judgement:
Civil Appeals Nos. 459 and 460 of 1960 Appeals by special leave from the award dated March 10, 1959, of the Industrial Tribunal, Assam, in Reference No. 16 of 1958.
M. C. Setalvad, Attorney General for India, B. Sen, section N. Mukherji and B. N. Ghosh, for the management appellant (in C. A. No. 459 of 60) and the respondent (in C. A. No. 460 of 1960).
section T. Desai, A. K. Dutt and Janardan Sharma, for the workmen respondents (in C. A. No. 459 of 60) and the appellants (in C. A. No. 460 of 1960).
November 24.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
Civil Appeals Nos. 459 and 460 of 1960 are cross appeals and they arise out of an award pronounced by the Industrial Tribunal, Assam, in an industrial dispute referred by the Assam Government for its adjudication.
This industrial dispute was raised against the management of the Tocklai Experimental Station (hereafter called the Station) by its workmen.
Six out of the demands made by the workmen formed the subject matter of reference.
In the present appeals we are concerned with three of them.
Demand No. 1 (a) was that the employees ' junior staff of the Station should be given pension in lieu of the existing practice of paying gratuity.
This demand has been rejected be the tribunal.
The other demand made by the employees was No. 3(b) and it had reference to the claim for free housing accommodation or adequate allowance in lieu thereof.
This demand has been partially allowed by the tribunal and it has directed that house allowance in each case shall be raised at the flat rate of Rs. 20/ instead of Rs. 101/ .
The decision of the tribunal in respect of these two demands did not satisfy the workmen and so by special leave of this Court they have filed Civil Appeal No. 460 of 1960.
The demand of the 560 junior staff for bonus which was resisted by the Station has been partially allowed by the tribunal.
It has ordered that the Station shall give punja bonus at the same rate as the employees working for the Indian Tea Association at Calcutta are getting.
This part of the award is challenged by the Station in its appeal by special leave by Civil Appeal No. 459 of 1960.
That is how the two cross appeals arise.
We will deal first with the Station 's Appeal in respect of bonus.
The learned Attorney General contends that in making the demand for bonus the workmen have entirely misconceived the true position of the industrial law on the point, and he argues that the Assam Government was not justified in making the reference in the form it has been made and the tribunal was not justified in making the award in the manner it has done.
The workmen made their demand for bonus in these words: "The Union requests the introduction of bonus for the Tocklai Staff on the following grounds".
Then follow six grounds.
It was urged that the Station is an arm of the tea industry and is maintained by the members of the I.T.A. who give bonus to their employees, that the Station exists and works for the advancement of the tea industry and increasing its profits and thus is an industry, that the I.T.A. employees at Calcutta office are given bonus, that the employees of the Bengal Chamber of Commerce receive bonus, that the employees of Shamshernagar and Tulsipara branches of this very Station used to be given bonus so long as these branches were functioning and that the personnel of the scientific research laboratories attached to many industrial concerns receive bonus, and so the workmen in the present case were entitled to make a claim in that behalf.
In appreciating this claim it is necessary to state that the Station is a research institution established by the Indian Tea Association to make research for the purpose of improving the quality of 561 tea and its production and the said Station is managed by the parent Association and is maintained by means of voluntary subscriptions from members of the said Association.
Broadly stated the ground on which the workmen claimed bonus was that the employees of the Association were receiving bonus and that the personnel of scientific research laboratories similarly situated in other industrial concerns were also given bonus.
When the Assam Government made the present reference it included within the scope of the reference this claim of bonus along with the other claims made by the workmen.
The issue referred for adjudication on this point was thus framed: "2(a).
Whether the demand of the employees (Junior Staff) for bonus is justified ? If so, at what rate should the same be paid ?" The tribunal considered this demand and partially allowed it by directing that the workmen should be paid puja bonus at the same rate as the employees working in the I.T.A. at Calcutta are getting.
In dealing with this question the tribunal has held that the Station is an industry within the meaning of the Industrial Disputes Act and so it could not resist the demand made by its workmen on the ground that it is an academic body devoted to research and as such outside the purview of the Act.
This position is not disputed before us by the Station because it is concluded by a decision of this Court in The Ahmedabad Textile Industry 's Research Association vs The State of Bombay (1).
The tribunal has, however, found in favour of the Station that it would be inexpedient, if not impossible, to apply the formula which governs the decision of industrial claims for the payment of bonus.
"There are obvious difficulties", says the tribunal, "in applying the formula laid down by their Lordships of the Supreme Court to an experimental station run 562 by the Association"; but it added that "it could not be overlooked that payment of bonus to members of the experimental staff is being made by some companies".
Then the tribunal referred to some instances where bonus is paid to workmen who, in the opinion of the tribunal, were similarly situated, and it came to the conclusion that refusing the workmen 's claim for bonus against the Station would amount to discrimination.
The tribunal then took into account the fact that what is described as puja bonus is paid to members of the staff of the Bengal Chamber of Commerce because it was admitted before it that the junior staff of the Bengal Chamber of Commerce which presumably was also serving the I.T.A. at Calcutta was receiving a fixed annual gratuity characterised as puja bonus.
The tribunal conceded that the claim for this kind of bonus "may not directly satisfy the requirements of law", but it added that "the fact that what was described as puja bonus was given at the sub stations and is also given to the clerical staff working at the I.T.A. at Calcutta, supports the demand to this extent at least that the same treatment may be meted out to them.
