Srimati Ashalata v. Sri Jadu Nath

"In the present case the work regarding the build ing which still remained to be done ' was so important the complainant the parties agreed that both into possession after should get the said work was completed. In such a case unless the building is com pleted the tenant has no right which can. be .enforced in a Court of law. impossible for any reason to complete right which an intending ten~nt can enforce against him. Therefore, in our opinion, there is considerable force in the contention urged by Mr. Lulla that present case even that the accused had received Rs. 2,400 in the circumstances to which we that would not bring them within have already referred there has been no the mischief of section 18(1) because grant of a lease ·at all. There. is only an agreement the complainant a particular flat after the building has been fully and properly completed. It does appear that section 18(1) does not bring within its mischief executory agreements of this kind." landlord would lease if it be held A contrary view had been expressed in ·Criminal Revision No. 1178 of 1949, by another Bench of High Court on the construction of section 18 ( 1 ). The • - - , S.C.R. SUPREME COURT REPORTS 161 therefore matter was question framed was in these terms :- referred to the Full Bench. The for the consideration of the Full Bench the complainant in "If as owners of an incomplete building the appel lants accepted Rs. 2,400 from pect of an agreement between them that the appellants were bound to give and the complainant was entitled to take possession of flat No. 15 in the said building as soon as the said building was completed on the agreed rent of Rs. 75 per month, did the acceptance of Rs. 2,400 by the appellants the mis.chief of fall within section 18 of Bombay Act L VII of 1947 ?" This question, if answered in the negative by the Full Bench, would have concluded the case. 1 954 Tolaram Relumal and Another v. The State of Bombay. Mehr Chand Mahajan C. The Full Bench answered the question It held that the oral agreement did the affirmative. not constitute a lease but it amounted to an agreement to grant a lease the receipt of consideration for an executory agreement was within the mischief of section 18(1) of the Act. The Full Bench expressed its opinion in these terms :- in future, and referred - "What the Legislature has penalized is receipt of a premium by the landlord and the Legislature has also required a nexus between the receipt by the land lord of a premium and the grant of a lease of any pre mises. Therefore a receipt alone by a landlord would not constitute an offence, but that receipt must be con nected with the grant of lease of any premises. Unless that connection is established no offence would be committed. The contention of Mr. Lulla on behalf of the accused is that the receipt of the premium must If the be simultaneous with the grant of the lease. lease comes into existence at a receipt of a premium according to him is not "in pect of" the grant of a lease. Therefore the key words according to us in this section are "in respect of." It is relevant to observe that the Legislature has advisedly the expression "for" or "in consideration of" not used or "as a condition of" It has used the grant of a lease. the widest connotation and an expression which has the expression used is "in respect of." "In respect of" future date, 1954 T olaram Relumal and Another v. The State of Bombay. "Mehr Chand Mahajan C. J. 162 SUPREME COURT REPORTS [1955] It is receiving In our opinion between ths landlord means m its plain meaning "connected with or attri butable to," and therefore it is not necessary that there must be simultaneous receipt by the landlord with the long as some connection is esta grant of the lease. So receipt lease and the blished between the grant of the the provisions of the of the premium by the landlord, section would be satisfied. it is impossi ble to contend that in the present case there was no con nection whatever It premium and his granting the lease of the premises. is true. that when he received the premium he did not grant a lease. true that all that he did when he received the premium was to enter into a contract with to grant a lease in future. But the object of his tenant the premium and the object of the landlord in receiving the tenant in paying the premium was undoubtedly on the letting of the premises and the part of the landlord on the part of the tenant· the securing . of. the premises. Therefore the object of both the landlord and tenant the premises concerned was the grant of the lease of to start with and that object was achieved partly and by an oral agreement being arrived at between the land lord and the tenant with regard to the granting of this lease, lease being completed when delivery of possess.ion of the premises would be given. Therefore, in our opinion, on the facts of this case it is not possi ble to contend that the payment of the premium receiv ed by the landlord was unconnected with the grant of a lease of any pr~mises. The fact that no grant was the premium was received, the made at the time when there was merely an agreement to grant a into. existence lease, -only at a future date, are irrelevant facts so long as the connection between the receiving of the premium and the granting of the lease is established." the lease would come the fact · On return from the Division Bench the Full Bench, considered the other contentions raised on behalf of the appellants and held tht; re were no merits in any the appeal was one of those points and in the result dismissed. involved a substantial question of law and was a fit . one for appeal to this Court. This appeal is before us on that certificate. It was certified that • - • S.C.R. SUPREME COURT REPORTS 163 The principal question to decide in the appeal whether the answer given by the Full Bench to question referred right, and whether receipt of a sum of money by a person who enters into an execu tory contract to grant a lease of a building under cons truction falls within the mischief of section 18 ( 1) of the Act? to it is Section 1§(1) provides: "If any landlord either himself or through any person acting or purporting to act on his behalf ....... . receives any fine, premium or other like sum or deposit rent .... or any consideration, other than the standard . . . . . . . . . . . . in