judgement:
Appeal No. 632 of 1962.
Appeal by special leave from the judgment and order dated January 5, 1960 of the Allahabad High Court in Civil Revision No. 325 of 1957.
G.N. Kunzru, B.C. Misra, P.K. Chakravarti and Om Prakash, for the appellants.
J. P. Goyal and S.P. Singh, for the respondents.
This appeal by special leave is directed against the judgment of the Allahabad High Court (Dhavan, J.) allowing the revision under section 115, C.P.C., and dismissing the suit brought by the appellants hereinafter referred to as the plaintiffs.
The relevant facts for the purpose of ,appreciating the points raised before us are as follows: The four plaintiffs, out of which three are appellants before us the fourth having died, brought a suit for damages against the six defendants (one defendant had in the meantime died and four are respondents before us).
The allegations in the plaint, in brief, were that the plaintiffs and the defendants were members of an ,association called Parsi Zoroastrian Anjuman; that the defendants, alongwith some other members of the association, formed a group and each of them conspired among themselves to injure and harass the plaintiffs and a few others in various ways; that at a meeting held on May 5, 1954, in connection with the election of Trustees, when defendant N.A. Guzder occupied the chair, he gave a ruling that the plaintiffs Kershasp section Gandhi and B.T.J. Shapoorji, since deceased, were unfit candidates for the office of Trustees and thus prevented them from seeking election, and contrary to the rules of the Anjuman and without taking votes declared the defendant, F.J. Gandhi, and one A.F. Cama duly elected.
It was further alleged that on 961 July 3, 1954, another meeting of the Anjuman was held when the plaintiffs Khushro section Gandhi and Framroze section Gandhi were candidates for election to the office of the trustees, and defendant F.J. Gandhi gave a perverse ruling rejecting the nominations of the above plaintiffs and after taking votes declared G.T. Shappoorjee as duly elected trustee; that by the aforesaid rejections the plaintiffs had suffered an injury for which defendants Nos.
1 to 6 were jointly and severally liable and the plaintiffs were entitled to recover damages from the defendants.
The plaint was filed on January 21, 1955.
Before any written statement was submitted, on February 13, 1955 the sixth defendant section Rabadi, entered into a compromise with the plaintiffs.
The terms of the compromise were: "1.
I, Shavak Dorabjee Rabadi, defendant No. 6 have considered the subject matter of the suit and am sincerely sorry and apologise to the plaintiffs unconditionally for whatever I have done.
I realise that I was m error *and was misguided.
The plaintiffs above named accept the apology tendered by Shri Shavak Dorabjee Rabadi defendant No. 6 and the suit against him may be disposed of treating the aforesaid apology and its acceptance by the plaintiffs as a settlement of the dispute between the plaintiffs and the defendant No. 6. 3.
The plaintiffs do not claim any costs against the defendant No. 6 and defendant No. 6 will bear his own costs.
It is therefore prayed that the claim against defendant No. 6 may be disposed of in terms of the above settlement.
" A decree was passed in terms of this compromise against defendant No. 6.
On May 14, 1955, the other defendants filed a written statement and inter alia alleged: "That the release of defendant No. 6 Sri section Rabadi, an alleged joint tort feasor and the compromise entered into behind the back of the answering defendants with him in full settlement of their suit for damages, appears to be collusive and dishonest and the release by the plaintiffs of defendant No. 6 from his joint liability as a tort feasor has in law extinguished the plaintiffs ' rights to sue the others remaining defendants and claim damage from them." 962 It was further alleged that "the four plaintiffs could not be legally allowed to totalise the sum of their individual damage, alleged to have been suffered, and thereby procure the trial of the suit in the court of higher jurisdiction," and that the suit had been purposely over valued.
In a statement dated March 17, 1956, the plaintiffs clarified that the "damages are being claimed by the plaintiffs in respect of all the facts mentioned in the plaint and particularly as a result of the facts that have been mentioned in paragraphs 17 and 19 the plaint", and further "that on account of all the facts complained of each plaintiff is entitled to claim Rs. 10,100 as damages but the plaintiffs have claimed only Rs. 10,100 and have given up rest of the claim.
" Two of the issues framed by the Civil Judge, may be set out: "Issue No. 5.
What is effect of the compromise between plaintiffs and defendant No. 6, as against rights of the other defendants ? Is the suit not maintainable against other defendants ? Issue No. 11.
Is the court fee paid by the plaintiffs insufficient ?" By order dated September 18, 1956, the Civil, Judge held that the court fee paid by the plaintiffs was insufficient and that there was a deficiency of Rs. 905/12/ in the court fee which the plaintiffs had to make good.
The plaintiffs were given 15 days time to make good the deficiency.
Instead of paying the money the plaintiffs applied under O.VI, r. 17, C.P.C., for amendment of the plaint.
The plaintiffs stated in this application that they would in consideration of the order of the Court split the amount of Rs. 10,100/ into two portions claiming Rs. 5,050/ each in respect of the two separate incidents dated July 3, 1955, and May 5, 1955, respectively.
The defendants filed an application contending that as the plaintiffs had failed to make good the deficiency in the court fee within the time given, the plaint should be rejected in view of the provisions of the O. VII, r. 11, C.P.C. and section 6, U.P. Court Fees Act.
By order dated November 28, 1956, the Civil Judge allowed the plaintiffs ' application for amendment on payment of Rs. 30/ as costs, and also rejected the defendants ' application.
Against this order the defendants filed a revision.
Dhavan, J., first dealt with the point whether the plaintiffs could renounce a part of the claim instead of making good the deficiency in court fee.
He came to the conclusion that the suit contained four causes of action, and that the plaintiffs had to pay court fee on four separate causes of action of the value of Rs. 2,525/ each.
As the learned counsel for the plaintiffs had 963 given an undertaking to make good any deficiency in court fee, Dhavan, J., directed the plaintiffs to pay court fee on the four separate causes of action valued at Rs. 2525/ each.
He also directed an amendment to be made in the plaint.
The learned Judge felt that it would be in the interest of justice that the question covered by issue No. 5 being one of law should be decided by him in the revision.
It appears that the counsel for both parties conceded that the Court had power to decide the issue as the entire record was there, although the learned for the plaintiffs felt that the decision should be left to the Trial Court.
The learned counsel for the appellants contends before us that the High Court had no jurisdiction to decide issue No. 5 in a revision.
He says that the subject matter of the revision was the order of the Civil Judge dated November 28, 1956, and the High Court could not decide any other point and convert itself into an original court.
The learned counsel for the respondents tried to justify the decision regarding jurisdiction of the High Court under section 24, C.P.C.
This section inter alia, provides that the High Court may withdraw any suit, appeal or other proceeding pending in any Court subordinate to it and try and dispose of the same.
We are unable to appreciate how the order of the learned Judge can be justified under section 24.
He has not purported to withdraw 'any suit and try the same.
What he has done is to try an issue arising in a suit in a revision arising out of an interlocutory order.
It seems to us that the High Court, even if the parties conceded, had no power to decide the issue.
But if we set aside the order of the High Court and remit the case to the Civil Judge to try it according to law, the Civil Judge would feel handicapped in deciding the case properly because he will feel bound to follow the opinion given by the learned Judge on issue No. 5.
Under the circumstances we heard arguments on the issue.
Dhavan J., following the English Common Law, held that the decree against Rabadi was complete accord and satisfaction and the cause of action against all the defendants being one and indivisible, the decree operated as a bar against further proceedings against the remaining joint wrong doers.
Winfield on Tort (8th edn.) p. 661 states the English Law thus: "The liability of joint tort feasors is joint and several, each may be sued alone, or jointly with some or all the others in one action; each is liable for the whole damage, and judgment obtained against all of them jointly may be executed in full against any one of them.
At common law, final judgment obtained against one 964 joint tort feasor released all the others, even though it was wholly unsatisfied.
This was established in Brinsmead vs Harrison(1) and the reason put by Blackburn J., was Interest reipublicae ut sit finis litium.
Kelly C.B. urged that if the rule were otherwise, then in a second action the second jury might assess an amount different from that in the first action and the plaintiff would not know for which sum he should levy execution.
The rule was abolished by the Law Reform (Married Women and Tortfeasors) Act, 1935.
It has long been settled that the release of one joint tortfeasor releases all the others, because the cause of action is one and indivisible.
This rule has not been affected by the Act of 1935.
It applies to a release under seal and to 'a release by way o,f accord and satisfaction, and probably to nothing else.
A mere covenant or agreement not to sue, as distinguished from an actual release, does not destroy the cause of action, but merely prevents it from being enforced against the particular tortfeasor with whom it is made.
" That was not the law in England in the beginning.
The history of the law on this point is set out in William 's 'Joint Torts and Contributory Negligence ' (p. 35 footnote) as follows: "In Y.B. (1305) 33 35 E. 1, R.S. 7, it was apparently held that in trespass against four, a verdict against two did not of itself prevent continuance against the other two.
The verdict may not, however, have been embodied in a judgment.
The former rule appears more clearly from Y.B. (1342) 16 E. 3, 1 R.S. 171, where judgment against one did not bar the action against the others.
That the parties were joint tortfeasors appears plainly from the note from the record, ibid, 175 n. 7.
See also Y.BB, E. 3.
7b, pl. 4; (1412/ 13) H. 14 H. 4.22b, 131.
27; in the latter it is said that in trespass against two, if one be condemned and the plaintiff has execution against him with satisfaction, he shall be barred against the others thus implying that the mere judgment would not bar.
Hickman vs Machin (1605) 1 Ro.
