judgement:
ivil Appeals Nos. 243, 344 and 45 of 59.
Appeals from the judgment and order dated January 12, 195O of the Madras High Court in A. A. O. Nos.
288 to 290 of 1946.
Alladi Kuppuswamy, section B. Jathar and K. B. Choudhuri, for the appellants, A. V. Viswnatha Sastri,V. Vedantachari and T. Satyanarayona, for respondent No. 2 (]in C. A. No. 345 of 59.) 923 T.V. R. Tatachari, for respondents Nos.
3 to 6 (in C. A. Nos. 343 and 344 of 59) and respondents Nos.
5 to 8 (in C. A. No. 345 of 1959.) 1962.
September 4.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
[ After disposing of Civil Appeals Nos. 343 and 344 of 1959, his Lordship proceeded as follows].
That takes us to Civil Appeal No. 345 of 1959 in which the appellant wants liberty to proceed against the surety, respondents Nos. 2 and 3.
This claim has been rejected by both the High Court.
But the decision of the High Court proceeds on the basis that the appellant was himself a defaulter and so, he could not be permitted to enforce his remedy against the sureties.
Since on the question of default, we have come to a contrary conclusion, it becomes necessary to examine whether the appellant is entitled to seek his remedy against the surety.
In determining this question, it is necessary first to enquire into the nature and extent of the liability undertaken by respondents Nos. 2 and 3 in executing the surety bond.
The surety bond was executed on the 29th Sept. 1935.
Clause 5 of the surety bond which is relevant provides that the sureties covenant that if the order of the High Court in C. M. A. No. 362/1929 be reversed or varied by the Privy Council and as a result of the said variation or reversal respondent No. 1 becomes liable to pay by way of restitution any amount to the said appellant in the Privy Council, the sureties would pay whatever sum may become payable by the said respondent and that if they failed therein, then any sum payable shall be realised in the man ner specified in the said clause.
This bond was executed in the favour of the court.
924 The appellant contends that as a result of the decision of the Privy Council, the matter was remitted to the trial Court for ascertaining the amount due to the appellant and it was during the pendency of the appeals which were pending in the Madras High Court against the decision of the trial Court on the applications made by the respective parties in the remanded proceedings that the compromise decree was passed between the appellant and respondent No. 1 and so whatever is claimable by the appellant by virtue of the said compromise decree must attract the operative portion of clause 5 of the surety bond.
On the other hand, Mr. Sastri for the surety agrees that the surety bond must be strictly construed and it is only if the amount claimed by appellant from respondent No. 1 can be said to be the result of the reversal or variation by the Privy Council of the orders under appeal before it that the surety bond can be proceeded against.
Mr. Sastri urges that when disputes were pending between the appellant and respondent No. 1 before the Madras High Court, the parties compromised the disputes and the compromise decree which followed acts as a discharge of the liability of the sureties.
In support of this argument, reliance is placed on the equitable principles underlying section 135 of the Indian Contract Act.
Mr. Kuppuswamy contests this position and urges that section 135 is inapplicable to a surety bond executed in favour of a court and he argues that appellants remedy against the surety is not affected by the fact that the dispute between the appellant and respondent No. 1 was amicably settled and terminated in a compromise decree.
This controversy raises the question as to whether section 135 of the Indian Contract Act or principles underlying it apply to surety bonds executed in favour of the court.
Section 135 provides that a contract between the creditor and the principal debtor, by which the creditor makes 925 a composition with or promises to give time to, or not to sue, the principal debtor discharges the surety, unless the surety assents to such contract.
There can thus be no doubt that a contract of suretyship to which section 135 applies would be unenforceable if the debt in question is compromised between the debtor and the creditor without the assent of the surety.
But this provision in terms cannot apply to a surety who has executed a bond in favour of the court, because such a contract of guarantee of suretyship does not fall within the scope of section 126 of the Contract Act.
A contract of guarantee under the said section postulates the existence of the surety, the principal debtor and the creditor, and this requirement is not satisfied the case of a bond executed in favour of the court.
Such a bond is given to the court and not to the creditor and it is in the discretion of the court to enforce the bond or not.
Therefore, there cannot be any doubt that in terms, the provisions of section 135 cannot apply to a court bond.
It is also clear that the equitable principles underlying the provisions of section 135 apply to such a bond.
If, for instance, the decree holder gives time to the judgment debtor and promises not to seek his remedy against him during that period, there is no reason why the extension of time granted by the creditor to the debtor should not discharge the surety even where the surety bond is executed in favour of the court.
The reason for the equitable rule which entitles the surety to a discharge in such circumstances is that the surety should be able at any time to require the creditor to call upon the principal debtor to pay off his debt or himself pay off the debt and seek his remedy against the principal debtor.
If the creditor has bound himself not to claim the debt from his principal debtor, that materially affects the right 926 of the surety and so, whenever time it; granted to the debtor by the creditor without the consent of the surety, the surety can claim discharge.
This equitable principle would apply as much to a surety bond to which section 126.
of the Contract Act applies as to a surety bond executed in favour of the court.
Therefore, we see no justification for the argument that even the equitable principles underlying the provisions of section 135 of the contract Act should not apply to surety bonds executed in favour of the court.
In determining the question as to whether liability under such a 'surety bond is discharged by reason of the fact that a compromise decree had been passed in the judicial proceedings in which the surety bond came to be executed, it will always be necessary to examine the terms of the bond itself.
Did the surety contemplate when he executed the bond that the dispute pending between the debtor and the creditor may be compromised, or did be contemplate that the dispute would, and must be settled by the court and not compromised by the parties? If the terms of the bond indicate that the surety undertook the liability on the basis that the dispute would be decided on the merits by the court in invitium and would not be amicably settled, then the compromise of the dispute would discharge the liability of the surety (vide The Official Liquidators, The Travancore National & Quilon Bank Ltd. vs The Official Assignee of Madras,(1) Parvatibai vs Vinayak Balvant (2); Mahomedalli Ibrahimji vs Laxmibai, (3); Narsingh Mahton vs Nirpat Singh (4) and Muhammad Yusaf vs Ram Gobinda Ojha.
(5) If, on the other hand, from the terms of the bond it appears that it was within the contemplation of the parties including the surety (1) I.L.R, (2) I.L.R. (3) (1929) I.L.R. LIV Bom.
(4) (1932) I.I.R. XI Patna 590.
(5) (1927) I.L.R. LV Cal.
927 that the dispute may be amicably settled and the surety executed the bond knowing that his liability may arise even under the compromise decree, then the passing of the compromise decree will not entitle him to claim discharge vide Haji Ahmed vs Maruti Ramji; (6) Appunni Nair vs Isack Mackadan, (7) and Kanailal Mookerjee vs Kali Mohan Chatterjee (3).
The question would thus always be one of construing the surety bond in order to decide whether a compromise decree discharges the surety or not.
Turning to the bond passed by respondents Nos. 2 and 3 in the present case, it is impossible to, hold that it was within the contemplation of the sureties when they executed the bond that the parties would amicably settle their dispute in the manner they have done.
At the time when the surety bond was executed, the dispute pending between the parties was the money dispute the decision of which would have ended in an order directing one party to pay another a certain specified amount.
The compromise decree has introduced complicated provisions for the satisfaction of the appellants claim against respondent No. 1.
Under the compromise decree, the appellant would have been entitled to take possession of the properties in suit and in that process, rival claims of both the parties would have been adjusted.
We are satisfied that the material terms in clause 5 of the surety bond could not be said to be attracted when the parties chose to settle their dispute in accordance with the terms of the compromise agreement.
Besides, it is clear that the compromise agreement gave time to respondent No. 1 and the decree was, therefore, not 'executable immediately after it was passed.
In substance, by the decree, time was granted though it is true that time was granted to both the parties to discharge their respective obligations under (6) (1930) I.L R. LV Bom 97.
(7) Mad.
(8) A.I.R. 1957 Cal 645.
928 the compromise.
That is another reason why we think the liability of respondents No. 2 and 3 under the surety bond is discharged as a result of the Compromise decree.
There is yet another consideration which is relevant in dealing with this point.
It is common ground that amongst the disputes which were settled between the parties was included the claim made by respondent No. 1 for damages on account of the fact that the appellant had created occupancy rights in favour of strangers in respect of the properties which were in his possession as a mortgagee.
This claim is plainly outside the proceedings contemplated and permitted by the order passed by the Privy Council, and yet this dispute has been settled by the compromise decree which means that a matter which was strictly not germane to the judicial proceedings in which the surety bond was executed has been introduced by the parties in their final settlement.
Therefore, we are satisfied that though the appellant succeeds in showing that he was not a defaulter, he cannot seek his remedy against the surety, respondents Nos. 2 and 3.
An attempt was made by Mr. Kuppuswamy to suggest that respondents Nos. 2 and 3 should not have been allowed to raise ibis point before the High Court, because no such point bad been taken by them in the trial Court.
