an award in terms as indicated above.
In the circumstances of the case, we make no order as to costs.
M.L.A. Appeals allowed.

summary/full:
The appellants were awarded by the Land Acquisition Officer compensation ranging from Rs.1,320 to 4,000 per acre depending upon the nature of the land acquired in 1977.
The District Judge enhanced the compensation to Rs.85,000 per acre on the ground that compensation @ Rs.85,000 per acre under Award exhibit A.4 and Rs.70,000 under Award exhibit A.5 had already been awarded in respect of acquisition of certain other similar lands situated in Karimnagar.
However, the High Court, in appeal, remanded the matter for fresh disposal and also observed that the District Judge should exclude exhibit A.4 and exhibit A. 5 from consideration as the land concerned in those awards are not comparable lands.
In appeals to this Court by Special Leave, it was contended on behalf of the appellants that the matter should not be remanded to the District Judge, since the claimants being small holders and agriculturists, are hard pressed and unable to fight another round of litigation and that they are prepared to accept any compensation which this Court may think fit to award.
Allowing the appeals, HELD: (1) The Judgments of the High Court and the District Judge e are set aside.
The compensation at the rate of Rs.25,000 per acre regardless of categorisation would be sufficient to meet the ends of justice.
It is needless to state that the claimants are entitled to mandatory solatium at 30% and also statutory interest.
[857G H] 2(i) It is of utmost importance that the award should be made without delay.
The enhanced compensation must be determined without 108s of time.
[857C] PG NO 853 PG NO 854 2(ii) The appellate power of remand at any rate ought not to be exercised lightly.
It shall not be resorted to unless the award is wholly unintelligible.
It shall not be exercised unless there is total lack of evidence.
If remand is imperative, and if the claim for enhanced compensation is tenable, it would be proper for the appellate court to do modest best to mitigate hardships.
The appellate court may direct some interim payment to claimants subject to adjustment in the eventual award.
[857C D] 3.
This is not a case of no evidence.
This is a case of both relevant and irrelevant evidence mixed up together.
Therefore irrelevant and exaggerated claim must be excluded.
[857F] In the instant case, the location of lands will have to be borne in mind while ascertaining the market value.
The Commissioner has stated that the lands are more suitable for house sites than for agriculture.
There is, no reason to discard this evidence and reject exhibit A. 5 altogether.
[856C D]


judgement:
ivil Appeal No. 3095 of 1988.
From the Judgment and Order dated 1.4.87 of the Madras High Court in C. R.P. No. 370/87.
T.S. Krishnamurthy Iyer, V. Krishnamurthy, V. Balachandran and V. Ramamoorthy for the Appellant.
Shanti Bhushan, section Rangarajan, and Sanjay Prakash for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
1.
After having heard learned counsel on both sides, we grant special leave and proceed to dispose of the appeal itself by this order, the point involved being a very short one.
Real estate prices all over the country, and particularly in important capital cities, have spiralled up in the last few decades to such heights that disputes over land, which at one time could have been resolved by a little give and take between the parties have now assumed a magnitude which makes any type of reconciliation impossible.
In this case, where that dispute arises out of a lease by a prominent charitable trust in Madras in favour of a well established engineering company of all India stature, we were somewhat hopeful that the parties would agree not to waste further time and energy in litigation but would come to some reasonable compromise.
We tried our best by adjourning the case several times and encouraging the parties to come up with various proposals for compromise.
PG NO 758 Ultimately, however, we found that it was not possible to bring the parties together.
We, there fore, proceed to dispose of the issues raised in the appeal.
1951, M/s. Larsen & Toubro.
the appellant company, took on lease from the respondent trustees a property situated in a busy central locality of the city of Madras.
In 1975, the trustees filed a suit for possession.
The appellant company respondent by claiming protection under Section 9 of the Tamil Nadu City Tenants ' Protection Act (No. 111 of 1922) (hereinafter referred to as the `Act ').
The short question that arises in the appeal is whether the company is entitled to this protection.
The above piece of legislation was enacted primarily for the protection of small tenants, who in certain municipal towns and adjoining areas had constructed buildings on others ' lands, by ensuring that they are not evicted so long as they pay a fair rent for the land.
