Civil Appeal No 2383 of 1977
Appeal by special leave from the judgment and order dated 18th November 1976 of the Bombay High Court in Civil Appln
No 1741 of 1976
Gobind Ram Bhatia R C Bhatia and P C Kapoor for the Appellant
Nemo for the Respondent
The Judgment of the Court was delivered by FAZAL ALI J
This appeal by special leave is directed against the judgment of the High Court of Bombay dated December 24 1975
The short point of law involved in this case is whether the lease in question granted by the landlord to the appellant tenant was a lease for manufacturing purposes
In case the lease was for a purpose of manufacture then it is manifest that under section 106 of the Transfer of Property Act the lease could be terminated only by giving six months notice
The suit was contested by the defendant tenant
The plaintiff s case was that the tenancy was from month to month and therefore a month s notice to terminate the tenancy was sufficient and the provision under section 106 of the Transfer of Property Act was not attracted
The plaintiff also denied that the lease was for a manufacturing purpose
The High Court upheld the judgment of the District Judge holding that the lease was not for a manufacturing 1199 purpose and held that the tenancy was rightly terminated as the notice was valid
Mr Gobind Ram Bhatia learned counsel for the appellant tenant has submitted a short point of law before us
He submits that having regard to the process of manufacturing carried on by the defendant there can be no doubt that the lease was for a manufacturing purpose and could be terminated only by six months notice under Section 106 of the Transfer of Property Act
Notice was issued to the respondents
That notice was duly served on them
There is a certificate given by the High Court of Bombay itself that the notice on the respondents was served
Nobody has appeared for the respondents to contest this appeal
In the present case the admitted facts are as under 1
That to begin with the lease was given to the defendant in respect of an open piece of land 2
That on the open piece of land the appellant installed a flour mill and that the defendant was not using the land for any other purpose except running a flour mill
That the receipts filed by the tenant clearly show that the lease was doubtless a yearly one
Reliance was placed by the District Judge on the counter foils where the plaintiff landlord tried to make out a case of monthly tenancy but the entry in the counter foil being an admission in his own favour was not admissible against the appellant
On the other hand the trial court has pointed out at page of its judgment that the receipts produced by the tenant clearly show that the rent used to be paid from year to year
Exhibits 24 to 26 pertained to the rent paid on an yearly basis right from 1959 to May 31 1961
On point of fact therefore we are satisfied that in the instant case the lease was from year to year and therefore a month s notice was not legal if the lease was for a manufacturing purpose
The second point which arises for decision is as to the purpose of the lease
This point is no longer res integra and is concluded by a clear authority of this Court in Allenburry Engineers Private Ltd vs Ramakrishna Dalmia and Ors
where this Court has laid 1200 down that the expression manufacturing purposes in Section 106 of the Transfer of Property Act must be used in its popular and dictionary meaning as the statute has not defined the word manufacturing purposes
We might state that in the present set up of our socialistic pattern of society when our country has made strong strides in various spheres of industrial activities an industrial venture must be given the most liberal interpretation so as to subserve the object of the statute
Of course the burden of proof whether the purpose of the lease was a manufacturing purpose would be on the defendant but we are satisfied that the defendant in this case has amply discharged its onus
In the aforesaid case this Court observed as follows The word manufacture  according to its dictionary meaning is the making of articles or material now on large scale by physical labour or mechanical power
Shorter Oxford English Dictionary Vol
I 1203
According to the Permanent Edition of Words and Phrases Vol
26 manufacture  implies a change but every change is not manufacture and yet every change in an article is the result of treatment labour and manipulation
But something more is necessary and there must be transformation a new and different article must emerge having a distinctive name character or use
 In coming to this conclusion this Court relied on two of its earlier decisions in South Bihar Sugar Mills vs Union of India and Union of India vs Delhi Cloth and General Mills
Even before the decision of this Court BK Mukherjea J as he then was who was later elevated to the Bench of this Court and retired as Chief Justice of India observed in Joyanti Hosiery Mills vs Upendra Chandra Das as follows To manufacture according to its Dictionary meaning means to work up materials into forms suitable for use
The word material does not necessarily mean the original raw material for a finished article may have to go through several manufacturing processes before it is fit and made ready for the market
