judgement:
ivil Appeal No. 1800(N) of 1974 From the Judgment and Order dated 2.11.73 of the Delhi High Court in C.W. No. 906 of 1973.
S.N. Mehta for the Appellant.
G. Ramaswamy, Additional Solicitor General, G. Venkatesh Rao and A.V. Rangam for the Respondents.
652 The Judgment of the Court was delivered by OZA, J.
This is an appeal on leave under Article 136 of the Constitution.
The appellant is a transporter and it is alleged that he brought goods into the limits of Delhi and were seized within the Union Territory as it was alleged that they were brought in without the payment of terminal tax.
A penalty of ten times of the amount of the terminal tax was also demanded from the appellant and he was informed that if the terminal tax alongwith the penalty is not paid within four days the goods will be sold at his risk.
By a writ petition the appellant challenged this demand before the High Court of Delhi and by the impugned judgment the Delhi High Court dismissed the writ petition and hence the present appeal.
The High Court has considered the law of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as the 'Act ') coupled with the provisions contained in the imposition of terminal tax and also examined the legislative competence of the Parliament to enact the law and ultimately came to the conclusion that the law was applicable in the territory.
There was also some controversy raised before the High Court in respect of the facts as to whether the cylin ders on which the duty was demanded were empty or were full and as to whether the appellant stopped its vehicle at the post and was allowed to go and later on he was stopped by the Squad or he got into the territory without payment of tax and was therefore caught but all these controversial questions of facts the High Court refused to consider as the appellant had an opportunity to pursue the remedy under the law where these facts could be investigated and therefore as that was not done and it was a writ petition filed before the High Court, the High Court rightly did not go into the disputed questions of facts.
The only question which was canvassed before the High Court and was considered is the question as to whether this penalty imposed under Section 464 of the Act could be imposed by the taxing authority without a prosecution having been filed before a competent magistrate and the High Court in its judgment dismissed the petition upholding the contention of the Delhi Municipal Corporation and the learned counsel appearing for the appel lant also canvassed that question alone as it was the ques tion on which High Court held against the appellant.
It was contended by learned counsel for the appellant that Sections 463 and 464 both fall in the Chapter "Offences and Penalties".
By referring to the language of Section 464, he contended that in the body of this Section language indicate that what is levied against the appellant is de scribed as "fine".
He also referred to Sections 469 and 470 and contended that according to the scheme of this Chapter, the 653 punishment provided in Section 463 and the penalty (or fine) provided in Section 464 could only be imposed by a Magis trate after a proper trial.
He also contended that the learned Judges of the High Court placing reliance on Section 59 and the notification delegating the functions by the Commissioner to the terminal tax authority came to the conclusion that under Section 464 it is the tax authority who has the jurisdiction to impose the penalty but according to the learned counsel the residuary powers of the Commis sioners under Section 59 are only administrative powers and according to him the High Court was not right in placing reliance on that The main emphasis by the learned counsel was that impo sition of penalty as provided in Section 464 where a wide discretion is given to impose penalty upto ten times of the tax payable itself indicates that the functions of the authority who is expected to exercise the jurisdiction under Section 464 is in the nature of judicial function and there fore it could not have been left to the executive authority of the Commissioner or a delegate to whom the powers may have been delegated.
According to the learned counsel the penalty was not imposed by the competent authority.
Learned counsel for the respondent on the other hand contended that the language used at the heading of the Chapter which starts with Section 461 itself indicates that this Chapter deals with .two types of matters (i) where offences are alleged to have been committed and (ii) where only penalties could be imposed and the scheme of this Chapter indicates that wher ever the offences are alleged to have been committed it has been provided that they will be tried by a competent magis trate and the punishment could only be inflicted by the competent magistrate on conviction of the person for the offences alleged against him.
Whereas wherever penalties are provided it has been provided that where the facts attract the relevant provisions pertaining to penalty the tax plus penalty could be imposed and these penalty provisions nei ther talk of any offence nor talk of conviction before a competent court of a Magistrate.
It was contended that on the basis of this distinction, if the two sections 463 and 464 which are relevant are examined it is clear that Section 464 do not pertain to any offence and therefore the penalty thus imposed under this Section is not a punishment which could only be inflicted under Section 463 after conviction and therefore for imposition of penalty under Section 464 the prosecution of the appellant before a competent magis trate is not at all necessary.
Learned counsel also contend ed that even reading the provisions of Section 470 or 469 do not indicate contrary.
As regards the authority of the tax authority to impose this pen 654 alty, learned counsel referred to the notifications which have been relied on by the High Court and contended that Section 59 confers very wide powers on the Commissioner of Municipal Corporation and he is also authorised to delegate the functions and in accordance with the provisions of law by a notification the functions have been delegated.
The Commissioner had the authority as regards the authority of the tax authority to impose this penalty under Section 464 and it is in this delegated authority that the terminal tax authority has imposed this penalty against the appellant as has been held by this Court.
The only question which arises in this appeal is as to whether penalty as provided in Section 464 of the Act could be imposed by the terminal tax authority or it could not be imposed unless the appellant is convicted and found guilty by a competent Magistrate as is contemplated in Section 463 of the Act.
Section 463 reads: 463: Punishment for offences relating to terminal tax.
"Whoever brings within the Union Territory of Delhi any goods liable to terminal tax without the payment of such tax shall, on conviction, be punishable with imprisonment for a term which may extend to six months or with the fine which may extend to one thousand rupees or with both, and the court trying an offence under this section may, on such conviction, also confiscate the goods in respect of which the offence has been committed.
" Sec. 464 reads: Penalty for evasion of terminal tax: "Where any goods imported into Delhi are liable to the payment of terminal tax, any person, with the intention of evading payment of the tax introduces or attempts to introduce or causes or abets introduction of any such goods within the Union Territory of Delhi, upon which payment of terminal tax due on such introduction, has neither been made nor ten dered, shall be punishable with fine which may extend to ten times the amount of such termi nal tax.
" It is significant that in Sections 463 and 464 the language used is that "a 655 person who brings the goods into the Union Territory of Delhi liable to terminal tax without the payment of tax shall on conviction be punishable." Whereas in Section 464 the Section talks of bringing the goods into the Union Territory on which terminal tax is due and is not tendered or paid a fine which may extend to ten times the amount of terminal tax could be levied.
This different phraseology used in the two Sections clearly go to show that where the ingredients of Section 463 are not in doubt it is open to the corporation authorities to launch a prosecution against the person who introduces the goods without payment of terminal tax and in this event the person on conviction only can be punished but the pun ishment is also imprisonment but the highest limit of fine is limited to Rs. 1,000 whereas under Section 464 neither there is any reference to a conviction nor any reference to the Court of a Magistrate and the only penalty provided is monetary which may extend to ten times.
It is therefore clear that Section 463 refers to a criminal offence if committed, could only be tried by a competent criminal court and on conviction alone the punishment could be imposed but Section 464 is in the nature of a revenue provision where non payment of tax could be remedied by imposition of penal ty and the limit of penalty has been prescribed at ten times of the tax which is payable.
In view of different language used in the two sections and also the language used in the marginal note it is clear that the two can not be said to be same or similar.
Even the heading of the Chapter talks of "Offences and Penalties".
It therefore clearly appears that this chapter deals with two categories of matters; (i) 'offences ' and the other 'penalties ' and the scheme of this Chapter indicates that so far as offences are concerned they could only be tried by a competent criminal court and punishment could only be awarded after conviction whereas so far as penalties are concerned they could be imposed by the taxing authority itself.
Even the language or Sections 470 or 469 does not help the appellant in any manner.
It is no doubt true that as regards the offences, a specific provision has been made in Section 469 for appoint ment of a Municipal Magistrate but in respect of penalties there is no specific provision authorising any officer or authority to exercise jurisdiction under the Section where for evasion of tax, penalty could be levied, like Section 464 but it could not be doubted that Section 59 gives a very wide power to the Municipal Commissioner either to exercise these powers himself 656 or to delegate.
It is not in dispute that in exercise of power under Section 59 the Municipal Commissioner had the authority and exercising the powers under Section 491 of the Act by notification dated September 17, 1973 he delegated the functions under Section 464 to the taxing authorities and it is the conclusion that the taxing authorities were competent under the scheme of this Act to impose the penalty to the tune of ten times of the tax which is payable.
Section 59 of the Act reads: 59: Functions of the Commissioner; "Save as otherwise provided in this Act, the entire executive power for the purpose of carrying out the provisions of this Act other than those pertaining to the Delhi Electric Supply Undertaking and of any other Act for the time being in force which confers, any power or imposes any duty on the Corporation, shall vest in the Commissioner who shall also (a) exercise all the powers and perform all the duties specifically conferred or imposed upon him by this Act or by any other law for the time being in force; (b) prescribe the duties of, and exercise supervision and control over the acts and proceedings of, all municipal officers and other municipal employees other than the Municipal Secretary and the Municipal Chief Auditor and the municipal officers and other municipal employees immediately subordinate to them and subject to any regulation that may be made in this behalf, dispose of all questions relating to the service of the said officers and other employees their pay, privileges, allowances and other conditions of service; (c) on the occurrence or threatened occurrence of any sudden accident or any unforeseen event or natural calamity involving or likely to involve extensive damage to any property of the Corporation, or danger to human fife, take such immediate action as he considers necessary and made a report forth with to the Standing Committee and the Corpo ration of the action he has taken and the reasons for the same as also of the amount of cost, if any, incurred or 657 likely to be incurred in consequence of such action, which is not covered by a budget grant; (d) exercise the powers and perform the duties conferred or imposed by or under this Act upon the General Manager (Electrici ty) in this absence or on failure by him to exercise or perform the same." This Section clearly shows that the Municipal Commissioner had wide powers and he could therefore exercise powers to impose the penalty as contemplated under Section 464.