We do not think there is any substance in this argument.
It is true that respondents No. 2 and 3 did not take any such contention in the trial Court, but that may be because parties had then concentrated on the issue as to who was the defaulter.
But when the appeals were argued before the High Court, this point was specifically urged by respondent No. 2 and it has been considered by the High Court.
No doubt Mr. Kuppuswamy ingeniously suggested that this was not a pure question of law and so, the High Court 929 should not have allowed it to be raised for the first time in appeal.
The argument is that if the point had been raised in the Court of first instance, the appellant would have shown that respondents Nos. 2 and 3 bad consented to the compromise agreement between the appellant and respondent No . 1.
This is clearly an afterthought.
If the appellant 's case was that respondents Nos. 2 and 3 were not discharged by the compromise decree because they were consenting parties to the compromise agreement, they should have stated so before the High Court and the High Court would then have either called for a finding on that issue or would have refused permission to respondents Nos. 2 and 3 to raise that point.
The result is, Civil Appeal No. 345 of 1959 fails and is dismissed with costs, Appeal dismissed.

summary/full:
Although section 135 of the Indian Contract Act does not in terms apply to a surety bond executed in favour of the court, there can be no doubt that the equitable rule underlying that section must apply to it.
The reason for the said rule which entitles the surety to a discharge is that he must be able at any time either to require the creditor to call upon the principal debtor to pay off his debt, or himself to pay the debt and seek his remedy against the principal debtor.
The question as to whether the liability of the surety is discharged by a compromise in the judicial proceeding in which the surety bond is executed must depend on the terms of the bond itself.
If the terms indicate that the surety undertook the liability on the basis that the dispute should be 922 decided on the merits by the court and not amicably settled, the compromise will effect a discharge of the surety.
The Official Liquidators, The Travancore National & Quilon Bank Ltd. vs The Official Assignee of Madras 1.
L. R , Parvatibai vs Vinayak Balvant, 1.
L. R. 1938 Bom.
Mahomedalli Ibrahimji vs Laxmibai, (1929) I. L. R. LIV Bom.
II 8, Narsingh on vs Nirpat Singh, (1932) I. L. R. XI Patna 590 and Muhammad Yusaf vs Ram GobindaOjha, (1927) 1.
L. R. LV Cal. 91, referred to.
But if the terms show that the parties and the surety contemplated that there might be an amicable settlement as well, anti the surety executed the bond knowing that he might be liable under the compromise decree, there can be no discharge and the surety will be liable under the compromise decree.
Haji Ahmed vs Maruti Ramji, (1930) 1.
L. R. LV Bom.
Appunni Nair vs Isack Mackadan,(1919) 1.
L. R. 43 Mad.
272 and Kanailal Mookerjee vs Kali Mohan Chatterjee, A. 1.
R. , referred to.
Consequently, in the present case where the surety bond was executed in favour of court and by it the sureties undertook to pay certain amount of money on behalf of the respondent if decreed by the court and the compromise decree between the parties introduced complicated provisions enabling the e appellant to take possession of the properties in adjustment of rival claims, granted time, albeit to both the parties, to discharge their obligations thereunder and included matters extraneous to the judicial proceedings in which the surety bond was executed.
Held, that the sureties stood discharged by the compromise decree.


judgement:
Appeals Nos.
484 to 489 of 1958.
Appeals by special leave from the judgement and order dated August 6, 1954, of the U.P. Board of Revenue, Allahabad, in petitions Nos.
203 to 208 of 1947 48.
G. C. Mathur, for the appellants.
M. L.Agarwala, for the respondents (in.
C. As.
484 &485 of 1958) and respondent No.3 (In C.A No. 488.
of 1958).
August 31.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
These appeals, by special leave, against the orders of the Board of Revenue, Utter Pradesh, arise in the following circumstances : The appellants presented applications against each set of the respondents in these six appeals under s.175, U.P. Tenancy Act, 1939 U.P. XVII of 1939, hereinafter called the Act, for ejectment stating that they were the sir bolders of the land occupied by the respondents as non occupancy tenants and that the period of five years during which the respondents were entitled to retain possession under s.20 of the Act had expired.
The respondents contested the notice of ejectment alleging that the land in suit was not air, that the appellants were not sir holders, that appellants paid local rate exceeding Rs. 25/ in the United Provinces, Agra and Oudh, and held more than 50 acres of sir land.
They claimed to be hereditary tenants of the land in dispute, in accordance with sections 14, 15 and 16 of the Act.
The paper were thereafter forwarded by the Tehsilder to the Assistant Collector in charge of the sub division, in accordance with the provisions of section 179 of the Act 907 The applications which were presented for the ejectment of the respondents were deemed to be plaints and the proceedings continued as suits, in view of sub section
(2) of a. 179 of the Act.
The Court called upon the appellants to file necessary extracts of papers and to join all tenants of air as parties.
The sub Divisional Officer did not accept the contention of the respondents and decreed the suits on February 28, 1946, holding that the land in suit was air, that the appellants were air holders, that each of them did not pay a local rate exceeding Rs. 25/ either in 1938 or in 1940, that he did not hold more than fifty acres of air land or more than fifty acres of air and khudkasht land which had not been sublet in 1317 F., corresponding to the period from July 1, 1939 to June 30,1940.
The respondents appealed against the decree to the Additional Commissioner, Benaras, and repeated their contentions which had not found favour in the Trial Court.
They also contended that the appellants had not complied with the requirements of s, 19 of the Act as amended by the U.P. Tenancy (Amendment) Act, 1947 (U.P. X of 1947) which came in to force on June 14.
1947 after the appeals had been instituted.
The Additional Commissioner confirmed the findings of the Sub Divisional Officer and further hold that there had been substantial compliance with the spiritof the law as laid down in the amended a. 19 of the Act.
He accordingly dismissed the appeals.
The respondents then instituted second appeals in the Board of Revenue.
The Board of Revenue did not agree with the additional Commissioner about there having been sufficient compliance with the provisions of amended a. 19 of 908 the Act and of the rules framed thereunder.
It therefore set aside the decree against the respondents and remanded the cases for fresh disposal in accordance with law and further directed the Trial Court to decide the further contention raised by the respondents before the Board to the effect that they had acquired adivasi rights in the land in suit after the coming into force of the U. P. Zamindari Abolition and Land Reforms Act, 1950 (U. P. 1 of 1951).
It is against these orders of the Board of Revenue that these six appeals have been filed after obtaining special leave from this Court.
It appears that there was no particular procedure laid down for the progress of the proceedings in the suit before the Sub Divisional Officer after the papers had been sent to him in accordance with the provisions of section 179 of the Act.
The ordinary procedure for the conduct of suits was followed.
The Sub Divisional Officer therefore called upon the appellants to file necessary extracts of documents.
Naturally evidence had to be led, documentary or oral, to substantiate the allegations made by the parties and, especially by the appellants, who bad to prove their right to eject the respondents.
They had to prove that the land in suit was sir and that they were sir holders.
Section 6 of the Act defines `sir '.
This section reads: "Sir" means (a) land which immediately before the commencement of this Act was air under the provisions of the Agra Tenancy Act, 1926, or the Oudh Rent Act, 1886: Provided that if at the commencement of this Act, the sir holder is assessed in the United Provinces to a local rate of more than 909 twenty five rupees, land which was sir, under the provisions of clause (d) or clause (e) of Section 4 of the Agra Tenancy Act, 1926, or of clause (c) or clause (d) of sub Section (17) of Section 3 of the Oudh Rent Act, 1886, ,shall on this Act coming into force cease to be sir unless it was (i)before the first day of July, 1938, received otherwise than in accordance with the provisions of Section 122 of the United Provinces Land Revenue Act, 1901, or (ii)before the commencement of this Act, received in accordance with the provisions of that section, in exchange for land which was sir under the provisions of clause (a) or clause (b) or clause (c) of Section 4 of the Agra Tenancy Act, 1926, or of clause (a) or clause (b) of sub Section (17) of Section 3 of the Oudh Rent Act, 1886.
Provided further that the provisions of the first proviso shall apply to a sir holder who was not at the commencement of this Act assessed in the United Provinces to a local rate of more than twenty five rupees if be or his predecessor in interest was so assessed on the 30th June, 1938 unless the local rate assessed on him has been decreased by resettlement or by revision of settlement or unless since that day he obtained his sir rights by succession or survivorship Provided also that if the land to which the provisions of the first proviso apply was joint air of several air holders and all, such joint air holders are not air holders to whom such provisions apply, such land shall not 910 cease to be sir at the commencement of this Act, but shall remain sir until that portion of it which is the sir of those joint holders to whom such provisions apply is demarcated under the provisions of this Act; (b) land which was khudkasht and which is demarcated as sir under the provisions of this Act.
