judgement:
ivil Appeal No. 2036 of 1987.
From the Judgment and Order dated 19.11.1986 of the Bombay High Court in W.P. No. 710of 1984.
Aspi Chinai, R.F. Nariman, Miss Darshna Bhogilal, K.K. Lahiri, R. Karanjawala, Ejaz Maqbool and Mrs. Manik Karanja wala for the Appellant.
K.K. Singhvi, Brij Bhushan and Anil Kumar Gupta for the Respondent in C.M.P. No. 19447 of 1988.
G. Ramaswamy, Additional Solicitor General, U.J. Mukhi ja, B.S. Basania, Mrs. A.K. Verma, Arun Banga and D.N. Misra for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal by special leave from the judgment and order dated 19th November, 1986 of the learned Single Judge of the Bombay High Court.
In this appeal this Court has been asked to examine the fron tiers of judicial review of the action of a statutory au thority, i.e. the Board of Trustees of the Port of Bombay, in evicting its tenant and granting the land in question to another tenant.
However, in order to appreciate the contro versy it is necessary to have a conspectus of the facts involved.
756 The respondent Board of Trustees of the Port of Bombay is a statutory authority.
Vast areas of South Bombay which are completely tenanted, are owned by the respondent.
Being a statutory authority, the respondent has been exempted from the operation of the relevant Rent Act.
The respondent is a statutory corporation constituted under the Major Port Trust Act, 1963 as amended by the Major Port Trust (Amendment) Act, 1974.
Between about 1906 and 1932, one Jhunjhunwala was the lessee of plot No. 6 (which adjoins plot 5B which is the suit plot) and a building was existing on plot No. 6 which was tenanted to M/s Bombay Bharat & Swadeshi Rice Mills, and the said Mills were desirous of operating a rice mill on plot No. 6 but could not get the licence from the Municipal ity for the operation of the said rice mill unless satisfac tory arrangement was made for the removal and storage of rice husk in a separate chamber/structure.
Since about 1932, the appellant had been the lessee of the respondent in respect of part of the original plot No. 4 (now plot 5B) which adjoins plot No. 6 of the suit plot measuring 113.4 sq. rots.
In or about 1933 34, with a view to acquire the suit plot and using the same for the rice mill/dust room, M/s Bombay Bharat & Swadeshi Rice Mills took over the appellant.
The dust room structure was constructed on the suit plot.
The rice mill on plot No. 6 and the dust room on the suit plot had a common wall and were inter connected by ducts.
It was stated that the respondent 's inspectors had regularly visited the premises in question but had never objected to the user of the rice mill/dust room.
In Decem ber '57, the Town Planning Scheme No. 1 in Bombay City came into force.
The original plot No. 4 was reconstituted into final plot No. 5 but continued to belong to the respondent.
The Scheme also stipulated that all rights of lessee/tenants in the original plots stood transferred to the final plots.
It may be noted that in December '57 original plot No. 4 comprised of 113.4 sq.
let to the appellant, 390 sq.
let to M/s Dhanji Mavji, 453 sq.
let to two asso ciate firms (M/s Gordhandas Ranchoddas and M/s Chunilal Gupta) and 195 sq. mts.
let to M/s Vassanji Hirji.
Hence, of the final plot No. 5, the appellant and their associates, it was asserted, held 569 sq. mts.
, Dhanji Mavji held 390, Vassanji Hirji held 195 sq. rots.
and the balance 155 sq.
was with the respondent/others.
Total area of final plot 5 was 1309 sq. mts.
From 1957 72, the respondent, it is asserted, continued the tenancies of the appellant and its associate firms.
In or about 1963, however, the respondent applied for and got final plot No. 5 sub divided into final plot 5A (659 sq. mts.) 757 and final plot 5B (650 sq. mts.).
The suit plot and M/s Dhanji Mavji 's plot fell entirely in final plot 5B and as a result of the sub division, Dhanji Mavji became the tenant/occupant of a major portion of plot 5B.
It is assert ed that appellant 's associate firm and Chunilal Gupta fell in plot No. 5A and became the tenants/occupants of a major portion of plot No. 5A.
In 197 1 the Municipality renewed the mill licence covering both the structures.
It is the case of the appellant that in 1970 71, the respondent arbitrarily agreed to let the entire plot 5B including the portion which had been let to and in the possession of the appellant since 1933 to M/s. Dhanji Mavji, and thereby agreed to give him 650.6 sq.
mrs. against his existing 390 sq. mts.
Also the appellant offered to develop final plot 5B jointly with Dhanji Mavji in 1972 76.
The appellant, however, asserted that it had offered to pay the revised rent that might be fixed by the respondent.
The appellant objected to the offer made to Dhanji Mavji exclu sively and pointed out that the established practice of the respondent was to continue the existing tenants/ occupants on the final plots.
The respondent, however, asserted that as Dhanji Mavji had been in possession of the major portion of plot No. 5B (390 sq.
vis a vis 113.4 sq. mts.), they agreed to let the entire plot to Dhanji Mavji and, there fore, could not entertain the appellant 's request.
In the premises, by notices issued in 197 1 73, the respondent purported to terminate the tenancy of the appellant.
In 1973 74, the Municipal Corporation auctioned the right, title and interest of Jhunjhunwala and the respondent in plot No. 6 for nonpayment of property taxes.
An associate firm of the appellant M/s. Natwar Parekh & Sons purchased plot No. 6 and became the owner thereof.
The case of the appellant was that the respondent got the Corporation to wrongfully exclude the respondent 's interest from the con veyance.
The said Natwar Parekh challenged such exclusion by filing writ petition No. 52/74 in the High Court.
On 26.7.1976, the writ petition was allowed, and Natwar Parekh are now the owners of plot No. 6.
This, according to the appellant, caused resentment to the respondent, and it offered Plot No. 5A to the existing tenants, i.e. the peti tioner 's associates who held 453 sq.
and Vassanji Hirji, who held 195 sq.
The petitioner 's associates who held 70% of the plot 5A, pointed out that the said Vassanji Hirji was not interested and that the entire plot should accordingly be given to them.
The respondents declined and instead commenced eviction proceedings against all the three holders.
In or about October 1977, the respondent issued one month 's notice to the appellant to terminate the tenancy.
In December, 1977 the respondent filed suits Nos. 447 & 603/77 against the appellant in the Court of Small Causes, Bombay.
The 758 appellant filed its written statement and pleaded that the proceedings had been instituted mala fide and just to bene fit Dhanji Mavji and to harass the appellant 's associates, who had acquired the respondent 's title to plot No. 6.
Secondly, it was asserted that the premises had been ac quired and used for rice mill for 40 years and accordingly it could not be terminated by one month notice.
The lease was for manufacturing purposes.
Thirdly, it was asserted, that the notice of termination, in any event, had been waived by demanding and recovering rent/ enhanced rent.
It is asserted that at the hearing the witnesses of the respondent had admitted that the plot would be given to Dhanji Mavji if the appellant was evicted therefrom.
It also agreed that the respondent was under no statutory obligation to give the entire plot to Dhanji Mavji.
On or about 31st March, 1981 the Trial Court dismissed the suit, holding that the appellant was admittedly using the plot for a rice mill for over 50 years to the knowledge of the respondent; and it would be legitimate to infer that the letting was for a manufacturing purpose.
Hence, the notice of termination was bad.