" It is on this reasoning that the tribunal ultimately made the award in favour of the workmen directing the Station to pay puja bonus to its employees.
It would be noticed that the demand originally made by the workmen appears to be in the nature of a demand for bonus which is usually described as industrial profit bonus the payment of which is governed by the application of the well known formula.
Such a demand is invariably made, and has to be made, by reference to a particular year because the formula which determines claims for profit bonus postulates the examination of the available surplus in the hands of the employer from which bonus may be directed to be paid to the employees.
A claim for profit bonus cannot 563 be validly made unless a specific year for which the claim is made is indicated and it is alleged that there is available surplus in the hands of the employer during that year.
It is unfortunate that this elementary aspect was overlooked by the workmen when they made the claim and has not been noticed even by the Assam Government when it made the reference in respect of this claim.
This serious infirmity in the claim is present even in the award made by the tribunal because the award does not say for what year the bonus should be paid, and like the claim made by the workmen in very general terms for the introduction of bonus the award also seems to make a direction in similar terms for the payment of bonus.
In our opinion, this is a patent infirmity in the award.
Profit bonus, it is hardly necessary to emphasise, can be awarded only by reference to a relevant year and a claim for such bonus has, therefore, to be made from year to year and has to be settled either amicably between the parties or, if a reference is made, it has to be determined by industrial adjudication.
A general claim for the introduction of profit bonus cannot be made or entertained in the form in which it has been done in the present proceedings.
Besides, the other serious infirmity in the award is that when a claim for profit bonus was made the tribunal has proceeded to grant puja bonus and that too solely on the ground that the refusal to grant the said claim would amount to discrimination.
In our opinion, the approach adopted by the tribunal in dealing with this alternative claim for puja bonus which was not made in the demand and which had not been expressly referred to the tribunal is entirely erroneous.
The claim for puja bonus proceeds on entirely different considerations.
Customary puja bonus undoubtedly prevails in many industries in Bengal but there are certain tests which have to be applied in 564 determining the validity of the claim.
The amount by of way of puja bonus, it must be shown, has been consistently paid by the employer to his employees from year to year at the same rate, that it has been paid even in years of loss and that it has no relation to the profit made by the employer during the relevant year.
The course of conduct spreading over a reasonably long period between the employer and the employees in the matter of payment of puja bonus is of considerable importance in dealing with the claim of customary puja bonus [Vide: The Graham Trading Co. (India) Ltd. vs Its Workmen (1)].
A claim for puja bonus can also be made in a proper case of the ground that the payment of such bonus is an implied term in the contract of employment [Vide: Messrs. Ispahani Ltd., Calcutta vs Ispahani Employees ' Union(2).
Such a claim again would necessarily involve the consideration of several relevant facts none of which has been alleged or proved in the present proceedings.
Therefore, the decision of the tribunal awarding puja bonus to the workmen cannot be sustained.
Indeed, in awarding puja bonus to the workmen the tribunal has failed to consider that it was making out an entirely new and inconsistent case for the workmen and granting the said claim without any proof of the relevant facts which would support such a claim.
It is rather surprising that even when the tribunal by its award wanted to grant the demand for puja bonus it did not think it necessary to clarify at what rate the said bonus was to be paid.
The award is absolutely vague in that behalf and that is another infirmity in the award.
Since that is the only point in Civil Appeal No. 459 of 1960 preferred by the Station we must hold that the appeal succeeds and must set aside the award made by the tribunal under issue No. 1 (a).
Before we part with this appeal, however, we ought to add that after special leave was granted 565 to the Station to prefer its appeal it applied for stay of the award directing the payment of puja bonus and stay was granted by this Court on condition that the amount of puja bonus should be paid by the Station to its employees on their furnishing security to the satisfaction of the management.
Accordingly the Station has paid to its workmen puja bonus for three years.
We suggested to the learned Attorney General that in case his appeal were to succeed the Station may consider whether it would partially forego its claim to recover the amount already paid by it to its workmen, and the learned Attorney General, after consulting his client, has stated before us that the Station would forego one third of the total amount paid by it to its employees under the orders of this Court.
This one third amount, we were told, is in the neighborhood of Rs. 65,000/ The learned Attorney General also stated that the balance of two third amount which it would recover from its employees can be paid by each one of them either by easy instalments or at the time when he would receive his gratuity or provident fund; the employee may exercise his option in that behalf.
It appears that some of the employees who received the said amount have left the service of the Station and at that time have refunded the amount received by them.
The Station would be prepared to give back to such employees one third of the said amount.
In our opinion, the attitude adopted by the Station in this matter is very fair and it would relieve the workmen from their liability to return one third of the total amount received by them in pursuance of the orders of this Court.
That takes us to Civil Appeal No. 460 of 1960 preferred by the workmen.
Mr. section T. Desai, who argued this appeal, could not seriously press the workmen 's case against the refusal of the tribunal to allow their demand for pension in lieu of the existing practice of paying gratuity.
On a consideration 566 of the relevant facts the tribunal came to the conclusion that this demand was not justified, and, in our opinion the conclusion of the tribunal is well founded.
Then, as regards the other demand which is the subject matter of the appeal the tribunal has increased the house allowance at a flat rate of Rs. 20/ instead of Rs. 10/ and this increased rate has been paid by the Station as from the date when the award became enforceable.
Mr. Desai contends that the tribunal should have made an award granting the demand for accommodation or in the alternative should have awarded larger amount by way of house allowance.