Explanation If any portion of the land revenue assessed on the sir holder 's land has been remitted owing to a fall in the price of agricultural produce, the local rate payable by him shall, for the purposes of this section, be deemed to have been reduced in the same proportion.
" It follows from these provisions that the appellants bad to establish the following facts : (i) The land in suit was `sir ' on January 1, 1940, when the Act came into force.
(ii) Each sir holder was not assessed in the United Provinces to a local rate of more than Rs. 25/ .
(iii) The sir holder or his predecessor in interest was not assessed to a local rate exceeding Rs. 25/ on June 30, 1938.
The appellants proved these facts and the trial Court held that the land in suit did not cease to be 'sir '.
Further, if the finding had been that the first proviso to section 6 applied, section 16 would have come into play and it would have been necessary for the Court to determine whether each of the sir holders possessed more than fifty acres of sir or of sir and khudkasht land which had not been let.
On this point too, the finding of the Trial Court, however, is that each sir holder bad less than fifty acres of sir and khudkasht land.
Section 19 of the Act, before its amendment, in 1947, provided that if a sir bolder could apply under the provisions of B. 15 or 16 of the Act, the 911 Court was to take action under those sections.
The amended section also repeated these provisions in its sub section
Its sub sections
(1) and (2) were, however new and read as follows. "(1) In a suit or proceeding for the ejectment of a tenant of sir the sir holder shall before the first date fixed for recording evidence,furnish to the court such particulars as the Board may by rule made in this behalf prescribe for ascertaining ' (a) whether the sir holder is a person to whom the provisions of the first proviso to clause (a) of Section 6 apply; and (b) the total area and nature of the sir holder 's air and.
khudkasht: Provided that if the sir holder satisfied the Court that he had sufficient cause for not filing the particulars before the date fixed, it way, subject to the payment of costs to the opposite party, extend the time.
(2)If the.
sir holder does not file the particulars mentioned in sub Section (1) within the time fixed thereunder, or deliberately furnishes inaccurate particulars, the Court shall dismiss the suit or proceeding, as the case may be, and shall declareare the tenant to be hereditary tenant.
" It is tobe noticed I that sub section
(1) requires a air holder tofurnish particulars prescribed by the Board and ' that the purpose of furnishing those particulars 'is to assist the Court in ascertaining whether the provisions of the first proviso to clause (a) of section 6 apply to the sir holder and what is the total area and nature of the sir holder 's sir and khudkasht.
Section 19 ' therefore, did not bring 912 about any real change in the substantive law affecting the question whether certain land is `sir ' or not, according to the definition of 'sir ' in section 6 of the Act.
After the amendment, a sir holder, in order to succeed in his suit, had to establish the same facts which he had to establish prior to the amendment, What proof he had to lead to support his case, he has to give even after the amendment.
The only difference brought about by the amendment is in the procedural conduct of the suit and is that prior to the amendment the sir holder had simply to lead evidence to prove his case, without informing the Court before hand about the material on which he would rely to establish that the provisions of the proviso (a) of section 6 did not apply to him and in case they applied how effect would be given to the provisions of s 16.
The amended Section made it incumbent on the sir bolder to furnish such information to the Court and thereby to the tenant before the parties proceeded to lead evidence.
Such information has to be furnished according to sub section
(1) of amended section 19, before the first date fixed for recording evidence.
The time for furnishing such information can be extended under the proviso to that sub section.
Great importance however, has been attached to the new provision as sub section
(2) of amended s.19 provides that the consequences of not filing those particulars, or filing those particulars inaccurately, would be that the Court shall dismiss the suit or proceeding and also declare the tenant to be a hereditary tenant.
Now, it is contended for the appellants, that the provisions of amended s.19 do not apply to the facts of this case as the amended section was enacted long after the first date of recording evidence and that therefore it could not have been possible for the appellant to furnish the necessary particulars in accordance with its provisions and that if its provisions apply to the facts of this case 913 the appellants have substantially complied with those provisions inasmuch as they had actually filed in Court documents which gave the necessary particulars required under rr.
239A and 239B made by the Boara of Revenue under s 19.
The contention for the respondents is that amended section 19 is retrospective in view of the provisions of section 31 of the Amendment Act of 197 and that the appellants had not complied with requirements of section 19 (1) and rules framed thereunder.
The aforesaid section 31 reads : "Disposal of pending suits and appeals (1)All proceedings, suits; appeals and revisions pending under the said Act on the date of the commencement of this Act and all appeals and revisions filed after that date against orders or decrees passed under that Act and all decrees and 'orders passed there under which have not been satisfied in full, shall be decided or executed, as the case may be, and where necessary such decrees and orders shall be amended, in accordance with the provisions of the said Act as amended by this Act: Provided firstly that if such a decree or order cannot be so amended, or the execution of or the appeal or revision from such an amended decree or order cannot be proceeded with, it shall be quashed.
In such a case the aggrieved party shall, notwithstanding any law of limitation be entitled to claim, within six months from the date on which such decree or order is quashed such rights and remedies as he had on the date of the institution of the suit or proceedings in which such decree or order was passed, except in so far as such rights or remedies are, inconsistent with 914 the provisions of the said Act as amended by this Act: Provided secondly that the proceedings under Section 53 between a landlord and his tenant and all proceedings under section 54 shall be quashed: Provided thirdly that appeals and revisions arising out of the proceedings under Section 53 between a landholder and his tenant or out of those under section 54 shall be so decided as to place the parties in the same position in which th ey were immediately before the institution of such proceedings Provided fourthly that all suits, appeals and revisions pending under Section 180 of the said Act, on the date of the commencement of this Act for the ejectment of any person who was recorded as an occupant on or after the first day of January, 1938, in a record revised under Chapter IV of the United Provinces Land Revenue Act, 1901, or corrected by an officer specialty appointed for the correction of annual registers in any tract shall be dismissed, and all decrees and orders for the ejectment of such persons, which have not been satisfied in full on the date of the commencement of this Act shall be quashed .
Provided fifthly that nothing in this subsection shall affect the forum of appeal or revision from a decree or order passed by a Civil Court under the said Act.
(2)In counting the period of limitation in respect of an application for the execution of a decree or order which was passed under the said Act and the execution of which was 915 stayed pending the enactment of this Act, the period during which execution was so stayed shall be excluded.
" In view of this section, the appeals which.
were pending before the additional Commissioner when the amendment Act came into force bad to be decided in accordance with the provisions of the Act as amended.
It has been stated above that no change in the substantive law affecting the rights of the parties has been brought about by the Amendment Act.
The only provision which could affect the rights of the parties is contained in sub s.(2) of amended s.19 and provides the consequences of the failure of the sir holder to furnish the necessary particulars.
It follows therefore that if the necessary particulars had been furnished in this case even prior to the Amendment Act coming into force, there could be no difficulty in deciding the appeals by the Additional Commissioner in accordance with the provisions of the Act as amended by the Amending Act.
This is exactly what the Additional Commissioner did.
He held that subs tantial compliance has been made with the provisions of the amended section and the rules framed thereunder.
The Board of Revenue is itself of the opinion that if substantial compliance bad been made of those provisions that would have been sufficient.
It however did riot agree with the Additional Commissioner 's view that the appellants had sufficiently complied with the provisions of amended s.19 aid the rules framed thereunder.
We are of opinion that in this the Board of Revenue was wrong.
Rules 239A and 239B framed by the Board are: "239A.
In a suit or proceeding for the ejectment of a tenant of sir, the sir holder shall before the first date fixed for recording 916 evidence, furnish to the Court the following particulars: (1)The amount of local rate to which the sir holder was assessed on 1st January, 1940, in the United Provinces.
(2) If the amount shown under the preceding subclause (1) is Rs. 25, or less, then (a) the amount of local rate to which the sir holder or his predecessor in interest was assessed on June 30, 1938.
(b)Whether the local rate assessed on 30th June, 1938, was decreased before 1st January, 1940, as a result of resettlement or revision 'of settlement, and if so, the amount by which it was decreased; (c)Whether the sir holder obtained his sir rights by succession or survivorship between 30th June, 1938, and 1st January, 1940.
(1)The area and khasra numbers of the plots, if any, held by him in severally or jointly with others, on 31st December, 1939, as sir in the United Provinces under the provisions of clause (d) or clause (e) of section 4 of the Agra Tenancy Act 1926, or of clause (c) or clause (d) of sub section (17) of section 3 of the Avadh Rent Act, 1886.
(2) Such of the plots, if any shown under the preceding sub clause (1) along with their areas, as were received by him in exchange for the land which was his sir under the provi sions of clause (a) or clause (b) or 917 clause (c) of Section 4 of the Agra Tenancy Act, 1926, or clause (a) or clause (b) of, subsection (17) of the Avadh Rent Act, 1886 (a) before the first day of July 1938 otherwise than in accordance with the provisions of Section 122 of the United Provinces Land Revenue Act, 1901, or (b) before the first day of January, 1940, in accordance with the provisions of that section.