The Trial Court did not deal with the question of mala fide.
On or about 13th January, 1984 the appellate court reversed that decision and also held that the issue of mala fide or arbitrariness was not relevant on the legality of the eviction proceedings.
Ag grieved thereby, the appellant filed a writ petition No. 710/84 under Article 227 of the Constitution.
The High Court dismissed the said writ petition by the judgment under appeal and upheld the order of eviction.
The High Court accepted the finding of the appellate court that the notice of ejectment was valid notice and there was no waiver of notice.
In our opinion, the High Court was right on this aspect and in any event under Article 227 of the Constitu tion the High Court could not have gone into this question.
We, in an appeal under Article 136 of the Constitution cannot re appraise that question.
The question that survived after the finding of the appellate court and which was urged mainly before the High Court and also in this appeal, was whether the action of the respondent in evicting the appellant and granting the prem ises in question to M/s Dhanji Mavji was proper and right.
It was contended on behalf of the appellant that the action of the respondent in terminating the appellant 's contractual tenancy had a public law character attached to it and was accordingly subject to judicial review.
It was asserted that every action of the respondent which was 'State ' within Article 12 of the Constitution, whether it be in the field of contract, or any other field, was subject to Article 14 of the Constitution and must be reasonable and taken only 759 upon lawful and relevant grounds of public interest.
In that light, it was urged that if the eviction of the appellant was not necessary in the public interest and if it had been taken pursuant to any norm or policy which does not permit eviction of the appellant, then the action is arbitrary and discriminatory and not in accordance with any policy which the respondent was enjoined to follow.
In the aforesaid background it was contended that the eviction of the appellant was not necessary in public inter est.
It appears that the eviction of the appellant was only in pursuance of a policy of the Port Trust to let out a reconstituted plot to the person who occupied the major portion and who could use it for development.
It was urged that the decision of the Port Trust to allot the entire plot to M/s Dhanji Mavji to the exclusion of the appellant (although the appellant was thereof for the past 40 years) was an arbitrary and discriminatory departure from the established policy of the Port Trust, which was to offer the plot to the existing tenants (where two or more tenants were in occupation of one plot) as joint tenants.
It was contend ed that the impugned termination was ultra vires and arbi trary.
It was contended that the exclusive allotment of the entire plot 5B to M/s Dhanji Mavji and the consequent termi nation of the appellant 's tenancy was not necessary to enable proper development of the plot as required by the Town Planning Scheme.
There was no policy requiring the entire final/reconstituted plot to be allotted exclusively to the person occupying the major portion thereof or requir ing the other existing occupants to be evicted.
Nor, it was submitted, was the allotment of the entire plot, pursuant to any such alleged policy.
On the other hand, the appellant contended that the respondent 's established policy was to offer/allot a final/ reconstituted plot for development to the existing occupants thereof as joint tenants.
It was contended that this rational policy which, according to the appellant, would have fulfilled the public interest of development in accordance with the regulations of the Town Planning Scheme and at the same time would not have required or necessitated the eviction of the existing occupants.
Contrary to the established rational policy of accommo dating tenants by offering/allotting a new plot jointly to the existing occupants/tenants, the respondent arbitrarily, it was contended, and discriminatingly did not offer the new plot 5B to M/s Dhanji Mavji and the appellant (both of whom were existing tenants/occupants of the plot) as joint ten ants, but instead wrongfully decided to give the entire plot to M/s Dhanji Mavji to the exclusion of the appellant.
"Our attention was drawn to Section 4 of the Bombay Rents, Hotel & Lodging House Rates (Control) Act, 1947, which enjoins that 760 the Act would not apply to the premises belonging to the Govt.
or to the local authorities.
By the provisions of the said Section 4, the Port Authorities were exempted from the operation of the Rent Act.
This privilege was given to the Port Trust Authorities, it was submitted, on the assumption that it would act in public interest, and would not behave like ordinary landlords.
The special privileges, powers and benefits were statutorily conferred on the Bombay Port Trust by Section (4) of the aforesaid Act.
It had those rights due to its statutory or public character, as a local authority.
Our attention was also drawn to the decision in Rampra tap Jaidayal vs Dominion of India, at 934 where the Chief Justice Chagla observed as follows: "It is not too much to assume, as the Legisla ture did in this case assume, that the very Government whose object was to protect the tenants and prevent rent being increased and prevent people being ejected, would not itself when it was the landlord do those very things which it sought to prohibit its people from doing, and therefore the underlying assumption of this exemption is that Government would not increase rents and would not eject tenants unless it was absolutely necessary in public interest and unless a particular building was required for a public purpose." This Court in Baburao Shantaram More vs The Bombay Housing Board & Anr., [1954] V SCR 572 had to consider Section 4 of the Bombay Rents, Hotel & Lodging House Rates Control Act, 1947, and so far as material for our present purposes explained the basis of exemption under Section 4 as that the Govt.
or local authority or the Board would not be actuated by any profit making motive so as to unduly enhance the rents or eject the tenants from their respective proper ties as private landlords are or are likely to be.
In other words, this Court recognised that the basis of differentia tion in favour of the public authorities like the respond ent, was on the ground that they would not act for their own purpose as private landlords do, but must act for public purpose. 'Our attention was also drawn by Mr Chinai, learned counsel for the appellant, to the observations on 'Adminis trative Law by Wade, 5th Edn.
at page 355.
It was stated therein as follows: "Statutory power conferred for public pur poses is conferred as it were upon trust, not absolutely that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended.
" 761 It, therefore, follows that the public authorities which enjoy this benefit without being hidebound by the require ments of the Rent Act must act for public benefit.
Hence, to that extent, this is liable to be gone into and can be the subject matter of adjudication.
Learned Addl.
Solicitor General Mr Ramaswami contended that the onus was entirely on the appellant and the burden lay on the defendant to establish that the Bombay Port Trust had terminated the tenancy or taken the proceedings in eviction not in public interest but for a collateral purpose or mala fide or that it had acted in a manner contrary to the provisions of article 14 of the Constitution.
He is right so contending.
It was further urged by Mr Ramaswamy that public law duties are owed to society at large and the nature of the body performing the functions is not determinative of public law or private law character of the action taken.
He con tended that since the provisions of the Bombay Rent Act did not apply to the premises of the Bombay Port Trust in the notice of termination no reason was required to be given either in the notice itself terminating the tenancy or in the plaint for evicting the appellant.
He further contended that originally the Bombay Port Trust was constituted as a body corporate under the provisions of the Bombay Port Trust Act, 1889 and is now constituted under the provisions of the Major Port Trusts Acts, 1988.
In both these Statutes the object for constituting the Bombay Port Trust was not to provide accommodation to persons and, therefore, the object was totally different from the object for which the Bombay Rent Act and similar enactments have been enacted.
It was, therefore, urged that since there was no obligation or duty cast upon the Bombay Port Trust to provide accommodation, there could be no question of acting in Government charac ter.
It was urged that the respondent did not enjoy any special privileges/powers of benefits vis a vis such activi ties by virtue of its being a local Body or Government character.
In the premises, it was contended that such a body stands on the same footing as any other citizen and will, in respect of such activity, not be subjected to public law duty.
We are unable to accept the submissions.
Being a public body even in respect of its dealing with its tenant, it must act in public interest, and an infraction of that duty is amenable to examination either in civil suit or in writ jurisdiction.
