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Appeal No. 1551 of 1966.
Appeal by special leave from the Award dated February 28, 1966 of the Industrial Tribunal, Madras 'in I. D. No. 21 of 1965.
H. R. Gokhale and D. N. Gupta, for the appellant.
M. K. Ramamurthi, Shyamala Pappu and vineet Kumar, for the respondents.
The Judgment of the Court was delivered by Shelat, J.
On demands for revision of wage scales, dearness allowance, medical benefit, bonus for the year 1963 64, gratuity 937 etc.
having been made by the workmen of the appellant company in its Madras and the other branches in that region and disputes thereabout having arisen between the company and its said workmen, the Government of Madras referred them by its notification dated April 6, 1965 for adjudication to the Industrial Tribunal, Madras.
The Tribunal granted some and rejected the rest of the demands.
Aggrieved by the award the company filed this appeal under special leave granted by this Court.
Though the award dealt with a number of demands counsel for the appellant company restricted its challenge against the award on three subjects only.
Consequently, we are, concerned in this appeal with those three subjects only, namely, bonus for the year 1963 64, medical benefits and revision by the Tribunal of the company 's existing gratuity scheme.
As regards the bonus, the company had already paid to the workmen bonus at the rate of 4 months ' basic pay as against the demand for the maximum bonus calculated in accordance with the , and on consolidated as against the basic wages.
The Tribunal conceded that demand and granted bonus at 209% of the consolidated wages.
In view, however, of this Court 's decision in Jalan Trading Co. vs Mill Mazdoor Union,(1) Mr. Ramamurthi for the workman conceded.
that the Act cannot apply in respect of the year in question and that the bonus payable for that year will have to be calculated on the basis of the Full Bench Formula as approved by this Court.
The award to that extent, therefore, has to be set aside and remanded to the Tribunal for determining the bonus in accordance with the said Formula.
On the question of medical facilities, the workmen 's demand is contained in paras 27 to 31 of their statement of claim filed before the Tribunal according to which the workmen wanted the company to reimburse all medical expenses incurred by them on production of bills therefore.
In paras 27 and 28 of the statement, it was stated that the company had a scheme for medical benefit for its workmen at Calcutta made under the consent award of 1962 and that there was no reason "why this amenity should be refused to the workmen in this region".
Para 30 of the statement stated that there was a discussion between the parties regarding this demand when the company agreed to appoint a medical officer for consultation by the workmen and also to meet the cost of medicines upto Rs. 100 for a workman per year.
This offer, however, was rejected on three grounds: (1) that the condition as to the ceiling was discriminatory, (2) that the ceiling was too low and (3) that there was no warrant for not extending the benefit to workmen of the branch offices outside Madras.
(1) ; 938 This demand is dealt with by the Tribunal in para 14 of the award.
It is clear therefrom that the union 's contention before the Tribunal was that there was no reason why "this amenity of medical facility which the company has granted to its Calcutta workmen should be refused to the workmen of the Madras region".
The contention thus clearly was that the company having made a scheme for its Calcutta employees, it was discriminatory to refuse such a scheme to its workmen in Madras region.
It is equally clear that the offer made by the company and referred to in the statement of claim by the workmen was rejected as it contained a ceiling which was not in its Calcutta scheme, and it was, therefore, that its offer was considered discriminatory.
In view of these contentions the Tribunal agreed that a scheme for medical benefit for this region was called for.
The Calcutta scheme was not produced before the Tribunal and therefore the Tribunal proceeded to frame its own scheme.
The Tribunal rejected the demand for reimbursement of all medical expenses in respect of which bills would be produced as it felt that such a provision would lead to abuses including the obtaining of false bills.
Instead, the Tribunal directed that the company should pay the cost of such medicines as are prescribed by the company 's doctor, if supported by genuine bills, and should also pay all cost of hospitalisation if and when it was recommended by the company 's doctor.
Counsel for the company objected to this part of the award on the grounds (1) that the Tribunal was not justified in throwing on the company the entire burden of medical expenses including the cost of hospitalisation even in cases of major diseases which workmen might suffer or contact, (2) that it was no part of the employer 's obligation to provide for such expenses and that too to an unlimited degree, and (3) that the award should have provided a ceiling both in respect of the cost of medicines and of hospitalisation.
The argument was that the grievance of the workmen was that denial of the medical amenity to them as the one given to its Calcutta workmen was discriminatory, and therefore, if the Tribunal decided to concede the demand, it should have been on the same lines as the Calcutta scheme.
Mr. Rama murthi, on the other hand, contended that (a) it was an accepted principle that though a company may have an all India organisation, it was not necessary that if should have uniform conditions of service in all the regions and that, therefore, merely because the company has a medical scheme for its Calcutta office it did not follow that scheme must also be applied to its workmen in Madras region, and (b) that the scheme framed by the Tribunal was fair and should not be interfered with in order only to bring it in line with that of Calcutta.
939 In a recent decision concerning this very company and its, workmen in Bangalore, Hyderabad and Kerala branches (Remington Rand of India vs The Workmen)(1), this Court had to consider this very question.
The Tribunals in those cases.
had, as in this case, made schemes which imposed the burden of medical facilities on the company without any ceiling and extended therein such benefit to the family members of the workmen also.
In those cases, on our finding the company 's Calcutta scheme to be fair and reasonable, we substituted it for the schemes framed by the, respective Tribunals.
The Calcutta scheme is thus in operation in those areas also.
Counsel for the workmen has not shown to us any substantial difference between those areas and the Madras region affecting, the question of medical benefit.
We,, therefore, find no legitimate reason why the Calcutta scheme should not be applied to these workmen.
It is true that medical benefit is excepted in that scheme for certain diseases of a contagious and epidemic nature.
That presumably was done on the ground that for such diseases the primary duty to give relief is of the State and not of the employer.
For the reasons given in that decision, we set aside the directions given by the Tribunal in this.
behalf and substitute them by the following scheme : 1.
When a workman during the course of his duty requires medical attention, and where such attention is given by the company 's doctor (i.e. a doctor or doctors nominated by the company including a doctor nominated as a part time doctor) and medicines are prescribed by him, the cost of such prescription should be borne by the company; 2.
In the event of a workman falling sick at his residence and the illness is other than a venereal disease, leprosy, smallpox, typhoid or cholera, he should be paid the cost of the medicines prescribed; 3. Bills or cash vouchers pertaining to such prescription should be produced for counter signature of the company 's doctor before payment is authorised; 4.
Disease of a serious nature requiring hospitalisation will be subject to consideration by the company; 5.
At the time of employment the company will be entitled to get the prospective employees examined by the company 's doctor and their employment will be subject to being found medically fit; 6.
All company employees who are presently employed or those employed in future will be medically (1) C.A. Nos. 856.
1475 and 2119 of 1968, decided on December 10, 1968.
940 examined by the company 's doctor once a year or at such other periodical intervals determined by the company but the results of such medical examinations will not be prejudicial to the workmen 's employment; 7.
In case a workman is found medically unfit to continue in service, the company will decide his case in consultation with the union 's secretary; and 8.
This scheme will come to an end as and when the Employees ' State Insurance Scheme is extended to the employees concerned.
The question of laying down any ceiling need not be con sidered as the company, we are told, is agreeable to extend this scheme in this region.
The third item in respect of which the company challenges the award is the revision made by the Tribunal of the existing gratuity scheme.
The workmen 's demand in this respect was : (1) that the maximum limit of 15 months ' salary should be enhanced to 20 months ' salary, and (2) that the provision in the existing scheme that no gratuity would be payable to a workman dismissed on the ground of misconduct should be substituted by a provision that even in such cases gratuity should be payable but the company would be entitled to deduct from such gratuity amount the amount of financial loss, if any, resulting from such misconduct.
The Tribunal 's view was that these demands were reasonable and accordingly made modifications in the existing scheme.
At first, Mr. Gokhale objected to this part of the award.
first ly on the ground that the Tribunal ought not to have allowed gratuity even in cases of dismissal for misconduct, and secondly, that the qualifying period in the case of termination of service by the company otherwise than for misconduct should be 10 years and not the graded periods from 5 to 15 years as provided in the award.
On second thoughts he did not press the second objection.
and therefore, nothing need be said about it.
He, however, contended that if gratuity even in cases of dismissal for misconduct is to be made payable, a provision should be made that it would be forfeited if the misconduct is a gross one involving violence, riotous behaviour etc.
and for the rest of the cases, the qualifying period should be 15 years of continuous service.
These objections involve a principle, and therefore, need serious consideration.
The principle invoked by Mr. Gokhale is, firstly, that since gratuity is paid as a reward for long and meritorious service it would be inconsistent with that principle to award gratuity in cases of dismissal for misconduct, for.
such cases cannot be treated as cases of meritorious service, and 941 secondly, the provision in such cases for deduction only of financial loss resulting from misconduct committed by the workman is neither proper nor consistent with the principle on which gratuity is made payable by an employer.
A workman may be guilty of gross misconduct, such as riotous behaviour or assault on a member of the staff.
Such misconduct may not result in any financial loss to the company, and therefore, the workman would be paid full gratuity amount.
The contention was that it would be a serious anomaly that while a workman, who has caused some damage to the company 's property and is dismissed on the ground that he was guilty of misconduct would have the gratuity amount payable to him reduced to the extent of that damage, another workman, who, for instance, assaults and causes injury, even a serious injury, to another employee would, though liable to be dismissed, be entitled to the full gratuity merely because the misconduct of which he is guilty, though graver in nature, does not result in pecuniary loss to the company.
In support of his contention, Mr. Gokhale leaned heavily on two recent decisions of this Court in Calcutta Insurance Co. Ltd. vs Their Workmen(1) and The Delhi Cloth & General Mills Company Ltd. vs The Workmen(2).