Sec tion 491 of the Act reads: 491: Power to delegate functions of Commissioner: "The Commissioner may by order direct that any power conferred or any duty imposed on him by or under this Act shall, in such circumstances and under such conditions, if any, as may be specified in the order, be exercised and performed also by any municipal officer or other municipal employee specified in the order." This Section authorises the Commissioner to delegate the authority vested in him and it is in exercise of these powers that in fact he had delegated the authority to the tax officer to exercise powers under Section 464.
Under these circumstances therefore the contention advanced by the learned counsel for the appellant that the penalty under Section 464 could not be imposed without a conviction by a criminal court is not sustainable in law.
We therefore see no reason to entertain this appeal.
It is therefore dismissed.
In the circumstances of the case par ties are directed to bear their own costs.
G.N. Appeal dis missed.

summary/full:
The appellant, a transporter, brought some goods to Delhi without paying terminal tax.
Under Section 464 of the Delhi Municipal Corporation Act, 1957, a penalty of ten times the amount of terminal tax was demanded from the appellant.
The demand was challenged before the High Court by way of a Writ Petition.
The High Court considered the question as to whether the penalty imposed under section 464 of the Act could be imposed by the taxing authority without a prosecution having been filed before a competent magis trate, and answered it in the affirmative.
This appeal by special leave is against the High Court 's judgment.
On behalf of the appellant, it was contended that Sec tion 464 of the Act gives a wide discretion to impose penal ty upto ten times of the tax payable and as such is a judi cial function which cannot be left to the executive authori ty and hence the authority who imposed the penalty was not competent to do so.
The respondents contended that Section 464 does not pertain to any offence and penalty levied under this section is not punishment; that section 463 provides for punishment after conviction and so, for imposition of penalty under Section 464, the prosecution of the appellant before a competent magistrate is not at all necessary.
It was also contended that Section 59 confers very wide powers on the Commissioner and he is also authorised to delegate the functions, and under such delegated authority the penalty has been imposed under Section 464.
Dismissing the appeal, HELD: 1. Penalty under Section 464 of the Delhi Munici pal Corporation Act, 1957 could be imposed without a convic tion by a 651 criminal court.
The different phraseology used in sections 463 and 464 clearly go to show that where the ingredients of Section 463 are not in doubt it is open to the corporation authorities to launch a prosecution against the person who introduces the goods without payment of terminal tax and in this event the person, on conviction only, can be punished and the punishment is also imprisonment, but the highest limit of fine is limited to Rs.1,000 whereas under Section 464 neither there is any reference to a conviction nor any reference to the Court of a Magistrate and the only penalty provided is monetary which may extend to ten times.
It is therefore clear that Section 463 refers to a criminal of fence if committed, could only be tried by a competent criminal court and on conviction alone the punishment could be imposed but Section 464 is in the nature of a revenue provision where non payment of tax could be remedied by imposition of penalty and the limit of penalty has been prescribed at ten times of the tax which is payable.
In view of different language used in the two sections and also the language used in the marginal note it is clear that the two cannot be said to be same or similar.
It is no doubt true that as regards the offences, a specific provision has been made in Section 469 for appoint ment of a Municipal Magistrate but in respect of penalties there is no specific provision authorising any officer or authority to exercise jurisdiction under the section where for evasion of tax, penalty could be levied, like Section 464, but it could not be doubted that Section 59 gives a very wide power to the Municipal Commissioner either to exercise these powers himself or to delegate.
It is not in dispute that in exercise of powers under Section 59 the Municipal Commissioner had the authority, and exercising the powers under Section 491 of the Act, by notification dated September 17, 1973 he delegated the functions under Section 464 to the taxing authorities.
Hence the taxing authorities were competent under the scheme of this Act to impose the penalty to the tune of ten times of the tax which is pay able.
[655G H; 656A, B]


judgement:
vil Appeal No. 1826 (N) of 1974.
From the Judgment and Order dated 6.4.1972 of the Madhya Pradesh High Court in F.A. No. 23 of 1966.
M.V. Goswami for the Appellants.
U.A. Rana and S.K. Agnihotri for the Respondents.
The Judgment of the Court was delivered by SAIKIA, J.
This plaintiffs ' appeal by special leave is from the appellate Judgment of the Madhya Pradesh High Court dismissing the appeal upholding the Judgment of the trial court dismissing the plaintiffs ' suit on the ground of limitation.
A registered firm Rai Saheb Nandkishore Rai Saheb Ju galki 599 shore (Appellants) was allotted contracts for manufacture and sale of liquor for the calendar year 1959 and for the subsequent period from 1.1.
1960 to 31.3.
1961 for Rs.2,56,200.00 and Rs.4,71,900.00, respectively, by the Government of Madhya Pradesh who also charged 7 1/2 per cent over the auction money as mahua and fuel cess.
As writ petitions challenging the Government 's right to charge this 7 1/2 per cent were pending in the Madhya Pradesh High Court, the Government announced that it would continue to charge it and the question of stopping it was under consid eration of the Government whose decision would be binding on the contractors.
The firm (appellants) thus paid for the above contracts a total extra sum of Rs.54,606.00.
On 17.10.1961 the Under Secretary to Government, M.P., Forest Department, Bhopal wrote the following letter No. 10 130 X/61 (Exhibit D 23) to the Chief Conservator of Forests, Madhya Pradesh, Rewa: "Subject: Levy of cess on liquor contractors.
Under former M.P. Government (Forest Depart ment) memo No. 4595 CR 73 XI dated 25th July, 1953, a royalty at 7 1/2 per cent of the license fee for liquor shops was imposed on liquor contractors to cover the value of mahua & fuel extracted from the reserved or protect ed forests by the contractors for their still.
The M.P. High Court has since decided that the levy of the aforesaid cess is illegal and the cess cannot be recovered from the liquor contractors.
In pursuance of this decision, Government desires that all process es whenever issued or proceedings instituted against liquor contractors for recovery of the mahua or fuel cess should forthwith be with drawn and no revenue recovery certificates should be issued in respect of this cess.
Simultaneously no free supply of mahua or fuel should be permitted by virtue of the imposition mentioned above.
Immediate compliance is requested.
No . .
X/61 Dt.
Bhopal the . . 661 Copy forwarded for immediate compliance to: 600 1.
Conservator of Forests, Bilaspur. 2.
All Divisional Forest Officers, Bilaspur Circle.
Copy to C.F. Raipur Circle for similar auction in this cess levied in any division of his Circle.
" On 24.4.1959 the Madhya Pradesh High Court 's Judgment in Surajdin vs State of M.P., declaring the collection of 7 1/2 per cent illegal was reported in 1960 MPLJ 39.
Even after this decision Government continued to charge 7 1/2 per cent extra money.
Again on 31.8.
1961 the High Court of Madhya Pradesh in N.K. Doongaji vs Collector, Surguja, decided that the charging of 7 1/2 per cent by the Government above the auction money was illegal.
This Judgment was reported in 1962 MPLI 130.
It is the appellants ' case that they came to know about this decision only in or about September 1962.
On 17.10.
1964 they served a notice on Government of Madhya Pradesh under section 80 of the Code of Civil Procedure request ing the refund of Rs.54,606.00, failing which, a suit for recovery would be filed; and later they instituted Civil Suit No. of 1964 in the court of Additional District Judge, Jabalpur on 24.12.1964.
The Government resisted the suit on, inter alia, ground of limitation.
The trial court taking the view that Articles 62 and 96 of the First Schedule to the Limitation Act, 1908 were applicable and the period of limitation began to run from the dates the payments were made to the Government, held the suit to be barred by limi tation and dismissed it.
In appeal, the High Court took the view that Article 113 read with section 17, and not Article 24, of the Schedule to the , was applicable; and held that the limitation began to run from 17.10.
1961 on which date the Government decided not to charge extra 7 1/2 per cent on the auction money, and as such, the suit was barred on 17.12.
1964 taking into consideration the period of two months prescribed by section 80 of the Code of Civil Procedure.
Consequently, the appeal was dismissed.
The appellants ' petition for leave to appeal to this Court was also rejected observing, "it was unfortunate that the peti tioners filed their suit on 24.12.
1964 and as such the suit was barred by time by seven days." Mr. M.V. Goswami, learned counsel for the appellants, submits, inter alia, that the High Court erred in holding that the limitation started running from 17.16.1961 being the date of the letter, Exhibit D 23, which was not communi cated to the appellants or any other contractor and there fore the appellants had no opportunity to know 601 about it on that very date with reasonable diligence under section 17 and the High Court ought to allow atleast a week for knowledge of it by the appellants in which case the suit would be within time.
Counsel further submits that the High Court while rightly discussing that section 17 of the was applicable, erred in not applying that section to the facts of the instant case, wherefore, the impugned Judgment is liable to be set aside.
Mr. Ujjwal A. Rana, the learned counsel for the respond ent, submits, inter alia, that 17.10.2961 having been the date on which the Government finally decided not to recover extra 7 1/2 per cent above the auction .money, the High Court rightly held that the limitation started from that date and the suit was clearly barred under Article 24 or 113 of the Schedule to the ; and that though the records did not show that the Government decision was communicated to the appellants, there was no reason why they, with reasonable diligence, could not have known about it on the same date The only question to be decided, therefore, is whether the decision of the High Court is correct.
To decide that question it was necessary to know what was the suit for.
There is no dispute that 7 1/2 per cent above the auction money was charged by the Government of Madhya Pradesh as mahua and fuel cess, and the High Court subsequently held that it had no power to do so.
In view of those writ peti tions challenging that power, Government asked the contrac tors to continue to pay the same pending Government 's deci sion on the question; and the appellants accordingly paid.
Ultimately on 17.10.1961 Government decided not to recover the extra amount any more but did not yet decide the fate of the amounts already realised.
There is no denial that the liquor contracts were performed by the appellants.
There is no escape from the conclusion that the extra 7 1/2 per cent was charged by the Government believing that it had power, but the High Court in two cases held that the power was not there.
The money realised was under a mistake and without authority of law.