Our attention was drawn to the observations of this Court in Radhakrishna Agarwal & Ors.
vs State of Bihar & Ors.
, ; Reliance was also placed on the observations of this Court in Life 762 Insurance Corpn.
of India vs Escorts Ltd. & Ors., ; , in support of the contention that the public corporations ' dealing with tenants is a contractual dealing and it is not a matter for public law domain and is not subject to judicial review.
However, it is not the correct position.
The Escorts ' decision reiterated that every action of the State 'or an instrumentality of the State, must be informed by reason.
Indubitably, the respondent is an organ of the State under article 12 of the Constitution.
In appropri ate cases, as was observed in the last mentioned decision, actions uninformed by reason may be questioned as arbitrary in proceedings under article 226 or article 32 of the Constitu tion.
But it has to be remembered that article 14 cannot be construed as a charter for judicial review of State action, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions.
The contractual privileges are made immune from the protection of the Rent Act for the respondent because of the public position occupied by the respondent authority.
Hence, its actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason not whimsically for any ulterior purpose.
Where any special right or privilege is granted to any public or statutory body on the presumption that it must act in cer tain manner, such bodies must make good such presumption while acting by virtue of such privileges.
Judicial review to oversee if such bodies are so acting is permissible.
The field of letting and eviction of tenants is normally governed by the Rent Act.
The Port Trust is statutorily exempted from the operation of Rent Act on the basis of its public/Government character.
The legislative assumption or expectation as noted in the observations of Chagla C.J. in Rampratap Jaidayal 's case (supra) cannot make such conduct a matter of contract pure and simple.
These corporations must act in accordance with certain constitutional conscience and whether they have so acted, must be discernible from the conduct of such corporations.
In this connection, reference may be made on the observations of this Court in S.P. Rekhi vs Union of India, ; , reiterated in M.C. Mehta & Anr.
vs Union of India & Ors.
, [1987] 1 SCC 395, wherein at p. 148, this Court observed: "It is dangerous to exonerate corporations from the need to have constitutional con science; and so, that interpretation, language permitting, which makes governmental agencies, whatever their mien amenable to constitutional limitations must be adopted by the court as against the alternative of permitting them to flourish as an imperium in imperio.
" 763 Therefore, Mr Chinai was right in contending that every action activity of the Bombay Port Trust which constituted "State" within article 12 of the Constitution in respect of any right conferred or privilege granted by any Statute is subject to article 14 and must be reasonable and taken only upon lawful and relevant grounds of public interest.
Reli ance may be placed on the observations of this Court in E.P. Royappa vs State of Tamil Nadu, ; ; Maneka Gandhi vs Union .of
India, [1978] 2 SCR 621; R.D. Shetty vs The International Airport Authority of India & Ors., ; ; Kasturi Lal Lakshmi Reddy vs State of J & K & Anr., ; and Ajay Hasia vs Khalid Mujib Sehravardi & Ors. etc.
; , Where there is arbitrariness in State action, article 14 springs in and judi cial review strikes such an action down.
Every action of the Executive Authority must be subject to rule of law and must be informed by reason.
So,, whatever be the activity of the public authority, it should meet the test of article 14.
The observations in paras 101 & 102 of the Escorts ' case (supra) read properly do not detract from the aforesaid principles.
The High Court had relied on the observations of this Court in Kasturi Lal Lakshrni Reddy vs State of Jammu & Kashmir & Anr., (supra) that the State was not totally freed of the duty to act fairly and rationally, merely because it could do so under a contract.
The High Court stated that though it might be accepted that a public body like the respondent should not act unreasonably or unfairly but it did not follow that every time they decided to take action against the contractual tenants, they had to decide the said action in terms of fairness, equity and good faith.
In support of this proposition, reliance was placed on the observations of this Court in L.I.C vs Escorts, (supra).
In this connection, Mr Chinai appearing for the appellant reiterated before us as he did before the High Court, that the basis of the legitimate assumption or expectation of which the statutory exemption had been granted by the Legis lature to the Bombay Port Trust provided a guideline or touch stone by which the conduct of the public authority which had been granted exemption, should be judged.
And, according to him, the necessity of eviction in the instant case, must have been only in public interest.
Reliance was placed on several decisions referred to hereinbefore.
We are inclined to accept the submission that every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigours of the Rent Act, must be informed by reason and guided by the public interest.
All exercise of discre tion or power by public authorities as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assump 764 tion that they would not act as private landlords must be judged by that standard.
If a governmental policy or action even in contractual matters fails to satisfy the test of reasonableness, it would be unconstitutional.
See the obser vations of this Court in Kasturi Lal Lakshrni Reddy, (supra) and R.D. Shettv vs The International Airport Authoritv of India & Ors., ; at 1034.
Learned Additional Solicitor General reiterated on behalf of the respondent that no question of mala fide had been alleged or proved in these proceedings.
Factually, he is right.
But it has to be borne in mind that governmental policy would be invalid as lacking in public interest, unreasonable or contrary to the professed standards and this is different from the fact that it was not done bona fide.
It is true as learned Addl.
Solicitor General contended that there is always a presumption that a governmental action is reasonable and in public interest.
It is for the party challenging its validity to show that the action is unrea sonable, arbitrary or contrary to the professed norms or not informed by public interest, and the burden is a heavy one.
In this background the contention of the appellant has been that its eviction was not necessary in public interest, and further that the eviction was only in pursuance of an alleged policy on the part of the Port Trust to let out the reconstituted plot to the person who occupied the major portion, which, according to the appellant, was not in consonance with the obligation of the Trust to take action only in public interest.
It was contended that eviction for development with least dislocation, should have been the aim and that would have served the public purpose better.
On behalf of the appellant it was contended that before the Trial Court it was established that both the appellant and M/s Dhanji Mavji had been tenants of the Port Trust on the original plot No. 4 since 1932, and in fact the appellant was older tenant.
Our attention was drawn to para 16 of the appellant 's written statement, Vol.
2 Paper Book, page 35.
In this context, it was submitted that the decision of the Port Trust was not based on public purpose/interest, and as such was ultra vires of the powers of the Port Trust.
It was contended that such a plea was justiciable in all civil suits.
On behalf of the Port Trust authorities, however, the submission was that there was no obligation under the Bombay Port Trust Act to provide accommodation.
So, there cannot be any governmental character.
This we have already dealt with.
Learned Add|.
Solicitor General submitted that in evi dence it has been mentioned by Katara (P.W. 1 at page 43, Vol.
II) that the plot had been allotted to Dhanji Mavji since it was the policy of the Bombay Port Trust to allot a re constituted plot to a person occupying 765 a major portion of such plot.
There was no challenge to this evidence .in cross examination.
On the other hand, he con tended that there was no evidence on the alleged policy of the Port Trust of giving plots on joint tenancy to all occupants.
According to him, in the letters addressed by the Port Trust at pp. 82, 123, 128 of Vol. 1 and in the letters by and on behalf of the appellant and/or their alleged associate concerns at pp.
14 1 to 147 they have specifically admitted that there was a policy of the Port Trust to allot plots to the occupants of the major portions thereof and in fact a grievance has been made by them that in accordance with the said policy of the Bombay Port Trust, Plot No. 5A was not being allotted to the associates of the appellant.
In that view of the matter even under the scope of judicial review, it was contended, whether it should have been given on joint tenancies or not, is not a matter which could be gone into by the Court.