(3) The area and: khasra numbers of the plots, if any, held by him in severally or jointly with others and khudkasht in the United Provinces, along with the period of cultivation and nature of khudkasht of each such plot.
(4) The extent of his share in the joint air and khudkasht, if any shown under the preceding sub clauses (1) and (3).
The particulars furnished in accordance with rule 239A shall be accompanied by the following documents: (1) If the local rate payable by the sir holder in the United Provinces is claimed to be Rs.25 or less, copies of the khewat khatas of 1345 Fasli and of 1347 Fasli, in which he was recorded as a co sharer; 918 (2) a certified copy of the khatauni khatas of his air and khudkasht; (3) a certified copy of the khewat to which such sir or khudkasht appertains, unless such copy is filed under sub rule (1); (4) a list giving the amount of local rate to which each co sharer of the sir holder in the joint sir and khudkasht, if any, is assessed; (5) in the case of sir or khudkasht of a joint Hindu family, a genealogical table and a list showing the share of each living member of the family having an interest in such sir or khudkasht and the share of local rate which each member would be liable to pay on ratable distribution.
" The documents filed by the appellants in the Trial Court consisted of (1) khewats of the various villages for the years 1345, 1346 and 1347 Fasli, i.e. for the periods between July 1, 1937 to June 30, 1940 (2) khatauni jamabandis of the various villages for the years 1345 and 1347 Fasli, corresponding to July 1, 1937 to June 30, 1938 and July 1, 1939 to June 30, 1940, respectively; (3) (a) a statement showing the shares of the appellants as recorded in the khewats and khataunis of 1347 Fasli, this statement showed the total of the air area held by the appellants to be 152.33 acres, their khudkasht area to be 19.93 acres and the total of the local rate payable by them to be Rs. 75.5.11; (b) a statement showing the air, khudkasht and local rate of each plain in 1317 Fasli.
This shows that none of them held sir or sir and khudkasht in excess of 50 919 acres, or was assessed to local rate exceeding Rs. 25/ (4) Copy of the pedigree.
These documents clearly furnish the particulars required by the rules as the periods covered by these documents include June 30, 1938, December 31, 1939 and January 1, 1940.
Rule 239AI required particulars regarding the amount of local rates on June 30, 1938 and January 1, 1940 and also about sir holders ' obtaining sir rights by succession or survivorship during the period.
The particulars required under sub rules (3) and (4) of rule 239AII were available from these documents.
Rule 239B required copies of the khewat khatas of 1345 Fasli and of 1347 Fasli; certified copies of khatauni khatas of sir and khudkasht; certified copies of the khewats to which that sir or khudkasht appertained; a list giving the amount of local rate to which each co sharer of the sir holder was assessed and a genealogical table in the case of sir or khudkasht of a joint Hindu family showing the share of each living member of the family.
The only particulars which can possibly be not had directly from the documents on record are those required by sub rules (1) and (2) of rule 239AII.
These require particulars about such sir which was the sir of the appellants under the provisions of cls.
(d) and (e) of s.4 of the Agra Tenancy Act, 1926 i.e., land which became sir on account of the landlord 's cultivation at the commencement of that Act, i.e., on September 7, 1926, and had been recorded as khudkasht in the previous agricultural year, i.e, in 1333 Fasli, or land which became air on account of the landlord 's continuously cultivating it for a period of ten years subsequent to the enforcement of the Agra Tenancy Act.
It is clear from the findings of the Trial Court that the land in suit had been sir from the time of 920 the settlement, presumably, the first settlement, which took place in the Nineties of the last Century.
This seems to be based on the fact that khatauni jamabandhis of 1345 and 1347 Fasli did not record a period of cultivation against the sir entry, indicating thereby that the sir is not of the kind mentioned in cls.
(d) and (e) of s.4 of the Agra Tenancy Act, 1926.
The Trial Court could and did record findings on all the facts which had to be proved by the appellants to establish their case.
The first Appellate Court confirmed them.
The particulars required by sub section
(1) of amended section 19 of the Act and the rules framed thereunder, were for the purpose of ascertaining those facts.
In the circumstances it is reasonable to hold that there had been substantial compliance with the provisions of amended section 19 and the rules framed thereunder.
The Board of Revenue was therefore in error in stating that the appellants had not given the amount of local rate to which they were assessed in U.P. on January 1, 1940, and that compliance did not appear to have been made of rule 239AII of the Revenue Court Manual and that there had not been sufficient compliance with the mandatory provisions of rules 239A and 239B.
From the judgment of the Board it is clear that its attention was not drawn to the several relevant documents filed by the appellants in the trial Court.
We have no doubt that if the Board had considered the said document it would not have held that section 19 had not been substantially complied with.
We therefore hold that the Board of Revenue was in error in setting aside the decree of the Additional Commissioner and remanding the case for fresh trial on the ground that there had not been compliance with the provisions of amended section 19 of the Act and the rules framed thereunder.
921 We accordingly allow the appeals, set aside the order of the Board of Revenue and remand the cases to it for decision in accordance with law.
We further direct it to decide itself the contention raised by the respondents about their having acquired adivasi rights under the U.P. Zamindari Abolition and Reforms Act.
In case the Board takes the view that for deciding the said issue any finding of fact is necessary, it.
may call for the said finding from the Trial Court and, on receiving it, proceed to deal with the appeals on the merits.
In the circumstances of these cases, we direct that the parties on either side bear their own costs.
Appeals allowed.

dataset_name: IN-Abs

summary/full:
The appellants filed suit under the U.P Tenancy Act, 1939.
for the ejectment of the respondents who were tenants of sir.
The appellants filed the necessary extracts of papers in support of their case.
The trial court decreed the suits 905 holding the land in suit was sir, that the appellants were sirholders, that each of them did not pay a local rate exceeding Rs 25, that he did not hold more then 50 acres of sir land or more than 50 acres of sir and khudkast land which had not been sublet and that the respondents had not become hereditary tenants.
The respondents preferred appeals before the Commissioner.
During the pendency of the appeals the U.P Tenancy (Amendment) Act.1947, amended s.19 of the Act Amended section 19 provided that in suits for ejectment of tenants of sir the sir holder shall, before the first day fixed for recording evidence, furnish such particulars as may be prescribed and further provided that for failure to file such particulars the suit shall be dismissed.
Section 31 of the Amending Act provided that its provision shall apply to pending suits, appeals etc.
The respondents contended that the appellants had failed to comply with the provisions of amended section 19 and that the suits should be dismissed.
The Commissioner confirmed all the findings of the trial court and held that there had been sufficient compliance with the provisions of amended section 19 and according dismissed the appeals.
The respondents preferred second appeals before the Board of Revenue.
The Board held that the provisions of amended section 19 and of the rules framed thereunder had not been complied with and remanded the case to the trial court for compliance therewith and retrial.
Held, that there had been sufficient compliance with the provisions of amended section 19 and the rules framed thereunder and that the Board was riot justified in remanding the cases for retrial.
Section 19 did not bring about any real change in the substantive law affecting the question whether land was sir or not.
Even after the amendment, a sir holder, in order to succeed in his suit, had to establish the same facts which he had to establish prior to the amendment.
The only difference brought about by the amendment was in procedure and whereas prior to the amendment a sir holder could lead his evidence without informing the Court before hand about the material he would produce, after the amendment it was incumbent upon him to furnish such information to the Court before the date fixed for recording evidence, The necessary particulars had been furnished even prior to the amendment and the Commissioner could decide the appeals in accordance with the provisions of the Act as amended by the amending Act.
The attention of the Board was not drawn to the relevant documents filed by the appellants and it erred in stating that there had been no substantial compliance with the provisions of amended section 19 and of the rules framed thereunder.


judgement:
Appeal No. 20 of 62.
Appeal by special leave from the award dated September 29, 1960, of the Industrial Tribunal Punjab, Patiala in reference No. 13 of 1960.
C.K. Daphtary, Solicitor General of India, Bhagirath Das and B. P. Maheshewari, for the appellants.
M. K. Ramamurthi, B. K. Gary, D. P. Singh and section C. Aggarwal, for the respondent No. 2(i).
September 7.
The Judgment of Gajendragadkar and Das Gupta, JJ., was delivered by Gajendragadkar, J. Mudholkar J. delivered a dissenting judgment.
GAJENDRAGADKAR, J.
This appeal by special leave arises out of an industrial dispute in relation to a comparatively minor demand made against the appellants by the respondents their employees but in challenging the validity of the award passed by the Industrial Tribunal in favour of the 933 respondents on that demand the learned Solicitor General has raised a general question before us.
He contends that in granting the demand made by the respondents, the award has illegitimately and unjustifiably trespassed on the appellants ' freedom of contract.
The appellants as employers, are entitled tofix the terms of employment on which they would be willing to employ workmen and it is open to the workmen either to accept those terms or not; industrial adjudication should not interfere in such a matter.