The Act also contained a provision under which the tenant could put forward a claim to purchase the land in question from the owner at its average market value of the three immediately preceding years.
It is highly doubtful whether the Act was intended to enable affluent persons or prosperous companies, like the present appellant, to take advantage of its provisions to compel a lessor to Sell to them property of which they have obtained initial possession as lessees.
However, the question has to be decided not on such general considerations but on the language of the statute itself and so we proceed to discuss the issue involved.
It is first necessary to advert to the terms of the lease deed.
By the lease deed dated 13.8.
1951, the lessors (trustees) purported to demise to the lessee (company) "all that plot of vacant land and the buildings erected thereon and more particularly described in the schedule hereto and delineated in the plan hereto annexed and measuring 17 grounds and 321 sq.
ft. or thereabouts".
The term of the lease was 21 years from the date of the lease.
The consideration was "a monthly rent of Rs.900 for the aforesaid land and a monthly rent of Rs.350 for the aforesaid buildings aggregating in all to Rs.1,250 per month" and the other conditions and covenants set out in the deed.
Paras I or II of the lease deed set out the following, among other,Covenants between the parties: (a) The lessee was to pay, and had paid, an advance of Rs.15,000 to the lessor refundable without interest on the termination of the lease ; PG NO 759 (b) the lessee was to pay the rent reserved regularly whether or not any buildings were erected by the lessees on the demised land and irrespective of whether the land or the buildings were of use to them for the purposes for which they were taken on lease ; xxx xxx xxx (e) the lessee was to comply with all municipal and local regulations "in the erection and completion of any buildings on the demised plot.
" (f) the lessors were to pay the property tax for the existing demised building but the lessees were to pay all taxes, rates etc.
chargeable in respect of any buildings to be erected by the lessees on the demised plot ; xxx xxx xxx (h) if and when the lessees sublet the demised land or any part thereof or the demised buildings or any portion or portions thereof at any higher rental and the Corporation authorities levy a property tax on the demised land or buildings higher than that based on a monthly rent of Rs.950 and Rs.300 respectively, the lessees shall pay such excess tax, if any, to the lessors.
xxx xxx xxx (j) the lessees were to enjoy the demised land during the term of the lease but surrender "the demised land and the buildings" to the lessors at the termination of the lease xxx xxx xxx (m) the lessees during the subsistence of the lease, were to renovate, at their own cost, the demised buildings or any portion or portions thereof and carry out and effect all repairs considered necessary for their use and habitation.
Under Para III of the lease deed, it was agreed between the parties, inter alia: (a) that in case of any default in the payment of rent or any breach of the covenant between the parties, the lessor could "re enter upon the demised plot and buildings PG NO 760 or upon any part thereof in the name of the whole" and determine the lease ; (b) that, in case the lessee fulfilled his obligations under the lease and gave six months ' prior notice of his desire to obtain a renewal of the lease, the lessors shall grant a renewal lease of the demised plot and building for a further period of 21 years ; (c) if during the subsistence of this lease, the lessors get an offer (for) the purchase of the demised plot of land or the buildings or both from third parties at a valuation acceptable to the lessors they shall intimate such offers to the lessees and give them the option of buying the demised plot and buildings at such valuation and if within two weeks of receipts of such intimation to the lessees they do not send a reply to the lessors expressing their consent to buy at such valuation and do not further pay to the lessors a deposit or earnest money towards the intended purchase, the lessors shall be entitled to sell the demised plot of land or buildings to such third parties for the price for which it was offered to the said lessees and any such sale to third parties shall be only subject to this lease.
The lessees shall (be) in the event of their purchase of the demised plot and buildings themselves pay and bear the stamp, registration and all other charges incidental to the deed of conveyance.
The schedule to the lease deed described the demised property as "all that piece or parcel of land marked 'J ' washed in yellow colour in the plan hereto stitched and measuring 17 grounds 32 I sq.
or there abouts and forming part of the entire piece or parcel of land with bungalow known as `Club Chambers ' and bearing No. 1, Patullo 's Road and No. 5, Club House Road .