Reliance was placed on the observa tions of Lord Justice Diplock in Council of Civil Service Unions vs Minister for the Civil Service, at 950, where the learned Lord Justice classified 8 grounds subject to control of judicial review, namely, illegali ty, irrationality and procedural impropriety.
Learned Addl.
Solicitor General is right, in our opinion, in that we cannot really substitute a decision reached by a fair proce dure keeping the policy of the respondent in mind by a different decision only on the ground that the decision which appeals to the court, is a better one.
Reliance was placed on the observations of Lord Chancellor Lord Hailsham in Chief Constable of the North Wales Police vs Evans, ; In our opinion, it is necessary to remem ber that judicial review, in the words of Lord Brightman in that case, is not concerned with the decision, but with the decision making process.
As observed by Prof. Dias in 'Juri sprudence ' (5th Edn.
at p. 91) unless the restriction on the power of the court is observed, the court would under the guise of preventing the abuse of power, be itself guilty of usurping power which does not belong to it.
It is therefore necessary to bear in mind the ways and means by which the court can control or supervise the judicial action of any authority which is subject to judicial control.
In this connection, it is necessary to refer to the observations of Lord Justice Templeman in re Preston vs I.R.C., and the observations of Lord Justice May in Regina vs Chief Constable of the Merseyside Police, It is not within the purview of a court to substitute a decision taken by a constituted authority simply because the decision sought to be substituted is a better one.
Learned Addl.
Solicitor General, in our opinion, is therefore right in contending that the appellant should not be allowed to contend that the decision of the Bombay Port Trust to allot the plot to the major holder is not one of the feasible means of achieving the objectives of development.
It was not open to the appellant to contend 766 that the Bombay Port Trust could have framed a better policy in a way in which both the goals, development and non evic tion of existing tenants, could have been achieved.
Furthermore, we have to bear in mind that joint allot ment for the purpose of development pre supposes coopera tion.
In this connection, it is necessary to remember that Mr Singhvi, appearing for the intervener, in C.M.P. No. 19447/88 indicated that the joint development was not possi ble because they were not willing to take it jointly.
He also pointed out that the appellant was aware that the decision to allot this plot in his client 's favour had been taken as early as 1973 and that it was within the knowledge of the present appellant that they had also put up construc tions thereon at substantial cost.
He urged that, though it is true that the lease in favour of the petitioner was terminated and the suit filed only in 1977, the fact is that the appellant took no step earlier to have the allotment in favour of his clients cancelled.
This, he has urged, is also a ground for non interference at this stage.
We are inclined to agree.
Our attention was drawn to the fact that Dhanji Mavji had held 80% of the re constituted plot.
The plot 5B had been developed inasmuch as a building of ground plus 5 upper storeys had been erected as was the maximum possible not withstanding the fact that the appellant had not yet surren dered their portion.
As against this, on plot 5A where the Bombay Port Trust offered a joint tenancy to the three occupants, since there was no occupant holding a major portion thereof, there had been no development whatsoever and in fact there has been litigation going on to remove all the 3 occupants.
In that view of the matter the Bombay Port Trust, perhaps, was justified in coming to the conclusion that the only possible way to develop the properties of the Bombay Port Trust in compliance with the Town Planning Scheme by allotting plots to holders of major portions thereon.
Such a decision cannot be faulted.
The Town Planning Scheme came into force in 1957.
Plot 5 was divided into Plot 5A and 5B in 1963.
The Town Planning Act had been enacted to meet the requirements for planning, development and use of land.
Having regard to Sections 2(7), 2(13), 2(17), 2(18), 2(21), 2(22), 2(27), 13, 14, 22, 59, 65, 88, 89, & 159, it appears that one of the purposes was the extinguishment of the tenancies of the Port Trust, and as such tenants of plot 5A and 5B were liable to eviction.
The Port Trust continued them as monthly tenants for many years before formulating a policy to develop the plots by offering them to major holders.
In pursuance to that Scheme, regulations have been flamed under Section 169 of the Town Planning Act.
Our attention was placed on some of these regulations.
It is contended that it was viewed that 767 plot of land of less than 500 sq.
yards out of the Town Planning Scheme cannot be allotted.
In that view of the matter it is a possible view and we need not go beyond this.
In that context even though we reiterate that the Port Trust must act reasonably and in adherence to a policy which serves the public purpose on the assumption of which exemp tion was granted to it from the Rent Act, while dealing with the tenants or occupants, it cannot be said that the Port Trust has acted improperly.
In that light the decision of the High Court must be affirmed though on a different empha sis.
In the view that we have taken, it is not necessary for us to go into the question whether under article 227 of the Constitution, it was open to the High Court to go into the question of constitutional validity for which reliance was placed on the observations of this Court in Venkatlal G. Pittie & Anr.
vs Bright Bros (P) Ltd. ; at 569 and Khalil Ahmed Bashir Ahmed vs Tufelhussein Samasbhai Sarangpurwala, ; Reliance was also placed by Mr Chinai on the observations of the House of Lords in England in Wandsworth London Borough Council vs Winder, ; at 505 507.
In that case the local authority was under the agreement itself, required to fix rent under the statutory provision.
It committed a breach thereof.
Hence, it was held there that that was a breach of a con tractual obligation enforceable under the Private Law and, therefore, justiciable.
As we look upon the facts of this case, there was an implied obligation in respect of dealings with the tenants/occupants of the Port Trust authority to act in public interest/purpose That requirement is fulfilled if it is demonstrated that the Port Trust Authorities have acted in pursuance of a policy which is referable to public pur pose.
Once that norm is established whether that policy is the best policy or whether another policy was possible, is not relevant for consideration.
It is, therefore, not neces sary for our present purposes to dwell on the question whether the obligation of the Port Trust Authorities to act in pursuance of a public purpose was of public law purpose or a private law purpose.
Under the Constitutional scheme of this country the Port Trust Authorities were required by relevant law to act in pursuance of public purpose.
We are satisfied that they have proceeded to so act.
We must record that learned Addl.
Solicitor General made a statement that irrespective of the result of this appeal, the Port Trust Authorities of Bombay, will consider reasonably granting of an alternative site to the appellant, if such an application is made to them.
In the view that we have taken this appeal must, there fore, fail and is accordingly dismissed.
The C.M.P. No. 19447/88 is disposed of 768 by directing that the applicants are permitted to intervene and their submissions have been considered.
In the facts and the circumstances of the case, the parties will pay and bear their own costs.
All interim orders are vacated.
RANGANATHAN, J. I respectfully agree with the conclusion of my learned brother Sabyasachi Mukharji, J.
However, I would like to add a word of reservation.
The principal argument which Shri Chinai addressed to us at great length on behalf of appellant was that the relationship between the appellant and the Port Trust was not purely contractual and in the realm of private law.
He urged that the Port Trust, having been granted an exemption from the provisions of the rent control acts on certain public grounds, is not at liberty to take action to evict the petitioner without being accountable therefore and that its action is in the realm of public law and hence liable to judicial review.
He submitted that the decision of this Court in the Escorts case, , is not inconsistent with this contention.
The learned Additional Solicitor General contested the above proposition on principle and refuted the sugges tion that the Port Trust was under any obligation to show that its action was bona fide, and not arbitrary or unrea sonable but could be justified on grounds of public inter est.
