judgement:
ivil Appeal No. 921 of 1968.
Appeal by special leave from the judgment and order dated January 8, 1968 of the Kerala High Court in Writ Appeal No. 79 of 1967.
465 S.V. Gupte and A.S. Nambiar, for the appellant.
Sarjoo Prasad and M.R.K. Pillai for respondent No. 1.
C.M. Kuruvilla, Sardar Bahadur, Vishnu Bhadur Saharya Yougindra Khushalani, for respondent No. 2.
The judgment of the Court was delivered by Bachawat, J.
The appellant challenges the scheme nationalisation of road transport services in respect of 9 routes in the districts of Ernakulam and Kottayam.
Chapter IVA the deals with nationalisation of road transport services.
Section 68C provides for the preparation and publication of a draft scheme of nationalization of road transport services in general or any particular class of such service in relation to any area or route or portion thereof whether to the exclusion, complete or partial, of other persons or otherwise.
Section 68D provides for the filing of objections of persons affected by the scheme, for the consideration of the objections by the government, for modification or approval of the scheme by the government and for publication of the approved or modified scheme.
Section 68E provides that a scheme finally settled under sec.
68D may at any time be cancelled or modified by the State transport undertaking.
The procedure laid down in secs.
68C and 68D shaH, so far as it can be made applicable, be followed in every case where the scheme is proposed to be modified as.
if the modification proposed were a separate scheme.
For the purpose of giving effect to the approved scheme in respect of a notified area or a notified route sec.
68F(2) (iii) authorises the Regional Transport Authority to modify the terms of an existing permit so as to curtail the area or route covered by the permit in so far as such permit relates to the notified area or notified route.
Section 68 authorises the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV A and in particular to provide the form in which any scheme or approved scheme may be published under secs.
68C and 68D.
In exercise of its powers under sec.
68 I the State Government framed the Kerala Motor Vehicles (State Transport Undertaking) Rules, 1960.
Rule 3 provides that every proposed scheme shall be in form I when it is in complete exclusion of existing road transport service, in form when the scheme is in partial exclusion of existing road transport service, in form III when the scheme is in supplementation of existing road transport service and in form IV when the scheme is to modify an existing scheme.
On December 15, 1965 the Kerala State Transport Corporation published a draft scheme in form II for nationalization of 9 specified routes in the districts of Ernakulam and Kottayam in partial exclusion of the existing passenger transport services 466 concerned, giving the particulars of the stage carriage permits to be excluded.
On October 17, 1966 after hearing the objectors the State Government approved the scheme.
On October 24, 1966 the government published the approved scheme.
On December 7, 1966 the appellant filed a writ petition in the Kerala High Court to quash the scheme.
V.P. Gopalan Nambiyar J. dismissed the petition.
A Divisional Bench of the High Court affirmed his order.
The present appeal has been filed after obtaining special leave.
The appellant 's contention is that the impugned scheme is a complete exclusion scheme and should have been in form I and as it is in form Ii it is in contravention of Rule 3 read with sec.
68C and is therefore invalid.
Let us examine this contention.
The scheme is in respect of 9 specified routes.
The scheme excludes all private operators holding stage carriage.
permits for those routes.
Take the route Kottayam Ernakulam.
All the private operators holding stage carriage permits for that route are excluded.
It is therefore argued that the scheme is one of complete exclusion.
But it appears that there are 33 existing routes partially overlapping the notified routes.
The 33 existing routes and the notified routes have many common road sectors.
The scheme does no.t interfere with the services on the 33 routes.
In spite of the scheme the public can get services on the common road sectors from the operators running on the 33 routes.
Take the notified Kottayam Ernakulam route.
There is an existing Kottayam Muttupetty route.
A portion of the Kottayam Muttupetty route overlaps the: Kottayam Ernakulam route.
The impugned scheme does not exclude the services of the operators of the Kottayam Muttupetty route on the road sector common to the Kottayam Ernakulam and Kottayam Muttupetty routes.
On these facts, it is impossible to.
say that the impugned scheme is one of complete exclusion.
Section 68C envisages schemes of road transport services in relation to any area or route or portion thereof whether to the exclusion, complete, or partial of other persons or otherwise.
Rule 3 of the Kerala Motor Vehicles (State Transport Undertaking) Rules, 1960 speaks of schemes of road transport service in complete or partial exclusion of existing road transport services.
From the language of sec.
68C and Rule 3 it appears that a complete exclusion scheme in relation to.
any area or route would be a scheme which completely excludes the existing road services of private operators on the, area or route in question.
The route includes the highway over which it runs.
If other existing services are allowed to continue over a part of the highway relating to the notified route the scheme.
is not one of complete exclusion.
467 A stage carriage permit is granted under secs.
46 to 48 for a specified area.
The words "roads included in the proposed route or area" in sec.
47( 1 )(f) implies that a route includes the road or the physical track.
Section 68F(2)(iii) implies that a portion of the route of an existing permit may relate to a notified route.
This happens when the two routes have a common road sector Section 68F (2)(iii) authorises the exclusion of the common portion of the road from the existing permit for giving effect to.
the scheme for the notified route.
For the purposes of Chapters.
IV and IVA there is no practical distinction between the route or the notional line from one terminus to another for which the permit is granted and the road over which the transport services are run and operated.