That is the nature of the general contention which has been raised before us in the present appeal.
The facts leading to the dispute are few and they lie within a very narrow compass.
The appellants are the Trustees of the Tribune Press and paper and the Trust is being worked in accordance with the terms of the will executed by Dyal Singh Majithia on June 15, 1895.
In carrying out the policy of the Trust, the five appellants have executed a power of Attorney in favour of Mr. R. R. Sharma and the Press is managed and the paper is conducted to carry out the policy laid down by the will.
It appears that before July 1, 1956, for the purposes of leave, the appellants had divided their employees into two categories (1) the Linooperators and (2) the rest of the workmen in the Press Section; and Rule 57 made provision for leave on the basis of the said classification.
The effect of the said rule was that no Press worker other than the lino operator was entitled to any kind of paid leave although he was given the right to claim 30 days ' wages plus dearness allowance payable in January every year if he had worked for 11 Months.
In addition, the said press worker was entitled to Quarantine leave on the terms mentioned in Rule 53.
934 This position was substantially altered on the July 12 1956, when the appellants framed a new Rule in respect of earned leave.
This rule abolished the two categories of workers on which the earlier rule 57 was based and divided the workers into two categories (i) workers who were employed on or before 1.7.1956 and (ii) those who were employed after 1.7. 1956.
In respect of the former category of workmen, the new Rule made the following provision: "Subject to the provisions of the Indian , every workman in the service of the Tribune on the 1st July, 1956, will be entitled to 30 days ' leave with wages after having worked for a period of 11 months.
This leave shall cease to be earned, when it amounts to 60 days" In regard to the workmen falling under the latter category, earned leave was to be governed by the provisions of section 79 of the Indian .
It is common ground that the provision for earned leave made by the said section is a provision for minimum earned leave which the employer is bound to give: whether or not additional leave should be granted by way of earned leave is a matter within the discretion of the employer.
As a result of the new rule, the position was that the employees who had joined the service of the appellants on or before July 1, 1956, were entitled to 30 days ' earned leave with wages, whereas those who joined after the said date became entitled to the statutory minimum of 21 days of earned leave.
At the time when this rule came into force there were 94 old employees to whom the rule applied and 27 new employees to them by virtue of the new Rule, section 79 of the was made 935 applicable.
Gradually, new hands have also been employed and to all such new employees section 79 is applicable.
It appears that by its resolution passed on January 8, 1960, the Tribune employees union sent to the Management a charter embodying about 20 demands.
Attempts at conciliation were made but they failed and so, on April 4, 1960, eight of the said demands were referred by the Punjab Government to the Industrial Tribunal for its adjudication under section 10 of the Industrial Disputes Act.
One of these demands was in rela tion to earned leave.
The demand was that the employees in the Press Section should be allowed 30 days ' earned leave with full wages for every months ' service without any discrimination.
The Tribunal has allowed this demand and it bad held that all workmen of the Press are entitled to 30 days ' earned leave without making any distinction a between workmen who joined before July 1, 1956, and those who joined subsequently.
It is the validity of this award which is questioned before us by the appellants.
The broad and general question raised by the learned Solicitor General on the basis of the employer 's freedom of contract has been frequently raised in industrial adjudication, and it has consistently been held that the said right is now subject to certain principles which have been evolved by industrial adjudication in advancing the cause of social justice.
It will be recalled that as early as 1949, it was urged before the Federal Court in Western India Automobile Association vs The Industrial Tribunal Bombay(1) that the industrial Tribunal had no jurisdiction to direct an employer to reinstate his dismissed employees and the plea made was that such a direction was contrary to the known principles which govern the relationship between master and servant.
This contention was negatived by the Federal Court.
(1) ,120.
936 Speaking for the Court, Mahajan J. as he then was, observed that the award of the Tribunal may contain provisions for the settlement of a dispute which no Court could order if it was bound by ordinary law, but the Tribunal is not fettered in any way by these limitations.
The same plea was again raised before this Court in The Bharat Bank Ltd., Delhi.
vs The.
Employees of The Bharat Bank Ltd., Delhi (1) and Mukherjea J. as he then was, emphatically rejected it.
"Insettling the disputes between the employers and the workmen", observed the learned Judge, "the function of the Tribunal is not confined to administration of justice in accordance with law.
It can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any, existing agreement.
It has not merely to interpret or to give effect to the contractual rights and obligations of the parties.
It can create new rights and obligations between them which it considers essential for keeping industrial peace.
" This view has been consistently accepted by industrial adjudication since 1949.
The doctrine of the absolute freedom of contract has thus to yield to the higher claims for social justice.
Take, for instance, the case where an employer wants to exercise his right to employ industrial labour on any wages he likes.
It is not unlikely that in an economically under developed country where unemployment looms very large.
for Industrial work, employees may be found willing to take employment on terms which do not amount to a minimum basic wage.
Industrial adjudication does not recognise the employer 's right to employ labour on terms below the terms of minimum basic wage.
This, no doubt, is an interference with the employer 's (1) ; , 513.
937 right to hire labour, but social justice requires that the right should be controlled.
Similarly the right to dismiss an employee is also controlled subject to well reorganised limits in order to guarantee security of tenure to industrial employees.
In the matter of earned leave, s.79 of the prescribes a minimum in regard to establishments to which the Act applies.
In the matter of bonus which is not regarded as an item of deferred wages, industrial adjudication has evolved a formula by the working of which employees are entitled to claim bonus, We have referred to these illustration to show bow under the impact of the demand of social justice, the doctrine of absolute freedom of contract has been regulated.
It is, however, necessary to add that the general question about the employer 's right to manage his own affairs in the best way he chooses cannot be answered in the abstract without reference to the facts and circumstances in regard to which the question is raised.
If a general question is posed and an answer must be given to it, the answer would be both yes and No. The right would be recognised and industrial adjudication would not be permitted or would be reluctant to trespass on that right or on the field of management functions unless compelled by over riding consi derations of social justice.
The right would not be recognised and would be controlled if social justice and industrial peace require such regulation.
That is why we think industrial adjudication always attempts not to answer questions in the abstract in order to evolve any general or inflexible principles.
The eat course to adopt in dealing with industrial disputes is to consider the facts of the case, the nature of the demand made by employees, the nature of the defence raised by 938 the employer and decide the dispute without unduly enlarging the scope of the enquiry.
If in the decision of the dispute, some principles have to be followed or evolved, that must be done: but care must be taken not to evolve larger principles which would tend to prejudge issues not directly raised in the case before the Industrial Tribunal.
That is why we think we would not be justified in giving any general answer to the broad contention raised by the learned Solicitor General before us in the present appeal.
The development and growth of industrial law during the last decade presents a close analogy to the development and growth of constitutional law during the same period.
In some respects, itis well know that article 19 of the Constitutionhag guaranteed fundamental rights to individualcitizens and at the same time, has provided forthe regulation of the said fundamental rights subject to the provisions of cls.
(2) to (6) of the said Article.
Where a conflict arises between the citizen 's fundamental right to hold property and a restriction sought to be imposed upon that right in the interest of the general public, courts take the precaution of confining their decision to the points raised before them and not to lay down unduly broad and generaI propositions.
As in the decision of constitutional questions of this kind, so in industrial adjudication it is always a matter of making a reasonable adjustment between two competing claims.
The fundamental right of the individual citizen is guaranteed and its reasonable restriction is permissible in the interest of the general public, so, the claims of the interest of the general public have to be weighed and balanced against the claims of the individual citizen in regard to his fundamental right.
So too, in the case of industrial adjudication 939 the claims of the employer based on the freedom of contract have to be adjusted with the claims of industrial employees for social justice.
The process of making a reasonable adjustment is not always easy, and so, in reaching conclusions in such a matter, it is essential not to decide more than ' is necessary.
If industrial adjudication pur ports to lay down broad general principles, it is likely ;to make its approach in future case#; inflexible and that must always be avoided.
In order that industrial adjudication should be completely free from the tyranny of dogmas or the sub conscious pressure of pro conceived notion, it is of utmost 'importance that the temptation to lay down broad principles should be avoided.
In these matters, there are no absolutes and no formula can be evolved which would invariably give an answer to different problems which may be posed in different cases on different facts.
Let us, therefore, revert to the facts of this case and decide whether the appellant 's attack against the validity of the propriety of the award can be sustained.
In dealing with the narrow dispute presented by this appeal, it is necessary to remember that all the employees of the appellants are governed by the same terms and conditions of ,service, except in regard to earned leave.
It is only in respect of this term and condition of service that a distinction is made between workmen employed on or before 1.7.
56 and those employed after that date.
Generally, in the matter of providing leave rules, industrial adjudication prefers to have similar conditions of service in the same industry situated in the same region.
There is no evidence adduced in this case in regard to the condition of earned leave prevailing in the comparable industry in this region.