The appellants also while paying suffered from the same mistake.
There is therefore no doubt that the suit was for refund of money paid under mistake of law.
The question is what was the law applicable to the case. 'Nul ne doit senrichir aux depens des autres ' No one ought to enrich himself at the expense of others.
This doctrine at one stage of English common law was remedied by 'indebitatus assumpsit ' which action lay for money "had and received to the use of the plaintiff".
It lay to recover 602 money paid under a mistake, or extorted from the plaintiff by duress of his goods, or paid to the defendant on a con sideration which totally tailed.
On abolition of 'indebit atus assumpsit ', courts used to imply a promise to pay which, however, in course of time was held to be purely fictitious.
Lord Manslied in Moses vs Macferlan, ; at 10 12 explained the juridical basis of the action for money "had and received" thus: "This kind of equitable action, to recover back money, which ought not in justice to be kept, is very beneficial, and therefore much encouraged.
It lies only for money which, 'ex aequo et bono ', the defendant ought to refund; it does not lie for money paid by the plain tiff, which is claimed of him as payable in point of honour and honesty, although it could not have been recovered from him by any course of law; as in payment of a debt barred by the Statute of Limitations, or contracted during his infancy, or to the extent of principal and legal interest upon a usurious contract, or, for money fairly lost at play; because in all these cases, the defendant may retain it with a safe conscience, though by positive law he was barred from recovering.
But it lies for money paid by mistake; or upon a consideration which happens to fail; or for money got through imposition, (express or implied); or extortion; or oppression; or an undue advan tage taken of the plaintiff 's situation, contrary to laws made for the protection of persons under those circumstances.
In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural jus tice and equity to refund the money." In that case Moses received from Jacob four promissory notes of cash each.
He endorsed these to Macferlan who, by a written agreement, contracted that he would not hold Moses liable on the endorsement.
Subsequently, however, Macferlan sued Moses on the notes in a Court of Conscience.
The Court refused to recognise the agreement, and Moses was forced to pay.
Moses then brought an action against Macferlan in the king 's Bench for money "had and received" to his use.
Lord Manslied allowed him to recover observing as above.
Courts in England have since been trying to formulate a juridicial basis of this obligation.
Idealistic formulations as 'aequum et bonum ' and 'natural justice ' were considered to be inadequate and the 603 more legalistic basis of unjust enrichment is formulated.
The doctrine of 'unjust enrichment ' is that in certain situation it would be 'unjust ' to allow the defendant to retain a benefit at the plaintiff 's expense.
The relatively modern principle of Restitution is of the nature of quasi contract.
But the English law has not yet recognised any generalised right to restitution in every case of unjust enrichment.
As Lord Diplock has said, "there is no general doctrine of "unjust enrichment" recognised in English law.
What it does is to provide specific remedies in particular cases of what might be classed as unjust enrichment in a legal system i.e. based upon the civil law.
" In Sinclair vs Brougham, Lord Haldane said that law could 'de jure ' impute promises to repay whether for money "had and received" otherwise, which may, if made defacto, it would inexorably avoid.
The principle of unjust enrichment requires: first, that the defendant has been 'enriched ' by the receipt of a "benefit"; secondly, that this enrichment is "at the expense of the plaintiff"; and thirdly, that the retention of the enrichment be unjust.
This justifies restitution.
Enrichment may take the form of direct advantage to the recipient wealth such as by the receipt of money or indirect one for instance where inevitable expense has been saved.
Another analysis of the obligation is of quasi contract.
It was said; "if the defendant be under an obligation from the ties of natural justice, to refund; the law implies a debt, and give this action rounded in the equity of the plaintiff 's case, as it were, upon a contract (quasi ex contracts) as the Roman law expresses it." As Lord Wright in Fibrosa Spolka vs Fairbairn Lawson, [1943] AC 32 1942 pointed out, "the obligation is as efficacious as if it were upon a contract.
Such remedies are quasi contract or restitution and theory of unjust enrichment has not been closed in English law.
" Section 72 of the Indian Contract Act deals with liabil ity of person to whom money is paid or thing delivered, by mistake or under coercion.
It says: "A person to whom money has been paid, or anything delivered, by mistake or under coer cion, must repay or return it." Illustration (b) to the section is: "A Railway Company refuses to deliver up certain goods to the consignee, except upon the payment of an illegal 604 charge for carriage.
The consignee pays the sum charged in order to obtain the goods.
He is entitled to recover so much of the charge as was illegally excessive.
" Our law having been codified, we have to apply the law.
It is true, as Pollock wrote in 1905 in the preface to the first Edition of Pollock and Mulla 's Indian Contract and Specific Relief Acts: "The Indian Contract Act is in effect . . a code of English law.
Like all codes based on an existing authoritative doctrine, it assumes a certain knowledge of the principles and habits of thought which are embodied in that doctrine.
" It is, therefore, helpful to know "those fundamental notions in the common law which are concisely declared, with or, without modification by the text.
" There is no doubt that the instant suit is for refund of money paid by mistake and refusal to refund may result in unjust enrichment depending on the facts and circumstances of the case.
It may be said that this court has referred to unjust enrichment in cases under section 72 of the Contract Act.
See ; ; and ; The next question is whether, and if so, which provision of the will apply to such a suit.
On this question we find two lines of decisions of this Court, one in respect of civil sulks and the other in respect of peti tions under Article 226 of the Constitution of India.
Though there is no constitutionally provided period of limitation for petitions under Article 226, the limitation prescribed for such suits has been accepted as the guideline, though little more latitude is available in the former.
A tax paid under mistake of law is refundable under section 72 of the .
In Sales Tax Officer vs Kanhaiya Lal, where the respondent, a regis tered firm, paid sales tax in respect of the forward trans actions in pursuance of the assessment orders passed by the Sales Tax Officer for the year 1949 51; in 1952 the Allaha bad High Court held in M/s Budh Prakash Jai Prakash vs Sales Tax Officer, Kanpur, that the levy of sales tax on forward transactions was ultra vires.
The respondent asked for a refund of the mounts paid, filing a writ peti tion under Article 226 of 605 the Constitution.
It was contended for the Sales Tax Author ities that the respondent was not entitled to a refund because (1) the amounts in dispute were paid by the respond ent under a mistake of law and were, therefore, irrecovera ble, (2) the payments were in discharge of the liability under the Sales Tax Act and were voluntary payments without protest, and (3) inasmuch as the monies which had been received by the Government had not been retained but had been spent away by it and the respondent was disentitled to recover the said amounts.
This Court held that the term "mistake" in section 72 of the comprised within its scope a mistake of law as well as a mistake of fact and that, under that section a party is entitled to recover money paid by mistake or under coercion, and if it is established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law, the party receiving the money is bound to repay or return it though it might have been paid voluntarily, subject, howev er, to questions of estoppel, waiver, limitation or the like.
On the question of limitation, it was held that section 17(1)(c) of the would be applicable and that where a suit will be to recover "monies paid under a mistake of law, a writ petition within the period of limita tion prescribed, i.e., within 3 years ' of the knowledge of the mistake, would also lie.
" It was also accepted that the period of limitation does not begin to run until the plain tiff has discovered the mistake or could, with reasonable diligence, have discovered it.
The money may not be recoverable if in paying and re ceiving it the parties were in pan delicto.
In Kiriri Cotton Co. Ltd. vs Ranchhoddas Keshavji Dewani, , where the appellant company, in consideration of granting to the respondent a sub lease asked for and received from him a premium of Sh.
10,000 and the latter.claimed refund thereof, the Privy Council held that the duty of observing the law was firmly placed by the Ordinance on the shoulders of the landlord for the protection of the tenant, and the appellant company and the respondent were not therefore in pari delic to in receiving and paying respectively the illegal premium, which, therefore, in accordance with established common law principles, the respondent was entitled to recover from the landlord and that the omission of a statutory remedy did not in cases of this kind exclude the remedy by money had and received.
In the instant case also the parties could not be said to be in pari delicto in paying and receiving the extra 7 1/2% per cent.
Had the appellants not paid this amount, they would not have been given the contracts.
In D. Cawasji &.
Co. vs The State of Mysore & Anr.
, ; , the appellants paid certain amount to the Government as 606 excise duty and education cess for the years 195 1 52 to 1965 66 in one case and from 1951 52 to 1961 62 in the other.
The High Court struck down the provisions of the relevant Acts as unconstitutional.
In Writ Petitions before the High Court claiming refund, the appellants contended that the payments in question were made by them under mis take of law; that the mistake was discovered when the High Court struck down the provisions as unconstitutional and the petitions were, therefore, in time but the High Court dis missed them on the ground of inordinate delay.
Dismissing the appeals, this Court held that where a suit would lie to recover monies paid under a mistake of law, a writ petition for refund of tax within the period of limitation would lie.
For filing a writ petition to recover the money paid under a mistake of law the starting point of limitation is from the date on which the judgment declaring as void the particular law under which the tax was paid was rendered.
It was held in D. Cawasji (supra) that although section 72 of the Contract Act has been held to cover cases of payment of money under a mistake of law, as the State stands in a peculiar position in respect of taxes paid to it, there are perhaps practical reasons for the law according different treatment both in the matter of the heads under which they could be recovered and the period of limitation for recovery.
P.N. Bhagwati, J., as he then was, in Madras Port Trust vs Hymanshu Inter national, , deprecated any resort to plea of limitation by public authority to defeat just claim of citizens observing that though permissible under law, such technical plea should only be taken when claim is not well founded.
Section 17(1)(c) of the , provides that in the case of a suit for relief of the ground of mistake, the period of limitation does not begin to run until the plaintiff had discovered the mistake or could with reasonable diligence, have discovered it.
In a case where payment has been made under a mistake of law as contrasted with a mistake of fact, generally the mistake become known to the party only when a court makes a declaration as to the invalidity of the law.