896, (F) 4, 7, from which case, however (sub.
Hickman vs Payns), a different inference is drawn in Broome vs Wooton ; (1605) Yelv.
67, The first discussion of the question in the Year Books is in Y.B, (1441) M. 20 H. 6, 11a, pl. 24, where X had first sued A, B, and C in trespass and (1) 965 obtained judgment against A, who alone appeared to the writ; later X, not having levied execution under this judgment, sued B. Paston and Fulthorpe expressed opinions that he was not barred by the first judgment, but Newton C.J. thought that he was.
In Y.B. (1495)M. 11 Ii. 7.
5b, pl. 23 (Bro.
Trespas 428) it was said that one can release one joint tortfeasor after judgment ,against another without affecting that other; such a release would have been unnecessary if the judgment had discharged all other joint tortfeasors.
Y. BB.
(1474) T. 14 E. 4.
6a, pl. 2; (1475) T. 15 E. 4. 26b, pl. 3.
The rule was not settled in 1584, for it was then made a question whether even satisfaction following on judgment would discharge the others (above 9 n.2); and see Cocke vs Jennor (n.d.) Hob.
66; , , where it was said that if joint tortfeasors be sued in several actions, satisfaction by one would discharge the others; it was not said that judgment against one would discharge." The common law rule was first established by the case of Broome (Brown) vs Wooton(x) and the only reason given was that transit in rem judicatam.
Goldrel Foucard & Sons vs Sinclair and Russian Chamber of Commerce in London(2) Sargant, L regarded the rule in Brinsmead vs Harrison(a) highly technical.
The rule was changed in England by legislation vide The Law Reform (Married Women and Tortfeasors) Act, Pt.
II (25 & 26 Geo. 5, c. 30).
Section 6(1)(a) and (b) of that Act read as follows: "Where damage is suffered by any person as a result of a tort (whether a crime or not) (a) judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage; (b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, parent or child of that person, against tortfeasors ,liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under.
the (1) ; (2) , 192, (3) , 966 judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is opinion that there was reasonable ground for bringing the action.
" This provision has been adopted in other parts of the Commonwealth.
Recently in Egger vs Viscount Chelmsford(1) Lord Denning M.R., observed: "I cannot help thinking that the root of 'all the trouble is the tacit assumption that if one of the persons concerned in a joint publication is a tortfeasor, then all are joint tortfeasors.
They must therefore stand or fail together.
So much so that the defence of one is the defence of all; and the malice of one is the malice of all.
I think this assumption rests on a fallacy.
In point of law, no tortfeasors can truly be described solely as joint tortfeasors.
They are always several tortfeasors as well.
In any joint tort, the party injured has his choice of whom to sue.
He can sue all of them together or any one or more of them separately.
This has been the law for centuries.
It is well stated in Serjeant Williams ' celebrated notes to Saunders ' Report (1845 ed.) of Cabell vs Vaughan ; f g.
I. several persons jointly commit a tort, the plaintiff has his election to sue all or any number of the parties; because a tort is in its nature the separate act of each individual '.
Therein lies the gist of the matter.
Even in a joint tort, the tort is the separate act of each individual.
Each is severally answerable for it; and, being severally answerable, each is severally entitled to his own defence.
If he is himself innocent of malice, he is entitled to the benefit of it.
He is not to be dragged down with the guilty.
No one is by our English law to be pronounced a wrongdoer, or be made liable to be made to pay damages for a wrong, unless he himself has done wrong; or his agent or servant has done wrong and he is vicariously responsible for it.
Save in the case where the principle respondent superior applies, the law does not impute wrongdoing to a man who is in fact innocent." (1) , 264.
967 Gatley on 'Libel and Slander ' (Sixth Edition), in a footnote at p. 367, remarks regarding the approach of Lord Denning in Egger vs Chelmsford ( 1 ): "His approach is also not easy to reconcile with the law on the release o.f joint tortfeasors".
In the United States of America, in an early decision, Lovejoy vs Murray(2), the United States Supreme Court refused to follow the English Common Law.
Miller J. speaking on behalf of the Court, observed, after referring to Broome (Brown) vs Wooten ( 3 ) and other cases: "The rule in that case has been defended on two grounds, and on one or both of these it must be sustained, if at 'all.
The first of these is, that the uncertain claim for damages before judgment has, by the principle of transit in rem judicatam, become merged into a judgment which is of a higher nature.
This principle, however, can only be applicable to parties to the judgment; for as to the other parties who may be liable, it is not true that plaintiff has acquired a security of any higher nature than he had before.
Nor has he, as to them, been in anywise benefited or advanced towards procuring satisfaction for his damages, by such judgment.
This is now generally admitted to be the true rule on this subject, in cases of persons jointly and severally liable on contracts; and no reason is perceived why joint trespassers should be placed in a better condition.
As remarked by Lord Ellenborough, in Drake vs Mitchell, , 'A judgment recovered in any form of action, is still but a security for the original cause of action, until it be made productive in satisfaction to the party; and, therefore, till then, it can not operate to change any other collateral concurrent remedy which the party may have. ' The second ground on which the rule is defended is, that by the judgment against one joint trespasser, the title of the property concerned is vested in the defendant in that action, and therefore no suit can afterwards be maintained by the former owner for the value of that property, or for any injury done to it.
This principle can have no application to trespassers against the person, nor to injuries to property, real or personal, unaccompanied by conversion or change of (1)[1965] 1Q.B.D.248, (2) 18L. ed.
129,132 132 134.
(3) ; 968 possession.
Nor is the principle admitted in regard to conversions of personal property.
Prior to Brown vs Wootton, Cro.
73, the English doctrine seems to have been the other way, as shown by Kent, in his Commentaries, 2 Kent, Com. 388, referring to Shepherd 's Touchstone, Title, Gift; and to Jenkins, p. 109, ease 88.
We have already stated the only two principles upon which it rests.
We apprehend that no sound jurist would attempt, at this day, to defend it solely on the ground of transit in rem judicatam.
For while this principle, as that other rule, that no man shall be twice vexed for the same cause of action, may well be applied in the case of a second suit against the same trespasser, we do not perceive its force when applied to a suit brought for the first time against another trespasser in the same matter.
But in all such cases, what has the defendant in such second suit done to discharge himself from the obligation which the law imposes upon him, to make compensation ? His liability must remain, in morals and on principle, until he does this.
The judgment against his co trespasser does not affect him so as to release him on any equitable consideration.
It may be said that neither does the satisfaction by his co trespasser, or a release to his co trespasser do this; and that is true.
But when the plaintiff has accepted satisfaction in full for the injury done him, from whatever source it may come, he is so far affected in equity and good conscience, that the law will not permit him to recover again for the same damages.
But it is not easy to see how he is so affected, until he has received full satisfaction, or that which the law must consider as such.
We are, therefore, of opinion that nothing short of satisfaction, or its equivalent, can make good a plea of former judgment in trespass, offered as ,a bar in an action against another joint trespasser, who was not party to the first judgment." In India the English Law has been generally followed.
The learned counsel for the appellant relies on Ram Kumar Singh vs Ali Husain(1).
The facts in that case in brief were as follows.
The plaintiff sued several defendants jointly to recover damages (Rs. 325/ ) in respect of an alleged assault committed on him by (1) All. 173, 175, 969 and accepted Rs. 25/ representing his proportionate share of damages.
The High Court held: "The fact that one of several tortfeasors in the progress of a suit 'admits his liability ' as well as that of the other defendants and agrees to pay a sum of money in satisfaction of his liability does not exonerate the other defendants, who may be rouged responsible for the acts complained of, from liability.
In the case of Brinsmead vs Harrison(1), one of the tort leasors was sued for damages for trover of a piano and damages were recovered as against him.
In that case it was held that a suit against the other tortfeasor could not be sustained for the same cause of action, notwithstanding the fact that the judgment already recovered remained unsatisfied.
That is a very different case from the case before us.
In the case before us all the tortfeasors were sued in one and the same suit and judgment was not recovered only against the party who had admitted his liability in the progress of the suit and had agreed to pay a sum of money in satisfaction of his liability.
" This case was followed in Hat Krishna Lal vs Haji Qurban Ali(2).
But in these cases the decree was not passed first against the tortfeasor admitting liability.
The learned counsel for the respondent relies on Makhanlal Lolaram vs Panchamal Sheoprasad(5).
It was held in that case that "an accord and satisfaction in favour of one joint tortfeasor operates in favour of them all.
" Vivian Bose, A.J.C., observed: "An accord and satisfaction in favour of one joint tortfeasor operates in favour of them all; ; 9 QB 819, and ; , Odgers on Libel and Slander, Edn. 6, p. 521, Ratanlal on Torts, Edn. 10, p. 71.
The basis of these decisions is that where the injury is one and indivisible it can give rise to but one cause of action.
Consequently if satisfaction is accepted 'as full and complete and against one person it operates with respect to the entire cause of action.
" In Shiva Sagar Lal vs Mata Din(4) the facts as stated in the head note, in brief, were: "Plaintiff filed a suit to recover damages for malicious prosecution 'against five defendants of whom defendant 1 was a minor.
It was alleged that the other defendants had instigated defendant 1 to make a complaint against (1) (1871 72) L.R.7 C.P. 547.
(2) Luck.
(3) A.I.R. 1934 Nag. 226, 227.
(4) A.I.R. 1949 All.
970 the plaintiff.
Subsequently, the plaintiff filed an application that there had been a settlement between him and defendant 1 and he had consequently released him.
The application was allowed and defendant 1 was discharged.
