January 16 v. A!ool Chand

Appeal from the judgment and decree dated Sep tember 21, 1955, of the Allahabad High Court in First Appeal No. 251of1954 arisin& out of the judgment 6+ Centrat Talkies Ltd., Kanpur v. Dwarka Prasad Hidayatullah ]. 496 SUPREME COURT REPORTS [1961] and decree dated May 24, 1954, of the Civil Judge, Kanpur, in Suit No. 35 of 1949. A. V. Viswanatha Sastri, G. S. Pathak and Naunit Lal for the appellant. N. C. Chatterjee, S. N. Andley, J. B. Dadachanji and P. L. Vohra, for the respondent. 196l. January 16. The Judgment of the Court was delivered by HIDAYATULLAH, J.-This is an appeal against the judgment aud decree of the High Court of Allahabad with a certificate granted by the High Court under Art. 133(l)(b) of the Constitution. The High Court, reversing the decision of the trial Court, decreed the present suit for ejectment against the appellants, and also awarded damages to the plaintiff-respondent at the rate of Rs. 593-12-0 per month. The suit was filed by the re~pondent, Babu Dwarka Prasad, against the appellants, Central Ta.Ikies Ltd., Kanpur, and Lala Ram Narain Garg, the Managing Director of the Company. The facts, briefly stated, are as follows: Dwarka Prasad was the sole owner of a plot of land No.73/22 (old No .. 73/28) situated in Collectorgunj, Kanpur. In 1933 an agreement of lease was executed by five persons in favour of Lala Rameshwardas, the prede cessor-in-title of Babu Dwarka Prasad, by which the five lessees took over on lease a hall and other construc tions, which the lessor agreed to build at a cost of Rs. 16,000/- within four months. It was agreed that, if the lessor was required to spend an amount in excess of Rs. 16,000/-, he would be entitled to interest at the rate of 12 annas per cent. per month from the second party till the end of tenancy. The tenancy was from month to month, and the period of the tenancy was fixed at 5 years in the first instance. This tenancy continued with variations in the amount of rent till the year 1946, and on January 15, 1946, Dwarka Prasad sent a letter to the def Pndants that the period of lease was to expire on February 28, 1946, and th:it the Central Talkies Ltd. should vacate the premisC's by that date. The defendants did not vacate the Central Talkies Lti.., Kanpur v. Dwarka Prasad Hidayalullah ]. 3 S.C.R. SUPREME COURT REPORTS 497 premises, and a suit for ejectment w' Central Talkies Ltd. 0 1nn "~ainst the During the pendency of that suit, the United Pro vinces (Temporary) Control of Rent and Eviction Act, 1947 (referred to in the judgment as the Eviction Act), came into force, Under s. 3 of the Eviction Act, permission of the District Magistrate was required to file in any Ci vii Court a suit for the eviction of a tenant, except on grounds which were enumerated in the section. · Admittedly, that suit was filed on a ground whlQ.h was not enumerated in the section, and Dwarka Prasad withdrew it. He then applied to the District. Magistrate for permission to eject the Central Talkies Ltd., from the premises, and permission was granted by the Additional District Magistrate (Rural Area) on July 7, 1948. It is not necessary to state the pleas which were taken by the defendants in the newly filed suit, because the only point argued before us was that the suit was incompetent, because permission of the District Magistrate as required by s. 3 had not been obtained. The Divisional Bench of the High Court held that the suit was competent. The two learned Judges, who heard the appeal, reached the same conclusion, though on slightly different grounds. Raghubar Dayal, J. held that the Additional District Magistrate, who granted permission, was empowered by the Provincial Govern ment under s. 10(2) of the Code of Criminal Procedure to exercise all the powers of a District Magistrate under the Code and all the laws for the time being in force, and the requirements of s. 3 were complied with. Brij Mohan Lal, J. came to the conclusion that the District Magistrate by transferring the case to the Additional District Magistrate (Rural Area) had autho rised him to perform his functions under the Act in this behalf and that the Additional District Magis trate, being thus included in the definition of "Distriet Magistrate" under s. 2(d), was competent to grant the permission. Concurring, therefore, that the suit was instituted .with the permission of the District Magis trate as required by the Eviction Act, the Divisional Bench held that the suit was competent. Central Talkies Ltd., If anpur v. Dwarka Prasad Hidayatullah ]. 