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Appeal No. 84 of 1957.
Appeal from the judgment and decree dated November 7, 1955, of the Bombay High Court in Appeal No. 629 of 1955, arising out of the judgment and decree dated August 9, 1955, of the.
City Civil Court, Bombay, in Suit No. 2178 of 1954.
A.V. Viswanatha Sastri and I. N. Shroff, for the appellants.
Purshotam Tricumdas and C. P. Lal, for the respondents.
March 31.
The following Judgment of the Court was delivered by IMAM J.
The sole question considered and decided by the High Court was whether the suit filed by the appellants in the City Civil Court could be entertained by that Court, having regard to the provisions of section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Act).
The High Court was of the opinion that the City Civil Court had no jurisdiction to entertain the suit.
It did not pronounce any opinion on the merits of the appellants ' case.
The only question which requires con sideration in this appeal is whether the High Court correctly decided that the City Civil Court had no jurisdiction to entertain the suit filed by the appellants.
The first plaintiff in the suit before the City Civil Court, was a tenant of the premises in question under the first defendant.
The second and third plaintiffs were persons to whom the said premises were sublet by 369 the first plaintiff.
The first defendant as landlord of the premises in suit gave notice to quit to the first plaintiff on December 6, 1947.
Thereafter, he filed suit ' No. 483/4400 of 1948 in the Court of Small Causes Bombay on April 29,1948, whereby he sought to evict the first plaintiffs To that suit the first defendant also made the second and the third plaintiffs parties alleging that they were trespassers and had no right to be on the premises.
The Small Cause Court held that the second and third plaintiffs were not lawful subtenants and the subletting by the first plaintiff to them being contrary to law the latter had deprived himself of the protection of the Act.
It accordingly passed a decree for eviction of all the plaintiffs of the present suit.
An appeal against the decree was unsuccessful and a revisional application to the High Court of Bombay was summarily dismissed by that Court.
Thereafter, the present suit No. 2178 of 1954 was filed by the appellants in the Bombay City Civil Court on September 20, 1954.
In this suit the appellants prayed for a declara tion that the first plaintiff was a tenant of the defendants and was entitled to protection under the Act and that the second and the third plaintiffs were lawful subtenants of the first plaintiff and were entitled to possession, use and occupation of the premises as subtenants thereof.
The City Civil Court held that it had jurisdiction to entertain the suit but dismissed the suit on the ground that there bad been no lawful subletting, by the first plaintiff of the premises to the second and the third plaintiffs as the provisions of section 10 of the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944 (Bombay Act No. VII of 1944) (hereinafter referred to as the Bombay Rents Act, 1944) had not been properly complied with.
Against that decision the appellants appealed to the Bombay High Court which was dismissed.
The High Court disagreed with the view of the Judge of the City Civil Court that he had jurisdiction to entertain the suit but did not record any decision on the merits of the appellants ' case.
The preamble of the Act states that it was expedient 47 370 to amend and consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions.
The entire provisions of the Act read as a whole show that the Act was passed to achieve that purpose.
The Act defines " landlord " to mean " any person who is for the time being, receiving, or entitled to receive, rent in respect of any premises whether on his own account or on account, or on behalf, or for the benefit of any other person or as a trustee, guardian, or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant ; and includes any person not being a tenant who from time to time derives title under a landlord; and further includes in respect of his subtenant a tenant who has sublet any premises " and " tenant " to mean " any person by whom or on whose account rent is payable for any premises and includes (a) such subtenants and other persons as have derived title under a tenant before the coming into operation of this Act, (a) any person to whom interest in premises has been transferred under the proviso to section 15, (b) any person remaining, after the determination of the lease, in possession, with or without the assent of the landlord, of the premises leased to such person or his predecessor who has derived title before the coming into operation of this Act, (c) any member of the tenant 's family residing with him at the time of his death as may be decided in default of agreement by the Court.
" Section 12 gives protection to a tenant from eviction if he pays or is ready and willing to pay standard rent and permitted increases.
Section 13 states the grounds upon which the landlord is entitled to recover possession of any premises.
Amongst the numerous grounds one is if the tenant had since the coming into operation of the Act sublet the whole or part of the premises or assigned or transferred in any other manner his interest therein.
Section 14 states: ,,Where the interest of a tenant of any premises is determined for any reason, any subtenant to whom the premises or any part thereof have been lawfully 371 sublet before the coming into operation of this Act shall subject to the provisions of this Act, be deemed to become the tenant of the landlord on the same terms and conditions as he would have held from the tenant if the tenancy had continued.
" Section 28 of the Act deals with jurisdiction of courts and it states: " (1) Notwithstanding anything con tained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction, (a) in Greater Bombay, the Court of Small Causes, Bombay, (aa) in any area for which, a Court of Small Causes is established under the Provincial Small Cause Courts Act, 1887, such Court and (b) elsewhere, the Court of the Civil Judge (Junior Division) having jurisdiction in the area in which the premises are situate or, if there is no such Civil Judge, the court of the Civil Judge (Senior Division) having ordinary jurisdiction, shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this Part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions and subject to the provisions of subsection (2), no other court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question." Section 29 deals with appeals.
It provides that there will be no further appeal from the appellate order.
Section 29A, however, states that nothing contained in sections 28 or 29 shall be deemed to bar a party to a suit, proceeding or appeal mentioned therein in which a question of title to premises arises and is determined, from suing in a competent court to establish his title to such premises.
The plaint in the suit filed by the appellants in the City Civil Court clearly asserts that the first plaintiff was entitled in law to sublet the premises in question to the second, and third plaintiffs and that there had been a lawful subletting of the premises to them.
It 372 was not necessary for the first plaintiff to comply with the provisions of section 10 of the Bombay Rents Act, 1944.
It further alleged that the Appeal Court of Small Causes of Bombay erred in holding that the first plaintiff could sublet the premises only if he had complied with the provisions of section 10 of the aforesaid Act.
According to para.
11 of the plaint the plaintiffs asserted that they were always ready and willing to pay the rent in respect of the said premises and to observe and perform the terms and conditions of the tenancy.
Paragraph 12 states the declaration which the plaintiffs prayed for in the suit, which is in the following terms: " The plaintiffs submit that they are entitled to a declaration that 1st plaintiff is a tenant of the said premises within the meaning of the Bombay Rents, Hotel and Lodging House Rates Control Act of 1947, and that the 2nd and 3rd plaintiffs are entitled to the possession, use and occupation of the said premises as the lawful subtenants of the 1st plaintiff in respect of the said premises".
Clauses (a) and (b) of para.
18 of the plaint contain the relief sought by the plaintiffs.
They are in substance what is stated in para.
12 though separately stated for the first plaintiff and second and third prayer in cl.
(c) of the defendants, their plaintiffs respectively.
The para an injunction against servants or agents restraining them from proceeding further with the execution of the decree of the Court of Small Causes in suit No. 483/4400 of 1948.
It is manifest from the assertion in the plaint and the nature of the relief asked for that the plaintiffs based their case on the provisions of the Act.
According to them, the Act gave the first plaintiff protection and the second and third plaintiffs were entitled to remain in possession as subtenants of the first plaintiff.
They accordingly sought to avoid eviction by seeking an injunction against the execution of the decree for eviction.
One of the grounds upon which a landlord is permitted to evict a tenant under section 13 of the Act is that he has since the coming into operation of the Act, sublet the premises or assigned or transferred in any other manner his interest therein.
The 373 Act, however, saved a subletting before its commencement, provided the premises had been lawfully sublet.
"Tenant " in the Bombay Rents Act, 1944, means " any person by whom or on whose account rent is payable for any premises, and includes every person I from time to time deriving title under a tenant.
" It was never pretended here or in the High Court, as indeed it could not be, that outside the Act a subtenancy would continue to subsist and the sub tenant would become the tenant when the principal tenancy itself had been lawfully terminated.
As the definition of "tenant " in the Bombay Rents Act, 1944, included a subtenant, that Act required, under section 10, certain conditions to be complied with for the creation of a lawful subtenancy, as a statutory status of a tenant was being conferred on a subtenant unknown to the ordinary law.
Even a lawful termination of the principal tenancy would not affect the subtenant.
In suit No. 483/4400 it was finally held by the Appeal Court that the first plaintiff had not lawfully sublet the premises and as his tenancy had been terminated he and his subtenants were liable to be evicted.
The plaintiffs seek for a redetermination of these very questions in the suit filed by them in the City Civil Court.
The plaintiffs rely upon section 29A of the Act in justification of the suit filed by them in the City Civil Court.
