judgement:
Civil Appeal No. 705 of 1962.
Appeal by special leave from the Award dated September 19, 1961 of the Fourth Industrial Tribunal, West Bengal in Case No. VIII 42 of 1961.
H. N. Sanyal, Solicitor General of India and P. E. Chatterjee, for the appellant.
D.L. Sen and Janardhan Sharma, for the respondents.
May 2.
The judgment of the Court was delivered by GAJENDRAGADKAR J.
This appeal arises out of an industrial dispute between the appellant, Khardah Co. Ltd., and the respondents, its workmen.
The dispute was in regard to the, dismissal of the appellant 's employee, Samiran jadav.
The respondents alleged that the said dismissal was unjustified, whereas, according to the appellant, the said employee had been properly and validly dismissed.
The dispute which was referred to the 4th Industrial Tribunal, West Bengal, for its adjudication was whether the said dismissal was justified, and to what relief, if any, was the workman entitled? The Tribunal has held that the dismissal was unjustified and so, it has directed the appellant to reinstate the said employee to his old post within a month from the date of the publication of the award.
It has also ordered that the period starting from the date of the dismissal till the date of reinstatement should be treated as leave without pay and as such, should be counted towards the length of service.
It is against this award that the appellant has come to this Court by special leave.
509 The respondent 's case was that jadav had been dismissed by the appellant mala fide with the motive of victimising him for his trade union activities.
jadav was the Organising Secretary of the Union and since he supported the Union 's demands very strongly, the appellant wanted to get rid of him.
It appears that jadav had been working as a weaver for some years past.
He was confirmed in service with effect from April 12, 1954.
On September 19, 1960, he went on a week 's leave.
When he returned on September 26, 1960, he was asked to work on machine producing twill, though, normally, he was assigned work on a plain machine.
jadav was not accustomed to work on the complicated machine which produces twill and so, he requested the management that he should be asked to do his usual work on a plain machine.
This request was, however, turned down Being unaccustomed to work on the machine producing twill, jadav met with an accident on September 27, 1960, and was grantedmedical leave for a week ending on Saturday, October 1, 1960.
On October, 3 1960, when he resumed duty, he again requested the management that he should be permitted to work on the plain machine, but when his request was turned down, he told the management that he would work on the twill machine in the second shift which starts from I P.M.
On that day, another employee Mahboob who was ailing and had been on leave, asked for further leave which was refused and he fell unconscious while he was going to operate his machine.
As a result, 700 weavers of the appellant stopped work and the weaving section could not resume work at 1 P. M.
The management then declared a lock out on October 5, 1960 which continued until October 29, 1960.
On October 3, 1960, the management served a charge sheet on jadav in which it was alleged that jadav had wilfully disobeyed the lawful 510 and reasonable order of his superior and had acted in a manner subversive of discipline.
The case against him was that he had moved from one place to another in the weaving Department and incited workers of the said department to go on strike.
The management alleged that by his conduct, jadav had committed misconduct under Rule 14(c) (i) and (viii) of the Standing Orders.
jadav was called upon to offer his explanation within 24 hours after receipt of the charge sheet.
After jadav gave his explanation, an enquiry was held.
At the initial stages of the enquiry, jadav appeared, but, later, he did not take part in the proceedings.
The appellant contends that jadav deliberately refrained from taking part in the proceedings, whereas according.
to the respondents, the enquiry was conducted unfairly, and so, it became impossible for jadav to participate in it.
This enquiry was conducted by the Manager himself After the enquiry was over, the Manager decided that jadav was guilty of the charge, and so, dismissed him on November 21, 1960.
The respondents ' case was that the dismissal was purely vindictive and was not justified at all.
On the other hand, the appellant 's case was that jadav had been working in the weaving department both on plain looms and on looms that produce twill.
When he returned to duty on October 3, 1960, the departmental Overseer, Mr. jha asked Jadav to go to his loom; but he refused to obey his orders.
The appellant further alleged that jadav moved inside the weaving department and incited the workers to stop work.
The appellant also pleaded that a proper enquiry had been held against jadav and it was as a result of the said enquiry that he was dismissed for misconduct under Rule 14 (c)(i) & (viii) of the Company 's Standing Orders.
Regarding the incident of Mahboob, the appellant alleged that 511 Mahboob was absent on October 3, 1960 and, therefore, no question of his working on any machine arose on that day.
In other words, the appellant 's contention was that the Union 's version that the strike was spontaneous because Mahboob fainted, was untrue and the strike was in substance, the result of the instigation of jadav.
Before the Tribunal, some oral evidence was led by the parties and reliance was placed by the appellant on the proceedings of the enquiry itself.
The Tribunal held that the management had deliberately suppressed the fact that Mahboob had gone to the mill on October 3, and prayed for extension of leave which was refused, and so, the Tribunal came to the conclusion that the strike could not have been instigated by jadav.
The Tribunal further commented on the fact that after the enquiry was held, no finding was recorded by the Manager who held the enquiry, and it appeared to the Tribunal that the conclusions on which the management presumably acted in dismissing jadav were of such a character that "no person acting fairly and honestly could have reached them".
The Tribunal also held that jadav was not used to work on a twill loom, and so, his request that he should be allowed to work on a plain loom was not unjustified.
Its conclusion, therefore, was that a grave charge had been unjustly framed against jadav and that showed want of good faith and Vindictiveness.
On these findings, the Tribunal answered the question in favour of the respondents and directed reinstatement of jadav.
On behalf of the appellant, the learned Solicitor General has strenuously urged before us that the appellant has held a proper domestic enquiry and has dismissed jadav because the management thought that the enquiry disclosed the fact that the charges framed against jadav had been established.
He contends that it is firmly established by decisions of this Court 512 that an Industrial Tribunal will not interfere with the action of the management in dismissing its employee after holding an enquiry into his alleged misconduct unless it is shown that the management has not acted in good faith; or that the dismissal amounts to victimisation or unfair labour practice, or where the management has been guilty of a basic error, or violation of a principle of natural justice, or when on the materials, the finding is completely baseless or perverse, vide Indian Iron & Steel Company Ltd. vs Their Workmen.
There is no doubt that this Court has consistently refrained from interfering with the conclusions reached.
by the enquiry officer who Conducts domestic enquiries against industrial employees unless one of the four tests laid down in the case of the Indian Iron & Steel Co. Ltd. (1) is satisfied, because we have generally accepted the view that if the enquiry is fairly held and leads to the conclusion that the charge framed against the employee is proved, the Industrial 'Tribunal should not sit in appeal over the finding recorded at the said enquiry and should not interfere with the management 's right to dismiss a workman who is found guilty of misconduct.
It would be noticed that the essential basis on which this view is founded is that the enquiry conducted by the management before a domestic tribunal must be a fair and just enquiry and in bringing home to the workman the charge framed against him, principles of natural justice must be observed.
Normally, evidence on which the charges are sought to be proved must be led at such an enquiry in the presence of the workman himself.
It is true that in the case of departmental enquires held against public servants, this Court has observed in the State of Mysore vs section section Makapur (2) that if the deposition of a witness has been recorded by the enquiry officer in the absence of the public servant and a copy thereof is given to him, and an opportunity is given to him (1) (1958) 1 I L. J. 260.
(2) ; 513 to cross examine the witness after he affirms in a general way the truth of his statement already recorded, that would conform to the requirements of natural justice; but as has been emphasised by this Court in M/s Kesoram Cotton Mills Ltd. vs Gangadhar (1), these observations must be applied with caution to enquiries held by domestic Tribunals against the industrial employees.
In such enquiries, it is desirable that all witnesses on whose testimony the management relies in support of its charge against the workman should be examined in his presence.
Recording evidence in the presence of the workman concerned serves a very important purpose.
The witness knows that he is giving evidence against a particular individual who is present before him, and therefore, he is cautious in making his statement.
Besides, when evidence is recorded in the presence of the accused person, there is no room for persuading the witness to make convenient statements, and it is always easier for an accused person to cross examine the witness if his evidence is recorded in his presence.
Therefore, we would discourage the idea of recording statements of witnesses exparte and then producing the witnesses before the employee concerned for cross examination after serving him with such previously recorded statements even though the witnesses concerned make a general statement on the latter occasion that their statements already recorded correctly represent what they stated.
In our opinion, unless there are compelling reasons to do so, the normal procedure should be followed and all evidence should be recorded in the presence of the workman who stands charged with the commission of acts constituting misconduct.
In this connection, it is necessary to point out that unlike domestic enquiries against public servants to which article 311 of the Constitution applies, in industrial enquiries, the question of the bona fldes or mala fides off the employer is often at issue. 'If it (1) [1964] Vol. 2 section C. R. 809.
514 is shown that the employer was actuated by a desire to victimise a workman for his trade union activities, that itself may, in some cases, introduce an infirmity in the order ' of dismissal passed against such a workman.
The question of motive is hardly relevant inenquiries held against public servants, vide UnionTerritory of Tripura vs Gopal Chandra Dutta Choudhuri (1).