respect of the grant, renewal or continuance of a lease of any premises ...... such landlord or person shall be punished .......... " 1954 Tolaram Relumal and Another v. The State of Bombay. Mehr Chand Mahajan C. J. - lease. the section. Under the grant of new or tenancy means the grant of in the manner indicated by section the· money must be received by the landlord respect of the grant of a lease. The section refers the "grant, renewal or continuance of a lease." Prima f acie, it would not cover an executory agreement grant a lease. The words "renewal or continuance of a lease" clearly suggest that there must be a renewal In the context, or continuance of a subsisting initial grant of tenancy means tenancy ; renewal of ancy after its termination ; and continuance contemplate continuance of a tenancy which is existing. Whether or not an executory agreement for grant of a lease comes within the ambit of the section by reason of the use of the words "in respect of" would be exa stated mined hereinafter. Before doing so it may be that an instrument is usually construed as a lease if it It is construed as contains words of present demise. it con an executory agreement, notwithstanding that tains words of present demise, where certain things have to be done by the lessor before is grant ed, such as the .completion or repair or improvement of the premises, or by the lessee, such as the obtaining of (Vide Halsbury's Laws of England, Second sureties. facts of this case Edition, Vol. 20, pp. 37-39). On the therefore the Full Bench very rightly held the lease 1954 T o/aram Relumal and Another v. The State of Bombay. Mehr Chand Mahjan C.j. 164 SUPREME COURT REPORTS [1955J oral agreement made between the parties did not constitute a lease but it amounted to an agreement to grant a lease in future. in fact, It may further be pointed out that, case the lease never came into existence. Moreover, in view of the provisions contained the Bombay Land Requisition Act XXXIII of 1948, as amended, the appellants could not let out the building even after its completion unless on a proper notice being given the Controller of Accommodation did not exercise his that as soon powers under that Act. as the building was completed the Controller of Accom and thus no occasion arose modation requisitioned it, for giving effect to the executory contract. It so happened ,and when the contemplated It may be here observed that The question that needs our determination in such a section 18(1) makes punishable situation is whether receipt of money at a moment of time when the there was a had not come into existence, lease might never possibility that ,come into existence. provisions of section 18(1) are penal in nature. and it is rule of construction of penal statutes a well settled reasonable constructions can that if two possible and the Court must be put upon a penal provision, subject towards that construction which exempts the the one which rather imposes It is not competent to . the Court to stretch penalty. the meaning of an expression used by the Legislature the Legislature. in order to carry out the intention of As pointed out by Lord Macmillan in London and North Eastern Radway Co. v. Berriman('), "where penalties for infringement are imposed it legitimate stretcl1 tl1e language of a rule, however beneficient intention, beyond the fair and 'ordinary meaning of language." penalty is not The High Court took the view that without stretch the language of section 18(1) beyond its fair and the very comprehensive expression lead to ordinary meaning, "in respect of" nsed by the Legislature could only one conclusion, that the Legislature wanted (r) [1946] A.C. 278, 295. - ,·• 1954 T olaram Relumal and Another v. The State of Bombay. Mehr Chand Mahajan C. J. S.C.R. SUPREME COURT REPORTS 165 In our to apply intended time that judgment, lease. The their widest meaning, viz., "relating to any penal consequences of section 18(1) the receipt by a landlord of a premium nexus between and the grant of the lease. the High Court laid undue emphasis on the words "in respect of" section. Giving the words "in in the context of the respect of" to" it is plain that this relationship or "with reference to'', must be predicated of the grant, renewal or continu ance of a lease, and unless a lease comes into existence the money simultaneously or nearabout the receipt was "in is received, it cannot be said that the relationship of respect of" the grant of a till a landlord arid tenant does not come into existence there is no lease comes into existence ; in other words, is a relationship of landlord and tenant until demise of the property which is capable of being If the Legislature to make possession of. receipts of money on executory agreements punishable, the section would have read as follows : "receives any fine, premium or other like sum or deposit or any con respect of sideration other the lease or an agreement of lease of the premises, such landlord or person shall be punished" in the manner indicated in the section. The section does not make the intention punishable ; it makes an act punishable which act is related to the existence of a lease. It does not make receipt of money on an executory contract punishable ; on the other hand it only makes receipt of money on the grant, renewal or continuance of the lease of any premises punishable and unless the lease comes into existence no offence can be said to have been com It is diffi mitted by the person receiving the money. that any landlord and to hold into existence on the execution of an tenant comes agreement executory in nature or that the expression "premium" can be appositely used in connection with the receipt of money on the occasion of the execution if a of such an agreement. receipt of money actually which has a nexus with that lease may fall within mischief of section 18 (I), but it is unnecessary to ex in the present press any final opinion on the question as .comes into existence then any than the standard rent in It may well be that relationship of - 1954 ·Tolaram Relumal and Another v. The State of -Bombay. Mehr Chand Mahajan C. J. 166 SUPREME COURT REPORTS [1955] the premises relationship of the parties. The receive the rent from the case admittedly no lease ever came into existence and tenant was never landlord and landlord never be created between came entitled to tenant and the tenant