According to them, questions of title are expressly allowed to be reagitated in a competent Civil Court other than those specified in section 28 even if such a question arose and was determined by a court exercising jurisdiction under that section.
This contention of the plaintiffs makes it necessary to construe the provisions of sections 28 and 29A of the Act.
In a suit for recovery of rent where admittedly one party is the landlord and the other the tenant, section 28 of the Act explicitly confers on courts specified therein jurisdiction to entertain and try the suit and expressly prohibits any other court exercising jurisdiction with respect thereto.
Similarly, in a suit relating to possession of premises where the relationship of landlord and tenant admittedly subsists between the parties, jurisdiction to entertain and try such a suit is in the 374 courts specified in section 28 and no other.
All applications made under the Act are also to be entertained and disposed of by the courts specified in section 28 and no other.
In all such suits or proceedings the courts specified in section 28 also have the jurisdiction to decide all claims or questions arising out of the Act or any of its provisions.
The words employed in section 28 make this quite clear.
Do the provisions of section 28 cover a case where in a suit one party alleges that he is the landlord and denies that the other is his tenant or vice versa and the relief asked for in the suit is in the nature of a claim which arises out of the Act or any of its provisions ? The answer must be in the affirmative on a reasonable interpretation of section 28.
Suit No. 483/4400 of the Court of Small Causes, Bombay was admittedly by a landlord.
Eviction of the tenant and those to whom he had sublet the premises was sought on the ground that the latter were trespassers and the former was not entitled to remain in possession, that is to say, that none of the defendants to that suit were protected from eviction by any of the provisions of the Act.
The suit, in substance, was a denial of the right of the defendants as tenants.
The claim of the defendants was that they were protected by the provisions of the Act.
In such a suit the claim of the defendants was one which arose out of the Act or any of its provisions and only the courts ,specified in section 28 and no other could deal with it and decide the issue.
The present suit filed in the City Civil Court raised in substance a claim to the effect that the plaintiffs were the tenants of the premises within the meaning of the Act.
Such a claim was one which arose out of the Act or any of its provisions.
The suit related to possession of the premises and the right of the landlord to evict any of the plaintiffs was denied on the ground that the first plaintiff was a tenant within the meaning of the Act and the premises had been lawfully sublet by him to the second and third plaintiffs.
The City Civil Court was thus called upon to decide whether the first plaintiff was a tenant of the premises within the meaning of the Act and whether he had 375 lawfully sublet the same to the second and third plaintiffs.
The City Civil Court, therefore, had to determine whether the plaintiffs had established their claim to be in possession of the premises in accordance with the provisions of the Act.
As the tenancy of the first plaintiff had been terminated by the landlord, this plaintiff could resist eviction only if he established his right to continue in possession under the provisions of the Act.
On the termination of the tenancy of the first plaintiff, outside the provisions of the Act, the subtenancy would come to an end and the landlord would be entitled to possession.
This could be denied to him only if the second and third plaintiffs could establish that the premises had been lawfully sublet to them and under section 14 of the Act they must be deemed to be tenants of the premises.
in other words, the City Civil Court could not decree the suit of the plaintiffs unless their claim to remain in possession was established under the Act or any of its provisions.
Independent of the Act the plaint in this suit disclosed no cause of action.
Section 28 obviously contemplates the filing of any suit relating to possession.
of any premises to which any of the provisions of Part 11 of the Act apply between a landlord and a tenant and it authorizes the court to deal with any claim or question arising out of the Act or any of its provisions in such a suit.
The suit of the plaintiffs filed in the City Civil Court certainly is one relating to possession of premises to which the provisions of Part 11 of the Act apply and in that suit claims and questions arising out of the Act or any of its provisions had to be dealt with.
It was, however, suggested that the suit in the City Civil Court was not one between a landlord and a tenant because the defendants of this suit did not admit that the plaintiffs were the tenants of the premises in question.
Section 28 applies to a suit where admittedly the relationship of landlord and tenant within the meaning of the Act subsists between the parties.
The plaint in the suit in the City Civil Court admits that the defendants were landlords of the premises at various stages and the plaintiffs were their tenants.
The suit, therefore, was 376 essentially a suit between a landlord and a tenant.
The suit did not cease to be a suit between a landlord and a tenant merely because the defendants denied the claim of the plaintiffs.
Whether the plaintiffs were the tenants would be a claim or question arising out of the Act or any of its provisions which had to be dealt with by the court trying the suit.
On a proper interpretation of the provisions of section 28 the suit contemplated in that section is not only a suit between a landlord and a tenant in which that relationship is admitted but also a suit in which it is claimed that the relationship of a landlord and a tenant within the meaning of the Act subsists between the parties.
The courts which have jurisdiction to entertain and try such a suit are the courts specified in section 28 and no other.
No doubt section 29A expressly provides that nothing contained in section 28 or section 29 shall be deemed to bar a party to a suit, proceeding or appeal, mentioned therein, in which a question of title to premises arises and is determined, from suing in a competent court to establish his title to such premises.
Even if it be assumed that a claim to a right to tenancy of premises is a question of title to the premises, is that a title which section 29A permits a party to establish in a com petent court other than that specified in section 28 ? If it is possible to avoid a conflict between the provisions of section 28 and section 29A on a proper construction thereof, then it is the duty of a court to so construe them that they are in harmony with each other.
It is possible to conceive of cases where in a suit under section 28 a question of title to premises which does not arise out of the Act or any of its provisions may be determined incidentally.
Any party to the suit aggrieved by such a determination would be free to sue in a competent court to establish his title to such premises by virtue of the provisions of section 29A.
On the other band, in a suit where a question of title entirely arises out of the Act or any of its provisions, the jurisdiction to try such a suit was exclusively vested in the courts specified in section 28 and no other.
That is to say, a title which could not be established outside the Act but 377 which arose under the provisions of the Act by virtue of a claim made thereunder must be determined by a court specified in section 28 and a title de hors the Act may be determined in any other court of competent jurisdiction.
The Act purported to amend and consolidate the law relating to the control of rents of certain premises and of evictions.
It defined " landlord " and " tenant " to have a meaning wider in scope and concept than those words have under the ordinary law.
Any one, who was a landlord or a tenant, as defined in the Act, would have to conform to the provisions of the Act and all claims to such a status would have to be determined under the provisions of the Act as they would be claims arising out of it.
The Act specially provided that the courts specified in section 28 shall have the jurisdiction to deal with any claim or question arising out of the Act or any of its provisions and expressly excluded any other court from having such jurisdiction.
It is difficult to accept the suggestion that the legislature intended, after setting up special courts under section 28 to deal with such matters, that the same should be reagitated and redetermined in another suit by a court not specified in section 28.
By enacting section 29A the legislature clearly intended that no finality should be attached to the decision of a court trying a suit under section 28 on a question of title de hors the Act.
The provisions of the Act, on the other hand, clearly indicate that all claims or questions arising out of the Act or any of its provisions, even though they may be in the nature of a title to the premises, were to be determined by the courts specified in section 28 and no other.
Some reference was made to section 49 of the which provides that recovery of possession of any immovable property under Ch.
VII of the Act shall be no bar to the institution of a suit in the High Court for trying the title thereto.
The provisions of this section render no assistance in the matter of interpretation of sections 28 or 29A.; Chapter VII of the deals with the recovery of possession of 48 378 immovable property from a person including a tenant.
The provisions of section 41 onwards prescribe a summary mode for recovery of possession which could even be stayed by the Small Cause Court if the provisions Of section 47 were complied with.
Indeed, under section 41 no claims or rights are determined.
In such a situation it is clearly understandable that nothing contained in Ch.
VII could be a bar to the institution of a suit in the High Court for trying the title to the immovable property.
In a suit under section 28 the court has to determine all questions relating to recovery of rent or relating to possession and all claims or questions arising out of the Act or any of its provisions.
Section 29 provides for an appeal against the decision of the court.
Under Ch.
VII of the there is no provision for an appeal against an order directing recovery of possession.
In our opinion, the High Court correctly decided that the suit filed by the plaintiffs, who are the appellants in this appeal, could not be determined by the City Civil Court.
On behalf of the appellants a request was made that if the appeal should fail, they may be given some time to vacate the premises.
The High Court in dismissing the appeal had directed " Decree not to be executed for a fortnight ".
In granting special leave this Court had granted an ex parte stay, staying the execution of the decree in suit No. 483/4400 of 1948 of the Court of Small Causes, Bombay until the 16th day of January, 1956 and had directed that the stay application be posted for hearing on that date.
On that (lay the application for stay was allowed on two conditions being fulfilled and on the non compliance of which the stay order would stand vacated.