. " To turn now to the statute, the relevant provisions are not many and may next be set out.
The Act came into force in 1922.S.1 applies the Act only to "tenancies of land" in certain towns and their adjoining areas in Tamil Nadu created before a particular date but there is no dispute that it does apply.
within the city of Madras and that the lease deed in the instant case is prior to the specified date.
section 2 contains the definitions of which we are concerned only with the following.
(1) " `Building ' means any building, hut or other structure whether of masonry, bricks.
wood, mud or metal or any other material whatsoever used PG NO 761 (i) for residential or non residential purposes in the City of Madras . .
(ii) for residential purposes only, in any other area; and includes the appurtenance thereto.
" (2) "Land" does not include buildings.
(4) 'Tenant ' in relation to any (i) means a person liable to pay rent in respect of such land, under a tenancy agreement express or implied, and (ii) includes (a) any such person as is referred to in sub clause (i) who continues in possession of the land after the determination of the tenancy agreement, (b) any person who was a tenant in respect of such land under a tenancy agreement to which this Act is applicable under sub section (3) of section 1 and who or any of his predecessors in interest had erected any building on such land and who continues in actual physical possession of such land and building, notwithstanding that (1) such person was not entitled to the rights under this Act by reason of the proviso to section 13 of this Act as it stood before the date of the publication of the Madras City Tenants ' Protection (Amendment) Act, 1972 (Tamil Nadu Act 4 of 1972), or (2) a decree for declaration or a decree or an order for possession or for similar relief has been passed against such person on the ground that the proviso to section 12 of this Act as it stood before the date of the publication of the Madras City Tenants ' Protection (Amendment), Act [Tamil Nadu Act 4 of 1972) disentitled such person from claiming the rights under this Act.
and (c) the heirs of any such person as is referred to in PG NO 762 sub clause (i) or sub clause (ii)(a) or (ii)(b); but does not include a sub tenant or his heirs.
Section 3 entitles every tenant " 'on ejectment" to be paid compensation for the value of any building which may have been erected by him, by any of his predecessors in interest, or by any person not in occupation at the time of ejectment who derived title from either of them.
Section 4 requires the Court in a suit for ejectment against a tenant in which the landlord succeeds to determine the amount of compensation payable under Section 3 and direct the landlord to pay the same within a time to be specified, in default of which the suit will stand dismissed and landlord debarred from instituting a fresh suit for ejectment or presenting a fresh suit for recovery of possession for a period of five years.
Sections 7 and 7 A enable the landlord and tenant respectively to apply to the court to fix a reasonable rent for the occupation of the land and section 8 provides that the tenant shall not be liable to eviction for a period of five years from the date of fixation of fair rent.
Section 9 confers a valuable right on the tenant.
It reads, in so far as it is relevant for our purpose, as follows: "9 [1] [a] [i] : Any tenant who is entitled to compensation under section 3 and against whom a suit in ejectment has been instituted . . may within one month after the service on him of summons, apply to the court for an order that the landlord shall be directed to sell for a price to be fixed by the court, the whole or part of the extent of land specified in the application.
XXX XXX XXX (b) On such application, the court shall first decided the minimum extent of the land which may be necessary for the convenient enjoyment by the tenant.
The Court shall then fix the price of the minimum extent of the land decided as aforesaid or of the extent of the land specified in the application under cause (a), whichever is less.
The price aforesaid shall be the average market value of the three years immediately preceding the date of the order.
The court shall order that within a period to be determined by the court, not being less than three months and not more than three years from the date of the order, the tenant shall pay into court or otherwise as directed the price so fixed in one or more instalments with or without interest.
PG NO 763 (2) In default of payment by the tenant of any one instalment, the application under clause (a) of sub section (1) shall stand dismissed, provided that on sufficient cause being shown, the court may excuse the delay and pass such orders as it may think fit, but not so as to extend the time for payment beyond the three years above mentioned.
On the application being dismissed, the court shall order the amount of the instalment or instalments, if any, paid by the tenant to be repaid to him without any interest.
(3)(a) On payment of the price fixed under clause (b) of sub section (1), the court shall pass an order directing the conveyance by the landlord to the tenant of the extent of land for which the said price was fixed.