Though a party could, with reasonable diligence, discover a mistake of fact even before a court makes a pronouncement, it is seldom that a person can, even with reasonable diligence, discover a mistake of law before a judgment adjudging the validity of the law.
E.S. Venkataramiah, J., as his Lordship then was, in Shri Vallabh Glass Works Ltd. vs Union of India, ; , where the appellants claimed refund of excess duty paid under Central Excise and Salt Act, 1944, laid down that the excess amount paid by the appellants would have become refundable by virtue of section 72 of the 607 if the appellants had filed a suit within the period of limitation; and that section 17(1)(c) and Article 113 of the would be applicable.
In Commissioner of Sales Tax, U.P.v.
M/s Auriaya Chamber of Commerce Allahabad; , , the Supreme Court in its decision dated May 3, 1954 in Sales Tax Officer vs Budh Prakash Jai Prakash, [1954] 5 STC 193 having held tax on forward contracts to be illegal and ultra vires the U.P. Sales Tax Act, and that the decision was applicable to the assessee 's case, the assessee filed several revisions for quashing the assessment order for the year 1949 50 and for subsequent years which were all dismissed on ground of limitation.
In appeal to this Court Sabyasachi Mukharji, J. while dismissing the appeal held that money paid under a mistake of law comes within mistake in section 72 of the Contract Act; there is no question of any estoppel when the mistake of law is common to both the assessee and taxing authority.
His Lordship observed that section 5 of the Limitation Act, 1908 and Article 96 of its First Schedule which prescribed a period of 3 years were applicable to suits for refund of illegally collected tax.
In Salonah Tea Co. Ltd. & Ors.
vs Superintendent of Taxes, Nowgong and Ors.
, ; , the Assam Taxa tion (on Goods carried by Road or Inland Waterways) Act, 1954 was declared ultra vies the Constitution by the Supreme Court in Atiabari Tea Co. Ltd. vs State of Assam, ; A subsequent Act was also declared ultra vires by High Court on August 1, 1963 against which the State of Assam and other respondents preferred appeals to Supreme Court.
Meanwhile the Supreme Court in a writ petition Khyer bari Tea Co. Ltd. vs State of Assam, ; , declared on December 13, 1963 the Act to be intra vires.
Consequently the above appeals were allowed.
Notices were, therefore, issued requiring the appellant under section 7(2) of the Act to submit returns.
Returns were duly filed and assessment orders passed thereon.
On July 10, 1973, the Gauhati High Court in its Judgment in Loong Soong Tea Es tate 's case, Civil Rule No. 1005 of 1969, decided on July 10, 1973, declared the assessment to be without jurisdic tion.
In November, 1973 the appellant filed writ petition in the High Court contending that in view of the decision in Loong Soong Tea Estate 's case he came to know about the mistake in paying tax as per assessment order and also that he became entitled to refund of the amount paid.
The High Court set aside the order and the notice of demand for tax under the Act but declined to order refund of the taxes paid by the appellant on the ground of delay and laches as in view of the High Court it was possible for the appellant to know about 608 the illegality of the tax sought to be imposed as early as in 1963, when the Act in question was declared ultra vires.
Allowing the assessee 's appeal, Mukharji, J. speaking for this Court held: "In this case indisputably it appears that tax was collected without the authority of law.
Indeed the appellant had to pay the tax in view of the notices which were without juris diction.
It appears that the assessment was made under section 9(3) of the Act.
Therefore, it was without jurisdiction.
In the premises it is manifest that the respondents had no authority to retain the money collected with out the authority of law and as such the money was liable to refund.
" The question there was whether in the application under article 226 of the Constitution, the Court should have refused refund on ground of laches and delay, the case of the appel lant having been that it was after the Judgment in the case of Loong Soong tea Estate, the cause of action arose.
That judgment was passed in July, 1973.
The High Court was, therefore, held to have been in error in refusing to order refund on the ground that it was possible for the appellant to know about the legality of the tax sought to be imposed as early as 1973 when the Act in question was declared ultra vires.
The Court observed: "Normally speaking in a society governed by rule of law taxes should be paid by citizens as soon as they are due in accordance with law.
Equally, as a corollary of the said statement of law it follows that taxes col lected without the authority of law as in this case from a citizen should be refunded because no State has the right to receive or to retain taxes or monies realised from citizens without the authority of law.
" On the question of limitation referring to Suganmal vs State of M.P., AIR 1965 SC 1740, and Tilokchand Motichand vs H.B. Munshi, , his Lordship observed that the period of limitation prescribed for recovery of money paid by mistake started from the date when the mistake was known.
In that case knowledge was attributable from the date of the Judgment in Loong Soong Tea Estate 's case on July 10, 1973.
There had been statement that the appellant came to know of that matter in October, 1973 and there was no denial of the averment made.
On that ground, the High Court was held to be in 609 error.
It was accordingly held that the writ petition filed by the appellants were within the period of limitation prescribed under article 113 of the Schedule read with section 23 of the .
It is thus a settled law that in suit for refund of money paid by mistake of law, section 72 of the Contract Act is applicable and the period of limitation is three years as prescribed by Article 113 of the Schedule to the Indian and the provisions of section 17(1)(c) of that Act will be applicable so that the period will begin to run from the date of knowledge of the particular law, where under the money was paid, being declared void; and this court be the date of judgment of a competent court declaring that law void.
In the instant case, though the Madhya Pradesh High Court in Surajdin vs State of M.P., declared the collection on 7 1/2% per cent illegal and that decision was reported in , the Government was still charging it saying that the matter was under consideration of the Government.
The final decision of the Government as stated in the letter dated 17.10.
1961 was purely an internal communication of the Government copy whereof was never communicated to the appellants or other liquor contractors.
There could, there fore, be no question of the limitation starting from that date.
Even with reasonable diligence, as envisaged in section 17(1)(c) of the , the appellants would have taken at least week to know about it.
Mr. Rana has fairly stated that there was nothing on record to show that the appellants knew about this letter on 17.10.
1961 itself or within a reasonable time thereafter.
We are inclined to allow at least a week to the appellants under the above provision.
Again Mr. Rana has not been in a position to show that the statement of the appellants that they knew about the mistake only after the judgment in Doongaji 's case reported in , in or about September, 1962, whereafter they issued the notice under section 80 C.P.C. was untrue.
This statement has not been shown to be false.
In either of the above cases, namely, of knowledge one week after the letter dated 17.10.
1961 or in or about September, 1962, the suit would be within the period of limitation under Article 113 of the Schedule to the .
In the result, we set aside the Judgment of the High Court, allow the appeal and remand the suit.
The records will be sent down forthwith to the trial court to decide the suit on merit in accordance with law, expeditiously.
The appellants shall be entitled to the costs of this appeal.
R.N .J.
Appeal allowed.

dataset_name: IN-Abs

summary/full:
The appellant firm was allotted contracts for manufac ture and sale of liquor for the year 1959 and for the subse quent periods from 1.1.
1960 to 31.3.1961 for Rs.2,56,200 and Rs.4,71,900 respectively by the M.P. Govt.
who also charged 7 1/2% over the auction money as mahua and fuel cess.
As writ petitions challenging the government 's right to charge this 7 1/2% were pending in the M.P. High Court, the Govt.
announced that it would continue to charge it and the question of stopping it was under consideration of Govt.
whose decision would be binding on the contractors.
The appellant firm paid for the above contracts a total extra sum of Rs.54,606.00.
On 24.4.1959 the M.P. High Court in Surajdin vs State of M.P., declared the collection of 7 1/2% as illegal.
Even after this decision the Govt.
continue to charge 7 1/2% extra money.
Again on 31.8.1961, the High Court of Madhya Pradesh in N.K. Doongaji vs Collector, Surguja, decided that charg ing of 7 1/2% by the Govt.
above the auction money was illegal.
Appellants came to know of this decision only in or about September, 1962.
On 17.10.1964 the appellants gave a notice under section 80 C.P.C. to the Govt.
of Madhya Pradesh requesting for the refund of Rs.54,606.00.
failing which a suit for recovery would be filed and later they instituted a civil suit in the court of additional District Judge, Jabalpur on 24.12.1964.
The Govt.
resisted the suit inter alia on the ground of limitation.
The Trial Court held that the suit was barred by 597 limitation and dismissed it.
The High Court also dismissed the appeal.
The appellants then came up in appeal by special leave.
While allowing the appeal and remanding the suit to the Trial Court for decision on merits.
This Court, HELD: 'Nul ne doit senrichir aux depens des autres ' No one ought to enrich himself at the expense of others.
This doctrine at one stage of English common Law was remedied by 'indebitatus assumpsit ' which action lay for money ' had and received to the use of the plaintiff '.
It lay to recover money paid under a mistake or extorted from the plaintiff by duress of his goods, or paid to the defendant on a consider ation which totally failed.
On abolition of 'indebitatus assumpsit ', courts used to imply a promise to pay which, however, in course of time was held to be purely fictitious.
[601G 602A] Courts is England have since been trying to formulate a juridical basis of this obligation.
Idealistic formulations as 'aequum et bonum ' and 'natural justice ' were considered to be inadequate and the more legalistic basis of unjust enrichment is formulated.
The doctrine of 'unjust enrich ment ' is that in certain situations it would be 'unjust ' to allow the defendant to retain a benefit at the plaintiff 's expense.
The relatively modern principle of restitution is of the nature of quasi contract.
But the English law has not yet recognised any generalised right to restriction in every case of unjust enrichment.
[602H 603B] The principle of unjust enrichment requires; first, that the defendant has been 'enriched ' by the receipt of a "benefit"; secondly.
that this enrichment is "at the expense of the plaintiff" and thirdly, that the retention of the enrichment be unjust.
This justified restitution.
Enrichment may take the form of direct advantage to the recipient wealth such as by the receipt of money or indirect one for instance where inevitable expense has been saved.
[603C 603D] There is no doubt that the suit in the instant case, is for refund of money paid by mistake and refusal to refund may result in unjust enrichment depending on the facts and circumstances of the case.