He submitted that on the facts of the present case, the state of the pleadings at the various stages and its own findings on the facts, the High Court was not called upon to go into the larger issue at all and that its observations in this regard were purely casual.
He submitted, however, that, without prejudice to these contentions, he would be willing to satisfy us on the facts of the present case that the action of the Port Trust was bona fide and based on policy and reason.
He addressed us on this aspect and I agree, with respect, with the conclusion of my learned brother Sabyasachi Mukharji, J. that, on the facts of the present case, the action of the Port Trust was not improper and that there are no grounds to interfere with the same.
In view of the above conclusion on the merits and in view of my opinion that we have not heard full arguments on both sides on the general propositions contended for by Shri Chinai as to the parameters and scope of judicial review in such matters which are issues of far reaching importance, I would like to refrain from expressing any final and conclud ed opinion on these aspects though, prima facie, I am also inclined to think, as held by my learned brother that there is considerable force in them.
R.S.S. Appeal dismissed.

summary/full:
The respondent Board of Trustees of the Port of Bombay is a statutory authority, and as such has been exempted from the operation of the Bombay Rents, Hotel & Lodging House Rates (Control) Act, 1947.
The appellant has been the lessee of the respondent since about 1932 in respect of part of the original plot No. 4 (now plot 5B) which adjoins plot No. 6 tenanted by M/s Bombay Bharat & Swadeshi Rice Mills.
In or about 1933 34, M/s Bombay Bharat & Swadeshi Rice Mills took over the appellant, and a rice mill was started on appel lant 's part of plot No. 4 and plot No. 6.
In December 1957, the Town Planning Scheme No. 1 in Bombay City came into force, and the original plot No. 4 was reconstituted into final plot No. 5.
In or about 1963 the respondent sub divided plot No. 5 into final plot 5A and final plot 5B, and as a result of the sub division M/s Dhanji Mavji became the tenant/occupant of a major portion of plot 5B, In 1970 71 the respondent agreed to let the entire plot 5B, including the portion which had been let to and was in possession of the appellant since 1933, to Dhanji Mavji.
The appellant objected to the offer made to Dhanji Mavji but the respondent asserted that as Dhanji Mavji had been in possession of the major portion of plot No. 5B, it agreed to let the entire plot to them.
In the premise, the respondent purported to terminate the tenancy of the appel lant in respect of its .
portion of plot 5B, and later filed suit for eviction.
The Trial Court dismissed the suit hold ing that it would be legitimate to infer that the letting was for a manufacturing purpose and hence the notice of termination was bad.
The appellate court reversed that decision.
Aggrieved thereby, the appellant filed a writ petition under Article 227 of the Constitution.
The High Court accepted the finding of the appellate court that the notice of ejectment was valid notice and there was no waiver of notice.
752 Before this Court, it was contended on behalf of the appellant that (1) the exemption from the operation of the Rent Act was given to the Port Trust Authority on the as sumption that it would act in public interest and would not behave like ordinary landlords; (2) the action of the re spondent in terminating the appellant 's contractual tenancy had a public law character attached to it and was according ly subject to judicial review; (3) every action of the respondent which was 'State ' within Article 12 of the Con stitution, whether it be in the field of contract or any other field, was subject to Article 14 of the Constitution and must be reasonable and taken only upon lawful and rele vant grounds of public interest; (4) the respondent 's estab lished rational/policy was to offer/allot a final/reconsti tuted plot for development to the existing occupants thereof as joint tenants; and (5) the eviction of the appellant was not necessary in the public interest for the proper develop ment of the plot as required by the Town Planning Scheme.
On behalf of the respondent it was contended that (1) the onus was entirely on the appellant to establish that the Bombay Port Trust had terminated the tenancy or taken the proceedings in eviction not in public interest but for a collateral purpose or mala fide or that it had acted in a manner contrary to the provisions of Article 14; (2) since there was no obligation or duty cast upon the Bombay Port Trust to provide accommodation, there could be no question of acting in governmental character, and such a body stood on the same footing as any other citizen and would, in respect of such activity, not be subjected to public law duty; (3) the respondent 's dealing with tenants was a con tractual dealing and it was not a matter for public law domain and was not subject to judicial review; and (4) it was the policy of the respondent to allot the entire re constituted plot to one person who was occupying the major portion of such plot, for its proper development.
Dismissing the appeal, it was, HELD: Per Sabyasachi Mukharji, J., (Kania, J. agreeing) (1) Bombay Port Trust being a public body, even in respect of its dealing with its tenants, it must act in public interest, and an infraction of that duty is amenable to examination either in civil suit or in writ jurisdiction.
[761G] Rampratap Jaidayal vs Dominion of India, [1952] 54 Bom.
L.R. 927; and Baburao Shantaram More vs The Bombay Housing Board, [1954] V SCR 572, referred to.
753 (2) Where any special right or privilege is granted to any public or statutory body on the presumption that it must act in a certain manner.
such bodies must make good such presumption while acting by virtue of such privilege.
Judi cial review to oversee if such bodies are so acting is permissible. ]762D E] Radhakrishna Agarwal & Ors.
vs State of Bihar & Ors.
, ; and Life Insurance Corporation of India vs Escorts Ltd. & Ors., [1985] 3 Supp SCR 909, referred to.
(3) The field of letting and eviction of tenants is normally governed by the Rent Act.
The Port Trust is statu torily exempted from the operation of the Rent Act on the basis of its public/Governmental character.
Every action/activity of the Bombay Port Trust which constituted "State" within Article 12 of the Constitution in respect of any right conferred or privilege granted by any statute is subject to Article 14 and must be reasonable and taken only upon lawful and relevant grounds of public interest.
[762E F; 763A B] S.P. Rekhi vs Union of India, ; and M.C. Mehta & Anr.
vs Union of India & Ors.
, [1987] 1 SCC 395, referred to.
(4) Where there is arbitrariness in State action, Arti cle 14 springs and judicial review strikes such an action down.
Every action of the Executive authority must be sub ject to rule of law and must be informed by reason.
So, whatever be the activity of the public authority, it should meet the test of Article 14.
[763C] All exercise of discretion or power by public authori ties as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assumption that they would not act as private landlords must be judged by that standard.
[763H; 764A] If a governmental policy or action even in contractu al matters fails to satisfy the test of reasonableness, it would be unconstitutional.
[764A B] E.P. Royappa vs State of Tamil Nadu, ; ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; R.D. Shetty vs The International Airport Authority of India & Ors., ; ; Kasturi Lal Lakshmi Reddy vs State of J & K, ; and 754 Ajay Hasia vs Khalid Mujib Sehravardi, ; , referred to.
(7) Governmental Policy would be invalid as lacking in public interest, unreasonable or contrary to the professed standards and this is different from the fact that it was not done bona fide.
[764B C] (8) There is always a presumption that a governmental action is reasonable and in public interest.
It is for the party challenging its validity to show that the action is unreasonable, arbitrary or contrary to the professed norms or not informed by public interest, and the burden is a heavy one.
[764C D] (9) Judicial review is not concerned with the decision, but with the decision making process.
Unless this restric tion on 'the power of the court is observed, the court under the guise of preventing the abuse of power, would be itself guilty of usurping power which does not belong to it.
[765E F] (10) The Court cannot really substitute a decision reached by a fair procedure keeping the policy of the re spondent in mind by a different decision only on the ground that the decision which appeals to the court is a better one.
