judgement:
Appeal No. 2262 of 1971.
Appeal by, special leave from the judgment and 'Order dated November 25, 1969 of the Mysore High Court in Writ Petition No. 6201 of 1969.
C. K. Daphtary and R. B. Datar for the appellant.
B. Sen and M. Veerappa for the respondent.
200 The Judgment (A the Court was delivered by MUKHERJEA, J.
This appeal by special leave is directed against a judgment of the High Court of Mysore by which that High Court disposed of several writ petitions in which the principal ,,question at issue was a common question of law.
The appellant was an officer of the old State of Mysore.
After the States Reorganisation Act of 1956, he entered service of the new State of Mysore constituted under that Act.
The question that has arisen is : what is the superannuation age of the appellant ? It is admitted that the appellant was entitled to the benefits of the service rules which obtained before his transfer to the new State of Mysore.
The relevant rules are the Mysore Services, Regulations as they stood on 1 November 1956.
According to the appellant the age of superannuation is 60 years while according to the respondent the age of superannuation is 55 years.
Difficulty has arisen for two reasons.
First,, there are two versions of the pre1956 Service Regulations, one to be found in the Seventh Edition of the Regulations published in 1945 and the other to be found in the Eighth Edition published in 1953.
Secondly, there are three decisions of this Court, two of which namely Al. Narasimha ,char vs The State of Mysore(1) and State of Mysore vs Padmanabhacharya (2) interpreting article 294 of the Eighth Edition have held that 55 years is the age of superannuation while the third decision in Union of India and ors.
vs R. V. Sadasiva Murthy etc.(3) dealing with article 305 of the Seventh Edition which incidentally corresponds to article 294 of the Eighth Edition has held that the age of superannuation is 60 years.
According to the High Court the latest decision of this Court in Union of India and ors.
vs R. V. Sadasiva Murthy etc.
( 3 ) which has supported the petitioners ' case of 60 years being the age of superannuation rested on the effect of clause (c) of the old article 305.
On behalf of the appellant, however, it was urged that the latest decision of this Court in Sadasiva Murthy 's ( 3 ) case in the correct decision to be followed in interpreting article 294 of the Eighth Edition as well as article 305 of the Seventh Edition.
It is necessary at the outset to set out article 305 of the Seventh Edition as well as article 294 of the Eighth Edition one after the other for making an effective comparison of these two Articles.
It is also of some importance in this connection to set out the provisions of article 428 of the Seventh Edition.
article 305 of the Seventh Edition "(a) An officer in superior service, who has attained the age of fifty five years, may be required to retire, (1) [1960] 1 S.C.R. 981.
(2) 11966] 1 S.C.R. 994.
(3) Civil Appeals Nos.
476 to 478 of 1969.
: Judgment delivered on 15 July, 1969 201 unless Government considers him efficient, and permits him to remain in the service.
But as the premature retirement of an efficient officer imposes a needless charge on the State, this rule should be worked with discretion.
And in cases in which the rule is enforced, a statement of the reasons for enforcing it shall be placed on record.
Note x x x (b) x x x "(c) The following ruling should be kept carefully in view in applying the rules regarding compulsory retirement 'As some misapprehension appears to exist on the subject of the rule regarding the compulsory retirement of officers after the age of fifty five years, it is desirable to state that not only do Article 305 and Article 428 of these Regulations read together, not require the compulsory retirement of any efficient officer of whatever age, but that though the Articles authorise the Heads of Departments, at their discretion, to presume that an officer is inefficient at fifty five years of age conditionally, at sixty years of age absolutely, yet the whole tenor of the rules is that such presumption shall be exercised with careful consideration both for the individual who would suffer by being deprived of his appointment while capable of ' discharging its duties.
and for the finances of the country, which would suffer we 're offi cers, still efficient prematurely thrown upon the pension list., article 428 of the Seventh Edition "If an officer in superior service, whose age is less than sixty years, is required to retire under Article 305 (a), the Head of his office must certify in the column for any other remarks on the third page of the application for his pension, the cause of the applicant 's inefficiency, and quote the order of Government or of any officer to whom power under Article 308 (a) (2) may have been delegated.
sanctioning the applicant 's retirement as superannuated.
If the officer wishes to retire of his own accord under Article 310, the fact should be stated.
" article 294 of the Eighth Edition "294(a) A Government servant in superior or inferior service, who has attained the age of fifty five years, may be required to retire, unless the Government 202 considers him efficient, and permits him to remain in the service.
But as the premature retirement of an efficient Government servant imposes a needless charge on the State, this rule should be worked with discretion And in cases in which the rule is enforced, a statement of the reasons for enforcing it shall be placed on record.
NOTE l.
It is trusted that the Heads of Departments will always be disposed to extend to this rule a very liberal interpretation, so that the State may, in no case, be deprived of the valuable experience of really efficient Government servants by the untimely exercise of the powers of compulsory retirement on pension.
NOTE (b) These rules apply to all Government ser vants without reference to their nationality.
(c) Heads of Departments are authorised to retire all non gazetted Government servants under them when they attain the age of fifty five, and to grant extension of service for a period not exceeding six months only in very exceptional cases if the Government servant is considered to be efficient and such extension is considered absolutely necessary in the interest of public service.
In no case.
extension be given beyond six months without orders of Government.
" The first case that came up to this Court for interpretation of these Regulations was the case of M. Narasimhachar vs The State of Mysore(1).
In that case this Court was called upon to construe the effect Art.294(a) of the Eight Edition of Mysore Services Regulations.
The petitioner, who was retired from service from a particular date on the ground that he had attained superannuation on that date, challenged the order of compulsory retirement on various grounds.
One of the grounds was that the order was contrary to article 294(a) of the Regulations.
The petitioner, in particular, relied on article 297 of the Mysore Services Regulations which laid down that a government servant in superior services who has attained the age of 55 years, may at his option retire from the service on his superannuation pension.
The petitioner urged that article 297 indicated clearly that the option is with the public servant whether he retires at the age of 55 years or not.
This court rejected that contention and held : first, that under article 294(a) the age of retirement is 55 years and, secondly, article 297 which is complementary to article 294(a) allows the government servant, if the Government wants to keep him in service after 55.
to opt for retirement.
Wanchoo J. (1) [1960]1 S.C.R. 981 203 observed that article 297 did not mean that Government cannot retire him at the age of 55 years if he does not exercise the option.
The next case that came up before this Court was the case of State of Mysore vs Padmanabhacharva(1).
In that case, Padmanabhacharya who was a trained teacher completed the age of 55 years on 3 February 1958 and was ordered to be retired from service from that date on the ground of superannuation.
Padmanabhacharya challenged the validity of the order in a writ petition before the High Court of Mysore and contended that Rule 294(a) of the Mysore Services Regulations which prescribed the age, of retirement fixed the normal age of superannuation at 58 years instead of 55 years as the result of an amendment made in April 1955.
The State of Mysore raised two contentions : First, that even after the amendment of 1955 the age of superannuation in, the case of trained teachers continued to be 55 years though it was open to the State to allow them upto the age of 5 8 years if they were fit and efficient and, secondly that a notification issued by the Governor on 25 March 1959 under article 309 of the Constitution validated the action of retiring Padmanabhacharya and certain other officers on their, attaining the age of 55 years.
The High Court rejected both these two contentions and allowed the petition.
On appeal, this Court held with regard to the first contention that under Rule 294(a) as it was before 29 April 1955, the normal age of retirement was 55 years for all including trained teachers but it gave discretion to the Government to extend the service of efficient government servants beyond the age of 55 years.
The position, however, was changed in regard to trained, teachers as a result of the addition of Note 4 to Rule 294(a) which entitled them to continue in service till the age of 58 years.
unless the Government came to the conclusion that they did not have a good record of service and were not upto the mark.
The net effect of this decision was that apart from trained teachers, the, normal age of superannuation was 55 years unless Government decided to extend it upto 58 years on the ground of fitness.
This Court was called upon to construe the effect of article 305 ' of the Seventh Edition of the Mysore Services Regulations in Union of India vs R. V. Sadasiva Murthy(3).
In that case Sada siva Murthy was a "superior service" employee of the Mysore, State Railways.
After the merger of the State of Mysore with the Indian Union he became an employee of the Indian Railway Administration.
On 5 January 1969 he received an order compulsorily retiring him from service.
Sadasiva Murthy moved a writ petition in the High Court of Mysore in which he asked for a, declaration that the Indian Railway Administration was bound to continue him in service till he attained the age of 60 years.
His, (1) ; (2) C. As.
476 478 of 1969 decided on 15 7 1969.
204 contention was upheld by the High Court and the order of compulsory retirement was quashed.
Upon an appeal from that decision this Court confirmed the decision of the High Court.
The appellant before us strongly relied on this latest decision of this 'Court.
Before the High Court an attempt was made on behalf of the .State to explain the difference between the latest decision of this 'Court and the two earlier decisions by pointing out that article 305 of the Seventh Edition contained a ruling of the Government which indicated that article 305 and article 428 should be, read together.