We are not impressed by this argument.
A demand for the provision of housing accommodation can be reasonably entertained where it appears that the financial position of the employer can bear the burden involved in the said demand.
Under the present economic conditions prevailing in the industry the responsibility for providing housing accommodation cannot reasonably be placed solely on the shoulders of the employer.
In due course the problem may have to be tackled by the industry in co operation with the State.
The State will have to bear a part of that responsibility [Vide: The Patna Electric Supply Co. Ltd., Patna vs The Patna Electric Supply Workers ' Union (1))].
The tribunal has considered the financial position of the Station, the urgency of the damned made by the workmen, and has come to the conclusion that the demand for housing accommodation was not justified and that the ends of social justices would be met in the present case if a flat rate of enhancement of Rs. 20/ is awarded.
It is true that the Station gives housing accommodation for members of the senior staff but as the tribunal has pointed out there are special reasons how more favourable terms have to be offered to senior research staff in order to get the services of properly trained and properly equipped personnel.
In our opinion, the tribunal was right in refusing 567 to draw an analogy between the requirements of the senior research staff and the junior staff with whose claims the tribunal was dealing.
Therefore, we are not satisfied that there is any substance in the grievance made by the workmen against the award passed by the tribunal in respect of house allowance.
The result is Civil Appeal No. 460 of 1960 fails and is dismissed.
There would be no order as to costs in both the appeals.
Appeal No. 459 allowed.
Appeal No. 460 dismissed.

summary/full:
The appellant, a research institution established for the purpose of improving the quality of tea, was managed by the India Tea Assciation.
The employees made claims, inter 558 alia, for (1) free housing accommodation or adequate allowance in lieu thereof, and (2) grant of bonus.
The tribunal, to which the matter was referred by the Government considered the financial position of the appellant and came to the conclusion that the demand for housing accommodation was not justified and that the ends of justice would be met if a flat rate of enhancement of Rs. 20/ was awarded.
As regards the demand for bonus the tribunal felt that it would be inexpedient to apply the formula which governed the decision of industrial claims for the payment of bonus, but made an award directing the appellant to pay puja bonus to its employees on the ground that what was described as puja bonus was being given to workmen who were similarly situated as also to the clarical staff working at the Indian Tea Association at Calcutta and that refusing the workmen 's claim for bonus against the appellant would amount to discrimination.
^ Held, that a demand for the provision of housing accommodation can be reasonably entertained where it appeared that the financial position of the employer can bear the burden involved, that under the present economic conditions prevailing in the industry the responsibility for providing housing accommodation cannot be placed solely on the shoulders of the employer, and that in due course the problem would have to be tackled by the industry in cooperation with the State, which would have to bear a part of that responsibility.
The Patna Electric Supply Co., Ltd. Patna vs The Patna Electric Supply Workers ' Union, [1959] Supp.
S.C. R. 761, relied on.
Held, further, that before a claim for the grant of puja bonus could be sustained it must be shown (1) that it was consistently paid by the employer to his employees from year to year at the same rate, and (2) that it had been paid even in years of loss and that it had no relation to the profit made by the employer during the relevant year.
A claim for puja bonus could also be made on the ground that the payment of such bonus was an implied term in the contract of employment.
The Graham Trading Co. (Indian) Ltd. vs Its Workmen, ; and M/s. Ispahani Ltd., Calcatta vs Ispahani Employees ' Union, [1960] 1 S.C.R. 24, followed.
Industrial profit bonus which is governed by the application of the well known formula, cannot be awarded unless a specific year for which the claim is made is indicated and it is alleged that there is available surplus in the hands of the employer for that year.


judgement:
Civil Appeal No. 274 of 1959.
Appeal by special leave from the judgment and order dated July 27,1956, of the Madras High Court, in C.R.P. No. 90 of 1955.
N. C. Chatterjee, R. Ganapathy Iyer and G. Gopalakrishnan for the appellant.
K. N. Rajagopala Sastri, R. Mahalinga Iyer and M. section K. Aiyengar, for respondent No. 1. 1960.
November, 28.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave in an insolvency matter.
The brief facts necessary for present purposes are these.
S.V.N. Nanappa Naicker and his sons were adjudged insolvents on an application of Smt.
Engammal (hereinafter referred to as the respondent).
They had preferred an appeal before the High Court of Madras but it was dismissed on April 17, 1953.
Thereafter the official receiver took steps to sell the property of the insolvents, which consisted of two lots, the first lot comprising 145 acres 10 cents of dry land and masonry house, and the second lot, 8 acres and odd of dry land.
Both these properties were subject to mortgage.
The official receiver fixed September 28, 1953, for sale of the properties by auction.
Fifteen of the creditors were present when the sale by auction took place, including the son of the respondent.
No request was made on that day by anyone for postponing the sale and consequently bids were made.
The highest bid for lot 1 was of 692 Rs. 4500/ and the highest bid for lot 2 was of Rs. 70/ .
Both these bids were made by the appellant who is a brother in law of Nanappa Naicker.
The reason why the two lots were sold for Rs. 4570/ was that there was an encumbrance on the entire property of Rs. 17,200/ .
The official receiver did not close the sale on that day in the hope that some higher offers might be made by the creditors and postponed it to various dates upto October 26, 1953.
On all these dates, the respondent 's son was present but no higher offer was made on behalf of the respondent.
On October 26, 1953, an application was made on behalf of the respondent praying that the sale be postponed for another three months apparently on the ground that there had been drought in that area for some years past and agricultural lands were not fetching good price.
