Appeal No 674 of 1957
Appeal by special leave from the judgment and decree dated August 10 1955 of the Bombay High Court in C R Application No 1213 of 1953 arising out of the judgment and decree dated April 25 1953 of the Assistant Judge Thana in C A No 97 of 1952 against the judgment and decree dated January 31 1952 of the Court of the Civil Judge J D Kalyan in Suit No 153 of 1949
Purshottam Tricumdas Rameshwar Nath and section N Andley for the appellant
H J Umrigar Ratnaparkhi Anant Govind and W P Oka for the respondent
February 16
The Judgment of the Court was delivered by KAPUR J
This is an appeal by special leave against the judgment of the High Court of Bombay confirming the order of ejectment passed by the Assistant Judge Thana
The tenant who was the defendant in the suit is the appellant and the landlord who was the plaintiff is the respondent
The facts giving rise to this litigation shortly stated are that the appellant was a tenant for about 20 years in the premises known as  Fida Ali Villa  in Kalyan
This building was purchased by the respondent who gave notice to the appellant to vacate as he wanted to construct a new building on the site of the old building
The appellant agreed to vacate and the respondent let to him a portion of his new building which 219 was riot far from  Fida Ali Villa 
The appellant had four sub tenants three of them also shifted to the new premises which were let to the appellant by the respondent
Although it was disputed the courts below have found that they occupied the same position qua the appellant
The 4th a Bohri was fixed up by the respondent in some other place
There was some dispute as to the date when these new premises were let to the appellant the appellant alleging that they were let on July 1 1948 and the respondent that they were let on June 1 1948
The trial Court found that they were let on June 1 1948
The terms of the lease are contained in a document dated June 71948 which is a letter in Marathi written by the respondent to the appellant and contains the following terms as to sub tenancy  In the shops in the old chawl which are with you you have kept sub tenants
We are permitting you to keep sub tenants in the same manner in this place also 
The parties were not agreed as to the correctness of the translation of this term
The submission of the appellant was that the word sub tenant  should be in the plural and of the respondent that it should be in the singular but whether it is in the singular or plural it does not make any difference to the principal argument advanced in this Court
On January 3 1949 the respondent gave notice to the defendant to vacate the premises on the ground of nonpayment of rent and sub letting which it was alleged had resulted in the termination of the tenancy
On April 20 1949 the respondent brought a suit for ejectment on the ground of non payment of rent and sub letting of the premises
The defence of the appellant was that under the terms of the lease he had the right to sub let the premises
As to the claim on the ground of non payment of rent be deposited the arrears of rent in court
The trial Court held that subletting was lawful in spite of section 15 of Bombay Hotel and Lodging Houses Rates Control Act 1947 Bom
57 of 1947
He also held that the appellant did not occupy the premises on the same terms and conditions on which he occupied the old premises in  Fida Ali 220 Villa
He passed a decree for Rs 445 on account of rent remaining due and dismissed the respondent s suit for ejectment
On appeal the Assistant Judge at Thana reversed the decree holding that section 15 of the Act completely prohibited sub letting and under section 131e of the Act the landlord bad the right to evict the tenant on account of sub letting
The appellant then went in revision to the High Court of Bombay but it affirmed the order of ejectment
The appellant has come to this Court by special leave
Counsel for the appellant urged that there was no new tenancy after the coming into force of the Act and therefore sections 131e and 15 of the Act did not apply 2 that the tenant had not sub let the premises to the sub tenants and they were merely licensees of the landlord 3 that no new sub tenancy had been created  4 that section 15 was confined to any other law  it did not apply to contracts between the landlord and tenant and therefore it did not preclude an agreement between the parties as to sub letting 5 that the parties were in pari delicto and therefore the plaintiff respondent could not succeed
He also raised a new ground which had not been raised in the courts below or in the grounds of appeal or in the statement of case in this Court that the respondent had waived his right in regard to the prohibition against sub tenancy and the provision in section 131e was for the protection of his rights which he was entitled to waive
The courts below have held that the tenancy by the letter of June 71948 was a new tenancy and not a continuation of the old and that the sub tenants were tenants of the appellant and not licensees of the respondent and in this Court no serious argument was addressed on these points
The previous tenancy was of a different building called I Fida Ali Villa  which came to an end when the appellant vacated those premises and entered into a new agreement of lease in regard to the premises in dispute