The court shall by the same order direct the tenant to put the landlord into possession of the remaining extent of the land, if any.
The stamp duty and registration fee in respect of such conveyance shall be borne by the tenant.
[b] On the order referred to in clause (a) being made, the suit . .
shall stand dismissed, and any decree or order in ejectment that may have been passed therein but which has not been executed shall be vacated.
XXX XXX XXX Section 11 provides for a notice offering compensation in terms of the Act before any suit for ejectment could be filed against a tenant.
Section 12 is of some relevance and needs to be set out: "Nothing in any contract made by a tenant shall take away or limits his rights under this Act.
Provided that nothing herein contained shall affect any stipulations made by the tenant in writing registered as to the erection of buildings, in so far as they relate to buildings erected after the date of the contract.
" The proviso, however, was deleted with complete retrospective effect by an Amendment Act of 1972.
When the trustees filed the suit for ejectment, the company, as already stated, filed Application No. 1541 of 1976 under Section 9 of the Act.
This application was PG NO 764 accepted by the trial court.
The court negatived the company 's contention that it had exercised its option for the renewal of the lease for the period beyond the initial period of 21 years.
However, it was of the opinion that the company was entitled to the benefit of the Act and appointed a commissioner to inspect the property, find out the market value of the property and fix the minimum extent of the property required by the defendant for convenient enjoyment of the super structure which it would be entitled to purchase in terms of Section 9.
The trustees filed an appeal.
They contended that the lease in favour of the company was that of a building with appurtenant land and that, therefore, the respondent was not entitled to the protection of section 9 of the Act and that, therefore, the application filed by the company should have been dismissed.
The appeal was allowed.
The company, thereupon, preferred a revision petition before the High Court.
The Iearned Judge examined closely the terms of the lease deed between the parties, discussed certain earlier decision of the Court and concluded that the first appellate court was right in holding that the lease was of a building and not of land and that, therefore, the application of the company under Section 9 was not maintainable.
He, therefore, dismissed the revision petition.
Hence the present appeal.
From the statutory provisions set cut above, it will be seen that the Act applies only to tenants in respect of land situated in certain areas where the tenancy has been created before a prescribed date.
The only controversy here is whether the lease in question can be said to be a lease of `land '.
section 2(2) which purports in define 'land ' only clarifies that 'land ' does not include 'building '. 'This takes us therefore to the definition of 'building ' in section 2(1) which expression means any structure whatever put up on land 'and includes the appurtenance thereto '.
From these definitions It will be clear that, before a right of purchase can be exercised under Section 9$, the tenant must be a tenant of land, not comprising of buildings or lands appurtenant thereto.
In the present case, the High Court has observed as follows: "If a land with a building is leased out, then T. N. Act III of 1972 would have no applicability to such a property.
(That) there was a palatial building over the property could not be disputed because the property originally belonged to a notable dignitary in yester years, who lived in that building with a spacious compound all round the property (and) which was enjoyed as an appurtenant area to the building PWl had stated that the plinth area of the building PG NO 765 XXX XXX XXX was about 5,285 sq.
In para 7 of the written statement, defendants stated that the vacant site covered by the lease deed was about 35,830 which is equal to 14 grounds and 323 sq. feet.
Under the lease deed, the total area leased out was 17 grounds and 321 sq.
Hence the building had occupied an area of nearly two grounds, which would be roughly about one eighth of the total area.
Hence it was not a tiny insignificant structure, but a substantial building which was used as a residential building by a very affluent person, and which had been later on given to the charity, on a will executed by him.
Under the Act, if there is a structure built with mud or any other material of even a tiny dimension, it would be a building for the purpose of the Act as defined in section 2(1); and section 3(2) being explicit that land does not include building, the provisions of the Act could be availed of by the tenant only if he had taken vacant land on lease.
XXX XXX XXX In the instant case a substantial building which had occupied one eighth of the area leased out cannot be overlooked particularly when the area was enjoyed us an appurtenant area for that building.
Once a superstructure of such dimension had existed, it will be impossible to apply the provisions of Act III of 1922 and hold that only the land had been taken on lease by defendant.