Relying on these decisions, he urged, that in cases of dismissal for misconduct, the qualifying period should not be as prescribed by the Tribunal but must be 15 years of continuous service.
Mr. Ramamurthi, on the other hand, contended that the principle that gratuity is a reward for long and meritorious service and that for a single misconduct after such service, such misconduct should not result in deprivation of gratuity except to the extent of the actual monetary loss caused to the employer has been long accepted in industrial adjudication and should not be abandoned, and that the two decisions relied on by Mr. Gokhale should not be construed as having the cumulative result of enhancing the qualifying period and also depriving gratuity in cases of dismissal for misconduct.
The first decision, according to him, lays down an increase in the qualifying period from 10 years, which generally used to be the period for earning gratuity, to 15 years, and the second lays down Certain exceptions to the accepted rule that deduction of monetary loss resulting from misconduct was sufficient.
He argued that neither of the two decisions lays down that both the consequences must follow where a workman is dismissed for misconduct, even if such misconduct has not resulted in any monetary loss to the employer.
In view of these contentions it becomes necessary for us to examine the earlier decisions cited before us before we come to (1) ; (2) ; 942 the cases of Calcutta Insurance Co. Ltd.(1) and the Delhi Cloth & General Mills Co. Ltd.(2).
The question as, to whether gratuity should be, payable even though the concerned workman is dismissed for misconduct appears to have been raised for the first time is The Garment Cleaning Works vs Its Workmen(3).
The objection there raised related to cl. 4 of the gratuity scheme: framed by the Tribuml which provided that even if a workman was dismissed or discharged for misconduct, gratuity would still be payable except that if such a misconduct resulted in financial loss, to the works, gratuity should be paid after, deducting such loss.
The contention urged by counsel, but which failed,, was that such a clause was, inconsistent with the principle on, which gratuity claims were based, namely, that they were in the nature of retiral benefit based ' on.
long and meritorious, service.
Therefore, if a workman was guilty of misconduct and was dismissed or discharged, it would be a blot on his long and meritorious service and in such a case it would not be open to him to claim gratuity.
This was a general argument and was repelled as such is clear from what the Court said at page 715 of the Report : "On principle, if gratuity is earned by an employee for long and meritorious service it is, difficult to understand why the benefit thus earned by long and meritorious service should not be available to the employee even though at the end of such service he may have been found guilty of misconduct which entails his dismissal.
Grautuity is not paid to the employee gratuitously or merely as a matter of boon.
It is paid to him for the service rendered by him to the employer, and when it is once earned it is difficult to understand why it.
should neceasarily be denied to him whatever may be, the nature of misconuct for his dismissal Therefore we do, not.
think that it would be possible to accede to the general argument that in all cases where the &mice of an employee is terminated for misconduct gratuity should riot be paid to him.
" The words "why it should necessarily be denied to him whatever may be the nature of misconduct occurring in the earlier part of the passage and the words "general argument that in all cases where the service of an employee is terminated for misconduct gratuity should not be paid" and the reference by the Court to certain awards made by tribunals where simple misconduct was distinguished from grave misconduct and forfeiture of gratuity (1)[1967] 2 S.C.R. 596.
(2) ; (3) 943 was provided for the letter occurring after this passage clearly show firstly that the Court was dealing with and repelled the general proposition that without any distinction between simple and gross misconduct there should be forfeiture in all cases of dismissal for misconduct of whatsoever nature, and secondly, that though the Court approved the scheme which provided that gratuity should be paid after deducting financial loss resulting from the workman 's misconduct, the Court did not lay down any principle that gratuity should be paid in cases of grave misconduct involving even violence which though it may not result in financial damage may yet be more serious than the one which results in monetary loss.
The decision thus is not an authority for the proposition that even if a workman were guilty of misconduct, such as riotous behaviour or an assault on another employee, in dustrial adjudication should not countenance a provision for forfeiture of gratuity in such cases merely because it does not result in monetary loss or that such a provision would be inconsistent with the principle that gratuity is not a boon or a gratuitous payment but one which is earned for long and meritorious service.
In Motipur Zamindari (P) Ltd. vs Workmen(1) the only question considered was whether the award was justified in providing forfeiture of gratuity in a case where the misconduct involved moral turpitude.
The Court following Garment Cleaning Works ( 2 ) directed that instead of forfeiture, the clause should provide deduction of the amount of monetary loss, if any, caused by such misconduct.
It is clear that no one canvassed the question as to whether a provision in a gratuity scheme that a workman should forfeit gratuity in the event of his committing misconduct involving violence or riotous behaviour within or around the works premises would be justified or not.
Nor was it con sidered whether it would be anomalous to provide for exaction of compensation from gratuity amount in case of misconduct involving moral turpitude while not making any provi sion against misconduct, such as the use of violence or force, which though not resulting in monetary loss, yet is unquestionably of a graver nature.
The case of Employees vs Reserve Bank of India(3) was again a case wherethere was a general clause in the gratuity scheme providing forfeiture in cases of dismissal for misconduct whatsoever and where in view of the decision in Garment Cleaning Works (2 )" the Bank conceded to:substitute the rule by providing deduction from gratuity the amount of monetary loss occasioned by the misconduct for which dismissal is ordered.
Thus, in none of the cases cited before us the question as to; what should be the minimum qualifying period in cases of dismissal (1) (2)[1962].2 S.CR.,711.
(3) ; , at 58. 944 for misconduct and the question as to whether a provision for forfeiture of gratuity in the event of such dismissal having been ordered for misconduct involving violence were either canvassed or considered.
On the other hand, in a recent decision between this very company and its workmen in Bangalore region (Remington Rand of India Ltd. vs Their Workmen)(1), the gratuity scheme made by the Tribunal provided for a qualifying period in cases of termination of service otherwise than for misconduct, but no qualifying period was provided for cases where termination of service was by way of punishment for misconduct.
This Court accepted the objection of the company on the ground of this omission and laid down the qualifying period of 15 years ' service in such cases.
In this decision the Court followed the earlier decision in Calcutta Insurance Co.(2) In another such case (Remington Rand of India vs The Workmen(3), where the dispute concerned the workmen of the company in Kerala region 15 years service was provided as the qualifying period in cases of dismissal for misconduct.
In the case of Calcutta Insurance Co.(2) on a contention having been raised that the qualifying period for earning gratuity in cases of retirement and resignation should be 15 years ' service and that no gratuity should be payable in cases of dismissal for misconduct, the Court examined the earlier decisions commencing from the Indian Oxygen & Acetylene Co. Ltd.(4) to the case of Garment Cleaning Works(5) 'and registered its demurrer against the observation made in the latter case that as gratuity was earned by an employee for long and meritorious service, it should consequently be available to him even though at the end of such service he may have been found guilty of misconduct entailing his dismissal.
In so doing the Court at page 608 of the Report remarked : "In principle, it is difficult to concur in the above opinion.
Gratuity cannot be put on the same level as wages.
We are inclined to think that it is paid to a workman to ensure good conduct throughout the period he serves the employer.
"Long and meritorious service" must mean long and unbroken period of service meritorious to the end.
As the period of service must be unbroken, so must the continuity of meritorious service be a condition for entitling the workman to gratuity.
if a workman commits such misconduct as causes financial loss to his employer, the employer would under the general law have a right of action against the employee for (1) [19681 (2) ; (3) , at 168.
(4) (1956] (5) 945 the loss caused and making a provision for withholding payment of gratuity where such loss caused to the employer does not seem to aid to the harmonious employment of laborers or workmen.
Further, the misconduct may be such as to undermine the discipline in the workers a case in which it would be extremely difficult to assess the financial loss to the employer.
" Continuity, in other words, must govern both the service and its, character of meritoriousness.
The Court further observed that a mere provision in a gratuity scheme enabling an employer to, deduct from the gratuity amount the actual loss caused as a. result of misconduct for which the workmen incurs the punishment of dismissal or discharge cannot subserve industrial peace and harmony, firstly, because an employer even without such a. provision has under the law the right of action for claiming damages, a right not taken away by industrial law, and secondly,.
because a misconduct resulting in dismissal may be such as may undermine discipline in the workmen, in which case it would be extremely difficult to assess the financial loss.
As regards the qualifying period, the Court laid down 10 years service in cases, of resignation or retirement and "following the principles laid down in the former decisions of this Court" provided 15 years ' service for qualifying for gratuity in cases of dismissal for mis conduct.
In the case of Delhi Cloth & General Mills Co. Ltd. (1) an objection was raised on behalf of the workmen to cl. 3 of the gratuity scheme framed by the Tribunal.
That clause provided as follows : "On termination of service on any ground whatsoever except on the ground of misconduct as in cl. 1 (a) and 1 (b) above.
" Cl. 1 (a) and 1 (b) provided for payment of gratuity in the eventof the death of an employee while in service or on his being physically and mentally incapacitated for further service and ' laid down the rates and the qualifying periods as follows : (a) After 5 years continuous service and less than 10 years ' service 12 days ' wages for each completed year of service (b) After continuous service of 10 years 15 days ' wages for each completed year of service.
The effect of cl. 3, therefore, was that in case of termination of service an employee would be entitled to get gratuity at the above (1) C.A. Nos.2168, 2569 of 1966 and 76, 123 and 560 of 1967, decided on September 27, 1968.
946 rates if he had put in service for the aforesaid periods, but would forfeit it if the termination was due to any misonduct committed by him.
The objection was that this provision was inconsistent with the decisions so far given by this Court, that according to those decisions the only provision permissible to the Tribunal was to enable Ox employer to deduct actual monetary loss arising from misconduct, and that therefore, the mere fact that a work man 's service was terminated for misconduct was no ground for depriving him altogether of gratuity earned by him as a result of his long and meritorious service, until the date, when he commits such misconduct.