[604D] Though there is no constitutionally provided period of limitation for petitions under Article 226, the limitation prescribed for such suits has been accepted as the guide line, though little more latitude is available in the for mer.
[604F] For filing a writ petition to recover the money paid under a mis 598 take of law the starting point of limitation is three years is prescribed by Article 113 of the Schedule to the Indian and the provisions of section 17(1)(c) of the Act will be applicable so that the period will begin to run from the date of knowledge of the particular law, where under the money was paid, being declared void and this could be the date of the judgment of a competent court declaring that law void.
[609B] Moses vs Macferlan, ; at 1012; Sin clair vs Brougham, ; Fibrosa Spolka vs Fair bairn Lawson; , = ; ; Sales Tax Officer vs Kanhaiya Lal, ; M/s Budh Prakash Jai Prakash vs Sales Tax Officer, Kanpur, ; Kiriri Cotton Co. Ltd. vs Ranchhoddas Keshavji Dewani, ; D. Cawasji & Co. vs The State of Mysore & Anr., ; ; Madras Port 7rust vs Hymanshu Inter national, ; Shri Vallabh Glass Works Lid.
vs Union of India; , ; Commissioner of Sales Tax, U.P.v.
M/s. Auriaya Chamber of Commerce Allahabad; , ; Sales Tax Officer vs Budh Prakash Jai Prakash, [1954] 5 STC 193; Salonah Tea Co. Ltd. & Ors.
vs Superin tendent of Taxes, Nowgong & Ors.
, ; ; Atiabari Tea Co. Ltd. vs State of Assam, ; ; Khyerbari Tea Co. Ltd. vs State of Assam, ; ; Loong Soong Tea Estate 's, case decided on July 10, 1973; Suganmal vs State of M.P., AIR 1965 SC 1740; Tilokchand Motichand vs H.B. Munshi, , referred to.


judgement:
vil Appeal Nos.
6 147 6 148 of 1983.
From the Judgment and Order dated 17.1.83 of the Rajas than High Court in D.B. Spl.
Appeal No. 43 of 1978 & D.B.S.A. No. 14 of 1975.
Sharma for the Appellants.
672 Dalveer Bhandari, K.R.R. Pillai, Surya Kant, P.T. Mathur and Sambandhan for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The question for consideration in these two appeals is whether the creation of two cadres, consist ing of Nursing Superintendent Grade I, Nursing Superintend ent Grade II, Assistant Nursing Superintendent and Nursing Tutor (hereinafter called 'nursing cadre ') and of Compounder Grade I, Compounder Grade 1I and Compounder Grade III (hereinafter called 'compounders cadre ') under the Rajasthan Medical and Health Subordinate Service Rules, 1965 (herein after called 'Rules '), is arbitrary and as such violative of Articles 14 and 16 of the Constitution of India.
The relevant facts are as under.
Bansi Lal Sharma was appointed as Male Nurse in 1941.
He qualified Punjab Nursing Registration Council Examination in 1944 and was confirmed as Compounder Grade I in 1950.
He was officiating as Sister Tutor when the Rules came into force in March, 1966.
He filed writ petition in the Rajasthan High Court in 1971 challenging the creation of two separate cadres under the rules.
It was pleaded that hitherto there was combined channel of promotion for compounders and nurses but the rules have arbitrarily deprived compounders Grade I of their right to promotion to the higher posts of Assistant Nursing Superintendent, Nursing Superintendent Grade II and Nursing Superintendent Grade I.
It was further urged that recruitment to the nursing cadre was confined to females alone which resulted in discrimination on the ground of sex and as such violative of Article 15 of the Constitution of India.
Kan Singh, J. rejected the contentions of Sharma and held that there was no arbitrariness in creating two sepa rate cadres for nurses and compounders.
The learned Judge further found as a fact that males and females were both eligible for recruitment to the nursing cadre and as such repelled the attack on ground of Article 15.
Shanti Lal Jain, in the second case, was appointed compounder Grade IV in 1955.
He was confirmed as compounder Grade I in the year 1959 and in March, 1966 when the rules were enforced, he was holding the post of Sister Tutor on officiating basis.
He also challenged the vires of the Rules on the grounds of Articles 14, 15 and 16 of the Constitution of India.
Dwarka Prasad, J. dismissed the writ petition 673 holding that creation of two separate cadres did not in fringe the equality clause and also that there was no dis crimination on the ground of sex.
Both Sharma and Jain filed separate special appeals before a Division Bench of the Rajasthan High Court.
The Division Bench upheld the findings of learned single Judges on Article 15 in the following terms: "Both the learned single Judges were, in our opinion, fight in holding that the Rules did not exclude the appointment of males on the posts mentioned in group A of the Schedule and the said categorisation of group A and E could not be held to be unconstitutional on the ground that it was based on sex alone.
The argument of Shri Mridul that the Rules were violative of the provisions of Article 15 of the Constitution cannot, therefore, be accept ed.
" So far as the attack on the grounds of Articles 14 and 16 was concerned, the Division Bench set aside the judgments of learned single Judges and found that there was no justi fication for creating separate cadres and denying channel of promotion to compounders Grade I to the higher posts in the nursing cadre.
The Bench held the Rules to be arbitrary and violative of Articles 14 and 16 of the Constitution of India and directed the State Government to consider Sharma and Jain for promotion to the post of Assistant Nursing Superin tendent and other higher posts from the dates when they filed writ petitions in the High Court.
This is how these two appeals by way of special leave, filed by the State of Rajasthan, are before us.
There is no material on the record to show as to what was the cadre composition before coming into force of the Rules.
Prior to 1966 there was no statutory Rules pertaining to the service.
No executive order creating cadres in the department or a joint seniority list indicating common cadre for nurses and compounders have been produced.
Simply be cause Sharma and Jain were working as Sister Tutors in officiating capacity in 1966 it cannot be assumed that there was a joint cadre of compounders and nurses.
Even if we assume that prior to coming into force of the Rules there was a combined cadre of nurses and compounders, Articles 14 and 16 of the Constitution do not forbid the State Govern ment from creating new cadres, bifurcating one cadre into two or more or uniting two or more cadres into one.
The creation of cadres in the service of the State is a matter which has to be left entirely to the State Government.
In Reserve Bank of India vs N.C. Paliwal & others; , this Court held as under: 674 "It is now well settled, as a result of the decision of this Court in kishori Mohanlal Bakshi vs Union of India, A.I.R. 1962 S.C. 1139 that Article 16 a fortiori also Article 14 do not forbid the creation of different cadres for government service.
And if that be so, equally these two Articles cannot stand in the way of the State integrating different cadres into one cadre.
It is entirely a matter for the State to decide whether to have sever al different cadres or one integrated cadre in its services.
That is a matter of policy which does not attract the applicability of the equality clause.
" The High Court has, by strained reasoning, come to the conclusion that the nurses and compounders form one class and as such treating them differently by creating two sepa rate cadres is discriminatory and violative of Articles 14 and 16 of the Constitution of India.
To appreciate the High Court reasoning we may reproduce Rule 4(1) of the Rules and relevant part of Schedule to the Rules: "4. Composition and Strength of the Service (1) The service shall consist of X eleven groups.
The fight of promotion shall be confined to each group except the extent specified in the Schedule.
section Name of Source of Minimum Post from Minimum remarks No. Post recruitment qualification which pro qualifica with and motion is tion & percentage experience to be experience for direct made required recruitment for promotion 1 2 3 4 5 6 7 GROUP A 1.
Nursing 50% by 1.
R.N.C.R.
Nursing 3 years Supdt.
direct or its Supdt. service as Gr.
I recruitment equivalent Gr.
II Nursing with per qualification Superin centage & recognised tendent 50% by by Govern Gr.
II promotion ment 2.
Regd. 'A ' 675 grade Nurse 3.
Sister Tutor course passed 4.12 years experience out of which 4 years must be as Sister Tutor & 3 years as Nursing Supdt.
II or at an equi valent post 2.
Nursing 25% by 1.
R.N.C.R. Asstt. 2 years Supdt.
direct or its equi Nursing service as Gr.
II recruitment valent quaIi Supdt.
Asstt.
75% by fication re Nursing promotion cognised by Supdt.
Government 2.
Regd. 'A ' Grade Nurse 3.
Sister Tutors ' course passed 4. 10 years ' experience out of which 4 years ' should be as sisters Tutor & 3 years as Asstt.
Nursing Supdt.
or at an equi valent post.
676 3.
Asstt.
25% by 1.
R.N.C.R.
Sister 2 years Nursing direct or its equi or Nursing service as Supdt.
recruitment valent quali Tutor Sister or and 75% by fication re Nursing promotion cognised by Tutor Government 2.
Regd. 'A ' grade Nurse.
Sister Tutors course passed 4.7 years exper ience out of which at least 3 years should be as Nursing Tutor 1 .
Sister or 25% by 1.
R.N .C.R.
Staff 5 years Nursing direct or its equi Nurse/ service Tutor recruitment valent quaIi Comp.
as Staff and 75% by fication re Gr.
II Nurse/ promotion cognised by Comp.
Government II or 4 2.Regd. 'A ' years ser vice as grade Nurse Staff Nurse 3.
Sister out of Tutors which 3 Course passed.
years con tinuous 4.3 years service experience should be as staff in opera Nurse/Comp.
tion Thea Gr.
II tre or 3 years ser vice as Staff Nurse with Sister Tutor Certif icate 677 Note: For the post of Sister Tutor, Sister Tutor 's Certificate will be compulsory 5.
Staff 75% by PNRC or Midwife &7 years Nurse direct its equi Auxiliary service as Comp.
recruitment valent Nurse Midwife or Gr.
II & 25% by qualification Midwife Auxiliary promotion Recognised Nurse by Midwife Government 6, Midwife 100% by Auxiliary & Auxi direct Nurse liary Nurse recruitment Midwifery Midwife trained and VIII standard passed GROUP 'E ' 1.