[765G] Council of Civil Service Unions vs Minister for the Civil Service, ; Chief Constable of the North Wales Police vs Evans, ; In re Pres ton vs I.R.C., and Regina vs Chief Consta ble of the Merseyside Police, , referred to.
(11) The Bombay Port Trust, perhaps, was justified in coming to the conclusion that the only possible way to develop the properties of the Bombay Port Trust in compli ance with the Town Planning Scheme was by allotting plots to holders of major portions thereon.
Such a decision cannot be faulted.
[766E F] (12) Upon the facts of the instant case, there was an implied obligation in respect of dealings with the tenants/occupants of the Port Trust Authority to act in public interest/purpose.
That requirement is fulfilled if it is demonstrated that the Port Trust authorities have acted in pursuance of a policy which is referable to public pur pose.
Once that norm is established whether that policy is the best policy or whether another policy was possible, is not relevant for consideration.
[767E F] 755 (13) Under the constitutional scheme of this country, the Port Trust Authorities were required by relevant law to act in pursuance of public purpose.
This Court is satisfied that they have proceeded to so act.
[767G] Per section Ranganathan, J. (Concurring) On the facts of the instant case, the action of the Port Trust was not improper and there are no grounds for inter ference.
[768F]


judgement:
vil Appeal Nos.
5 135 15 (NT) of 1975.
From the Judgment and Order dated 24.9.1973 of the Gujarat High Court in Income Tax Reference No. 31 of 1971.
T.A. Ramachandran, Mrs. A.K. Verma and D.N. Mishra for the Appellant.
C.M. Lodha, K.C. Dua and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
These appeals by certificate granted by the High Court of Gujarat are directed against the judgment of the High Court 722 answering the following question in favour of the Revenue and against the assessee: "Whether, on the facts and in the circum stances of the case, the income of the Society from ginning and pressing was exempt under section 81(i)(c) of the Income Tax Act, 1961, as it stood prior to its amendment on 1st April, 1968?" The assessee is a. co operative society constituted under the Cooperative Societies ACt.
The objects of the society intend that it should press cotton and pack the bundles for its individual members as well as other custom ers, to Use its machinery for any useful work of its mem bers, and to sell raw cotton seeds and other agricultural products.
The assessee possesses a ginning and pressing factory to cater to the needs of its members.
It gets raw cotton from the members, and ginns and presses the cotton for marketing on behalf of its members.
For rendering the services of ginning and pressing before selling the goods, the assessee charges the members a certain amount by way of ginning and pressing charges.
It also charges commission for the sale of the finished product.
In the course of assessment for the assessment years 1961 62 to 1963 64, the assessee claimed that the receipts from the ginning and pressing activities were exempt under section 81(i)(c) of the Income Tax (as it stood then).
The In come Tax Officer, however, declined to accept the claim on the ground that the assessee had been carrying out the process of ginning and pressing with the aid of power.
The Appellate Assistant Commissioner confirmed orders of the Income Tax Officer.
In second appeal the Income Tax Appel late Tribunal held that having regard to the circumstance that the receipts were from members only, that there was a general market for ginning and pressing cotton only and no evidence appeared of any dealing in raw cotton, the ginning and pressing activities were to be regarded as an integral part of the marketing activity, and therefore the receipts from those activities were not liable to tax by virtue of section 81(i)(c).
At the instance of the Revenue the Appellate Tribunal referred the question of law set out earlier to the High Court of Gujarat for its opinion.
For the purpose of contention raised before the High Court, and again before us the following provisions of section 81 seem relevant: "81.
Income of Co operative societies Income tax shall 723 not be payable by a co operative society (i) in respect of the profits and gains of business carried on by it, if it is (c) a society engaged in the marketing of the agricultural produce of its members; or (e) a society engaged in the process ing without the aid of power of the agricul tural produce of its members; or Provided that, in the case of a co operative society which is also engaged in activities other than those mentioned in this clause, nothing contained herein shall apply to that part of its profits and gains as is attributa ble to such activities and as exceeds fifteen thousands rupees.
" The High Court proceeded on the view that if a Society carries on certain activities which are exempted activities according to cls.
(a) to (f) of section 81(i) and certain other activities which are not exempted, the profits and gains attributable to such non exempted activities must necessari ly be taxed.
The High Court observed that the assessee carried on ginning and pressing of cotton with the aid of power, and even if those activities are regarded as ancil lary or incidental to its marketing activity they would not come within the category of exempted activities in view of the proviso, and therefore they would have to be taxed.
We find ourselves unable to accept the view taken by the High Court.
It is apparent that the ginning, and pressing was part of the integral process of marketing.
It was an activi ty incidental or ancillary to the marketing of the produce of its members.
The ginning and pressing of the raw cotton was never regarded as a distinct process.
When they deliv ered the raw cotton to the assessee for marketing, ginning and pressing was regarded as part of that process.
The members did not take back the cotton after it was ginned and pressed.
They paid only the costs of ginning and pressing.
All the raw cotton s6 724 treated by the assessee was received from its members, and it was only such ' cotton of its members which was marketed by the assessee.
The sale of the cotton was effected by the assessee to the outside world and not to its members.
The object of section 81(i) was to encourage and promote the growth of cooperative societies, and consequently a liberal con struction must be given to the operation of that provision.
The proviso to section 81(i) operates to exclude from the exemp tion those activities which can be regarded as separate and distinct from the activities enumerated in clauses (a) to (f) of section 81(i).
If the activity in question is incidental or ancillary to one of the activities mentioned in those clauses, the proviso, in our opinion, will not apply.
We may refer in this connection to the observations of the Karnata ka High Court in Addl.
Commissioner of Income Tax, Karnataka vs Ryots Agricultural Produce Co operative Marketing Society Ltd., where reference has been made to the broad meaning of the expression 'marketing ' appearing in cl.
(c) of section 81(i), and it has been explained that in order to make agricultural produce fit for marketing the activi ties involved in enabling that to be done must be regarded as involved in the activity of marketing itself.
Reference may also be made to Commissioner of Income tax, Gujarat IV vs Karjan Co op.
Cotton Sale, Ginning & Pressing Society Ltd., where the concept of 'marketing ' was given a meaning which included the ginning and pressing of raw cotton and was not confined to the selling activity alone.
An attempt was made by learned counsel for the Revenue to raise the point that ginning and pressing into cotton bales changed the character of the cotton and therefore, what was marketed was not the agricultural produce of the members of the assessee.
This point was not raised at any earlier stage by the Revenue and cannot be permitted to be taken now.
We are of opinion that the assessee is entitled to the exemption of the profits and gains derived from the activity of the entire business of ginning and pressing of cotton and marketing it by virtue of cl.
(c) of section 81(i) of the Income tax Act, and that the High Court erred in holding to the contrary.
In the result the appeals are allowed and the question referred by the Income tax Appellate Tribunal to the High Court must be answered in the affirmative, in favour of the assessee and against the Revenue.
The assessee is entitled to its costs.
L S.S. Appeals allowed.

dataset_name: IN-Abs

summary/full:
The assessee, a co operative society, was rendering the service of ginning and pressing raw cotton received from its members and marketing the finished product on their behalf.
The assessee charged the members a certain amount by way of ginning and pressing charges and further charged commission for the sale of the finished product.