" Following Duck vs Mayeu(1) it was held that the discharge ' of defendant 1 amounted merely to a covenant not to sue him and not to a release of all the joint tortfeasors.
The English Courts adopted this line of reasoning in order to soften the rigour of the common law, but in the present case it cannot be said that the compromise amounted to a covenant not to sue, as a decree was passed.
It seems to us, however, that the rule of common law prior to Brown vs Wooton(2) and the rule adopted by the United States Supreme Court is more in consonance with equity, justice and good conscience.
In other words, the plaintiff must have received full satisfaction or which the law must consider as such from a tortfeasor before the other joint tortfeasors can rely on accord and satisfaction.
This rule would recognise that the liability of tortleasors is joint and several.
What is full satisfaction will depend on the facts and circumstances of the case.
For example, the acceptance of Rs. 25/ in the case of Ram Kumar Singh vs
Ali Hussain(3) would not be a case of full satisfaction.
In this case an apology was received from the defendant Rabadi and accepted and embodied in 'a decree.
This cannot be treated to be a full satisfaction for the tort alleged to have been committed by the respondents defendants.
But this must be treated as 'an election on the part of the plaintiffs to pursue their several remedy against the defendant Rabadi.
The learned counsel for the respondents urges that if a decree is passed against them for damages, the defendant Rabadi, who compromised, would be liable to contribute in accordance with the rule laid down in Dharni Dhar vs Chandra Shekhar(4) in which it was held that the rule in Merry weather vs Nixon(5) did not apply in India.
It is not necessary to decide whether the Full Bench decision of the Allahabad High Court lays down the law correctly, because even if it is assumed that this is the law in India it would not affect the rights of the plaintiffs. ' In the result the appeal is allowed, the judgment ,and decree of the High Court set aside and the case remitted to the Trial Court.
He shall dispose of the suit in accordance with this judgment and law.
No order as to costs.
V.P.S. Appeal allowed.
(1) (2) ; (3) All. 173 (4) I.L.R. [1952] 1 All.
759 (F.B.).

summary/full:
A suit for damages was filed on the allegations that the plaintiffs and defendants were all members of an association and that the defendants committed a tort against the plaintiffs by conspiring and preventing the plaintiffs from being elected to the office of trustees of the association.
One of the defendants tendered an unconditional apology which was accepted by the plaintiffs and a decree was passed in terms of the compromise.
The other defendants, thereafter, filed written statements contending that the release of one of the defendants from his joint liability as a tort lessor extinguished the plaintiff 's rights against the remaining defendants and raised questions regarding valuation and court fees.
The trial court took up the issue regarding court fees, held there was a deficiency and granted time to the plaintiffs to make good the deficiency.
The plaintiffs, instead, applied for amendment of the plaint and the trial court allowed the application.
The High Court, in revision filed by the defendants gave appropriate directions regarding payment of court fee.
The High Court, also decided, with the consent of both sides, that the decree against one of the defendants namely, the compromise decree, was complete accord and satisfaction and that the cause of action against all the defendants being one and indivisible, the decree operated as a bar against further proceedings against the remaining defendants.
In appeal to this Court, it was contended that the subject matter of revision before the High Court being only the order of the trial court regarding court fee, the High Court had no jurisdiction to decide any other point.
HELD: (1) The High Court had no power to decide any other issue even if the parties had consented.
The order of the High Court could not be justified under section 24, Civil Procedure Code, because, it was not a case of the High Court withdrawing the case to itself and trying the same.
[9 '63 D E] (2) The High Court having decided the question of maintainability of the suit against the.
other defendants, the trial court would feel handicapped if the matter were to be remitted to it.
The appropriate procedure is for this Court to decide the question.
[963 E F] (3) The rule which is in consonance with equity, justice and good conscience and which also recognises that the liability of tort feasors is joint and several, is that, before the other joint tort feasors can rely on accord and satisfaction, a plaintiff must have received full satisfaction or L6Sup.
CI/69 10 960 what the law must consider as such from one of the tort feasors.
What is full satisfaction would depend on the facts and circumstances of each case.
[970 C E] In the present case, the apology which was embodied in a decree could not be treated as full satisfaction for the tort alleged to have been committed by the defendants.
But it must be treated as an election on the part of the plaintiffs to pursue their several remedy against the defendant tendering the apology.
[970 E F] Ram Kumar Singh vs Ali Husain, All. 173, Makhanlal Lolaram vs Panchamal Sheoprasad, A.I.R. ; Har Krishna Lal vs Haji Qurban Ali, Luck.
284 and Shiva Sagar Lal vs Mata Din A.I.R. 1949 All. 105; and English and American Law, referred to.


judgement:
Appeal No. 98 of 1966.
Appeal from the judgment and order dated September 7, 1962 of the Punjab High Court, Circuit Bench at Delhi in Civil Revision Application No. 140 D of 1961. ' P. Sinha, G. Bhimsena Rao and M. 1.
Khowaja, for the appellants.
I. N. Shroff, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by certificate granted by the Circuit Bench of the Punjab High Court at Delhi is governed by the decision of this Court in Bahadur Singh vs Munl Subrat Dass(1).
(1) [1969] 2 S,C.R. 1041 The facts out of which the present appeal arises are these.
One Raghunath Sharma, predecessor m interest of the appellants hereinafter referred to as the plaintiff instituted on February 7, 1956, suit No. 53 of 1956 in the Court of Subject 1st Class, Delhi, for the eviction of his tenant, K.L. Bansal, hereinafter referred to as the defendant.
He gave three grounds for ejectment in the plaint: (1 ) that the premises were required bona fide by the plaintiff for occupation as residence for himself and other members of the family, and that he had no other, suitable accommodation to meet his bona fide residential requirements; (2) that the defendant already owned a house in Delhi which was suitable for him; and (3) that the defendant had defaulted in payment of rent.
The defendant flied a written statement denying these allegaltions.
Appropriate issues were framed on April 4, 1956.
On June 5, 1956, an application was filed by the plaintiff and the defendant that a compromise had been effected on the following terms: "(a) Decree for ejectment be passed in favour of the plaintiff against the defendant, the decree will be executable after the 31st December, 1958, if the defendant does not give possession till then.
(b) The standard rent of the premises be fixed at Rs. 40/ per mensem, instead of Rs. 50/ paid at present payable from the 1st July, 1956, till the defendant vacates the premises.
(c) The amount, in deposit with this Court be paid to the plaintiff which will be adjusted between the On July 6, 1956, the counsel for the parties and the plaintiff made a statement on solemn affirmation to the same effect, and on the same day the Court recorded the following order: "In view of the statement of the parties ' counsel and the written compromise, a decree is passed in favour of the plaintiff against the defendant.
" The decree was drawn up accordingly.
The defendant, however, did not vacate the premises ' on December 31, 1958.
On the other hand, he presented an application on February 16, 1959, under section 47, C.P.C., challenging the validity of the decree alleging that the same had been passed in contravention of the provisions of section 13 of the Delhi and Ajmer Rent Control Act, 1952 (XXXVIII of 1952), (hereinafter referred to as the Act) and hence the decree was a nullity.
He failed 1050 before the Sub Judge, 'and also 'on appeal before the Senior Sub Judge, Delhi.
The High Court, on revision, held that the decree was a nullity as the order passed on the basis of the compromise did not indicate that any of the statutory grounds mentioned in section 13 of the Act existed.
In Bahadur Singh 's case(1) this Court held that the decree passed on the basis of an award was in contravention of section 13(1) of the Act became the Court had passed the decree in terms of the award without satisfying itself that the ground of eviction existed.
Bachawat, J,.
speaking for the Court, observed that "on the plain wording of section 13(1) the Court was forbidden to pass the decree.
The decree is a nullity and cannot be enforced in execution." This Court, accordingly, declared inter alia that "the decree in so far as it directs delivery of possession of the premises to the landlord is a nullity and cannot be executed.
" The present case is also governed by the provisions of section 13(1) of the Act and, as we have said before, this appeal must fail, in view of the judgment of this Court in Bahadur Singh 's case(x).
In the result the appeal is dismissed but there will be no order as to costs.
R.K.P.S. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The appellant plaintiffs filed a suit in February 1956, for the eviction the respondent on the ground that the premises were required for their own use, that the defendant already owned a suitable house of his own, and that the respondent had defaulted in payment of rent, after the defendant had flied a written statement and issues had been framed a joint application was made by them that a compromise had been effected.
The trial court decreed the suit in the plaintiff 's favour in terms of the compromise which provided inter alia, for the ejectment of the defendant after 31st December 1958, and fixed the standard rent as agreed.
The defendant, however, did not vacate the premises in December 1958, and presented an application in February 1959 under section 47 C.P.C., challenging the validity of the decree alleging that it had been passed in contravention of the provision of Delhi and Ajmer Rent Control Act, 1952 and contending that the decree was, therefore, a nullity.
He 'failed before the Sub Judge and also in appeal before the Senior Sub Judge.
However, the High Court in revision held in his favour.
appeal to this Court, HELD: The High Court has rightly held that the decree was a nullity as the order passed on the basis of the compromise did not indicate that any of the statutory grounds mentioned in section 13 of the Act existed.
[1050 B] Bahadur Singh vs Muni Subrat Dass, , followed.


judgement:
Appeal No. 284 of 1967.
979 Appeal from the judgment ,and order dated December 23.
1964 of the Calcutta High Court in Appeal From Original Order No. 90 of 1964.
S.V. Gupte, K.P. Bhandare and D.N. Gupta, for the appellant.