In examining, the validity of this contention the Court analysed the previous decisions and pointed out that none of them laid down a general principle, that an industrial tribunal cannot _justifiably provide that an employer need not be made to pay gratuity even where, the workman had incurred termination of service on account of his having committed misconduct, not merely technical but of a grave character.
The Court observed that in some decisions this Court, no doubt, had held that the fact that dismissal of a workman on account of his having committed misconduct need not entail forfeiture and that it would be sufficient to forfeit partially the gratuity payable to him to the extent of monetary loss caused to the employer.
But then no decision had laid down as a principle that a provision for such forfeiture cannot be justified, however grave the misconduct may be, provided it had not caused monetary loss.
The Court noticed that the trend in the earlier decisions was to deny gratuity in all cases where the, workman 's service was terminated for misconduct but that in later years in cases such as the Garment Cleaning Works(1) "a less rigid approach" was adopted.
The Court then observed: "A bare perusal of the Schedule (Model Standing Orders) shows that the expression "misconduct ' covers a large area of human conduct.
On the one hand arc the habitual late attendance, habitual negligence and neglect of work on the other hand are riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline, wilful insubordination or disobedience.
Misconduct falling under several of these latter heads of misconduct may involve no direct loss or damage to the employer, but would render the functioning of the establishment impossible or extremely hazardous.
For instance, assault on the manager of an establishment may not directly involve the, employer in any loss or damage, which could be equated in terms of money, but it would render the working of the establishment impossible.
One may also (1) 947 envisage several acts of misconduct not directly involving the establishment in any loss, but which are destructive of discipline and cannot be tolerated.
In none of the cases cited any detailed examination of what mis conduct would or would not involve to the employer loss capable of being compensated in terms of money was made.
It was broadly stated in the cases which have come before this Court that notwithstanding dismissal for misconduct a workman will be entitled to gratuity after deducting the loss occasioned to the employer.
If the cases cited do not enunciate any broad principle we think that in the application of those cases as precedents a distinction should be made between technical misconduct which leaves no trail of.
indiscipline, misconduct resulting in damage to the employer 's property, which may be compensated by forfeiture of gratuity or part thereof, and serious misconduct which though not directly causing damage,, such as acts of violence against the management or other employees or riotous or disorderly behaviour, in or near the place of employment is conducive to grave indiscipline.
The first should involve no forfeiture: the second may involve forfeiture of an amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third may entail forfeiture of gratuity due to the workmen.
The precedents of this Court, e.g., Wenger & Co. vs Its Workmen [1963(2) L.L.J. 388], Remington Rand of India Ltd. 's case [1968(1) L.L.J. 542] and Motipur Zamindari (P) Ltd. 's case [1965(2) L.L.J. 139] do not compel us to hold that no misconduct however grave may be visited with forfeiture of gratuity.
In our _judgment, the rule set out by this Court in Wenger & Co. 's case and Motipur Zamindari (P) Ltd. 's case applies only to those cases where there has be en by actions wailful or negligent any loss occasioned to the property of the employer and the miscon duct does not involve acts of violence against the management or other employees, or riotous or disorderly behaviour in or near the place of employment.
In these exceptional cases the third class of cases the employer may exercise the right to forfeit gratuity; to hold otherwise would be to put a premium upon con duct destructive of maintenance of discipline.
" In this view, the Court modified cl. 3 of the scheme by adding an explanation, the effect of which was that though the employer could not deprive the workman of the gratuity in all cases of misconduct, he could do so where it consisted of acts involving violence against the management or other 'employees or riotous 5Sup.
Cl/70 15 948 or disorderly behaviour in or near the place of employment and also gave right to the employer to deduct from gratuity such amount of loss as is occasioned by the workman 's misconduct.
We may mention that the Court did not alter the qualifying period in cases of misconduct since no objection appears to have been raised on that ground.
As against the contention that a provision in accordance with these two decisions should be introduced in the scheme under examination, Mr. Ramamurthi submitted that the two decisions should not be construed as if they laid down principles which should have the cumulative effect, firstly, as to the qualifying period, and secondly, as to deprivation of gratuity in cases specified in the Delhi Cloth & General Mills case(1).
It is true that this decision does not lay down that the qualifying period in cases of misconduct should be 15 years as was held in Calcutta Insurance Company(2).
But, as aforesaid, that was because that ques tion was not raised, while in the Calcutta Insurance Co. case(2) it was expressly raised and the Court laid down that in such cases it would be proper to provide 15 years continuous service as a criterion.
Once the principle that gratuity is paid to ensure good con duct throughout the period that the workman serves his employer is accepted as laid down in Calcutta Insurance Co.(2) some distinction in the matter of the qualifying period between cases of resignation and retirement on the one hand and dismissal for misconduct on the other becomes logically necessary.
Such a distinction cannot legitimately be assailed as unreasonable.
Similarly, if the object underlying schemes of gratuity is to secure industrial harmony and satisfaction among workmen it is impossible to equate cases of death, physical incapacity, retirement and resignation with cases of termination of service incurred on account of misconduct.
Besides, a longer qualifying period in the latter cases would ensure restraint against wailful use of violence and force neglect etc.
No serious argument was advanced that such a distinction would not be reasonable.
The objection was against the insertion of both and not against the merit of such distinction.
As regards the clause as to misconduct, it is not possible to disagree with the proposition laid down in the Delhi Cloth & General Mills case( ) that acts amounting to misconduct as defined in the standing orders, where they are made, or the model standing orders, where they are applicable, differ in degree of (1) 11969] 2 S.C.R. 307.
(2) (19671 2 S.C.R. 596.
949 gravity, nature and their impact on the discipline and the working of the concern, and that though grave in their nature and results, all of them may not result in loss capable of being calculated in terms of money.
Amongst them there would be some which would forthwith disentitle the workman from retaining his employment and justifying his dismissal.
For the reasons given in the Delhi Cloth & General Mills ' case(1) with which we, with respect, concur, we must agree with counsel for the company that it is necessary to modify the scheme and to add in cl. 5 thereof a proviso that in cases where there has been termination of service on account of an employee found guilty of act or acts involving violence against the management or other employees or riotous or disorderly behaviour in or near the company 's premises, the company would be entitled to forfeit the gratuity which would otherwise be payable to the concerned workman.
5 should also be modified so as to introduce therein 15 years continuous service as the qualifying period for earning gratuity in cases where the service of the employee has been terminated on account of misconduct and that such gratuity should be payable at the rate prescribed in cl. 3(d) of the scheme.
The appeal is allowed and the award is set aside to the extent aforesaid.
The gratuity scheme and the scheme for medical benefit, as revised by the Tribunal, are modified as stated above.
So far as the question of hours is concerned, that question is remanded to the Tribunal to decide it in accordance with the observations made hereinabove.
The Tribunal will give liberty to the parties to adduce for that purpose such further evidence as they think necessary.
There will be no order as to costs.
Y.P. Appeal allowed.

Output:
An industrial dispute between the appellant company and its workmen relating,.
inter alia, to bonus, medical benefits anti gratuity was, referred by the State Government of.
Madras on April 6, 1965 to the Industrial Tribunal for adjudication.
Tribunal awarded bonus at 2O,% of the consolidated wages as provided in the .
As to medical benefit& the Tribunal diverted that the company should pay the cost of medicines prescribed by the company 's doctor and the full cost of hospitalisation when it was.
recomanded by the company 's doctor.
The Tribunal modified, the company '& gratuity scheme in accordance with the workmen 's demands.
The company appealed to, this Court against the award The question of bonus had to be considered, in, the light of this Courts decision in Japan Trading, Company 's law.
On the question.
of medical benefits the Court had to consider whether the company 's scheme for its Calcutta employees could be extended to Madras Region.
In regard to gratuity the main questions for consideration were as, to, the qualifying, period for payment of gratuity to workmen who were guilty of misconduct, and whether gratuity should be payable for workmen whose misconduct consisted of violence, riotous behaviour etc.
HELD: (i) In View of this Court 's decision in Jalian Trading Company 's case the.
Payment of Bonus Act, 1965 was not applicable in respect of the year in question, and the bonus payable had to be calculated in accordance with, the Full Bench, Formula.
The award to that extent therefore had to be set aside and remanded, to the Tribunal for determining the bonus in accordance with the said Formula [937 E] Jalam Trading Co. vs Mill Mazdoor Union, ; , referred to.
(ii) In the appellant company 's earlier cases relating to its Bangalore, Hyderabad and Kerala Branched this Court had held that the Company 's Calcutta scheme relating to medical benefit for its workmen was fair and reasonable and had made the said scheme applicable to these areas also.
No substantial difference had been shown between these areas and the Madras region affecting the question of medical benefit.
These areas and the no legitimate reason why the Calcutta scheme should not be applied to the workmen in the present case.
[The Court framed an eight point scheme for medical benefit based on the Calcutta scheme] [939 A 940 C] Remington Rand of India vs The Workmen, C.A. Nos.
856/68 etc.
10 12 1968, applied.
(iii.) Once the principal, that gratuity is paid to ensure good conduct throughout the period that the workman serves his employer as laid drown 936 in Calcutta Insurance Co. some distinction in the matter of the qualifying period between cases of resignation and retirement on the one hand and dismissal for misconduct on the other becomes logically necessary.
Such a distinction cannot legitimately be assailed as unreasonable.
Similarly if the object underlying the scheme of gratuity is to secure industrial harmony and satisfaction among workmen it is impossible to equate cases of death, physical incapacity, retirement and resignation with cases of termination of service incurred on account of misconduct.
Besides, a longer qualifying period in the latter cases would ensure restraint against wailful use of violence and force, neglect etc.