The official receiver, however, saw no reason to postpone the sale, particularly when no higher offer was forthcoming from the side of the respondent and decided to knock down the properties in favour of the appellant.
Later, an application was made on behalf of the respondent on November 18, 1953 under section 68 of the , No. V of 1920 (hereinafter referred to as the Act).
The case of the respondent was that the sale had been made for a very inadequate price and there had been drought in the village for several years in the past and there was very great stringency in the money market and it was hoped that if the sale was postponed for three or four months, the properties would fetch a good price of not less than Rs. 15,000/ , exclusive of the sum due on the encumbrances.
The respondent also stated that if the sale was postponed for three months she would be prepared to bid more than Rs. 7500/ for the properties.
There were some other allegations in the petition suggesting collusion between the official receiver on the one side and the 693 insolvent and the appellant on the other.
The respondent therefore prayed that the official receiver should be ordered not to sell the properties to the appellant at the price bid by him.
The application was opposed by the official receiver as well as by the appellant.
The official receiver contended that he had done his best and that no higher bid could be obtained.
He also denied the allegation made against him in the nature of collusion and also about the manner of conducting the sale.
The Subordinate Judge allowed the application on the ground that the price fetched was low and that the general body of creditors to whom debts to the extent of Rs. 30,000/ were payable would be considerably prejudiced if the sale was allowed to stand.
Thus the only ground on which the application under section 68 was allowed was that the price fetched was low.
Thereupon there was an appeal to the District Judge under section 75 of the Act.
The District Judge allowed the appeal.
He pointed out that there was nothing to show that there was any irregularity in the conduct of the sale.
He also pointed out that there was no reason to hold that the official receiver was in any way in collusion with the insolvent and the appellant.
He also pointed out that the respondent 's son was all along present and if he really thought that the price fetched at the auction sale was low he could offer a higher price on behalf of the respondent.
Finally, the District Judge held that the Subordinate Judge was not right in his view that the property had been sold for a low price and gave various reasons for coming to that conclusion.
The matter was then taken in revision under the proviso to section 75 of the Act, which lays down that "the High Court for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it 694 thinks fit".
The High Court however did not consider the question whether the order of the District Judge was according to law.
It appears that before the High Court an offer was made by the respondent that she was prepared to deposit Rs. 9,000/ if a fresh auction was held and would start the bid at Rs. 9,000/ and also that she would pay Rs. 1,000/ to the appellant for any loss caused to him.
The High Court accepted this offer, though it was of opinion that it could not be said that the price fetched at the auction was unconscionably low; it however held that the price was low considering the extent and nature of the properties, and if Rs. 9,000/ or more could be got for the properties the creditors would receive appreciably more as dividend.
It therefore allowed the revision on the terms offered by the respondent.
It is this order of the High Court which has been brought before us by special leave and the only question that has been urged on behalf of the appellant is that the High Court had no jurisdiction to interfere with the order of the District Judge unless it came to the conclusion that the order was not according to law.
It is contended at the High Court 's order does not show that it applied its mind to the question whether the order of the District Judge was according to law or not and that the High Court seems to have been carried away by the offer made by the respondent to make minimum bid of Rs. 9,000/ for those properties.
It is pointed out however that this offer was made three years after the auction and is no indication that the price fetched in the auction in 1953 was inadequate, for prices may have risen during this period of three years.
On the other hand, it is contended on behalf of the respondent that the court 's power under section 68 in appeal from an act of the receiver is much wider than the power of the court in dealing with 695 auction sales in execution proceedings and therefore the Subordinate Judge was right in setting aside the act of the receiver in knowing down the properties to the appellant and the High Court was consequently right in setting aside the order of the District Judge and resorting that of the Subordinate Judge.
It may be accepted that the power of the court under section 68 in not hedged in by those considerations which apply in cases of auction sales in execution proceedings.
Even so, the power under section 68 is a judicial power and must be exercised on well recognised principles, justifying interference with an act of the receiver which he is empowered to do under section 59 (a) of the Act.
The fact that the act of the receiver in selling properties under section 59 (a) is subject to the control of the court under section 68 does not mean that the court can arbitrarily set aside a sale decided upon by the official receiver.
It is true that the court has to look in insolvency proceedings to the interest in the first place of the general body of creditors; in the second place to the interest of the insolvent, and lastly, where a sale has been decided upon by the official receiver to the interest of the intending purchaser in that order.
Even so, the decision of the official receiver in favour of a sale should not be set aside unless there are good grounds for interfering with the discretion exercised by the official receiver.
These grounds may be wider than the grounds envisaged in auction sales in execution proceedings.
Even so, there must be judicial grounds on which the court will act in setting aside the sale decided upon by the official receiver.
These grounds may be, for example, that there was fraud or collusion between the receiver and the insolvent or the intending purchaser; the court may be also interfere if it is of opinion that there were irregularities in the conduct of the sale which might have affected the 696 price fetched at the sale; again, even though there may be no collusion, fraud or irregularity, the price fetched may still be so low as to justify the court to hold that the property should not be sold at that price.
These grounds and similar other grounds depending upon particular circumstances of each case may justify a court in interfering with the act of the official receiver in the case of sale by him under section 59 (a) of the Act.
The High Court had therefore to see whether the Subordinate Judge 's order was justified on these grounds and whether the District Judge made any mistake in law in reversing that order.