It was contended that article 428 suggests that an officer in the superior service could be, retired before reaching 60 years only on the ground of inefficiency.
The argument was that this clause (c) which attracts the operation of article 428 was omitted in the Eight 'Edition and article 294 of that Edition standing by itself indicated 5.5 years to be the age of superannuation.
In our opinion, it is not necessary for us, to examine the question whether article 428 of the Seventh Edition which is essentially a rule regarding pension supports the contention that the normal age of superannuation is 60 years.
So far as the instant case is concerned, we consider the two . earlier decisions to be more apposite for two reasons.
First, it appears from the judgment of the High Court of Mysore that it was a common ground of the parties to the instant case that the conditions of service governing the services of the appellant are those contained in the Eighth Edition.
Since in the two earlier decisions it was the rule of the Eighth Edition which was construed those are the decisions with which we are concerned directly in the instant case.
Secondly, the decision in the latest case may be supported on an entirely different ground.
Rule 2046 of the Indian Railway Fundamental Rules as amended on 11 January 1967 provided, inter alia, that if a ministerial railway servant, who entered Government service on or before 31 March 1938 and held on that date (i) a lien or a suspended lien on a permanent post, or (ii) a permanent posit in a provisional substantive capacity and continued to hold the same without interruption until be was confirmed in that post, he was to be retained in service till he attains the age of 60 years.
This rule was modified on 23 December 1967 so that the expression "Government service" in that rule included service rendered in a former provincial Government and in ex Company and ex State Railway, if the rules of the Company or ' of the State had a similar provision.
In the facts of the case of Sadasiva Murthy, he, it appears, completely answered the description of a ministerial railway servant given in Rule 2047.
Therefore he could claim 60 years to be his age of retirement.
From that point of view the judgment in Sadasiva Murthy 's case is un 205 exceptionable.
On facts, however, that case is entirely distinguishable from the facts of the present case in which the petitioner appellant is not a Railway officer and does not, therefore, claim the benefit of Rule 2046 of the Indian Railway Fundamental Rules.
Apart from the considerations we have just mentioned, in our opinion article 294 does not leave any room for doubt on this point.
The discretion to retire an officer whether of the superior service or of the inferior service at 55 years has been given in clear unmistakable language to Government.
All officers attaining that age "may be required to retire".
It is clear that the officers themselves have no option in the matter.
If Government decides to retire them, they must go out.
At the same time, however, the Government has been given.
the discretion to retain them in service if the Government considers them to be fit and efficient.
There is nothing in the language of article 294 which makes it incumbent on Government to give this extension after the age of 55 years.
In these circumstances we do not think there is any merit in the appeal which is accordingly dismissed.
We do not, however, make any order as to costs.
G.C. Appeal dismissed.

summary/full:
The appellant was an officer of the old State of Mysore.
A the States Reorganisation Act of 1956, he entered service of the new State of Mysore constituted under that Act.
The appellant was entitled to the benefits of the service rules which obtained before his transfer to the.
new State of Mysore, the relevant rules being the Mysore Services Regulations as they stood on 1 November, 1956.
According to the State of Mysore the appellant was due to retire at the age of 55 years.
He claimed however in a writ petition before the High Court that the age of superannuation under the rules was 60 years.
The High Court rejected the petition.
In appeal before this Court it was common ground between the parties that it was the Eighth Edition of the Regulations published in 1953 that was applicable to the case.
HELD : article 294 of the Eighth Edition does not leave any room for doubt on the point at issue.
The discretion to retire an officer whether of the superior service or of the inferior service at 55 years All officers attaining that age 'may be required to retire. 'It is clear that the officers themselves have no option in the matter.
If Government decides to retire them, they must go out.
At the same time, however, the Government has been given the discretion toretain them in service if the Government considers them to be fit and efficient.
There is nothing in the language of article 294 which makes it incumbent on Government to give this extension after the age of 55 years.
[205BC] There was therefore no merit in the appeal which must accordingly be dismissed.
M.Narasimhachar vs The State of Mysore, [1960] 1 S.C.R. 981 and State of Mysore vs Padmanabhacharya, [1966] 1 S.C.R. 994, applied.
Union of India and Ors.
vs R. V. Sadasiva Murthy etc., Civil Appeals Nos.
476 to 478 of 1969; Judgment delivered on 15 July 1969.
distinguished.


judgement:
Appeal No. 1240 of 1967.
Appeal from the judgment and order dated June 24, 1964 of the Assam and Nagaland High Court at Gauhati in Civil Rule No. 57 of 1963.
D. N. Mukherjee, for respondents Nos. 1 to 3.
B. D. Sharma and section P. Nayar, for respondent No. 4.
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
This is an appeal by special leave against the judgment of the High Court of Assam allowing the petition filed by respondents questioning the validity of the order dated 27 6 1962 issued by the Deputy Commissioner, Khasi Jaintia Hills on behalf of the Government of Assam that their application for renewal of the mining lease granted to their father must be deemed to have been refused under sub rule (3) of Rule 24 of the Mineral Concession Rules, 1960.
171 The lease in question was granted by the Crown Representative on 29th April, 1942 to Bhagirath Mohta the father of the respondents for a period of 20 years to operate the coal mines.
Bhagirath Mohta died on 18 5 1961 and on 3 8 1961 the respondents applied for renewal of the lease.
By his order earlier mentioned the Deputy Commissioner informed the respondents that the application for renewal must be deemed to have been refused.
On 22 10 1962 the respondents filed a revision petition to the Central Government under Rule 54 of the Mineral Concession Rules, and this was rejected on 8 2 1963.
On 7 5 1963 the respondents filed a petition before the High Court of Assam for quashing the order dated 27th June, 1962 and for a writ of Mandamus directing the renewal of the lease.
The appellants contended that the rights of the respondents, if any, were wholly contractual and based on disputed facts and they could only establish them by.
filing a regular suit in a Civil Court.
The High Court of Assam allowed the petition filed by the respondents holding that Rule 24(3) of the Mineral Concession Rules, under which the application by the respondents was deemed to have been rejected, was unreasonable and ultra vires of Section 8 of the Mines & Minerals (Regulation and Development) Act, 1957, and the deemed refusal of the application for renewal had no legal effect, that the explanation to Rule 54 should also be struck down as repugnant to the main sections of the Act.
It, therefore, quashed the order of the Deputy Commissioner dated 27th June, 1962 and issued a writ of Mandamus to the State Government to deal with and dispose of the application of the petitioners dated 3 8 1961 for renewal.
The first question to be decided, therefore, is whether Rule 24(3) and the explanation to Rule 54 are repugnant to the provisions of Section 8 of the Act and, therefore.
liable to be struck down.
We may first set out the relevant provisions.
Rule 24 reads as follows : "24.
Disposal of application for mining lease.(1) An application for the grant of a mining lease shall be disposed of within nine months from the date of its receipt.
(2)An application for the renewal of a mining lease shall be disposed of within ninety days from the date of its receipt.
(3)If any application is not disposed of within the period specified in sub rule (1), of sub rule (2), it shall be deemed to have been refused.
" 172 Rule 54 reads as follows: "Application for revision. (1) Any person aggrieved by any order made by the State Government or other authority in exercise of the powers conferred on it by the Act or these rules may, within two months of the date of communication of the order to him, apply to the Central Government in duplicate in Form N for revision of the order.
The application should be accompanied by a treasury receipt showing that a fee of Rs. 100 has been paid into a Government treasury or in any branch of the State Bank of India doing the treasury business to the credit of the Central Government.
Provided that any such application may be entertained after the said period of two months, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within time.
(2)In every application under sub rule (1) against the order of a State Government refusing to grant a prospecting licence or a mining lease, any person to whom a prospecting licence or mining lease was granted in respect of the same area or for a part thereof, shall be impleaded as a party.
(3)Along with the application under sub rule (1), the applicant shall submit as many copies thereof as there are parties impleaded under sub rule (2).
(4)On receipt of the application and the copies thereof, the Central Government shall send a copy of the application to each of the parties impleaded under sub rule (2) speci fying a date on or before which he may make his representations, if any, against the revision application.
Explanation.
For the purpose of this rule, where a State Government has failed to dispose of an application for the grant or renewal of a prospecting licence or a mining lease within the period specified in respect thereof in these rules.
the State Government shall be deemed to have made an order refusing the grant or renewal of such licence or lease on the date on which such period expires.
(1) The period for which a mining lease may be granted shall not (a) in the case of coal.
iron ore or bauxite, exceed thirty years; and 173 (b) in the case of any other mineral, exceed twenty years.
(2) A mining lease may be renewed (a) in the case of coal.
iron ore or bauxite, for one period not exceeding thirty years; and (b) in the case of any other mineral, for one period not exceeding twenty years : Provided that no mining lease granted in respect of a mineral specified in the First Schedule shall be renewed except with the previous approval of the Central Government.