never became liable to pay the rent. There was no transfer of interest from the landlord to the tenant. On its plain, natural, gram matic meaning, section does not the language of the the Full warrant the construction placed upon it by Bench merely by laying emphasis on the words "in In our opinion the language of the section· respect of." "in respect of the grant, renewal or continuance of a lease" envisages the existence of a lease and the pay ment of an amount lease or with in respect of the existence . of a reference to that lease. Without to it. If the Legisla lease there can be no reference receiving . pugree on to punish persons merely executory contracts should have made its intention clear by use of clear and unambiguous language. intended to premises let, The construction we are placing on the section 1s it occurs in Part II borne out by the circumstance that of the Act. Section 6 of this · Part provides that "in areas specified in Schedule this Part shall apply to I, premises let for residence, education, business, trade or storage." This Part relates in other words, premises demised or given on lease and not to lease and premises that are promised to be given on iP.to being. of which the lease may or may not come The definition of the expression "landlord" also the same construction. "Landlord" as defined in section 5 of the Act means any person who is for time being receiving, or entitled respect of any premises whether on his own account or on account, or on behalf, or for the benefit, of ·any other person, or as a trustee, guardian or for any other person or who would so receive the rent or be entitled to a tenant .......... " It is obvious that on the basis of an executory agreement the appellants would not be enti tled to receive any rent. They would only be entitled is executed and actual the rent if the premises were let receive rent after the lease to receive, rent receiver receive . ..,.,.. .. I ~ .. ' S.C.R. SUPREME COURT REPORTS 167 demise of the premises or their transfer is made in favour of the complainant. The definition of the expression "tenant" also suggests the same construction. Mr. Mehta for the State, besides supporting emphasis placed by the High Court on the words "in respect of," contended that that construction could be supported in view of the provisions of sub-section (3) of section 18 which is in these terms: 1954 T olaram Relumal and Another v. The State of Bomba)'. Mehr Chand MajanC.J. > - "18(3)-Nothing in this section shall apiy to for the purpose of financing .any payment made under any agreement entered mto before the first day of September, 1940, or to any pay ment made by any person to a landlord by way of a loan, the erection of the whole or part of a residential building or a residential section of a building on land held by him as an owner, a lessee or in any other capacity, entitling him to build on such land; under an agreement which shall be in writing and shall, notwithstanding anything con Indian Registration Act, 1908, be regis tained tered. Such agreement shall following conditions, namely, (1) that the landlord is inter alia include in the to let to such person the whole or part of the building when completed for use of such person or any member of his family ...... " In our view, the exception was added the mischief of the section this exception It was suggested that but executory agreement would be included within that unless such agree mischief of section 18(1) and ments were within in exempting them from its would have been no point this contention is not sound. provisions. to the sec In the first place, the agreement tion by Act 42 of 1951, subsequent in question, and for the purposes of this case section 18(1) should ordinarily be read as it stood the Act, at the time the offence is alleged to have been commit• ted. Be that as it may, it appears that sub-section (3) was added to the section by reason of some Courts construed section 18(1) in the manner in which it has been construed by the Full Bench in this case, and the Legislature by enacting clause (3) made it clear that agreements of the nature indicated in 168 SUPREME COURT REPORTS [1955] never intended to be included therein. the language of that section is not of the main provisions of in construing 1954 T olaram Relumal and Another v. The State of Bombay. Mehr Chand /vfaha}an C. J. sub-section Vl'ere In our opinion, much assistance section 18(1). The result therefore is that in our view the receipt of money by the appellants the complainant at the time of the oral executory agreement of lease was not made punishable under section 18(1) of the Act and the Presidency Magistrate is outside was in error in convicting the appellants and the High Court was al>o in error in upholding their conviction. We accordingly allow this appeal, set aside the convic tion of the appellants and order that they be acquitted. its mischief, and " l Appeals allowed. 1 954 April 5. M. K. GOPALAN AND ANOTHER v. THE STATE OF MADHYA PRADESH. [MuKHERJEA, SuDHI RANJAN DAs, BHAGWATI, JAGANNADHADAS and VENKATARAMA AYYAR JJ.J Constitutt°on of India-Article 14-Criminal Procedure Code (Act V of 1898), Section 14 and 197(1) and (2)-Section 14 whether ultra vires article 14 of the Constitution-Scope of power under sec~ tion 197(2) and section 14-Whether the word "Court" in section 197 (2) means the same thing as ward "person" in section 14. The petitioner, an officer of the Madras Government, was employed in Central Provinces and Berar for the purchase of grains on behalf of the Madras Government. He along with many others, was under prosecution before a Special Magistrate, Nagpur (Madhya Pradesh), on charges for offences under section 420 of Indian Penal Code etc. for causing loss to the Madras Government. The Special Magistrate trying the case was appointed by the Madhya Pradesh Government under section 14 of the Code of Criminal Procedure and as the petitioner was a servant of the Government of Madras, initiated with the sanction given by the Government of Madras under section 197(1) of the Code of Criminal Procedure. the prosecution against him was Held, (i) that section 14 of the Criminal J>rocedure Code in so far as it authorises the Provincial Government to confer upo'n any person all or any of the powers conferred or conferrable by or under the Code on Magistrates of the first, second or third class in