If the Subordinate Judge 's order was not justified on these grounds or if the District Judge made no mistake in law in interfering with that order, the High Court cannot interfere in revision under the proviso to section 75, for the High Court 's jurisdiction to interfere arises only if it is of opinion that the District Judge 's order was not according to law.
If the High Court comes to that conclusion, it can then pass such order as it may think fit.
Let us therefore turn first to the order of the Subordinate Judge and see if it is justified on the ground mentioned above.
Now both the Subordinate Judge and the District Judge found that there was no reason to hold that there was any fraud or collusion on the part of the official receiver in this case.
Further, the Subordinate Judge did not find that there was any irregularity committed by the official receiver in conducting the sale and the District Judge has definitely found that there was no such irregularity.
The only ground on which the Subordinate Judge held that the sale should be set aside was that the price fetched was low.
Now if that ground is justified, the Subordinate Judge would have been right in interfering with the sale proposed by the official receiver.
That matter has been considered by the District Judge and he has 697 held that there is no reason to hold that the properties were being sold for a low price.
The Subordinate Judge in dealing with the question of price has pointed out that the insolvent had valued the properties at Rs. 80,000/ , though he was conscious of the fact that this was properly an exaggeration.
He therefore did not hold that the properties were worth Rs. 80,000/ .
He came to the conclusion that the properties would be worth at least Rs. 40,000/ and the main reason why he said so was that the properties had been mortgaged for over Rs. 20,000/ in 1936.
According to him there seems to be some infallible rule that one must double the mortgaged money in order to arrive at the valuation of the properties mortgaged.
The District Judge has pointed out and we think, rightly that there can be no such rule.
Therefore, the main basis on which the Subordinate Judge held that the properties were worth Rs. 40,000/ and therefore the bid of the appellant was low, falls to the ground as pointed out by the District Judge.
The Subordinate Judge also pointed out that the insolvents were in possession of the properties during the pendency of the insolvency appeal and had been depositing Rs. 2000/ annually on the order of the High Court in order to remain in possession.
The Subordinate Judge however did not calculate the value of the properties on the basis that their annual income was Rs. 2,000/ and rightly so because the amount deposited by a litigant on the order of a court in order to retain possession of some property cannot necessarily lead to the inference that was the annual income of the property.
It seems therefore that the District Judge was right when he held that there was no evidence on the record which would justify the finding of the Subordinate Judge that the price fetched by the sale in this case was inadequate or unreasonable.
We may add that it was open to the respondent to show to the Subordinate Judge by well recognised methods 698 of valuation as to what the value of the properties was.
The Subordinate Judge should have then taken into account the total amount of the encumbrance on these properties.
The mortgage deed is not on the record and we do not know what interest, if any, the mortgage money carried.
Before the Subordinate Judge could come to the conclusion that the price offered by the appellant was low, he had first to find out the price of the properties by some recognised method.
He had then to find what was the total amount of encumbrance on the properties.
If on finding these things it appeared that the difference between the two was much larger than the price bid by the appellant, the Subordinate Judge would have been justified in interfering with the order of the official receiver, even if there was no question of fraud, collusion or irregularity in the present case.
But no such findings have been given by the Subordinate Judge and the District Judge consequently was right when he said that the view of the Subordinate Judge that the price fetched was inadequate and unreasonable is incorrect.
Unfortunately, the High Court did not address itself to the question whether the order of the District Judge was according to law or not.
It seems to have been impressed by the offer made by the respondent, overlooking the fact that the offer of Rs. 9,000/ as the minimum bid and Rs. 1000/ for the appellant was being made three years after the auction during which, for all that we know, the prices might have risen.
Further, the High Court has remarked that the price offered by the appellant was not unconscionably low but it felt that it was still low on a comparison with the offer made by the respondent in 1956.
As the High Court did not consider the question whether the order of the District Judge was according to law or not and did not come to the conclusion that order was not according to law, the High Court would have no jurisdiction to interfere with that order.
699 Learned counsel for the respondent urged that even though the High Court may not have considered the matter from this aspect, we should not interfere with the order of the High Court if we are satisfied that in fact the price offered by the appellant was low, in the circumstances prevailing in 1953.
We agree that if it was possible for us to come to the conclusion that the price offered by the appellant was low, there would be no reason to interfere with the order of the High Court, even though it might not have considered what was necessary for it to do for interfering under the proviso to section 75; but as are have pointed earlier, there is no sufficient material on the record on which we can say that the price offered by the appellant is low.
As we have already pointed out, no attempt was made in the Subordinate Judge 's court to value the properties by any of the well recognised methods by which properties are valued.
Further no attempt was made to show the total encumbrance on the property.
Unless the valuation was properly made and the encumbrance was found out, it is not possible to say that the offer made by the appellant was low, for that would depend upon the difference between the value of the properties and the amount of encumbrance.
In these circumstances, it is not possible for us to say that the order of the District Judge when he held that the Subordinate Judge was not right in holding that the price fetched was inadequate or unreasonable, is not according to law.
We therefore allow the appeal, set aside the order of the High Court and restore the order of the District Judge.
The appellant will get his costs in this Court from the first respondent.
Appeal allowed.

dataset_name: IN-Abs

summary/full:
The official receiver put the properties of the insolvents N and his sons for sale, which were subject to mortgage.
The properties were ultimately knocked down to the appellant whose bid was the highest.