Compoun 100% by Compoun PNRC or der Gr.
I promotion der Gr.
II its equi valent qualifica tion recog nised by Govern ment with 5 years service as Compoun der Gr.
Compoun do Compoun PNRC or der Gr.
II der Gr.
III its equi valent qualifica tion recog nised by Govern ment 678 3.
Compoun 100% by Matriculate der Gr.
III direct or equivalent recruitment qualification recognised by Government.
A bare reading of the Rules show that the composition of the two cadres including designations, qualifications and methods of appointment to various posts, is entirely differ ent.
We do not agree with the High Court that nurses and compounders belong to one class and as such must be encadred together.
The attention of the High Court was invited to wards the qualifications prescribed for the nursing cadre and it was argued that the compounders do not possess the said qualifications and hence are not eligible to be consid ered for promotion in nursing cadre.
The High Court repelled the argument with the following reasoning: "Special qualification in midwifery is re quired for the purpose of maternity cases only.
But maternity cases form only a small part of the patients undergoing treatment in the hospitals and special qualification in midwifery is not required for other patients.
In this regard it may be pointed out that under the original Schedule to the Rules a person having P.N.C.R. or its equivalent qualification recognised by Government was eligible for direct recruitment or the post of Staff nurse and it was not necessary that he should be midwifery trained.
Such a person on being appointed as Staff nurse could be pro moted to all the higher nursing posts enumer ated in group 'A ' of the schedule.
In other words, the absence of special qualification in midwifery would not preclude a person who was directly recruited as Staff nurse being pro moted to the higher posts.
There is no reason why the same person should be denied this right if he, instead of joining as staff nurse, joined as compounder Gr.
" We do not agree with the approach of the High Court.
It is not for the High Court to assume the extent of maternity cases which are treated in the hospitals or to lay down that compounders though not qualified to treat maternity cases must be equated with nurses because they can treat other type of cases.
The High Court further errored when it equat ed the qualifications of Punjab Nursing Registration Certif icate with that of matriculation for holding that staff nurses and com 679 pounders Grade III possess the same qualifications for entry into service.
On the face of it Nursing Certificate is a specialised qualification and cannot be equated with matric ulation.
We may mention that by amending the Rules in 1978 an opening has been provided for compounders Grade 11 to enter the nursing cadre by competing with the staff nurses for promotion to the post of Sister Nursing Tutor.
The compound ers Grade II have thus been provided with two channels of promotion, one in their own cadre and the other to the nursing cadre.
Thus the grievance of the compounders that they were denied channel of promotion of the higher posts m nursing cadre has also been removed.
We, therefore, see no legal or equitable grounds to sustain the judgment of the High Court.
We accept the ap peals and set aside the judgment of the Division Bench of the High Court.
Affirming the judgments of the learned single Judges we hold that the Rules are constitutionally valid.
There shall be no order as to costs.
R.S.S. Appeals allowed.

summary/full:
Bansi Lal Sharma, respondent in one appeal, was appoint ed as Male Nurse in 1941 and was officiating as Sister Tutor in March 1966 when the Rajasthan Medical and Health subordi nate Service Rules, 1965 came into force.
Shanti Lal Jain, respondent in the second appeal, was appointed as Compounder Grade I in the year 1959 and was holding the post of Sister Tutor in March 1966.
In their separate petitions fried in the Rajasthan High Court, the respondents challenged the creation of two separate cadres Nursing Cadre and Compound ers Cadre under the Rules as arbitrary and as such viola tive of Articles 14, 15 and 16 of the Constitution of India.
It was pleaded that hitherto there was combined channel of promotion for compounders and nurses but the Rules had arbitrarily deprived Compounders Grade I of their right to promotion to higher posts of Assistant Nursing Superintend ent and Nursing Superintendent Grade II/Grade I.
It was further urged that recruitment to the Nursing Cadre was confined to females alone which resulted in discrimination on the ground of sex.
The writ petitions were dismissed by the learned Single Judges who held that creation of two separate cadres was not arbitrary, did not infringe the equality clause, and was not discriminatory on the ground of sex. 'The Division Bench, on appeal, upheld the findings of the learned Single Judges on Article 5 but set aside their judgments and found that there was no justification for creating separate cadres and deny ing channel of promotion to Compounders Grade I to the higher posts in the Nursing Cadre.
The Division Bench ac cordingly held the Rules to be arbitrary and violative of Articles 14 and 16 of the Constitution.
Allowing the appeals filed by the State, this Court, 671 HELD: 1.
Prior to 1966 there was no statutory Rules pertaining to the service.
No executive order creating cadres in the department or a joint seniority list indicat ing common cadre for nurses and compounders have been pro duced.
[673F] 2.
Even assuming that prior to coming into force of the Rules there was a combined cadre of nurses and compounders, Articles 14 and 16 of the Constitution do not forbid the State Government from creating new cadres, bifurcating one cadre into two or more, or uniting two or more cadres into one.
The creation of cadres in the service of the State is a matter which has to be left entirely to the State Govern ment.
[673G H] Reserve Bank of India vs N.C. Paliwal & Ors., ; ; referred to.
A bare reading of the Rules show that the composition of the two cadres including designations, qualifications and methods of appointment to various posts, is entirely differ ent.
This Court does not agree with the High Court that Nurses and Compounders belong to one class and as such must be encadred together.
[678B] 4.
It is not for the High Court to assume the extent of maternity cases which are treated in the hospitals or to lay down that compounders though not qualified to treat maternity cases must be equated with nurses because they can treat other type of cases.
[678G] 5.
By amending the Rules in 1978 an opening has been provided for compounders Grade II to enter the Nursing cadre by competing with the staff nurses for promotion to the post of Sister/Nursing Tutor.
The Compounders Grade II have thus been provided with two channels of promotion, one in their own cadre and the other to the Nursing Cadre.
Thus the grievance of the Compounders that they were denied channel of promotion to the higher posts in Nursing Cadre has also been removed.
[679B C]


judgement:
ivil Appeal No. 331 of 1978.
From the Judgment and Order dated 3.9.1976 of the Cal cutta High Court in Appeal from Original decree No. 407 of 1974.
B. Sen, A.K. Verma and section Suikumaran for the Appellants.
Tapash Chandra Ray and H.K. Puri for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave arises out of a suit filed by the appellants for eviction of the respondent tenant (hereinafter referred to as the Corpora tion) from certain premises on Lalbazar Street, Calcutta, on the ground of sub letting.
The City Civil Court, Calcutta, decreed the suit, but on appeal by the tenant Corporation, the Calcutta High Court reversed the judgment and dismissed the suit.
Admittedly the defendant Corporation was inducted as a tenant under a registered deed of lease dated 23.4.1948 for a period of three years from 1.5.1948.
After expiry of the period in 1951, the Corporation continued in possession, and by holding over became a month to month tenant.
The premises consists of a big room, described as room No. 3, along with a small room for the use of a Darwan (porter), staying there as guard.
The big room was, from time to time, leased out by the tenant Corporation in portions to differ ent subtenants and in 1960 the landlord brought a suit, registered as Ejectment Suit No. 978 of 1960, for the evic tion of the Corporation on several grounds including sub letting.
In the meantime West Bengal Premises Tenancy Act, 1956 had been enacted, and the provisions of section 13(1)(a) which are in the following terms, were relied on by the parties: "section 13.
Protection of tenant against evic tion.
(1) Notwithstanding anything to the contrary in any other law, no 635 order or decree for the recovery of possession of any premises shall be made by any Court in favour of the landlord against a tenant except on one or more of the following grounds, namely: (a) where the tenant or any person residing in the premises let to the tenant without the previous consent in writing of the landlord transfers, assigns or sub lets in whole or in part the premises held by him . ; . " 3.
The tenant Corporation contended that it was permit ted to create sub leases under clause 6 of the lease docu ment which is quoted below and it cannot, therefore, be accused of sub letting without the consent of the landlords: "That the lessees shall use the demised prem ises as office in connection with their busi ness and shall be entitled to sublet the portion which may not be used by them.
" It was asserted on behalf of the tenant Corporation that all the subtenants had been inducted in the premises in question in pursuance of the aforesaid permission and before the expiry of the lease period in 1951.
The City Civil Court decided the issue ,n favour of the tenant Corporation on the ground that all the sub tenancies had been created within the period covered by the lease deed and before coming in force of the West Bengal Premises Tenancy Act, 1956.
The suit was held to be not maintainable also on the ground that a legally valid notice terminating the tenancy had not been served on the tenant.
The suit was thus dismissed on 30.8.
1962 by the judgment Ext.
B(2). 4.
The present suit was filed in 1972 alleging that the tenant Corporation has, without the consent of the land lords, created fresh sub tenancies in the premises in favour of other sub tenants after the dismissal of the earlier suit.
The case is that after the original lease exhausted itself by efflux of time, and otherwise also came to an end by the landlords ' notice terminating it, the general permis sion under clause 6 of the lease deed, mentioned above, also disappeared.
Alternatively the appellants have contended that even assuming that the term in clause 6 continues to bind the parties, it does not authorise the respondent Corporation to sub let the entire premises.
The dominant purpose of the lease was actual user by the tenant itself for the purpose of running its office and clause 6 permitted it to sub let 636 only such portion which was left unused as surplus.
The appellants have also alleged default of payment of rent, but the plea has been rejected by the trial court and has not been pressed before us.
The suit was defended by the respondent Corporation contending that as held in the earlier suit the defendant was and is entitled to grant sub tenancies, and the plain tiffs ' case is fit to be dismissed.
Reliance was placed, besides the plea of res judicata, on the language of clause 6 which according to the defendant continues to bind the parties.
The City Civil Court rejected the defendant 's case of res judicata and agreeing with the plaintiffs on the question of sub letting, decreed the suit.