(underlining ours) In other words, the High Court came to the conclusion that, in the present case, there had been a lease, not of vacant land but of a building with the land appertunant thereto and that, therefore, the provisions of the Act would not apply.
Learned counsel for the appellant attacks the above finding on two grounds.
ln the first place, he points out that under the terms of the lease deed what was leased out was" . .
plot of vacant land and building erected thereon".
This is the description given of the subject matter of the lease both in the preamble as well as in the Schedule.
He, therefore, submits that the subject matter of the lease was a piece of vacant land on some portion of PG NO 766 which there were buildings and not of a building with appurtenant land.
The second submission is that when the definition of 'building ' talks to appurtenant land, what it refers to is only such an extent of land as is absolutely necessary for the necessary and convenient enjoyment of the building in question.
Pointing out that the building in the present case occupied barely an eighth of the area of the entire plot of land which was the subject matter of the lease, he contends that the land covered by the lease cannot be said to be appurtenant land.
In this context, learned counsel relies on the definition of `appurtenant ' in Black 's Law Dictionary (Special Deluxe, Fifth Edition) page 94 which, in so far as is relevant, reads as follows: "Appurtenant: belonging to; accessory or incident to; adjunct, appeanded, or annexed to; answering to accessorium in civil law.
Employed in leases for the purpose of including any easments or servitudes used or enjoyed with the demised premises.
A thing is 'appurtenant ' to something else when it stands in relation of an incident to a principal and is necessarily connected with the use and enjoyment of the latter.
A thing is deemed to be incidental or appurtenant to land when it is by right used with the land for its benefit, as in the case of a way, or water course, or of a passage for light, air or heat from or across the land of another." In our opinion, the contentions of the learned counsel cannot be accepted.
So far as the first contention is concerned, we do not think that the language employed is conclusive on the issue.
It only shows that both land and building were leased.
Whether the land is to be treated as an appurtenant or not would depend upon the extent and nature of the land and its situation vis a vis the building thereon and not on whether the lease deed describes the subject matter as "all that land and building" or vice versa.
Perhaps, if the deed had described the demised premises as 'building and appurtenant land ' that would have helped in ascertaining the intention of the parties but even that would not have been conclusive.
On the second question, we may point out that this Court had occasion to consider at length the meaning of the expression 'appurtenant to building ' in Maharaja Singh vs State of U.P., There the question was whether the land on which a cattle fair was being held could be said to be appurtenant to the building situated on the land.
This Court observed : PG NO 767 "The heated debate at the bar on this and allied aspects need not detain us further also because of our concurrence with the second contention of the Solicitor General that the large open space cannot be regarded as appurtenant to the terraces, stands and structures.
What is integral is not necessarily appurtenant.
A position of subordination, something incidental or ancillary or dependant is implied in appurtenance.
Can we say that the Iarge spaces are subsidiary or ancillary to or inevitably implies in the enjoyment of the buildings qua buildings? That much of space required for the use of the structures as such has been excluded by the High Court itself.
Beyond that may or may not be necessary for the hat or mela but not for the enjoyment of the chabutras as such.
A hundred acres may spread out in front of a clubhouse for various games like golf.
But all these abundant acres are unnecessary for not incidental to the enjoyment of the house in any reasonable manner.
lt is confusion to miss the distinction, fine but real.
"Appurtenant", in relation to a dwelling, or to a school, college includes all land occupied therewith and used for the purposes thereof [Words and Phrases Legally Defined Butterworths, 2nd EDM.
The word 'appurtenances ' has a distinct and definite meaning .
Prima facie it imports nothing more than what is strictly appertaining to the subject matter of the devise or grant, and which would, in truth, pass without being specially mentioned.
Ordinarily, what is necessarily for the enjoyment and has been used for the purpose of the building, such as easements, alone will be appurtenant.
Therefore, what is necessary for the enjoyment of the building is alone covered by the expression 'appurtenance '.
If some other purpose was being fulfilled by the building and the Iands, it is not possible to contend that these lands are covered by the expression "appurtenances".