There as no privity between the respondent and the sub tenants of the appellant and they could not be termed his licensees
These contentions are without substance and have rightly been rejected
221 It was then argued that under section 15 of the Act there is no prohibition against a contract of sub letting the non obstante clause being confined to other laws
The section when quoted runs as follows  Notwithstanding anything contained in any law it shall not be lawful after the coming into operation of this Act for any tenant to sub let the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein Provided that the State Government may by notification in the Official Gazette permit in any area the transfer of interest in premises held under such leases or class of leases and to such extent as may be specified in the notification 
This section prohibits sub letting and makes it un lawful for a tenant to assign or to transfer his interest in the premises let to him
The non obstante clause would mean that even if any other law allowed subletting e g section 108 of the Transfer of Property Act the sub letting would because of section 15 be unlawful
This would appy to contracts also as all contracts would fall under the provisions of the law relating to contracts i e Contract Act
An agreement contrary to the provisions of that section section 15 would be unenforceable as being in contravention of the express provision of the Act which prohibits it
It is not permissible to any person to rely upon a contract the making of which the law prohibits section 23 of the Contract Act
Counsel for the appellant contended that the view of the Bombay High Court in P D Aswani vs Kavashah Dinshah Mulla 1 was erroneous and that the correct rule was laid down by that Court in Cooper V Shiavax Cambatta 2
That was a case under section 10 of Bombay Rents Hotel Rates and Lodging Houses Rates Control Act Bom
VII of 1944 which in ex press terms allowed sub letting as follows   Notwithstanding anything to the Contrary in any law for the time being in force a tenant may sublet any portion of his premises to a sub tenant provided be forthwith intimates in writing to his landlord 1 2 AIR 1949 Bom
222 the fact of his having so sub let the premises and also the rent at which they have been sub let 
It was contended that the non obstante clauses in section 10 of Act VII of 1944 and of section 15 of the Act being similar in language must be similarly interpreted
The non obstante clause has to be read in conjunction with the rest of the section
Section 10 of the Act of 1944 permitted sub letting on certain conditions
By section 9 of that Act provision was made for a Contract between the landlord and the tenant prohibiting sub letting and in Cooper vs Shiavax Cambatta 1 the two provisions were reconciled by saying that a contract under section 9 prevailed over the permission given by section 10
But section 15 expressly prohibits subletting and therefore a contract to the contrary cannot neutralise its prohibitory effect
The non obstante clause of the two sections section 10 of the Act of 1944 and of section 15 of the Act therefore cannot be said to have the same effect
The respondent s suit for ejectment was brought under section 131e which provides  Notwithstanding anything contained in this Act but subject to the provisions of section 15 a landlord shall be entitled to recover possession of any premises if the Court is satisfied e that the tenant has since the coming into operation of this Act sub let the whole or part of the premises or assigned or transferred in any other manner his interest therein  
It was contended that section 131e had to be read separately and not in conjunction with section 15 of the Act
The section itself makes it quite clear that it is subject to the provision of section 15 and the two sections must therefore be read together
The appellant pleaded that under the agreement between him and the  respondent he was entitled to sub let the premises
Such an agreement in our opinion is void because of the provisions of section 15 of the Act and section 23 of the Contract Act and enforcement of the agreement would produce the 1 AIR 1949 Bom
very result which the law seeks to guard against and to prevent and by sustaining the plea of the appellant the Court would be enforcing an agreement which is prohibited and made illegal
The appellant relied on the maxim in pari delicto potior est conditio posidentis to support his plea that the respondent could not enforce his right under section 13 1e
But this maxim  must not be understood as meaning that where a transaction is vitiated by illegality the person left in possession of goods after its completion is always and of necessity entitled to keep them
Its true meaning is that where the circumstances are such that the Court will refuse to assist either party the consequence must in fact follow that the party in possession will not be disturbed 
Per Du Parcq L J in Bowmakers Ltd vs Barnet Instruments Ltd 1
The respondent in the present case did not call upon the Court to enforce any agreement at all