On February 19, 1957, another order was passed by this Court when its attention was drawn to the non compliance of the conditions stated in the order of January 16, 1956, on the part of the appellants.
The stay order was not vacated as the appellants were ordered to do certain things and because of the undertaking given by them that they would deliver forthwith possession of the premises to the respondents in 379 the event of the appeal being dismissed or decided against them.
Having regard to the undertaking given, as also the fact that execution of the decree in suit No. 483/4400 of the Court of Small Causes, Bombay has been delayed long enough.
, we are unable to accede to the request made by the appellants.
The appeal is accordingly dismissed with costs.
Appeal dismissed.

Output:
A who was a tenant of N sub let the premises to B and C. N filed a suit for ejectment against A, B and C in the Court of Small Causes, Bombay, on the ground of illegal sub letting.
The suit was decreed.
Thereafter, A, B and C filed the present suit in the Bombay City Civil Court for a declaration that A was a tenant of N and was protected from eviction by the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, and that B and C were lawful sub tenants of A and were as such entitled to possession, use and occupation of the premises.
The City Civil Court held that it had jurisdiction to entertain the suit but dismissed it on the ground that there was no lawful subletting.
On appeal, the Bombay High Court held that the City Civil Court had no jurisdiction to entertain the suit and dismissed the appeal without going into the merits : Held, that the High Court was right in holding that section 28 of the Act barred the City Civil Court from entertaining the suit.
Section 28 explicitly confers on courts specified therein jurisdiction to entertain a suit between a landlord and a tenant in respect of a claim which arose out of the Act or any of its provisions, 368 and expressly prohibits any other court exercising jurisdiction with respect thereto.
In the present suit the claim being one which arose out of the Act, and the City Civil Court not being a court specified in section 28, it could not entertain the suit.
Though section 29A of the Act allows questions of title to be regarded in a civil court, it applies only to titles which do not arise out of the Act or any of its provisions; and titles which could riot be established outside the Act but which arose under the provisions of the Act by virtue of a claim made thereunder must be determined by a court specified in section 28.


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n Nos.11757 & 11758 of 1984.
(Under Article 32 of the Constitution of India).
WITH Civil Appeal No. 1124 of 1985.
P.P. Rao, K. Jagan Mohan Rao and Raju Ramachandran for the Petitioners.
V.C. Mahajan, Ms. A Subhashini and R.B. Mishra for the Respondent.
The Judgment of the Court was delivered by KASLIWAL, J.
The above writ petitions and appeal are disposed of by one single order as identical question of law are involved in these cases.
In order to appreciate the controversy we would narrate the facts of the writ petitions.
Shri Des Raj Bhatnagar, Petitioner DES No. 1 and Shri Ved Pal Seth, Petitioner No.2 were employees of the 359 Central Government.
The petitioner No. 1 after serving in various capacities in the Department of food of the Central Government from 24.10.1941 to 31.8.1971 (29 years and 10 months) was permanently absorbed in Food Corporation of India as Assistant on 1st September, 1971 and retired from the Government service.
The petitioner No. 2 after serving the Government in various capacities for the period from 5.11.1947 to 8.2.1972 (20 years and 3 months) was permanently absorbed on 9.2.1972 in Food Corporation of India as Sr. Asstt.
Manager and retired from the Government service.
On absorption in the Food Corporation of India, the petitioners were required to exercise either of the following two options: (a) Receiving the pro rata monthly pension and death cum retirement gratuity as admissible under the rules; and (b) Receiving the pro rata gratuity and a lumpsum amount in lieu of pension worked out with reference to commutation table obtaining on the date from which the pension was to be admissible and under the option order.
The office of the Pay and Accounts Officer, Ministry of Food and Agriculture determined the original pension payable to the petitioners per mensem.
The petitioners were sanctioned original pensions in accordance with the provisions of the Central Civil Service (Pension) Rules, 1972.
In case of petitioner No. 1 the original pension was determined at Rs. 240 per mensem payable from 1st September, 1971.In case of petitioner No. 2 the original pension admissible was determined at Rs.287 per mensem payable from 9.2.1972.
The petitioner No. I received his pension @ Rs.240 per mensem for the period from 1.9.1971 to 29.10.1972.
Petitioner No. 2 received his pension @ Rs.287 per mensem for the period from 9.2.1972 to 16.8.1972.
Under the above Rules maximum of one third of the amount of admissible pension could be commuted.
However, in the case of Government officers including Industrial Management Pool Officers who were opting for permanent absorption in Public Sector Undertakings, an option was given to commute the full amount of their original pension.
The petitioner No. I and petitioner No. 2 commuted their original pensions for a lumpsum of Rs.35,568 and Rs.43,601 on 30.10.1972 and 17.8.1972 respectively.
360 The Third Central Pay Commission was required to make its recommendations in the matter of providing relief to Government pensioners.
The Pay Commission, in order to secure Government pensioners against the continuing erosion in the value of the rupees and to recommend appropriate measures for protecting the pension of Government servants from such erosion on account of the possible increase in the case of living in future and after having considered the matter, recommended that irrespective of the amount of pension drawn by them, pensioners should be given relief at the rate of 5% of their pension subject to a minimum of Rs.5 per mensem and a maximum of Rs.25 per mensem.
The relief at those rates were recommended to be given to the Government pensioners as and when there was a 16 point rise in the 12 months average of the All India Working Class Consumer Price Index ( 1960 100).
The relief for the first time, at these rates was to be paid when the 12th monthly average of this index reached 216.
The said recommendation made by the Pay Commission was duly accepted by the Central Government.
The Ministry of Finance Office Memorandum No. F. 22(8) EV(A)/75 dated 13.2.1976 inter alia, provided that where an officer on his retirement commutes a portion of his pension he is eligible for relief and ad hoc reliefs in pension on the full amount of original pension as admissible to him.
Under the said O.M. the term 'Pension ' includes for the purposes of ad hoc relief the commuted portion of pension, if any.
The case of the petitioners is that according to these Rules, an officer who has commuted any part of this pension and an officer who has not opted for any commutation both receive the full quantum of relief and ad hoc relief on full amount of original pension.
It has thus been contended that for the purposes of grant of the full benefit of relief or ad hoc relief the Rules do not make any distinction between an officer who has sought commutation of his original pension and one who has not sought any such commutation.
The petitioner and other Government servants who opted for commutation of their original pension in accordance with the Rules are being arbitrarily and without just and reasonable cause are deprived of the relief and ad hoc relief on commutation in pursuance of the Office Memorandum dated 13.2.1976.
Though, an officer who commutes one third of his pension gets relief and ad hoc relief on the basis of original amount of his pension but whereas an officer commutes whole of his original pension is deprived of the entire amount of the relief or ad hoc relief.
The petitioners have thus contended that aforesaid Office Memorandum dated 13.2.1976 is vitiated by an inherent discrimination and is violative of Articles 14 and 16 of the Constitution.
361 The petitioners have further submitted that they are entitled to the aforesaid reliefs granted to all other Government pensioners, and the amount of relief to which pensioners are entitled and has been denied to them under the impugned Office Memorandum dated 13.2.
1976 works out to Rs. 13,592 and Rs. 15,040 in case of petitioner No. 1 and petitioner No. 2 respectively upto 29.2.1984.
The Ministry of Finance in their Office Memorandum No. 2(8)/EV/82 dated 10.10.1983 has sanctioned the grant of relief and ad hoc reliefs to Government servants who retired prior to 10th September, 1979 @ 92.5% of their original pension subject to minimum of Rs.93 and maximum of Rs.463 with effect from 1st July, 1983.
This has been done by taking in view the decline in the purchasing power of the rupee and the original sanction being insufficient and meagre to sustain the pensioners.
Apart from the above the petitioners have submitted that they are also entitled to the benefit of Liberalised Pension Formula of 1979,which was introduced vide the Finance Ministry 's Office Memorandum No. F. 19(37)/EV/79 dated 25.5 1979, in respect of the approved pensionable service rendered by them in the Central Government as admissible to other pensioners who retired from Government service between 17.4.1950 to 31.3.1979.
The said Memorandum was made applicable only to those Government servants who retired from service on or after 31.3.1979.
However, this Court in D.S. Nakara & Others vs Union of India, ; held that all Central Government pensioners governed by the Central Civil Service (Pension) Rules, 1972 were entitled to pension w.e.f.
1.4.1979 as computed under the Liberalised Pension Formula irrespective of the date of their retirement.
Placing reliance on the above decision it has been claimed that there should be no discrimination between the applicability of the Liberalised Pension Formula to pre 31.3.1979 pensioners and there is no just and reasonable cause in denying such benefit to the petitioners under the impugned Office Memorandum No. F. 1(3)/EV/83 dated 22.10.1983.