But we cannot ignore the fact that this 940 very concern provides for better facilities of earned leave to a section of its employees when other terms and conditions of service are the same in respect of both the categories of employees.
It is not difficult to imagine that the continuance of these two different provisions in the same concern is likely to lead to dissatisfaction and frustration amongst the new employees.
It cannot be denied that the existence of industrial peace and harmony and the continuance of the said peace and harmony are relevant factors, but their importance should not be unduly exaggerated.
If a frivolous demand is made by the employees and it is accompanied by a threat that non compliance with the demand would lead to industrial disharmony or absence of peace, it would be unreasonable to treat the thrust as relevant in deciding the merits of the demand.
In this connection, it is necessary to remember that the continuance of harmonious relations between the employer and his employees is treated as relevant by industrial adjudication, because it leads to more production and thereby has a healthy impact on national economy, and so it is necessary that in dealing with several industrial disputes, industrial adjudication has to bear in mind the effect of its decisions on national economy.
In their zest to fight for their respective claims, the parties may choose to ignore the demand of national economy, but industrial adjudication cannot.
If the demand is plainly frivolous, it has to be rejected whatever the consequences may be.
In the present case, the argument that the continuance of two different provisions would lead to disharmony cannot, however, be treated as frivolous.
It is difficult to understand on what principle the discrimination is based.
The only argument urged in support of the discrimination is the employer 's right to provide for new terms of service to the new entrants in service.
In our 941 opinion, the validity of this argument cannot be accepted in the circumstances of this case.
Take the case of the wages or dearness allowance which the Appellants paid to their employees.
Would the appellants be justified in assertion of their right of freedom of contract to offer less favourable terms of wages or dearness allowance to employees who would be employed after a certain date ? If the general point raised by the learned Solicitor General is upheld without any qualifications, then it would be open to the employer to fix different wages for different sets of workmen who are doing the same kind of work in his concern.
We have rarely come across A case where such a claim has either been made or has been upheld.
It is well known that both industrial legislation and industrial adjudication seek to attain similarity or uniformity of terms of service in the same industry existing in the same region, as far as it may be practicable or possible, without doing injustice or farm to any particular employer or a group of employers That being so, we do not think the Tribunal was in error in holding that in the matter of earned leave, there should be uniformity of conditions of service governing all the employees in the service of the appellants.
There is another aspect of this question to which reference must be made.
This is not a case in which the financial liability imposed on the employer by the award when it directed the employer to grant the earned leave of 30 days to all the employees, is very heavy; and so, having regard to the fact that the appellants have been conducting their business in a profitable way and their financial position is distinctly good, no attempt has been made before us and rightly, to suggest that the burden imposed by the award is beyond their means.
it is not disputed that the total annual liability which 942 may accrue as a result of the award may not exceed Rs. 1,000/ , and it is also common ground that the appellants are a flourishing concern and their not profits which were in the neighbourhood of a lac of rupees in 1949, have shown an upward tendency and have reached almost rupees eight lacs in 1959.
That is another factor which has to be borne in mind in dealing with the present dispute.
It is not suggested by the appellants that the provision made by them for earned leave in respect of old employees is unduly generous of extravagant and so, it has become necessary to invoke the provisions of section 79 of the in respect of new employees.
On the other hand, earned leave provided by section 79 is the minimum statutory leave to which employees are entitled and if the appellants thought it necessary to provide for additional earned leave to their old employees, there is no reason why they should not make a similar provision in respect of the new employeesas well.
We ought to add to that on the record, it does appear that the appellants are good employees and they are treating their employees in a liberal manner.
It, however, appears that they have brought the present dispute to this Court more for asserting the general principle of the employer 's right to fix conditions of service with his new employees than for vindicating any real or substantial grievance against the award which would prejudicially affect their interest.
In our opinion, having regard to the nature of the dispute raised in the present appeal and the other relevant facts and circumstances, it cannot be said that the Industrial Tribunal erred in law in directing the appellants to provide for the same uniform rule as to earned leave for all their employees.
We are satisfied that the award under appeal cannot be set aside only on the academic or abstract point of law raised by the appellants.
943 The result is, the appeal fails and is dismissed with costs.
MUDHOLKAR, J. This is an appeal by special leave from the award of the Industrial Tribunal, Punjab.
The appellants before us are the trustees of 'The Tribune ' Ambala Cantt.
and the opposite party to the appeal consists of the workmen of the Tribune through their two unions, one the Tribune Employees ' Union and the other the Tribune Workers ' Union.
The Trust was founded in Lahore by the late Sardar Dayal Singh Majithia on February 1, 1881.
It publishes the newspaper "Tribune".
By the will of the founder dated June 15, 1895 the Management of the Tribune was vested in a public trust in September, 1898.
After the partition of India the offices of the newspaper had to be shifted from Lahore and they are now located at Ambala.
The Trust naturally had to leave the entire machinery and other equipment of the Tribune Trust along with its immovable property in Lahore.
The value of that property is stated by the appellants to be Rs. 25 lakhs or so.
The Trust was however, able to transfer its bank accounts and Government securities to India a few days before the partition.
With the help of these assets it reestablished the Tribune Press and office at Ambala and established new machinery at a cost of Rs. 15 lakhs or so.
Gradually the Trust has been able to rehabilitate its fortunes.
It is not disputed before us that despite the heavy loss entailed by the Trust by reason of being uprooted from Pakistan, the employees quite a number of whom are old employees who were able to migrate to India, have been treated with a great deal of consideration.
After the Tribune started making profits the employees are being given bonus every year.
Moreover even before the Employees Provident Fund scheme applicable to newspaper 944 industry and even before the scheme of gratuity for all categories of employees were enforced by statute be Tribune had provided for both provident fund and gratuity to its employees.
In addition to this it has provided free housing accommodation to its workmen in two colonies, one built in 1955 with the help of subsidy from the Government of India and the other in the year 1958 at a cost of Rs. 6 lakhs.
The quarters in the two colonies are provided with modern sanitation Besides that, there are extensive recreation grounds, lawns etc., in these colonies.
Even electricity is supplied free to the employees.
Several other amenities are also provided by the Trust.
It would thus appear that the welfare of the employees has been kept prominently in mind by the trustees.
Even so, some disputes arose between the management and the employees.
Ultimately eight demands made by the employees were referred by the Government of Punjab for adjudication under section 10(1) of the industrial Disputes Act, 1947 (14 of 1947) to the Industrial Tribunal, Punjab, Patiala constituted under s.7A of the Act.
Four demands were rejected by the Tribunal as having been withdrawn, one was settled amicably and on the remaining three the Tribunal has made its award.
One of those three demands is : "Whether the employees in the Press Section should be allowed 30 days ' earned leave with full wages for every 11 months ' service without discrimination ?" The Tribunal hold in favour of the workmen and it is only against this part of the award of the Tribunal that the trustees have come up in appeal before us.
Certain facts have to be stated in connection with this demand.
The Trust had framed certain rules governing the conditions of service of 945 its employees.
Rule 57 of those rules deals with leave and reads thus : "The Lino Operators shall be entitled to 30 days ' leave of all description (luring the course of a calendar year, which will be with pay plus all allowances.
Press employees, other than the Lino operators may be granted leave by the competent authority from time to time as the authority may determine.
Such leave shall be without pay or allowance.
They shall, however, be entitled to in the month of January every year to receive a sum amounting to the leave pay plus ordinary dearness allowance for the preceding month of December for the period of II months ' service or to a proportionate amount for a lesser period.
In addition, Press workers will be entitled to quarantine leave on the terms mentioned in Rule 53".
On July 1, 1956 a new rule was framed which reads as follows : "(1) Subject to the provisions of the Indian , every workman in the service of the Tribune on the 1st July, 1956, will be entitled to 31 days ' leave with wages,, after having worked for a period of II months.
This leave shall cease to be earned, when it amounts to 60 days.
(2) A workman joining the service of the Tribune after the 1st July, 1956 will be entitled to leave, in accordance with the provisions of section 79 of the Indian .
" Under the old rule the Lino Operators in the press section were allowed 30 days ' leave on full wages 946 including dearness allowance.
The other workers in the press section were, however, allowed not leave with pay, but 30 days ' wages in the month of January calculated on the basis of the full wages drawn in the preceding month provided that an employee had served for a period of II months till the beginning of the month of January.
If he had served for a lesser period he was to be paid propor tionately less amount.
Bearing in mind the fact that in industries leave, vacation and holidays with pay are regarded as supplemental pay practices (see Collective Bargaining principles and Cases by John T. Dunlop and James J. Healy, revised edn., p. 433), in substance even the employees in the press section other than lino operators got the same money equivalent of the leave allowed to lino operators.
It may be mentioned that these other press section employees were also entitled to take leave but the rule provided that they will Dot be paid any pay and allowances for such leave.