When the instrument of lease was executed and possession given and sub letting done it received its full effect no aid of the Court was required to enforce it
The respondents  suit for ejectment was not brought for the enforcement of the agreement which recognised sub letting but he asked the Court to enforce the right of eviction which flows directly from an infraction of a provision of the Act section 15 and for which the Act itself provides a remedy
There is thus a manifest distinction between this case where the plaintiff asked the Court to afford him a remedy against one who by contravening section 15 of the Act has made himself liable to eviction and those cases where the Court was called upon to assist the plaintiff in enforcing an agreement the object of which was to do an illegal act
The respondent is only seeking to enforce his rights under the statute and the appellant cannot be permitted to assert in a Court of justice any right founded upon or growing out of an illegal transaction
Gibbs  Sterret Manufacturing Co vs Brucker 2
In our opinion section 15 of the Act is based on public policy and it has been hold that if public policy demands it even an equal participant in the 1 1945 I KB 65 72
2 1884 III US 597  224 illegality is allowed relief by way of restitution of res cission though not on the contract
It was next contended that section 131e is a provision for the protection of private rights of the landlord and unless there is in the Act itself any provision to the contrary such rights as far as they were personal rights may be parted with or renounced by the landlord
In other words the right of the respondent to sue for ejectment on the ground of subletting being a personal right for his benefit the landlord must be taken to have waived it as by an express contract he had allowed the tenant to sub let and consequently he could not evict the appellant under section 131e of the Act
The plea of waiver was taken for the first time in this Court in arguments
Waiver is not a pure question of law but it is a mixed question of law and fact
This plea was neither raised nor considered by the courts below and therefore ought not to be allowed to be taken at this stage of the proceedings
But it was argued on behalf of the appellant that according to the law of India the duty of a pleader is to set up the facts upon which he relied and not any legal inference to be drawn from them and as he had set up all the circumstances from which the plea of waiver could be inferred lie should be allowed to raise and argue it at this stage even though it had not been raised at any previous stage not even in the statement of case filed in this Court and he relied upon Gouri Dutt Ganesh Lal Firm vs Madho Prasad 1
Assuming that to be so and proceeding on the facts found in this case the plea of waiver cannot be raised because as a result of giving effect to that plea the Court would be enforcing an illegal agreement and thus contravene the statutory provisions of section 15 based on public policy and produce the very result which the statute prohibits and makes illegal
In Surajmull Nargoremull vs Triton Insurance Co 2 Lord Sumner said  No Court can enforce as valid that which competent enactments have declared shall not be valid nor is obedience to such an enactment a thing from 1 AIR 1943 P C 147
2 1924 LR 52 I A 126
225 which a Court can be dispensed by the consent of the parties or by a failure to plead or to argue the point at the outset Nixon vs Albion Marine Insurance Co 1
The enactment is prohibitory
It is not confined to affording a party a protection of which he may avail himself or not as he pleases
It is not framed solely for the protection of the revenue and to be enforced solely at the instance of the revenue officials nor is the prohibition limited to cases for which a penalty is exigible In the instant case the question is not merely of waiver of statutory rights enacted for the benefit of an individual but whether the Court would aid the appellant in enforcing a term of the agreement which section 15 of the Act declares to be illegal
By enforcing the contract the consequence will be the enforcement of an illegality and infraction of a statutory provision which cannot be condoned by any conduct or agreement of parties
Dhanukudhari Singh vs Nathima Sahu 2
In Corpus Juris Secundum Vol
92 at p 1068 the law as to waiver is stated as follows   a waiver in derogation of a statutory right is not favoured and a waiver will be inoperative and void if it infringes on the rights of others or would be against public policy or morals  
In Bowmakers Limited vs Barnet Instruments Ltd 3 the same rule was laid down
Mulla in his Contract Act at page 198 has stated the law as to waiver of an illegality as follows  Agreements which seek to waive an illegality are void on grounds of public policy
Whenever an illegality appears whether from the evidence given by one side or the other the disclosure is fatal to the case
A stipulation of the strongest form to waive the objection would be tainted with the vice of the original contract and void for the same reasons
Wherever the contamination reaches it destroys 
This in our opinion is a correct statement of the law and is supported by high authority
Field J in 1  2  852
3 1945 1 XB 65 72