As pointed out in Nilkanth Prasad & Ors.
vs State of Bihar(1) "the distinction between "route" as the notional line and "road" as the physical track disappears in the working of Chap.
" The route is also an area.
(see Kondala Rao vs Andhra Pradesh S.T.C. Corporation(2) & C.P.C. Motor Service vs State of Mysore(3).
The impugned scheme does not exclude the road transport services of the 33 existing routes over many sections of the highways relating to the notified routes.
It follows that the scheme is not in complete exclusion of existing road transport services in respect of the notified routes and is not required to be in form I.
There is no infirmity in the scheme because it was in form II.
The impugned scheme is in partial exclusion of operators from Kottayam Ernakulam and Kottayam Eratupettah routes and 7 other routes.
It is common case that there were earlier schemes relating to the Kottayam Ernakulam and Kottayam Eratupettah routes.
In so far as the impugned schemes excludes private operators from those routes, it has the effect of modifying the earlier schemes.
The appellant 's contention is that the impugned scheme is invalid as the modification of the earlier schemes were made without complying with the provisions of sec.
68E. In our opinion, this contention is baseless.
The new scheme has been proposed and approved after following the procedure laid down in secs.
68C and 68D.
In so far as the new scheme modities the earlier schemes, the modifications could be made under sec.
68E. As the procedure laid down in sees.
68C and 68D were followed the conditions of sec.
68E were satisfied.
68E does not require that the new scheme should expressly say that it cancels or modifies the earlier schemes.
On the promulgation of the new scheme the earlier schemes stand modified by implication pro tanto.
A scheme to modify an existing scheme simpliciter is required by Rule 3 of the Kerala Motor Vehicles (State Transport Under (1) [1962] Suppl.
1 S.C.R. 728 at 737.
(2) A.I.R. 1961 S.C. 82 at 93.
(3) [1962] Supp.
I.S.C.R. 717; A.I.R. 1966 S.C. 1661.
468 taking) Rules, 1960 to be in Form IV.
The impugned scheme was in Form H as it was in partial exclusion of the existing road transport service.
Such a scheme could not be in form IV.
The partial exclusion scheme was rightly proposed in form Ii and when approved it had the effect of modifying the earlier schemes.
Counsel suggested that the approval of the scheme by the State Government on October 17, 1966 was defective as the Government was merely of the opinion that the proposed scheme was necessary to provide efficient, adequate and co ordinated road transport services and it did not form the opinion that the scheme was necessary to provide economical road transport service.
The point was not taken in the courts below and we therefore indicated in the course.
of the arguments that the appellant will not be permitted to raise.
this point at this late stage.
Several other objections were taken in the courts below but they are not pressed in this Court.
The appeal is dismissed with costs.
Y.P. Appeal dismissed.

summary/full:
The respondent State approved a scheme in form II for nationalization of certain specific routes after complying with the provisions of sections 68C and 68D of the .
The scheme excluded.
all private operator 's from the notified routes.
The notified routes formed part of highways, having common road sectors and private operators continued to operate on the highways.
The appellant unsuccessfully filed writ petition in the High Court to quash the scheme.
In appeal to this Court, the appellant challenged the validity of the scheme on the grounds that (i) the scheme was a complete exclusion scheme and should have been in form I and as it was in form II it was in contravention of Rule 3 of the Kerala Motor Vehicles(State Transport Undertaking) Rules, 1960 read with section 68C of the Act; and (ii) since there were earlier schemes, they could not be modified by the impugned scheme without complying with the provisions of section 68E.
Dismissing the appeal, this Court: HELD: (i) From the language of section 68C and r. 3 it appears that a complete exclusion scheme in relation to.
any area of route would be a scheme which completely excludes the existing road services of private operators on the area or route in question.
The route includes the highway over it runs.
If other existing services are allowed to continue over a part of the highway relating to the notified route, the scheme is not one of complete exclusion.
The impugned scheme did not exclude the road transport services of other existing routes which overlapped many sectors of the highways relating to the notified routes.
In spite of the scheme the public could get services on the common road sectors from the private operators who continued to operate the highways.
Therefore, the scheme was not in complete exclusion of existing road transport services in respect of notified routes and was not required to be in form 1.
[466 G H, 467 D] Nilkanth Prasad & Ors.
vs State of Bihar.
[1962] Suppl.
1 S.C.R. 728 at 737; Kondala Rao vs Andhra Pradesh S.T.C. Corporation, A.I.R. 1961 S.C. 82, followed.
(ii) On the promulgation of the new scheme the earlier schemes stood modified pro tanto.
As the procedure laid down in sections 68C and 68D were followed the conditions of section 68 were satisfied.
section 68E does not require that the new scheme should expressly say that it cancels or modities the earlier schemes.
[467 G]


judgement:
Appeal No. 582 of 1965.
Appeal by special leave from the judgment ' and order dated August 23, 1961 of the Madras High Court in Appeal No. 157 of1957.
C.R. Pattabhiraman and R. Thiagarajana, for the appellants.
Vedantachari, G. Kausalya and section Balakrishnan, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
This is an appeal by special leave.
It is directed against the decision of the High Court of Madras in A.S. No. 157 1957.
This case has a fairly long history but we shall set out in this Judgment only such facts as are necessary for the decision of the issues debated before us.
