Civil Appeal No 5858 of 1983
From the Judgment and Order dated 5583 of the Allahabad High Court of in SA No 1281 of 74
SK Bisaria AP Malhotra JK Nayyar and RS Sharma for the Appellant
Shakil Ahmed Syed for the Respondent
The Judgment of the Court was delivered by 822 OJHA J
This is a tenant s appeal by special leave against the judgment of the Allahabad High Court dismissing his second appeal arising out of a suit for ejectment of the appellant filed by the landlord respondent in respect of a shop
One of the questions which came up for consideration in the suit was as to whether the UP Temporary Control of Rent and Eviction Act 1947 UP Act III of 1947 was or was not applicable to the shop in question
The trial court held that the said Act was not applicable
Other pleas raised in defence by the appellant having failed a decree for eviction and for recovery of damages for use and occupation was passed against him on 19th August 1971
The trial court however directed the parties to bear their own costs
Against that decree an appeal was preferred by the appellant
During the pendency of the appeal the UP Urban Buildings Regulation of Letting Rent and Eviction Act 1972 UP Act 13 of 1972 hereinafter referred to as the Act was enforced with effect from 15th July 1972
The appellant made deposit contemplated by Section 39 read with Section 40 of the Act on 19th July 1972 that is within one month from 15th July 1972 which was the date of the commencement of the Act in the lower appellate court and asserted that in view of the deposit so made he was entitled to be absolved from his liability for eviction from the disputed shop
The amount so deposited however did not include the costs of the suit
Subsequently the appellant was permitted to deposit even the costs of the suit by the lower appellate court but at his own risk
In regard to the claim of the appellant that he was entitled to be absolved from his liability for eviction on account of the deposit made by him on 19th July 1972 it was urged on behalf of the landlord respondent that since the costs of the suit had not been deposited and the subsequent deposit thereof was beyond one month contemplated by Section 39 of the Act the appellant was not entitled to the benefit of the said Section read with Section 40
For the appellant on the other hand it was urged that since the trial court had directed the parties to bear their own costs the benefit of the aforesaid Sections could not be denied to him for non deposit of the costs of the suit
In the alternative it was asserted by him that since the costs even of the suit were deposited subsequently the delay in the deposit was liable to be condoned
However neither the main plea nor the alternative plea found favour with the lower appellate court and it dismissed the appeal with costs
It further passed a decree for the costs of the suit also in favour of the landlord respondent by allowing the cross objection filed by her in this behalf
823 Aggrieved by the decree passed by the lower appellate court the appellant preferred a second appeal which was dismissed by the High Court by the judgment appealed against
The pleas which were raised by the appellant before the lower appellate court and the High Court in regard to the scope of Section 39 read with Section 40 of the Act have been reiterated before us by his learned counsel
In support of his alternative submission that the delay in depositing the costs of the suit deserved to be condoned the learned counsel for the appellant placed reliance on a decision of this Court in Krishna Kumar Gupta vs Addl
District Judge IV and others On the facts of the instant case however we do not find it necessary to go into the question as to whether the delay in making deposit contemplated by Section 39 can be condoned or not because in our opinion the appeal deserves to be allowed on the main submission made by learned counsel for the appellant namely that since the trial court had directed the parties to bear their own costs as a result of which the costs of the suit were not payable by the appellant on the date of the deposit the non deposit of the said costs within one month from 15th July 1972 as contemplated by Section 39 of the Act could not deprive him of the benefit of the said Section
What was the true import of the expression full costs  used in Section 39 of the Act came up for consideration before a Division Bench of the Allahabad High Court in RDRam Nath  Co and another vs Girdhari Lal and another 1975 ALJ Page 1
In so far as is relevant for the present case it was held The expression full costs of the suit  in respect of a pending suit will represent the amount of court fee paid on the plaint and on other documents and other taxable expenses incurred by the landlord by the date of deposit together with such amount of the Advocate s fee and the fee of his clerk as is taxable on the contested scale whether any certificate of fee has or has not been filed by the date of deposit
In case of a first appeal or revision filed against a decree or order of the trial court it will represent the costs awarded to the landlord in the decree or order together with the amount paid as court fee on the memorandum of appeal or revision and other documents and other taxable expenses incurred in the first appellate or revisional court including the Advocate s fee and the fee of his clerk which are to be computed in the manner stated above 824 This decision was cited before the learned Judge who decided the appellant s second appeal with particular emphasis on the words the costs awarded to the landlord in the decree or order  with regard to the deposit to be made in case of a first appeal or revision filed against a decree or order of the trial court
The learned Judge however took the view that since an appeal was a continuation of the suit the aforesaid words appear to have been mentioned by the Bench rather loosely
He also pointed out that in case the cross objection filed by the landlord was ultimately allowed the costs of the trial court would become payable and in this view of the matter also the costs of the suit had to be deposited notwithstanding the fact that the trial court had directed the parties to bear their own costs
According to the learned Judge the words landlord s full costs of the suit  were not the same thing as the costs awarded to the plaintiff in a suit and that the word landlord  had been used in Section 39 purposely in order to distinguish it from the plaintiff of the suit