That is another reason why domestic enquiries in industrial matters should be held with scrupulous regard for the requirements of natural justice.
Care must always be taken to see that these enquiries are not reduced to an empty formality.
Take the present case where, after the enquiry was held, the Manager who held the enquiry has not recorded any findings, and so, we do not know what reasons weighed in his mind and how he appreciated the evidence led before him.
The learned Solicitor General contends that there was hardly any need to record any findings or to make a formal report in the present case, because the Manager who held the enquiry was himself competent to dismiss the employee.
We are not impressed by this argument.
The whole object of holding an enquiry is to.
enable the enquiry officer to decide upon the merits of the dispute before him, and so, it would be idle to contend that once evidence is recorded, all that the employer is expected to do is to pass an order of dismissal which impliedly indicates that the employer accepted the view that the charges framed against the employee had been proved.
One of the tests which the Industrial Tribunal is entitled to apply in dealing with industrial disputes of this character is whether the conclusion of the enquiry officer was perverse or whether there was any basic error in the approach adopted by him.
Now, such an enquiry would be impossible in the present case because we do not know how the enquiry officer approached the question and what conclusions he C. R. 266.
515 reached before he decided to dismiss jadav.
In our opinion, therefore, the failure of the Manager to record any findings after holding the enquiry constitutes a serious infirmity in the enquiry itself.
The learned Solicitor General suggested that we might consider the evidence ourselves and decide whether the dismissal of jadav is justified or not.
We are not prepared to adopt such a course.
If industrial adjudication attaches importance to domestic enquiries and the conclusions reached at the end of such enquiries, that necessarily postulates that the enquiry would be followed by a statement containing the conclusions of the enquiry officer.
It may be that the enquiry officer need not write a very long or elaborate report ; but since his findings are likely to lead to the dismissal of the employee, it is his duty to record clearly and precisely his conclusions and to indicate briefly his reasons for reaching the said conclusions.
Unless such a course is adopted, it would be difficult for the Industrial Tribunal to decide whether the approach adopted by the enquiry officer was basically erroneous or whether his conclusions were perverse.
Indeed, if the argument urged before us by the learned Solicitor General is accepted, it is likely to impair substantially the value of such domestic enquiries.
As we have already observed, we must insist on a proper enquiry being held, and that means that nothing should happen in the enquiry either when it is held or after it is concluded and before the order of dismissal is passed, which would expose the enquiry to the criticism that it was undertaken as an empty for mality.
Therefore, we are satisfied that the Industrial Tribunal was right in not attaching any importance to the enquiry held by the Manager in dealing with the merits of the dispute itself on the evidence adduced before it.
It is well settled that if the enquiry is held to be unfair, the employer can lead evidence before the Tribunal and justify his action, but in such a case) the question as to whether the dismissal of The employee is justified or not would be open before the Tribunal and the Tribunal will consider the merits ,if the dispute and come to its own conclusion without having any regard for the view taken by the management in dismissing the employee.
If the enquiry is good and the conduct of the management is not mala fide or vindictive, then, of course, the Tribunal would not try to examine the merits of the findings as though it was sitting in appeal over the conclusions of the enquiry officer.
In the present case, the Tribunal has come to the conclusion that the dismissal of jadav was not effected in good faith and has been actuated by a desire to victimise him for his trade union activities.
That is a conclusion of fact which cannot be said to be perverse, and so, it is not open to the,appellant to challenge its correctness of the merits before us.
There is one point to which we ought to refer before we part with this appeal.
It appears that the main dispute between the parties was whether the strike on October 3, 1960, was spontaneous, or had been instigated by jadav.
The respondents contended that the treatment given by the management to Mahboob caused this strike and 700 weavers struck work spontaneously, whereas the appellant urged that Mahboob was not present on the said date, and so, the story that his request for leave was not acceded to and he had to work is altogether false and the strike had really been instigated by jadav.
On this point, the Tribunal has made a categorical finding against the appellant and in doing so, it has relied upon the minutes of the Emergency Works Committee meeting held on October 3, 1960, at 3 P.M. with the Manager himself in the chair.
These minutes show that when an enquiry was made as to why the strike had commenced, it was definitely reported to the Committee that Mahboob who had 517 gone on leave, had extended his leave and after the expiry of the extended leave, he reported or October 3, and pleaded that he was still unwell and should be given still further leave, but "nobody paid any heed to his prayer", and so, presumably he had to resume duty.
The minutes further show that the Labour Officer informed the members of the Com mittee that Mahboob had produced a certificate of fitness on September, 22, 1960 and after discussion, it was unanimously decided to refer his case to the Mill 's Medical Officer on whose recommendation the leave should be considered.
These minutes, therefore, clearly prove that Mahboob had gone to the Mill on October 3, had asked for further leave, and his request for further leave was not granted.
We ought to add that these minutes have been signed by the joint Secretary on the employer 's side and the joint Secretary on the employees ' side, and their correctness cannot be impeached.
It is in the light of these statements that the plea made by the appellant before the Tribunal had to be considered by it.
The plea specifically made was that Mabboob was absent on October 3, and, therefore, there was no question of his working on any machine.
This plea would seem to suggest that Mahboob was absent from the Mill and that undoubtedly is not true.
The learned Solicitor General invited us to consider this plea in the light of the statement made by one of the witnesses in the domestic enquiry.
This statement was that Mahboob and the witness had gone to the Labour Officer for extension of leave to Mahboob and the Labour Officer had granted leave.
This statement would show that leave had been granted to Mahboob in the morning of October 3, but as 'we have already seen, the Labour Officer himself told the members of the Works Committee at 3 P.M. on the same day that leave had not been granted to Mahboob because he had produced 518 a certificate of fitness dated September 22, and the Works Committee had resolved that Mahboob 's case should be referred to the Mill 's Medical Officer on whose recommendation action should be taken.
Thus, there can be not doubt that even if the plea made by the appellant is liberally construed and is read in the light of the statement made by one of the witnesses at the domestic enquiry, the Industrial Tribunal was right in holding that the stand taken by the appellant was wholly untrue and that Mahboob had not been given leave on October 3.
That being so, if the Industrial Tribunal took the view that the refusal of the management to give leave to Mahboob exasperated the workmen, we cannot hold that its conclusion is erroneous or that its propriety can be successfully challenged before us.
The incident in regard to Mahboob forms the main background of the strike and the anxiety of the appellant was to show that Mahboob was not present on that date.
Therefore, once the Industrial Tribunal came to the conclusion that the version given by the appellant was untrue, it naturally changed the complexion of the whole of the charge sheet framed by the appellant against jadav.
That is why the Industrial Tribunal came to the conclusion that the conduct of the appellant in dismissing jadav showed lack of good faith and appeared to have been in spired by the desire to victimise jadav for his trade union activities.
The learned Solicitor General commented on the fact that the Tribunal had allowed the respondents to call for the register of trade unions after the arguments had been heard before it.
It appears that both the parties appeared before the Tribunal on January 19, 1961, when arguments were heard and the award was reserved.
The Union then filed an application praying that the trade union record may be called for, and the Tribunal ordered that the record be called for.
The grievance made by the 419 learned Solicitor General is that it is improper to have allowed additional evidence to be called for after the arguments had been heard.
We do not think there is any force in this argument, because the only purpose for which the record was called for by the Union was to show that jadav was the Organising Secretary of the Union.
Since that fact was presumably disputed by the appellant in arguing the case before the Tribunal, the Union urged that the record kept by the Registrar of Trade Unions would show that the appellant 's plea was not well founded.
If, in such circumstances, the Tribunal sent for the record to satisfy itself 'that the record showed that jadav was the Organising Secretary of the Union, we do not think any serious grievance can be made by the appellant about the conduct of the Tribunal.
It is perfectly true that in dealing with industrial matters, the Tribunal cannot allow evidence to be led by one party in the absence of the other, and should not accept the request of either party to admit evidence after the case has been fully argued unless both the parties agree.
In the present case, however, what the Tribunal has done, is merely to send for authenticated record to see whether jadav was the Organising Secretary of the Union or not.
The result is, the appeal fails and is dismissed with costs.
Appeal dismissed.

summary/full:
The appellant dismissed one of its workmen on a domestic enquiry held by its Manager who did not record any findings, took some of the evidence in the absence of the workman and found him guilty of misconduct under Rule 14 (c) (i) and (viii) of the Standing Orders.
The Industrial Tribunal held that the dismissal was unjustified and directed the appellant to reinstate the employee.
The respondent Union 's case was that the dismissed workman, who was the Organising Secretary of the union, was dismissed by the appellant mala fide with the purpose of victimising him for his trade union activities.
The dispute centered round the question whether the strike which the dismissed workman was charged as having instigated was really instigated by him or was the spontaneous result of the treatment meted out by the appellant to another workman who was sick and fainted on the day the strike started.
The case of the appellant was that this latter workman was not present on that day at all.