S.R. Chari and fanardan Sharma, for respondeat No. 3.
P.K. Chatterjee and P.C. Chakravarti, for respondeat No. 4.
The Judgment of the Court was delivered by Shelat, J.
This appeal by certificate is directed against the judgment and order of the Division Bench of the High Court of Calcutta setting aside the order of a Single Judge of that High Court in a writ petition under article 226 of the Constitution.
The facts relevant for this judgment may first be set out.
The appellant company was at the relevant time carrying on business at various places in India including Calcutta as merchants, selling agents and manufacturers.
Its registered office is at Madras.
Its business at Calcutta was two fold: (1) as selling agents of certain companies, and (2) of conducting an engineering workshop at Kidderpore.
According to the company its agency business began to decline from 1954 and it had, therefore, to retrench some of its employees in that year.
The company consequently decided upon a policy of reorganising its business by giving accent to its manufacturing activities 'and of giving up the agencies ' held by it.
In pursuance of the said policy, the company relinquished between April 1, 1960 and September 30, 1961, 13 agencies in Bombay, 11 in Delhi, 8 in Madras and 11 in Calcutta.
It also closed down 3 of its branches in Northern India and 11 in South India.
The total staff engaged at Calcutta consisted of 75 employees in the workshop at Kidderpore and 225 in the Branch office.
Apprehending that the said policy would result in retrenchment, the third respondent union wrote to the Deputy Labour Commissioner requesting him to intervene stating that the Board of Directors and the company had declared their policy of surrendering agencies and that in the result the union feared that about 60 employees would be retrenched.
The Deputy Commissioner called for the comments of the company 's manager, who in his reply dated June 17, 1961 affirmed that the company had taken the said policy decision in consequence of which some of the employees would have to be retrenched.
On June 20,. 1961 the Deputy Commissioner held conciliation proceedings during which also the manager made it clear that in pursuance of the policy of reorganising its business the company had decided to give up cer 980 tain agencies.
On June 23, 1961 the union sent to the company its demands inter alia claiming (a) that the retrenchment must be fully justified, and (b) that transfer of service to other places in the company 's organisation should be offered to those who are willing to accept such transfer.
Neither in its letter to the Deputy Commissioner nor in the conciliation proceedings, nor in the demands of the union disputed the fact that the company had taken the said policy decision and that the decision would result in retrenchment.
Indeed, the said demands accepted the policy decision but called upon the company to pay certain amounts to those retrenched, to retrench only to the extent fully justified and to offer transfer to those retrenched.
On June 28, 1961 the company 'sent its comments on the union 's demands stating inter alia that (1) the company would pay one month 's wages in lieu of notice as also retrenchment compensation, (2) that 25 permanent and 17 temporary employees would be retrenched with effect from July 1, 1961, (3) that re employment of retrenched workmen would be governed by the provisions of sec.
25H, and (4) that the company 's policy being to recruit local persons at its branches, transfer from one place to another had not been frequently resorted by the company but the company would consider transfer of the employees concerned after employees retrenched at other branches had first been absorbed.
On June 29, 1961 the company_ gave the notice of retrenchment to the employees concerned, also a notice to the Commissioner of Labour and the Conciliation Officer under sec.
25F(c), paid one month 's wages to the employees concerned in lieu of notice and also retrenchment compensation.
The State Government by its order dated July 31, 1961 referred for adjudication to the Second Industrial Tribunal, Calcutta, the question whether retrenchment of the said 52 employees was ' justified and to what relief, if any, they were entitled.
In its statement of claim the union inter alia pleaded that the company had in a spirit of vindictiveness and to break the union retrenched the said.
employees, that with that mala fide end in view it gave up in the name of a policy of reorganisation agencies although they were profitable, creating thereby an artificial condition to show fall in business and surplus age in staff, that the company 's mala fides were apparent in that it gave up agencies in Calcutta only, that the company being dominated by persons from Madras its real object was to divert its resources to Madras from parochial and anti union considerations, that as a result of giving up the agencies the company had suffered in profits, that the work load of the remaining employees had increased, that there was in fact no real surplusage, and lastly, that the company had not followed while retrenching the principle of "last come.
first go".
The cornpany 's reply was that retrenchment was bona fide and in 981 accordance with law, that it had relinquished all the pharmaceutical agencies, general sales agencies except one, and a number of other agencies not only in Calcutta but also in Bombay, Delhi and Madras, that it had absolute right to decide which business it should continue and which to give up, that as a matter of business policy it had decided to discontinue the agency business with the result that retrenchment had become inevitable, that the union had indulged in incorrect, irrelevant and irresponsible allegations, that though the actual surplusage was 66, it had retrenched only 52 employees of whom 17 were temporary, and that the question whether the workload on the remaining employees had increased or not was irrelevant.
In support of its reply the company produced two statements.
exhibit D and E, showing the number of and places where branches were closed and the agencies relinquished.
The Calcutta branch had at the time 21 agencies out of which 11 were given up.
Prima facie, the surrender of so many agencies would result in surplusage of employees.
On these pleadings and the issues arising therefrom the only question before the Tribunal, therefore, was whether retrenchment of 52 employees was justified.
However, the union challenged not only the legality and propriety of the retrenchment but also the propriety and reasonableness of the said policy decision alleging absence of good reason.
for relinquishing agencies and further alleging that an artificial surplusage was caused for weakening the union and parochial considerations.
The Tribunal thought that these questions required elucidation by the company.
It held that though 11 agencies in all.
in Calcutta were given up, since two of them were given up July 1, 1961 and the third on August 1, 1961, only 8 agencies were given up before the notice of retrenchment.
The Tribunal, however, failed to observe that notices of giving up these three agencies were served by the company as early as May 1, 1961.
The Tribunal held that though agencies were surrendered in places other than Calcutta also, the company led no evidence that the staff was retrenched in these places also and whether such retrenched staff was absorbed in those places.
In the union 's statement of claim, however, no such question was raised, the only question raised being that no agencies were given up in places other than Calcutta.
Next, the Tribunal rejected the company 's case about its policy of reorganising its business.
The manager of the Calcutta branch gave evidence and also produced an extract from a speech of the managing director, East India Distilleries & Sugar Factores Ltd. of which the appellant company is a subsidiary.
The manager also gave certain other reasons which led the company to give up certain agencies.
The Tribunal, however, rejected this evidence on the ground that the manager could not give 982 evidence about the policy decision as that was the function of the Board of Directors, that the extract from the said speech reflected the policy of the East India Distilleries Co. but not necessarily of the appellant company and that the additional reasons given by the manager showed that the real reasons for giving up the agencies were those reasons and not the policy decision.
The rejection of the manager 's evidence was totally unwarranted and the finding that the pokey decision was not proved was contrary to the evidence on record.
As akeady stated, in the union 's letter to the Labour Commissioner, the union had based its request for intervention on the footing that it apprehended retrenchment as a result of the company 's said policy decision.
During conciliation proceedings also the manager had clarified that retrenchment was inevitable on account of the said policy decision.
Besides, there was no reason why the manager could not depose about the company 's said_decisiOn.
The additional reasons given by the manager were the reasons to show why of the 21 agencies the particular 11 agencies were surrendered.
The finding of the Tribunal that those agencies were not given up on account of the company 's said policy was not only unwarranted but was contrary to the evidence on record.
The further reasoning of the Tribunal that there could be no such policy decision because though the agencies were given up no corresponding development in manufacturing activities was taken up was also without foundation.
The evidence of the manager was that such development had already been launched in Madras and, about the time of his giving evidence, also at Kidderpore.
That evidence was not accepted as according to the Tribunal the development on the manufacturing side of the company 's business should have been contemporaneous with the surrender of the agencies in Calcutta.
The fact that such activities were also not undertaken in Kidderpore could not possibly be a reason for disbelieving the company 's case about the said policy.
To disbelieve the company 's case on the ground 'that no ,such ,manufacturing activity was undertaken in Calcutta was altogether unjustified.
The Tribunal next found that there could not be any real surplus age in the staff as the company had during the year 1960 made 17 appointments.
The Tribunal accepted the union 's case that this circumstance indicated that there was no need of retrenchment.
It rejected the company 's explanation that until retrenchment was decided upon and calculations were made about the extent of ' retrenchment, temporary appointments had to be made in place of those who retired or left the company 's service.
Even though the agencies were given up winding up work in connection with them would still require the same staff.
Besides, all.
the 17 temporary employees were ' included in ,the list of the retrenched employees.
As regards the statement exhibit G showing surplusage.
of 66 ' employees, the.
Tribu 983 nal questioned its correctness on the ground that although four agencies were given up in 1960 no retrenchment was made during that year, that on the other hand 17 temporary hands were engaged, that the evidence of the union 's secretary showed that after the retrenchment workload of the remaining employees had increased, and lastly, that retrenchment could have been avoided by transferring the employees concerned to other branches of the company.
Though the Tribunal gave a clear finding that the company had not resorted to retrenchment with the intention of victimisation, yet it held that "the allegations made by the union (as to parochial considerations) do not appear to be unfounded or unreasonable".
The reasons given for this observation were that the company 's head office was at Madras, that the chairman and the directors of the company were from Madras and that the agencies given up in Madras were less in number than in Calcutta.
On these findings the Tribunal held that the scheme of reorganisation was not sufficiently established, that mere surrender of agencies was no proof of such a scheme that therefore, a good case for retrenchment was not made out,.
that the company had failed to establish the exact number of surplus employees and the extent of retrenchment, that it failed to observe the principle laid down in sec.