In the course of his arguments Mr. C.R. pattabhiraman, learned Counsel for the appellant, urged two grounds in support of this appeal.
They are: (1 ) the appellant being an 'occupancy tenant ' of the suit properties he cannot be evicted from the land 510 in view of the provisions of the Madras Estates Land Act (Madras Act I of 1908) as amended by the Madras Estates Land Third Amendment Act (Madras Act XVIII of 1936) and (2) that under any circumstance the appellant should be held as enjoying the lands in question by personal cultivation and there fore he cannot be evicted in view of the provisions of the Madras Cultivating Tenants Protection Act (Madras Act XXV of 1953).
The respondent is the owner of the suit properties.
It leased out two different portions of those properties to the appellant under two lease deeds dated 11 9 1945 and 27 7 1946 (Exhs.
A 7 & A 8) respectively for a period of three years.
Even before the lease period came to an end the respondent sued the appellant for the possession of the suit properties on various grounds.
The appellant pleaded that the cannot be evicted from the suit properties in view of the protection afforded to him by section 6 of the Madras Estates Land Act.
He claimed 'occupancy right ' in the suit properties on the basis of the provisions of that Act.
The trial court upheld his contention and dismissed the suit.
But in appeal the High Court held that as the case fell within the scope of section 8(5) of the Madras Estates Land Act, the appellant was not entitled to the benefit of section 6 of that Act.
It accordingly allowed the appeal and remanded the case to the trial court for the trial of the other issues.
During the pendency of the appeal in the High Court the Madras Cultivating Tenants Protection Act came into force.
On the basis of the provisions of that Act, the appellant claimed before the trial court after remand that he should be considered as a cultivating tenant under that Act and if so held, he cannot be evicted from the suit properties.
Both the trial court as well as the High Court rejected both the aforementioned contentions of the appellant.
As regards the occupancy right pleaded, they held that the matter is concluded by the earlier decision of the High Court.
The trial court held that the appellant cannot be considered as a cultivating tenant under the Madras Cultivating Tenants Protection Act as he is not proved to have cultivated the properties by his own physical labour as claimed by him.
That Court opined that mere supervision of the work of the hired labour cannot be considered as "Physical labour" of the appellant.
The High Court affirmed this conclusion observing: "But the evidence disclosed that the cultivation of the suit lands was carried on by the appellant solely with the aid of hired labour.
Neither the appellant nor any member of his family took part in the cultivation operations in respect of the suit lands.
We therefore agree with the learned District Judge in his view that the appellant does not satisfy the test of carrying on personal cultivation to qualify for becoming a cultivating tenant.
He could not therefore claim the benefits conferred by the various protection Acts in force.
" 511 We have to first decide whether the appellant can be permitted to raise the contention that he has 'occupancy right in the suit properties in view of the decision of the High court of Madras in A.S. No. 241 of 1949.
In other words whether that decision operates as res judicata as regards his claim to the occupancy fight.
We are unable to agree with Mr. Pattabhiraman that the High Court did not finally decide the appellant 's claim to occupancy right in the suit properties in A.S. No. 241 of 1949 and that it merely made some tentative observations in respect of the same leaving the matter for a fresh decision by the trial court.
The High Court has specifically gone into the appellant 's claim to occupancy right, examined the relevant provisions of the Madras Estates Land Act, took into consideration the decisions bearing on the point and thereafter came to a firm conclusion that the appellant 's claim is unsustainable.
The case was remanded to the trial court for the trial of the issues that have not been decided earlier.
Therefore we have now to see whether the plea of occupancy right can be gone into afresh.
There is hardly any doubt that the trial court could not have gone into that issue again.
It was bound by the Judgment of the High Court.
It is also clear that that decision was binding on the Bench which heard the appeal.
On this question judicial opinion 'appears to be unanimous and it is a reasonable view to take.
We are unable to agree with the contention of the respondent that the decision of the High Court of Madras in A.S. No. 241 of 1949 on its file precludes the appellant from reagitating in this Court the plea that he has occupancy right in the suit properties.
An identical question came up for decision in this Court in Satyadhyan Ghosal and Ors.
vs Sm.
Doorajin Debi and Ant.(1) wherein this Court ruled that such a decision can be challenged in an appeal to this Court against the final Judgment.
As it is open to the appellant to recanvass the correctness of the decision of the High Court regarding his claim for occupancy right, we shall now go into the merits of that claim.
The suit land was in an Inam village but it was not an 'estate ' within the meaning of the Madras Estate Land Act as it originally stood; but it became an 'estate ' by virtue of the amending Act XVIII of 1936.
The lands in dispute are not admittedly 'private lands '.
Prior to the amending Act came into force, the respondent had obtained a decree for possession against the tenants who were then in the suit lands.
It is also not in dispute that no tenant had obtained any occupancy fight in those lands prior to 1936.
Therefore all (1) ; 512 that we have to see is whether the appellant can 'be said to have acquired occupancy right in those lands in view of the leases in his favour.
For deciding this question we have to examine the scope of section 6(1) and section 8(5) of the Act as they now stand.
Section 6(1) reads thus: "Section 6(1) : Subject to the provisions of this Act every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such land holder shall have a permanent right of occupancy in his holding.
Explanation (1 ).