Clause 5 of the Office Memorandum dated 22.10.1983 reads as under: "Central Government employees, who got themselves absorbed under Central Public sector undertaking/autonomous bodies prior to 1.4.1979 and have received/or opted to receive commuted raise for 1/3rd of pension as well as terminal benefit equal to the commuted value of the 362 balance amount of pension left after commuting 1/3rd, of pension, are not entitled to any benefit under these orders as they were not Central Government pensioners as on 1.4.79.
In cases where only a portion of pension has been commuted the pension will have to be enhanced in accordance with these orders with effect from 1.4.1979".
The above clause makes it clear that such Central Government employees, who got themselves absorbed under Central Public Sector Undertakings prior to 1.4.1979 and opted to receive commuted raise for 1/3rd of pension as well as terminal benefit equal to the commuted value of the balance amount of pension left after commuting 1/3rd of pension were not entitled to any benefit as they were not Central Government pensioners as on 1.4.1979.
An identical writ petition No. 1068/1987 under article 32 of the constitution was filed on behalf of the Welfare Association of absorbed Central Government Employees in Public Enterprises and this Court dismissed the said writ petition on April 12, 1990.
In the said writ petition benefit of Judgment of this Court in "Common Cause" a Registered Society & Ors.
vs Union of India, [ ; was claimed but the same was negatived by making a distinction that the Writ Petition "Common Cause" was on behalf of the Government servants who had commuted their pension partially and this Court for the reasons indicated in the judgment came to hold that on the expiry of 15 years from the date of commutation the entire pension revived.
The petitioners were persons who had, at the time of retirement from Government service and entering into public sector had taken the advantage of commuting the entire pension.
They certainly belong to a class different from those whose case was before this Court at the instance of the common cause in Writ Petition Nos.
1955 61 of 1983.
It was further held in the above case that the commutation does bring certain advantages to the committees and the class of Government officers whom the petitioner seeks to represent have derived such benefits. ' We find no reason to take a different view.
The commutation brings about certain advantages.
The commuting pensioner gets a lumpsum amount which ordinarily he would have received in the course of his spread over period subject to his continuing to live.
Thus, two advantages are certainly forthcoming out of commutation (1) availability of a lumpsum amount, and (2) the risk factor.
In the present case the petitioners had not only got 1/3rd of their pension commuted but exercised the option of getting the entire pension commuted and in lieu thereof got a lumpsum.
Such persons cannot fall in 363 the category of Central Government pensioners for the purposes of getting benefit of Liberalised Pension Rules which can be made applicable only to Central Government Pensioners.
It is no doubt correct that the family pension has been allowed in case of the persons like the petitioners but that does not make them entitled to get any benefit given to the pensioners on account of the liberalised Pension Rules taking note of the fallen value of the rupee.
It was contended by Mr. Rao on behalf of the petitioners that the petitioners are not claiming any pension but their contention is that the Liberalised Pension Rules which given benefit to those pensioners who had got their 1/3rd pension commuted should be granted to the petitioners by awarding lumpsum after increasing their pension and calculating such amount in proportion to the increased pension.
We find no force in this contention as the petitioners fall in a different class altogether and are not entitled to claim any benefit granted to Central Government pensioners.
After getting a lumpsum in lieu of entire pension, they do not fall in the class of Central Government pensioners and are not entitled to any benefit granted to Central Government pensioners.
The case of such Central Government pensioners who got their 1/3rd pension commuted also fall in a different class in as much as they get 2/3rd pension, and after 15 years of such commutation or having attained the age of 70 years whichever was later they become entitled to full pension.
Petitioners on the other hand were not entitled to any pension after having received the lumpsum amount in lieu of pension being commuted and having opted to receive such amount in lumpsum at the time of entering the service in Public, Sector Undertaking.
In the above mentioned civil appeal the legal question is identical except that the appellant in this case became a pensioner of the Central Government w.e.f.
1.4.1977 and the pension determined as payable to him was Rs.609 per month and the same was got commuted by the appellant for a lumpsum amount on and from 7.8.1978.
The appellant had exercised the option for absorption in Steel Authority of India Limited (SAIL) a Public Sector Enterprise.
The Writ Petition filed by him before the High Court of Delhi was dismissed on 25.8.1982.
The appellant then filed a S.L.P. against the said order.
This Court had granted special leave on 25.3.1985 and had given a direction to hear the appeal alongwith the writ petition Nos. 11757 & 11758 of 1984.
In the result we find no force in all these cases and the same are dismissed with no order as to costs.
R.P. Petitions and Appeal dismissed.

Output:
The petitioners, who were Central Government employees, on their absorption in a Central Public Sector Undertaking, retired from Central Government service on different dates prior to 31.3.1979, and commuted their original pension for a lump sum as permissible under the Civil Service (Pension) Rules, 1972.
The Central Government issued O.M. dated 13.2.1976, enabling an officer who commuted a portion of his pension to be eligible for relief and ad hoc reliefs on the full amount of his original pension, but persons who got themselves absorbed in Public Sector Undertakings were not eligible to the said benefits.
Taking note,of the erosion in the value of the rupee, the Government, by O.M. dated 25.5.1979, introduced the Liberalised Pension Formula, benefit of which, by this Court 's decision in D.S. Nakara 's case was extended to all Central Government pensioners irrespective of the dates of their retirement.
In order to implement the said decision, the Government issued O.M. dated 22.10.1983, but the benefit was not given to those persons who got them selves absorbed in Central Public Sector Undertakings and received/opted to receive commuted raise of 1/3rd of pension as well as 357 terminal benefits equal to the commuted value of the balance amount of pension left after such commutation.
The petitioners challenged the validity of the aforesaid O.Ms.
dated 13.2.1976 and 22.10.1983 and contended that for the purposes of grant of the full benefit of relief or ad hoc relief, the Rules do not make any distinction between an officer who has sought commutation of a portion of his original pension and one who has not sought any such commutation; and as the petitioners who opted for commutation of their original pension in accordance with the Rules were being arbitrarily and without just and reasonable cause deprived of the relief, the aforesaid Office Memoranda were vitiated by an inherent discrimination and were violative of Articles 14 and 16 of the Constitution.
The facts of the appeal were identical to those of the petitions except that the appellant came before this Court in appeal against the order of the High Court which dismissed his writ petition.
On the question: whether the petitioners/appellants fell in the category of Central Government pensioners for the purpose of entitlement to the benefit of the Liberalised Pension Formula or did they fall in a different class altogether and were not entitled to get any such benefit, Dismissing the writ petitions and the appeal, this Court, HELD: 1. Clause 5 of O.M. dated 22.10 1983 is clear that such Central Government employees who got themselves absorbed under Central Public Sector Undertakings prior to 1.4.1979 and opted to receive commuted raise for 1/3rd of pension as well as terminal benefit equal to the commuted value of the balance amount of pension were not entitled to any benefit as they were not Central Government Pensioners as on 1.4 1979.
[362B C] 2.Commutation brings about certain advantages.
The person who commutes his pension gets a lump sum which ordinarily he would have received in the course of his spread over period subject to his continuing to live The two advantages of the commutation are the availability of a lump sum and the risk factor.
The allowance of Family Pension to such person does not however make them entitled to get any benefit that is given to the pensioners on account of Liberalised Pension Rules taking note of the fallen value of the rupee.
[362F G, 363A B] 3.1 In the instant case, the petitioners had not only got 1/3rd of 358 their pension commuted but exercised the option of getting the entire pension commuted and in lieu thereof got a lump sum.
Such persons cannot fall in the category of Central Government pensioners for the purposes of getting benefit of the Liberalised Pension Rules which can be made applicable only to Central Government pensioners.
[362G H, 363A] 3.2 The petitioners fell in a different class altogether and were not entitled to claim any benefit granted to the Central Government Pensioners.
After getting a lump sum in lieu of entire pension, they did not fall in the class of Central Government pensioners and were not entitled to any benefit granted to such pensioners.
The case of the Central Government pensioners who got their 1/3rd pension commuted also fail in a different class inasmuch as they got 2/3rd pension, and after 15 years of such commutation or having attained the age of 70 years whichever was later, they became entitled to full pension.
[363C D] "Common Cause" a Registered Society & Ors.
vs Union of India, ; , distinguished.
D.S. Nakara & Ors.
vs Union of India, ; , referred to.


Input:
ivil Appeal Nos. 815 and 1284 of 1978 Appeals by special Leave from the Judgment and order dated 20 12 1977 of the Delhi High Court in Civil Writ No. 616176.