The first respondent made an application under section 68 of the which was allowed by the Subordinate Judge on the ground that the price fetched was very low on appeal under section 75 of the Act the District Judge, inter alia, held that the price fetched was not low.
In revision under the proviso to section 75 of the Act, the High Court did not consider whether the order of the District Judge was according to law but accepted an offer made by the first respondent and allowed the revision petition.
^ Held, that the power of the court under section 68 is a judicial power, and must be exercised on well recognised principles, justifying interference with an act of the receiver which he is empowered to do under section 59(a) , and the court must not arbitrarily set aside a sale decided upon by the official receiver, unless there are good judicial grounds to interfere with the discretion exercised by the official receiver, for example that there was fraud or collusion between the receiver and the insolvent or intending purchaser, or the court is of the opinion that there were irregularities in the conduct of the sale which might have affected the price fetched at the sale, or price was low as to justify the Court to hold that the property should not be sold at that price.
691 The High Court had therefore to see whether the Sub Judge 's order was justified on these grounds and whether the District Judge made any mistake in law in reversing that order otherwise the High Court cannot interfere in revision under the proviso to section 75 of the , for the High Court 's jurisdiction to interfere arises only if it is of opinion that the District Judge 's order was not according to law, and only then it can pass such order as it may think fit.


judgement:
Civil Appeal No. 19 of 1961.
Appeal by special leave from the judgment and order dated April 11, 1957, of Bombay High Court, in Special Civil Application No. 3170 of 1956.
K. R. Bengeri and A. G. Ratnaparkhi, for the appellant.
E. Udayaratnam and section section Shukla, for the respondent.
November 29.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises out of a tenancy case instituted by the appellant against his tenants the respondents in the Court of the Mamlatdar Raver (East Khandesh), in the State of Maharashtra.
The property in suit 702 consists of agricultural lands, Survey Nos. 32 and 38, situated in the village Raipur.
The respondents had executed a rent note in respect of these lands in favour of the appellant on February 5, 1943.
The period for which the rent note was executed was five years and the rent agreed to be paid annually was Rs. 785/ .
In ordinary course the lease would have expired on March 31, 1948.
However, before the lease expired, on April 11, 1946 the Bombay Tenancy Act, 1939 (Bombay Act XXIX of 1939) was applied to the area of the East Khandesh where the lands are situated, and in consequence as a result of section 23 (1) (b) of the said Act the five years period stipulated in the rent note was statutorily extended to ten years; the result was that under the said statutory provision the rent note in favour of the respondents would have expired on March 31, 1953.
During the subsistence of the tenancy thus statutorily extended the Bombay Tenancy and Agricultural Lands Act LXVII of 1948 came into force.
This act repealed the earlier Act of 1939 except sections 3, 3(a) and 4 as modified.
Sections 5 and 14 (2) of this Act are material.
On March 11, 1952 the appellant gave notice to the respondents intimating to them that the period of the rent note executed by them which had been statutorily extended would expire on March 31, 1953 and calling upon them to deliver possession of the lands to him immediately thereafter.
Before the notice could be effectively enforced on the expiration of the period of the lease, however, Bombay Act XXXIII of 1952 came into operation on January 12, 1953.
This Act repealed section 14(2) and amended section 5 and added sub section
(3) to it.
Shortly stated the effect of this amendment was that the tenancy of the respondents, who were till then ordinary tenants as distinct from protected tenants, could not be terminated on the expiry of their tenancy except by giving one year 's notice and that too on the ground that the lands were required by 703 the landlord for bona fide personal cultivation and that the income of the said lands would be the main source of income of the landlord.
The relevant averments about these grounds had to be made by the landlord in issuing the notice to the tenants for terminating their tenancy.
On April 4, 1953 the appellant instituted the present tenancy proceedings for obtaining possession of the lands.
The Mamlatdar who tried the proceedings rejected the appellant 's claim on the ground that he had not terminated the tenancy of the respondents as required by law in that he had not given the statutory notice making the prescribed relevant averments in that behalf.
The appellant then preferred an appeal against the decision of the Mamlatdar but the appellate authority agreed with the view taken by the Mamlatdar and dismissed his appeal.
The dispute was then taken by the appellant before the Bombay Revenue Tribunal by way of a revisional application; and the revisional application succeeded.
The Tribunal held that the relevant amendments on which the Mamlatdar and the appellate authority had relied in dismissing the appellant 's claim were not retrospective and that the appellant was entitled to eject the respondents.
This order of the Revenue Tribunal was challenged by the respondents by a petition filed by them under article 227 of the Constitution in the Bombay High Court.
The High Court has allowed the writ petition and held that the relevant amendments are retrospective in operation and that the appellant is not entitled to eject the respondents.
On that view the order passed by the Revenue Tribunal has been set aside and that of the appellate authority restored.
It is against this decision that the appellant has come to this Court by special leave.
It is necessary at the outset to set out the relevant statutory provisions which fall to be considered in the present appeal.
704 Section 23 (1) (b) of the Bombay Tenancy Act of 1939 which statutorily extended the original contractual five years period of the lease to ten years reads thus: "Every lease subsisting on the said date (that is to say the date on which section 23 came into force) or made after the said date in respect of any land in such area shall be deemed to be for a period of not less than ten years".
We have already noticed that as soon as this act was made applicable to the area where the lands in question are situated the original period of five years agreed to between the parties for the duration of the lease was statutorily extended to ten years.
Then followed the Tenancy Act LXVII of 1948.
Section 5 of the said Act originally stood thus: "5.