Indeed it is settled by the earliest authority, repeated without contradiction to the latest, that land cannot be appurtenant to land.
The word 'appurtenances ' includes all the incorporal hereditaments attached to the land granted of demised, such as rights of way, of common . but it does not include lands in addition to that granted ' (Words and Phrases, supra].
PG NO 768 In short, the touchstone of `appurtenance ' is dependence of the building on what appertains to it for its use as a building.
The law thus leads to the clear conclusion that even if the buildings were used and enjoyed in the past with the whole stretch of vacant space for a hat or mela, the land is not appurtenant to the principal subject granted by Section 9, viz., buildings".
The question, therefore, whether certain land is appurtenant or not is one of fact.
The High Court has applied its mind to the nature of the building as well as to the terms of the lease deed.
It has kept in mind that the lease relates to a period about 35 years ago, a time when residential houses occupied large extents of land.
There used to be a building in the middle surrounded by a vast area covered by garden, arbor, trees and the like.
The lease also describes the building as "Club Chambers" with a municipal door number.
The building is itself a substantial one occupying as many as two grounds.
Having regard to the position pertaining at the time when the lease was executed, the first appellate court and High Court came to the conclusion that the land in this case was appurtenant to the building.
We see no reason to disturb this finding.
On the other hand, we agree that the use of the land, in the circumstances of this case, was incidental to the enjoyment and beneficial use of the building and, therefore, squarely fell within the definition which has been discussed above.
It was then contended for the appellant, in the alternative, that the lease deed in the present case should be treated as creating two separate leases, one of the building and the other of the land and that, viewed in this light, the appellant would be entitled to exercise rights under the Act atleast in respect of the portion of the demised premises which comprised of vacant land.
To substantiate this contention, Iearned counsel for the appellant relied upon the following clauses in the lease deed: 1.
The divisibility of the clauses in para I of the lease deed into two sets: clauses (b), (d), (e) and (g) as pertaining to the land and clauses (f), (m), (n).
(o) and (p) as pertaining, to the building; 2.
The stipulation of separate rents for the land and the building, 3.
The presence of clauses clearly envisaging and implying that the lessee could put up buildings on the vacant portions of the land and even providing that the lessee would be liable to pay taxes etc.
in respect of the buildings to be so erected ; 4.
The provision that the lessee that the sublet the demised land or building or any part or portion thereof PG NO 769 subject only to its being liable for any extra burden of municipal tax that may fall on the landlord as a consequence; 5.
The covenant that, if during the subsistence of the lease, the lessors got an offer for the purchase of the demised plot of land or the buildings or both from third parties the lessee should be given a first option to purchase at the price offered.
Relying upon the above features, it was contended that the lease deed does deal with the land and building separately.
Separate rents were provided for; the lessees were given right to put up structures and, if necessary, even let them out; the sale or disposal of various parts of the land or the building separately was envisaged.
It was, therefore, vehemently contended that the lease deed should be construed as consisting of two leases, one in respect of the vacant land and one in respect of the building rolled into one.
We are unable to accept this contention.
We agree with the conclusion of the High Court that these clauses of the lease deed cannot to be construed in the manner suggested by the lessees.
There are clear indications in the lease deed that it is a single lease of both the building and the vacant land.
They are jointly referred to in the lease deed.
There are various passages in the lease deed where it is referred to as "the lease" i.e. a single indivisible lease.
The rent payable is specified as an aggregate of Rs. 1,250 per month and a consolidated advance of one year rent is payable under the lease deed.
The lease is for a period of 21 years with an option to the lessee to renew it for the same period.
The lease deed does not envisage the termination or renewal of the lease in respect of a part of the leased premises.
The lease of the building alone cannot be renewed without a renewal of lease in respect of the land or vice versa.
The deed contemplates the termination of lease at one point of time whereat the lessee has to surrender the possession with liberty to remove any super structures it might have put up there.
The re entry clause also provides a right to re entry in respect of the demised premises as such in the event of any non payment of rent or breach of the stipulations.
physically, it is impossible to consider the document as comprising of two leases because the extent of land which has to go with the building as appurtenance for some part of the land atleast is clearly and necessarily appurtenant and the extent of land which can be treated as separately demised cannot be defined.