He further took the view that landlord s full costs of the suit  in Section 39 really meant all those taxable costs which were capable of being ascertained on the date of the deposit
Having heard learned counsel for the parties we find it difficult to agree with the view that the words the costs awarded to the landlord in the decree or order  were used loosely
Irrespective of the actual amount of costs that may have been incurred by the landlord in prosecuting a suit he is entitled to recover from the tenant only such costs which in law are known as taxable costs and are made payable by the tenant to the landlord
The matter may be clarified by an illustration
Take a case where court fee in excess of what is prescribed has been actually paid by the landlord
Notwithstanding such payment the tenant even on the suit being decreed with costs will not be liable to pay the excess amount of court fee inasmuch as law does not permit it to be taxed
The same would be the position in regard to the fee paid by the landlord to his counsel in excess of such fee as is taxable
For this reason even though the word taxable  has not been prefixed to the words costs of the suit  in Section 39 of the Act the concept of taxable costs has been introduced therein in the process of interpretation of the said Section
On principle we do not find much difference in a case where the costs incurred by the landlord have been made specifically not payable by the tenant to the landlord by a decree or order of the court
In our opinion non deposit of such costs which either on account of the relevant rules or some specific order of the court are not payable by the tenant to the landlord on the date of deposit contemplated by Section 39 or 40 as the case may be cannot deprive the 825 tenant of the benefit of these two sections
The fact that in appeal there was a possibility of costs of the suit also being awarded to the landlord by reversing the decree of the trial court in this behalf will in our opinion not be material
As regards the use of the word landlord  in place of the word plaintiff  in Section 39 of the Act suffice it to point out that since the Act deals with landlords and tenants the word landlord  was used in Section 39 also as it was used in various other sections
This circumstances in our opinion could not be used for holding that even if costs are not payable to the landlord on the date of deposit because of some specific order of the court it would still be payable
We would however like to emphasise that since Section 39 contemplates deposit of full costs of suit also in cases falling under this category namely where because of a decree or an order passed by the court below depriving the landlord of his costs the tenant is not liable to pay the amount of costs on the date when the deposit contemplated by Section 39 read with Section 40 of the Act is made in an appellate or revisional court such court in order to safeguard the interests of the landlord and to give effect to the intention of the legislature expressed in Section 39 read with Section 40 of the Act will require the tenant to deposit such costs also in supersession of the decree or order of the subordinate court in this behalf if other conditions of these two sections have been complied with before passing an order giving him the benefit of these sections namely of absolving him from his liability for eviction from the premises in question
Such a course would meet the ends of justice and safeguard the interests of both the parties
In doing so in cases falling under the aforesaid category the court will neither be condoning any default nor extending the time for depositing costs of the suit beyond the date contemplated by Section 39 in as much as on that date such costs were not payable by the tenant because of an order of court passed in this behalf
In the instant case the costs of the suit had already been deposited by the tenant and only an order permitting the landlord to withdraw the same was needed
The learned counsel for the landlord respondent while supporting the judgment appealed against placed reliance on a subsequent decision by Division Bench of the Allahabad High Court in Smt
Phoolwati vs Gyan Chand Verma and another 1985 ALL
LJ Page 826 1
It was pointed out by him that the judgment under appeal in the instant case on the point in question has been approved in the case of Smt
Phoolwati supra
In our opinion the decision in the case of Smt
Phoolwati supra is distinguishable on facts
That was a case where during the pendency of the suit the landlord had sought permission to file some papers but her application made in this behalf was rejected by the trial court
Against that order the landlord preferred a revision which was allowed with costs which amount as quantified in the formal order came to Rs13210
The amount which was deposited by the tenant in order to claim the benefit of Section 39 of the Act however did not include this sum
It was urged on behalf of the tenant that since the sum of Rs13210 represented costs awarded in a revision arising not out of the main decree but out of an interlocutory order it was not necessary to be deposited
This plea was repelled and in doing so reliance was indeed placed on the decision in the case of RD Ram Nath  Co supra
Emphasis was placed on the words other taxable expenses incurred  occurring in that part of the judgment in the case of RD Ram Nath  Co supra which has been extracted above
Another circumstance which was relied on by the tenant in that case was that even though the revision against the interlocutory order had been dismissed with costs the amount of Rs13210 even though mentioned in the formal order was not included in the ultimate decree which was passed in the suit
It is in this background that it was held that the said amount of Rs13210 fell within the expression of landlord s full costs of the suit  notwithstanding the fact that it was not shown in the decree
It was thus a case where the sum of Rs13210 had specifically been made payable by the tenant to the landlord in the revision against the interlocutory order but for some reason was omitted to be included in the ultimate decree
It was not a case where the costs of the revision had been directed to be borne by the parties so that it was rendered not payable by the tenant
Since the question in regard to the effect of costs not being allowed by a decree or order did not arise in the case of Smt
Phoolwati supra there was really no occasion to approve in that case the judgment appealed against in the instant case