[948 E] As laid down in Delhi Cloth & General Mills case that acts amounting to misconduct as defined in the standing orders, when they are made, or the model standing orders, where they are applicable differ in degree of gravity, nature and their impact on the discipline and the working of the concern, and that though grave in their nature all of them may not result in loss capable of being calculated in terms of money.
Amongst, them there would be some which would forthwith disentitle the workman from retaining his employment and justifying his dismissal.
For the reasons given in the Delhi Cloth & General Mills case it was necessary to modify the scheme of gratuity and to add in cl. 5 thereof a proviso that in cases where there has been termination of service on account of an employee found guilty of act or acts involving violence against the management or other employees or riotous or disorderly be haviour in or near the company 's premises, the company would be entitled to forfeit the gratuity which would otherwise be payable to the concerned workmen.
Clause 5 should also be modified so as to introduce therein 15 years continuous service as the qualifying period for earning gratuity in cases when the service of an employee has been terminated on account of misconduct and that such gratuity should be payable at the rate prescribed in cl. 3(d) of the scheme.
[948 G 949 D] Calcutta Insurance Co. Ltd. vs Their Workmen, ; and Delhi Cloth & General Mills Co. Ltd. vs The Workmen, ; , applied.
Garment Cleaning Works vs Its Workmen, , Motipur Zamindari (P) Ltd. vs Workmen, , Employees vs Reserve Bank of India, ; , 58, Remington Rand of India Ltd. vs ' Their Workmen, , Remington Rand of India vs The Workmen, , 168 and Indian Oxygen & Acetylene Co Ltd. case , considered.


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Appeal No. 1868 of 1968.
Appeal from the Judgment and Decree dated the 21st February 1968 of the Judicial Commissioner 's Court at Goa, Daman and Diu in Appeal No. 3370 of 1964.
S.V. Gupte, Naunit Lal and (Miss) Lalita Kohli for the Appellant.
V.C. Mahajan and R.N. Sachthey for Respondents.
The Judgment of the Court was delivered by BEG, J.
The Plaintiff appellant Timblo Irmaos Ltd., (hereinafter referred to as 'the Company ') had sued Jorge Anibal Matos Sequeira and his wife (hereinafter referred to as Sequeiras ') for recovery Rs. 2,82,141/ claimed under a contract of 23rd January, 1954, and a sum of Rs. 1,14,700/ , claimed under another contract of 4th February, 1954.
The Sequeiras counter claimed Rs. 3 lakhs as price of 8000 tons of iron ore supplied to the Company; and pleaded that a sum of Rs. 1,13,000/ , advanced by the Company to the Se queiras was to be adjusted after final determination of the amount due as price, of goods sold and supplied.
The Sequeiras are holders of a mining concession.
They, it was alleged, had entered into the two contracts, one of 23rd January, 1954, through their attorney, Ramesh Jethalal Thakker (hereinafter referred to as Thakker Junior), for supplying 8000 tons of iron ore, altered in some respects, by a later agreement, and the other of 4th February, 1954, alleged to be binding on the Sequeiras although entered into through Jethalal C. Thakker (hereinafter referred to as 'Thakker Senior '), the.father of R.J. Thakker.
The most important clause in the contract of 23rd January, 1954, was that iron ore should be loaded in a ship 'Mary K ' at Marmagoa, and that the loading must be done at the rate of 500 tons per 'weather working day" of 24 hours.
Under the contract, the rate of demurrage for not loading the ship in time was to be paid at the rate of US $ 800.00 per day an pro rata for each fraction of a day.
The buyer company was to pay what was called "despatch money" at half the rate of demurrage for time saved in loading.
The payment was to be in the Portuguese Indian rupees at the exchange rate of Rs. 4.76 per US $.
The buyers had also to make an initial payment of Rs. 55,000/ as soon, as delivery by load ing began.
The buyers were also to establish a Letter of Credit, before 27th January, 1954, in favour of 453 the sellers, the Sequeiras, for the full value of the iron ore after deducting Rs. 55,000/ paid initially, and Rs. 1/4 per gross ton awaiting final settlement by presentation within ten days, at the bank named in the agreement, by presentation of the certificate of weight issued by the Master of the vessel.
Certificates of the quality and specifications and of final weighment were to be sent by the buyers after the vessel 's arrival at the port of dis charge.
The second agreement of 4th February, 1954, relates to loading of 6000 to 9000 tons of iron ore of given quality and specifications in the ship 'Mary K ' at the minimum rate of 500 tons per day commencing delivery within 24 hours of the buyer notifying the requirements to the seller.
It also contained other stipulations similar to those of the first one.
The important point to note about this agreement is that it is signed by Jethalal C. Thakker as the attorney of his son Ramesh Jethalal Thakker.
It appears that the clause relating to initial payment was changed so that the sellers, Sequeiras, were paid Rs. 1,13,000/ between 25th January, 1954, and 22nd July, 1954.
It also appears that there was delay in delivery for which the plaintiff claimed demurrage.
There were also complaints about alleged departure by the seller from the specifica tions agreed upon.
The Sequeiras, the sellers, had it seems, also applied for an interim injunction so that the ship 's loading capacity may be checked.
Under orders of the Court, an inspection of the ship was made and a report was submitted by an expert on 15th March, 1954, after the deter mination of its loading capacity so that the ship could finally sail only on 16th March, 1954.
The Margao Comarca Court, where the claim and the counter claims were filed, held that the seller 's attorney, Thakker Junior, who had received Rs. 1,13,000/ , which had to be deducted from the price of the iron ore supplied, was not duly authorised by the power of attorney executed by the Sequeiras to sell.
The Court did not find enough material to reach a definite conclusion about the quantity of ore supplied and left that to be determined in execution pro ceedings.
It, however, held the first contract to be binding between the parties as it had been ratified by the seller and acted upon by the buyer.
But, the second contract was held to be not binding upon the Sequeiras as Thakker (Jun ior) was found to have been given only a limited authority so that he could not constitute his father his attorney for the purpose of executing the second agreement.
The Trial Court accepted the basis of the counter claim of the Sequei ras and found that the company had committed breaches of contract but left the quantum of damages to be determined in execution proceedings.
The decree of the Trial Court was substantially affirmed in appeal.
Nevertheless, the Additional Judicial Commission er Goa, Daman & Diu, had modified the decree, the appellant company has come up to this Court in appeal as of right.
Two questions arise for determination before us.
The first is whether the second contract of 5th February, 1954, was duly covered by the authority conferred by the Sequeiras upon their attorney, Ramesh Jethalal Thakker, or not.
The second 454 relates to the amount of demurrage, if any, payable by the Sequeiras, the defendants respondents, to the plaintiff appellant.
On the first question, the Judicial Commissioner concen trated on the dictionary meaning of the word "exploitation" used in the power attorney executed by the Sequeiras in favour of Thackker Junior.
The learned Judicial Commissioner took the meaning of the word from Chambers ' 20th Century Dictionary which gave: "the act of successfully applying industry to any job, as the working of mines, etc; the act of using for selfish purposes".
The learned Judicial Com missioner also referred to the inability of learned Counsel for the company to cite a wider meaning from the Oxford Dictionary which the learned Counsel had carried with him to the Court.
The Judicial Commissioner then ruled: "Hence, I see no escape from the conclu sion that on the basis of the power of attor ney given by Sequeira to Ramesh the latter could not have entered into any agreement for sale of ore extracted from the mine belonging to Sequeira on his behalf.
Consequently, Sequeira is not bound by the agreement dated 4th of February, 1954".
As already mentioned by us, the first con.tract of 23rd January, 1954, was held to be binding despite this finding because the parties had acted upon it and dealt with each other on the basis that such a contract existed.
We think that this background can be taken into account as indicating what the parties themselves understood about the manner in which the words used in the power of attorney dated 17th January, 1953, executed by Sequeiras in favour.of Thackker Junior was related to the actual facts or dealings between or by the parties.
Moreover, the power of attorney had to be read as a whole in the light of the purpose for which it was meant.
As it is not lengthy, we reproduce its operative part.
It reads: "Jorge Anibal de Matos Sequeira, mar ried, major of age, businessman, landlord, residing in Panglm, whose identity was war ranted by witnesses, said in the presence of the same witnesses that by the present letter of attorney he appoints and constitutes his attorney Mr. Ramesh Jethalal, Bachelor, major of age, businessman, from Bombay, residing at present in Bicholim and conters on him the power to represent him, to make applications, allegations, and to defend his right in any public offices or Banks, to draw up and sign applications, papers, documents and corre spondence; specially those tending to acquire petrol, gunpowder, train, transport vehicles, machines, furniture (alfaias) and other in struments used in mining industry, apply for and obtain licences for importation and expo ration, to give import and export orders, even temporary, sign applications, suits and only other things necessary, attach and withdraw documents, make declaration.
even under oath and in general any powers necessary for the exploitation of the mine named Pale Dongor situate at Pale for the concession of which the said Siqueira applied and which he is going to obtain to impugn, object, 455 protect and prefer appeals upto the higher Courts, notify and accept notifications and summons in terms of Sec. 35 and 37 of the C.P.C., to use all judicial powers without any limitation, to subrogate these powers to some one else.
This was said and contracted.
The witnesses were Bablo Panduronga Catcar ad Xec Adam Xecoli, both married landlords, major of age from Bicholim who sign below".
Apparently, practice and custom have some bearing on these transactions in Goa.
It is this reason that, although the power of Attorney was executed by Mr. Sequeira, yet, his wife was impleaded, according to the practice in Goa, and no objection was raised either on the ground that she was wrongly impleaded or that the power of attorney was vitiated on the ground that it was executed only by her husband.