No seperate lease of land can be read into the document without a proper specification and delineation of the extent of land that is to be comprised in such a separate lease.
PG NO 770 The clauses on which reliance has been placed on behalf of the appellant, in our opinion, do not lead to the inference suggested by the appellant.
The High Court has pointed out that the rent for the property was Rs. 1,250 and that the bifurcation thereof into Rs.900 and Rs.350 had been introduced only with a limited purpose in view.
The landlord wanted to, protect himself against the possibility of demands of high municipaL takes being made against him as a result of the Iessees putting up structures on the land or letting out parts of the property at high rent$. So far as the other clauses are concerned, as rightly pointed out by the learned counsel for the respondents they are just the usual clauses which find a place in a lease of immovable property.
They are merely permissive in nature and enable the Iessee to deal with the land, during the period of demise, to the best advantage without affecting the lessor 's interests.
There was a substantial building existing on the land.
There is no material to indicate that this was not sufficient for the purposes for which the building was taken on lease by the appellant.
However, in case it was considered necessary to put up further structures, the lease deed permits the lessee to do so subject to safeguards against higher tax and compensation and with a stipulation that this should be removed at the time of termination of the lease.
So far as the clause pertaining to sale is concerned, again, it merely provides for a possible eventuality.
The execution of a lease deed does not prevent the lessor from disposing of the property, in whole or in part, subject to the lessees ' leasehold rights therein.
The clause only provides that, in case the landlord decided to exercise this right, he should give a right of pre emption to the lessee.
Thus all these are merely clauses which provide against the various contingencies that may occur during the period of the lease which may go up to 42 years.
It is not possible to infer from these clauses that the parties had entered into two separate transactions of lease, though incorporated in a single document.
In our opinion, this was a composite lease, as we have already said, of a building with appurtenant land and having regard to the definitions contained in the Act, the lessee is not entitled to the rights conferred by section 3 or section 9 of the Act.
Before we conclude, we might refer to one more argument addressed on behalf of the appellant.
Counsel submitted that the lease deed itself contains a clear indication that the parties were fully conscious that the transaction was liable to be hit by the provisions of the Act.
He pointed out that, when the lease deed was executed in 1951, section 12 of the Act contained a proviso (which has been extracted by us earlier).
That proviso saved any stipulations between the parties regarding buildings erected after the date of the contract.
Learned counsel for the appellant urged that the PG NO 771 clause I (j) in the lease deed which, by implication, disentitles the lessee to payment of any compensation in respect of structures at the time of termination of the lease was specifically put in to exclude the applicability of the Act.
For, both parties were conscious that the Act would be applicable to the transaction and realised that, if such a clause were not specifically put in, the lessee would be entitled to such compensation and hence to the protection of the Act.
Unfortunately, learned counsel urged, the proviso was dropped with retrospective effect.
The result was that, despite the above clause in the lease deed, the lessor has become liable to pay the lessee compensation under section 3 thus conferring on the latter the correlative right of exercising an option to purchase the property under section 9.
In our opinion, this argument is far fetched.
Whether the Act applies to the lease in question or not is something which has to be considered on the terms of the lease deed, having regard to the nature of the property.
On this we have already expressed our conclusion.
The clause regarding removal of structures is the normal clause that occurs in leases under the Transfer of Property Act.
There may have been some force in the argument at least if there had been a clause specifically stating that the lessee will not be entitled to compensation for his structures.
The clause here makes no mention of compensation and only talks of the lessees ' right to remove structures.
Even if no such clauses had been inserted, that would have been the position in law.
it is not possible to infer from such a neutral clause that it was put in with a view to deny compensation to the lessee and thus get over the hurdle of the assessee putting in a claim for acquiring the property by purchase.
lt is clear that the lease deed between the parties is a simple lease deed containing the usual clauses and covenants that one expects in it and nothig more.
lf, indeed, the parties had been conscious of the possibility of the lessee claiming any rights under the Act, the lessors would have tried to safeguard themselves by making it clear that what was being let out was only a building and appurtenant land.
We, therefore, do not think that there is much force in this submission of the learned counsel for the appellant.