In view of the foregoing discussion we are of the opinion that on the facts of the instant case the appellant was entitled to the benefit of Section 39 read with Section 40 of the Act and to be absolved from his liability to be evicted from the shop in question on account of the deposit made by him on 19th July 1972 referred to above
In the result this appeal succeeds and is allowed and the suit of the plaintiff 827 respondent in so far as the eviction of the appellant from the shop in question is concerned is dismissed
The landlord respondent shall be entitled to withdraw the various amounts including costs of suit deposited by the tenant appellant in the courts below
In the circumstances of the case however the parties shall bear their own costs of this appeal
RSS Appeal allowed


Summary:
The respondent No 1 in this appeal was manufacturing Spun yarn
In the manufacture of the said product the respondents used as raw material cellulosic fibres and non cellulosic fibres
Prior to 7th July 1983 the respondents had filed a classification list in respect of the spun yarn manufactured by them showing the same as covered by Item No 18 III i in the first schedule to the Central Excises and Salts Act 1944 Central Excises Act
This classification was on the basis that the spun yarn was manufactured by them out of non collulosic synthetic waste
The said classification list was approved by the excise authorities on 7th July 1983
A supplementary classification list was approved on 15th October 1983
Samples were drawn out of the spun yarn manufactured by the respondents and sent for chemical analysis
Reports were submitted by the Chemical Analyser
On 7th February 1984 the Superintendent of Central Excises issued a demand notice against the respondent No 1 on the footing that there was short payment of excise duty as the goods manufactured by the respondents were liable to be classified under Central Excises Tariff Item No 18III ii
The respondents filed a writ petition in the High Court challenging the notice of demand
On 9th February 1984 the Assistant Collector of Central Excises passed an order modifying the approval granted to the classification lists submitted by the respondents and classifying the aforesaid product of the respondents under Item No 18III ii of Schedule I of the Central Excises Act on the basis of which the Superintendent Central Excises issued on the 10th February 1984 a notice to the respondent No 1 calling upon them to show cause why duty short levied should not be recovered from them under the provisions of section 11 A of the Central Excises Act
A second similar show cause notice was also issued
The Assistant Collector passed orders of adjudication dated 5th 839 March 1984 modifying the classification lists and confirming the demand made under the aforesaid notice of demand
The respondents petitioners thereupon amended their aforesaid writ petition to challenge the two show cause notices and the orders of adjudication
The petitioners also filed an appeal before the Collector of Central Excises against the said orders of adjudication
The High Court allowed the writ petition in part quashing the notice of demand for the period 15th August 1983 to 6th February 1984 and the orders modifying the classification lists and directing the Collector Central Excises to hear the appeal of the petitioners on merits considering their evidence in respect of the period from 7th February 1984 onwards
The High Court took the view that the show cause notice served on the petitioner could be treated as valid only in respect of the period from 7th February 1984 onwards and not retrospectively from 15th August 1983 to 6th February 1984
The Union of India the Collector of Central Excises and other Excise officers then moved this Court by this appeal against the decision of the High Court
Dismissing the appeal the Court  HELD If the Cellulosic spun yarn made by a manufacturer with the aid of power contains man made fibre of non cellulosic origin it will fall under Item No 18III ii but if it does not contain any man made fibre of non cellulosic origin it will fall under Item No 18III i and duty would be leviable there at a lower rate
843B C Under the provisions of Section 11 A of the Central Excises Act before any demand is made on any person chargeable in respect of non levy or short levy or under payment of duty a notice requiring him to show cause why he should not pay the amounts specified in the notice must be served on him
In this case no such notice was served
The aforesaid notice of demand dated 7th February 1984 was in violation of the provisions of Section 11 A and is bad in law and the High Court was fully justified in quashing the same
843G H844G H The appellants contended that although the notice of demand might be set aside the notice to show cause dated 9th10th February 1984 should be treated as a valid notice in respect of the period from 15th August 1983 to 6th February 1984 and the period from 7th February 1984 onwards
The notice referred to the service of notice of demand dated 7th February 1984 on the respondent No 1
The notice set out as an established fact that the classification lists submitted by the 840 respondents had been modified by the Assistant Collector and the only matter with respect to which the respondents were asked to show cause was with regard to the quantification of the amount of short levy which was liable to be recovered from the respondent No 1
The Notice could not be regarded as a show cause notice against the modification of the classification lists in respect of the aforesaid period
The show cause notice was bad in law and of no legal effect as far as the earlier period was concerned
Under Section 11 A of the Central Excises Act the notice can relate only to a period of six months period to the issue of that notice except in cases where it is alleged that the short levy or payment has occurred by reason of fraud collusion or wilful misrepresentation or suppression of facts or contravention of the provisions of the said Act or rules as contemplated in the proviso to sub section 1 of Section 11 A
No such case was made out in the said show cause notice
The said show cause notice must be struck down in so far as the period upto 6th February 1984 was concerned and could be regarded as a proper show cause notice only in respect of the subsequent period from 7th February 1984 onwards
Under the said show cause notice the question of short levy or non levy of excise duty prior to 6th February 1984 could not be gone into by the Collector and the High Court was right in the view it took
845B C846A E Gokak Patel Vokkart Ltd vs Collector of Central Excise Belgaum   referred to