For the purposes of this Sub section, the, expression 'every ryot in possession ' shall include every person who, having held land as a ryot, continues in possession of such land at the commencement of this Act.
Explanation (2).
In relation to any inam village which was not an estate before the commencement of the Madras Estate Land (Third Amendment) Act, 1936 but became an estate by virtue of that Act, or in relation to any land in an inam village which ceased to be part of an estate before the commencement of that Act, the expression 'now ' and 'commencement of that Act ' in this sub section and Explanation (1) shall be construed as meaning and thirtieth day of June 1934, and the expression 'hereafter ' in the sub section shall be construed as meaning the period after the thirtieth day of June,1934.
" Section 8 ( 5 ) reads as follows: "If before the first day of November 1933 the landholder has obtained in 'respect of any land in an estate within the meaning of Sub clause (d) of Clause (2) of Section 3 a final decree or order of a competent Civil Court establishing that the tenant has no occupancy right in such land, and no tenant has acquired any occupancy right in such land before the commencement of the Madras Estates Land (Third Amendment)Act, 1936, the .land holder shall, if.the land is not private land within the meaning of this Act, have the right, notwithstanding anything contained in this Act, for a period of twelve years from the commencement of the Madras.
Estates Land (Third Amendment) Act, 1936, of admitting any person to the possession of such land on such terms as, may be agreed upon between them: Provided that ' nothing contained ' in "this sub section shall be deemed during the said period of twelve years 513 or any part thereof to affect the validity of any agreement between the land holder and the tenant subsisting at the commencement of the Madras Estates Land (Third Amendment) Act, 1936.
" The parties are agreed that the facts of this case satisfy the requirements of section 8(5) of the Act.
That being so the respondent was entitled for a period of twelve years from the commencement of the Madras Estate Land (Third Amendment) Act, 1936 to admit any person to the possession of the suit lands on such terms as may be agreed upon between him and his lessee notwithstanding anything contained in the Act.
While section 6(1) is subject to the provisions of the Act, section 8(5) is not controlled by any other provision of the Act.
Therefore if the case falls both within section 6( 1 ) as well as section 8( 5 ) then the governing provision will be section 8 ( 5 ) and not section 6 ( 1 ).
Once it is held ' that the present case falls within section 8 (5 ) it necessary follows that it is taken out of the scope of section 6 (1 ), But what is argued on behalf of the appellant is that when section 8(5) says that the land holder shall"have . the right notwithstanding anything contained in the Act for a period of twelve years from the commencement of the Madras Estate Land (Third Amendment) Act, 1936 of admitting any person to the possession of such land on such terms as may be agreed upon between them" it merely means that for the said period of twelve years, the tenants on the land cannot claim the benefit of section 6( 1 ) of the Act but they get those rights immediately after the twelve years period is over.
It was urged on behalf of the appellant that the object of the Act is to confer occupancy right on the tenants in respect of all lands included the inam excepting the 'private lands ' of the inamdar; at the same time the legislature thought that in respect of lands coming within the scope of section 8 ( 5 ) a period of grace should be allowed to the inamdar so that he may adjust his affairs; once that period is over all lands other than 'private lands ' would be governed by the provisions of section 6(1).
Another facet of the same argument was that section 6(1) is the main provision; it has general application; that provision contains the policy and purpose of the law; section 8(5) is an exception; therefore section 6(1) should be construed liberally and section 8(5) should be strictly construed with a view to advance the purpose, of the law.
Further we were asked to take into aid the policy laid down, in the proviso to section 8(5) while ascertaining the legislative intention behind section 8(5).
This proviso applies to agreements entered into between landholders and their tenants prior to the 1936 amendment.
It 'was said that there was no, discernible reason for treating the agreements in force on October 31,, .1936 (the date of commencement of the amended Act).
differently from agreements entered into 'after that date and since the legislature has expressly stated that the former shall be in force only for a period of twelve years, it is not reasonable to hold that in the case Of leases subsequent to Oct. 514 31, 1936, it intended to lay down a different rule.
We do see some force in these contentions but in our opinion none of these considerations are sufficient to cut down the plain meaning of the words "that the landlord has a right of admitting any person to the possession of such land on such terms as may be agreed upon between them." "Such terms" must necessarily include the term relating to the period of the lease.
We have to gather the intention of the legislature from the language used in the statute.
The language of section 8(5) is plain and unambiguous.
Hence we cannot call into aid other rules of construction of statutes.
If it was the intention of the legislature that the terms of the agreements entered into between the land holders and their tenants during the period of the twelve years mentioned earlier should come to an end at the close of the period and thereafter the provisions of the Act other than those in section 8(5) should govern the relationship between them it should have said so.
From the language of section 8(5), it is not possible to hold that the contract itself is exhausted or stands superseded at the end of the twelve years period mentioned therein.
If the legislative intention is not effectuated by the language employed in section 8(5) then it is for the legislature to rectify its own mistake.
It must be remembered that this legislation is in operation only in some parts of the Madras State as it was prior to the formation of the Andhra State in 1954.
In other words it is a State legislation.
The Madras High Court has consistently taken the view right from 1955 that agreements entered into by virtue of section 8(5) under which tenants were admitted into possession of lands falling within the scope of that provision do not get exhausted or superseded merely by the expiry of twelve years period mentioned in that sub section.