(3)Notwithstanding anything contained in subsection (2), if the Central Government is of opinion that in the interests of mineral development it is necessary so to do, it may, for reasons to be recorded, authorise the renewal of a mining lease for a further period or periods not exceeding in each case the period for which the mining lease was originally granted.
" From a reading of Section it is difficult to see how exactly the rules referred to above can be said to be contrary to the provisions contained in that Section.
Let us, therefore, consider the scheme of the Act.
It is an Act to provide for the regulation of mines and the development of minerals under the control of the Union.
Section 4 lays down that no person shall undertake any prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a prospecting licence, or as the case may be, a mining lease, granted under this Act and the rules made thereunder.
Section 5 lays down certain restrictions in the matter of granting prospecting licences or mining leases.
Section 6 lays down the maximum area for which a prospecting licence or mining lease may be granted.
Section 7 lays down periods for which prospecting licences may be granted or renewed.
Section 8 lays down the periods for which mining leases may be granted or renewed.
Section 10 lays down the procedure for applying for prospecting licences or mining leases.
Section 11 lays down the preferential rights of certain persons to the grant of prospecting licences and mining leases.
Section 13 enables the Central Government to make rules for regulating the grant of prosecuting licences and mining leases.
Among the clauses contained in subsection (2) of that Section, which specify the purpose for which rules may be made, are clauses (g) and (r) which are as follows (g)the terms on which.
and the conditions subject to which, any other prospecting licence or mining lease may be granted or renewed; 174 (r)any other matter which is to be, or may be prescribed under this Act.
Section 19 lays down that any prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act, or any rules or orders made thereunder shall be void and of no effect.
Section 20 lays down that the provisions of the Act and the rules made thereunder shall apply in relation to the renewal after the commencement of this Act of any prospecting licence or mining lease granted before such commencement as they apply in relation to the renewal of a prospecting licence or mining lease granted after such commencement.
Section 30 enables the Central Government of its own motion or on application made within the prescribed time by an aggrieved party, revise any order made by a State Government or other authority in exercise of the powers conferred on it by or under the Act.
The first Schedule to the Act contains a list of minerals in respect of which no prospecting licence or mining lease shall be granted except with the previous approval of the Central Government.
The Mineral Concession Rules, 1960 were made under this Act.
Chapter 11 of the rules contains provisions regarding certi ficate of approval.
Chapter III deals with grant of prospecting licences in respect of land in which the minerals vest in the Government.
Chapter IV deals with grant of mining leases in respect of land in which the minerals vest in the Government.
Rule 24 is found in this Chapter.
Chapter V deals with procedure for obtaining a prospecting licence or mining lease in respect of land in which the minerals vest in a person other than the Govern ment.
Chapter VI deals with grant of prospecting licences and mining leases in respect of land in which the minerals vest partly in Government and partly in a private person.
Chapter VII deals with revision.
Rule 54, the explanation to which has been held void by the Assam High Court, is found in this Chapter.
It is not necessary for the purpose of this discussion to refer to Chapters VIIII and DC.
The Act and the Rules thus contain the complete code in res pect of the grant and renewal of prospecting licences as well as mining leases in lands belonging to Government as well as lands belonging to private persons.
The main point to be kept in mind is the fact that the mining lease in question is in a land belonging of Government and it is for a mineral included in the First Schedule to the Act in respect of which no mining lease can be granted without the previous approval of the Central Government.
Normally the Government like any other owner of property is entitled to choose with whom it shall deal and what sort of a contract it will enter into, but being a public authority its 175 acts are necessarily regulated by certain rules.
The Act and the rules in this case are intended to regulate the development of mines and minerals under the control of the Union and contain the provisions necessary for that purpose.
No person can claim any right in any land belonging to Government or in any mines in any land belonging to Government except under and in accordance with the Act and the Rules or any right except those created or conferred by the Act.
There is no question of any fundamental right in any person to claim that he should be granted any lease or any prospecting licence or mining lease in any land belonging to the Government.
It is necessary to bear this in mind because some sort of vague right was claimed on behalf of the respondents as though there is a right of renewal of the mining lease in question even apart from the rules.
The original lease in favour of the father of the respondents contained a clause that if the lessee were desirous of taking a renewed lease for a further term of years he should give six calendar months ' previous notice in writing to that effect and the Crown Representative will deliver a renewed lease for a further term of 20 years.
Now as a result of the provisions of Section 19 and 20 of the Act renewal of the lease granted to the father of the res pondents is governed by the Act and the Rules.
Rule 24(3) provides that an application for the grant of a mining lease shall be disposed of within ninety days from the date of its receipt, and if it is not so disposed of it shall be deemed to have been refused.
A later amendment omitted the words "or sub rule (2)" found in that sub rule with the result that the sub rule (3) now reads as follows : "If any application is not disposed of within the period specified in sub rule (1) it shall be deemed to have been refused.
" This might seem a little confusing.
Does it mean that the period specified in sub rule (1) applies not merely to the grant of a mining lease mentioned in sub rule (1) but also to the renewal of a mining lease mentioned in sub rule (2) ? But we think that it will be a reasonable interpretation to hold that the effect of this amendment would be that while the provision regarding disposal within 90 days of an application for renewal still stands, the provision for deeming it to have been refused is no longer there.
But this does not dispose of the matter because the "plantation to rule 54 lays down that for the purposes of that rule, where a State Government has failed to dispose of an application for the grant or renewal of a prospecting licence or a mining lease within the Period specified in respect thereof, the State Government shall be deemed to have made an order refusing the grant or renewal on the date on which such period expires.
So the explanation 176 has two purposes (i) to state the effect of the failure to dispose of the applications referred to in Rule 24, sub rule (1) & (2) within the periods specified in those sub rules, as also (ii) to provide the starting point for the purpose of computing,the period of two months within which an application for revision under Rule 54 must be preferred.
It has been urged vehemently that a provision to the effect that if the State Government does not dispose of an application for renewal within 90 days it should be deemed to have been refused is an unreasonable one and should, therefore, be struck down.
As we have already mentioned it cannot be said that the respondents had any right apart from the rights conferred on them by the Act and the Rules.
Their right, if any, is a creation of, and only flows from, the Act and the Rules.
They cannot claim any right de hors the Act and the Rules.
So if the Act and the Rules provide that an application not disposed of within 90 days should be deemed to have been refused, they have to abide by the Rules and take the consequences.
There is no question of any contravention of any rights of the respondents in the making of these rules.
It is said that there is no way of the respondents knowing what has been done about their application for renewal and if the concerned officer or authority neglects to take any action with regard to their application they should not be penalised.
We do not see how, if that is the Legislative policy, it can be ques tioned.
It cannot be said to be in contravention of any provision of the Constitution.
Nor is there any question of the principles of natural justice having been violated.
Indeed there may be some purpose in such a provision.
It is well known that in almost all statutes regarding local bodies it is provided that applications for building licences that are not disposed of within a specified period should be deemed to have been granted.
It has never been argued in those cases that it is unfair to the local bodies concerned.
That is the provision of law.
Let us assume that in a case like the present rule 24(2) did not exist.
Let us assume that the officer or authority dealing with the application for renewal simply sleeps over it for years.
The applicant will then be in a worse position.
Apparently the idea was that the officer or authority dealing with an application for renewal must dispose of it quickly and if he did not it should be deemed to have been refused thus giving an opportunity to the aggrieved party to approach the Central Government to exercise its powers of revision under Rule 54.
Under Rule 55 the Central Government can call for the records from the State Government and after considering any comments made on the petition by the State Government or other authority, may confirm, modify or set aside the order or Pass such other order in relation thereto as the Central Government may deem just and proper.
It also provides for an opportunity to the 177 applicant to make his representation against the comments, if any, received from the State Government or other authority.
Thus the fact that the application for renewal is deemed to have been refused as a result of Rule 24(2) does not prohibit the Central Government from passing any order it may deem just and proper including an order granting renewal.
In this case the respondents did not file an application for renewal within two months of the Deputy Commissioner 's informing them that their application should be deemed to have been rejected, though that letter of the Deputy Commissioner itself was issued nearly nine months after their date of application.
Indeed they could have filed an application.
for revision when they failed to get a reply within 90 days of their application for renewal.
It means that it is the respondents that were not alert.
We can see nothing unreasonable in the order passed by the Central Government.
It has been mentioned in that order that after careful consideration of the facts stated in their review application it was rejected as being time barred.
The application to the Central Government preferred by the respondents contained all the facts.
The applications for revision have to be in form (L) appended to the Rules.
It has to specify the minerals for which the revision application is filed.
the details of the area in respect of which the revision application is filed and a map or plan for the area has also to be attached.
There is no reason to assume that the Central Government did not apply their minds to these facts.
We are unable to see how Rule 24 (3) and explanation to Rule 54 can be said to contravene the provisions of Section 8 of the Act.
They are within the rule making powers of the Government.