498 SUPREME COURT REPORTS [1961] It may be pointed out that, at first, the application for permission was made over by the District Magis trate to Mr. Ha.di Hasan, who was also an Additional District Magistrate; but the latter sent the case back to the District Magistrate asking for a transfer, because he had been approached on behalf of the defendants. The District Magistrate thereafter passed an order on February 11, 1948, to the following effect: "Transferred to Additional District Magistrate (R.A.) for disposal." The application for permission was disposed of by Mr. Brijpal Singh Seth, Additional District Magistrate (Rural Area.), on July 7, 1948. This Officer, who was previously a City Magistrate, Kanpur, was appointed an Additional District Magistrate by Notification No. 3400/Il-276-48 dated May 22, 1948. The material portion of this Notification read as follows: " With effect from the date on which he takes over charge Shri Brijpal Singh Seth, City Magis. trate, Kanpur, is appointed vice Shri Sheo Ramdas Saksena- (a) under sub-section (2) of section 10 of the Code of Criminal Procedure, 1898 (Act V of 1898), to be an Additional District Magistrate of Kanpur District, with jurisdiction extending over the whole of the said district and with all the powers of a District Magistrate under the said Code and under any other law for the time being in force ... " The appellants contended before us that both the reasons given by the Divisional Bench of the High Court were not valid, and that the suit was not brought in accordance with the Eviction Act. At first, the appellants wished to raise a question as to the invalidity of the notice; but during the course of the arguments, that ground was expressly abandoned. The oase was thus argued only on the footing that the permission given by Mr. Brijpal Singh Seth did not comply with s. 3 of the Eviction Act. The material portion of s. 3, as it stood on the rele. vant date, read as follows : "No suit shall, without the permission of the · in any civil court District Magistrate, be filed r96r Ce1tlral TalkU, Ltd., Kanpur Vo Dwarka Pras.4cl Hidayalull4h j, 3 S.C.R. SUPREME COURT REPORTS 499 against a. tenant for his eviction from a.ny accom modation, except on one or more of the follow- " . mg groun s ... d "District Magistrate" is defined by s. 2(d) of the Act, which reads : "'District: Magistrate' includes a.n officer autho rized by the District Magistrate to perform a.ny of his functions under this Act." The argument of the a. ppellants wa.s that the District Magistrate mentioned in s. 3 wa.s a. persona designata, a.nd that either he or a.n officer authorised by him to perform his functions could grant permission. Accord ing to them, in view of the provisions quoted a.hove and in view also of the provisions of s. 1(2) of the Code of Criminal Procedure, no Additional District Magistrate was competent to grant the permission, unless autho· rised to do so by the District Magistrate. The order of the District Magistrate by which the case wa.s made over to the Additional District Magistrate (Rural Area) was characterised as a mere transfer and not an autho risation. It was contended that a transfer could only take place to a person possessing jurisdiction, and that jurisdiction under the present Act was confined only to the District Magistrate or an officer authorised by him. The transfer of the case, it was contended, did not constitute such authorisation. Reliance was placed on the decision of a learned single Judge of the Allahabad High Court reported in Kedar Nath v. Mool Chand (1) and on the decision of the Nagpur High Court referred to therein, P. K. Tare v. Emperor ('). Section 10 of the Code of Criminal Procedure, at the relevant time, provided as follows: "10(1). In every district outside the presidency. towns the Provincial Government shall appoint a Magistrate of the first class, who shall be ca.lied the District Magistrate. (2) The Provincial Government may 11.ppoint any Magistrate of the first class to be an Additional District Magistrate and such Additional District Magistrate shall have all or any of the powers of a. District Magistrate under this Code or under any (1) A.l.R. 1953 All. 62. (2) A.l.R. r943 Nag. 260 r961 Ceniral Talkies Ltd., Kanpur v. Dwarka Prasad Hidayatullah ]. 500 SUPREME COURT REPORTS [1961] other law for the time being in force, as the Provin cial Government may direct." The Notification, which was issued about Mr. Brijpal Singh Seth and which has been quoted already, invested him with all the powers of the District Magistrate under the Colle of Criminal Procedure as well as under any other Jaw for the time being in force. He was thus competent to deal with an applica. tion under the Act for permission to file a civil suit without special authorisation from the District Magis trate. Learned counsel for the appellants contended that the definition of "District Magistrate" clearly showed that in addition to the District Magistrate, only an officer specially authorised by him could act under the Eviction Act, and he referred to sub-s. (2) of s. 1 of the Code of Criminal Procedure, which provided: "It extends to the whole of British India; but, in the absence of any specific provision to the con trary, nothing herein contained shall affect any special or local law now in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force ... " The argument was that the special jurisdiction created by the Evict.ion Act was not affected by s. 10(2) of the Code, in view of the provisions of this sub-section. The argument overlooks the words "in the absence of any specific provision to the contrary ", and because there is in the Code of Criminal Procedure such a pro vision in s. 10(2), sub-s. (2) of s. 1 is excluded, and an Additional District Magistrate must be regarded as possessing the powers under any other law including the Eviction Act. The argument that the District l\ifagistrate was a persona designata cannot be accepted. Under definition of" District Magistrate", the special autho risation by the District Magistrate had the effect of creating officers exercising the powers of a District Magistrate under the Eviction Act. To that extent, those officers would, on authorisation, be equated to the District Magistrate. A persona designata is " a Cenlt'al Talkies Ltd., Kanpur v. Dwarka Prasad HidayafulJah ]. 