It held that a number of sub tenants who were in possession of the premises at the time of the earlier suit have been substituted later by another set of sub tenants after the coming into force of the Act.
The learned Judge also agreed with the plaintiffs that the entire premises was let out to sub tenants which was not consistent with the terms of the permission as mentioned in clause 6.
The Court, holding that the tenant had violated the provisions of the 1956 Act, passed a decree for eviction in favour of the plaintiffs.
The tenant Corpo ration appealed before the Calcutta High Court.
The High Court disagreed with the City Civil Court on the interpretation of clause 6 of the lease deed, and held that by reason of the judgment in the earlier suit, the present suit was barred by the rule of res judicata.
The appeal was, accordingly, allowed and the suit dismissed.
Mr. B. Sen, the learned counsel appearing in support of the appeal contended that since large portion of the disputed property was sub let to fresh sub tenants after the institution of the earlier suit of 1960, there was no scope for applying the doctrine of res judicata to the present litigation.
He inter alia argued that having regard to the change in the law brought about by the 1956 Act and special ly in view of the provisions of sections 13, 14 and 16, the appellants are entitled to a decree.
The factual position is that there are 16 sub ten ants as mentioned in Annexure B to the plaint who are occu pying the disputed room now.
Out of them 5 had been inducted before the 1960 suit and were parties thereto (as was right ly pointed out by the respondent Corporation in its applica tion dated 17.12.1973 for amendment of the written state ment).
The other 11 sub lessees were let in after the earli er suit, when the 1956 Act was in force.
The question is whether the creation of these sub tenancies violated the provisions of the Act.
637 In the earlier suit all the sub lesses were inducted during the period the lease was operative, i.e., much before the present Act was passed.
The question of violation of the provisions of the present Act, therefore, did not arise there.
It follows that so far this issue is concerned the earlier judgment can not operate by way of res judicata.
The main question which remains to be decided is whether in the circumstances, the plaintiffs ' case, based on alleged violation of the Act can be accepted.
section 14 enjoins that after the commencement of the Act no tenant shall, without the previous consent in writing of the landlord, sub let the whole or any part of the premises held by him as a tenant; or transfer or assign his rights in the tenancy or in any part thereof.
According to Mr. Tapas Ray, the learned counsel of the respondent Corporation, clause 6 of the lease deed, which continued to bind the parties by reason of the Corporation holding over, must be treated to contain the necessary consent of the appellants.
As has been seen earli er, this clause granted a general permission to the tenant to induct a sub tenant.
Can such a provision in general terms satisfy the requirements of the Act? Or, as has been suggested on behalf of the appellant, the consent contem plated by the Act has to be specific in regard to each sub lease? 10.
section 13 protects a tenant from eviction except on the grounds, enumerated therein and one of the grounds in clause (a) of sub section
(1) is in the following terms: "(a) where the tenant or any person residing in the premises let to the tenant without the previous consent in writing of the landlord transfers, assigns or sub lets in whole or in part the premises held by him;" The language of Ss. 13 and 14 by itself does not resolve the issue.
However, the provisions of section 16 which is quoted below clearly indicate that permission to the tenant to sub let in general terms can not be deemed to be consent for the purposes of Ss. 13 and 14: "section 16 Creation and termination of sub tenan cies to be notified (1) Where after the commencement of this Act, any premises are sub let either in whole or in part by the tenant with the previous consent in writing of the landlord, the tenant and every sub tenant to whom the premises are sub let shall give notice to the landlord in the prescribed manner of the creation of the sub tenancy within one 638 month from the date of such sub letting and shall in the prescribed manner notify the termination of such subtenancy within one month of such termination (2) Where before the commencement of this Act, the tenant with or without the consent of the landlord, has sub let any premises either in whole or in part, the tenant and every sub tenant to whom the premises have been sub let shall give notice to the landlord of such sub letting in the prescribed manner (within six months) of the commencement of this Act and shall in the prescribed manner notify the termination of such sub tenancy within one month of such termination (3) Where in any case mentioned in sub section (2) there is no consent in writing of the landlord and the landlord denies that he gave oral consent, the Controller shall, on an application made to him in this behalf either by the landlord or the sub tenant within two months of the date of the receipt of the notice of sub letting by the landlord or the issue of the notice by the sub tenant, as the case may be, by order declare that the ten ant 's interest in so much of the premises as has been sub let shall cease and that the subtenant shall become a tenant directly under the landlord from the date of the order.
The Controller shall also fix the rents payable by the tenant and such sub tenant to the landlord from the date of the order.
Rents so fixed shall be deemed to be fair rent for purposes of this Act.
" It is plain from the above that the Act contemplates that while one sub tenant may be evicted another may continue in the premises as a tenant directly under him, depending on the circumstances.
We are, therefore, of the view that previous consent in writing of the landlord with respect to each sub letting separately is essential and a general authority to the tenant in this regard will not be suffi cient in law.
Our view is supported by the observations in M/s Shalimar Tar Products Ltd. vs H.C. Sharma and Others, ; ; a case arising under the Delhi Rent Control Act.
An examination of Ss. 14(1)(b), 16, 17 and 18 of the Delhi Rent Control Act would show that the two Acts (West Bengal Act and the Delhi Act) are similar so far the present question is concerned.
In the present case, since it is not suggested on behalf of the respondent that consent of the appellants was obtained specifically for each of the sub tenancies, the respondent Corporation 639 must be held to have violated section 14.
The appellants have thus, established the ground mentioned in section 13(1)(a) and are entitled to succeed.
None of the sub tenants has been impleaded in the present suit, but as it is not the case of the tenant Corpo ration that any of them had sent any notice to the plain tiffs, the suit, so far the present respondent is concerned, can not fail on the ground of their non impleading.
However, the sub tenants can not be bound by the finding in this suit that they have failed to serve a notice as prescribed by the Act on the plaintiffs and will be entitled to be heard if and when the plaintiffs seek their eviction.
So far the sub tenants who had been inducted in the premises earlier and were parties to the 1960 suit may have still a better claim on the strength of the decree in their favour and may insist that they would be entitled to continue in possession as tenants directly under the plaintiffs.
For the reasons mentioned above, the decision of the High Court is set aside and the decree of eviction passed by the City Civil Court against the respondent Corporation is restored.
The appeal is accordingly allowed with costs throughout.
P.S.S. Appeal allowed.

summary/full:
Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956 provides for recovery of possession where the tenant or any person residing in the premises let to the tenant without the previous consent in writing of the land lord transfers, assigns or subsets in whole or in part the premises held by him.
Section 14 forbids the tenant from sub letting the premises without the previous consent in writing of the landlord.
Sub section (1) of section 16 requires the tenant and every sub tenant to whom the premises are sub.let to give notice to the landlord of the creation of the sub tenancy within one month from the date of such sub letting and also to notify the termination of such sub tenancy within one month of such termination.
Sub section (2) prescribes such a notice in respect of sub tenancies created with or without the consent of the landlord before the commencement of the Act, within the time specified therein.
Where there is no such consent in writing from the landlord, sub section (3) provides for cessation of tenant 's interest in the portion sub let and the sub tenant becoming a tenant directly under the landlord in certain circum stances.
Clause 6 of the lease deed creating tenancy for a period of 'three years from 1st May 1948 permitted the respondent tenant to sub.let any portion of the demised premises which was left unused or surplus.
After expiry of the lease period in 1951, the said tenant continued in possession, and by holding over became a month to month tenant.
It had, howev er, created certain sub tenancies within the period covered by the lease and before the Act came into force.
A suit for its eviction brought by the landlord in 1960 was dismissed by the trial court.
The landlord filed a fresh suit in 1972 on the Found that the tenant had created sub.tenancies in the premises after the dismissal of the earlier suit.
The tenant advanced the plea of res judicata and con 632 633 tended that it was and is entitled to grant sub tenancies under cl. 6 of the lease deed which continues to bind the parties.
Rejecting the case of res judicata, the trial court held that a number of sub tenants who were in possession of the premises at the time of the earlier suit had been sub stituted later by another set of sub tenants after the coming into force of the Act, and that the entire premises was let out to sub tenants which was not consistent with the terms of the permission as mentioned in cl. 6.
Allowing the appeal, the High Court, however, held that the suit was barred by the rule of res judicata.
In this appeal by special leave, it was contended for the appellants that since a large portion of the disputed property was sublet to fresh sub tenants after the institu tion of the earlier suit of 1960 there was no scope for applying the doctrine of res judicata, and that the consent contemplated by the 1956 Act has to be specific in regard to each sublease, which requirement was not satisfied by the general permission granted by cl. 6 of the lease deed.
Allowing the appeal, HELD: 1.
In the earlier suit all the sub lessees were inducted during the period the lease was operative, i.e., much before the Tenancy Act was passed.
The question of violation of the provisions of the said Act, therefore, did not arise there.
The earlier judgment cannot thus operate by way of res judicata.
[637A] 2.1 The provisions of section 16 of the Act clearly indicate that permission to the tenant to sub let in general terms cannot be deemed to be consent for the purposes of sections 13 and 14.
[637F] 2.2.
The Act contemplates that while one sub tenant may be evicted another may continue in the premises as a tenant directly under the landlord, depending on the circumstances.
Therefore, previous consent in writing of the landlord with respect to each sub letting separately is essential.
Since in the instant case consent of the appellant landlord was not obtained specifically for each of the sub tenancies, the respondent tenant must be held to have violated section 14.
The appellants are thus entitled to succeed under section 13(1)(a).
[638F, H] M/s Shalimar Tar Products Ltd. vs H.C. Sharma & Ors., ; , referred to.
It was not the case of the respondent that any of the sub 634 tenants had sent any notice to the landlord as prescribed by the Act.
Therefore, the eviction suit cannot fail on the ground of non impleading of the sub tenants.
However, the sub tenants cannot be bound by that finding in the suit.
They will be entitled to be heard if and when the landlord seeks their eviction.
[639B]


judgement:
vil Appeal No. 6 184 of 1983.