This was belied by the record and the Industrial Tribunal without attaching any importance to the domestic enquiry held by the Manager dealt with the merits of the dispute itself and found in favour of the respondent, holding that the management was unjustified in dismissing the workman on the report of the Manager which was neither fair nor honest.
On behalf of the appellant reliance was placed on the decision of this Court in Indian Iron & Steel Co. Ltd. vs Their Workmen and it was contended that the Industrial Tribunal was in error in interfering with the decision of the management.
Held the Industrial Tribunal was right in discarding the domestic enquiry.
Although this Court has consistently 507 refrained from interfering with the conclusions of domestic enquiries in industrial matters unless one of the four tests laid down in Indian Iron & Steel Co. Ltd. vs Their Workmen was satisfied, the essential basis on which this view is founded is that the domestic enquiry must be conducted fairly and properly in conformity with the principles of natural justice.
The evidence on which the charges are sought to be proved against the workman must normally be led in his presence.
The procedure of recording statements of witnesses ex parte and thereafter producing the witnesses for cross examination, unless there are compelling reasons to do so, must be discouraged.
Departmental enquiries under article 311 of the Consti tution where the question of motive is hardly relevant do not stand on the same footing as those in industrial enquiries where the question of bona fides or mala fides of the employee is often in issue.
Indian Iron & Steel Co. vs Their Workmen, , explained.
State of Mysore vs section section Makapur, ; ; M/s. Ke.8oram Cotton Mills Ltd. vs Gangadhar, [1961] Vol. 2 S.C.R. 809, and Union Territory of Tripura vs Gopal Chander Dutta Choudhri, [1963] Supp.
I S.C.R. 266, referred to.
The failure of the Manager to record any findings after holding the enquiry was a serious infirmity in the enquiry and it is not for this Court to go into the evidence to decide whether the dismissal was justified.
It is the duty of the enquiry officer in an industrial enquiry to record clearly and precisely his conclusions and to indicate briefly the reasons therefor so that the Industrial Tribunal can judge whether they arc basically erroneous or perverse.
Although the Industrial Tribunal should not as a normal procedure allow evidence to be led by one party in absence of the other or admit evidence after the case has been fully argued unless both the parties agree, the mere calling for the authenticated record to see whether the workman was the Organising Secretary could not amount to a breach of the rule.


judgement:
Appeal No. 717 of 1961.
Appeal by special leave from the judgment and order dated April 10, 1961 of the Assam High Court in Civil Revision No. 10 of 1961.
D. R. Prem, P. D. Menon for R. N. Sachthey, for the appellants.
The respondent did not appear.
626 1963.
May 7.
The judgment of the Court was delivered by RAGHUBAR DAYAL J.
This appeal, by special leave, is directed against the order of the High Court of Assam rejecting the revision application, under section 115 of the Code of Civil Procedure, hereinafter called the Code, of the appellants against the order of the Additional Subordinate, Judge, Gauhati, in a money suit to the effect that he had jurisdiction to try the suit.
The contention of the appellants is that this view of the Subordinate judge, confirmed by the High Court, is wrong.
To appreciate the contention for the appellants, the facts of the case may be stated.
The suit was instituted by the plaintiff respondent against the Union of India and the Northern Frontier Railway represented by the General Manager, having its headquarters at Pandu.
It related to a claim for recovery of a sum of Rs. 8,250/ on account of nondelivery of the goods which had been consigned to the plaintiff 's firm run tinder the name and style of M/s. Ladu Lal Jain.
The consignment consisted of 134 bags of rice and was booked from Kalyanganj station of defendant No. 2 for carriage to Kanki station of the same defendant on April 13, 1958.
The goods consigned were no, delivered to the plaintiff and hence the suit, after serving a notice under section 77 of the Indian Railways Act on the defendant railway and also serving a notice tinder section 80 of the Code.
It was alleged in the plaint that the cause of action arose at Pandu within the jurisdiction of the Court at Gauhati, the place where notice under section 80 of the Code was duly served upon the defendant railway and that the suit was filed in the Court within the jurisdiction of which the defendant railway had 627 its principal place of business by virtue of its held quarters being at Pandu.
The two defendants filed a joint written statement.
Kalyanganj is in West Bengal and Kanki is in the State of Bihar.
Gauhati is in the State of Assam.
It was contended inter alia that Gauhati Court had no territorial jurisdiction to try the suit as neither of the aforesaid railway stations was within its jurisdiction and that the consignment never travelled within any part of the State of Assam and therefore the cause of action could not arise within the jurisdiction of any Court in Assam It was further contended that mere service of notice, which was not admitted, on the defendants at a place within the jurisdiction of the Court, could not vest territorial jurisdiction on it and that defendant No. 1, the Union of India, had no principal place of business at Pandu or any other place within the jurisdiction of the Court, its head quarters office being at New Delhi.
It was also stated that defendant No. 2 is owned and managed by defendant No. 1, that the office of defendant No. 2 at Pandu was also owned and controlled by defendant No. 1 and that the office at Pandu was a branch office of the Union of India which was controlled by defendant No. I from New Delhi.
Relying on the case reported as P.C. Biswas vs Union of India (1), the Trial Court decided the preliminary issue about jurisdiction against the defendants holding that the principal place from which the railway administrator in a particular area is carried on is the principal place of business for the purpose of section 20 of the (ode.
The single judge of the High Court rejected the revision also on the basis of the same decision of his Court.
The territorial jurisdiction of a Court is in general determined by the provisions of section 20 of the Code which reads : "Subject to the limitations aforesaid, ever suit 628 shall be instituted in a Court within the local limits of whose jurisdiction (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides,.
or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution ; or (c) the cause of action, wholly or in part, arises.
Explanation I : Where a person has a permanent dwelling at one place and also temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he hag such temporary residence.
Explanation 11 : A corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
" The principle behind the provisions of clauses (a) and (b) of section 20 is that the suit be instituted at a place 629 where the defendant be able to defend the suit without undue trouble.
The expression 'voluntarily resides or personally works for gain ' cannot be appropriately applied to the case of the Government.
The Government can however carry on business.
The mere fact that the expression 'carries on business ' is used along with the other expressions, does not mean that it would apply only to such persons to whom the other two expires ions regarding residence or of personally working for gain would apply.
The sole contention raised for the appellants in this Court is that the running of railways by the Union of India cannot be said to amount to its carrying on business and that therefore the fact that the headquarters of the Northern Frontier Railway Administration is at Pandu within the jurisdiction of the Court at Gauhati does not give the Court jurisdiction under section 20 of the Code.
The contention is based on the reasoning that any undertaking run by the Government, even if it amounts to the carrying on of a business when run by a private individual, would not be the carrying on of business by the Government if there was no element of profit making in it.
There is no allegation in the written statement that the Government is not running railways for profit.
No issue was framed about it.
The Court below recorded no decision on the point.
It cannot be presumed that the Government is not making a profit from its running the railways in the country or is not running it with a profit motive.
The fact that the Government runs the railways for providing quick and cheap transport for people and goods and for strategic reasons will not convert what amounts to the carrying on of a business into an activity of the State as a sovereign body.
630 Article 298 of the Constitution provides that the executive power of the Union and of each State shall extend to the carrying on of any trade or business and cl.
(6) of article 19 provides that nothing in sub cl.
section (g) of cl.
(1) of that Article shall prevent the State from making any law relating to the carrying on by the State or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
These provisions clearly indicate that the State can carry on business and can even exclude citizens completely or partially from carrying on that business.
Running of railways is a business.
that is not denied.
Private companies and individuals carried on the business of running railways, prior to the State taking them over.
The only question then is whether the running of railways ,ceases to be a business when they are run by Government.
There appears to be no good reason to hold that it is so.
It is the nature of the activity which defines its character.
Running of railways is such an activity which comes within the expression 'business '.
The fact as to who runs it and with what motive cannot affect it.
This Court bad occasions to detemine the nature of certain activities of Government.
The rationale of those cases is a good guide for determining the point before us.
In State of Bombay vs The Hospital Mozdoor Sabha(1) ' the question was whether the relevant provisions of the , applied to the group of hospitals run by the State of Bombay and whether they are 'industry ' within the meaning of that Act.
The decision of the question depended on the interpretation of the definition of 'industry ' prescribed by section 2 (j) of the Act.
This section provides that industry means any business, trade, undertaking etc., of employers.
In considering the question it became necessary to enquire whether that activity, i.e., the running of the (1) 631 hospitals, would be an undertaking if it is carried on by a private citizen or a group of private citizens.
It was field that if a hospital is run by private citizens for profit, it would be an undertaking very much like the trade or business in their conventional sense.
It was observed at p. 878 : "Thus the character of the activity involved in running a hospital brings the institution of the hospital within section 2.(j).
Does it make any difference that the hospital is run by the Government in the interpretation of the word undertaking ' in section 2 (j) ? In our opinion, the answer to this question must be in the negative.