Soli J. Sorabjee, A. C. Gulati, A. K. Ganguli, G. section Chatterjee and B. B. Swahney for the Appellant in CA No. 815/78.
Lal Narain Sinha, Att.
Miss A. Subhashini and Girish Chandra for the Appellant in CA No. 1284 and Respondent No. 1 in CA No. 815178.
The Judgment of the Court was delivered by SEN, J.
These appeals by special leave against a judgment of the Delhi High Court turn on the construction of certain provisions of the .
The appeals raise a question of far reaching importance namely, whether a raising contractor of a coal mine is an owner within the meaning of sub section
(1) of section 4 of the (hereinafter referred to as the Nationalisation Act), and if so, whether the fixed assets like machinery, plants, equipment and other properties installed or brought in by such a raising contractor vest in the Central Government.
They also give rise to a subsidiary question, namely, whether subsidy receivable from the erstwhile Coal Board established under section 4 of the upto the specified date, from a fund known as Conservation and Safety Fund, by such raising contractor prior to the appointed day, can be realised by the Central Government by virtue of their powers under sub section
(3) of section 22 of the Nationalisation Act, to the exclusion of all other persons including such contractor and applied under sub section
(4) of section 22 towards the discharge of the liabilities of the coking coal mine, which could not be discharged by the appointed day.
To make the points intelligible, it is necessary to state a few facts.
By an agreement dated February 7, 1969 made between Messrs Balihari Colliery Co. Pvt.
Ltd. (hereinafter referred to as the 'owner ' of the one part and Messrs Industrial Supplies Pvt.
Ltd. (hereinafter referred to as 'the petitioners ') of the other part, it was recited as follows: "WHEREAS the owners are the owners of a Working Colliery comprising an area of 800 Bighas more or less and known 379 as Balihari Colliery particularly described in the first Schedule A hereunder written held under the lease and subleases mentioned in the said Schedule and in connection therewith have built various structures, dhewrahs coolie lines (hereinafter referred to as the said buildings) and also installed and put up various machinery, plants, tools, implements and utensils (hereinafter referred to as the said machinery therein; AND WHEREAS the owners have appointed INDUSTRIAL SUPPLIES PRIVATE LIMITED as Managing Contractor of their said colliery and the said Managing Contractor has agreed to act as such Managing Contractor for the period and upon the terms and conditions herein contained:" Under the said agreement the petitioners were appointed to be the Managing Contractors of Kutchi Balihari Colliery for a period of 20 years.
Under cl. 7(a) the petitioners were required at their own cost to install fixed assets like equipment, machinery and plants and also invest in the form of current assets like stores in the said colliery and to work the same as raising contractors.
By cl.
7(b) the additional machinery so installed and the chattels and utensils so brought in by the petitioners were to remain the property of the petitioners absolutely and on the determination of the agreement they were entitled subject to the provisions of cl. 9, to remove such additional fixed assets and current assets.
Clause 9 gave an option to the owners to purchase the additional machinery, chattels and utensils referred to in cl. 7.
Clause 25 of the agreement is material for our purposes and it reads: "25.
That in case the said colliery is nationalised these presents shall stand determined and all moneys then due and owing by the owners to the Managing Contractor or by the Managing Contractor to the owners under the provisions hereof shall at once become due and payable by the owners to the Managing Contractor or by the Managing Contractor to the owners as the case may be.
If as result of such nationalisation the machinery, chattels and utensils installed at and/or brought into the said colliery by the Managing Contractor under the provisions of clause 7 of these presents or any one or more of them or the buildings and structures created by it at the said colliery under the provisions of clause 8 of these presents are taken over by the authorities concerned then and in such event the Managing Contractor shall be entitled to compensation payable for or attributable to the said machinery, chattels and utensils and the buildings and structures so taken over and the owners shall be entitled to receive compensation for all other properties comprised in the said colliery.
" 380 Under the said agreement, the petitioners installed from time to.
time various fixed assets like machinery, plants and equipment and erected structures and raised new roads within the said colliery and brought in various current assets and movables for the efficient working of the said mine.
The petitioners were also raising contractors in respect of another coking coal mine known as 'Khas Dharmaband Colliery ' owned by Messrs Khas Dharmaband Colliery Co. Pvt. Ltd., subsequently known as 'New Dharmaband Colliery '.
They had similarly brought over various assets including stores which were being used in the said colliery.
Under an agreement of October 1969, the New Dharmaband Colliery was brought over by Messrs Sethia Mining & Mfg. Corporation Ltd. An inventory was prepared of the assets like plants, machinery and stores belonging to the petitioners which were lying in the colliery, the value of which was approximately Rs. 1,21,000, On October 171 1971, the resident promulgated the Coking Coal Mines (Emergency provisions) ordinance 1971 to provide for .
the taking over by the Central Government, in the public interest of the management of 214 coking coal mines and 12 coke oven plants, including the coal mines in question, pending nationalisation of such mines.
The ordinance was replaced by the .
Thereafter, Parliament enacted the to complete the process of nationalisation of the coking coal mines and coke oven plants.
It was entitled as 'An Act to provide for the acquisition and transfer of the right, title and interest of the owners of the coking coal mines specified in the First Schedule and the right, title and interest of the owners of such coke oven plants as are in or about the said coking coal mines with a view to reorganising and reconstructing such mines and plants for the purpose of protecting, conserving and promoting scientific development of the resources of coking coal needed to meet the growing requirements of the iron and steel industry and for matters connected therewith or incidental thereto ', "Appointed day" under section 2(a) of the was October 17, 1971, while that under section 3(a) of the , is May 1, 1972.
According to the petitioners, the total value of the fixed and current assets and movables of Kutchi Balihari Colliery taken over by the Central Government on October 17, 1971 was to the tune of Rs. 11,85,591.00.
As regards New Dharmaband Colliery they allege that between October 1969 and October 17, 1971, Messrs Sethia Mining 381 & Mfg. Corporation Ltd., had utilised some of the stores lying in the colliery to the extent of Rs. 50,000.00 and the balance of the stores lying in the colliery as on October 17, 1971 was approximately Rs. 72,000.00.
Since April 1969 when the petitioners became raising contractors of Kutchi Balihari Colliery and until October 17, 1971 when the management of the said colliery was taken over by the Central Government, the petitioners allege that they had undertaken, at their cost, operations for sand stowing and hard mining and had accordingly submitted bills to the Coal Board established under section 4 of the Coal Mines (Conservation and Safety) Act, 1952 for subsidy through the owners from time to time.
As on October 17, 1971 the amount of subsidy payable to them was about Rs. 4,50,000.
On May 5, 1976 the petitioners filed a Writ petition in the Delhi High Court seeking a declaration that sub section
(1) of section 4 does not provide for the acquisition of the right, title and interest of the petitioners inasmuch as being raising contractors they were not an owner within the meaning of section 3(n) of the Nationalisation Act and, therefore, they were entitled to dismantle and remove the fixed assets like machinery, plants and equipment installed in the two mines and also to remove the movables and current assets thereof like furniture, stores, etc.
and were further entitled to recover the amount of subsidy of about Rs. 4,50,000 collected by the Central Government from the erstwhile Coal Board.
They, accordingly, sought a writ or direction in the nature of mandamus requiring the Central Government to return the assets like machinery, plants, equipment and other assets and movables and all amounts collected by way of subsidy or other dues, or in any event pay Rs. 16,35,591 with interest thereon from May 1, 1972 till the date of payment.
The High Court substantially disallowed the claim of the petitioners, holding that they fall within the meaning of the term 'owner ' as defined in section 3(n) of the Nationalisation Act read with section 2(1) of the and that as such the various machinery, plants, equipment and other filled assets, current assets and movables belonging to them lying in the two coal mines were included in the expression "mine" as defined in section 3(i) of the Nationalisation Act, and therefore, the right, title and interest of the petitioners therein stood vested in the Central Government under sub section
(1) of section 4 free from all incumbrances.
It, however, held that the amount of subsidy of Rs. 4,50,000 receivable from the Coal Board by way of reimbursement towards cost of sand stowing and hard mining operations carried on by the petitioners, could not be treated to be as an "amount due to the coking coal mine" within sub section
(3) of section 22 and, therefore, could not be 382 utilised by the Central Government under sub section
(4) of section 22 for discharge of the liabilities of the coking coal mine.
It was contended by the petitioners that they were neither the owners nor immediate occupiers or managing contractors of the coal mines in question, but were merely raising contractors thereof and, therefore, they did not come within the purview of the term 'owner ' as defined in section 3(n) of the Nationalisation Act read with section 2(1) of the .