From the Judgment and Order dated 28.7.1983 of the Bombay High Court in S.C.A. No. 5/B/1982.
S.K. Mehta, Dhruv Mehta, Aman Vachher and Atul Nanda for the Appellant.
S.K. Dholakia and Praveen Kumar for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
The only point involved in this appeal is whether the document (Ext. 20) executed by the parties at the time the appellant was inducted in the disputed premises is an agreement of leave and licence or a deed of lease.
The building belongs to the respondent, and the appellant claims to be in its occupation as a month to month tenant.
The respondent instituted the suit in the civil court, out of which this appeal by special leave arises, for a decree for eviction of the appellant alleging that he has been in occupation of the building as a licensee and has illegally refused to vacate in spite of service of notice.
The appel lant 's defence is that he is a tenant protected by the provisions of the Goa, Daman and Diu Buildings (Lease, Rent and Eviction) Control Act, 1968, and in view of section 56 there of the suit in the civil court is not maintainable.
Agreeing with the plaintiff respondent, the trial court passed a decree which was confirmed on appeal by the District Judge.
The High Court dismissed the second appeal filed by the appellant observing that it was concluded by concurrent findings of fact.
We do not agree with the High Court that the findings of the courts below were those of fact so as to be binding on the High Court under section 100 of the Code of Civil Proce dure.
The case has to be decided on the nature of possession of appellant which is dependent on a correct interpretation of the document Ext.
20. 3.
The document Ext.
20 has been described as an agreement of 629 leave and licence and the parties as the Licensor and the Licensee.
But it is significant to note that in the very first sentence of the document the respondent is described as "Landlord hereinafter called the Licensor".
However, this cannot answer the disputed issue as it is firmly established that for ascertaining whether a document creates a licence or lease, the substance of the document must be preferred to the form.
As was observed by this Court in Associated Hotels of India Ltd. v .R.N.
Kapoor; , , the real test is the intention of the parties whether they intended to create a lease or licence.
If an interest in the property is created by the deed it is a lease but if the document only permits another person to make use of the property "of which the legal possession continues with the owner", it is a licence.
If the party in whose favour the document is executed gets exclusive possession of the property, prima facie he must be considered to be a tenant; although this factor by it self will not be decisive.
Judged in this light, there does not appear to be any scope for interpret ing Ext.
20 as an agreement of leave and licence.
The document has been placed before us by the learned counsel for the appellant.
Although as stated earlier, it has been described as an agreement of leave and licence and the parties as the "Licensor" and the "Licensee", its provi sions unmistakably indicate that the,appellant was being let in as a tenant on the monthly rental of Rs.350 (besides water and electricity charges) to be paid regularly on or before the 5th day of each consecutive month.
By clause 5, it was agreed that the appellant "shall not sub let, under let or part possession of the premises to any stranger nor shall he keep the premises vacant for more than 3 months without the consent of the Licensor", that is, the respond ent.
The question of executing a sub lease or subletting can arise only by a tenant.
If a licensee inducts any person in the property as his tenant, it cannot be described as sub letting.
In clause 15 it is stated that on the expiry of the period, the deed "shall be renewable thereafter at the will of the licensee"; and in the event of the licensee not desiring to renew, "shall give one month 's notice in writ ing".
These terms are not consistent with the respondent 's case of licence, and indicate that an interest in the property was created in favour of the appellant in pursuance of which he was put in possession with a right of renewal.
When compared with the terms of the documents set out in the judgments in Associated Hotels of India Ltd. vs R.N. Kapoor, ; and Sohan Lal Naraindas vs Laxmidas Raghu nath Gadit, , relied upon by the learned counsel for the appellant, which were construed by this Court as creating lease inspite of their description as licence deeds, the appellant 's 630 case stands out as stronger.
If the approach adopted by the courts below in interpreting the document is accepted, it shall defeat the object of the Rent Acts, by permitting the parties to camouflage the real nature of the transaction by resorting to skilful drafting.
Mr. Dholakia, learned counsel for the respondent, streneously, contended that the test of exclusive possession is an out dated one which should not now be taken into account for the purpose of deciding the nature of posses sion.
Reliance was placed on the observations of Lord Den ning MR in Shell Mex and BP Ltd. vs Manchester Garages Ltd., We do not agree that exclusive pos session of a party is irrelevant as is suggested; but at the same time as has been observed in the earlier cases of this Court, referred to above, it is not conclusive.
The other tests, namely, intention of the parties and whether the document creates any interest in the property or not, are important considerations.
The observations in the English case, relied upon by the learned counsel for the respondent cannot be understood to suggest that the test of exclusive possession has been now rendered irrelevant and redundant as they are immediately followed by the statement; "As I have said manytimes, exclusive posses sion is no longer decisive." The position stands further clarified by the following statement in the concurring judgment of Buckley, L J,; "The only clause which points one way or the other, I think, is cl. 19 in Sch. 1 which Lord Denning MR has already read, which clearly recognises that notwithstanding the bargain between the parties, the plaintiffs retained rights of possession and control over the property in question.
That seems to me to be consistent only with the fact that this trans action was in truth a licence transaction and not a tenancy under which the defendants would obtain an exclusive right to possession of the property during the term of the tenancy, subject, of course, to any rights reserved by the plaintiffs.
" We are also not in a position to agree with Mr. Dholakia when he says that if the parties themselves have chosen to describe the transaction as a licence, we cannot make out a different case for them.
It is well settled that the main purpose of enacting the Rent statutes is to protect 631 the tenant from the exploitation of the landlord, who being in the dominating position is capable of dictating his terms at the inception of the tenancy; and, the Rent Acts must receive that interpretation which may advance the object and suppress the mischief.
By adopting a different approach the Rent laws are likely to be defeated altogether.
The surrounding circumstances are also consistent with the deed being one of lease.
The notice to vacate the premises was served on the appellant after several years of expiry of the term of the agreement.
It is not suggested on behalf of the respondent that there is any relationship between the parties or that they were friends which induced him to allow the appellant to occupy the building.
Realisa tion of rent which has been described in the document (Ext. 20) as "compensation reserved for use and occupation" was the sole consideration of the transaction.
In this back ground the description of the parties as lessor and lessee or the rent as compensation does not carry much weight.
For the reasons mentioned above, we hold that Ext.
20 was in reality a document of lease and the appellant has been enjoying the exclusive possession thereof in the capac ity of month to month tenant.
As a result the suit was, in view of the provisions of the Goa, Daman and Diu Buildings (Lease, Rent and Eviction) Control Act, not maintainable.
The appeal is accordingly allowed but without costs, the decree passed by the courts below is set aside and the suit is dismissed.
T.N.A. Appeal allowed.

summary/full:
The respondent landlord inducted the appellant into the suit premises pursuant to an agreement.
The agreement was described as agreement of leave and licence, the parties as licensor and licensee and the rent as compensation for use and occupation, and it was provided that the appellant (i) shall pay monthly rent regularly on or before the 5th day of each consecutive month; (ii) shall not sub let, under let or part with possession nor shall keep the premises vacant for more than three months without the consent of the licensor; (iii) that on the expiry of the deed, it shah be renewable at the will of the licensee.
Several years after the expiry of the above agreement the respondent instituted a civil suit for a decree of eviction of the appellant on the ground that the appellant was in occupation as a licensee and has illegally refused to vacate.
Rejecting the plea of the appellant that he was a month to month tenant protected by the provisions of, the Goa, Daman and Diu Buildings (Lease, Rent and Eviction) Control Act, 1968 and that the suit was barred by section 56 the Trial Court passed a decree for eviction which was confirmed in appeal by the District Judge.
The second appeal filed by the appellant was also dismissed by the High Court holding that it was concluded by concurrent findings of fact.
Hence this appeal.
Allowing the appeal, and setting aside the decree of the Courts below, 627 HELD: 1.
The findings of the Courts below were not those of fact so as to be binding on the High Court under section 100 of the Civil Procedure Code.
The case has to be decided on the nature of possession of the appellant which is de pendent on a correct interpretation of the document.
[628G] 2.
It is well settled that the main purpose of enacting the Rent statutes is to protect the tenant from the exploi tation of the landlord, who being in the dominating position is capable of dictating his terms at the inception of the tenancy; and, the Rent Acts must receive that interpretation which may advance the object and suppress the mischief.
By adopting a different approach the Rent laws are likely to be defeated altogether.
[630H, 631A] 3.
For ascertaining whether a document creates a licence or lease, the substance of the document must be preferred to the form.
The real test is the intention of the parties whether they intended to create a lease or licence.
If an interest in the property is created by the deed it is a lease but if the document only permits another person to make use of the property of which the legal possession continues with the owner, it is a licence.
The test of exclusive possession is not irrelevant but at the same time it is not conclusive.
If the party in whose favour the document is executed gets exclusive possession of the property, prima facie he must he considered to he a tenant; although this factor by itself will not be decisive.
[629A B C, 630B C] Associated Hotels of India Ltd. vs R.N. Kapoor, ; ; Sohanlal Naraindas vs Laxmidas Raghunath, ; applied.
Shell Mex and BP Ltd. vs Manchester Garages Ltd., ; explained 4.
In the instant case, the terms of the deed are not consistent with the respondent 's case of licence, and indi cate that an interest in the property was created in favour of the appellant in pursuance of which he was put in posses sion with a right of renewal The surrounding circumstances are also consistent with the deed being one of lease.
The notice to vacate the premises was served on the appellant after several years of expiry of the agreement.
There was no relationship or friendship between the parties, which would have induced the respondent to allow the appellant to occupy the building.
Realisation of rent was the sole considera tion.
The description of the parties as licensor and 628 licensee or the rent as compensation does not carry too much weight.
The agreement was in reality a document of lease, and the appellant has been enjoying the exclusive possession in the capacity of month to month tenant.
The suit filed by the respondent was, therefore, not maintainable.
[629F, 631 B C, D E]