On the other hand under section 8 ( 5 ) a land holder is given a right during the said period of twelve years to admit tenants to possession of such lands on such terms as may be agreed upon.
It was so held for the first time in this very case before it was remanded to the trial court for further trial.
That decision is reported in Navaneethaswaraswami.
Devasthanam, Sikki represented by its Executive Officer vs L.K. Ganapathi Thevar(1).
This view was affirmed by a Full Bench of that High Court in Sri Navaneethaswaraswami Devasthanam Sikki represented by its Executive Officer vs
P. Swaminatha Pillai(2).
The learned Counsel for the appellant invited our attention to three decisions of the Madras High Court and one of Andhra Pradesh High Court.
The first decision to which our attention was invited is Muminia Damudu and Ors.
vs Datla Papayyaraju Garu by Muktyar Putravu Ramalingaswami and Ors.(3).
That is a decision of Hotwill, J. sitting singly.
Therein it was head that when (1) (2) I.L.R. (3) A.I.R. (1944) Mad.
515 the legislature spoke in section 8(5) of the tenant acquiring occupancy right during the period between the passing of the final decree and the commencement of the Act, it was referring to acquisition of occupancy rights otherwise than under the Act; the legislature must have intended by section 8(5) to exempt from the general operation of section 6, all cases where the 1andholder had obtained a decree prior to 1st November, 1933, unless the tenant subsequent to the passing of the final decree had acquired occupancy right independently of the Act.
Consequently where the landlord obtained a final decree referred to in section 8(5) before 1st November, 1933, the tenant cannot be said to have acquired occupancy rights under section 6 merely because he was in 'possession on 30th June 1934 so as to render section 8(5) inapplicable.
We fail to see how this decision bears on the rule with which we are concerned in this appeal.
In Korda Atchanna vs Jayanti Seetharamaswami(1), Viswanatha Sastri, J. differed from the view taken by Hotwell,.
J. in the decision cited above.
This decision also does not bear on the question of law we are considering.
In Thota Seshayya and six ors.
vs Madabushi Vedanta Narasimhacharyulu(2), a Bench of the Madras High Court while considering the vires of section 8(5 ) observed: "We are satisfied that section 8(5) is giving some limited privileges for a limited period to the landholders who have obtained decrees before 1st November 1933, has acted on a classification based on some real and substantial distinction beating a reasonable and just relation to the object sought to be attained, and that the classification cannot be called arbitrary or without any substantial basis, and must be upheld as perfectly valid and not impugning in the least on article 14 or 15 of the Constitution of India.
We may add that tenants who have been given now occupancy rights under the third amendment where they had none before, cannot reasonably complain of the restrictions put on the acquisition of such new occupancy rights in a few cases where justice requires such restrictions as in section 8(5).
The tenants acquired the right only under those conditions and cannot very well complain about them.
" From these observations we are asked to spell out that the learned Judges had come to the conclusion that all contracts entered into between the landholders and their tenants during the twelve years ' period mentioned in section 8(5) came to an end at the end of that period.
In the first place this conclusion does not necessarily flow from the observations quoted above.
Even if such a conclusion, can be spelled out, the observations in question are mere obiter on the question for decision before us.
That was also the view taken by the Division Bench of the Madras High Court in Nava (1).
AIR. 1950 Mad.
I.L.R. Ll3Sup.
CI/68 2 516 neetheeswaraswami Devasthanam Sikkil vs L. K. Ganapathi Thevar(1) .
In Vadranam Ramchandrayya and ant. vs Madabhushi Ranganavakamma(2), a Division Bench of the Andhra pradesh High Court followed the decision of the Madras High Court in Thota Seshayya and ors.
vs Madabushi Vendanta Narasimbhacharyulu(3).
Therein again the Court was not called upon to consider the scope of section 8(5).
For the reasons already mentioned we are unable.to hold that .the appellant had acquired occupancy right in the suit properties.
This takes us to the question whether the appellant can be considered as a 'cultivating tenant ' within the meaning of the Madras Cultivating Tenants Act 1955.
If he can be considered a cultivating tenant then he cannot be evicted from the suit properties except in accordance with the provisions of that Act.
In the Cultivating Tenants Act as it originally stood the definition .of a cultivating tenant was as follows : "Cultivating tenant in relation to an), land means a person who carries on personal cultivation on such land, under a tenancy agreement, express or implied, and includes (i) any such person who continue in possession of the land after the determination of tenancy agreement.
" If this definition had remained unaltered then on the basis of the findings of the trial court and the High Court the appellant could have been held as a cultivating tenant, as cultivation today is a .complex process involving both mental as well as physical activity.
But by the time this case came to be instituted the definition of "cultivating tenant ' was amended by additing an explanation to the original definition.
That explanation reads: "A person is said to carry on personal cultivation on a land when he contributes his Own physical labour or that of the members of his family in the cultivation of that land." The true effect of the amended definition came up for consideration before a Division Bench of the Madras High Court in Mohamed Abubucker Lebbai and anr.
vs The Zamindar of Ettayapuram Estate, Koilapatti(4).
' Therein it was held that in order to fall within the definition of 'cultivating tenant ', a person should carry on personal cultivation which again requires that he should contribute physical labour.
The use of physical labour includes physical strain, the use of muscles and sinews.