That was perfectly reasonable because they got pay in lieu of paid leave for an additional period in the month of January.
However, even this slight distinction in the mode of conferring benefits on the two categories of employees was abolished by the new rule which came into force on July 1, 1956, and all employees in the press section upto that date were made eligible for the grant of 30 days ' leave with wages after having worked for a period of 11 months.
It 'May be mentioned here that the of 1948 provided in a. 79 that every worker who has worked for a period of 240 days or more in a calendar year shall be given at least one days ' leave for every 20 days of service.
No doubt this was the minimum provided by the Act but since the press section is governed by the it was open to the Trust to modify its rules with regard to all employees of this section and grant leave according to the provisions of this 947 section.
There is no prohibition in law against doing so but still it did not wish to revise unfavourably its rules regarding the quantum of leave to its existing employees.
It, however, felt that in view of the statutory provision there was no obligation upon it to provide for a longer leave than that laid down in section 79 of the .
It was for this reason that it provided that all employees engaged on or after July 1, 1956, will be granted leave according to the provisions of section 79 of the , the idea being that eventually all employees should be governed by the rules.
Apparantly, to forestall this consequence the employees contend that the new rule has introduced discrimination.
That is why they raised a dispute relating to this matter and it was referred to the Tribunal along with the other disputes they had raised.
The Tribunal, dealing with this matter, has observed as follows : "It may be of some importance to note that till 1st July, 1956 the workmen who had entered service before that date and those who had been employed thereafter were in the matter of leave compensation, treated alike.
It was on 1st July, 1956 for the first time that the workmen who had been in service before that date were given 30 days ' paid leave but for now entrants the number of days of that leave was reduced to that permitted by section 79 of the .
The Union 's contention is that to allow 3 days ' earned leave with full wages in an year to a certain group of workmen in Press Section and to deny that benefit to the rest of the workmen of that section simply on the score of their having entered service after 1st July, 1956, is to acknowledge the prominent element of discrimination which has been res 948 ponsible for the heart burning, resentment and dissatisfaction of the workmen.
It is further urged with emphasis that all workers for the Press Section should in the matter of earned leave be treated equally.
For the long space of seven years even after the had come into force the management had continued to treat all workmen of the Press Section alike irrespective of the date of their employment.
There is no reason why a distinction of a discriminatory nature and effect be made between the two artificially created sets of workmen belonging to the same section.
" It seems to me that the Tribunal 's ultimate finding is vitiated by a misconception entertained by it.
The first sentence in the above quotation would show that the Tribunal thought that those persons who were employed after July 1, 1956 were treated in the matter of leave on par with those employed before July 1, 1956, ,till July 1, 1956" but were sought to be discriminated against only thereafter.
It is difficult to understand how persons who were employed after July 1, 1956, could possibly be treated before July 1, 1956, equally with employees who were in service on that day.
Apparently it is this confusion in the mind of the Tribunal which has influenced its ultimate conclusion.
That apart, it is quite clear that what the Trust has done is to put in one category persons who enjoyed in substance the same kind of benefit uptil July 1, 1956 and permit them to enjoy the benefit they bad hitherto enjoyed.
Then it put in a separate category those persons who could never possibly lay any claim to have enjoyed a similar benefit because they were not its employees till July 1, 1956, and decided that they will get leave only as provided in section 79 of the .
All persons in each category are intended to be alike and, therefore the 949 question of discrimination does not in fact arise.
It was, in my opinion, open to the management to offer to the new entrants now terms.
When the new entrants entered service accepting the new terms and knowing fully well that one of those terms i. e., the one relating to annual leave was different and less beneficial from the one which obtained in the case of the old employees, it is not reasonable for them now to say that they are being discriminated against.
The Tribunal, however, thinks otherwise.
It has held that the Trust, by treating the now entrants less favourably in the matter of leave than its old employees has practiced discrimination and that this discrimination has caused heart burning.
Presumably, therefore, the Tribunal felt impelled to interfere and direct that the new entrants should be treated ' in the matter of leave on par with the old employees in ' order to avoid industrial unrest which may result 'from ' heart burning amongst the new entrants.
What we must first consider is whether the existing of heart burning has at all been established in this case.
It is said that the continuance of different provisions in the same concern has caused heart burning, dissatisfaction and frustration among the new employees and this would lead to unrest in the industry.
For one thing, there is no evidence before us to show that the new employees are making a very serious grievance of the fact that they would get a few days less of leave than the old employees.
All that Mr. Ramamurti could point out to us was the statement in the evidence of Som Nath, A. W. 7.
that he should also be given 30 days, privilege leave in a year.
Merely saying that he should be given privilege leave does not mean that he is harbouring bitterness in his mind.
Apart from that it would be extremely unreasonable to take notice of bitterness, if any, in the minds of 950 these new employees in regard to this matter because.
as already stated, they voluntarily took up employment knowing that they would got less leave than the old employees.
Som Nath 's statement is no evidence of the fact that there is any heart burning.
To say that the very fact that two sets of people are governed by different rules will necessarily lead to heartburning, without establishing anything more, such as inadequacy of the benefit enjoyed by one set will be to ignore that such differences are a matter of common occurrence and no reasonable person is expected to magnify their consequences.
It seems to me, further, that the workers as a body did not think much of the distinction between the extent of leave enjoyed by old and new employees because during all the four years while the rule has been in force they raised no protests.
No doubt they did ultimately make a protest in the year 1960 when the dispute was referred to the Tribunal.
But then, this was not the sole dispute but was one of eight disputes, at least four of which were withdrawn by the Unions, apparently after realising that there was no substance in them.
The mere fact that they did not withdraw this dispute would not of itself indicate that they regarded it as of great importance.
It may well be that they did not withdraw it in an erroneous belief that anything which is characterised as discrimination will at once earn the sympathy of Industrial Tribunals and the Courts.
Even assuming that is creating heartburning amongst the employees the question arises whether they have a real grievance.
They say that the Trust has discriminated against the new entrants and this is their grievance.
In this connection it may be observed that the more refusal or failure of an employer to treat equally all its employees doing a particular kind of work would not necessarily amount to discrimination.
The subject of is d 951 crimination has come up for consideration before this Court in a largo number of cases in which a complaint has been made that the equality clause of the Constitution, article 14, has been violated.
This Court has held that It is open to the State to make reasonable classification both as regards persons and as regards things (see in particular Budhan vs State of Bihar(1) ; Khandige Sham Bhatt vs Agricultural Income tax Officer (2); This Court has laid down that a classification made by the, State will be reasonable provided that (1) it is founded on an intelligible differentia which distinguishes persons or things that are grouped together from other left out of the group; and (2) that the differentia has a rational relation to the object sought to be achieved by the statute.
In the State of Madhya Pradesh vs Gwalior Sugar Co. Ltd. (4); it has been held that it is permissible to make classification on historical grounds, by putting in one class one set of persons or things and in 'other all those left out from the first class Court.
In Ramjilal vs Income tax Officer, Mohindargarh(5) this Court has held that a taxing law may provide that a law imposing a new rate shall not apply to pending proceedings.
In other words this Court has upheld the law where one rate of income tax shall be applicable to persons whose cases were pending for assessment and another rate to persons whose cases were not so pending.
Thus, this Court has hold as reasonable classification made by reference to difference in time.
In Sardar Inder Singh vs The State of Rajasthan (6) this Court has held that it is open to the legislature to decide the date from which a law should be given operation and that the law made by it cannot be challenged as discriminatory because it (1) ; (2) ; (3) C A. Nos. 98 & 98 of 1959 decided on November 30, 1960.
(4) ; (5) ; 952 does not apply to prior transactions.
Thus in this case also classification made on the basis of difference in time has been upheld.
Finally in Hathising Mfg. Co. vs Union of (India (1) this Court has held that there is no discrimination if the law applies generally to all persons who come within its ambit as from the date on which it is made operative.
This case likewise accepts that it will not amount to discrimination if one set of persons is treated differently from another by reference to a point of time.
It would follow from these decisions that if the State as an employer provided that persons entering its service after a certain date will be governed by a set of condition which will be different and, may be less favourable than those governing the existing entrants that law will not be open to attack under article 14 of the Constitution on the ground that it discriminates between one set of employees and another.
In my judgment the principle laid down by this Court that reasonable classification does not amount to discrimination is of general application.
Therefore, when an employer 's action is challenged before an Industrial Tribunal as discriminatory, the Tribunal will also have to bear it in mind.
For if an action cannot be regarded as discriminatory and violative of article 14 of the Constitution because it is based on a reasonable classification an identical action of a private employer affecting his employees can also not be regarded as discriminatory.
The content and meaning of 'discrimination ', wherever the term is used, must necessarily be the same and we cannot adopt one standard for judging whether an action when it emanates from the State, is discriminatory or not and another standard for judging an identical action, when it emanates from a private citizen.