It is the character of the activity which decides the question as to whether the activity in question attracts the provision of section 2(j); who conducts the activity and whether it is conducted for profit or not do not make a material difference " To similar effect were the observations in The Corporation of the City of Nagpur vs Its employees where it was said : "If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation.
" It was earlier said at p. 960 "Monetary considerations for service is, therefore, not an essential characteristic of industry in a modern State." "Barring the regal functions of a municipality, if such other activities of it, if undertaken by an individual, would be industry, then they would equally be industry in the hands of a municipality, (1) [1960] a S.C.R. 942, 962, 632 Lastly, in Satya Narain vs District Engineer, P.W.D. (1), the question for determination was whether plying motor buses by the Government by way of commercial activity amounts to its running it on a public service.
In determining this question, this Court observed at p. 1163: "It is undoubtedly not easy to define what is "Public service ' and each activity has to be considered by itself for deciding whether it is carried on as a public service or not.
Certain activities will undoubtedly be regarded as public services, as for instance, those undertaken in the exercise of the sovereign power of the State or of governmental functions.
About these there can be no doubt.
Similarly a pure business undertaking though run by the Government cannot be classified as public service.
But where a particular activity concerns a public utility a question may arise whether it falls in the first or the second category.
The mere fact that that activity may be useful to the public would not necessarily render it public service.
An activity however beneficial to the people and however useful cannot, in our opinion, be reasonably regarded as public service if it is of a type which may be carried on by private individuals and is carried on by government with a distinct profit motive.
It may be that plying stage carriage buses even though for hire is an activity undertaken by the Government for ensuring the people a cheap, regular and reliable mode of transport and is in that sense beneficial to the public.
It does not, however, cease to be a commercial activity if it is run with profit motive.
Indeed even private operators in order to attract custom are also interested in providing the same facilities to the public as the Government undertaking provides.
Since that is so, it is difficult (1) A, I, R. 633 to see what difference there is between the activity carried on by private individuals and that carried on by Government.
By reason of the fact that a commercial undertaking is owned and run by the State it does not ipso facto become a "public service '.
" This case simply held that commercial activity carried on with profit motive cannot be held to be 'public service '.
It does not hold that such activity carried on by Government will not be "business ' if conducted without profit motive.
We are of opinion that 'profit element ' is not a necessary ingredient of carrying on business, though usually business is carried on for profit.
It is to be presumed that the Railways are run on a profit basis, though it may be that occasionally they are run at a loss.
The case reported as Director of Rationing & Distribution vs The Corporation of Calcutta (1), relied on for the appellants is really of no help to them.
It was in connection with the sovereign activities of the State that it was said that the State was not bound by any statute unless the statute provided to that effect in express terms or by necessary implication.
The contention that the Government could not get the benefit of this law in connection with its business activities was neither repelled nor considered.
It was held to have no foundation as there was nothing on the record that the Food Department of the Government of West Bengal by undertaking rationing and distribution of food on a rational basis had embarked upon any trade or business and, in the absence of any such indication, it appeared that the department was discharging the elementary duty of a sovereign to ensure proper and equitable distribution of available foodstuffs with a view to maintaining peace and good government.
(1) [1961] I. &.C.
A? 158, 634 In view of what we have said above, we hold that the, Union of India carries on the business of running railways and can be sued in the Court of the Subordinate Judge of Gauhati within whose territorial jurisdiction the headquarters of one of the railways run by the Union is situated.
We accor dingly dismiss the appeal with costs.
Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The plaintiff respondent instituted a suit in the court of the Additional Subordinate Judge, Gauhati, against the Union of India and the Northern Frontier Railway represented by the General Manager, having its headquarters at Pandu.
Pandu is within the jurisdiction of the Subordinate judge.
The claim was for the recovery of a sum of Rs. 8,250/ on account of nondelivery of the goods which had been consigned to the plaintiffs firms, The consignment was booked from Kalyanganj station of defendant No. 2 fair carriage to Kanki, a station of the same defendant.
It was alleged in the plaint that the cause of action arose at Pandu within the jurisdiction of the Court, where the defendant railway had its principal place of business by virtue of its headquarters being at Pandu.
The suit was resisted by the defendants on the ground that the court bad no jurisdiction to entertain the suit.
Relying on the decision of the Assam High Court in P. C. Biswas vs Union of India, A. I. R. , the court of first instance held that the principal place from which the railway administration in a particular area is carried on is the principal place of business for the purpose of jurisdiction under section 20 of the Code of Civil Procedure, 1908, and decided the issue in favour of the plaintiff.
The revision petition filed by the appellants was rejected by the High Court.
The present appeal was filed with special leave granted by this Court.
It was contended in the appeal by the appellants that the running of the railway by the Union of lndia could not be said to amount to carrying on of business and that therefore the fact that the headquarters of Northern Frontier Railway Administration was at Pandu within the jurisdiction of the 625 Court at Gauhati did not give the Court jurisdiction under section 20 of the Code of Civil Procedure.
Held that articles 19 (6) and 298 of the Constitution clearly indicate that the State can carry on business and can even exclude citizens completely or partially from carrying on that business.
The running of railways which is a business when carried on by private companies or individuals does not cease to be a business when they are run by the Government.
It is the nature of the activity which determines the character of an activity.
The fact as to who runs it and with what motive cannot affect it. 'Profit element ' is not a necessary ingredient of carrying on of business, though usually business is carried on for profit.
The fact that the Government runs the railways for providing cheap transport for the people and goods and for strategic reasons will not convert what amounts to carrying on of business into an activity of the State as a sovereign body.
The Union of India carries on the business of running railways and can be sued in the court of the Subordinate judge of Gauhati within whose territorial jurisdiction the headquarters of one of the railways run by the Union is situated.
Case Law reviewed.
State of Bombay vs Hospital Mazdoor Sabha [1960] 2 S.C.R. 866, The Corporation of the City of Nagpur vs Ito Employees, ; and Satya Narain vs District Engineer, P. W. D., A. I. R.


judgement:
Appeal No. 219 of 1962.
384 Appeal from the judgment and decree dated August 31, 1960 of the Patna High Court in Appeal from Original decree No. 7 of 1955.
B. Sen, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants.
B. R. L. Iyengar, section K. Mehta and K. L. Mehta, for the respondents.
April 25.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
This appeal arises out of proceedings under the Land Acquisition Act, 1894 (No. 1 of 1894) (hereinafter called 'the Act ').
The respondents owned an area of 0.12 acre of land in village Bermo No. 18 in the district of Hazaribagh.
This land was required for the construction 'of Aerial Rope way for Bokaro Thermal Power Plant, and so, in order to acquire the said land, a declaration under section 4 of the Act was made on August 9, 1952.
The property of the respondents which stands on this plot consists of two buildings, one is the main structure and the other is made up of out houses together with an open space of land in front of these structures.
The notification showed that the Government thought it necessary, to acquire a space of 50 fit in width for the electric wire to run over and this included a portion of open space as also the out houses of the respondents.
Under the proceedings taken under the relevant provisions of the Act, the Land Acquisition Officer fixed the compensation to be paid to the respondents at Rs. 4,4511516; according to him, the said amount represented a fair and reasonable compensation for the land together with the out houses under acquisition.
The respondents were not satisfied with this award, and so, ' they applied for reference under section 18 385 of the Act.
One of the grounds taken by the respondents in para I (d) of their petition for reference was that the other lands and buildings contiguous to the land and building acquired which belonged to them had not been acquired, and in consequence, they had to suffer a huge loss; the rope line passes close to the rest of the property, and so, it could not be used for fear of its being dangerous for human habitation.
On this basis, the respondents alleged that they were entitled to recover as compensation amount Rs. 21,765/8/ which they had spent on the construction of the principal building.
Besides, they urged that the monthly rent of Rs. 160/ which they were receiving from the tenants in respect of the said principal building would also be lost and they were entitled to adequate compensation on that account.
In other words, one of the grounds raised by the respondents in their petition was referrable to section 23 (3) of the Act.
The Deputy Commissioner of Hazaribagh then proceeded to make the reference as claimed by the respondents.
In his letter of reference, he stated that the respondents were claiming additional compensation on the ground that the other lands and buildings contiguous to the land and building acquired which they owned had not been acquired and thereby they had to suffer a huge loss.
On reference, the District judge of Hazaribagh heard the matter.
It appears that before the District judge, Kundan Singh, respondent No. 1, gave evidence and stated that on October 22, 1952, he had put in an application that the other quarters belonging to him which had not been acquired should also be acquired, because the said quarters were contiguous to the land acquired and had become useless to the respondents.
The learned District judge considered the point raised by the respondents and held that since only a narrow 386 strip of land had been left in front of the larger building, it had affected the utility of the said building and the other unacquired land of the respondents, and so, he directed that in addition to the amount of Rs. 4 451/5/6 which had been determined as the amount of compensation by the Land Acquisition Officer, Rs. 1000/ should be paid to the respondents.