3 S.C.R. SUPREME COURT REPORTS 501 person who is pointed out or described as an indivi dual, as opposed to a person ascertained as a member of a class, or as filling a . particular character." (See Osborn's Concise Law Dictionary, 4th Edn., p. 253). In the words of Schwabe, C.J., in Parthasaradhi Naidu v. Koteswara Rao ( 1 ), personae designatae are "persons selected to act in their private capacity and not in their . capacity as Judges." The same consideration applies also to a well-known officer like the District Magistrate named by virtue of his office, and whose powers the Additional District Magistrate can also exercise and who can create other officers equal to himself for the purposes of the Eviction Act. The decision of Sapru, J., in the Allahabad case, with respect, was erroneous. Reference was made to the definition of " District Magistrate" in the United Provinces (Temporary) Accommodation Requisition Act, 1947, which includes an "Additional District Magistrate". This definition has been made wide for obvious reasons, because under s. 10(2) of the Code of Criminal Procedure, the Additional District Magistrate has to be specially empowered. By including the Additional District :Magistrate in the definition of " District Magistrate ", power is conferred by the Requisition Act itself whe ther or not the Provincial Government specially em powers any particular Additional District Magistrate in that behalf. The Eviction Act, on the other hand, gave power to the District Magistrate to authorise offi'cers other than the Additional District Magistrates empowered by the Provincial Government, by defin ing the term "District Magist, rate" differently. I In view of the above, it is hardly necessary to go into the reasons given by Brij Mohan Lal, J. ; but even those reasons are, with all due respect, equally valid. By the act of transferring the case tu the Additional District Magistrate, the District Magistrate must be deemed to have authorised him to exercise his powers under s. 3 of the Eviction Act. However, it is not necessary to rely upon this aspect ·of the case because, in our opinion, s. 10(2) of the Code of (I) (1923) l.L.R. 47 Mad. 369. 373 (F.B.). 502 SUPREME COURT REPORTS (1961] Cl•lral Talkies Ltd., Kpnpur v. Dwarha Prasad Hidayatullah ], Criminal Procedure gave ample powers to Mr. Brijpal Singh Seth to accord permission for bringing the suit, a.nd the order of the District Magistrate, even if treated as a. transfer, was valid. In the result, the appeal fails, and is dismissed with costs. Appeal dismissed. January z7. NATIONAL CEMENT MINES INDUSTRIES, LTD. v. COMMISSIONER OF INCOME-TAX, WEST BENGAL, CALCUTTA. (J. L. KAPUR, M. HrnAYATULLAH and J.C. SHAH, JJ.) Income-tax-Conveyance with reservation of rights-Category of-Receipts under the conveyance, if income or capital. The appellants were carrying on the bnsiness of cement and lime manufacture and supply thereof. By a deed dated May 7, 1935, the appellants conveyed to the Associated Cement Ltd. the rights which had vested in them under an earlier conveyance made in their favour by a company known as Karanpura Co. Under the deed the appellants reserved to themselves the right to receive from the Associated Cement Company a sum equal to thirteen annas in respect of every ton of cement sold by it which shall have been manufactured from the limestone won by it from the lands transferred and comprised in the leases and agreements. Pursuant to this stipulation in the year_ of account, the appellants received from the Associated Cement Ltd. Rs. 77,820. The Income-tax Officer included this amount in the total assess able income of the appellants in the assesment year and his order was confirmed l>y the Appellate Assistant Commissioner and by the Income-tax Appellate Tribunal. The contention of appellants before the High Court in_ a reference under s. 66 of the Indian Income-tax Act that on a proper construction of the deed and on the facts and circumstances of the case the sum of Rs. 77,820 did not represent receipt of a revenue nature in the hands of the appellants and was not assessable as such, was negatived. Held, that the deed 1iid not incorporate a transaction of ·either sale or lease. The conveyance was· subject to several restrictions and the'appellants retained in part, rights in the land conveyed. The transaction was substantially a transaction for sharing the profits of the commercial activities of the Associ ated Cement Ltd. and the receipt under cl. I of the deed was of the nature ·of income and not capital and as such assessable to tax, ·