25G, that the said notice dated June 29, 1961 was not in accordance with rule 77 of the West Bengal Industrial Disputes Rules, 1958 as the notice was of June 29, 1961 while retrenchment was to take effect from, July 1, 1961.
The Tribunal held that the retrenchment, therefore, was not with immediate effect, the proviso.
to that rule did not apply and a notice of one month, aS required by sub cl. 1 of ' that rule, was necessary and that not having been done the retrenchment was invalid as being in breach of sec.
25F(c).
In accordance with these findings the Tribunal ordered reinstatement and payment to the 52 employees of back wages as from July 1, 1961.
Aggrieved by this order the company,filed a writ petition for certiorari which was heard by a learned Single Judge of the High Court.
The learned Single Judge held that ' an employer has the right to reorganise his business in 'any manner he likes for the purpose of economy or convenience,.
that a Tribunal, therefore, cannot question its ' propriety, the only limitation being that it should be bona fide and not with the object of victimising employees.
He observed that though the Tribunal had found that the union had failed to establish victimisation or any unfair labour practice, it had, yet, come to an inconsistent finding that the probability that the union 's activity would be weakened by large scale retrenchment could not be ignored or overlooked.
The learned Judge found that in coming to this finding the Tribunal acted not upon evidence but on mere conjectures.
He also held that interview of the evidence the Tribunal Was in patent error in 984 rejecting the company 's case of relinquishment of agencies and the resultant retrenchment.
He further held that the finding of the Tribunal that the policy of reorganisation was not bona fide but was for parochial consideration was based on inferences for which there were no justifying premises.
Lastly, he held that the Tribunal 's finding that the company did not establish retrenchment of 52 employees was not justified as the ground given by it, namely, (1) that retrenchment could have been avoided by transferring the employees concerned to other centres, (2) that the principle of "last come first go" was not followed, and (3) that the procedure under sec.
25F(c) was not observed were not warranted by the evidence.
As regards the first ground, the learned Judge held that that ground was not sustainable.
As to the second ground he held that that being a finding of fact he could not substitute his own opinion in place of the Tribunal 's and remanded that part of the case to the Tribunal for further consideration.
Regarding the third ground, he found that the Tribunal was in error in holding that el. 1 of r. 77 of the said rules applied and that a month 's notice not having been given thereunder the retrenchment was invalid. ' He set aside the award and remanded the case to the Tribunal for the limited purpose of enforcing retrenchment according to the principle of "last come first go".
In appeal against the said judgment, a Division Bench of the High Court held that the High Court could interfere in a writ petition for certiorari with the Tribunal 's findings only within well recognized limits, such as, where the inferior tribunal has acted without jurisdiction or in excess of it or where it has acted illegally as when it acts in breach of the principles of natural justice or where there is an error of law apparent on record.
The superior court in such cases acts in supervisory and not appellate jurisdiction and therefore, cannot review findings of fact however erroneous they are.
The Division Bench found that the findings of the Tribunal that the company had failed to prove its scheme of reorganisation, that retrenchment was effected in Calcutta only, that the company was actuated by parochial considerations, and therefore retrenchment was not bona fide could not be said not to have been supported by evidence and that therefore the learned Single Judge was not competent to interfere with those findings.
Counsel for the company raised three contentions: (1) that since the Tribunal had held that there was no victimisation, its jurisdiction was limited to the consideration only whether the employees were retrenched within the meaning of sec.
2(00) of the Act and whether the employer 's obligations under sections 25F, 25G and 25H were complied with, (2) that the Tribunal had no juris 985 diction to consider the question whether the reorganisation scheme was for parochial considerations or otherwise, i.e., whether the scheme had merits, which opinion is entirely managerial, and (3) that some of the findings of the Tribunal were without legal evidence and based on mere surmises and therefore perverse.
The contention on behalf of the union, on the other hand, was that the scope of interference by the High Court in a certiorari petition was limited and only on certain well recognised grounds and that the learned Single Judge was not correct in allowing the petition, for, that meant interfering with findings of fact arrived at by the Tribunal.
The grounds on which interference by the High Court is available in such writ petitions have by now been well established.
In Basappa vs Nagappa(1) it was observed that a writ of certiorari is generally granted when a court has acted without or in excess of its jurisdiction.
It is available in those cases where a tribunal, though competent to enter upon an enquiry, acts in flagrant disregard of the rules of procedure or violates the principles of natural justice where no particular procedure is prescribed.
But a mere wrong decision cannot be corrected by a writ of certiorari as that would be using it as the cloak of an appeal in disguise but a manifest error apparent on the face of the proceedings based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so corrected.
In Dharangadhara Chemical Works Ltd. vs State of Saurashtra(2) this Court once again observed that where the Tribunal having jurisdiction to decide a question comes to a finding of fact, such a finding is not open to question under article 226 unless it could be shown to be wholly unwarranted by the evidence.
Likewise, in the State of Andhra Pradesh & Ors.
section Sree Ram Rao(3) this Court observed that where the Tribunal has disabled itself from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case or where its conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person can ever have arrived at that conclusion interference under article 226 would be justified.
The question for our determination, therefore, is whether the learned Single Judge was within the aforesaid well recognised limits when he set aside the award.
Before, however, we examine that aspect of the case we may first consider the scope of the Tribunal 's jurisdiction in cases of retrenchment arising under see.
25F of the Act.
In D. Macropollo & Co. vs Their Employees ' Union(4) this Court held that if a scheme of reorganisation has been adopted (1) ; (2) ; (3) ; (4) [1958] 2 L.L.J. 492.
986 by an employer for reasons of economy or convenience and it has been introduced in all the areas of its business, the fact that its implementation would lead to the discharge of some of the employees would have no material bearing on the question as to whether the scheme was adopted by the employer bona fide or not In the circumstances, an industrial tribunal considering the issue relating to retrenchment, should not attach any importance to the consequences of reorganisation.
The resulting discharge and retrenchment would have to be considered as an inevitable, though unfortunate, consequence of such a scheme.
It also held that where the finding of a tribunal is based on wrong and 'erroneous assumption of certain material facts, such a finding would be perverse.
A recent decision in Ghatge & Patil Concern 's Employees ' Union vs Ghatge & Patel (Transport) (P) Ltd.(x) was a case of an employer reorganising his business from conducting a transport business himself through employees engaged by him to conducting it through a contract system where under he let out his motor trucks to persons who, before this change, were his employees.
Admittedly, this was done because he could not implement some of the provisions of the .
The change over to the contract system was held by the Tribunal not to have been effected for victimising the employees.
The employees had voluntarily resigned and hired the employer 's trucks on contract basis.
It was held that a person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying.
In Workmen Subong Tea Estate vs The Outgoing Management of Subong Tea Estate(a).
this Court laid down the following propositions: (1) that the management can retrench its employees only for proper reasons, which means that it must not be actuated by any motive of victimisation or any unfair labour practice, (2) that it is for the management to decide the strength of its labour force, for the number of workmen required to carry out efficiently the work in his industrial undertaking must always be left to be determined by the management in its discretion, (3) if the number of employees exceeded the reasonable and legitimate needs of the undertaking it is open to the management to retrench them, (4) workmen may become surplus on the ground of rationalisation or economy reasonably or bona fide adopted by the management or on the ground of other industrial or trade reasons, and (5) the right to affect retrenchment cannot normally be challenged but when there is a dispute about the validity of retrenchment the impugned retrenchment must be shown as 'justified on proper reasons, i.e., that ' it was not capricious or without rhyme or reason.
(1) [1968] 1: S.C R., 300., (2) [1964] 5 S.C.R. 602.
987 Since this is an appeal arising from a writ petition for certiorari we also would not interfere with the conclusions arrived at by the Tribunal except on grounds on which the High Court could have done.
Mr. Gupte 's contention was that the findings of the Tribunal were beyond its jurisdiction, that they were unwarranted by evidence on record and were based either on wrong assumptions or mere conjectures without any foundation in the evidence, and therefore, this is a fit case for our interference.
It is not in dispute that the company gave up 11 out of its 21 agencies in Calcutta, that is, more than half of its agency business was given up during the years 1960 and 1961.
There was clear and unchallenged evidence that certain agencies were likewise given up in other places including Madras.
The manager gave evidence that this was done in pursuance of the policy decision taken by the company to reorganise its business by concentrating more on its manufacturing side than its agency business as the company found the agency business unprofitable on account of import restrictions and other reasons.
The Tribunal, however, rejected this evidence on the ground that the policy decision being the function of the Board of Directors, the manager was not competent to depose about it and that if the company wanted to establish it it should have produced a resolution of the Board and on that ground held that the company had failed to prove the said policy.
In the first place we fail wholly to appreciate the Tribunal 's view that the said policy could not be proved through the manager.
In the second place, in the very first letter of the union to the Deputy Labour Commissioner, as also during the conciliation proceedings, it was assumed that the company had taken such a decision, that consequently retrenchment was apprehended and that therefore that officer should intervene.
In these circumstances, the finding that the company had failed to establish its policy was not only beyond the scope of the enquiry before the Tribunal but totally invalid.
As held in J.K. Iron and Steel Co. vs Iron and Steel Mazdoor Union(x) the Tribunal had to confine itself to the pleadings and the issues arising therefrom and it was, therefore, not open to it to fly off at the tangent disregarding the pleadings and reach any conclusions that it thought as just and proper.
It is well established that it is within the managerial discretion of an employer to organise and arrange his business in the manner he considers best.
So long as that is done bona fide it is not competent of a tribunal to question its propriety.