In his opinion, the amounts determined by the Acquisition Officer for the property actually acquired was quite appropriate and all that was needed to be done was to award an additional amount of Rs. 1,000/ on the ground that the unacquired property was adversely affected by the acquisition in question.
The respondents then preferred an appeal before the High Court of Patna under section 54 of the Act.
In their appeal, the only ground which they urged was that the rope way having completely spoiled the main building, the Land Acquisition Officer could not acquire the out houses without acquiring the main building.
Accordingly, they claimed a declaration that the Land Acquisition Officer should acquire the main building along with the other properties under acqiuisition.
When this plea was raised before the High Court, the appellants, the State of Bihar and the Deputy Commissioner, Hazaribagh, contended that it was not open to the respondents to claim a declaration for the acquisition of other properties in their appeal, because the said appeal arose out of a reference under section 18 of the Act and a plea like the one raised by the respondents which could be made under section 49 of the Act, was foreign to the present enquiry.
It was also contended that this point had not been taken by the respondents either before the Land Acquisition Officer or before the District judge.
These arguments were rejected by the High Court and a direction has been issued by the High Court calling upon the Land Acquisition Officer to takeover the remaining area 387 and the building and assess the compensation thereon in due course according to law.
The High Court has ordered that when the said assessment is thus determined, the additional compensation of Rs. 1,000/which has been allowed by the District judge should be deducted and the balance paid to the respondents.
It is against this order that the appellants have come to this Court with a certificate issued by the High Court; and the principal question which has been raised before us by Mr. Sen on behalf of the appellants is that the High Court was in error is allowing section 49 to be invoked in the appeal before it.
The first point which must be considered in dealing with the appellants ' argument is whether the respondents had made an application to the Land Acquisition Officer under section 49 of the Act as alleged by respondent No. I in his evidence before the District judge.
We have already noticed that respondent No. I stated in his evidence that on October 22, 1952 he had put in an application that the other quarters should also be acquired.
In other words, his plea was that the said application had been made invoking the provisions of section 49 of the Act after the date of the notification and before the award was made on November 27, 1952.
The judgment of the District judge shows that he did not accept this plea, and so, he proceeded to deal with the case on the basis that the respondents were claiming additional compensation either under the third or the fourth clause of section 23 (1) of the Act.
If he had held that an application had been made by the respondents under section 49 of the Act before the award was made and they were asking for relief under that provision, he would, undoubtedly, have considered the matter and recorded his conclusion on it.
Therefore, it would not be unreasonable to assume that the District judge did not attach any importance to the statement made by respondent No. I that he had put in an application under section 49, or it may be that the 388 respondents merely pressed their claim for additional compensation under section 23 before the learned District judge.
When the matter was argued before the High Court, the appellants seriously disputed the allegation of the respondents that an application had been made to the Land Acquisition Officer under section 49.
It is true that the statement of respondent No. 1 that he had made such an application was not challenged in cross examination, but it is remarkable that the said statement does not appear to have been pressed before the District judge and when it was attempted to be pressed before the High Court, the application alleged to have been made by respondent No. I was not produced before or shown to the High Court at all.
In fact, no such application has been printed in the paper book prepared for this Court in the present appeal.
The High Court also does not appear to have made any definite finding that the statement of respondent No. I could be accepted.
It has, however, held that the claim made by the respondents when they asked for reference under s.18 showed that they were asking for protection under s.49 of the Act and it is on the basis of the said claim contained in para.
I (d) of the respondents ' petition under section 18 of the Act that the High Court came to the conclusion that the respondents had relied upon section 49 before the Land Acquisition Officer.
We have already referred to the ground taken by the respondents in para I (d) of their petition and have noticed that the claim made under the said ground was under section 23 of the Act and not at all under section 49; and so, we are not prepared to accept Mr. Iyenger 's argument that the present appeal should be dealt with on the basis that the respondents had made an application to the Land Acquisition Officer under section 49 of the Act before he pronounced his award.
By their application for 'reference, the respondents merely claimed additional compensation under section 23(1) and 389 that is how their claim was considered and decided by the learned District Judge.
It is in the light of this, finding that we have to determine the question as to whether the High Court could have entertained the respondents ' plea under section 49 in the appeal preferred before it by the respondents against the decision of the District Judge in reference proceedings taken before him under section 18 of the Act.
In determining the question about the scope of the enquiry under section 18, it is necessary to consider the relevant provisions of the Act.
Section 4 of the Act deals with the publication of a preliminary notification in regard to the acquisition proceedings proposed to be taken.
Section 5 A deals with the hearing of objections.
Section 6 provides for the declaration that a particular land is required for a public purpose.
Section 9 requires notice to be given to the persons interested in the said property.
Section 11 prescribes the manner of the enquiry and provides for the making of the award by the Collector.
Section 12 lays down that the award, when made, shall be filed in the Collector 's office and shall be final, as therein prescribed ' Section 16 empowers the Collector to take possession of the property acquired, ' and section 18 deals with reference to Court.
In dealing with the claim for compensation made by the owner of the property, the Court has to consider the matters specified in section 23.
The third clause of section 23 (1) provides that in determining the amount of compensation, the Court shall take into account the damage (if any), sustained by the person interested, at the time of the Collector 's taking possession of the land , by reason of severing such land from his other land and the fourth clause requires the Court to take into account the damage (if any), sustained by the person interested, at the time of the Collector 's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings.
390 Section 18 (1) provides that any person interested who has not accepted the award may, by written application to the Collector,require that the matter be referred by the Collector or the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons interested. ' It is thus clear that the scope of the enquiry under section 18 (1) is specifically indicated by the section itself.
The objections which the Court can consider on a reference made to it under section 18 may be either in respect of the measurement of the land, the amount of compensation, the persons to whom it is payable, and the apportionment of the compensation among different persons.
In dealing with the ' question about the amount of Compensation, the Court may have to take into account the matters specified in s.23.
As was observed by the Privy Council in Pramatha Nath Mullick vs Secretary of State for India (1), the section clearly specifies four different grounds of objection which can be the subject matter of an enquiry in reference proceedings.
Therefore, it is very difficult to accede to Mr. Iyengers ' argument that in dealing with the reference proceedings under section 18 (1), the Court can also consider the pleas raised by the owner of the property under section 49 of the Act.
It does appear that the owner of property under acquisition may claim additional compensation on the ground that the portion of the property acquired so materially affects the value or the utility of his other property not acquired as to justify a claim for additional compensation under section 23, and if such a claim is made, it would legitimately form the subject matter of an enquiry in a reference under section 18 (1), but if the owner of the property wants to claim 'that the whole of his property should be acquired, and in that connection relies on the provisions of section 49, that cannot be introduced in an enquiry under section 18 (1) (1929) L. R. 57 I. A. 100.
391 such a claim must form the subject matter of different proceedings taken by the owner under section 49 itself.
That takes us to section 49.
Section 49 reads thus " (1) The Provisions of this Act shall not be put in force for the purpose of acquiring a part only of any house, manufactory or other building, if the owner desires that the whole of such house, manufactory or building shall be so acquired Provided that the owner may, at any time before the Collector has made his award under section 1 1, by notice in writing, withdraw or modify his expressed desire that the whole of such house, manufactory or building shall be so acquired : Provided also that, if any question shall arise as to whether any land proposed to be taken under this Act does or does not form part of a house, manufactory or building within the meaning of this section the Collector shall refer the determination of such question to the Court and shall not take possession of such land until after the question has been determined.
In deciding on such a reference the Court shall have regard to the question whether the land proposed to be taken is reasonably required for the full and unimpaired use of the house, manufactory or building.
(2) If, in the case of any claim under section 23, sub section (1), thirdly, by a person interested, on account of the severing of the land to be acquired from his other land, the (appropriate Government) is of opinion that the claim is unreasonable or excessive, it may, at 392 any time before the Collector has made his award, order the acquisition of the whole of the land of which the land first sought to be acquired forms a part.
(3) In the case last hereinbefore provided for, no fresh declaration or other proceedings under sections 6 to 10, both inclusive, shall be necessary ; but the Collector shall without delay furnish a copy of the order of the (appropriate Government) to the person inter ested, and shall thereafter proceed to make his award under section 11.
The provisions of section 49 (1) prescribe, inter alia, a definite prohibition against putting in force any of the provisions of the Act for the purpose of acquiring a part only of any house, if the owner desires that the whole of such house shall be acquired.
This prohibition unambiguously indicates that if the owner expresses his desire that the whole of the house should be acquired, Do action can be taken in respect of a part of the house under any provision of the Act, and this suggests that where a part of the house is proposed to be acquired and a notification is issued in that behalf, the owner must make up his mind as to whether he wants to allow the acquisition of a part of his house or not.
If he wants to allow the partial acquisition, proceedings would be taken under the relevant provisions of the Act and an award directing the payment of adequate compensation would be made and would be followed by the taking of possession of the property acquired.
If, on the other hand, the owner desires that the whole of the house should be acquired, he should indicate his desire to the Land Acquisition officer and all further proceedings under the relevant provisions of the Act must stop.
