Civil Appeal Nos
960 to 962 NT of 1975
From the Judgment and order dated 231973 of the Allahabad High Court in Income Tax Reference No 721 of 1970
SL Aneja Pawan Aneja and KL Tarieja for the Appellants
CM Lodha Ms A Subhashini and KC Dua for the Respondents
The Judgment of the Court was delivered by VENKATACHALIAH J
These assessee s appeals by certificate arise out of the Judgment and order dated 231973 of the Allahabad High Court in ITR No 721 of 1970 answering certain questions of law referred for the opinion of the High Court against the assessee
The assessee is a Hindu Undivided Family
The assessment years are 1954 55 1960 61 and 1961 62
The principal controversy in these appeals pertains to the allowance of and deduction for repairs  in respect of a house property at Delhi leased out to the Chinese Embassy under a deed of lease dated 3051952
Originally assessments were completed including therein the annual letting value of this property at Rs36000 and allowing a deduction of Rs6000 for repairs under Section 241ia of the Income tax Act 1961 Act or the corresponding provisions of the Act of 1922
Subsequently the assessments were reopened on the ground that the assessee had got excess of relief
In the re assessments the Income tax officer held that as the lessee had undertaken to keep 90 the premises in good and habitable condition execute all repairs  the deduction of Rs6000 was impermissible
The Income tax officer accordingly determined the annual letting value of the property at Rs40000 and allowed a deduction at Rs4000 towards repairs  under Section 241ib of the Act
In respect of the assessment year 1954 55 the assessee claimed unsuccessfully that he had undertaken  considerable repairs and that a sum of Rs5645 should be allowed
This claim was negatived by the Income tax officer who confined the allowance for repairs to the limit permissible under Section 241ib of the Act on the premise that this was a case where the tenant had undertaken to bear the cost of repairs
This view was affirmed by the Appellate Asst
Commissioner of Income Tax and the Income tax Appellate Tribunal  Tribunal 
It is perhaps relevant to mention that some of the assessment years are governed by the provisions of the 1922 Act
But having regard to the similarity of the provisions this does not assume any significance or affect the substance of the matter
At the instance of the assessee the Tribunal stated a case and referred the following three questions of law for the opinion of the High Court 1 Whether on the facts and in the circumstances of the case the assessments for the years 1954 55 1960 61 and 1961 62 were validly reopened under Section 147a of the Income Tax Act 1961 2 Whether on the facts and in the circumstances of the case the provisions of Section 241ib of the Income tax Act 1961 were applicable 3 Whether on the facts and in the circumstances of the case the expenditure which was not allowed while completing the original assessments could be considered for allowance in course of assessments re opened under Section 147a As stated earlier the High Court answered the questions against the assessee but granted a certificate under Section 261 of the Act as in its opinion two important questions arose out of the judgment
The questions the High Court had in mind are questions No 2 and 3 supra
It must at the outset be observed that the question as to the validity of the re opening of the assessments which was raised before the High Court was not in our opinion rightly re agitated here Learned counsel for the appellants urged that the High Court was in error in its opinion on questions 2 and 3
The third question referred was whether where once an assessment is re opened by a valid notice the whole proceedings of assessment were at large and all the claims and allowances which had been disallowed in the original assessment could be re agitated by the assessee
The High Court has answered this proposition against the assessee
We may take up and dispose of this contention first
It is seen from the order of the Tribunal that though certain reliefs were claimed by the assessee before the authorities the matter before the Tribunal was however confined to the question of allowance for repairs
The relief on the claim for repairs if otherwise tenable can be granted even without going into this larger question
It is therefore unnecessary to consider this contention in this case
We may now turn to question No 2 as formulated in the reference
Learned counsel urged that the covenant for repairs embodied in the lease deed did not cast the burden to carry out the repairs exclusively on the lessee and that since the lessor had also undertaken to carry out some of the repairs Section 241ib was not attracted and that in the circumstances the benefit of Section 241ia was available to the assessee
Counsel relied upon Commissioner of Income tax vs Parbutty Churn Law 6
Section 241ib of the Act provides that where a property is in the occupation of a tenant who has undertaken to bear the cost of repairs the deduction towards repairs which the assessee owner is entitled to is either the excess of the annual value over the amount of rent payable for a year by the tenant or a sum equal to one sixth of the annual value whichever is lesser
There is no dispute that if Section 241ib is applicable the computation would be correct
The only question therefore is whether having regard to the terms of the covenant it could be said that the tenant had undertaken to bear the cost of repairs within the meaning and for purposes of Section 241ib of the Act
The covenant in this behalf in the lease deed dated 991952 is in terms following To maintain and keep the demised premises in good and 92 habitable condition tenantable repair execute all repairs including annual white washing repairs of electric and sanitary fittings etc at the lessee s expenses
Major repairs such as repairs against collapse of the house etc shall be undertaken by the lessors at their own cost
 The view of the High Court in substance is that this covenant satisfies the requirements of and attracts Section 241ib 
The correctness of this view turns upon what in the law of landlord and tenant is the content of a covenant for repairs  and whether by the terms of the present agreement the tenant is said to have undertaken the burden of such repairs 
Referring to what is implicit in and carried with the covenant for repairs Halsbury states Under a covenant to repair a tenant is liable to repair but not to renew Repair  in this sense means the restoration by renewal or replacement of subsidiary parts of the whole whereas renewal  as distinguished from repair means the re construction of the whole or of substantially the whole