Mere supervision of work, or maintaining of accounts or distributing the wages will not be such contribution of physical labour as to attract the definition.
This view was upheld by this Court in section N. Sunda (1) (1955)2 M.L.J. 112.
(2) (1957) 2 Andhra Weekly Reports, p. 114.
(3) I.L.R. (4) (1961) 1 M.L.J.P. 256.
517 laimuthi Chettiar vs Palaniyandayan(1) to which one of us was a party.
In view of the said decision it follows that on the facts found in tiffs case, the appellant cannot be considered as a cultivating tenant.
In the result, this appeal fails and the same is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) [1966] I S.C.R. 450.

dataset_name: IN-Abs

summary/full:
The respondent was the owner of the suit properties leased to the appellants by lease deeds executed in 1945 and 1946 and sued the appellant for their possession on various grounds.
The appellant claimed an 'occupancy right ' in the properties and pleaded that he could not be evicted in view of the protection afforded to him by section 6 of the Madras Estates Land Act 1 of 1908.
The Trial Court upheld his contention and dismissed the suit but the High Court allowed an appeal holding that as the case fell within the scope of section 8(5) of the Act, the appellant was not entitled to the benefit of section 6; it therefore remanded the case for trial on other issues.
During the pendency of the appeal in the High Court, the Madras Cultivating Tenants Protection Act came into force and therefore the appellant claimed before the Trial Court after remand that he was a 'cultivating tenant ' within the meaning of the Act and could not, for this additional reason, be evicted.
Both the Trial Court as well as the High Court rejected the appellant 's contentions.
In the appeal to this Court it was contended on behalf of the appellant that although section 8(5) of Madras Act 1 of 1908 may govern the present case, but when section 8(5) says that the land holder shall 'have the right notwithstanding anything contained in the Act for a period of twelve years from the commencement of the Madras Estate Land (Third Amendment) Act, 1936 of admitting any person to the possession of such land on such terms as may be agreed upon between them", it merely means that for the period of twelve years, the tenants on the land cannot claim the benefit of section 6(1) of the Act but they get those rights immediately after the twelve years period is over; furthermore, that section 6(1) is the main provision; it has general application and contains the policy and purpose of the law; section 8(5) is an exception; therefore section 6(1) should be construed liberally while section 8(5) should be strictly construed with a view to advance the purpose of the law.
It was also contended that the Trial Court as well as the High Court were in error in holding that the decision of the High Court prior to the remand was binding on both courts and could not be reagitated before them.
HELD: Dismissing the appeal.
(i) While section 6(1) is subject to the provisions of the Act, section 8(5) is not controlled by any other provision of the Act.
Therefore if the case falls both within section 6(1) as well as section 8(5), then the governing, provision will be section 8(5) and not section 6(1).
As the present case fell within section 8(5) it necessarily followed that it was taken out of the scope of section 6(1).
[513 C D] From the language of 'section 8(5), it is not possible to.
hold that the contract itself is exhausted or stands superseded at the end of the twelve year period mentioned therein.
[514 C D] 509 Executive Officer vs
L.K. Ganapathi Thevar, ; and Sri Navaneethaswaraswami Devasthanam Sikki, represented by its Executive Officer vs
P. Swaminatha Pillai, I.L.R. ; referred to.
Muminia Damudu and Ors.
vs Datla Papayyaraju Garu by Muktyar Putravu Ramalingaswami and Ors.
, A.I.R. 1944 Mad. 136; Korda Atchanna vs Jayanti Seetharamaswami, A.I.R. 1950 Mad. 357; Thota Seshayya and six Ors.
vs Madabushi Vedanta Narasimhacharyulu, I.L.R. and Vadranam Ramchandrayya and Anr.
vs Madabhushi Ranganavakamma, (1957) 2 Andhra Weekly Reports, p. 114 distinguished.
(ii) On the facts found in the present case, the appellant could not be considered a 'cultivating tenant ' after the amendment of the definition of a cultivating tenant ' in the Madras Cultivating Tenants Act, 1955, became of the addition of the explanation; in order to fall within the definition of 'cultivating tenant ' a person should carry on personal cultivation which again requires that he should contribute physical labour.
The use of physical labour includes physical strain, the use of muscles and sinews.
Mere supervision of work, or, maintaining of accounts or distributing the wares will not be such contribution of physical labour as to.
attract the definition.
[516 G] Mohamed Abubucker Lebbai & Anr.
vs The Zamindar of Ettayapuram Estate, Koilapatti, (1961) (1) M.L.J., p. 256 and S.N. Sundalaimuthi Chettiar vs palaniyandayan; , ; referred to.
(iii) The trial court could not go into the question of the claim to an occupancy tenant 's right after the judgment of the High Court at the time of the remand.
That decision was also binding on the bench which heard the appeal.
However, the appellant was entitled to reagitate the issue in the present appeal.
Satyadhyan Ghosal and Ors.
vs Sm.
Deorajin Debi and Anr.
, ; , referred to,.


judgement:
l Appeals Nos, 1761 of 1967.
Appeal from the judgment and decree, dated the 14th April, 1964 of the Allahabad High Court in Income tax Reference No. 130 of 1960 and Civil Appeal No. 1762 of 1967.