In any case, the subsequent agreement of 23rd January, 1954, which was held to have been acted upon, and the similar agreement of 5th February, 1954, of which also the defend ants were bound to have and did have full knowledge, were never repudiated by Sequeiras, before the filing of the suit before us.
Indeed, the agreement of 5th February, 1954, appears to be a sequal to the first agreement of 23rd January, 1954.
We do not think that the two could be really separated in the way in which the Judicial Commissioner thought that they could be by holding that the one was acted upon whereas the other was not.
In any case, the second was the result of and a part of the same series of dealings between the parties.
We do not however propose forest our findings on the ground that the parties are bound by the second agreement due to some kind of estoppel.
We think that the terms of the power of attorney also justify the meaning which the parties themselves appear to have given to this power of attorney that is to say, a power to conduct business on behalf of the Sequeiras in such a way as to include sales on behalf of Sequeiras.
We think that perhaps the most important factor in interpreting a power of attorney is the purpose for which it is executed.
It is evident that the purpose for which it is executed must appear primarily from the terms of the power of attorney itself, and, it is only if there is an unresolved problem left by the language of the document, that we need consider the manner in which the words used could be related to the facts and circumstances of the case or the nature or course of dealings.
We think that the rule of construction embodied in proviso 6 to Section 92 of the Evidence Act, which enables the Court to examine the facts and surrounding circumstances to which the language of the document may be related, is applicable here, because we think that the words of the document, taken by themselves, are not so clear in their meanings as the learned Judicial Commissioner thought they were.
As we have already mentioned, the learned Judicial Commissioner chose to concentrate on the single word "ex ploitation" torn out of its context.
The word "exploita tion" taken by itself, could have been used to describe and confer only such general powers as may be 13 1546 SCI/76 458 them.
If the word 'negotiate ' had stood alone, its meaning might have been doubtful, though, when applied to a bill of 'exchange or ordi nary promissory note, it would probably be generally understood to mean to sell or dis count, and not to pledge it.
Here it does not stand alone, and, looking at the words with which it is coupled, their Lordships are of opinion that it cannot have the effect which the appellant gives to it, and, for the same reason, 'dispose of ' cannot have that effect".
We think that this case also bears out the mode of construc tion adopted by us.
We were then referred to O.A.P.R.M.,A.R.
Adaikappa Chettiar vs Thomas Cook & Son (Bankers) Ltd.,(1) where the well known principle of ejusdem generis was applied to hold that general words following words conferring specifically enumerated powers "cannot be construed so as to enlarge the restricted power there mentioned".
In this case, the purpose of the general power was subordinated to the specif ic powers given which determined the object of the power of attorney.
There is no deviation in this case from the general rules of construction set out above by us.
We have indicated above that implied powers cannot go beyond the scope of the general object of the power but must necessari ly be subordinated to it.
In fact, in a case like the one before us, where a general power of representation in ' various business transactions is mentioned first and then specific instances of it are given, the converse rule, which is often specifically stated in statutory provisions (the rules of construction of statutes and documents being large ly common), applies.
That rule is that specific instances do not derrogate from the width of the .general power ini tially conferred.
To such a case the ejusdem generis rule cannot be applied.
The mode of construing a document and the rules to be applied to extract its meaning correctly depend upon not only upon the nature and object but also upon the frame, provisions, and language of the document.
In cases of uncertainty, the rule embodied in proviso 2 to Section 92 of the Evidence Act, which is applicable to contracts, can be invoked.
Thus, the ultimate decision, on such a matter, turns upon the particular and peculiar facts of each case.
Coming now to the second question, we find that the findings of fact recorded by the Judicial Commissioner are unexceptionable.
Firstly, it was found that, although, under the contract, the defendants respondents could load iron ore at any time during 24 hours, which included the night, yet, the defendants were prevented from doing so owing to the failure of the plaintiff to provide either sufficient light ing or enough winches to enable due performance of the contract.
Secondly, it was admitted that the appellant never opened a Letter of Credit with the named bank by 27 January, 1954, as promised by it.
Thirdly, the delay in loading was held to be due to the fault of the company.
The Judicial Commissioner rightly concluded that the company had not discharged its own part of the contract so that it could not claim (1) 459 demurrage or damages.
Indeed, it was found that the company did not have to pay any demurrage at all to the shippers for delayed departure.
Learned Counsel for the appellant relied strongly on the following terms in the contract of 23rd January, 1954: "Demurrage (if any) in loading payable by Seller at the rate of US $ 800.00 per running day fraction of day pro rata.
Buyers to pay despatch money at half the demurrage rate for all time saved in loading.
Payment either way in Portuguese Indian rupee currency at the rate of exchange of Rs. 476/ for US $ 100.00.
" The contention was that this created an absolute liability to pay for delay in loading irrespective of whether the company had to pay the shippers any demurrage.
It was urged that the liability was upon the seller irrespective of whether such payment had to be made to the shipping company or not.
We think that the demurrage could not be claimed when the delay in loading was due to the default of the respondents themselves.
It is apparent that the basis upon which the agreement to pay demurrage rested was that the appellant will afford proper facilities for loading.
When the appellant itself had committed breaches of its obliga tions, it is difficult to see how the respondents could be made responsible for the delay in loading.
We think that the Judicial Commissioner had rightly disallowed this part of the claim.
In the result, we partly allow this appeal, set aside the finding of the Judicial Commissioner as regards the binding nature of the contract dated 5th February, 1954.
We hold that this document embodied the terms of an agreement which was legally binding on both sides before us.
The case will now go back to the Trial Court for determination of the liabilities of the parties to each other for alleged breaches of contract except to the extent to which the findings negative the claim to demurrage and the admitted payment of Rs. 1,13,000/by the appellant to the defendants which will have to be taken into account.
The parties will bear their own costs.
P.H.P. Appeal allowed in part 462 Ltd., Calcutta vs Commissioner of Excess Profits Tax, West Bengal(1) wherein the High Court held .that when a party at whose instance the reference had been made under section 66(1) of the Indian Income tax Act, 1922 does not appear at the hearing of the reference, the High Court is not bound to answer the question referred to it and should not do so.
It is urged by Mr. Manchanda that the above decision has been followed by some of the other High Courts.
As against that Mr. Desai on behalf of the appellant has urged that the correctness of those decisions is open to question in view of the decision of this Court in the case of Commissioner of Income tax, Madras vs
section Chenniappa Mudaliar(1).
It was held by this Court in that case that an appeal filed by the assessee before the Tribunal under section 33 of the Act should be disposed of on merits and should not be dismissed in default because of non appearance of the appellant.
The Court in this context referred to section 33(4) of the Act and particularly the word "therein" used in that sub sec tion.
It is urged by Mr. Desai that as the Tribunal is bound to dispose of the appeal on merits even though a party is not present, likewise the High Court when a question of law is referred to it, should dispose of the reference on merits and answer the question referred to it.
In our opinion, it is not essential to express an opinion about this aspect of the matter, because we are of the opinion that the High Court was not functus Officio in entertaining the application which had been filed on behalf of the appel lant for re hearing the reference and disposing of the matter on merits.
A party or its counsel may be prevented from appearing at the hearing of a reference for a variety of reasons.
In case such a party shows, subsequent to the order made by the High Court, declining to answer the reference, that there was sufficient reason for its nonappearance, the High Court, in our opinion, has the inherent power to recall its earlier order and dispose of the reference on merits.
We find it difficult to subscribe to the view that whatever might be the ground for non appearance of a party, the High Court having once passed an order declining to answer the question referred to it because of the non appearance of that party, is functus officio or helpless and cannot pass an order for disposing of the reference on merits.
The High Court in suitable cases has, as already mentioned, inherent power to recall the order made in the absence of the party and to dispose of the reference on merits.
There is nothing in any of the provisions of the Act which, either expressly or by necessary implication, stands in the way of the High Court from passing an order for disposal of the reference on merits.
The courts have power, in the absence of any ex press or implied prohibition, to pass an order as may be necessary for the ends of justice or to prevent the abuse of the process of the court.
To hold otherwise would result in quite a number of cases in gross miscarriage of justice.
Suppose, for instance, a party proceeds towards the High Court to be present at the time the reference is to be taken up for hearing and on the way meets with an accident.
Suppose, further, in such an (1) (2) 463 event the High Court passes an order declining to answer the question referred to it because of the absence of the person who meets with an accident.
To hold that in such a case the High Court cannot recall the said order and pass an order for the disposal of the reference on merits, even though full facts are brought to the notice of the High Court, would result in obvious miscarriage of justice.
It is to meet such situations that courts can exercise in appropriate cases inherent power.
In exercising inherent power, the courts cannot override the express provisions of law.
Where however, as in the present case, there is no express or implied prohibition to recalling an earlier order made because of the absence of the party and to directing the disposal of the reference on merits, the courts, in our opinion, should not be loath to exercise such power provided the party concerned approaches the court with due diligence and shows sufficient cause for its non appearance on the date of hearing.
Our attention had been invited to the decision of the Alla habad High Court in Roop Narain Ramchandra (P) Ltd. vs Commissioner of Income tax, U.p.(1) wherein the High Court held that it has no power to recall an order returning a reference unanswered.
For the reasons stated above, we are unable to agree with the view taken by the Allahabad High Court in that decision.
The facts brought out in the appli cation flied on behalf of the appellant show, in our opin ion, that there was sufficient cause for the non appearance on behalf of the appellant on the date of hear ing as well as for the non filing of the paper books within time.
It also cannot be said that there was lack of dili gence on the part of the appellant in approaching of the High Court for recalling it 's earlier order and for dispos ing of the reference on merits.
We accordingly accept the appeal, set aside the order of the High Court and remand the case to it for answering the questions referred to it on merits.
Looking to all the circumstances, We make no order as to costs.
M.R. Appeal al lowed.
