Case: Allenbury Engineers Pvt. Ltd Vs. Ramkrishna Dalmia and Ors

10 would not be of assistance as the question there discussed was not as to meaning of the word manufacture, but whether the premises in question were industrial hereditaments within the meaning of S. 3 of the Rating and Valuation (Appointment) Act, 1928. Likewise, decision given by courts on the word manufacture occurring in different statutes would not be of assistance where the statute concerned gives an artificial meaning or a special definition.11. Bearing in mind the connotation of the word manufacture as understood in the decisions above-cited, we have to ascertain whether the appellant-company could be said to be carrying on operations in the premises in question which could properly be called manufacturing operations. On this question, the evidence on record is general in character and almost meagre in quantum. With Choradia, who was the managing director of the Bharat Insurance Co. between 1950 to 1954 and who used to reside in Delhi where the company had its headquarters, but occasionally used to visit its branch in Bombay, deposed that after the premises in question were purchased in 1953 by his company from Sir Shapurji Bharucha Mills, he visited them and found them to comprise an open land with sheds and a godown. There were lying there army automobiles, jeeps etc., but he did not notice at that time any manufacturing process going on. He again visited the premises in 1954 when also he found no manufacturing operations going on. Wit. V. G. Kannan was an accountant in Allenbury and Co. Ltd. He used to go to the premises in 1950 and 1951 to pay wages to the workmen engaged there by his company. The premises had a workshop, a godown and a small office and the rest was open land. The company wound up its business in 1950, but there were lying in the premises steel racks belonging to his company, to inspect which he had to go there on several occasions.He also said that he did not see any manufacturing processes going on except that the workshop was used for repairing the disposal vehicles lying stored there. This was the position till July-August 1954 and till then there was no change in the user of the premises.Wit. J. P. Jain examined by the appellant-company was the Central Manager of the Bombay branch of Allenbury and Co. from 1946 to 1950.Thereafter he became the managing director of the appellant-company. According to him, Allenbury and Co. Ltd. had in 1948 purchased disposal vehicles which were stored for sale in the premises in question. The vehicles were in a damaged condition when they were purchased. In some cases chassis were missing or they were bent or broken; most of the parts were broken and missing. These used to be repaired and then sold. The company had put up a workshop where these vehicles were repaired, reconditioned and painted before they were sold. The repairs, according to him, involved in some cases making of new bodies and new parts. For that purpose, the appellant company had to have in the workshop lathes, drill machines, welders etc. and had employed some 200 to 250 workmen. When the appellant-company took over the business of Allenbury and Co. Ltd. in 1950-51, there were in all 189 vehicles of different types in the suit premises. The working, he said, of overhauling, reconditioning and repairing these vehicles went on until 1957 when reconditioning of vehicles stopped presumably because the vehicles were sold out. The premises had on them a servicing station also with a trench in the centre for washing the vehicles and were spare parts needed for repairs used to be stored. There was also an office and a store room where spare parts, oils and other stores purchased locally were kept. He denied that the premises were used only for repairing the vehicles.12. Besides his oral testimony, there is one letter on record written by this witness to Allenbury and Co. Ltd., dated November 21, 1950 giving details of stocks lying on these premises when that companys business was taken over by the appellant-company. The schedule to this letter gives particulars of these stocks, viz., 182 vehicles of different types, stores, accessories, spare parts purchased from the market or the Disposal Directorate, tools and other workshop equipment and three cars under repairs. The schedule shows that the premises were used till then for storing the Disposal Vehicles together with spare parts etc. acquired along with them or purchased from the market for repairing and reconditioning and making them fit for resale. There is no evidence except the bare word of wit. Jain that parts such as chassis and bodies etc. were actually manufactured and replaced for the old. No books of account or long books showing the work carried on the premises or other documents were produced which would throw light on the activities carried on the premises. Even if the evidence of Jain were accepted in toto, and we were to find that some spare parts were being manufactured for repairing or reconditioning the vehicles, the dominant purpose of the lease would still have to be regarded as one for storage and resale of the vehicles and not for manufacturing purposes. Manufacturing of spare parts would then be merely incidental to the main purpose of disposal of these vehicles as without repairing or reconditioning them, such disposal could hardly have been possible. In our opinion, the appellants failed to establish that the dominant purpose of the lease was manufacturing purpose. In that view, the appellants could not have challenged the legality of the notice. The High Court, therefore, was right in the conclusion it arrived at and no reason has been shown justifying our interference with it. That being the position, it is not necessary to go into the question whether S. 107 has any impact on S. 106 of the Transfer of Property Act, a question which the Division Bench, while referring this appeal to a larger Bench, thought the appeal raised.13.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]The working, he said, of overhauling, reconditioning and repairing these vehicles went on until 1957 when reconditioning of vehicles stopped presumably because the vehicles were sold out. The premises had on them a servicing station also with a trench in the centre for washing the vehicles and were spare parts needed for repairs used to be stored. There was also an office and a store room where spare parts, oils and other stores purchased locally were kept. He denied that the premises were used only for repairing the vehicles.Besides his oral testimony, there is one letter on record written by this witness to Allenbury and Co. Ltd., dated November 21, 1950 giving details of stocks lying on these premises when that companys business was taken over by the appellant-company. The schedule to this letter gives particulars of these stocks, viz., 182 vehicles of different types, stores, accessories, spare parts purchased from the market or the Disposal Directorate, tools and other workshop equipment and three cars under repairs. The schedule shows that the premises were used till then for storing the Disposal Vehicles together with spare parts etc. acquired along with them or purchased from the market for repairing and reconditioning and making them fit for resale. There is no evidence except the bare word of wit. Jain that parts such as chassis and bodies etc. were actually manufactured and replaced for the old. No books of account or long books showing the work carried on the premises or other documents were produced which would throw light on the activities carried on the premises. Even if the evidence of Jain were accepted in toto, and we were to find that some spare parts were being manufactured for repairing or reconditioning the vehicles, the dominant purpose of the lease would still have to be regarded as one for storage and resale of the vehicles and not for manufacturing purposes. Manufacturing of spare parts would then be merely incidental to the main purpose of disposal of these vehicles as without repairing or reconditioning them, such disposal could hardly have been possible. In our opinion, the appellants failed to establish that the dominant purpose of the lease was manufacturing purpose. In that view, the appellants could not have challenged the legality of the notice. The High Court, therefore, was right in the conclusion it arrived at and no reason has been shown justifying our interference with it. That being the position, it is not necessary to go into the question whether S. 107 has any impact on S. 106 of the Transfer of Property Act, a question which the Division Bench, while referring this appeal to a larger Bench, thought the appeal raised.