This provision thus seems to suggest that if an objection is intended to be raised to the acquisition of a part of the house, it must be 393 made before an award is made under section 11.
In fact, it should be made soon after the initial notification is published under section 4 ; otherwise, if the proceedings under the relevant provisions of the Act are allowed to be taken and an award is made, it would create unnecessary confusion and complications if the owner at that stage indicates that he objects to the acquisition of a part of his house ; at that stage, it would no doubt be open to him to claim adequate compensation in the light of the material provisions of section 23 of the Act, but that is another matter.
The first proviso to section 49 (1) also leads to the same conclusion.
If the owner has made his objection to the acquisition of a part of his house, it is open to him to withdraw or modify his objection before an award is made under section 11 ; and if he withdraws 'his objection, further proceedings will follow and if he modifies his objection, steps will have to be taken as indicated in the other provisions of section 49.
This proviso, therefore, suggests that the objection of the owner to acquisition of a part of his house has to be considered and dealt with before an award is made under section 11.
It would be noticed that if an objection is made by the owner under section 49 (1), the Collector may decide to accept the objection and accede to the desire of the owner to acquire the whole of the house.
In that case, further proceedings will be taken on the basis that the whole of the house is being acquired.
In some cases, the Collector may decide to withdraw acquisition proceedings altogether, because it may be thought not worthwhile to acquire the whole of the house ; in that case again nothing further remains to be done and the notification issued has merely to be withdrawn or cancelled.
But cases may arise where the Collector may not accept the claim of the owner that what is being acquired is a part of the house ; in that case, the matter in dispute has to be 394 judicially determined, and that is provided for by the second proviso to section 49 (1).
Under this proviso, the Collector is under an obligation to refer the matter to the Court and he shall not take possession of the land under acquisition until the question is determined by the Court.
In dealing with this matter, the Court has to have regard to the question as to whether the land proposed to be taken is reasonably required for the full and unimpaired use of the house.
Sub section
(2) of section 49 seems to contemplate that where land is acquired and it is shown to form part of a house, it would be open to award to the owner of the house additional compensation under the third clause of section 23, and I so, this sub section deals with cases where the claim made by the owner of the house under the third clause of section 23 is excessive or unreasonable, and provides that the appropriate Government may decide to acquire the whole of the land of which the land first sought to be acquired forms a part rather than agree to pay an unreasonable or excessive amount of compensation as claimed by the owner.
This provision also emphasises the fact that where land is acquired and it results in the acquisition of a part of the house connected with the land, the owner can make a claim for additional compensation under section 23, or he may require, before the acquisition has taken place, that the whole of the house should be acquired.
These are two alternative remedies available to the owner ; if he wants to avail himself of the first remedy under section 23, he may make a claim for additional compensation in that behalf and such a claim would form the subject matter of an enquiry under section 18 ; if, on the other hand, he claims the other alternative remedy provided by section 49 (1), that must form the subject matter of another proceeding which has to be dealt with under section 49 itself.
It is true that in cases of dispute, this matter also goes to the same Court for its decision on a 395 reference by the Collector; but though the Court is the same the proceedings taken are different and separate and must be adopted as such.
A claim under section 49 which can be properly tried by the Court on a reference made to it by the Collector under the second proviso to section 49 (1), cannot be mixed up with a claim which can be made in reference proceedings sent to the Court under section 18 by the Collector.
Section 49 (3) merely dispenses with the necessity of issuing a further fresh declaration or adopting other proceedings under sections 6 to 10 in regard to cases falling under section 49 (2).
Thus, it would be seen that the scheme of section 49 is that the owner has to express his desire that the whole of his house should be acquired before the award is made, and once such a desire is expressed, the procedure prescribed by section 49 has to be followed.
This procedure is distinct and separate from the procedure which has to be followed in making a reference under section 18 of the Act.
In the present case, the respondents have taken no steps to express their desire that the whole of their house should be acquired, and so, it was not open to the High Court to allow them to raise this point in appeal which arose from the order passed by the District judge on a reference under section 18.
That being our view, we do not think necessary to consider the respondents ' contention that what is acquired in the present proceedings attracts the provisions of section 49 (1).
It now remains to consider two relevant decisions which were cited before us.
In the Secretary of State for India in Council vs Narayanaswamy Chettier (1), the Madras High Court appears to have taken the view that there is nothing in section 49 requiring the claimant to put forward his particular claim, viz., that the whole of his house should be acquired, at any particular stage of the proceedings.
Referring (1) Mad.
391 396 to section 49 (1), Ramesam off.
C. J., observed that the said clause cannot imply that the claims covered by it should be made before the Collector makes his award.
Cornish J., who delivered a concurrent judgment agreed with this view.
It appears that in coming to this conclusion, both the learned judges referred to the special circumstances under which the claimant made his claim under section 49 on September, 29, that is to say, after the award. and those special circumstances clearly showed that the claimant was not to blame for the delay made by him in expressing his desire under section 49 (1).
In our opinion, however, the scheme of section 49 is clear.
Section 49 (1) has imposed a ban on taking any further action under any of the provisions of the Act where the owner expresses a desire that the whole of his house should be acquired, and that clearly indicates that after the relevant notifications are issued under sections 4 and 6, if it appears to the owner of the land under acquisition that a part of his house is being acquired, he has to express his desire before an award is made under section 11 ; otherwise if the owner allows.
proceedings to be taken under the provisions of the Act and an award follows, it would lead to unnecessary complications if the owner is allowed to express his desire under section 49 (1) and the reference is then required to be made under the second proviso to section 49 (1).
Logically, if an enquiry has to be made as contemplated by section 49, it must precede any further action under the other provisions of the Act, and that is the main basis of the mandatory prohibition prescribed by section 49 (1).
The said prohibition coupled with the first proviso to section 49 (1) leads to the conclusion that the owner cannot take recourse to section 49 after an award is made under section 1 1 of the Act.
In our opinion, therefore, the High Court did not correctly interpret the effect of section 49 (1) when it held that the said section did not require the claimant to put forward his claim before the award was made.
397 In Krishna Das Roy vs The Land Acquisition Collector of Pabna (1), the Calcutta High Court, on the other hand, seems to have taken the view and we think, rightly, that if the owner wants to make an application expressing his desire under section 49 (1), he has to make that application some time before the award is actually made.
The result is, the appeal is allowed, the order passed by the High Court is set aside and that of the District judge restored.
There will be no order as to costs.
Appeal allowed.

summary/full:
The appellant acquired a plot of land on which the respondent 's property stands, consisting of the main house and an outhouse with an open space in front of them.
The land acquired covered a space 50 ft.
in width for the electric wire to run over and this included a portion of the open space as also the outhouse.
The Land Acquisition Officer fixed a compensation of Rs. 4,451/5/6.
Not being satisfied with this award the respondents appealed under section 18 of the Land Acquisition Act, 1894.
One of the grounds taken in the petition for reference was that the other lands and buildings contiguous to the land and building acquired which belonged to them had not been acquired, they had to suffer a huge loss, the electric rope line passed close to the rest of the property and so it could not be used as it might be dangerous for human habitation.
On this basis compensation of about Rs. 21,765/8/which had been spent in the constructions of the principal house was claimed Before the District Judge, on reference, Respondent No. I gave evidence that he had made I an application before the award was given for the payment of the higher compensation on the above stated ground.
The District judge considered this ground and held that since only a narrow strip of land was left in front of the main building its utility was diminished and awarded an additional compensation of Rs. 1,000/ .
The respondents preferred an appeal to the High Court in which they prayed for a declaration that the Land Acquisition Officer should acquire the main building along with the other properties acquired.
The present appellant contended that the respondents should not be allowed to raise this contention 383 because this plea could have been raised by them only under section 49 of the Act and the plea was foreign to the scope of the reference out of which the appeal arose.
It was also contended that his plea was not taken before the Land Acquisition Officer.
The High Court rejected these contentions of the Appellants and granted the declaration as prayed for by the respondents.
The present appeal is by way of a certificate granted by the High Court.
Substantially the same contentions as were raised before the High Court were raised in this appeal before this Court.
Held that the claim was made by the respondents under section 23 of the Act and not under section 49 and what they have in fact done is to claim additional compensation under section 23 (1).
It is clear that the scope of the enquiry under section 18 (1) is specifically indicated by the section itself and the grounds on which objection can be taken.
The Court cannot consider the pleas raised by the owner of the property under section 49 in an enquiry under section 18 (1).
The scheme of section 49 is that the owner has to express his desire that the whole of his house should be acquired before the award is made and once such a desire is expressed the procedure prescribed by section 49 has to be followed.
This procedure is distinct and separate from the procedure which has to be followed in making a reference under section 18.
In the present case the respondents have not taken any steps to express their desire that the whole of their house should be acquired and it was not open to the High Court to allow them to raise this point in appeal which Arose out of an order passed by the District Judge under section 18.
Case law reviewed.