(1) 466 The Judgment of the Court was delivered by BHAGWATI, J. There is a house bearing No. 10 A situ ate at Khuldabagh in the city of Allahabad belonging to respondent No. 3.
This house consists of a ground floor and a first floor.
There are two tenements on the ground floor and two tenements on the first floor.
Each of the two tene ments in the first floor is in the possession of a tenant.
The tenement on the northern side of the ground floor is in the possession of respondent No. 3, while the tenement on the southern side is in the possession of the appellant as a tenant since the last over 35 years.
The appellant pays rent of Rs. 4/ per month in respect of the tenement in his occupation.
Respondent No. 3, after determining the tenan cy of the appellant, made an application before the Rent Control and Eviction Officer, Allahabad under section 3 of the U.P. Rent Control & Eviction Act, 1947 for permission to file a suit to eject the appellant on the ground that she bona fide required the rented premises in the possession of the appellant for her use and occupation.
The Rent Control & Eviction Officer, on a consideration of the evidence led before him, came to the conclusion that the need of respond ent No. 3 for the rented premises was not bona fide and genuine and on this view, he rejected the application of respondent No. 3 by an order dated 23rd February, 1972.
Respondent No. 3 preferred a revision application against the decision of the Rent Control and Eviction Officer to the Commissioner and, on the coming into force of the U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Act, 1972 (U.P. Act No. 13 of 1972), this revision application came to be transferred to the District Court under section 43 (m) of that Act and it was numbered as Civil Appeal No. 245 of 1972.
The District Judge by an order dated 12th January, 1973 agreed with the view taken by the Rent Control and Eviction Officer and dismissed the appeal.
However, within a short time thereafter, respondent No. 3 undaunted by her failure, filed an application before the Prescribed Authority on 18th January, 1974 under section 21(1) of U.P. Act No. 13 of 1972 claiming release of the rented premises in her favour on the ground that she bona fide required them for occupation by herself and the members of her family for residential purposes.
The Prescribed Authority held that Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 was attracted in the present case, since the ground floor of house No. 10 A constitute a build ing, a part of which was under tenancy of the appellant and the remaining part was in the occupation of respondent No. 3 for residential purposes, and hence it must be held to be conclusively established that the rented premises were bona fide required by respondent No. 3.
The Prescribed Au thority also went into the question of comparative hardship of the appellant and respondent No. 3 and observed that greater hardship would be caused to respondent No. 3 by refusal of her application than what would be caused to the appellant by granting it.
On this view, the Prescribed Authority allowed the application of respondent No. 3 and released the rented premises in her favour.
The appellant being aggrieved by the order passed by the Prescribed Authority prefered an appeal to the District Court, Allahabad.
The 467 District Court agreed with the view taken by the Prescribed Authority that Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 was applicable to the facts of the present case and "that fact conclusively proved that the building was bona fide required" by respondent No. 3.
But on the question of greater hardship, the District Court disagreed with the conclusion reached by the Prescribed Authority and held that the appellant was likely to suffer greater hard ship by granting the application than what respondent No. 3 would suffer by its refusal.
The District Court accordingly allowed the appeal and rejected the application of respond ent No. 3 for release of rented premises.
This led to the filing of a writ petition by respondent No. 3 in the High Court of Allahabad challenging the legali ty of the order rejecting her application.
Respondent No. 3 contended that since her bona fide requirement of the rented premises was established by reason of applicability of Explanation (iv) to section 21 (1) of U.P. Act No. 13 of 1972, the question of comparative hardship was immaterial and the District Court was in error in throwing out her application on the ground that greater hardship would be caused to the appellant by granting her application than what would be caused to her by refusing it.
The High Court while dealing with this contention observed that the Pre scribed Authority had recorded a finding of fact that "the accommodation on the ground floor constituted one building" and "the respondent was in possession of a part of the building and the land lady was in occupation of the remain ing part of the building for the residential purposes" and this finding of fact reached by the prescribed Authority was confirmed by the District court and in view of this finding which the High Court a apparently thought it could not disturb, the High Court proceeded on the basis that Expla nation (iv) to section 21 (1) of U.P. Act No. 13 of 1972 was applicable in the present case.
But the High Court went on to point out that once it was held that Explanation (iv) to section 21(1) of the U.P. Act No. 13 of 1972 was attracted, there could be no question of examining comparative hard ship, for in such a case greater hardship of the tenant would be an irrelevant consideration.
The High Court on this view allowed the writ petition, set aside the order of the District Court and allowed the application of respondent No. 3 for release of the rented premises but gave two months ' time to the appellant to vacate the same.
The appel lant being dissatisfied with this order passed by the High Court preferred the present appeal with special leave ob tained from this Court.
Now, it may be pointed out straight away that if Explanation (iv) to section 21(1) of U.P. Act No. 13 of 1972 is applica ble in the present case, the question of comparing the relative hardship of the appellant and respondent No. 3 would not arise and respondent No. 3 would straight away be entitled to an order of eviction as soon as she shows that the conditions specified in the Explanation are satisfied.
Section 21 (1), as it stood at the material time with the retrospective amendment introduced by the U.P. Urban Build ings (Regulation of Letting, Rent & Eviction) (Amendment) Act, 1976 being U.P. Act 470 accommodation which is the subject matter of tenancy.
The question thus is: what is the sense in which the word 'buil ding ' is used when it occurs for the second time in the Explanation.
The context clearly indicates that the word 'building ' is there used to denote a unit, of which the accommodation under tenancy constitutes a part and the remaining part is in the occupation of the land, lord for residential purposes.
The accommodation under tenancy and the accommodation in the occupation of the landlord together go to make up the 'building '.
The use of the word 'part ' is a clear pointer that the 'building ', of which the accommoda tion under tenancy and the accommodation in the occupation of the landlord are parts, must be a unit.
Where a super structure consists of two or more tenements and each tene ment is an independent unit distinct and separate from the other, the Explanation would be of no application, because each tenement would be a unit and not part of a unit.
It is only where there is a unit of accommodation out of which a part is under tenancy and the remaining part is in the occupation of the landlord, that the Explanation, would be attracted.
To determine the applicability of the Explana tion, the question to be asked would be whether the accommo dation under tenancy and the accommodation in the occupation of the landlord together constitute one unit of accommoda tion ? The object of the Legislature clearly was that where there is a single unit of accommodation, of which a part has been let out to a tenant, the landlord who is in occupation of the remaining part should be entitled to recover posses sion of the part let out to the tenant.
It could never have been intended by the Legislature that where a super struc ture consists of two independent and separate units of accommodation one of which is let out to a tenant and the other is in the occupation of the landlord, the landlord should, without any proof of bona fide requirement, be entitled to recover possession of the tenement let out to the tenant.
It is difficult to see what social object or purpose the legislation could have had in view in conferring such a right on the landlord.
Such a provision would be plainly contrary to the aim and objective of the legisla tion.
On the other hand, if we read the Explanation to be applicable only to those cases where a single unit of accom modation is divided by letting out a part to a tenant so that the landlord, who is in occupation of the remaining part, is given the right to evict the tenant and secure for himself possession of the whole unit, it would not unduly restrict or narrow down the protection against eviction afforded to the tenant.
This construction would be more consistent with the policy and intendment of the legislation which is to protect the possession of the tenant, unless the landlord establishes his bona fide requirement of the accom modation under tenancy.
We may point out that Mr. Justice Hari Swarup has also taken the same view in a well consid ered judgment in Chuntwo Lal vs Addl.
District fudge.
Alla habad(1) and that decision has our approval.
Since the question as to the applicability of Explana tion (iv) on the facts of the present case has not been considered by the High Court as well as the lower courts on the basis of the aforesaid construction of the Explanation, we must set aside the judgment of the High Court as also the order of the District Court and remand the case to the District Court with a direction to dispose it of in the light 471 of the interpretation placed by us on the Explanation, It was contended before us on behalf of the appellant that since Explanation (iv) has been omitted by U.P. Act No. 28 of 1976, respondent No. 3 was no longer entitled to take advantage of it and her claim for possession must fail.
But the answer given by respondent No. 3 to this contention was that the omission of Explanation (iv) was prospective and not retrospective and since Explanation (iv) was in force at the date when respondent No. 3 filed her applica tion for release, she had a vested right to obtain release of the rented premises in her favour by virtue Explanation (iv) and that vested right was not taken away by the pro spective omission of Explanation (iv) and hence she was entitled to rely on it despite its omission by U.P. Act No. 28 of 1976.
We have not pronounced on these rival conten tions since we think it would be better to leave it to the District Court to decide which contention is correct.
If the District Court finds that by reason of the omission of Explanation (iv) by U.P. Act No. 28 of 1976 respondent No. 3 is no .longer entitled to rely on it to sustain her claim for release of the rented premises in her favour, it will be unnecessary for the District Court to examine the further question as to whether Explanation (iv) is attracted on the facts of the present case, If, on the other hand, District Court finds that the omission of Explanation (iv) by U.P. Act No. 28 of 1976 being prospective and not retrospective, respondent No. 3 is entitled to avail of that Explanation, the District Court will proceed to decide whether the two tenements or the .around floor constituted one single unit of accommodation so as to attract the applicability of Explanation (iv) and for this purpose, the District Court may, if it so thinks necessary, either take further evidence itself or require further evidence to be taken by the Pre scribed Authority.
If the District Court finds that the case is covered by Explanation (iv), there would be no ques tion of examining comparative hardship of the appellant and respondent No. 3, and respondent No. 3 would straight away be entitled to an order of release of the rented premises in her favour.