Appeal from the judgment and decree, dated May 5, 1964 of the Allahabad High Court in Income tax Reference No. 777 of 1961.
538 B. Sen, B.D. Sharing and R.N. Sachthey, for the appellant (in both the appeals).
G.C. Sharma, V.C. Rishi and P.K. Mukherjee, for the respondent (in C.A. No. 1761 of 1967).
The Judgment of the Court was delivered by Grover, J.
The common question which arises in these appeals by certificate, is whether speculative losses can be set off against profits from any other business activity under section 10 in spite of the first proviso to.
section 24(1) of the Income Tax Act, 1922.
The facts in C.A. 1761/67 in which the question in the above form was referred, the language of the question being somewhat different in the other appeal, may be stated.
The assessee who is an individual derived income from three sources i.e., property, shares in joint stock companies and commission agency business and shares in partnership firms.
The accounting year relevant to the assessment year 1953 54 was the period from October 20., 1951 to October 8, 1952.
In the personal business of commission agency, the assessee returned a net profit of Rs. 2,761.
In arriving at this figure the net share of loss of Rs. 11,075 from the firm of Kamta Prasad Raghunath Prasad in which the assessee was a partner, was Claimed.
The Income Tax Officer did not go into the details but ignored the figure in the absence of information from the Income tax Officer assessing the aforesaid firm.
Before the Appellate ASsistant Commissioner it was submitted that the actual share of loss was Rs. 13,232 and it included a sum of Rs. 8,669 representing loss suffered in speculative dealings in silver paid through the firm Kamta prasad Raghunath Prosad.
The Appellate Assistant Commissioner, after examining the details of the loss, directed the Income Tax Officer to exclude a profit of Rs. 1,415 from the speculative transactions and to carry forward the net loss of Rs. 7,254 for setting it off against the income of the assessee from speculative dealings in subsequent years.
Before the Appellate Tribunal there was no dispute about these figures.
What was contended was that the loss of Rs. 7,254 should be set off against profit from other business.
The Tribunal rejected this contention following the decision in Keshavlal Pramchand vs Commissioner of Income tax.
Ahmedabad(1).
Thereafter the assessee moved the Tribunal for making a reference to the High Court.
The High Court did not accept the view in Keshavlal Pramchand 's(1) case which has been followed in several other decisions by other High Courts.
Now certain provisions of the Act may be noticed before the case law is discussed.
Section 6 gives the heads of income (1) 539 chargeable to income tax which are six in number.
Section 7 deals with the first head "salaries"; Section 8 with the second head "interest on securities"; section 9 with "income from property" and section 10 provides for liability to tax under the head "profits and gains of business, profession or vocation" which is the fourth head given in section 6.
It is unnecessary to go to the 5th and 6th heads.
Section 24 provides that where any assessee sustains.
a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year.
In the year with which we are concerned in the present case there was a proviso which was, at that time, the second proviso but it became the first proviso after the enactment of the Taxation Laws (Extension to Jammu & Kashmir) Act 1954.
This proviso, at the material time, stood as follows: "Provided further that in computing the profits and gains chargeable under the head 'Profits and gains of business, profession or vocation ', any loss sustained in speculative transactions which are in the nature of a business shah not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions".
In Keshavlal Pramchand 's(1) case the assessee had suffered a loss in speculative business carried on by him in the year of account.
His contention was that he was entitled to take this loss into account in arriving at the profits and gains of his business (of non speculative nature).
Mr. Palkhiwala, who argued the case before the Bombay court, put forward the view that section 24( 1 ) read with proviso referred only to a case where the assessee was claiming the right to set off the loss which he had suffered under one head against a profit which he had earned in another head.
The section therefore had no application when the assessee wanted to adjust or set off a loss against a profit under the same head.
It was urged by him that the assessee in claiming to.
set off his speculative loss against his business profits under the same head was not claiming the benefit of any right conferred by section 24(1) and therefore the proviso had no application.
The argument was elaborated further by referring to the true nature and function of a .proviso which was to except or take out a particular portion from the field dealt with by the section.
Chagla, C.J., who delivered the judgment of the Bombay Bench, had no difficulty in coming to the conclusion that on the language of the proviso itself and on the scheme of the Act the Legislature in enacting the so called proviso was enacting a substantive provision dealing with the mode of computing the profits and gains charge (1) 540 able under the head "profits and gains of business profession or vocation" and that the Legislature had provided that when profits and gains.
were computed the loss sustained in a speculative transaction must not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions.
The learned Chief Justice further referred to the mischief which was aimed at by the Legislature in enacting the proviso.
In recent times businessmen were known to buy speculative losses in order to reduce their profits and the Legislature wanted to put an end to that mischief which could only be done by preventing the assessee from reducing his profits by speculative losses.
Bombay decision was followed by the Madhya Pradesh High Court in Commissioner Income Tax, Nagpur vs Ram Gopal Kanhaiya Lal(1) as also by the Division Bench of the Punjab High Court in Manohar Lal Munshi Lal vs Commissioner of Income ' Tax, New Delhi(").
The matter ultimately went to a Full Bench of the Punjab High Court in Commissioner of Income Tax vs Ram Swarup(") in which after reviewing the entire case law and examining the various aspects relevant to the questio,n the view exp.
ressed by Chagla, C.J. in the Bombay case was accepted as correct.