Clause (g) of Section 13 too enables the Government to make rules regarding the terms on which and conditions subject to which any prospecting licence or mining, lease may be granted or renewed.
It includes the power to make rules regarding conditions subject to which they may be refused.
We do not see how the provision of Rule 26, which lays down that 'where the State Government passes any order refusing to grant or renew a mining lease, it shall communicate in writing the reasons for such order militates against this conclusion.
In view of the provisions of Rule 24 and 54 the only reason which the State Government can give under Rule 26 is that because 90 days are over the application should be deemed to have been refused.
The High Court 's view that Rule 24(3) and the explanation to Rule 54 are in contravention of Section 8 is vitiated by its assumption that every order to be 'Passed on an application for renewal should be approved by the Central Government.
This is not correct.
Only renewal cannot be granted without the Central Governments approval and not rejection.
L631Sup CI/73 178 The only relevant decisions of this Court are reported in ; , Shivji Nathubhai vs Union of India & others and the, decision in C.A. No. 657 of 1967 dated 17 8 67.
In both of them it was held that the power of the Central Government under Rule 54 is a quasi judicial power.
They do not deal with the nature of the power exercised by the State Government in granting or refusing mining leases renewals thereof.
The decisions or in Seeta Ramaiah vs State of Andhra Pradesh(1) and Shivji Nathubhai vs Union of India(2) more or less take the same view of the matter as we have.
We do not feeld called upon to deal with the question whether as a result of the order passed by the Central Government there has been a merger and the application by the respondents before the High Court, which did not ask for setting aside the order of the Central Government, cannot succeed as that point was not taken before the High Court; nor it is necessary to deal with the question in the view that we have taken of this case in its other aspects.
In the result we hold that the High Court was in error in holding that Rule 24(3) and the explanation to Rule 54 of the Mineral Concession Rules 1960 are contrary to the provisions of the Act and should be struck down.
The appeal is allowed and the order of the High Court is set aside.
The respondents will pay the appellant 's costs.
S.B.W. Appeal allowed.
(1) A.I.R. 1963 A.P. 54.
(2) A.I.R. 1959 Punjab 510.

dataset_name: IN-Abs

summary/full:
On 29 4 1942, a mining lease was granted by the Crown Representative to the father of the respondents for a period of 20 years to operate the coal.
mines.
The father died on 18 5 1961.
On 3 8 61, the respondents applied for renewal of the lease.
By his order dated 27 6 62, the Deputy Commissioner Khasi Jayantia Hills informed the respondents that the application for renewal must be deemed to have been refused.
On 22 10 1962.
the respondents filed a revision petition to the Central Government under Rule 54.
This was rejected on 8 2 1963.
On 7 5 63, the respondents filed a writ petition before the High Court for quashing the order dated 27 6 62 and for a writ of mandamus directing the renewal of the lease.
The High Court allowed the petition filed by the respondents holding that Rule 24(3) of the Rules under which the application by the respondents was deemed to have been rejected was unreasonable and ultra vires of Sec. 8 of the Act, and the deemed refusal of the application for renewal had no legal effect that the explanation to Rule 54 should also be struck down as repugnant to the main sections of the Act.
On appeal by special leave to this Court, HELD : (i) The Act and the Rules contained the complete code in respect of the grant and renewal of prospecting licence as well as mining lease in lands belonging to the Government, as well as the lands belonging to private persons.
The mining lease in question is in a land belonging to Government and it is for a mineral included in the First Schedule to the Act in respect of which no mining lea ,P. can be granted without previous approval of the Government.
Normally, the Government like any other owner of property is entitled to choose with WhoM it shall deal and what sort of a contract it will enter into, but being a public authority, its acts are necessarily regulated by certain Rules.
The Act and Rules in this case are intended to regulate the development of mines and minerals under the control of the Union an contained the provisions necessary for that purpose.
No person can claim as of right any lease or prospecting licence in any land belonging to Government or in any mines in anv lands belonging to Government except under and in accordance with the Act at the Rules or any right except these created or conferred by the Act.
[174G H] As a result of the provisions of Sections 19 and 20 of the Act, renewal of the lease granted to the father of the respondents is governed by Act and the Rules.
Rule 24(3) as amended.
has the effect that while the provisions regarding disposal within 90 days of an application for renewal still stands, provision for deeming it should have been 170 refused is no longer there.
The explanation to Rule 54 has two purposes : (i) to state the effect of the failure to dispose of the applications referred to in Rule 24 sub rule (1) and (2) within the periods specified within these sub rules as also (ii) to provide the starting point for the purpose of computing the period of two months within which an application for re vision under Rule 54 must be preferred.
[175D, G & 176A] (ii)There is nothing unreasonable in the order passed by the Central Government.
It has been mentioned in that order that after careful considerations of the facts stated in that review application, it was rejected as time barred.
The application to the Central Government preferred by the respondents contained, all the facts.
There is no reason to assume that the Central Government did not apply their minds to these facts.
[177 DE] (iii)Rule 24(3) and the explanation to Rule 54 cannot be said to contravene the provisions of Section 8 of the Act.
They are within the rule making powers of the Government and in view of the provisions of Rule 24 and 54, the only reason which the State Govt.
can give under Rule 26 is that because 90 days are over, the application should be deemed to have been refused.
The High Court 's view that Rule 24(3) and the explanation to Rule 54 are in contravention of Sec. 8 is vitiated by its assumption that every order to be passed on an application for renewal should be approved by the Central Government.
This is incorrect.
Only renewal cannot be granted with the Central Govt 's approval and not rejection.
[177 F H] Shivji Nathubhai vs Union of India & Others, [1960] 2S.C.R. 775, Supreme Court judgment dated 7 8 1967 in C.A. 657/67 distinguished.
Seeta Ramaiah vs State of Andhra Pradesh, A.I.R. 1963 A.P. 54, Shivaji Nathubhai vs Union of India, A.I.R. 1959 Punjab 510 referred to.


judgement:
Appeal No. 1690 of 1969.
Appeal by special leave from the judgment and order dated July 15, 1968 of the Delhi High Court at New Delhi in Incometax Reference No. 44 of 1964.
G.C. Sharma, R. Chawla, section R. Gupta, R. P. Soni and K. B. Rohtagi for the appellant.
F. section Nariman, Addl.
Solicitor General of India, A. N. Kirpal, section P. Nayar and R.N. Sachthey for the respondent.
The Judgment of the Court was delivered by HEGDE, J.
This is an appeal by special leave.
The appellant is the assesssee.
In this case we are concerned with his assessment for the assessment year 1958 59.
The relevant previous year ended on March 31, 1958.
The assesses firm applied for renewal of its registration under section 26(A) of the Indian Income Tax Act 1922 (in short 'the Act ') before the Income Tax Officer on May 26, 1958.
In that application he mentioned that the previous years ' income had been divided among the partners.
The Income Tax Officer rejected that application.
He did not believe the version of the assessee that the previous years ' income 77 had been divided.
In appeal, the Appellate Assistant Commissioner agreed with the conclusion reached by the Income tax Officer.
On a further appeal being taken to the Income tax Appellate Tribunal the Tribunal agreed with the conclusions reached by the lower authorities.
Before the Tribunal yet another contention appears to have been taken.
That contention was that at any rate the partners having divided the income of the previous year as evidenced by the balance sheet before the assessment Was made, the assessee firm was entitled for its registration under section 26(A).
The Tribunal did not go into that question.
The High Court agreed with the view taken by the Tribunal.
The only question that arises for decision in this case is whether it was incumbent on the part of the assessee to have divided the profits of the previous year before it made its application for renewal of the registration certificate.
For deciding this question it is necessary to refer to the relevant provisions of the Act as well as the Rules.
Section 26 (A) of the Act reads.
thus. "26A. Procedure in registration of firms (1) Application may be made to the Income tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax.
(2) The application shall be made by such person or persons, and at such times and small contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by the income tax Officer in such manner as may be prescribed.
" Turning to the relevant Rules, they are found in Rules 2, 3 and 6.
These Rules read thus: "Rule 2 Any firm constituted under an Instrument of Partnership specifying the individual shares of the partners may, under the provisions of section 26A of the Indian Income tax Act, 1922 (hereinafter in these rules referred to as the Act), register with the Incometax Officer, the particulars contained in the said Instrument on application made in this behalf.
Such application shall be signed by all the partners (not being minors) personally, or in the case of a dis 78 solved firm by all persons (not being minors) who were partners in the firm immediately before dissolution and by the legal representative of any such partner who is deceased and shall, for any year of assessment UP to and including the, assessment for the year ending on the 31st day of March, 1953, be made before the 28th February, 1953, and for any year of assessment subsequent thereto, be made.
(a)Where the firm is not registered under the (TX of 1932), or where the deed of partnership is not registered under the Indian (XVI of 1908), and the application for registration is being made for the first time under the Act.
(i) within a period of six months of the constitution of the firm or before the end of the "previous year" of the firm whichever is earlier, if the firm was constituted in that previous year, (ii)before the end of the previous year in any other case.