As the view we have taken is entirely based on a construction of the lease deed before us, we do not consider it necessary to refer to the various decisions discussed by the High Court in its judgment.
In the result, this appeal fails and is dismissed.
The respondents will be entitled to their costs.
S.L. Appeal dismissed.

summary/full:
In this appeal by special leave, the dispute arose out of a lease by a charitable trust in favour of a company.
The respondent Trust Bled a for possession of a property taken on lease from it by the appellant company.
The appellant responded by filing an application claiming protection under section 9 of the Tamil Nadu City Tenant 's Protection Act (the `Act ').
The application was accepted by the trial court which held that the company was entitled to the benefit of the Act and appointed a Commissioner to inspect the property and fix the minimum extent of the property required by the defendant for convenient enjoyment of the super structure which it would be entitled to purchase in terms of section 9.
The trustees filed an appeal, contending that the company was not entitled to the protection of section 9.
The appeal was allowed.
The company preferred a revision petition before the High Court, which dismissed it, holding that the application of the company under section 9 was not maintainable.
The company appealed to this Court, Dismissing the appeal, the Court, HELD: The short question to be decided was whether the company was entitled to the protection under section 9 of the Act.
This piece of legislation was enacted primarily for the protection of small tenants, who in certain municipal towns and adjoining areas had constructed buildings on others ' lands, by ensuring that they were not evicted so long as they paid a fair rent for the lease.
The Act also contained a provision whereunder a tenant could put up a claim to purchase the land in question from the owner.
[758C] PG NO 755 PG NO 756 The Act applies only to tenants in respect of land situated in certain areas where the tenancy has been created before a prescribed date.
The only controversy here was whether the lease in question could be said to be a lease of `land '.
Before a right of purchase can be exercised under section 9, the tenant must be a tenant of land, not comprising buildings or lands appurtenant thereto.
The High Court had held that there had been a lease not of the vacant land but of a building with the land appurtenant thereto and the provisions of the Act would not apply.
[764E, F G; 765F G] The case involved construction of the lease deed.
The language employed in the lease deed only showed that both land and building were leased.
Whether the land was to he treated as an appurtenant or not would depend upon the extent and nature of the land and its situation vis a vis the building thereon and not on whether the lease deed described the subject matter as `call that land and building" or Vice Versa.
If the deed had described the demised premises as `building and appurtenant land '.
that would have helped in ascertaining the intention of the parties but even that would not have been conclusive.
[766E G] The question whether a certain land is appurtenant or not is one of fact.
There was no reason to disturb the finding of the first appellate Court and the High Court that the land was appurtenant to the building.
The use of the land, in the circumstances of the case, was incidental to the enjoyment and beneficial use of the building.
[768B d] The clauses of the lease deed could not be construed as consisting of two separate leases, one, of the building and the other, of the land, as suggested by the lessees.
There were clear indications in the lease deed that it was a single, indivisible lease of both the building and the vacant land.
It was impossible to consider the document as comprising two leases.
It was a composite lease of a building with appurtenant land, sad having regard to the definitions contained in the Act, the Lessee was not entitled to the rights conferred by section 3 or section 9 of the Act.
[769D; 770F] Whether the Act applied to the lease or not was something which had to be considered on the terms of the lease deed, having regard to the nature of the property.
The clause regarding removal of the structures is the normal clause that occurs in the leases under the Transfer of Property Act.
The clause in this case made no mention of compensation and only talked of the lessees ' right to remove structures.
Even if no such clause had been inserted, that would have been the position in law.
It was not PG NO 757 possible to infer from such a natural clause that it had been put in with a view to denying compensation to the lessee and getting over the hurdle of the lessee putting in a claim for acquiring the property by purchase.
The lease deed was a simple lease deed containing the usual clauses and covenants expected in it and nothing more.
If the parties had been conscious of the possibility of the lessee claiming any rights under the Act, the lessors would have tried to safeguard themselves by making clear that what was let out was only a building and the appurtenant land.
[771C F] The appeal was dismissed.
Maharaja Singh vs State of U. P., [1977] 7 S.C.C. l55r referred to.