Pramatha Nath Mullick vs Secretary of State for India in Council, (1929) L. R. 57 I. A. 100.
The Secretary of State for India in Council V. R. Narayanaswami Chettiar, Mad. 391, distinguished.
Krishna Das Roy vs The Land Acquisition Collector of Pabna,


judgement:
Civil Appeal No. 577 of 1961.
Appeal by special leave from the judgment and decree dated January 7, 1959, of the Allahabad High Court in Second Appeal No. 448 of 1952.
Sarjoo Prasad, Vithal Bhai Patel and S.S. Shukla, for the appellants.
C. B. Agarwala, and J. P. Goyal, for the respondent No. I. 1963.
May 3: The judgement of the Court was delivered by RAGHBAR DAYAL J.
The facts leading to this appeal, by special leave, are these.
Nine 551 persons, including Kedar Nath, instituted a suit for ejectment and recovery of rent against two defendants on the allegation that defendant No. I was the tenant inchief who had sub let the premises to defendant No. 2.
The suit for ejectment was decreed against both the defendants and for arrears of rent against defendant No. 1.
On appeal by defendant No. 2 the District judge set aside the decree for ejectment against defendant No. 2 and confirmed the rest of the decree against defendant No. 1.
It is against this decree that the nine original plaintiffs filed the second appeal in the High Court on February 29, 1952.
Kedar Nath, appellant No. 3, died on September 8, 1955.
In view of rr. 3 and 11 of O. XXII of the Code of Civil Procedure, hereinafter called the Code, the appeal abated so far as Kedar Nath was concerned as no application for bringing his legal representatives on the record was made within the prescribed time.
On October 1, 1956, two applications were filed in the High Court One was an application under section 5 of the Limitation Act for the condonation of the delay in filing the application for substitution of the heirs in placec of Kedar Nath.
The other was the application for substitution in which it was prayed that Bithal Das and Banarsi Das, the sons of Kedar Nath, deceased, be substituted in place of the deceased appellant as they were his heirs and representatives.
These two applications were dismissed on May 1, 1957, with the result that the appeal stood abated as against Kedar Nath.
Bhagwati Prasad, appellant No. 9 also died on July 2,1956.
His widow, Remeshwari Devi, was brought on the record in his place.
When the appeals of the appellants other than Kedar Nath came up for hearing on September 1, 1958, a preliminary objection was taken for the, 552 respondent that the entire appeal had abated.
Mr. jagdish Swarup, learned counsel appearing for the appellants, contended that the deceased belonged to a joint Hindu family and other members of the family were already on the record and that it was not necessary to bring on record any other person.
He further stated that the appeal could not be said to have abated in the particular circumstances.
The Court allowed the appellants time for filing an affidavit stating that the deceased was a member of the joint Hindu family and other relevant facts.
On September 8, 1958, an affidavit was filed by Suraj Prasad Misra pairokar of the appellants.
Para 9 of the Affidavit stated that Lala Ram Chandra Prasad, appellant No. 8, managed the family properties including the one in dispute which was joint and looked after the affairs of the properties and acted for and on behalf of the family and was 'already on the record.
A counter affidavit was filed stating that the allegations in para 9 of the affidavit were misleading, that there was no allegation in the affidavit that the family was a joint Hindu family and that the true facts were that the family of the plaintiffsappellants was not a joint family, that the members were separated, that Lala Ram Chandra Prasad was not karta of the joint Hindu family, that the plaintiffs were assessed to income tax separately and that the property in dispute was not joint family property or even joint property.
A rejoinder affidavit was then filed by Sri Narain, general agent of the appellants stating that the aforesaid statements in the counteraffidavit were misleading and irrelevant and re affirming that Ram Chandra Prasad managed the house property of the family including the one in dispute and that he looked after the affairs of the house property and acted for and on behalf of the family just as other members of the family looked after other affairs including the business belonging to the family.
553 At the hearing of the appeal of the surviving appellants, the only point which was urged for consideration seems to have been that the surviving appellants were competent to continue the appeal in view of O.XLI, r. 4, C. P. C.
This contention was repelled in view of the full Bench decision of the Allahabad High Court reported in Baij Nath vs Ram Bharose (1), as the interests of the surviving appellants and the deceased appellant were joint and indivisible and as in the event of the success of the appeal there would be two inconsistent and contradictory decrees.
It accordingly dismissed the appeal.
It is against this decree that this appeal has been filed after obtaining special leave.
Mr. Sarjoo Prasad, learned counsel for the appellants, has raised two points.
One is that the provision of r. 2 of O. XXII and not of r. 3 of that Order apply to the facts of this case as the nine appellants constitute a joint Hindu family and the surviving plaintiffs could continue the appeal.
The second point is that if the provisions of r. 3 of O.XXII applied and the appeal of Kedar Nath had abated, the provisions of r. 4 of O.XLI have not been correctly construed in Baij Nath vs Ram Bharose (1) and Ramphal Sahu vs Babu Satdeo Jha (2).
We see no force in the first contention.
We have already referred to the contents of the various affidavits filed by the parties subsequent to the point being raised that Kedar Nath, the deceased appellant and the surviving appellants constituted a joint Hindu family.
They clearly indicate that the affidavits filed on behalf of the appellants made no averment that Kedar Nath and the surviving appellants formed a joint Hindu family, even though time had been given to them for filing an affidavit stating such a fact.
The inference is obvious, and (1) I.L.R. [1953) All, Pat, 870, 554 is that these people did not form a joint Hindu family as alleged by the respondents.
It is further of significance that the application made on October 1, 1956, for substituting the sons of Kedar Nath in his place stated that they were his heirs and legal representatives.
The application was on the basis that Kedar Nath was not a member of the joint Hindu family.
We are, therefore, of opinion that it is not proved that Kedar Nath, deceased, and the other appellants constituted a joint Hindu family that the right to appeal survived to the surviving appellants alone and that they could have continued their appeal in view of r. 2 of of XXII of the Code.
The second contention really is that the surviving appellants could have instituted the appeal against the entire decree in view of the provisions of O. XLI, r. 4 of the Code, that they were, therefore, competent to continue the appeal even after the death of Kedar Nath and the abatement of the appeal so far as he was concerned, that the Court could have reversed or varied the whole decree in favour of all the original plaintiffs and could have granted relief 'with respect to the rights and interests of Kedar Nath as well.
We do not agree with this contention Rule 4 of O.XLI reads: "Where there are more plaintiffs or more defendants than one in a suit, and the decree appealed from proceeds on any ground common to all the plaintiffs or to all the defendants, any one of the plaintiffs or of the defendants may appeal from the whole decree, and there upon the appellate Court may reverse or vary the decree in the favour of all the plaintiffs,or defendants, as the case may be." These provisions enable one of the plaintiffs or one of the defendants to file an appeal against the entire 555 decree.
The second appeal filed in the High Court was not filed by any one or by even some of the plaintiffs as an appeal against the whole decree, but was filed by all the plaintiffs jointly, and, therefore, was not an appeal to which the provisions of r. 4 O.XLI could apply.
The appeal could not have been taken to be an appeal filed by some of the plaintiffs against the whole decree in pursuance of the provisions of r. 4 of O.XLI from the date when the appeal abated so far as Kedar Nath was concerned.
If the appeal could be treated to have been so filed, then, it would have been filed beyond the period prescribed for the appeal.
At that time, the decree stood against the surviving plaintiffs and the legal representatives of Kedar Nath.
The legal representatives could not have taken advantage of r. 4 of O. XLI.
It follows that r. 4 of O. XLI would not be available to the surviving plaintiffs at that time.
Further, the principle behind the provisions of r. 4 seems to be that any one of the plaintiffs or defendants, in filing such an.
appeal, represents all the other non appealing plaintiffs or defendants as he wants the reversal or modification of the decree in favour of them as well, in view of the fact that the original decree proceeded on a ground common to all of them.
Kedar Nath was alive when the appeal was filed and was actually one of the appellants.
The surviving appellants cannot be said to have filed the appeal as representing Kedar Nath.
Kedar Nath 's appeal has abated and the decree in favour of the respondents has become final against his legal representatives.
His legal representatives cannot eject the defendants from the premises in suit.
It will be against the scheme of the Code to hold that r. 4 of O. XLI empowered the Court to pass a decree in favour of the legal representatives of the 556 deceased Kedar Nath on hearing an appeal by the surviving appellants even though the decree against him has become final.
This Court said in State ' of Punjab vs Nathu Ram(1).
"The abatement of an appeal means not only that the decree between the appellant and the deceased respondent had become final, but also, as a necessary corollary, that the appellate Court cannot, in any way, modify that decree directly or indirectly.
The reason is plain.
It is that in the absence of the legal representatives of the deceased respondent, the appellate Court cannot determine anything between the appellant and the legal representatives which may affect the rights of the legal representatives under the decree.
It is immaterial that the modification which the Court will do is one to which exception can or cannot be taken." No question of the Provisions of r. 4 of O.XLI overriding the provisions of r. 9 of O. XXII arises.