On the other hand, if the District Court comes to the conclusion that by reason of the omission of Explanation (iv) of the U.P. Act No. 28 of 1976 respondent No. 3 is not entitled to rely on it or that Explanation (iv) is not applicable on the facts of the present case, the application of respondent No. 3 would fail, since it has already been found by the District Court and we do not ' propose to disturb this finding that the appellant would suffer greater hardship by granting of the application than what would be suffered by respondent No. 3 if the application were to be refused.
We accordingly remand the matter to the District Court with no order as to costs.
P.H.P. Appeal allowed.

Output:
The appellant.company sued Mr. & Mrs. Sequeira for recovery of certain amounts under two contracts of supply of iron ore.
The first contract was signed by Ramesh holder of a power of attorney of Sequeiras and the second contract was signed by Ramesh 's father as the agent of Ramesh.
Under the two contracts Sequeiras were supposed to supply and load iron ore and were liable to pay demurrage in case of delay in loading the ship and were entitled to receive certain despatch money if the loading was made earlier.
Sequeiras filed their counter claims.
The Court did 'not arrive at a definite conclusion about the quantity of ore supplied and left that to be determined in execution proceedings.
The court found that the first contract was binding between the appellant and Sequeiras as it had been ratified by Sequerias and acted upon by the appellant.
The court, however, held that the second contract was not 'binding on Sequeiras as Ramesh had a limited authority and, therefore, he could not constitute his father his attorney for the purposes of executing the second agreement.
The trial Court also found that the appellant had committed breaches of the contract but left the quantum of damages to be determined in execu tion proceedings.
The decree of the .trial Court was sub stantially confirmed in appeal by the Additional Judicial Commissioner.
HELD: 1.
The Judicial Commissioner erred in concentrat ing on only one dictionary meaning of.
the word "exploita tion" used in the power of attorney executed by Sequeiras m favour of Ramesh.
The court, while interpreting a power of attorney, has to construe the document as a .whole m the light of its purpose and surrounding circumstances and the transactions meant to be governed by it.
Practice and custom have also some bearing on the nature and effect of the power of attorney.
The purpose of the powers conferred on the power of attorney have to be ascertained having regard to the need which gave rise to the execution of the docu ment, the practice of the parties and the manner in which parties themselves understood the purpose of the document.
The powers.
which are absolutely necessary and incidental to the execution of the ascertained purposes of the general powers given must be necessarily implied.
Applying the above rules of interpretation the court came to the conclu sion that Ramesh had power to appoint an agent to execute the contract in question and therefore the second .contract was also binding on Sequeiras [454A B, 456A H] Bryant, Powls, and Bryant, Limited vs La Banque De Peuple etc.
@ 177 and 179 and Jonmenjoy Coondoo vs George ,Alder Watson, @ 912 approved.
O.A.P.R.M.A.R. Adaikappa Chettiar vs Thomas Cook & Son (Bankers) Ltd. , distinguished.
The implied powers cannot go beyond the scope of the general object tances do not derrogate from the width of the general power initially conferred of the power of attorney but must necessarily be subordinated to it Specific in to such a case ejusdem generis cannot be applied.
The mode of construing a document and the rules to be applied to extract its meaning correctly depends upon not only the nature and object but also upon the frame, provisions, and language of the documents.
In cases of uncertainty the rule embodied in proviso 2 to section 92 of the Evidence Act which is ap plicable to contracts can be invoked.
452 The ultimate decision of such a matter turns upon the prac tice and particular facts of each case.
[458D P] 3.
The findings arrived at by the Appellate Court that Sequeiras were prevented from performing their part of the contract, owing to the failure of the appellant to provide either sufficient lighting or enough winches to enable due performance of the contract, is unexceptionable.
The Judi cial Commissioner rightly concluded that the company had not discharged its own part of the contract so that it could not claim demurrage or damages.
[458 G H] The court partly allowed the appeal and remanded the matter back to the trial court for determining the liabili ties of the parties in the light of the judgment.
[459E F]


Input:
ivil Appeal No. 1201 of 1976.
From the Judgment and Order dated 3.8.76 of the Allahabad High Court in Civil Miscellaneous Writ No. 12204 of 1975.
Appellant in person.
Dileep Tandon and R.B. Mehrotra for the Respondents.
The Judgment of the Court was delivered by NATARAJAN, J.
This appeal by special leave by a tenant is directed against the dismissal of Civil Miscellaneous Writ No 12204 of 1975 by the High Court of Allahabad.
The second respondent became the owner of a house bearing Municipal No. 140 (old No. 94 A) in Hewett Road, Allahabad under a gift deed executed in his favour by his mother in 1945.
However even in 1944, his father had leased the house to the appellant on a monthly rent of Rs.30 which after some years was raised to Rs.35 The house is a three storeyed building and the appellant was residing in the first and second floors and running a drug store belonging to his wife in the ground floor.
Some years later the second respondent 's father leased out an adjacent building also to the appellant for being used for the drug store business.
In 1967 it became necessary for the second respondent to seek recovery of possession of the house because his elder brother, with whom he was living, asked him to find accommodation elsewhere.
Therefore the second respondent applied for permission under Section 3 of the U.P. (Temporary) Control of Rent and Eviction Act 1947 (hereinafter referred to as the 1947 Rent Act) to the Prescribed Authority to file a suit for eviction against the PG NO 725 appellant on the ground of urgent and reasonable requirement of the house for his own occupation.
The Prescribed Authority rejected the application on November 10, 1967.
After the 1947 Rent Act came to be replaced by the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act 1972 (hereinafter the 1972 Rent Act), the second respondent again sought the permission of the Prescribed Authority to file a suit against the appellant but this time he sought for recovery of possession of the leased premises either fully or partially.
He averred in the application that since his brother had asked him to vacate his house he had taken up residence in a single room in the house of one Srivastava and was living there in great hardship and as such he wanted to recover possession of his house in its entirety failing which at least a portion of it.
The Prescribed Authority refused to grant permission on the ground the application had been made within a period of six months from the commencement of the 1972 Rent Act and hence it was barred by Rule 18(1) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Rules, 1972 (hereinafter the Rules).
The Appellate Authority, however, differed from the Prescribed Authority and granted permission to the second respondent to recover possession of the ground floor portion of the house alone.
Thereupon the appellant moved the High Court under Article 226 of the Constitution for issuance of a writ to quash the order of the Appellate Authority but did not meet with Success and hence this appeal by special leave.
A few facts may first be noticed before the appellant 's contentions are set out and examined.
Admittedly, the second respondent became the owner of the leased premises in the year 15145 under a gift settlement made by his mother and except the leased building he has no other house.
It is also an admitted fact that when the first Application for permission to sue was made, the second respondent was living with his brother but subsequently he had to move out of that house and take up residence in a single room in a building belonging to one Srivastava.
A Commissioner appointed by the Court had inspected the room occupied by the second respondent and found that the second respondent was faced with acute shortage of space and that the bath room and latrine were situated in the ground floor which was in the landlord 's occupation.
While the prayer in the first application was for the release Of the entire house, the prayer in the second application was for release of the whole house or in the alternative for the release of at least a portion of the house.
PG NO 726 Coming now to the contention of the appellant, who is a member of the bar and who appeared in person and argued the case for himself.
they were as follows: 1.
The application made under the 1972 Rent Act was a second application for release of the house on the same ground of requirement and hence it was barred under Rule 18(1) of the Rules since it had been made within six months from the commencement of the 1972 Rent Act.
The High Court 's view that the second application was not barred under Rule 18(1) because it is the circumstances of requirement and not the nature of the requirement that would constitute the ground of eviction is erroneous and unsustainable.
The Act and the Rules do not permit the creation of two dwelling units in a building covered by a single tenancy and hence the grant of permission for partial eviction is bad in law.
The Appellate Authority has erred in rendering a finding against the appellant in the matter of comparative hardship merely because the appellant had another building adjacent to the leased premises for running the drug store.
In any event, the Appellate Authority and the High Court have failed to notice that without the ground floor, the first and second floors cannot be used as residence because the bath and toilet rooms are situated only in the ground floor. 'The learned counsel for the second respondent.
besides refuting the above contentions of the appellant argued that the appeal itself has become unsustainable because the appellant has vacated the building in the year 1976 itself and taken up residence in another house belonging to his wife and consequently by reason of Explanation (1) to Section 21 of the 1972 Rent Act, he is disentitled to dispute the second respondent 's right to recover possession of the house.
We will now consider the contentions of the appellant in seriatum In so far as the first contention is concerned, it suffers from a fallacy in that it is founded upon a misconstruction of Rule 18 (1) The Rule in question is worded as under: 18.
Avoidance of multiplicity of proceedings (Section 38(4) and 41) (l) Where an application of a landlord against any tenant for permission to file a suit for PG NO 727 eviction under Section 3 of the old Act, on any ground mentioned in Section 21(1) has been finally allowed or rejected on merits either before or after the commencement of the Act, whether by the District Magistrate or on revision by the Commissioner or the State Government or under clause (i) or clause (m) of Section 43(2) by the District Judge, and the landlord instead of filing a suit for eviction makes an application under Section 21 on the same ground within a period of six months from such decision or from the commencement of the Act, whichever is later, the Prescribed Authority shall accept the findings in those proceedings conclusive. " (emphasis supplied) Provided that the period during which the operation of any permission as aforesaid is stayed by order ot ' any court or authority shall be excluded in computing the said period of six months (2) . . omitted.
On a reading of Rule 18(1), it may be seen that the Rule does not prohibit or bar the filing of an application for release of any building on any ground mentioned in Section 21( 1) within a period of six months from the date on which a final order was passed in the previous application made under Section 3 of the 1947 Rent Act or within a period of six months from the commencement of the Act.
All that the Rule says is that it a second application is made for release of the house on which permission to sue was sought in the previous application on the same ground within a period of six months from the date of the final order in that application or within six months from the commencement of the Act whichever is later," the prescribed authority shall accept the findings in those proceedings as conclusive.