For the assessment years 1961 62 to 1963 64, the assessee claimed that the receipts from the ginning and pressing activities were exempt under section 81(i)(c) of the Income Tax Act, 1961 (as it stood then) which provided that income tax shall not be payable by a co operative society in respect of the profits and gains of business carried on by it, if it was a society engaged in the marketing of the agricultural produce of its members.
The Income Tax Officer declined to accept the claim on the ground that the assessee had been carrying out the process of ginning and pressing with the aid of power.
The Appellate Assistant Commissioner confirmed the orders of the Income Tax Officer.
The Appellate Tribunal allowed the second appeal of the assessee holding that the ginning and pressing activities were to be regarded as an integral part of the marketing activity.
The High Court, while deciding the reference in favour of the Revenue, observed that the assessee carried on ginning and pressing of cotton with the aid of power, and even if those activities were regarded as ancillary or incidental to its marketing .activity, they would not come within the category of exempted activities in view of the proviso to the section.
Allowing the appeals, this Court, HELD: (1) Ginning and pressing was part of the integral process of marketing.
It was an activity incidental or ancillary to marketing, 721 which included the ginning and pressing of raw cotton and was not confined to selling activity alone.
The members did not take back the cotton after it was ginned and pressed.
All the raw cotton so treated was marketed by the assessee on behalf of its members to the outside world and not to its members.
[723G H; 724A] Addl.
Commissioner of Income Tax, Karnataka vs Ryots Agricultural Produce Co operative Society Ltd., ; Commissioner of Income Tax, Gujarat IV vs Karjan Co op.
Cotton Sale, Ginning & Pressing Society Ltd., , referred to.
(2) The object of section 81(i) of the Income Tax Act, 1961 was to encourage and promote the growth of co operative societies, and consequently a liberal construction must be given to the operation of that provision.
[724A B] (3) The proviso to section 81(i) operates to exclude from the exemption those activities which can be regarded as separate and distinct from the activities enumerated in clauses (a) to (f) of section 81(i).
If the activity in question is inciden tal or ancillary to one of the activities mentioned in those clauses, the proviso will not apply.
[724B] (4) The assessee is entitled to the exemption of the profits and gains derived from the activity of the entire business of ginning and pressing of cotton and marketing it by virtue of cl.
(c) of section 81(i) of the Incometax Act, and the High Court erred in holding to the contrary.
[724F G]


judgement:
vil Appeal No. 1154 1155 (N) of 1974.
From the Judgment and Order dated 30.6.1972 of the Court of Judicial Commissioner of Goa, Daman and Diu in Civil Revision Application Nos. 13 and 14 of 1972.
Anil Dev Singh and Miss A. Subhashini for the Appellant.
S.K. Mehta and Dhruv Mehta for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the Judicial Commissioner, Goa dated 30.6.1972 setting aside the order of the Civil Judge, Senior Division, Panaji and declaring that the suit instituted by the appel lant had abated.
The appellant Bank instituted a suit before the Civil Judge for recovery of an amount of Rs. 63,315 against Vi naique Naique, advanced to him as loan by it.
Vinaique Naique, the defendant contested the suit, issues were framed and evidence was being recorded.
On 26.2.
1970 statement of PW I was recorded and the case was adjourned to another date but on that date also the case was adjourned to 23.7.1970.
The suit was again adjourned on 23.7.
1970 on the ground that the defendant Vinaique Naique was indisposed and 813 was hospitalised.
Thereafter, the suit was taken up for hearing on 4.11.
On that date the defendant 's pleader informed the Court orally that the defendant had died at Margaon but did not give any further details.
The Custodian of the appellant Bank Panaji deputed his clerk to Margaon to collect necessary information and to obtain death certifi cate from the Civil Registration Office if the defendant was found to be dead.
The clerk visited Margaon on 5th and 6th November, 1970 and on enquiry he came to know that the defendant had died on 4.8.1970, he obtained death certifi cate from the Civil Registration Office on 6.11.1970 and handed over the same to the Custodian of the Bank on 7th November, 1970.
Since 8th November, 1970 was Sunday, the Custodian could not file the same in the court.
The appel lant made application under Order XXII Rule 4 of CPC on 9th November, 1970 for bringing on record Smt.
Nalini Bai Naique as the legal representative of the deceased original defend ant.
He made another application for condoning delay in making the application duly supported by affidavit.
The appellant made another application requesting the court to treat his earlier application made for condonation of delay as an application under Order 22 Rule 9 for setting aside the abatement of the suit.
Nalini Bai Naique late defendant 's widow contested the applications on the ground that the news regarding the death of Vinaique Naique had been published in the local newspapers and the plaintiff had knowledge of his death and further the suit had abated on the expiry period of 30/60 days of the death of original defendant as no application for setting aside abatement had been filed within time.
Meanwhile the appellant made another application for adding the names of six heirs four sons, one major son and three minor sons and two minor daughters of the deceased defendant Vinaique Naique on the ground that earlier the appellant had no knowledge about the sons and daughters of the deceased defendant.
On behalf of Mrs. Nalini Bai it was vehemently asserted before the trial court that the application for substitution was not maintainable as it was filed beyond time, and in the alternative she was not the legal heir of the deceased defendant but she was only his 'Meeira ' and as other legal heirs of the deceased defendant were not brought on record within time the appli cation for bringing the sons and daughters on record was liable to be rejected.
The trial Judge on an elaborate consideration of the rival contentions held that even though the news relating to the death of original defendant Vi naique Naique had been reported in local newspapers but in view of the affidavit of Custodian and other material on record the appellant Bank came to know of the death of the defendant only on 4. ] 1. 1970 from the deceased defendant 's lawyer in the court and within four days thereof application for 814 bringing the legal representative of the deceased defendant was made, therefore, the application made under Order XXII Rule 4 was not barred by time.
The learned Judge further held that since Smt.
Nalini Bai Naique one of the legal representative of the deceased defendant was brought on record within time, the sons and daughters could also be impleaded as defendants along with her.
On these findings the learned Judge by his order dated 16.11.
1971 set aside the abatement of the suit and directed for substituting the name of the widow Smt.
Nalini Bai Naique along with the name of four sons and two daughters as defendants to the suit in place of deceased defendant Vinaique Naique.
Mrs. Nalini Bai filed a revision application under Section 115 of Code of Civil Procedure before the Judicial Commissioner of Goa at Panaji against the aforesaid order of the trial Judge.
The Judicial Commissioner by his order dated 30.6.1972 set aside the order of the trial Judge and declared the suit to have abated.
Aggrieved the plaintiff Bank has preferred this appeal after obtaining special leave.
The learned Judicial Commissioner interfered with the order of the trial Judge on the sole ground that Mrs. Nalini Bai whose name was proposed to be brought on record was not legal representative of the deceased Vinaique Naique as under the Portugees Law she being the widow had acquired Meeira rights and her status was not that of "Cabeca De Casal" (Head of the family and administrator) of the other heirs of deceased Vinaique Naique.
Since all the heirs of the deceased defendant had not been brought on record along with Mrs. Nalini Bai within time the suit abated as Mrs. Nalini Bai alone could not represent the estate of the deceased defendant.
The learned Judicial Commissioner did not interfere with other findings recorded by the trial Judge, instead he set aside the order of the trial Judge on the sole ground as aforesaid, and declared the suit to have abated.