Looked at this way, I have no doubt that the Trust has not practised what can in law be regarded as discrimination against its now entrants (1) A.I.R. 1960 S.C. 931. 953 by allowing them lesser leave than it has allowed to its old entrants.
I may point out that it is not an unusual thing even in Government service to find new entrants being treated differently in the matter of leave, emoluments etc., from the old entrants.
It is a well know fact that in most of the provinces of India in the year 1932 or 1933 pay scales in various categories of Government service were revised and new scales less favourable than the old ones were introduced.
Therefore, a largo body of men were performing the same duties as other large body of men but were getting lesser pay than the latter.
That happens often, is happening today in several of the recently reorganised States and may happen hereafter also.
But merely because new terms of service are less favourable than the old ones, would it be correct to say that there is discrimination between the new entrants and the old entrants? As already pointed out, it is open to the employer to offer different and even less favourable terms to new entrants and if the new entrants entered service with their eyes wide open they cannot reasonably complain of being discriminated against.
Mr. Ramamurthi who appears for the employees, however, contends that it is open to an employee to take up employment on the existing conditions of service and immediately start clamouring for improving his conditions of service.
It is sufficient to say that without establishing that there was a change in circumstances subsequent to the time when a workman accepted service a demand for improvement in the conditions of service cannot, with justice, be entertained unless of course the original conditions of service were plainly unfair.
Mr. Ramamurthi does not say that the term regarding leave in the rule applicable to the new entrants is unfair in the sense that the 954 leave allowed is inadequate.
But, Mr. Ramamurthi said that where a service condition causes heartburning amongst two sections of employees discontent and unrest would be its natural outcome and so it is open to the Tribunal to revise the condition and thus eliminate that discontent.
I am unable to accept the argument.
No doubt, the provisions of the Industrial Disputes Act are wide enough, like those of other legislative enactments placed on the statute book, for promoting the welfare of the employees to permit an Industrial Tribunal to override the contract between an employer and his employees governing conditions of service of the employees.
But it does not follow from this that no sooner a reference of a dispute is made to a Tribunal for adjudication than the contract of service ceases to have any force.
The power to interfere with a contract of service can only be resorted to in certain limited circumstances.
As has been pointed out by this Court in State of Madras vs C. P. Sarathy(1), the adjudication by a Tribunal is only an alternative form of settlement of disputes on a fair and just basis, having regard to the prevailing conditions of the industry.
Bearing in mind this principle, it would follow that it is only for securing a fair and just settlement of an industrial dispute that the Tribunal can over ride the contract between the parties.
For deciding what is fair and just, it is not enough for the Tribunal to say that a particular demand be granted for doing social justice.
What it must ascertain is whether the grievance is a real one and whether it is of a type of which the employees can justly complain.
In Muir Mills Co., Ltd. vs Suti Mills Mazdoor Union, Kanpur (2) it has been pointed out social justice is a very vague and indeterminate expression and no clear cut definition can be laid down which will cover all the situations and that the fancy of an (1) (2) ; 955 individual adjudicator is not social justice.
But, of course.
, that does not mean that social justice has no place in the settlement of industrial disputes.
It is indeed a relevant consideration but it is well to bear in mind that doing social justice in an industrial dispute is not merely doing justice between the employer and the employee.
The question of doing anything in the interest of social justice comes in when the State has a social interest in a situation or in an activity because of its repercussions on the community at large.
Therefore, when the social interest of the community is involved in a situation or an activity, the interests of all parties who are affected by it have to be borne in mind, the parties being not merely the employers and the employees but also the community at large which includes also the consumers.
So, where a direction in an award is sought to be sustained on the ground that it was made with the intention of promoting social justice it must be shown that the adjudicator had borne in mind also the interests of the community.
This aspect of the matter has not been borne in mind by the Tribunal and, therefore, the relevant direction in its award cannot be sustained on the ground that it is actuated by the need of promoting social justice.
The ground given by the Tribunal, as already stated, is that there is discrimination and the existence of the discrimination will be a perpetual source of unrest.
Granting, again, that there is discrimination it is difficult to appreciate now it can be a perpetual source of bitterness for.
with the efflux of time, the old employees will gradually be fading out till at last there will be left only that category of workers to which the provisions of is.
79 of the apply.
956 Nor again.
do I think the fact that a dispute a comparatively of minor character and that the financial burden entailed on the employer is inconsiderable, a matter which would entitle the Tribunal to alter a contract between an employer and his employees.
In fact these factors are not relevant for consideration.
If the leave terms offered to new employees were on their face unfair, the mere fact that the employer did not have the capacity to pay would not have been allowed to influence the determination of the issue.
I would go further and say that since the Trust has provided for its new entrants such leave facilities as are recognised by the itself as fair, it was not open to the Tribunal to revise the relevant term of the contract,.
For all these reasons I am of opinion that the appeal must succeed and the award of the Tribunal should beset aside in so far as it refers to the demand made by the employees for grant of the same leave to new entrants as is being granted to old employees.
By COURT.
In accordance with the opinion, of the majority, the appeal fails and is dismissed with costs.

summary/full:
On July 1, 1956, the appellants made a rule that every workman employed on or before that date would be entitled to 30 days leave with wages after working for II months and workmen employed after that date would be entitled to earned leave in accordance with the provisions of s.79 of the Indian .
The State Government referred for adjudication to the Industrial Tribunal the question whether all the employees should be allowed 30 days earned leave with full wages for every II months ' service without discrimination.
The Tribunal held that ail the workmen were entitled to 30 days earned leave without making any distinc tion between workmen who joined before July 1, 1956, and those who joined subsequently.
The appellants contended that they were entitled to fix the terms of employment on which they would employ the workmen and it was open to the workmen to accept those terms or not and the tribunal was not justified in interfering in such a matter.
Held, per Gajendragadkar and Das Gupta, JJ., that the Tribunal was justified in directing the appellants to provide for the same uniform rule as to earned leave for all their employees.
The doctrine of absolute freedom of contract had to yield to the higher claims for social justice and had to be regulated.
In industrial adjudication no attempt should be made to answer questions in the abstract for evolving any general or inflexible principles.
Each dispute has to be decided on its own facts without enlarging the scope of the enquiry.
If some principles have to be followed or evolved, care has to be taken not to evolve larger 931 principles.
In order that industrial adjudication should be free from the tyranny of dogmas or the sub conscious pressure of preconceived notions it is important that the temptation to lay down broad principles should be avoided.
Accordingly it is not necessary to decide the broad contention whether industrial adjudication can interfere with the contract between the employers and the employees.
In the present case, all the workmen were governed b the same terms and conditions of service, except in regard to earned leave.
The discrimination was not based upon any principle and was bound to lead to disaffection amongst the new employees.
The financial burden imposed by the award on the employers was slight.
The provisions for earned leave in respect of old employees were not unduly generous or extravagant.
Earned leave provided for by s.79 was the minimum statutory leave.
If the appellants thought it necessary to provide for additional earned leave for their old employees, there was no reason why they should not make a similar provision in respect of new employees as well.
Western Indian Automobile Association vs Industrial Tribunal, Bombay, and Bharat Bank Ltd. vs The Employees of Bharat Bank Ltd. , referred to.
Per Mudholkar, J. The Tribunal was not justified in interfering with the rule made by the appellants.
It was open to the appellants to grant leave according to s.79 , to all the employees but still they did not wish to reduce the leave of 30 days which they were already giving to the old employees.
The appellants have put into one category persons who enjoyed the same kind of benefits until July 1, 1956, and have put in another category persons who did not enjoy such benefits.
All persons in each category were treated alike, and the question of dis crimination did not in fact arise.
If the State had pro vided that persons entering its service after a certain date would be governed by a set of conditions which were different and less favorable than those governing the existing servants its action would not be open to an attack under article 14 of the Constitution.
An identical action of a private employer could also not be regarded as discriminatory.
An award made with the intention of promoting social justice must take into consideration the interests of the community.
Even if there was discrimination it could not be a perpetual source of bitterness as gradually the old employees would fade out 932 till only one category of workers would remain.
The facts that the dispute was comparatively of a minor character and that the financial burden imposed on the appellants was small did not entitle the tribunal to alter the contract between the employer and employees.
Since the appellant had provided for its new entrants such leave facilities as were recognised by the itself as fair, it was not open to the Tribunal to revise the relevant term of the contract.
Budhan vs State of Bihar, A.I.R. 1956 section C. 191, Khandige Sham Bhat vs Agricultural Income Tax Officer [1963] 3 S.C.R. 809, State of M.P. vs Gwalior Sugar Co. Ltd. C.A. Nos. 98 & 99 of 1959, dated 30.1 1.60, Ramjilal vs Income tax Officer, Mohindargarh, ; , Sardar Inder Singh vs The State, of Rajasthan, ; and Hathisingh .Mfg.
Co. vs Union of India, A.1 R. 1960S. C. 931 referred to.