If a scheme for such reorganisation results in surplusage of employees no employer is expected to carry the burden of such economic dead weight and retrenchment has to be accepted as inevitable, however unfortunate it is.
The Legislature realised this position and therefore provided by sec.
25F compensation to soften the blow (1)[1956] 988 of hardship resulting from an employee being thrown out of employment through no fault of his.
It is not the function of the Tribunal, therefore, to go into the question whether such a scheme is profitable or not and whether it should have been adopted by the employer.
In the instant case, the Tribunal examined the propriety of reorganisation and held that the company had not proved to its satisfaction that it was profitable.
The Tribunal then held (a) that the scheme was ' not reasonable inasmuch as the number of agencies given up in Madras was less than that in Calcutta, (b) that though development of manufacturing activity was taken up in Madras, no such activity was undertaken in Kidderpore, and (c) that the company should have developed its manufacturing activity in Kidderpore simultaneously with the surrender of the agencies.
It is obvious that while reorganising its business it is not incumbent on the company to develop its manufacturing side at the very place where it has surrendered its agencies, namely, Calcutta, nor to do so at the very same time.
These considerations which the Tribunal took into account were totally extraneous to the issue before it and the Tribunal ought not to have allowed its mind to be influenced by such considerations and thereby disabling itself from viewing the issue from proper perspective.
It was also beyond its competence to go.
into the question of propriety of the company 's decision to reorganise its business.
Having come to the conclusion that the said policy was not actuated by any motive of victimisation or unfair labour practice and therefore was bona fide, any consideration as to its reasonableness or propriety was clearly extraneous.
Therefore, its finding that the company had failed to establish that it was profitable was incompetent.
It is for the employer to decide whether a particular policy in running his business will be profitable, economic or convenient and we know of no provision in the industrial law which confers any power on the tribunal to inquire into such a decision so long as it is not actuated by any consideration for victimisation or any such unfair labour practice.
The finding that the policy decision was actuated by parochial considerations, namely, for transferring the company 's resources from Calcutta to Madras at the cost of the former, was without evidence and was entirely speculative.
Even assuming that the company had decided to concentrate its activity in Madras there is nothing in the industrial law to compel it to continue its business in Calcutta.
As regards the Tribunal 's finding that there was no surplusage in spite of the company having given up more than half of its agencies, the manager produced the statement, exhibit G, showing 'that on his calculations there would be a surplusage of 66 employees.
The Tribunal rejected the case of surplusage on the grounds that though 4 agencies were given up 989 in Calcutta in 1960 the company had during that year engaged 17 temporary employees, that there was overload of work on the remaining employees after retrenchment and that retrenchment could have been avoided by transferring the retrenched employees to other branches especially as their conditions of service included the liability of being transferred.
It is true that no retrenchment was carried out in 1960 and there was evidence of the union 's secretary that work had accumulated when he gave his evidence in January 1962.
These facts, however, would not by themselves mean that there was no surplusage and that retrenchment was unjustified.
As laid down in Workmen of Subong Tea Estate(x), it is for the management to decide the strength of its labour force to carry out efficiently the working of its undertaking.
If, as a result of reorganisation, the number of its existing employees exceeded the reasonable and legitimate needs of the undertaking the management, subject to its obligation to pay compensation, can effect retrenchment.
So long as retrenchment carried out is bona fide and not vitiated by any consideration for victimisation or unfair labour practice and the employer comes to the conclusion that he can carry on his undertaking with reasonable efficiency with the number of employees retained by him after retrenchment, the Tribunal ought not ordinarily to interfere with such decision.
, The fact that in 1960 17 temporary appointments were made or that the union 's secretary deposed that work had accumulated would not mean that the surplusage calculated by the manager was unjustified.
Accumulation of work at a given point of time, unless it is constant, may be seasonal or due to various reasons and not necessarily because there was no surplusage.
The management had worked out the surplusage which would occur in consequence of their giving up the agency business.
Barring the bare statement of the union secretary that work had accumulated and that employees were doing overtime work there was no rival data available to the Tribunal to come to the startling conclusion that there would be no surplusage at all even though a little more than half of the agency business was given up.
Such a conclusion could be arrived at only on the assumption that the accumulation of work was permanent, which assumption could not follow from the evidence.
As regards the company 's refusal to transfer the retrenched employees, the Tribunal 's finding was clearly against law.
The liability of an employee to be transferred and the right of the company to transfer him did ,not mean that there was a corresponding obligation on the company to transfer the employee to another branch.
No evidence was led by the union to show that if transferred, these workmen could have been absorbed at other places, either because there were vacancies or that the work there (1) ; 990 was the same as was done by them at Calcutta.
There was equally no evidence whether wage scales, dearness allowance and other conditions of service were the same in Madras and other centres.
It is true that the company had started developing its manufacturing business in Madras but the Tribunal made no enquiry whether these employees could have been fitted in the manufacturing work when they had done only administrative and other duties connected with the agency business, yet, the Tribunal drew the conclusion that because the company failed to transfer these employees to other centres retrenchment was not justified.
Equally the Tribunal 's decision on rule 77 was contrary to its provisions.
The rule by sub cl. 1 provides that when an employer finds it necessary to retrench any workman he shall at least one month before the date of actual retrenchment give notice thereof to the Labour Commissioner and to the Conciliation 'Officer.
The proviso to it states that where an employer retrenches any workman with immediate effect by paying him wages in lieu of notice he shall immediately after such retrenchment give notice thereof to the said officers.
Obviously, sub cl. 1 did not apply to the facts of this case.
It is true that the notice was given two days before the actual retrenchment and was not given "immediately".
But the Tribunal could not conclude that since the notice was not given immediately after retrenchment the proviso did not apply, and therefore, it would be sub cl. 1 which would be applicable and since one month 's notice was not given the retrenchment was invalid.
In our view such a conclusion was not only incorrect but contrary to the very object of the rule.
We are in agreement with the learned Single Judge that though the notice was not given immediately after the retrenchment but two days before it, the company had substantially complied with the requirements of the proviso.
The object of the proviso clearly is that where it is not possible, for an employer to give one month 's notice to the two authorities concerned by reason of his retrenching the employees with immediate effect, information should be supplied to the two officers immediately after such retrenchment.
H instead of giving such information after the retrenchment it is given two days before the retrenchment takes place it is hardly possible to say that the requirement of the proviso was not carried out.
So long as the object underlying the proviso was satisfied it did not make any difference that information was given a little earlier than the date when retrenchment took place.
We have no doubt in our mind that some of the findings arrived at by the Tribunal and which influenced its verdict were beyond its competence.
The rest were either speculative or contrary to the evidence on record and were consequently liable to 991 be set aside in a writ petition for.
certiorari.
The Division Bench of the High Court, therefore, was not correct in its view that the learned Single Judge could not interfere with those findings or that such findings did not fall under one or the other recognized grounds justifying the High Court 's interference.
In the result we allow the appeal, set aside the order passed by the Division Bench and restore the order passed by the learned Single Judge including his order of remand to the Tribunal to prepare a list of 52 persons liable to be retrenched in accordance with the principle of "last come first go".
In the circumstances of the case we do not make any order as to costs.
Appeal allowed.
L6Sup.

summary/full:
In pursuance of its policy of reorganising its business by concentrating more on manufacturing side than agency business, the appellant company gave up more than half of its agencies in Calcutta and some agencies in other places including Madras.
The Union representing the workmen wrote to the Labour Commissioner to intervene stating that due to the company 's said policy it feared retrenchment.
The company served notices on some of the employees for retrenchment to take effect two days thereafter.
Also notice was given to the Labour Commissioner and the Conciliation Officer as required under section 25F (c) of the Industrial Disputes Act.
On reference of the dispute to the Industrial Tribunal, the company justified the retrenchment and the Manager of the Calcutta branch gave evidence that retrenchment was done in pursuance of the said policy decision taken by the company.
The Tribunal held that a good case for retrenchment was not made out and ordered reinstatement.
The Tribunal did not accept the manager 's evidence holding that the development on the manufacturing side of the company 's business should have been contemporaneous with the surrender of agencies in Calcutta.
The Tribunal also held that the policy decision was actuated by parochial considerations for transferring the company 's resources from Calcutta to Madras, that there was overload of work on the remaining employees; that the retrenchment could have been avoided by transferring the retrenched employees to other branches specially as their conditions of service included the liability of being transferred; and that the retrenchment was in breach of a. 25F(c) as the notice of retrenchment was two days prior to the date of the retrenchment and not with immediate effect, the proviso to r. 77(1) of the West Bengal/ndustrial Disputes Rules, 1958, did not apply and a notice of one month, as required by sub el.
(1) of that rule, was necessary.
The company filed a petition for a writ of certiorari.
The Single Judge of the High Court set aside the. award and remanded the case to the Tribunal only for enforcing the retrenchment according to the principle of "last come first go".
The Division Bench of the High Court in appeal, agreed with the findings of the Tribunal and held that the Single Judge was not competent to interfere with those findings.
In appeal this Court, HELD: Some of the findings arrived at by the Tribunal and which influenced its verdict were beyond its competence.
The rest were either speculative or contrary to the evidence on record and were consequently liable to be set aside in a writ petition for certiorari.
(i) A writ of certiorari is generally granted when a court has acted without or in excess of its jurisdiction.
It is available, in those cases 977 where a tribunal though competent to enter upon an enquiry, acts in flagrant disregard of the rules of procedure 0r violates the principles of natural justice where no particular procedure is prescribed.
But a mere wrong decision cannot be corrected by a writ of certiorari as float would be using it as the cloak of an appeal in disguise but a manifest error apparent on the face of the proceedings based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so corrected.