It was, therefore, said that the plants, equipment and machinery and other assets, and current assets and movables belonging to them as on October 17, 1971 could not, and did not, vest in the Central Government under sub section (1) of section 4 of the Nationalisation Act.
It was urged that the High Court was in error in construing the definition of the term 'owner ' as defined in section 2(1) of the so as to include a raising contractor, by laying emphasis on the words 'as if he were ' in the last sentence of the definition, and particularly so, because the Act itself, separately and/or clearly distinguishes between an 'owner ' and a 'contractor '.
It was further contended that due to the absence of the word 'includes ' in the last sentence, in the definition of 'owner ' in section 2(1) of the , a 'contractor ' cannot be treated to be an 'owner '.
It was said that the object of the fiction in section 2(1) of the was for the limited purpose of making such a raising contractor responsible for the due observance of the provisions of that Act and such a deeming provision could not be invoked for construing the purpose and object of the Nationalisation Act which were different, i.e., for the purpose of acquiring machinery, plants and equipment and other assets belonging to such raising contractor, lying within the mine, under sub section
(1) of section 4 of the Act.
We are afraid, we cannot accept these contentions.
The construction that is sought to be placed on the definition of 'owner ' in section 3(n) of the Nationalisation Act read with section 2(1) of the , upon the basis of which the argument proceeds would, if accepted, frustrate the very object of the legislation.
The Nationalisation Act provides by sub section
(1) of section 4 that the right, title and interest of the owners in relation to the coking coal mines specified in the First Schedule, on the appointed day, i.e., on October 17, 1971 shall stand transferred to and shall vest absolutely in the Central Government free from all incumbrances.
In the Nationalisation Act, 'owner ' is defined in section 3(n) thus: "3(n) "owner", (i) when used in relation to a mine, has the meaning assigned to it in the ; 383 (ii) when used in relation to a coke oven plant, means any person who is the immediate proprietor or lessee or occupier of the coke oven plant or any part thereof or is a contractor for the working of the coke oven plant or any part thereof ;" Section 2(1) of the reads as follows: "(1) "owner", when used in relation to a mine, means any person who is the immediate proprietor or lessee or occupier of the mine or of any part thereof and in the case of a mine the business whereof is being carried on by a liquidator or receiver, such liquidator or receiver and in the case of a mine owned by a company, the business whereof is being carried on by a managing agent, such managing agent; but does not include a person who merely receives a royalty, rent or fine from the mine, or is merely the proprietor of the mine, subject to any lease, grant or licence for the working thereof, or is merely the owner of the soil and not interested in the minerals of the mine; but any contractor for the working of a mine or any part thereof shall be subject to this Act in like manner as if he were an owner, but not so as to exempt the owner from any liability;" In support of the contention that the petitioners could not be regarded as occupiers and, therefore, do not come within the definition of 'owner ' under section 3(n) of the Nationalisation Act, reliance was placed on the decision in The Chief Inspector of Mines & Anr.
vs Lala Karamchand Thapar etc.
While a raising contract may not be a lease and, therefore the contractor not a lessee, we find no reason why he should not be treated to be an occupier within the meaning of section 3(n).
Under the terms of the agreement dated February 7, 1969, the petitioners acquired complete dominion and control over the colliery in question for a period of 20 years.
It is common ground that the said agreement was by a registered instrument and even though this perhaps may not amount to a leases there can be no doubt that it was a licence coupled with a grant.
The petitioners were by virtue of cl. 7(a} of the agreement entitled to install at their own cost such additional machinery, tramways, ropeways etc.
, in connection with the transport of coal raised and to bring in chattels for the purpose of discovery and removal of coal.
They were entitled under cl 7(b} to remove such additional machinery that may be installed and such chattels and utensils as may be brought in by them to the said collieries unless of course, the owners exercised their option to purchase the same under cl. 9.
In view of these terms, it is futile to contend that the petitioners were not occupiers of the mines.
They had the actual use and occupation of the coal mine in question.
384 We have carefully gone through the judgment in Lala Karamchand Thapar 's case and, if we may say so, the decision is distinguishable on facts.
There the question was whether the managing agent of a company owning a colliery was an occupier of the colliery, and the Court negatived this observing: "From the very collocation of the words "immediate proprietor, or lessee or occupier of the mine", it is abundantly clear that only a person whose occupation is of the same character, that is, occupation by a proprietor or a lessee by way of possession on his behalf and not on behalf of somebody else is meant by the word "occupier" in the definition.
Thus, a trespasser in wrongful possession to the exclusion of the rightful owner would be an occupier of the mine, and so be an "owner" for the purpose of the Act.
" The Court further observed: "That must be because possession on behalf of somebody else was not in the contemplation of the legislature such "occupation" as to make the person in possession an "occupier" within the meaning of section 2(1)." These observations, if we may say so, with great respect, are rather widely stated.
They are indeed susceptible of a construction that a raising contractor being in possession on behalf of a proprietor or the lessee of a mine in possession is not an 'occupier ' within the meaning of section 3(n) of the Nationalisation Act read with section 2(1) of the .
We are quite sure that was not the intention of the Legislature.
There is no reason why the word 'occupier ' should not be understood to have been used in its usual sense, according to its plain meaning.
In common parlance, an 'occupier ' is one who 'takes ' or (more usually) 'holds ' possession: Shorter oxford Dictionary, 3rd edn., vol. 2, p. 1433.
In the legal sense, an occupier is a person in actual occupation.
The petitioners being raising contractors were, under the terms of the agreement dated February 7, 1969 entitled to, and in fact in actual physical possession and enjoyment of the colliery and were, therefore, an occupier thereof.
That being so, the petitioners being in possession, in their own right, by virtue of the substantial rights acquired by them under the agreement, were not in possession on behalf of somebody else and, therefore, the decision in Lala Karamchand Thapar 's case cannot apply.
It is next urged that the Nationalisation Act itself makes a distinction between an 'owner ' and a 'managing contractor ', there being separate provisions made with regard to both.
It is said that in view of this.
there is no legal justification to read the word 'contractor ' 385 for the word 'owner ' in sub section
(1) of section 4.
The contention is wholly misconceived and cannot be accepted.
The Nationalisation Act no doubt separately defines 'owner ' and 'managing contractor '.
The definition of managing contractor in section 3(i) reads: "3(i) "managing contractor" means the person, or body of persons, who, with the previous consent in writing of the State Government has entered into an arrangement, contract or under standing, with the owner of a coking coal mine or coke oven plant under which the operations of the coking coal mine or coke oven plant are substantially controlled by such person or body of persons ," The words and expressions used and defined in the Act have the meaning, respectively, assigned to them 'unless the context otherwise requires '.
The expression 'managing contractor ' finds place in Chapter VI, which deals with the power, functions and duties of the Commissioner of Payments appointed under sub section
(I) of section 20, for the purpose of disbursing the amounts payable to the owner of each coking coal mine or coke oven plant.
It appears in sub section
(2) of section 26, which provides: "(2) In relation to a coking coal mine or coke oven plant, the operations of which were, immediately before the 17th day of October, 1971 under the control of a managing contractor, the amount specified in the First Schedule against such coking coal mine or in the Second Schedule against such coke oven plant shall be apportioned between the owner of the coking coal mine or coke oven plant and such managing contractor in such proportions as may be agreed upon by or between the owner and such managing contractor, and in the event of there being no such agreement, by such proportions as may be determined by the Court.
" Under cl. 25 of the agreement, it was agreed upon between the parties that (i) in the event the colliery was nationalised, the agreement shall stand determine and all moneys then due and owing by the owners to the petitioners and vice versa shall at once become due and payable, and (ii) in the event of such nationalisation, if the machinery, .
chattels and utensils installed at and/or brought into the colliery by the petitioners or the buildings and structures erected by them are taken over by the authorities, they shall become entitled to compensation payable for or attributable to the said machinery, chattels and utensils and buildings and structures so taken over and the owners shall be entitled to receive compensation for all other properties comprised in the said colliery.
The expression 'managing contractor ' as defined in section 3(i) of the Nationalisation Act comes into play only 386 for the purpose of appointment of compensation under sub section
(2) of section 26.
The submission that the term 'owner ' used in sub section
(1) of section 4 of the Nationalisation Act excludes a 'managing contractor ' is against the scheme of the Act.
The term 'owner ' in sub section
(1) of section 4 of the Act must bear the meaning given in the definition contained in section 3(n).
It was asserted that the petitioners were really not the managing contractors but wrongly described as such in the agreement.
A bare perusal of the agreement would, however, be destructive of the argument.
It is a document drawn consisting of 46 clauses defining the mutual rights and obligations of the parties.