The two deal with different stages of the appeal and provide for different contingencies.
Rule 4 of 0 XLI applies to the stage when an appeal is filed and empowers one of the plaintiffs or defendants to file an appeal against the entire decree in certain circumstances.
He can take advantage of this provision, but he may not.
Once an appeal has been filed by all the plaintiffs the provisions of 0 XLI, r. 4 became unavailable.
Order XXII operates during the pendency of an appeal and not at its institution.
If some party dies during the ' pendency of the appeal, his legal representatives have to be brought on the record within the period of limitation.
If that is not done, the appeal by the deceased appellant abates and does not proceed any further.
There is thus no inconsistency between the previsions of r. 9 of O. XXII and those of r. 4 of O~. XLI, C.P.C. They operate at different stages and provide for (1) [1962] 2 S.C. R. 636 557 different contingencies.
There is nothing common in their provisions which make the provisions of one interfere in any way with those of the other.
We do not consider it necessary to discuss the cases referred to at the hearing.
Suffice it to say that the majority of the High Courts have taken the correct view viz., that the appellate Court has no power to proceed with the appeal and to reverse and vary the decree in favour of all the plaintiffs or defendants under O. XLI, r. 4 when the decree proceeds on a ground common to all the plaintiffs or defendants, if all the plaintiffs or the defendants appeal from the decree and any of them dies and the appeal abates so far as he is concerned under O.XXII, r. 3.
See : Ramphal Sahu vs Babu Satdeo Jha (1); Amin Chand vs Baldeo Sahai Ganga Sahai(2), Baij Nath vs Ram Bharose (3); Nanak vs Ahmad Ali (4); Pyarelal vs Sikhar Chand (5); Raghu Sutar vs Nrusingha Nath (6); Venkata Ram Rao vs Narayana (7); Sonahar Ali vs Mukbul Ali (8).
The Bombay,, Calcutta and Madras High Courts have taken a differentview : see Shripad Balwant vs Nagu KushebaSatulal Bhattachariya vs Asiruddin ShaikhSomasundaram Chettiar vs Vaithilinga Mudaliar OrderXLI, r. 33 is of no greater help to the contention of the appellants that their appeal could continue even though the appeal by Kedar Nath had abated, as the Court could have passed a decree in favour of the rights and interests of Kedar Nath, deceased, as well.
This rule reads : "The Appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, an( this power may be exer cised by the Court notwithstanding that the (1) I.L.R. [1953] 2 All.
Lah.667 (3) I.L.R. [1953] 2 All.
(6) A.I.R. 1959 Orissa 148.
(7) A.I.R. 1963 A.P. 168 (8) A I.R. (9) I.R.R. (10) I.L.R. (11) I.L.R. 558 appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection : Provided that the Appellate Court shall not make any order under section 35A, in pursuance of any objection on which the Court from whose decree the appeal is preferred has omitted or refused to make such order.
" This rule is under the sub heading 'judgment in appeal '.
Rule 31 provides that the judgment of the Appellate Court shall be in writing and shall state inter alia the relief to which the appellant is entitled in case the decree appealed from is reversed or varied.
Rule 32 provides as to what the judgment may direct and states that the judgment may be for confirming, varying or reversing the decree from which the appeal is preferred, or, if the parties to the appeal agree as to the form which the decree in appeal shall take, or as to the order to be made in appeal, the Appellate Court may pass a decree or make an order accordingly.
The reversal or variation in the decree would, therefore, be in accordance with what the appellant had been found to be entitled.
The decree therefore, is not to be reversed or varied with respect to such rights to which the appellant is not found entitled.
Rule 33 really provides as to what the Appellate Court can find the appellant entitled to.
It empowers the Appellate Court to pass any decree and make any order which ought to have been passed or made in the proceedings before it and thus could have reference only to the nature of the decree or Order in so far as it affects the rights of the appellant.
It further empowers the Appellate Court to pass or make such further or other decree or Order as the case may require.
The Court is thus given wide discretion to pass such decrees and Orders as 559 the interests of justice demand.
Such a power is to be exercised in exceptional cases when its non exercise will lead to difficulties in the adjustment of rights of the various parties.
A case like the present is not a case of such a kind.
When the legal representatives of the deceased appellant and the surviving appellants were negligent in not taking steps for substitution, the Court is not to exercise its discretion in favour of such a party.
The discretionary power cannot be exercised to nullify the effect of the abatement of the appeal so far as Kedar Nath is concerned.
In fact such an exercise of power will lead to the existence of two contradictory decrees between the heirs of Kedar Nath and the respondents, one passed by the appellate Court and another to the contrary effect by the Court below which has attained finality consequent on the abatement of the appeal in so far as they are concerned.
This is always avoided.
Rule 33 deals with a matter different from the matter dealt with by r. 9 of O. XXII and no question of its provisions overriding those of r. 9 of O. XXII or vice versa arises.
In Mahomed Khaleel Shirazi & Sons vs Los Panneries Lyonnaises (1) it was held that O. XLI, r. 33 was not intended to apply to an appeal which was not a competent appeal against a party under the Code or under the Letters Patent 'of the High Court.
This principle applies with equal force in the present case.
The appeal by the surviving appellants is not competent in the circumstances of the case and, therefore, the provisions of 0.
XLI, r. 33 are not applicable to it.
We are, therefore, of opinion that the High Court could not have heard the appeal of the surviving appellants when the appeal by kedar Nath had (1) 53 I.A 84 560 abated as all the appellants had a common right and interest in getting a decree of ejectment against defendant No. 2 and such decree could have been on a ground common to all of them.
The defendant cannot be ejected from the premises when he has a right to remain in occupation of the premises on the basis of the decree holding that Kedar Nath, one of the persons having a joint interest in letting out the property could not have ejected him.
It is not possible for the defendant to continue as tenant of one of the landlords and not as a tenant of the others when all of them had a joint right to eject him or to have him as their tenant.
We, therefore, dismiss the appeal with costs.
Appeal dismissed.

summary/full:
Nine persons including K instituted a suit for ejectment and recovery of rent against two defendants and obtained a decree, but on appeal, the District judge set aside the decree against defendant No. 2.
The plaintiffs then filed a second appeal in the High Court on February 29, 1952, and while the appeal was pending K died on September 8, 1955.
No application for bringing his legal representatives on the record was, however, made within the prescribed time, and the appeal abated so far as K was concerned.
When the appeal of the appellants other than K came up for hearing on September 1, 1958, a preliminary objection was taken for the respondents that the entire appeal had abated on the ground that the interest of the surviving appellants and the deceased appellant were joint and indivisible and that in the event of the success of the appeal there would be two inconsistent and contradictory decrees.
The appellants claimed that the appeal was maint.
ainable on the grounds that the surviving appellants could have filed the appeal against the entire decree in view of the provisions of O. 41, r. 4, of the Code of Civil Procedure, that they were, therefore, competent to continue the appeal even after the death of K and the abatement of the appeal so far as he was concerned, and that the Court could have reversed or varied the whole decree in favour of all the original plaintiffs and could have granted relief with respect to the rights and interests of K as well.
Held (1) that the provisions of r. 4 of 0.
41 of the Code of Civil Procedure were not applicable, since the second appeal in the High Court was not filed by anyone or by even some of the plaintiffs as an appeal against the whole decree, but was filed by all the plaintiffs jointly, and the surviving appel 550 lants could not be said to have filed the appeal as representing K. (2) that an appellate court had no power to proceed with the appeal and to reverse and vary the decree in favour of all the plaintiffs or defendants under O. 41, r. 4, of the Code of Civil Procedure, when the decree proceeded on a ground comm.
on to all the plaintiffs or defendants, if all the plaintiffs or the defendants appealed from the decree and any of them died and the appeal abated so far as he was concerned under O. 22, r. 3.
Ramphal Sahu vs Babu Satdeo Jha, I.L.R. 19 Pat. 870; Amin Chand vs Baldeo Sahai Ganga Sahai, I.L.R. ; Baij Nath vs Ram Bharose, I.L.R. 1953 (2) All. 434; Nanak vs Ahmad Ali, A.I.R. 1946 Lah. 399; Pyarelal vs Sikhar, Chand, I.L.R. 1957 M.P. 21; Raghu Sutar vs Narusingha Nath, A.I.R. 1959 Orissa 148 ; Venkata Ran Rao vs Narayana, A. I.R. and Sonahar Ali vs Mukbul Ali, A.I.R. 1956 Assam 164, approved.
Shripad Balwant vs Nagu Kusheba, I.L.R. ; Satula Bhattachariya vs Asiruddin Shaikh, I.L.R. and Somasundaram Chettiar vs Vaithilinga Mudaliar, I.L.R. , disapproved.
(3) that the provisions of O. 41, r. 33 were 'not applicable since the appeal by the surviving appellants was not competent in the circumstances of the case.
Mohomed KhaleeJ Shirazi & Sons vs Lee Tanneries 53 I.A. 84, relied on.