[985] Basappa vs Nagappa, ; , Dharangadhara Chemical Works Ltd. vs State of Saurashtra, [1957] S.C.R. 152 and Andhra Pradesh & Ors.
vs Sree Ram Rao, ; , followed.
(ii) The Tribunal wrongly rejected the company 's evidence on the ground that the policy decision being the function of the Board of Directors, the Manager was not competent to depose about it and that if the company, wanted to establish it, it should have produced a resolution of the Board.
In its letter to the Labour Commissioner and also during conciliation proceedings the union had assumed that the company had taken the said decision, that consequently, retrenchment was apprehended and that therefore that officer should intervene.
In these circumstances, the finding that the company had failed to establish its policy was not only beyond the scope of the enquiry before the Tribunal but totally invalid.
[987 D F] 1.
K. Iron and Steel Co. vs Iron and Steel Mazdoor Union, , followed.
(iii) It is within the managerial discretion of an employer to organise and arrange his business in the manner he considers best.
So long as that is done bona fide it is not competent for a tribunal to question its propriety.
If a scheme for such reorganisation results in surplusage of employees, no employer is expected to carry the burden of such economic tribuanaldead weight and retrenchment has to be accepted as inevitable.
however unfortunate it is.
The Legislature therefore, provided by section 25F compensation to soften the blow of hardship resulting from 'an employee being thrown out of employment through no fault of his.
The Tribunal having come to the conclusion that the said policy was not actuated by any motive of victimisation or unfair labour practice and therefore was bona fide, any consideration as to its reasonableness or propriety was clearly extraneous.
It is not the function of the Tribunal, to go into the question whether such 'a scheme is profitable or not and whether it should have been adopted by the employer.
So long as retrenchment carried out is bona fide and not vitiated by any consideration for victimisation or unfair labour practice and the employer comes to the 'conclusion that he can carry on his undertaking with reasonable efficiency with the number of employees retained by him after retrenchment, the Tribunal ought not ordinarily to interfere with such decision.
The fact that in the earlier year some temporary appointments were made or that the Union 's Secretary deposed that work had accumulated would not mean that the surplus age calculated by the manager was unjustified.
Accumulation of work at a given point of time, unless it is constant, may be seasonal or due to various reasons and not necessarily because there Was no surplusage.
[987 G, 989 D F] (iv) While reorganising its business, it is not incumbent on a company to develop its manufacturing side at the very place where it has surrendered its agencies, namely, Calcutta, nor to do so at the very same time.
These considerations which the Tribunal took into account were 978 totally extraneous to the issue beore it and the Tribunal ought not to have allowed its mind to be influenced by such consideration and thereby disabling itself from viewing the issue from proper perspective.
The finding that the policy decision was actuated by parochial considerations, namely, for transferring the company 's resources from Calcutta to Madras at the cost of the former, was without evidence and was entirely speculative.
Even assuming that the company decided to concentrate its activity in Madras there is nothing in the Industrial Law to compel it to continue its business in Calcutta.
[988 D, G] D. Marcropollo & Co. vs Their Employees Union , Ghatge & Patil Concern 's Employee 's Union vs Ghatge & Patil (Transport) (P) Ltd. [1968] 1 S.C.R. 300, and Workmen of Subong Tea Estate vs The Outgoing Management of Subong Tea Estate, ; , followed.
(v) The liability of an employee to be transferred and the right of the company to transfer him did not mean that there was a corresponding obligation on the company to transfer the employee to another branch.
No evidence was led by the Union to show that if transferred, these men could have been absorbed at other places, or that there were vacancies or that the work there was the same as was done by them at Calcutta.
There was no evidence whether wage scales, dearness allowance and other conditions of service were the same in Madras and other centres.
It is true that the company had started developing its manufacturing business in Madras but the Tribunal made_ no enquiry whether these employees could have been fitted in the manufacturing work when they had done only administrative and 'other duties connected with the agency business, yet the Tribunal drew the conclusion that because the company failed to transfer these employees to other centres retrenchment was not justified.
[989 G 990 A] (vi) Rule 77(1) of the West Bengal Industrial Disputes Rules, provides that when an employer finds it necessary to retrench any workmen he shall, at least _one month before the date of actual retrenchment, give notice thereof to the Labour Commissioner and the Conciliation Officer.
The proviso to it states that where an employer retrenches any workman with immediate effect by paying him wages in lieu of notice he shall immediately after such retrenchment give notice thereof to the said officers.
Though the notice of retrenchment was not given immediately after the retrenchment but two days before it, the company had substantially complied with the requirements of the proviso to r. 77(1).
The object of the proviso clearly is that where it is not possible for an employer to give one months notice to the two authorities concerned by reason of his retrenching the employees with immediate effect, information should be supplied to the two officers immediately after such retrenchment.
instead of giving such information after the retrenchment it is given two days before the retrenchment takes place it is hardly possible to say that the requirement of the proviso was not carried out.
So long as the object underlying the proviso was satisfied it did not make any difference that information was given a little earlier than the date when retrenchment took place.
[990 C]


judgement:
Appeal No. 441 of 1965.
Appeal from the judgment and decree dated September 19, 1958 of the Mysore High Court in Regular Appeals Nos. 154 and 196 of 1952 53.
section Govind Rao and K. Rajendra Chaudhuri, for the appellants.
C.B. Aggarwala and R. Gopalakrishnan, for the respondents. 1084 The Judgment of the Court was delivered by Bhargava, J.
One Khanmull, whose legal representatives are the appellants in the present appeal, instituted Original Suit No. 59 of 1949 50 on 10th January, 1950 for recovery of amounts due to him on the basis of two simple mortgages dated 12th January, 1937 and 14th June, 1937 in the Court of the District Judge, Civil Station, Bangalore.
Both these mortgages were executed by three brothers, Ahmed Saleh Mohamed Sait (since deceased), Elias Saleh Mohamed Sait (respondent No. 1), and Mohamed Saleh Mohamed Sait (respondent No. 2), while their mother Rahamatbai alias Bhayabai joined them in the execution of the mortgagedeed of 14th June, 1937.
In the suit, in addition to respondents 1 and 2, Hajirabai widow of the deceased brother Ahmed Saleh Mohamed Sait, and their sisters, Ameenabai and Haneefabai, were also impleaded as defendants 3, 4 and 5.
Further, Khan Saheb Abdul Gani Saheb, and Khan Saheb Abdul Shakoor Saheb were impleaded as defendants 6 and 7 in their capacity of purchasers of the equity of redemption from the mortgagors.
On the foot of the first mortgage, the amount claimed was Rs. 51,200/ as principal and interest, while, on the foot of the second mortgage, the amount claimed as principal and interest was Rs. 60,200/ .
The contractual rate of interest was 1 per cent per mensem.
The trial court decreed the suit on 27th March, 1952, after applying the provisions of section 17 of the Mysore Money Lenders Act No. 13 of 1939 (hereinafter referred to as "the Act").
For the purpose of giving effect to.the provisions of section 17 of the Act, the trial court held that the principal amount of the two loans was Rs. 44,000/ , being the aggregate of the consideration shown in the two mortgage deeds, and, consequently, allowed as arrears of interest the sum of Rs. 44,000/ .
The preliminary decree was, therefore, granted for a sum of Rs. 88,000/ composed of Rs. 44,000/ as principal and Rs. 44,000/ as interest.
The excess interest claimed at the contractual rate of 1 per cent per mensem was disallowed on the ground of the maximum limit for the grant of the total amount of interest laid down in section 17 of the Act.
Thereupon, both the parties filed appeals in the High Court of Mysore.
The High Court held that the trial court had wrongly treated the amounts of Rs. 20,000/ and Rs. 24,000/ as the principal amounts of the original loans; and recorded a finding that the principal amounts, in fact, were Rs. 15,017 8 0 in respect of the first mortgage deed, 'and Rs. 22,954/ in respect of the second mortgage deed.
The High Court, thus, worked out the aggregate of Rs. 37,971/50P as the principal amount of the two loans advanced under these two mortgage deeds and, applying section 17 of the Act, granted a decree for this amount as principal together with the same amount as interest.
The High Court further held 1085 that this would be the arrears of interest to which the appellants would be entitled up to the date fixed for payment of the redemption money by the judgment of the High Court, that date being the 19th March, 1959.
The High Court also made a direction that the principal amount will carry interest at 6% per annum from the date fixed for redemption till realisation.
The appellants have now come up against this decree passed by the High Court by certificate granted by that Court.
In this appeal, Mr. Govinda Rao, learned counsel for the.
appellants, raised only two points.
The first point urged was that the High Court was wrong in re opening the accounts in respect of loans prior to.
the two mortgage deeds which formed the consideration for the two mortgage deeds in suit, and that the.
High Court should have held that the principal amount was Rs. 44,000/ for the two mortgages as decided by the trial Court.
The second point urged by learned counsel was that the High Court was wrong in fixing the dates up to which the arrears of interest could be calculated for being included in the decree and for prescribing future rates of interest.
It was urged that the arrears of interest envisaged by section 17 of the Act should be interpreted to mean arrears only up to the date of the institution of the. suit.
and the High Court should have granted future interest subsequently instead of granting future interest only with effect from the date fixed for redemption.
So far as the first point raised by learned counsel is concerned, it appears to us that it is totally misconceived, because the language of section 17 of the Act plainly justifies the view taken by the.
High Court.
Section 17, in prescribing the maximum amount of arrears of interest to be allowed, refers to "the principal of the original loan" and not "the principal of the loan".