(1) No tenancy of any land shall be for a period of less than ten years.
Notwithstanding any agreement, usage or law to the contrary, no tenancy shall be terminated before the expiry of a period of ten years except on the grounds mentioned in section 14: Provided that any tenancy may be terminated by a tenant before the expiry of a period of ten years by surrendering his interest as a tenant in favour of the landlord.
" Section 14, sub section (2) which is relevant reads thus: "In the case of tenant, the duration of whose tenancy is for a period of ten years or more, the tenancy shall terminate at the expiration of such period, unless the landlord has by the acceptance of rent or by any other act or conduct of his allowed the tenant to hold over within the meaning of Section 116 of the ." On January 12, 1953, the amending Act XXXIII of 1952 came into force.
By this amending Act 705 the following proviso was added to sub section
(1) of section 5: "Provided that at the end of the said period and thereafter at the end of each period of ten years in succession, the tenancy shall, subject to the provisions of Sub Sections (2) and (3), be deemed to be renewed for a further period of ten years on the same terms and conditions notwithstanding any agreement to the contrary." The said amending Act repealed section 14 (2) of Act LXVII of 1948 and amended section 5, sub section
(2) in this way: "The landlord may, by giving the tenant one year 's notice in writing before the end of each of the periods referred to in Sub Section (1), terminate the tenancy, with effect from the thirty first day of March in the last year of each of the said period, if he bona fide requires the land for any of the purposes specified in Sub Section (1) of Section 34, but subject to the provisions of Sub Section (2) and (2A) of the said Section, as if such tenant was a protected tenant." A new sub section, sub section
(3) was added to section 5.
This new sub section reads thus: "Notwithstanding anything contained in sub section (1) (a) every tenancy shall, subject to the provisions of sections 24 and 25, be liable to be terminated at any time on any of the grounds mentioned in section 14; and (b) a tenant may terminate the tenancy at any time by surrendering his interest as a tenant in favour of the landlord: Provided that such surrender shall be in writing and shall be verified before the Mamlatdar in the prescribed manner.
" 706 It is common ground that if the provisions of the amending Act XXXIII of 1952 are applicable to the present proceedings the appellant would not be entitled to claim the ejectment of the respondents because he has not given any notice in that behalf as prescribed by the said relevant provisions of the amending statute.
His case, however, is that the technical requirements of a valid notice prescribed by the amending Act do not apply to his claim inasmuch as the relevant provisions of the amending Act are not retrospective in operation.
According to him he has already given notice to the respondents on March 11, 1952, intimating to them unequivocally his intention to eject them from the lands on the expiration of the ten year period of the lease.
The High Court has held that this contention is not well founded and so the appellant 's claim for ejectment has been dismissed.
The question which arises for our decision is whether the appellant is entiled to eject the respondents even without complying with the statutory requirement as to the valid notice prescribed by the amending Act XXXIII of 1952.
It would be noticed that though the lease originally was for five years, before the five years expired the duration of the lease was statutorily extended to ten years by virtue of the provisions of section 23(1)(b) of Act XXIX of 1939.
A somewhat similar, though from the point of view of the appellant a more revolutionary, result followed when a proviso was added to section 5(1) by the amending Act XXXIII of 1952.
By virtue of this amendment the period of the lease gets automatically extended for ten years from time to time.
In other words, before the lease in favour of the respondents could expire on March 31, 1953, by virtue of the proviso to section 5(1) of the amending Act of 1952 it got extended for ten years, and unless it is terminated by a valid notice or a surrender 707 is made by the tenant as specified by the statute the tenancy would be extended from time to time at every stretch for ten years.
Therefore, there can be no doubt that as a result of the amending Act of 1952 the expiration of the lease did not take place on March 31, 1953 as had been anticipated by the appellant when he gave notice on March 11, 1952.
In one sense the amending Act which is undoubtedly a piece of beneficent legislation conferred on the respondents additional rights and these additional rights were conferred on them before the lease in their favour had come to an end.
In order to put an end to the tenancy thus statutorily safeguarded the appellant has to follow the course prescribed by the amending statute and give a valid notice as required by the said statute.
Just as the appellant could not have complained against the extension of the original period of five years to ten years by Act XXIX of 1939 so he cannot complain against the further extensions statutorily granted to the respondents by section 5(1) of the amending Act XXXIII of 1952.
That is one aspect of the matter.
Besides, it is necessary to bear in mind that the right of the appellant to eject the respondents would arise only on the termination of the tenancy and in the present case it would have been available to him on March 31, 1953 if the statutory provision had not in the meanwhile extended the life of the tenancy.
It is true that the appellant gave notice to the respondents on March 11, 1952 as he was then no doubt entitled to do; but his right as a landlord to obtain possession did not accrue merely on the giving of the notice, it accrued in his favour on the date when the lease expired.
It is only after the period specified in the notice is over and the tenancy has in fact expired that the landlord gets a right to eject the tenant and obtain possession of the land.
Considered from this 708 point of view, before the right accrued to the appellant to eject the respondents amending Act XXXIII of 1952 stepped in and deprived him of that right by requiring him to comply with the statutory requirement as to a valid notice which has to be given for ejecting tenants.
In this connection it is relevant to distinguish between an existing right and a vested right.
Where a statute operates in future it cannot be said to be retrospective merely because within the sweep of its operation all existing rights are included.
As observed by Buckley, L. J. in West vs Gwynne retrospective operation is one matter and interference with existing rights is another.