(b) where the firm is registered under the (TX of 1932), or where the deed of partnership is registered under the Indian (XVI of 1908), before the end of the previous year of the firm, and (c)where the application is for renewal of registration under Rule 6 for any year, before the 30th day of June of that year : Provided that the, Income tax Officer may entertain an application made after the expiry of the time limit specified in this rule, if he is satisfied that the firm was prevented by sufficient cause from making the application within the specified time .
Rule 3 The application referred to in Rule 2 shall be made in the form annexed to this rule and shall be accompanied by the original Instrument of Partnership under which the firm is constituted, together with a copy thereof : provided that if the Income tax Officer is satisfied that for some sufficient reason the original Instrument cannot conveniently be produced, be may accept a copy of it certified in writing by all the partners (not being minors) or, where the application is made after dissolution of the firm, by all the persons 79 referred to in the said Rule, to be correct copy, and in such a case the application shall be accompanied by a duplicate copy.
FORM I FORM OF APPLICATION FOR REGISTRATION OF A FIRM UNDER SECTION 26A OF THE INDIAN INCOME TAX ACT, 1922.
TO The Income tax Officer, Dated 19 Income tax year 19 19 1.
. . . 2. . . 3.We do hereby certify that the profits (or loss if any ) of the previous year were/will be (period upto the date of dissolution were/will be) divided or credited as shown in section B of the Schedule and that the information given above and in the attached Schedule is correct.
(Signatures) (Address) Note : This application must be signed. . .
SCHEDULE Name of Address Date of (1) (1) (2) partner admitt Interest Salaryor Share in REMARKS ance to on capital commis the bal partner or loans sion from ance of ship.
(if any) firm profits (or loss) etc.
1 2 3 4 5 6 7 (A)Particulars of the firm as constituted at the date of this application.
80 (B) Particulars of the apportionment of the income, profits or gains (or loss) of the business, profession or vocation in the previous year between the partners who in that previous year were, entitled to share in such income, profits or gains (or loss).
Applicable where the application is made after the end of the relevant previous year).
Note: (I) If the interest, salary and/or commission . . . . . . . . column with the letter "R".
(In other cases the interest, salary and/or commissionmay exceed the total profits so as to leave a balance of net loss divisible in column 6).
(2)If any partner is entitled to share in profits but is not liable to bear a similar proportion of any losses this fact should be indicated by putting against his share in column 6 the letter "P".
Rule 6 Any firm to whom a certificate of registration has been granted under Rule 4 may apply to the Income tax Officer to have the certificate of registration renewed for a subsequent year.
Such application shall be signed personally by all the partners (not being minors) of the firm or, where the application is made after dissolution of the firm, by all persons (not being minors) who were partners in the firm immediately before dissolution and by the legal representative of any such person who is deceased, and accompanied by a certificate in the form set out below.
The application shall be made before the 30th day of June of the year for which assessment is to be made provided that the Income tax Officer may entertain an application made after the expiry of the said date, if he is satisfied that the firm was prevented by sufficient cause from making the application before that date.
FORM OF APPLICATION FOR THE RENEWAL OF REGISTRATION OF A FIRM LTNDER SECTION 26A OF THE INDIAN INCOME TAX ACT, 1922 TO The Income tax Officer Dated 19 Assessment for the Income tax Year 19 /19 1. . . 2. . . . 81 3.We do hereby further certify that the profits (or loss if any) of the previous year were/period up to the date of dissolution were/will be divided or credited as shown below: Particulars of the apportionment of the income, profits or gains (or loss) of the business, profession or vocation in the previous year or the period upto the date of dissolution between the partners who were entitled to share in such income, profits or gains (or. loss).
Name of Address Date of (1) (1) (2) Partner admitt Interest Salary Share ance of on capital or comm in the REMARKS partner or loans ission balance ship (if any) from of profits firm.
(or loss) etc.
1 2 3 4 5 6 7 Note : (1) If the interest, salary and/or. . loss divisible in column 6.
(2) If any partner is entitled . . his share in column 6 the letter "P".
(Signatures) (Address) Note : This application must be signed personally . of any such person who is deceased".
From a reading of these provisions it is clear that in the case of an application for renewal it is incumbent on the part of the assessee to have divided the previous year 's profits.
This conclusion appears to be obvious from Section 26(A) read with Rules 2, 3, 6 and the forms set out earlier.
The contention ' of Mr. Sharma, the learned counsel for the assessee, that if the relevant provisions are interpreted in the manner that we have done it leads to hardship to the assessee, is not relevant in view of the plain language of the provisions.
Our conclusion in this regard receives support from the decision of Madras High Court in Surajmall vs Commissioner of, L63lSuP Cl/73 82 Income tax, Madras(1), and that of the Allahabad High Court in Ganesh Lal Laxmi Narain vs Commissioner of Income tax, U.P.(2).
In Khanjan Lal Sewak Ram vs Commissioner of Income tax, U.P.(3) this Court had ruled that para 3 of Rule 6 (supra) is mandatory.
We see no merit in this appeal.
It is dismissed with costs.
V.P.S. Appeal dismissed.

summary/full:
The assessee firm applied for renewal of its registration under s.26A, Income Tax Act, 1922, in May 1958, stating that the income of the previous year, which ended on March 31, 1958, had been divided among the partners.
The Department Tribunal and the High Court did not believe that the previous year 's income had been divided and rejected the application.
Dismissing the appeal to this Court, HELD : From a reading of the section and rules 2, 3 and 6 of the In,come tax Rules and the forms prescribed, it is clear that in the case of an application for renewal, it is incumbent on the part of the assessee to have divided the previous year 's profits before the application for renewal is made.
The fact that the interpretation may cause hardship to the assessee is irrelevant when the language is plain.
[81 G] Surajmal vs Commissioner of Income tax, Madras, 43 I.T.R. 491 and Ganesh Lal Laxmi Narain vs Commissioner of Income Tax, U.P. , approved.
Khanjan Lal Sewak Ram vs Commissioner of Income tax, U.P., , referred to.


judgement:
Appeal No. 846 and 1343 of 1972.
Appeal by special leave from the judgment 'and order dated November 22, 1971 of the Delhi High Court in S.A.0.
No. 83 D of 1965 And Civil Appeal No. 1343 of 1973 Appeal by Special leave from the judgment and order dated November 22, 1971 of the Delhi High Court in SAO No. 239 D of 1965.
V.M. Tarkunde, section section Shukla and A. P. Gupta, for the appellant (in C. A. No. 846).
S.P. Pandey, Shiv Prakash Pandey and section section Shukla, for the ,appellant (in C. A. No. 1343).
D. N. Mukherjee, for respondent (in C. A. No. 846).
Bakshi Man Singh and Harbans Singh, for the respondent (in C.A. No. 1343).
456 Sardar Bahadur Saharya, Vishnu Bahadur Saharaya and Y. Khushalani, for the Intervener (in C.A. No. 846).
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
These two appeals by special leave are against the judgment of the High Court of Delhi allowing the ,appeals filed by the two respondents.
The respondents are landlords of two houses in the Karol Bagh area of Delhi.
The houses are built on lands given on long lease by the Delhi Improvement Trust to the rights, liabilities and assets ,of which the Delhi Development Authority has since succeeded.
Under the terms of the lease, subject to revision of rent, the lessees were to put up residential buildings on the leased lands.
,and the lessees undertook : "(vi) not to use the said land and buildings that may be erected thereon during the Said term for any other purpose than for the purpose of residential house without the consent in writing of the said lessor; provided that the lease shall become void if the land is used for any purpose than that for which the lease is granted not being a purpose subsequently approved by the lessor.
" The present landlords are not the original lessees but their successors in interest.
Portions of buildings have been leased for commercial purposes, a barber shop in C.A. 846 and a scooter repair shop in C.A. 1343.
The Delhi Development Authority appears to have given notice to them drawing their attention to the provision of the lease extracted above and that as they had permitted the buildings to he used for commercial purposes contrary to the terms of the lease deed, the lease was liable to be determined and called upon them to discontinue the use of the land for commercial purposes, failing which they were asked to show cause why their lease should not be determined 'and the land, together with the buildings thereon, reentered upon without any compensation to them.
Thereupon the landlords issued notice to the tenants asking them to stop the com mercial use of the buildings and later instituted the proceedings out of which these appeals arise.
In both these cases the buildings had been put to commercial use even before 1957 when the Delhi Development Authority Act of 1957 came into force.
The Controller dismissed the petitions filed by the landlords and the appeals filed by them were dismissed.
They thereupon filed appeals to the High Court.
A learned single Judge of the High Court taking a view contrary to two earlier decisions in 457 Smt.
Uma Kumari vs Jaswant Rai Chopra(1) and section P. Arora vs Ajit Singh (2 ) referred the question that arise in these appeals to a Division Bench which took a view contrary to that taken in the two earlier decisions above referred to, and decided in favour of the landlords.