After hearing learned counsel for the parties, we are of opinion that the learned Judicial Commissioner committed serious error of law in setting aside the order of the trial Judge.
"Legal representative" as defined in Civil Procedure Code which was admittedly applicable to the proceedings in the suit, means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued.
The definition is inclusive in character and its scope is wide, it is not confined to legal heirs only instead it stipulates a person who may or may not be heir, competent to inherit the property of the deceased but he should represent the 815 estate of the deceased person.
It includes heirs as well as persons who represent the estate even without title either as executors or administrators in possession of the estate of the deceased.
All such persons would be covered by the expression "legal representative".
If there are many heirs, those in possession bona fide, without there being any fraud or collusion, are also entitled to represent the estate of the deceased.
In the instant case it is not disputed that under the Portugees Law of Inheritance which was applicable to Goa at the relevant time Mrs. Nalini Bai had acquired "Meeira rights" according to which she had acquired half share in the estate left by the deceased Vinaique Naique and the remaining half share was inherited by sons and daughters of the deceased who were subsequently brought on record.
On the admitted facts Mrs. Nalini Bai therefore represented the estate of the deceased Vinaique Naique.
Once the name of Mrs. Nalini Bai was brought on record within time and the application for setting aside abatement was allowed by the trial Judge, the suit could proceed on merits and the mere fact that the remaining legal representatives were brought on record at a subsequent stage could not render the suit defective.
The Custodian of the appellant Bank had no knowl edge that there were other legal representatives of deceased defendant along with Mrs. Nalini Bai.
He had filed affidavit that on making diligent and bona fide inquiry, he had come to know that Nalini Bai was the sole legal representative but later on he acquired knowledge that the deceased had left four sons and two daughters as legal representatives, along with Mrs. Nalini Bai, therefore, he made another application for bringing them on record.
The trial Judge accepted the testimony of the Custodian, and placing reli ance on the decision of Andhra Pradesh High Court in Mannem Venkataramaih vs M. Munnemma & Ors., AIR 1963 A.P. 406 he allowed the substitution application.
The trial court com mitted no error in law, instead he applied correct princi ples of law.
In Daya Ram & Ors.
vs Shyam Sundari, ; this Court recognised the principle of representation of the estate by some heirs, where the defendant died during the pendency of the suit to enforce claim against him and all the heirs are not brought on record within time.
This Court held that if after bona fide inquiry, some, but not all the heirs, of a deceased defendant, are brought on record the heirs so brought on record represent the entire estate of the deceased and the decision of the Court in the absence of fraud or collusion binds even those who are not brought on record as well as those who are impleaded as legal represen tatives of the deceased defendant.
In N.K. Mohd. Sulaiman vs N.C. Mohd. Ismail; , this Court 816 rejected the contention that in a suit to enforce a mortgage instituted after the death of a Muslim, if all the heirs of the deceased were not impleaded in the suit and a decree was obtained, and in execution the property was sold, the auc tion purchaser could have title only to the extent of the interest of the heirs who were impleaded, and he could have no title to the interest of those heirs who had not been impleaded to the suit.
The Court held, that those who were impleaded as party to the suit in place of the deceased defendant represented the entire estate as they had share in the property and since they had been brought on record the decree was binding on the entire estate In the instant case Mrs. Nalini Bai had admittedly hall share in the property left by the deceased defendant and as she was brought on record within time, she represented the estate of the deceased defendant and the suit could proceed on merit.
In this view the impleadment of other legal repre sentatives at a subsequent stage could not affect validity of the proceedings.
In the result we allow the appeal and set aside the judgment and order of the Judicial Commission er dated 30.6.1972, and restore the order of the trial Judge.
Since trial of the suit has been delayed, we direct the trial court to make every effort to decide the suit expeditiously.
The appellant is entitled to its costs throughout.
P.S.S. Appeal allowed.

summary/full:
The appellant bank instituted a suit against respond ent 's husband for recovery of a large amount advanced as loan.
The defendant contested the suit.
issues were flamed and evidence was being recorded.
He, however, died before the next hearing on 4th November, 1970 when the court was informed by his pleader orally about his demise.
The appel lant on inquiry learnt on 7th November that the defendant had died on 4th August.
The 8th November being Sunday, an application under Order XXII Rule 4 of CPC was filed on 9th November for bringing on record the widow as his legal representative.
Another application for condoning delay in making the application was also made.
The appellant later made another application requesting to treat the latter application as an application under Order XXII Rule 9 for setting aside the abatement of the suit.
These applications were contested by the respondent on the ground that the news regarding the death of her husband had been published in the local newspapers and the plaintiffs had knowledge of his death, and that the suit had abated as no application for setting aside abatement had been filed within time.
In the meanwhile, the appellant made another application for adding the names of four sons and two daughters of the deceased defendant on the ground that earlier it had no knowledge about that.
On behalf of the respondent, it was asserted that the application for 811 substitution was not maintainable as it was filed beyond time, and in the alternative she was not the legal heir of the deceased defendant but only his "Meeira" and as other legal heirs of the deceased defendant were not brought on record within time the application was not maintainable.
The trial court found that the application under Order XXII Rule 4 was not barred by time since it had been filed within four days of coming to know of defendant 's death.
It further held that since the widow, one of the legal repre sentatives of the deceased defendant, was brought on record within time the sons and daughters could also be impleaded as defendants along with her.
It, therefore, set aside the abatement of the suit.
The Judicial Commissioner, however, took the view that the widow was not a legal representative of the deceased as under the Portugees Law she had acquired Meeira rights and her status was not that of 'Cabeca De Casal ' (Head of the family and administrator) of the other heirs of the de ceased.
Since all the heirs of the deceased defendant had not been brought on record alongwith the widow within time, the suit had abated as she alone could not represent the estate of the deceased defendant.
Allowing the appeals, HELD: 1.1 The trial court committed no error in law in allowing the substitution application.
[815EF] 1.2 A 'legal representative ' as defined in Civil Proce dure Code means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in representative character the person on whom the estate devolves on the death of the party so suing or sued.
The definition is inclusive in character and its scope is wide, it is not confined to legal heirs only instead it stipulates a person who may or may not be heir, competent to inherit the property of the deceased but he should represent the estate of the deceased person.
It includes heirs as well as persons who represent the estate even without rifle either as executors or administrators in possession of the estate of the deceased.
All such persons would be covered by the expression 'legal representative '.
If there are any heirs, those in possession bona fide, without there being any fraud or collusion, are also entitled to represent the estate of the deceased.
The Civil Procedure Code was ap plicable to the proceedings in the instant case.
[814G 815A] 812 1.3 The respondent had acquired 'Meeira ' rights under the Portugees Law of Inheritance, which was applicable to Goa at the relevant time, according to which she had ac quired half share in the estate left by her husband and the remaining half share was inherited by sons and daughters of the deceased.
As she was brought on record within time, she represented the estate of the deceased defendant and the suit could proceed on merits.
The impleadment of other legal representatives at a subsequent stage could not affect validity of the proceedings.
[815B, 816C] Daya Ram & Ors.
vs Shyam Sundari, ; and N.K. Mohd. Sulaiman vs N.C. Mohd. Ismail, [1966] 1 S.C.R. 937, referred to.
Mannem Venkataramaih vs M. Munnemma & Ors., AIR 1963 A.P. 406, approved.