If the latter expression had been used, it could have been argued in the present case that the sums of Rs. 20,000/ and Rs. 24 '000/which purported to be the principal amounts of the two loans evidenced by the two mortgage deeds in suit, were the principal amounts of the loans to be taken into account in working out the maximum amount of interest permissible under section 17 of the Act.
The expression "the principal of the original loan" makes it clear that, in determining the maximum amount of arrears of interest allowable, the Court must go behind the transaction of the loan and find out what was the actual cash originally advanced as principal and ignore all interest that may have been added subsequently to that original advance in order to make up the consideration for the loans in suit.
In the present case, therefore, the High Court was justified in looking at the transactions prior to the two mortgage deeds to find out what were the actual cash amounts origi 1086 nally advanced which, together with interest and after adjustment of accounts, formed the principal amounts for the two mortgagedeeds.
It was admitted by counsel for both parties before us that the figures accepted by the High Court as the principal amounts of the two loans are correct, if the original cash advances are treated as the principal amounts of the original loans.
It is, therefore, clear that, on the plain language of section 17 of the Act, the High Court was right in holding that the aggregate of the principal amounts of the original loans was only Rs. 37,971/50 P and.
not Rs. 44,000/ and, consequently, in awarding arrears of interest only to the extent of the same amount and not a larger amount.
On the second question, we are unable to agree with the view of the High Court that the arrears of interest mentioned in section 17 of the Act mean interest calculated up to the date fixed for redemption.
At the same time, we are also unable to accept the submission made on behalf 'of the appellants that the arrears of interest in this section mean arrears of interest up to the date of the suit.
It is to be noticed that the section is in the form of a directive to a Court not to pass a decree on account of arrears of interest for a sum greater than the principal of the original loan.
This language clearly gives an indication of the intention of the Legislature.
Obviously, the directive is to be carried out by the court at the time of passing the decree and, consequently, it would be at that time that the court will see how much it is awarding for arrears of interest.
The maximum prescribed for the arrears of interest must, therefore, be held to be the maximum amount in respect of interest payable up to the date of the decree when the court carries out the directire laid down in this section.
In the present case, the trial Court passed the decree on the 27th March, 1952 and, consequently, the amount of Rs. 37,971/50 P awarded as arrears of interest must be the arrears of interest due up to that date.
The High Court, in our opinion, was not correct in holding that these arrears of interest will cover interest due up the date fixed for redemption by the High Court.
In this connection, learned counsel for the respondents urged that the arrears of interest envisaged by section 17.
of the Act should be held to include interest due up to the date of the decree by the High Court, because that is the effective decree granting interest to the mortgagees; but this arguments overlooks the principie of law that the decree of an appellate Court takes effect from the date of the decree of the original court.
In this case, therefore, even though the High Court passed the appellate decree at a later date, that decree has to.
be deemed to have come into 1087 effect from 27th March, 1952 which was the date of the decree of the trial Court, so that no question can arise of holding that the arrears of interest under section 17 of the Act must be computed up to the date on which the High Court passed the decree.
The further point that arose was as to the interest which the appellants could claim after the date of the decree, viz. 27th March, 1952, on the amount decreed.
On behalf of the appellants, reliance was placed on Order 34, r. 11 of the Code of Civil Procedure and it was urged that interest.
should be allowed after that date in accordance with the provisions of that rule.
The High Court has expressed the opinion that, if interest is allowed under r. 11 of Order 34, C.P.C., it would be in conflict with section 17 of the Act; but we are unable to see any such conflict.
Section 17 of the Act confines itself to laying down the maximum of arrears of interest to be allowed up to the date of the decree and is not concerned with the interest that is to be allowed for the period thereafter.
Admittedly, the Code of Civil Procedure was applicable to this suit and, consequently, interest subsequent to the date of the decree had to be awarded in accordance with Order 34, r. 11, C.P.C.
Under r. 11(a)(i), interest would be payable on the principal amount found or declared due on the mortgage, from the date of the decree up to the date fixed for payment, at the rate payable on the principal, or, where no such rate is fixed, at such rate as the Court may deem reasonable.
In this case, the date of the decree by the trial Court was 27th March, 1952, while the date fixed for payment became 19th March, 1959 as a result of the decree of the High Court.
The interest for this period has to be calculated in accordance with r. 11(a)(i) of Order 34, C.P.C., on the principal amount of Rs. 37,971/50 P. As regards the rate, it is true that, under the mortgage deeds, the interest was payable @ 1% per mensem but, under the provisions of the Act read with the provisions of the Usurious Loans Act (Mysore Act IX of 1923), the fair interest payable on the loan would be @ 9 per cent per annum and it is at this rate that the interest must be calculated on this principal amount for this period.
In addition, under r. 11(a)(ii) of 0.34, C.P.C., interest @ 6% per annum has to be allowed on the amount decreed for costs, charges and expenses incurred by the appellants up to the date of the preliminary decree.
A further direction that is necessary is that interest under r. 11 (b) of 0.34.
C.P.C., will be payable up to the date of realisation or actual payment on the aggregate of the two principal sums just mentioned @ 6% per annum which must be deemed to be reasonable as interest at that rate is ordinarily awarded in all decrees in respect of future periods.
1088 The result is that the decree passed by the High Court will have to be amended in respect of calculation of interest in the manner indicated by us above.
The appeal is partly_ allowed to this extent.
In the circumstances of this case, we direct parties to bear their own costs of this appeal.
G.C. Appeal partly allowed.

summary/full:
The predecessor in interest of the appellants filed a suit under two mortgages claiming as principal and interest in respect of the first mortgage a sum of Rs. 51,200 and in respect of the second mortgage a sum of Rs. 60,200.
The trial court applying section 17 of the Mysore Money Lenders Act, 1939 held that the principal amount of the loan in the case of the first mortgage.
deed was the consideration shown therein, namely Rs. 20,000, and similarly the principal amount under the second mortgage was Rs. 24,000.
Accordingly the trial court passed a decree for the amount of Rs. 44,000 towards principal under the two mortgages and an equal amount as laid down in the aforesaid section 17, towards interest.
The High Court in appeal held that the principal amount of the original loan was Rs. 15,017 8 0 in respect of the first mortgage and Rs. 22,954 in respect of the second mortgage the aggregate being Rs. 37,971.50 Np.
The High Court therefore passed a decree for Rs. 37,971.50 Np.
as principal and the same amount as interest.
The High Court further held that this would be the arrears of interest to which the appellants would be entitled up to the date fixed for payment of the redemption money by its judgment.
The High COurt also made a direction that the principal amount would carry interest at 6% per annum from the date fixed for redemption till realisation.
The appellant in appeal to this Court by certificate urged: (i) that the High Court was wrong in reopening the accounts in respect of loans prior to the two mortgage deeds which 'formed the consideration for the two mortgage deeds in suit and it should have held, like the trial court, that the principal amount was Rs. 44,000 for the mortgages; (ii) that the arrears of interest under section 17 of the Act should be interpreted to mean arrears only up to the date of the institution of the suit, and the High Court should have granted future interest subsequently instead of granting it only with effect from the date fixed for redemption.
The Court also had to consider whether there was a conflict 'between O. 34 r. 11 of the Code of Civil Procedure and section 17 of the Act.
HELD: (i) Section 17, in prescribing the maximum amount of arrears of interest to be allowed, refers to "the principal of the original loan" and not "the principal of the loan".
If the latter expression had been used, it could have been argued in the present case that the sums of Rs. 20,000 and Rs. 24,000 which purported to be the principal amounts of the two loans evidenced by the two mortgage deeds in suit, were the principal amounts of the loans to be taken into account in 1083 working out the maximum amount of interest permissible under section 17 of the Act.
The expression "the principal of the original loan" makes it clear that, in determining the amount of arrears of interest allowable, the court must go behind the transaction of the loan and found out what was the actual cash originally advanced as principal and ignore all the interest that may have been added subsequently to that original advance in order to make up the consideration for the loans in suit.
In the present case therefore the High Court was justified in looking at the transactions prior to the two mortgage deeds to find out what were the actual cash amounts originally advanced which, together with interest and after adjustment of accounts formed the principal amounts for the two mortgage deeds.
(ii) Section 17 is in the form of a directive to a Court not to pass a decree on account of arrears of interest for a sum greater than the principal of the original loan.
Obviously, the directive is to be carried out by the court at the time of passing the decree and, consequently, it would be at that time that the court will see how much it is awarding for arrears of interest.
The maximum prescribed for the arrears of interest must, therefore be held to be the maximum amount in respect of interest payable up to the date of the decree when the court carries out the directive laid down in this section.
The decree of an appellate court takes effect _from the date of the decree of the original court, so that no question can arise of holding that the arrears of interest under section 17 of the Act must be computed up to the date on which the High Court passed the decree.
(iii) There is no conflict between O '.
34 r. 11 C.P.C. and section 17 of the Act.
Section 17 confines itself to laying down the maximum of arrears of interest to be allowed up to the date of the decree and is not concerned with the interest that is to be allowed for the period thereafter.
Admittedly the Code of Civil Procedure was applicable to the present suit and consequently interest subsequent to the date of the decree had to be awarded in accordance with O. 34 r. 11 C.P.C.
The interest under the mortgage deeds was payable @ 1% per mensem but under the provisions of the Act read with the provisions of the Usurious Loans Act (Mys.
Act ix of 1923) the fair interest payable on the loan would be @ 9 ' per cent per annum.
[The Court gave appropriate directions for the calculation of interest.]