The question that arises for decision in these cases is this : Are the landlords estopped or otherwise prohibited from getting possession of the property from the tenants because they themselves had let it out for commercial purposes.
We shall set out the relevant portion of the statutory provisions regarding this question.
Section 14 of the Delhi Rent Control Act 1958, which deals with the question of protection to tenants against eviction, in so far as it is relevant, is as follows : "14.
(1) Notwithstanding anything to the con trary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or Controller in favour of the landlord against a tenant : Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely (c) that the tenant has used the premises for a purpose other than that for which they were let (i) if the premises have been let on or after the 9th day of June, 1952, without obtaining the consent in writing of the landlord; or (ii)if the premises have been let before the said date without obtaining his consent.
(k) that the tenant has, notwithstanding previous notice, used or dealt with the premises in a manner contrary to any condition imposed on the landlord by the Government or the Delhi Development Authority or the Municipal Corporation of Delhi while giving him a lease, of the land on which the premises are situate.
" Sub section 11 of the same section, which is also relevant, reads " (11) No order for the recovery of possession of any premises shall be made on the ground specified in clause (k) of the proviso to sub section (1), if the tenant, within such time as may be specified in this (1) P.L.R. (1960) 460.
(2) I.L.R. (1970) 11 Delhi 130.
458 .lm15 behalf by the Controller, complies with 'the condition imposed on the landlord by any of the authorities referred to in that clause or pays to that authority such amount by way of compensation as the Controller may direct.
" Section 14 of the Delhi Development Act 1957 is as follows "14.
After the coming into operation of any of the plans in a zone no person shall use or permit to be used any land or building in that zone otherwise than in conformity with such plan : Provided that it shall be lawful to continue to use upon such terms and condition as may be prescribed by regulations made in this behalf any land or building for the purpose and to, the extent for and to which it is being used upon the date on which such plan comes into force." Before this Act was passed the United Provinces Town Improvement Act 1919 was in force in Delhi and the Delhi Improvement Trust was constituted thereunder.
It was this Trust which had leased the lands to the predecessors of the two landlords in the present appeals.
The Delhi Development Authority established under the Delhi Development Act 1957 succeeded to the asets, rights and liabilities of the Delhi Improvement Trust.
We shall deal first with the question that arises under the Delhi Rent Control Act.
Clause (k) of the proviso to sub section (1) of Section 14 provides that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on the ground that the tenant has, notwithstanding previous notice, used or dealt with the premises in a manner contrary to any condition imposed on the landlord by the Government or the Delhi Development Authority or the Municipal Corporation of Delhi while giving him a lease of the land on which the premises are situate.
In this case the lease granted by the Delhi Improvement Trust, the predecessors in interest of the Delhi Development Authority, to the predecessors in interest of the landlords contains a condition that any building to be erected on the land shall not be used for any purpose other than residential purpose.
There is no dispute that part of each of the buildings is being used in a manner contrary to that condition.
The landlord has also given notice asking the tenant to cease using the building for that purpose.
The two earlier decisions referred to held that notwithstanding this provision the landlord was not entitled to get possession of the land because he himself had leased the building for a commercial purpose and was, therefore, estopped from 459 claiming possession.
The result will be this : The Delhi Development Authority can enforce the conditions of the lease and forfeit the leased land with the buildings thereon.
In that case both the landlord as well as the tenant stand to lose.
The landlords point but this situation and say that they are not interested in evicting the tenants but are interested only in seeing that the tenants do not use the buildings for commercial purpose with the consequences that they may have to lose the land and the buildings and the tenants also cannot any longer use it for a commercial purpose.
It has been argued on behalf of the tenants that this clause will apply only where the tenant has used the land after previous notice from the landlord, i.e., if the landlord had told him at the 'beginning of the tenancy that the building was not to be, used for commercial purpose and notwithstanding that the tenant used it for a commercial purpose.
They, therefore, contend that as in this case both the landlord and the tenant were aware of the use to which the ' building was to be put there is no question of any notice from the landlord asking the tenant not to use the building for commercial purpose and by merely issuing such notice the landlord cannot take advantage of clause (k).
This is really another way of putting the argument that the landlord having granted the lease for a commercial purpose is estopped from contending that the tenant should not use it for commercial purpose.
While the argument appears to be plausible we are of opinion that there is no substance in this argument.
If it is a case where the tenant has contrary to the terms of his tenancy used the building for a commercial purpose the landlord could take action under clause (c).
He need not depend upon clause (k) at all.
These two clausesare intended to meet different situations.
There was no need for anadditional provision in clause (k) to enable a landlord to get possession where the tenant has used the building for a commercial purpose contrary to the terms of (the tenancy.
An intention to put in an useless provision in a statute cannot be imputed to the Legislature.
Some meaning would have to be given to that provision.
The only situation in which it can take effect is where the lease is for a commercial purpose agreed upon by both the landlord and the tenant but that is contrary to the terms of the lease of the land in favour of the landlord.
That clause does not come into operation where there is no provision in the lease of the land in favour of the landlord, prohibiting its use for a commercial purpose.
The legislature has clearly taken note of the fact that enormous extents of land have been leased by the three authorities mentioned in that clause, and has expressed by means of this clause its anxiety to see that these lands are used for the purpose for which they were leased.
The policy of the legislature seems to be to put an 14 L79 6Sup C.I./73, 460 end to unauthorised use of the leased lands rather than merely to enable the authorities to get back possession of the leased lands.
This conclusion is further fortified by a reference to sub section 11 of section 14.
, The lease is not forfeited merely because the building put upon the leased land is put to an unauthorised use.
The tenant is given an opportunity to comply with the conditions imposed on the landlord by any of the authorities referred to in clause (k) of the proviso to sub section (1).
As long as the condition imposed is complied with there is no forfeiture.
It even enables the Controller to direct compensation to be paid to the authority for a breach of the conditions.
Of course, the Controller cannot award the payment of compensation to the authority except in the presence of the authority.
The authority may not be prepared to accept compensation but might insist upon cessation of the unauthorized use.
The sub section does not also say who is to pay the compensation, whether it is the landlord or the tenant.
Apparently in awarding compensation the Controller will have to apportion the responsibility for the breach between the lessor and the tenant.
The provision of clause (k) of the proviso to sub section (1) of section 14 is something which has to be given effect to whatever the original contract between the landlord and the tenant.
The leases were granted in 1940, and the buildings might have been put up even before the Delhi and Ajmer Rent Control Act 1952 came into force.
It was that Act that for the first time provided the kind of remedy which is found in clause (k).
The relevant provision in that Act enabled the landlord to get possession where the tenant whether before or after the commencement of the Act used or dealt with the premises in a manner contrary to any condition imposed on the landlord by the Government or the Delhi improvement Trust while giving him a lease of the land on which the premises are situate notwithstanding previous notice.
The anxiety of the legislature is to prevent unauthorized user rather than protection of the tenant or strengthening the hands of Development Authority in effecting forfeiture.
The Development Authority can always resort to the terms of the lease.
There is no estoppel here because both the landlord and the tenant know that the tenancy was not one permitted under the terms of the lease of the land.
In any case there can be no estoppel against the statute.
It would not benefit the tenant even it it is held that the landlord cannot, under the circumstances, evict him.
The landlord will lose Ms property and the tenant also will lose.
He cannot, after the Development Authority takes over the building use it for a commercial purpose.
We thus reach the conclusion that the leased in its inception was not void nor is the landlord estopped from claiming possession because he himself was a party to the breach of the conditions under which the land was leased to him.
461 Neither the clear words of the section, as in Waman Shriniwas Kini vs Rati Lal Bhagwandas(1), nor a consideration of the policy of the Act lead us to the conclusion that the lease was void in its inception if it was for an unauthorised user.
We are also of the opinion that the High Court was not justified in leaving to the Controller no option but to pass.
an order for eviction.
That would make the alternative provided in subsection (11) of section 14 useless.
The High Court is not correct in saying that since the Authority has no power to legalize the misuser of land contrary to the plans by acceptance of compensation under the Development Act, the Controller cannot order the payment of compensation by the tenant to the Delhi Development authority.
This is in effect nullifying part of the provisions contained in sub section (11) of section 14.
The High Court has arrived at its conclusion on the basis that section 14 of the Delhi Development Act applies to this Case.
We shall presently show that that section has no relevance to the decision of this case.
It is under the terms of the lease granted by the Delhi Improvement Trust that the use of this building for commercial purpose is prohibited and not under the Delhi Development Act.
"Furthermore, section 14 applies not only to lands leased by authorities like the Delhi Development Authority containing conditions against unauthorised user as well as to lands which do not belong to that category.
Its provisions are not intended to enforce the conditions in those leases.
The proviso to that section deals with the use to which a land or building may continue to be put after the coming into force of any plan subject to such terms and conditions as may be prescribed by regulations, provided that building or land had been used for that purpose prior to the coming into force of the plan.