" The Rule only sets out a rule of presumption to be followed by the Prescribed Authority for dealing with an application for release on the same ground without a sufficient interval of time between the filing of the two petitions The Rule does not mandate that a second application preferred on the same ground within a period of six months from the date of the order in the previous application or from the commencement of the Act must necessarily be dismissed as barred under the Rules.
The first contention of the appellant is therefore obviously misconceived and cannot therefore be sustained PG NO 728 In so far as the second contention is concerned, the appellant is right when he says that the earlier application under Section 3 of the 1947 Rent Act and the later application under Section 21(1) of the 1972 Rent Act should be construed as having been made on one and the same ground viz. bona fide requirement of the premises by the second respondent for his own occupation.
The High Court has however taken the view that the ground of eviction in the two applications is not the same because different sets of circumstances would constitute different grounds and such a test is satisfied in this case.
We do not think it necessary to go into the question whether the High Court 's view is correct or not because even if we treat the two applications as having been made on the same ground, the second application would not attract the operation of Rule 18(1).
Since the Rule contains only a formula of presumption based on facts, it goes without saying that the prescription is only of a directory nature and not of a mandatory nature.
In this context we may appositely refer to the following passage in Phipson on Evidence (Thirteenth Edition) at pages 4 and 5: "Presumptions are either of law or fact.
Presumptions of law are arbitrary consequence expressly annexed by law to particular facts; and may be either conclusive, as that a child under a certain age is incapable of committing any crime; or rebuttable, as that a person not heard of for seven years is dead, or that a bill of exchange has been given for value.
Presumptions of fact are inferences which the mind naturally and logically draws from given facts, irrespective of their legal effect.
Not only are they always rebuttable, but the trier of fact may refuse to mke the usual or natural inference notwithstanding that there is no rebutting evidence.
" Besides it is a well known principle that in the interpretation of statutes that where the situation and the context warrants it, the word "shall" used in a Scction or Rule of a statute has to be construed as "may".
The present context is one such where the words "the Prescribed Authority shall accept the findings in those proceedings as conclusive" have to be read as "the Prescribed Authority may accept the findings in those proceedings as conclusive" because the findings are based upon existence of facts.
We may now set out the reason as to why the prescription in Rule 18(1) should be construed as only PG NO 729 directory and not mandatory In the first place, the Rule envisages two kinds of situations, one of them where the second application is made within an interval of six months from the date on which final orders were passed in the previous application and the other where the second application is made beyond an interval of six months, which may even go up to several years, as in this case where the interval was over five years, but within six months of the Act coming into force.
Surely, the legislature would not have intended that the interval factor in the two sets of situations should be visited with the same consequences by adopting a rigid and inflexible application of the prescriptive guideline given in Rule 18(1) .
The second factor is that even if the interval factor is the sole criterion for the application of the formula contained in Rule 18(1), the legislature could not have intended that even where drastic changes had taken place subsequent to the disposal of the earlier application, the prescribed authority should shut his eyes to the realities of the situation and blindly and mechanically apply the formula in Rule 18(1) and reject the second application.
To cite a few examples it may be that after the disposal of the first application, the landlord had been rendered houseless due to the house occupied by him falling down due to decay or heavy rains or being destroyed by fire Could any one say that irrespective of the changes that have taken place, the findings rendered in the previous application would have the force of relevancy till the period of six months fixed under the Rule has expired? It is, therefore, manifest that the rule of presumption enunciated in Rule 18(1) is only to serve as a guideline to be followed by the prescribed authority if he finds the circumstances to remain unchanged and the finding rendered in the earlier application to have relevancy even with reference to the facts set out in the second application the Rule intended to avoid multiplicity of proceeding as the very heading given to the Rule would make it clear It will therefore be inequitable and unrealistic to construe Rule 18 (1) as containing an inexorable legal prescription for rejecting a second application filed within the prescribed time limit solely on the basis of the findings rendered in the earlier application.
In this case we have already referred to the fact that after the first application was rejected, the living conditions ot ' the second respodent had changed materially He had been turned out of his brother 's house and forced to take up residence in a single room belonging to a third party and live there in great discomfort and hardship In the plight in which he was placed, he was even prepared to accept partial release of the house it ' he could not get release of the entire premises.
The long interval of time PG NO 730 between the rejection of the first application and the date of making the second application viz. about five years and the significant changes that had taken place during the interval in the living conditions of the second respondent undoubtedly rendered irrelevant the earlier findings and such being the case the rule of presumption given in Rule 18(1) can have no application or relevance to the second application.
Viewed in this manner, we do not think the Appellate Authority or the High court has committed any error in granting the relief of partial release of the house to the respondent Hence the second contention of the Appellant has also to fail.
So far as the third contention is concerned viz. the impermissibility of creating two dwelling units in a single tenanted premises, the argument fails to note that Section 21(1) provides for an order of eviction being passed against a tenant "from the building under tenancy or any specified part thereof." (Emphasis supplied).
We do not therefore find any error in the second respondent being granted the relief of partial eviction.
As regards the fourth contention, it is admitted that the appellant had been given an additional building by the second respondent 's father for being used for the drug store business Since the appellant was using the ground floor in the suit premises only for running his wife 's drug store and was not living there in the Appellate Authority cannot be said to have committed any error in taking the view that in the matter of comparative hardship the second respondent would be the more affected person if eviction was not ordered than the appellant by an order of partial eviction being passed because he had another building and could conveniently shift his business to that building.
Coming to the last contention of the appellant viz the unsuitability of the first and second floors for residential purpose without the use of the bath and toilet rooms in the ground floor, it is open to the appellant to move the Prescribed Authority for directions being given to the second respondent to make suitable provision in the ground floor for the appellant and his family members to have access to and make use of the bath and toilet rooms in the ground floor.
As regards the contention of the respondent that the appellant and his wife are now living in a house belonging to the appellant 's wife and as such the appellant is precluded under Explanation (i) to Section 21(1) of the 1972 Rent Act from resisting the second respondent 's suit for eviction, we are unable to make any pronouncement on it because of lack of evidence in support of that plea and PG NO 731 besides the appellant would say that the house now occupied by him and his wife is the subject matter of a litigation between his wife and her uncle.
In the light of our conclusions, the appeal fails and is accordingly dismissed.
There will, however, be no order as to costs.
R.S.S. Appeal dismissed.

Output:
In 1967 the second respondent landlord applied to the Prescribed Authority, under section 3 of the U.P. (Temporary) Control of Rent and Eviction Act, 1947 for permission to file a suit for eviction against the appellant tenant on the ground of his own requirement because his brother with whom he was living had asked him to find accommodation elsewhere.
This application was rejected.
After the 1947 Rent Act was replaced by the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act 1972, the second respondent again sought the permission of the Prescribed Authority for recovery of possession of the leased premises either fully or partially, on the ground that he was living in great hardship in a single room in a house.
The Prescribed Authority refused to grant the permission on the ground that the application had been made within a period of six months from the commencement of the 1972 Rent Act and hence it was barred by Rule 18 (1) of the U.P. Urban Buildings (Regulation of letting, Rent and Eviction) Rules, 1972.
The Appellate Authority, however, granted permission to the second respondent to recover possession of the ground floor portion of the house.
The appellant moved a petition in the High Court against the order of the Appellate Authority but did not succeed.
Before this Court the appellant contends that(l) a second application on the same ground made within six months from the commencement of the 1972 Act was barred under Rule 18 (1) of the 1972 Rules; (2) the High Court 's view that it is not barred because it is the circumstances of requirement and not the nature of the requirement that would constitute PG NO 722 PG NO 723 the ground of eviction is erroneous and unsustainable (3) the Act and the Rules do not permit the creation of two dwelling units in a building covered by a single tenancy; (4) the Appellate Authority has erred in rendering a finding against the appellant in the matter of comparative hardship; and (5) the Appellate Authority and the High Court have failed to notice the without the ground floor, the first and second floors cannot be used as residence because the bath and toilet rooms are situated only in the ground floor.
Dismissing the appeal, it was, HELD: (I) All that Rule 18(1) says is that if a second application is made for release of the house on which permission to sue was sought for in the previous application on the same ground within a period of six months from the date of the final order in that application or within six months from the commencement of the Act, whichever is later, 'the prescribed authority shall accept the findings in those proceedings as conclusive." [727E Fl (2) Even if the two applications are treated as having been made on the same ground, the second application would not attract the operation of Rule 18(1) since the Rule contains only a formula of presumption based on facts.
The prescription of the rule is only of a directory nature and not of a mandatory nature [728C] (3) In the interpretation of statutes, where the situation and the context warrants, the word "shall" used in a section or rule has to be construed as "may".
The present context is one such where the words "the prescribed Authority shall accept the findings in those proceedings as conclusive" have to be read as "the Prescribed Authority may accept the findings in those proceedings as conclusive" because the finding are based upon existence of facts.
[728(, H] (4) It will be inequitable and unrealistic to construe Rule 18(1) as containing an inexorable legal prescription for rejecting a second application filed within the prescribed time limit solely on the basis of the findings rendered in the earlier application.
[729F] (5) The long interval of time between the rejection of the first application and the date of making the second application viz., about five years, and the significant changes that had taken place during the interval in the living conditions of the second respondent undoubtedly rendered irrelevant the earlier findings.
[730A B] PG NO 724 (6) Section 21(1) provides for an order of eviction being passed against a tenant 'From the building under tenancy or any specified part thereof." [730C] (7) It is open to the appellant to move the Prescribed Authority for directions being given to the second respondent to make suitable provision in the ground floor for the appellant and his family members to have access to and make use of the bath and toilet rooms in the ground floor.
[730G]