What is itself a manufactured commodity may 1201 constitute a material for working it up into a different product
Thus for example for the tanner the material would be the raw hide but the leather itself a manufactured article would constitute the material for the shoemaker s business and we cannot say that the shoe makers are not manufacturers because they do not work on raw hides
 In the case of John Augustine Peter Mirande and anr
vs N Datha Naik the Mysore High Court following the Calcutta decision held that the lease in that case which was a case of saw mill was for manufacturing purposes
We might observe that so far as the present case where the mill is a flour mill stands higher than the facts of the case in Mysore case supra
Coming now to the tests laid down by this Court the position may be summarised as follows 1
That it must be proved that a certain commodity was produced 2
That the process of production must involve either labour or machinery 3
That the end product which comes into existence after the manufacturing process is complete should have a different name and should be put to a different use
In other words the commodity should be so transformed so as to lose its original character
In the instant case what happened was that wheat was transformed by the manufacturing process which involved both labour and machinery into flour
The commodity before manufacture was wheat which could not be consumed by any human being but would be used only for cattles or medicine or other similar purposes
The end product would be flour which was fit for human consumption and is used by all persons and its complexion has been completely changed
The name of the commodity after the product came into existence is Atta and not Gehun wheat
Thus in the instant case all the three tests have been fully satisfied
This being the position the irresistible inference and the inescapable conclusion would be that the present lease was one for manufacturing purposes
In this view of the matter the notice of one month must be held to be invalid and suit for ejectment should have failed on that ground
1202 We therefore allow this appeal set aside the judgment of the High Court and dismiss the plaintiff s suit
Before concluding we would like to add that with due respect that the judgment of the High Court is not very satisfactory as it has not made any real attempt to apply its mind to the substantial question of law that was involved in the case and seems to have rushed to its conclusions even without considering the authorities on the subject particularly the one referred to in the judgment as also the authoritative decision of this Court referred to above which was pronounced five years before the judgment of the High Court was given
From such a prestigious High Court as Bombay we do expect a more careful and cautious approach in a matter like this
As the respondents have not appeared before us we make no order as to costs in this Court
The appellant will certainly be entitled to costs in the Courts below
PBR Appeal allowed


Summary:
A piece of open land belonging to the plaintiff respondent was given on lease to the defendant appellant
The appellant installed a flour mill on that land
He did not use it for any purpose other than running the flour mill
In his suit for eviction of the tenant from the land the plaintiff claimed that the tenancy was from month to month and that a month s notice given by him to terminate the tenancy was sufficient
The trial court on the basis of receipts produced by the plaintiff held that rent was paid on an yearly basis
Upholding the view of the District Judge that the lease was not for a manufacturing purpose the High Court held that the tenancy was rightly terminated by giving a valid notice
On further appeal to this Court it was contended on behalf of the tenant that the lease was for a manufacturing purpose and that under section 106 of the Transfer of Property Act it could be terminated only by giving six months  notice
Allowing the appeal  HELD The lease was from year to year and was for a manufacturing purpose and therefore a month s notice was not legal
The suit for ejectment should have failed on this ground
1201 H When the country is making rapid strides in various spheres of industrial activity the term manufacturing purpose must be given the most liberal interpretation so as to subserve the object of the statute
So interpreted the tests for deciding whether a lease was for a manufacturing purpose are i that a certain commodity is produced ii that the process of production would involve either labour or machinery and iii that the end product coming into existence after the manufacturing process is complete should have a different name and should be put to a different use
1200 B 1201 D E 1198 In the instant case all the three tests have been satisfied because wheat was transformed into flour by the use of labour and machinery making it fit for human consumption and therefore the lease was for a manufacturing purpose
1201 F Allenburry Engineers Private Ltd vs Ramakrishna Dalmia and Ors  followed
Joyanti Hosiery Mills vs Upendra Chandra Das AIR 1946 Calcutta 317 and John Augustine Peter Mirande and Anr
vs N Datha Naik AIR approved