The section does not therefore contemplate complete prohibition of the use of a land or building for purposes other than that permitted in the plan.
Such uses can be continued subject to the terms and conditions prescribed by the regulations provided it had been so used even before the plan.
It is admitted that no such regulations have been framed.
Therefore, if a plan had come into operation in this area, the previous use can be continued till the regulations are framed and after the regulations are framed, they will be subject to the terms and conditions of those regulations.
We are of opinion, therefore, that section 14 of the Development Act has no relevance in deciding the question at issue in his case.
" The appeals are allowed and the judgment of the High Court is set aside.
The matter will have to go back to the Controller for (1`) ; 462 deciding the question under sub section ( 1 1 ) of section 14 whether he should exercise the one or the other of the two alternatives mentioned therein.
As already mentioned, no order awarding compensation under the second alternative given in that sub section can be made except in the presence of the Delhi Development Authority.
In the circumstances of this case we direct the parties to bear their own costs.
G.C. Appeals allowed.

summary/full:
The respondents were landlords of two houses in the Karol Bagh area of Delhi.
The houses were built on lands given on long lease by the Delhi Improvement Trust to the rights, liabilities and assets.
of which the Delhi Development Authority subsequently succeeded.
Under the terms of the leases the buildings erected on the lands were to be used for residential purposes only.
If they were used for any other purpose without the approval of the lessor the leases would become void.
Portions of the buildings in question were however let out for commercial purposes viz.
a barber shop and a scooter repair shop.
The Delhi Development Authority gave notice to the landlords that since the buildings had been permitted to be used for commercial pur poses the leases were liable to be determined.
They were called upon to discontinue the use of the land for commercial purposes failing which they were asked to show cause why their leases should not be determined and the land together with the buildings thereon be not reentered upon without compensation.
Thereupon the landlords issued notice to the tenants asking them to stop the commercial use of the buildings.
The landlords later on instituted proceedings against the tenants under the Delhi Rent Control Act, 1958 but the Controller ,dismissed the petitions.
Their appeals were dismissed.
The Division Bench of the High Court decided in favour of the landlords.
In appeal to this Court by special leave the question for consideration was whether the landlords were estopped or otherwise prohibited from getting possession of the property from the tenants because they themselves had let it out for commercial purposes.
The Court had to consider the question in the light of the provisions of section 14 of the Act.
HELD : (i) If it is a case where the tenant has contrary to the terms of his tenancy used the buildings for a commercial purpose the landlord could take action under clause (c) of the proviso to section 14(1).
He need not depend upon clause (k) at all.
The only situation in which clause (k) can take effect is when the lease is for a commercial purpose agreed upon both by the landlord ,and the tenant but, that is ,Contrary to the terms of the lease of the land in favour of the landlord.
[459E G] (ii)The policy of the legislatures seems to be to put an end to unauthorised use of the leased lands rather than merely to enable the authorities to get back possession of the leased lands.
This conclusion is further fortified by a reference to sub section 11 of section 14.
The lease is not forfeited merely because the building put upon the leased land is put to unauthorised use.
The tenant is given an opportunity 455 to comply with the, condition imposed on the landlord by any of the authorities referred to in clause (k) of the proviso to sub section (1).
As long as the condition imposed is complied with there is no forfeiture.
It even enables the, controller to direct compensation to be paid to the authority for a breach of the conditions, which must be done in the presence of the authority.
[459H; 460A D] (iii)The anxiety of the legislature is to prevent unauthorised user rather than protection of the tenant or strengthening the hands of the Development Authority in effecting forfeiture.
The Development authority can always resort to the terms of the least, [460F G] There is no estoppel here because both the landlord and the tenant knew that the tenancy was not one permitted under the terms ofthe lease of the land.
In any case there can be no estoppel againstthe statute.
It would not benefit the tenant even if it is held thatthe landlord cannot, under the circumstances evict him.
The landlordwill lose his property and the tenant will also lose.
He cannot after the Development Authority takes over the building use it for a commercial purpose.
[460G H] Therefore the conclusion must be that the lease in its inception was not void not is the landlord estopped from claiming possession because he himself was a party to the breach of the conditions under which the land was leased to him.
Neither the clear words of the section nor a consideration of the policy of the Act lead us to the conclusion that the lease was void in its inception if it was for an unauthorised user.
[461A] Smt.
Uma Kumari vs Jaswant Rai Chopra, P.L.R. (1960) 460 and section P. Arora vs Ajit Singh, I.L.R. (1970) 11 Delhi 120, disapproved.
Waman Shriniwas Kini vs Rati Lal Bhagwandas, ; , referred to.
[The Court found that section 14 of the Delhi Development Act was inapplicable to the case.
The matter was sent back to the Controller for deciding the question under sub section (11) of Section 14 whether he should exercise the one or the other of two alternatives mentioned therein.]


judgement:
Appeal Nos.
685 to 690 of 1970.
Appeals by certificate from the judgment and order dated 27th June 1968 by the Madras High Court at Madras in Tax case ' No,.
308 of 1964.
M. C. Setalvad and T. A. Ramachandran, for the appellant.
N. D. Karkhanis, section P. Nayar and R. N. Sachthey, for the respondents.
The Judgment of the Court was, delivered by HEGDE, J.
These are connected appeals by certificate.
They are directed against the decision of the High Court of Madras in a Reference under Section 66(1) of the Indian Income Tax Act, 1922 (to be hereinafter referred to as the Act).
The question of law referred for ascertaining the opinion of the High Court was : "Whether on the facts and in the circumstances of the case, the Department was justified in assessing the assessee in the status of an Association of Persons ?" In this case we are concerned with the assessment of the assessee for the assessment years 1957 1958 to 1962 63.
In all these years the assessees were assessed as an 'Association of the persons '.
The contention of the assessees is that in the years, in question, they should have been assessed as 'individuals, ' and not as an 'Association of Persons '.
Therefore, the only question that calls for decision is as to the status of the assessee during the relevant assessment years.
For deciding the question formulated above, it is necessary to divide the assessment years into two groups.
For the assessment years 1957 58 and 1958 59 the assessees themselves submitted their return in the status of 'Association of Persons ', but for the later years, they submitted their returns as 'individuals '.
In their returns for the assessment years 1959 60, they stated that they have divided their interest in the shares and therefore they should be thereafter assessed as 'individuals '.
It is necessary to mention one other circumstance before we proceed to set out the relevant facts.
The income in which we are concerned in this case arises under two heads.
Part of the income arises from house property 517 and the remaining 'income arises from dividends from shares.
So far as the income from house property is concerned, the High.
Court has answered the question in favour of the assessee the Revenue has not appealed against that decision.
Hence we need not go into that aspect.
All that we have to, decide in the present case is whether the dividend income which is the subject matter cf these appeals should be assessed in the hands of the appellants.
as an 'Association of Persons ' or as 'individuals '.
Now, we shall refer to the material facts as could be gathered ' from the case stated, by that Tribunal.
One Sinnamani Nadar(who will be hereinafter referred to as 'Nadar ') and his son Ganesan partitioned their family properties on December 4, 1940.
Thereafter, Nadar started a firm of his own on June 27, 1955.
Later Nadar executed a settlement deed in favour of his four grandsons, namely, G. Murugesan, G. Kathiresan, G. Raja Shankar and G. Vettrivel.
The property covered by the said settlement deed included a house property, which had been let cut.
Under this settlement deed, the donees are to enjoy during the life time the properties gifted and thereafter the same was to devolve on their children.
Sometime thereafter Nadar purchased a number of shares in Joint Stock Companies in the.
name of 'G. Murugesan & Brothers '.
For each of such purchase, a debit entry was made in the books of the firm.
The share applications addressed to.
the companies for the transfer of the shares from the, prior owners to the name of G. Murugesan and Brothers were, signed by Padamavathy Ammal, the mother of donees as their guardian.
The donees were minors at the time most of these transactions; took place.
Murugesan be came a major on March 3, 1955.
After 1959, Murugesan himself signed all transfer applications both on his behalf as well as on behalf of his brothers.
The youngest of the brothers became a major on 15th December, 1.962.
The income from the house property and the dividend income from shares were credited to an account called "G. Murugesan & Brothers" in the books of Nadar 's Firm.
In those books.
there are separate account$ for G. Murugesan ' G. Kathiresan, G. Raja Shankar and G. Vetrivel.
Private income and expenses of these persons were credited or debited to these individual accounts.
At the end of each year the balance in the account of G. Murugesan & Brothers is transferred in equal proportion to the individual accounts of the four persons mentioned above.
There was a partition between Ganesan and his 'sons on 3rd February 1958, but that does not include the house property or the shares gifted by Nadar to his grandsons.
As mentioned earlier for the assessment years 1957 58 and 1958 59, the assessees submitted their returns in the status of 'Association of Persons ' and thereafter they submitted their returns as individuals.
518 On the basis of the above facts, the Income Tax Officer assessed the assessee during all the years mentioned earlier in the status of 'Association of Persons '.