29 226 Oscanyan vs Winchester Arms Company 1 quoted with approval the observation of Swayne J in Hall vs coppell 2  The principle is indispensable to the purity of its administration
It will not enforce what it has forbidden and denounced
The maxim Ex dolo malo non oritur actio is limited by no such qualification
The proposition to the contrary strikes us as hardly worthy of serious refutation
Wherever the illegality appears whether the evidence comes from one side or the other the disclosure is fatal to the case
No consent of the defendant can neutralise its effect
A stipulation in the most solemn form to waive the objection would be tainted with the vice of the original contract and void for the same reasons
Wherever the contamination reaches it destroys 
Waiver is the abandonment of a right which normally everybody is at liberty to waive
A waiver is nothing unless it amounts to a release
It signifies nothing more than an intention not to insist upon the right
It may be deduced from acquiescence or may be implied
Chitty on Contract 21st Ed p 381  Stackhouse vs Barnston 3
But an agreement to waive an illegality is void on grounds of public policy and would be unenforceable
In Mytton vs Gilbert4 Ashurst J said  Besides there is still further reason why the trustees should not be estopped  for this is a public Act of Parliament and the Courts are bound to take notice that the trustees under this Act had no power to mortgage the toll houses
This deed therefore cannot operate in direct opposition to an Act of Parliament which negatives the estoppel 
Vaughan Williams L J in Norwich Corporation vs Norwich Electric Tramways Company5 said   The case is not like that of a provision in an agreement which is for the benefit of one of the parties and which he may waive
This is a provision in an Act of Parliament which though to some extent 1   2 7 Wallace 542
3   4  1787 2 TR 171  5  124
227 it may be for the benefit of the parties to the difference must be regarded as inserted in the interest of the public also In that case there was a provision made by the Legislature that disputes mentioned in the section of the Act were to be determined by an Expert nominated by the Board of Trade and it was contended that though not in the strict technical sense estoppel it was a waiver of the provisions introduced into the Statute for the benefit of private rights
No doubt that was a case which proceeded on a question of jurisdiction but the judgment proceeded on the principle of waiver of a statutory provision inserted in public interest
Thus the plea of waiver is unsustainable
In our opinion therefore the judgment of the High Court is sound and the appeal must therefore be dismissed with costs
Appeal dismissed


Summary:
The respondent company in its factory set up at Madras 1959 introduced slab system of dearness allowance DA ie the DA paid to the workmen was linked to the cost of living index as well as the basic pay
The double linked DA scheme being consciously accepted as basic constituent by the company and its workmen in various settlements between them became basic feature of the wagestructure and remained operative in the company for about 30 years In the year 1983 a dispute arose between the company and its workmen
The matter was referred to the industrial Tribunal
One of the issues before the Tribunal was based on the demand of the Management for restructuring of the dear ness allowance scheme and to frame a new scheme
The Tribu nal abolished the existing slab system of DA and directed the dearness allowance to be linked only to the cost of living index at 33 paise per point over 100 points at the Madras city cost of living index 1936 base
Before the High Court both the parties agreed not to press their respective writ petitions except on the issue of restructuring of 130 DA
Upholding the findings of the Tribunal on the sole surviving issue the Single Judge dismissed the workmen s writ petition
The intra Court appeal filed by the workmen was also dismissed
grieved the workmen filed the appeal by special leave to this Court
It was contended on behalf of the workmen that the Tribunal and High Court grossly erred in taking Rs 26 as a pre war wage of a worker in Madras region and holding that the rate of neutralization on the basis of cost of living index in December 1984 was 192 that even assuming that there was over neutralization the existing pay structureDA scheme could not be revised to the prejudice of the workmen unless their pay structure was within the concept of living wage  and in addition it was proved that financially the company was unable to bear the burden and that the company could not be permitted to abolish the DA scheme to the detriment of the workmen much less on the plea that the said scheme was more beneficial than the DA schemes adopted by other industries in the region
The respondent contended that the company had proved to the satisfaction of the Tribunal that financially it was not in a position to bear the burden of existing DA scheme that its workmen were in a high wage island and as such the revision of DA scheme was justified
It was also contended that so long as there was some basis and material to vali date the award the jurisdiction under Article 136 of the Constitution stood repelled