Where the demised building is erected on in herently defective foundations the tenant is not liable to substitute new foundations   See Halsbury s Laws of England 14th Edn
paragraph 285 In regard to the Standard of Repairs Halsbury at paragraph 286 states If he has expressly covenanted to put a house into tenantable repair and to keep it in such repair and it is not in tenantable repair at the commencement of the tenancy the tenant must do the necessary repairs not with standing that the building is thereby put in a better condition than when the landlord let it
The effect is the same if without expressly covenanting to put it into repair the tenant only covenants to keep the house in tenantable repair
Such a covenant presupposes putting the house in such repair and keeping it in repair during the term
The construction of the covenant is the same whether the covenant specifies tenantable  or habitable  or good  repair
A general covenant to repair without any such words is satisfied if the premises are kept in a substantial state of repair
emphasis supplied 93 7
The oft quoted observations in Lurcott vs Wakely and Wheeler as to what is meant by repairs  are generally considered apposite
This has been referred to and relied upon by the High Court
The observations in Lurcott s case was referred to with approval by the Privy Council in Rodesia Railway Ltd vs Income tax Collector 1933 Appeal cases 368
The idea of repair  may include replacement or even a renewal
But the converse may not be true
All replacements or renewals need not necessarily be repairs 
In the case of a building restoration of stability or safety of a subordinate or subsidiary part of it or any portion of it can be considered as repair while the re construction of the entirety of the subject matter may not be so regarded
The somewhat comprehensive import of the word repair  in this context is evident from the reliance by Forbes J in Ravenseft Properties Ltd vs Davstone Holdings Ltd 1980 QB 12 on the following observations of Sir Herbert Cozens Herdy MR in Lurcott s case supra It seems to me that we should be narrowing in a most dangerous way the limit and extent of these covenants if we did not hold that the defendants were liable under covenants framed as these are to make good the cost of repairing this wall in the only sense in which it can be repaired namely by re building it according to the requirements of the county council Having regard to somewhat comprehensive nature of the obligations that go with and are attached to and recognised under the tenant s covenants for repairs  it must be held that the covenant in the present case is one under which the tenant has undertaken substantial repairs  and it must accordingly be held to fall within Section 241ib of the Act and that the allowance for repairs must be one under and limited to that provision
The case of the assessee that it should fall under Section 241ia we are afraid is very nearly unarguable
There is no substance in the contention
This is clearly not a case where the burden of carrying out repairs as understood in the context of Section 241ib is shared between the lessor and the lessee
The obligation is on the lessee alone
The obligation under the latter part of the covenant does not relate to such repairs
The appellant s reliance on Commissioner of Income tax vs Parbutty Churn Law supra is in the facts of the present case misplaced
In the result for the foregoing reasons these appeals fail and are dismissed but in the circumstances without an order as to costs
NPV Appeals dismissed


Summary:
 The petitioners who were engaged on terms of casual labour for periods varying between 10 and 16 years in the Construction Department of the Signal Unit in the Northern Railway filed writ petitions in this Court alleging that though they had put in continuous service for quite a long period the Railway Administration the respondent had not treated them as temporary servants and had applied discriminatory rates of wages and prayed for a direction to treat them at par with maintenance workers and to declare that they were entitled to equal pay for equal work and absorption in the regular cadre in The permanent category as per the circulars issued by the respondents
The respondents in their counter affidavits contested the claim of the petitioners contending that out of the forty four petitioners sixteen bad been empanelled five of whom had been given temporary appointments eleven had refused to join and seventeen had been given temporary status and that by the Railway Board s directions on January 1 1984 project casual labourers were now entitled to all privileges that were applicable to open line temporary railway servants that temporary status will first be given in the cadre of Khallasis and then promotion to skilled category after conducting trade test and that the employees in the open line acquired temporary status on completion of 120 days of service whereas such status was acquired by the casual labour in project work on completion of 360 days as formulated under orders of this Court
Disposing of the writ petitions  HELD Casual labour seems to be the requirement of the Railway 139 administration and cannot be avoided
The Railway Establishment A Manual has made provisions for their protection but implementation is not effected
Several instructions were issued by the Railway Board and the Northern Railway Headquarters to remove the difficulties faced by the casual labour but there is slackness in enforcing them
This Court hopes and trusts that such an unfortunate situation will not arise again and in the event of any such allegation coming to the Court the Administration will have to be blamed
144F G No doubt the petitioners have put in more than 360 days of service
But keeping the prevailing practice distinction between the casual labour employed in the open line and in the project line cannot be obliterated
141D F The Railway Administration should take prompt steps to screen such of the petitioners who have not yet been tested for the purpose of regularising their services
144C The respondents are directed to consider the claims of the petitioners promptly and make appropriate orders for their regularisation
144D E The petitioners are entitled to the same pay as is admissible to others either in the project or in the open line
Retiral benefit of pension is not admissible144DB