, The petitioners were conferred all the rights to work the mine for winning, getting and raising coal.
The so called 'remuneration ' payable to them was virtually the price of coal supplied leaving to the owners a margin of profit.
Even the liability for payment of rent, royalty, taxes etc.
, in relation to the mine was saddled on the petitioners.
In view of these terms, they cannot be heard to say that they were not the managing contractors though they have been so described in the preamble to the agreement and in each and every clause thereof.
It is, however, asserted that the functions of a managing contractor.
namely, appointment of managers, were not entrusted to the petitioners but were actually assigned to Messrs Madhusudan & Co. under a separate agreement.
The submission is spelled out from the terms of cl. 11 relating to employment of workers of the colliery.
All that was done was that the erstwhile owners had by this clause reserved to them selves the power to appoint managers.
Such reservation does not take the petitioners out of the definition of managing contractor under 6.
3(i) of the Nationalisation Act, as they still had substantial control over the mine.
The plea that not they but someone else was the managing contractor is only an after thought.
The petitioners having bound themselves by the terms of the agreement, cannot be permitted to escape from the provisions of sub section
(1) of section 4.
as they come within the purview of the definition of 'owner ' in section 3(n) of the Nationalisation Act.
It is then argued, in the alternative.
that the term 'owner ' as defined in section 3(n) of the Nationalisation Act read with s: 2(1) of the does not in any event, include a raising contractor.
It is not suggested that a raising contractor does not come within the description of a contractor in section 2(1), but it is urged that the word 'includes ' is not there.
There was no need for Parliament to insert the word 'includes ' because of the words 'as if he were '.
Although the term 'owner ' in common parlance, in its usual sense, connotes ownership of a mine.
the term has to be understood in the legal sense, as defined.
387 Parliament, with due deliberation, in section 3(n) adopted by incorporation the enlarged definition of owner in section 2(1) of the to make the Nationalisation Act all embracing and fully effective.
The definition is wide enough to include three categories of persons: (i) in relation to a mine, the person who is the immediate proprietor or a assesses or occupier of mine or any part thereof, (ii) in the case of a mine the business whereof is carried on by a liquidator or a receiver, such liquidator or receiver, and (iii) in the case of a mine owned by a company, the business whereof is carried on by a managing agent.
such managing agent.
Each is a separate and distinct category of persons and the concept of ownership does not come in.
Then come the crucial last words: "but any contractor for the working of a mine or any part thereof shall be subject to this Act in like manner as if he were an owner, but not so as to exempt the owner from any liability".
The insertion of this clause is to make both the owner as well as the contractor equally liable for the due observance of the Act.
It is needless to stress that the contains various provisions for the safety of the mines and the persons employed therein.
In the case of a mine, the working whereof is being carried on by a raising contractor, he is primarily responsible to comply with the provisions of the Act.
Though a contractor for the working of a mine or any part thereof is not an owner, he shall be subject to the provisions of the Act, in the like manner 'as if he were an owner ' but not so AS to exempt the owner from any liability.
It is now axiomatic that when a legal fiction is incorporated in a statute, the Court has to ascertain for what purpose the fiction is created.
After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion.
The Court has to assume all the facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction.
The legal effect of the words "as if he were" in the definition of owner in section 3(n} of the Nationalisation Act read with section 2(1) of the is that although the petitioners were not the owners, they being the contractors for the working of the mine in question, were to be treated as such though, in fact, they were not so.
The oft quoted passage in the judgment of Lord Asquith in East End Dwelling Co. Ltd. Fine bury Borough Council brings out the legal effect of a legal fiction in these words: "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequence and incidents which, if the putative state of affairs had in fact existed, must inevitably have 388 flowed from or accompanied it.
The statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.
" The whole object and purpose of the Nationalisation Act is to expropriate private ownership of coking coal mines and all interests created therein.
It provides by sub section
(1) of section 4 that on the appointed day, the right, title and interest of the owners in relation to the coking coal mines specified in the First Schedule shall stand transferred to, and shall vest absolutely in the Central Government, free from all incumbrances.
Now unless the term 'owner ' in sub section
(1) of section 4 is given an extended meaning so as to include a contractor for the working of a mine or any part thereof, the very object of the legislation would be frustrated.
It has to be presumed that Parliament was fully aware of the normal pattern of working of all the coal mines, i.e., by employment of raising contractors.
Any other construction would lead to a manifest absurdity and attribute to Parliament a result which it never intended.
It would result in the contractors escaping from the consequences of vesting under sub section
(1) of section 4 of the Act and permit them to dismantle and remove the additional machinery, plants and equipment which were being utilised for the working of mines.
This brings us to the next question, namely whether the amount of Rs. 4,50,000 receivable by the petitioners from the erstwhile Coal Board, was an amount impressed with a trust, being advanced for a specific purpose, i.e., for the purpose of stowing and other safety operations and conservation of coal mines, and could not be regarded as "any money due to the coking coal mines" within sub section
(3) of section 22 of the Act and the Central Government, therefore, could not appropriate the amount of subsidy and utilize it under sub section
(4) thereof for meeting the liabilities of the coking coal mines.
The conclusion of the High Court upon this point is contained in the following passage: "The amount of subsidy due could not be current assets of the coking coal mine because it had to be utilised for a certain definite specified purpose.
In the instant case cost of stowing and other safety operations had already been incurred and the subsidy was by way of reimbursement.
The amount was already identified as belonging to the petitioner and is on the analogy or in the nature of trust money impressed with a specific purpose." 389 In reaching that conclusion, it relied upon the decisions in Barclays Bank Ltd. vs Quistclose Investments Ltd. and Coal Products Private Ltd. vs I.T.O., which are both distinguishable.
They enunciate the principle that when property is entrusted for specific purpose, it is clothed with a trust.
It seems somewhat illogical that the equitable doctrine of resulting trust should be brought into play in the construction of the provisions of a legislation dealing with nationalisation like the .
In Barclays Bank Ltd. vs Quistclose Investments Ltd., the House of Lords dealt with a question as to rights of set off following the liquidation of a company.
The principle was applied to a sum of money lent to a company (later wound up) for a specific purpose, viz., payment of dividend, which was not implemented; the money, being still identifiable, was held to be impressed with a trust, and accordingly did not enure to the benefit of the general body of creditors, but was recoverable by the lender.
In Coal Products Private Ltd. vs I.T.O. there was an extension of this principle by a Single Judge of the Calcutta High Court to "assistance" which was payable to the assessee and was sought to be 1 attached by the Income tax Department by way of garnishee proceedings under section 226(3)(i) of the Income tax Act, 1961.
There was an application made for grant of assistance under r. 49 of the Coal Mines (Conservation and Safety Rules, 1952.
There were conditions attached to the grant under r. 54.
There was an affidavit filed before the Calcutta High Court showing that the grant was subject to the condition that it would be utilised for the purpose of stowing and other connected operations in the coal mine.
The High Court quashed the garnishee notice on the ground that the Income tax Department was not entitled to any part of the money for the payment of income tax liabilities of the assessee, as it could only be utilized for the purpose of stowing and other safety operations and conservation of coal mines.
F Two questions arise, both of which must be answered in favour of the Union of India.
The first is whether the payment of Rs. 4,50,000 was advanced for a special purpose, i.e., as 'assistance ' under r. 49 and not 'by way of reimbursement '.
The second is whether, in that event, the money having been advanced for a special purpose, and that being so clothed with a specific trust, it could not be adjusted by the Central Government under sub section
(4) of section 22 of the Nationalisation Act towards the liabilities of the coking coal mines.
It is not difficult to establish precisely on what terms the money was advanced by the erstwhile Coal Board.
On behalf of the petitioners, it is not disputed that the bills for the subsidy were for the H 390 cost of stowing and connected safety operations and of hard mining operations which, the petitioners had already prior to October 17, 1971, at their own cost, carried out.
If that be so, the inevitable conclusion is that the amount of subsidy in question was like any other amount due to the coking coal mine, prior to the appointed day, and therefore did not fall outside the purview of sub section
(3) of section 22.
The payment in question was not by way of 'assistance ' receivable from the erstwhile Coal Board for carrying out of stowing and other safety operations and conservation of the coal mines.
In the present case, the petitioners on their own showing had already carried our sand stowing and hard mining operations and had admittedly applied for subsidy by way of reimbursement.
The payment of Rs. 4,50,000 was, therefore, one to reimburse for the expenditure already undertaken.
Indubitably, the amount in dispute was payable 'by way of reimbursement '.
The petitioners were, therefore, free to utilise the money in any manner they liked.
In other words, the grant was not impressed with any particular purpose or purposes.