On the question whether the Management is entitled to restructure the DA scheme to the prejudice of the workmen on the ground that the existing system had resulted in over neutralization thereby landing the workmen in the high wage island Allowing the appeal of the workmen this Court HELD 11
The management can revise the wage structure to the prejudice of the workmen in a case where due to financial stringency it is unable to bear the burden of the existing wage
But in an industry or the employment where the wage structure is at the level of minimum wage no such revision at all is permissible not even on the ground of financial stringency
p 142 E Monthly Rated workmen at the Wadala factory of the Indian Hume 131 Pipe Co Ltd vs Indian Hume Pipe Co Ltd Bombay   relied on
Ms Crown Aluminium Works vs Their Workmen   Ahmedabad Mills Owners  Association etc
vs The Textiles Labour Assosication   referred to
Killick Nixon Ltd vs Killick  Allied Companies Employ ees Union  distinguished
12 The employees are entitled to the minimum wage at all times and under all circumstances
An employer who cannot pay the minimum wage has no right to engage labour and no justification to run the industry
p 137 C 13 It is for the management seeking to restructure the DA scheme to the disadvantage of the workmen to prove to the satisfaction of the tribunal that the wage structure in the industry concerned is well above minimum level and the management is financially not in a position to bear the burden of the existing wagestructure
p 142 F 21 The concept of minimum wage  is no longer the same as it was in 1936
Even 1957 is way behind
A worker s wage is no longer a contract between an employer and an employee
It has the force of collective bargaining under the labour laws
Each category of the wage structure has to be tested at the anvil of social justice which is the live fibre of our society today
pp 136 H 137 A 22 The Tripartite Committee of the Indian Labour Con ference  1957 has formulated five norms for the fixation of minimum wage  i three consumption units for one earner disregarding earnings of women children and adolescents ii minimum food requirement based on net intake calories iii clothing requirement at 72 yards per annum for an average working family of four iv house rent correspond ing to minimum area provided for under the Government s Industrial Housing Scheme v 20 of total minimum wage for fuel lighting and other miscellaneous items
p 136 D G Express Newspapers P Ltd vs Union of India  followed
Standard Vacuum Refining Co of India vs Its Workmen  Anr   relied on
132 Keeping in view the socio economic aspect of the wage structure the following additional component has also to be taken into account vi children education medical require ment minimum recreation including festivalsceremonies and provision for old age marriages etc
should further constitute 25 of the total minimum wage The wage structure which approximately answers these six components is nothing more than a minimum wage at subsist ence level
p 137 A C 23 In spite of the promise by the Constitution of a living wage and a socialist  framework to enable the work ing people a decent standard of life industrial wage looking as a whole has not yet risen higher than the level of minimum wage
p 137 D E 31 Purchasing power of today s wage cannot be judged by making calculations which are solely based on 3040 years old wagestructure
The only reasonable way to determine the category of wage structure is to evaluate each component of the category concerned in the light of the prevailing prices
There has been skyrocking rise in the prices and the inflation chart is going up so fast that the only way to do justice to the labour is to determine the money value of various components of the minimum wage in the context of today
p 140 F H 32 In the instant case the Company neither pleaded nor argued before the Tribunal that its financial position had so much deteriorated that it was not possible for it to bear the burden of the slab system of DA nor did the Tribunal deal with this aspect of the matter while considering the demand of the Company for re structuring the DA scheme
p 144 F G 33 Although the DA paid by the Company was somewhat higher than what was being paid by the other similar indus tries in the region yet it could not be shown that what was being paid by the Company was higher than what would be required by the concept of need based minimum wage
In any case there is a very long way between the need based wage and the living wage
p 145 AB 4
The Tribunal and the High Court acted in total oblivion of the legal position
Consequently manifest injustice has been caused 133 to the workmen by the award
It can therefore not be said that jurisdiction under article 136 stands repelled
p 145 CD Shaw Wallace  Co Ltd vs Workmen  The Statesman Ltd vs Workmen   referred to
The Tribunal was not justified in abolishing the slab system of DA which had stood the test of time for almost 30 years and had been approved by various settlements between the parties and as such the award of the Tribunal and the High Court judgments were unsustainable
pp 144 AB 145 DE Buckingham and Carnatic Mills Ltd vs Their Workers 1951 2 LL
J 314  Good Pastor Press vs Their Workers  referred to