Similarly in Jummar Lal Surajkaran vs Commissioner of Income Tax(4), Hanuman Investment Company vs Commissioner of Income Tax(5), and Joseph ' John vs Commissioner of Income Tax(6), the considerations which prevailed in Keshavlal Pramchand 's(7) case were accepted as correct.
It would appear that so far as this Court is concerned the matter now stands concluded by the following observations in Commissioner 07 Income ' Tax, Gujarat vs Kantilal Nathu Chand(8): "Section 24 is, thus, a provision laying clown the manner of computation of total income.
The principal clause of section 24( 1 ) lays down that, if there.
ben loss of profits or gains in any year under any of the heads mentioned in section 6, that loss has to be set off against the income, profits or gains of the assessee under any other head in that year.
If this provision had stood by itself without any provisos, the result would.
have been that all losses incurred by an assessee under any of the heads mentioned in section 6 would be adjusted against profits under all other heads, and then the total income.
of the assessee would be worked out on that basis.
The first ' proviso.
to this.
sub section, (1) (2) (3) (4) (5) (6) (7) (8) ; , 321.
541 however, lays down an exception to this general rule contained in the principal clause.
The exception relates to income from business sustained in speculative transactions and places the limitation that losses sustained in speculative transactions are not to be taken into account in computing the profits and gains chargeable under the head "Profits and gains of business, profession or vocation", except to the extent that they will be set off against profits and gains in any other business which itself consists of speculative transactions.
The effect of the proviso is that if there are profits in speculative business, those profits are added to income under the other heads mentioned in section 6 for purposes of computing the total income of the assessee in order to determine the tax under section 23 of.
the Act.
On the other hand, losses in speculative business are not to be taken into account when computing the total income, except to the extent to which they can be set off against profits from other speculative business.
The first proviso, thus, clearly limits the applicability of the principal clause of section 24 ( 1 ); and, when applied, it governs.
the manner in which the total income of the assessee is to be corn .
puted.
In the case before us, the Income Tax Officer was clearly right in the assessment years 1958 .59 and 1959 60 in not setting off the losses in the speculative business against the income earned in those years either from property or from ready business in kappas".
The learned counsel for the assessee sought to press the reasons which prevailed with the learned Judges of the High Court and has sought to characterise the above observation as obiter.
It is neither necessary to.
deal with the reasoning of the High Court nor can that reasoning stand in view of what has been laid down in Kantilal Nathu Chand 's(1) case by this Court which cannot be regarded as obiter becau 'se it has been clearly stated that the question of the applicability of the proviso with which we are concerned arose directly in that case in respect of the assessment years 1958 59 and 1959 60.
The concluding portion of the passage extracted leaves.
no room or doubt in this matter.
Moreover we are of the opinion that where the language is quite clear and no other view is possible it is futile to go into the question whether the proviso to.
section 24( 1 ) operates as a substantive provision or only by way of an exception to section 24( 1 ).
The proviso says in unmistakable and unequivocal terms that any losses sustained in speculative transactions which are in the nature of a business shall not be taken into account except to the extent (1) ; 542 of the amount of profits or gains in any other business consisting of speculative transactions.
This has to be read with Explanation (1) according to which where the speculative transactions carried on are of such a nature as to constitute a business the business shall be deemed to be distinct and separate from any other busi In the above view of the matter the answer to the questions referred in both the appeals will be in the negative, namely, against the assessee and in favour of the Department.
The appeals are accordingly allowed with costs.
There will be one hearing fee.
V.P.S. Appeals allowed.

summary/full:
The assessee, an individual, derived income from various.
sources including commission agency business and shares in partnership firms.
In arriving at the net profit for the assessment year 1953 54, he claimed his share of the loss 'from one of the firms in which he was a partner, as a set off against profits from other business.
The loss was the result of speculative transactions.
The Department and Tribunal held against him.
On a reference, the High Court held in favour of the assessee on the basis.
that the observations of this: Court, in Commissioner of Income tax, Gujarat vs Kantilal Nathu Chand, ; namely: that under the first proviso to section 24(1) of the Incometax Act, 1922, losses in speculative business are not to be taken into account when computing the total income, except to the extent to, which they can be set off against profits 'from other speculative business, are obiter.
In appeal to this Court, HELD: The observations in Kantilal Nathu Chand 's case, cannot be regarded as obiter, because the question of the applicability of the proviso directly arose in the ease.
The proviso says in unequivocal terms that any losses sustained in speculative transactions which are in the nature of ' a business shall not be taken into.
account except to the extent of the amount of profits or gains in any other business consisting of speculative transactions.
If this is read with Explanation I, according to which where the speculative transactions carried on are of such a nature as to constitute a business the business shall be deemed to be distinct and separate from any other business, no other view is possible.
[541 G H; 542 A B] Keshavlal Pramchand vs Commissioner of Income tax, Ahmedabad, , Commissioner of Income tax Nagpur vs Ram Gopal Kanhaiyalal, , Manohar Lal Munshi Lal vs Commissioner of Income tax, New Delhi, , Commissioner of Income tax vs Ram Swarup, , Jummar Lal Surajkaran vs Commissioner of Income tax , Hanuman Inves 'tment Company vs Commissioner of Income tax, and Joseph John vs Commissioner of Income tax, , approved.