Even if the subsidy receivable from the erstwhile Coal Board was by way of 'assistance ', the amount of Rs. 4,50,000 was recoverable by the Central Government in whom the coking coal mines have vested under sub section
(1) of section 4 of the Nationalisation Act and not by the petitioners.
It is, however, needless to stress that if the grant were by way of 'assistance ' under r. 49 of the Coal Mines (Conservation and Safety) Rules, 1952, the grant being conditional, the Central Government would in that event.
be bound to comply with the requirements of r. 54 and apply the same for the purposes for which it was granted viz., for the purposes of showing or other safety operations and conservation of coal mines.
For these reasons, the judgment of the High Court partly allowing the claim of the petitioners with regard to the subsidy amount of Rs. 4.50,000 is set aside, and the writ petition is dismissed: Accordingly, the appeal of the Union of India is allowed and that of the Industrial Supplies Pvt. Ltd., is dismissed with costs throughout.
Civil Appeal No. 815/78 dismissed, and Civil Appeal No. 1284/78 S.R. allowed.

Output:
The appellants by virtue of two agreements with M/s. Balihari Colliery Co. Pvt. Ltd. and with New Dharamband Colliery Ltd. became the managing contractor for a period of 20 years of the former and the raising contractor of the latter.
In terms of the said agreements, they installed from time to time various fixed assets like machinery, plants and equipment and erected structures and raised new roads within the said collieries.
These two collieries were taken over by the Central Government under its management with effect from October 17, 1971, by virtue of the powers vested in it under the .
The appellants aggrieved by the said taking over filed a writ petition in the Delhi High Court seeking a declaration that subs.
(I) of section 4 of the Nationalisation Act does not provide for the acquisition of the right, title and interest inasmuch as being raising contractors they were not covered by the term 'owner ' within the meaning of section 3(n) of the Nationalisation Act and, therefore, they were entitled to dismantle and remove the fixed assets like machinery, plants etc.
They also sought to recover the amount of subsidy of about Rs. 4,50,000 collected by the Central Government from the erstwhile Coal Board.
The High Court substantially disallowed the claim of the appellants holding that they fall within the meaning of term 'owner '.
It, however, held that the amount of subsidy of Rs. 4,50,000 receivable from the Coal Board by way of reimbursement towards the cost of sand stowing and hard mining operations carried on by them could not be treated to be as an amount due to the coking coal mine within the meaning of sub section
(3) of section 22 and, therefore, could not be utilised by the Central Government under sub section
4 of section 22 for discharge of the liabilities of the coking coal mine.
Hence, the two appeals one by the appellants and the other by the Union of India.
Allowing the Union of India 's appeal only and dismissing the Company 's appeal, the Court 376 ^ HELD: (I) The appellants do fall under the purview of the term "owner" in section 3(n) of the Nationalisation Act read with section 2 of the and any other construction as sought to be placed on the definition would frustrate the very object of the legislation and the intention of the Legislature.[387 F] Parliament, with due deliberation.
in section 3(n) adopted by incorporation the enlarged definition of the "owner" in section 2(1) of the to make the Nationalisation Act all embracing and fully effective.
The definition is wide enough to include three categories of persons (i) in relation to a mine.
the person who is the immediate proprietor or a lessee or occupier of mine or any part thereof, (ii) in the case of a mine the business whereof is carried on by a liquidator or a receiver, such liquidator or receiver, and (iii) in the case of a mine owned by a company, the business whereof is carried on by a managing agent, such managing agent.
Each is a separate and distinct category of persons and the concept of ownership docs not come in.
The insertion of the clause "but any contractor for the working of a mine or any part thereof shall be subject to this Act in like manner as if he were an owner, but not so as to exempt the owner from any liability" is to make both the owner as well as the contractor equally liable for the due observance of the Act Tn the case of a mine the working whereof is being carried on by a raising contractor he is primarily responsible to comply with the provisions of the .
Though a contractor for the working of a mine or any part thereof, is not an owner he shall be subject to the provisions of the in the like manner "as if he were a owner" but not so as to exempt the owner from any liability.
[387 A D] The whole object and purpose of the Nationalisation Act is to expropriate private ownership of coking coal mines and all interests created therein.
The term 'owner ' in sub section
(l) of section 4 is to be given an extended meaning so as to include a contractor for the working of a mine or any part thereof.
It has to be presumed that Parliament was fully aware of the normal pattern of working of all the coal mines, that is, by employment of raising contractors.
Any other consumption would lead to a manifest absurdity and attribute to Parliament a result which it never intended.
It would result in the contractors escaping from the consequences of vesting under sub section
(I) of section 4 of the Act and permit them to dismantle and remove the additional machinery, plants and equipment which are being utilised for the working of mines.
[388 B D] (2) The word 'occupier ' in 5. 3(n) of the Nationalisation Act should be understood to have been used in the usual sense according to its plain meaning.
In the legal sense an occupier is a person in actual occupation.
The appellants being "raising contractors" were under the terms of the agreement dated February 7, 1969 entitled to and were in fact in actual possession and enjoyment of the colliery and were, therefore, an occupier thereof.
That being so, the appellants in possession in their own right by virtue of their substantial right acquired by them under the agreement were not in possession on behalf of somebody else.
[384F G] The Chief Inspector of Mines and Anr.
vs Lala Katarnchand Thaper etc.
; , distinguished.
(3) The Nationalisation Act, no doubt, separately defines 'owner ' and 'managing contractor '.
The words and expressions used and defined in the Act have the meaning respectively assigned to them "unless the context otherwise requires".
Therefore, the expression 'managing contractor ' as defined in section 3(1) of the Nationalisation Act comes into play only for the purpose of apportionment 377 of compensation under sub section
(2) of section 26.
To exclude a "managing contractor" from term 'owner ' used in sub section
(I) of section 4 of the Nationalisation Act would be against the scheme of the Act.
The term 'owner ' in sub section
(I) of section 4 of the Act must bear the meaning given in the definition contained in section 3(n).
Any reservation under any process of any agreement between the parties to reserve the power to appoint managers, does not take the appellants out of the definition of 'managing contractor ' under section 3(1) of the Nationalisation Act since they still had substantial control over the mine.
The plea that not they but someone else was the managing contractor is only an after thought.
The appellants who have bound themselves by the terms of the agreement, cannot be permitted to escape from the provisions of sub section
(I) of section 4 of the Act, as they come within the purview of the definition of 'owner ' in section 3(n) of the Nationalisation Act.
[384 H, 385 C, 385 H 386 A; 386 E F] (4) When a legal fiction is incorporated in a statute, the Court has to ascertain for what purpose the fiction is created.
After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion.
The court has to assume all the facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction.
The legal effect of the words "as if he were" in the definition of owner in section 3(n) of the Nationalisation Act read with section 2(1) of the is that although the petitioners were not the owners, they being the contractors for the working of the mines in question, were to be treated as such though, in fact, they were not so.
[388 E G] East End Dwelling Co. Ltd. vs Finebury Borough Council, L.R. [1952].A.C. 109, p. 132; quoted with approval.
(5) The bills for the subsidy were for the cost of stowing and connected safety operation and all hard mining operations which the appellants had already prior to October 17, 1971 at their own cost, carried out.
If that be so, the amount of subsidy in question was like any other amount due to the coking coal mines prior to the appointed day and, therefore, did not fall outside the purview of sub section
(3) of section 22.
[389 H 390 A] The payment in question was not by way of assistance receivable from the erstwhile Coal Board for carrying out the stowing and other safety operations and conservation of the coal mines.
The payment of Rs. 4,50,000 claimed by the appellants was, therefore, one to reimburse for the expenditure already undertaken.
Indubitably, the amount in dispute was payable 'by way of reimbursement".
The appellants were, therefore, free to utilise their money in any manner they liked.
In other words, the grant was not impressed with any particular purpose or purposes.
[390 B C] (6) Even if the subsidy receivable from the erstwhile Coal Board was by way of 'assistance ' the amount of Rs. 4,50,000 was recoverable by the Central 6 Government in whom the coking coal mines have vested under sub section
(1) of section 4 of the Nationalisation Act and not by tho appellants.
If the grant were by way of assistance under rule 49 of the Coal Mines (Conservation and Safety) Rules 1952, the grant being conditional, the Central Government would in that event, be bound to comply with the requirements of r. 54 and apply the same for the purposes for which it was granted namely, for the purposes of stowing or other safety operations and conservation of coal mines.
[390 D E] H Barclays Bank Ltd. vs Quistclose Investments Ltd., L.R. [1970] A.C. 567, Coal Products Private Ltd. vs Income Tax Officer explained and distinguished.