His orders were confirmed by the Appellate Assistant Commissioner.
But on a further appeal to the Appellate Tribunal, the Tribunal held that the assessee ,should be assessed as 'individuals ' and not as 'Association of Persons '.
At the instance of the Commissioner, the question set out earlier was referred to the High Court.
The High Court answered that question in the affirmative and in favour of the Revenue.
The High Court was of the opinion that because of the fact that the shares were purchased jointly in the name of G. Murugesan & Brothers, the transfer applications were filed by Padmayathy acting as guardian of all the assessees, and further, after Murugesan became ' major, he collected the dividends jointly on behalf of the assessees , the assessees should be considered to have acted as an 'Association of Persons '. 'That conclusion is challenged before us by Mr. Setalvad, appearing on behalf of the assessees.
,Counsel urges that the facts that a joint gift of shares was made in favour of more than one persons or those shares were regis tered jointly in their names or even the fact that the dividend was realised together do not go to, show that the shareholders or the beneficiaries did act as an 'Association of Persons '.
On the other hand, it is contended on behalf of the Revenue by Mr. Karkhanis that the facts proved in this case clearly establish that the assessee functioned as an 'Association of Persons '.
The expression 'Association of Persons ' is not a term of article That expression has come up for consideration before this Court in more than one case.
In Commissioner of Income tax, Bombay, North, Kutch and Saurashtra vs Indra Balkrishna , this Court after referring to the various judgments, observed thus : "It is enough for our purpose to refer to three decisions : In re.
B. section Elias ; Commissioner of Income tax vs Laxmidas Devidas ; and In re Dwark anath Harishchandra Pitale In re B. N. Elias Derbyshire, C.J., rightly pointed out that the word "associate" means, according to the Oxford Dictionary, "to join in common purpose, or to join in an action.
Therefore, an association of persons, must be one in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one the object of which is to produce income, profits or gains.
This was the view expressed by Beaumont, C.J., in Com missioner of income tax vs Lakshmidas Devidas, at page 589 (1937) 5 I.T.R., and also In re: Dwarkanath Harishchandra.
519 Pitale.
In re : B. N. Elias, Costello, J., put the test in more forceful language.
He said : "It may well be that the intention of, the Legislature was to hit combinations of individuals who were engaged together in same joint enterprise but did not in law constitute partnerships . when we find that there is a combination of persons formed for the promotion of a joint enterprise then I think no difficulty arises whatever in the way of saying that . these persons did constitute an association. . ".
We think that the aforesaid decision correctly lay down the crucial test for determing what is an 'Association persons within the meaning of section 3 of the Income tax Act, and they have been accepted and followed in a number of later decisions of different High Courts to all of which it is unnecessary to call intention.
It is, however, necessary to add some words of caution here.
There is no formula of universal application as to what facts, how many of them and of what nature, are necessary to come to a Conclusion that there is an association of persons within the meaning of section 3; it must depend on the particular facts and circumstances of each case as to whether the conclusion can be drawn or not.
" In the course of that judgment, this Court also observed "With regard to the shares, dividends, and interest on deposits there was no finding of any act of joint management.
Indeed, the main item consists of the dividends and it is difficult to understand what act of management the windows performed in respect thereof which produced or helped to produce income.
" For forming an 'Association of Persons ', the members of the association must join together for the purpose of producing an income.
An 'Association of Persons ' can be formed only when two or more individuals voluntarily combine together for a certain purpose.
Hence volition on the part of the member of the association is an essential ingredient.
It is true that even a minor can join an 'Association of Persons ' if his lawful guardian gives his consent.
In the case of receiving dividends from shares, where there is no question of any management, it is, difficult to; draw an inference that two more shareholders functioned as an 'Association of Persons ' from the mere fact that they jointly own one or more shares, and jointly receive the dividends declared.
Those circumstances do not by themselves go to show that they acted as an 'Association of Persons '.
But unfortunately for the assessee for the assessment years 1957 58 and 1958 59, they themselves had submitted their returns in the status of 'Association of Persons '.
Those returns were 520 niether withdrawn nor did they file fresh returns as 'individuals".
It was for the first time in the appeal it was argued on their behalf that they should not have been assessed as 'Association of Persons '. 'The question whether the assessees function as on 'Association of Persons ' during those years was best known to them.
Their admission in that regard is an important piece of evidence.
They have made no attempt to show that the said admission was made under erroneous impression of law or is otherwise vitiated.
Hence for those years they were rightly assessed as an 'Association of Persons '.
But so far as the other assessment years are concerned, the same result does not follow.
They themselves have specifically stated that they are no more functioning as 'Association of PerSons '.
In the case of 'association of persons ' it is always open to its members to withdraw from the same.
No one can be compelled to continue as a member of an association.
For withdrawing from an association there is no particular form need be observed.
As seen earlier, herein we are concerned only with the realisation of dividends.
If the individual members of the association choose to realise their dividends as individuals, there is an end of the association.
The assessee 's assertion that they have realised their dividends in their individual capacity remains un rebutted.
There is nothing to disprove that claim.
None of the facts proved can be said to be inconsistent with the claim made by them.
For the reasons mentioned above, we are unable to agree with the High Court that during the assessment years 1959 60 to 1962 63, the assessees should be held, as having functioned as an 'association of persons '.
Mr. Karkhanis in support of the contention of Revenue relied on the decision of the Bombay High Court in section C. Gambatta vs Commissioner of Income tax, Bombay Therein, the only question was whether when an action is taken by an Income tax Officer under Section 23A, should the dividend deemed to have been declared to the shareholders must be considered has been taken by a husband and wife who were the joint holders of a share as an 'Association of Persons ' or by the husband alone who under the Articles of Association was to act on behalf of the joint holders.
The contention of the Revenue was that the husband alone was the shareholder.
On the other hand the contention of the assessee was that they were an 'Association of Persons ' and that contention was accepted by the 521 Court.
The ratio of that decision has no bearing on the point in issue in the present case.
We are also not able to agree with Mt. Karkhanis that the decision of this Court in N. V. Shanmugham & Co. vs Commissioner of Income Tax, Madras lends any support for the contention of the Revenue.
On the other hand, therein this Court relied upon the decision of this Court in Commissioner of Income tax, Bombay North, Kutch & Saurashtra vs Indra Balkrishna In the result, Civil Appeals Nos. 685 & 686 of 1970 are dis missed with no order as to costs.
Civil Appeals Nos.
687 690 of 1970 are allowed with costs one hearing fee.
Consequently the answer given by the High Court in those four appeals is discharged and in its place, we answer the question, in the negative and in favour of the assessee.

summary/full:
For the years 1957 58 to 1962 63 the assessees were assesed by the Income tax Officer as an 'Association of Persons. ' They had filed their returns for the first two of these years as 'Association of persons but in 1959 60 they claimed that they had divided their interest in the shares held by them and therefore in respect of them they should be thereafter assessed as 'Individuals '.
The Appellate Assistant Commissioner upheld the order of the Income ' tax Officer.
The Tribunal however held that the assesseess should be assessed as 'Individuals ' and not as Association of Persons '.
The High Court in reference answered in favour of the Revenue.
In appeal by certificate it was urged on behalf of the assessees appellants that the facts that a joint gift of shares was made in favour of more than one person or those shares were registered jointly in their names or even the fact that the dividend was realised together did not go to show that the shareholders or the beneficiaries did act as an 'Association of Persons. ' HELD : (i) For forming an 'Association of Persons ' the members ,of the association must join together for the purpose of producing income.
An 'Association of Persons ' can be formed only when two or more individuals voluntarily combine together for a certain purpose.
Hence volition on the, part of the members of the association is an essential ingredient.
[519F G] In the case of receiving dividends from shares where there is no question of any management, it is difficult to draw an inference that two or more shareholders functioned as an 'Association of Persons ', from the mere fact that they jointly own one or more shares and jointly receive the dividends declared.
These circumstances do not by themselves go to show that they acted as an 'Association of Persons '.
[519G H] (ii)For the years 1957 58 and 1958 59, the assessees were rightly assessed as an 'Association of Persons ' because of their own admission which was an import ant piece of evidence.
[519,H; 520A B] (iii)For the years 1959 60 and 1962 63 they had specifically stated that they were no more functioning as an 'Association of Persons '.
In the case of an 'Association of Persons '.
It is always open to its members to withdraw from the same.
No one can be compelled to continue as a member of an association.
For withdrawing from an association no particular form need be observed.
[520C D] In the present ease the question related only to realisation of dividends.
If the individual members of the association choose to realise their dividends as individuals there is an end of the association.
The assesees ' assertion that they bad realised their dividends in their individual capacity remained unrebutted.
There was nothing to disprove their claim.
None of 516 the facts proved could be said to be inconsistent with the claim made by them.
[520D E] The answer, therefore, in respect of the years 1959 60 to 1962 63 must be in favour of the assessees.
[521C D]