"If an Act provides that as at a past date the law shall be taken to have been that which it was not that Act I understand to be retrospective.
That is not this case.
The question here is whether a certain provision as to the contents of leases is addressed to the case of all leases or only of some, namely, leases executed after the passing of the Act.
The question is as to the ambit and scope of the Act, and not as to the date as from which the new law, as enacted by the Act, is to be taken to have been the law.
" These observations were made in dealing with the question as to the retrospective construction of section 3 of the Conveyancing and Law of Property Act, 1892 (55 & 56 Vict. c. 13).
In substance section 3 provided that in all leases containing a covenant, condition or agreement against assigning, underletting, or parting with the possession, or disposing of the land or property leased without licence or consent, such covenant, condition or agreement shall, unless the lease contains an expressed provision to the contrary, be deemed to be subject to a proviso to the effect that no fine or sum of money in the nature of a fine shall be payable for or in respect of such licence or consent.
It was held that the provisions of 709 the said section applied to all leases whether executed before or after the commencement of the Act; and, according to Buckley, L. J., this construction did not make the Act retrospective in operation; it merely affected in future existing rights under all leases whether executed before or after the date of the Act.
The position in regard to the operation of section 5(1) of the amending Act with which we are concerned appears to us to be substantially similar.
A similar question had been raised for the decision of this Court in Jivabhai Purshottam vs Chhagan Karson in regard to the retrospective operation of section 34(2)(a) of the said amending Act XXXIII of 1952 and this Court has approved of the decision of the full Bench of the Bombay High Court on that point in Durlabbhai Fakirbhai vs Jhaberbhai Bhikabhai.
It was held in Durlabbhai 's case that the relevant provision of the amending Act would apply to all proceedings where the period of notice had expired after the amending Act had come into force and that the effect of the amending Act was no more than this that it imposed a new and additional limitation on the right of the landlord to obtain possession from his tenant.
It was observed in that judgment that "a notice under section 34(1) is merely a declaration to the tenant of the intention of the landlord to terminate the tenancy; but it is always open to the landlord not to carry out his intention.
Therefore, for the application of the restriction under sub section
2(A) on the right of the landlord to terminate the tenancy, the crucial date is not the date of notice but the date on which the right to terminate matures; that is the date on which the tenancy stands terminated".
Mr. Bengeri, for the appellant, fairly conceded that the decision of this Court in Jivabhai 's case was against his contention but he purported to rely 710 on another decision of this Court in Sakharam alias Bapusaheb Narayan Sanas vs Manikchand Motichand Shah.
In that case the Court was called upon to consider the question as to whether the provisions of section 88 of Bombay Act LXVII of 1948 were retrospective in operation or not, and it has been held that the said provisions are prospective.
However, we do not think that the position with regard to the provisions contained in section 88 can be said to be analogous or similar to the position with regard to the relevant provisions of the amending Act XXXIII of 1952 with which we are concerned in the present appeal.
Therefore, we do not think that Mr. Bengeri can make any effective use of the said decision.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed.

summary/full:
In February 1943 the appellant leased out an agricultural land for 5 years to the respondent.
Before the expiry of the lease, the Bombay Tenancy Act, 1939, was made applicable to the area where the land was situated, and under section 23(1)(b) the period of the lease was statutorily extended to 10 years.
During the subsistence of the tenancy thus statutorily extended, the Bombay Act 67 of 1948 came into force.
In March 1952 the appellant gave notice to the respondents intimating that the statutory period of tenancy expired on 31st March 1953, and called upon them to deliver possession immediately thereafter.
Before the notice could effectively be enforced the Bombay Act 33 of 1952 came into force, the effect of which was that the lease was automatically extended for 10 years from time to time, unless terminated by giving one year 's notice with the averment that the land was required bona fide by the landlord for personal cultivation and that income would be the main source of income to the landlord.
The appellant 's case was that the technical requirements of a valid notice prescribed by the Amending Act do not apply to his claim inasmuch as the relevant provisions of the amending Act are not retrospective in operation.
The question was whether the appellant was entitled to eject the respondents even without complying with the statutory requirement as to valid notice prescribed by the Amending Act 33 of 1952.
^ Held, that by virtue of the Amending Act 33 of 1952 the period of lease was automatically extended for a period of ten years from time to time, unless terminated by a valid 701 notice or a surrender was made by the tenant as specified by the statute, otherwise the tenancy would be extended from time to time at a stretch of every ten years.
In order to put an end to the tenancy, thus statutorily safe guarded, the landlord had to follow the course prescribed by the amending statute to give a valid notice as required by the said statute.
The right of a landlord to obtain possession does not accrue merely on the giving of the notice, it accrues in his favour on the date when the lease expires.
It is only after the period specified in the notice is over and the tenancy in fact had expired that the landlord gets a right to eject the tenant and take possession of land.
Held, further, that there is distinction between existing right and vested right.
Where a statute operates in future it cannot be said to be retrospective merely because within the sweep of its operation all existing rights are included.
The operation of section 5(1) of the Amending Act is not retrospective, it merely affects in future the existing rights under all leases whether executed before or after the date of the Act.
vs Gwynne, [191I] 2 Ch. 1, Durlabhai Fakirbhai vs Jhaverbhai Bhikabhai, (1955) 58 Bom.
L. R. 85, applied.
Jivabhai Purshottam vs Chhagan Karson, [1962]1 section C. R. 568, referred to.