Case: Rai Bahadur Kanwar Raj Nathand Others Vs. Pramod C. Bhatt, Custodian Ofevacuee Property

Messrs Abdul Karim and Brothers owned, along with certain other properties which are not the subject-matter of the present appeal, three mills with bungalows and chawls at Ambernath in Thana District and the Bobbin Factory at Tardeo in Bombay.They having migrated to Pakistan, these properties were declared by a notification dated 12-9-1951 issued under S. 7 of the Act as evacuee property, and under S. 8(1) of the Act, they became vested in the respondent as the custodian for the State. The appellants are displaced persons, and on 30-8-1952 the respondent entered into an agreement with them, Exhibit A, which is, as apty characterised by learned counsel for the appellants, of a composite character, consisting of three distinct matters.There was, firstly a demise under which the mills and the factory in question were leased to the appellants for a period of five years on the terms and conditions set out therein. Secondly, there was a sale of the stock of raw materials, unsold finished goods, spare parts, cars trucks and other movables which were in the mills and the factory, with elaborate provisions for the determination and payment of the price therefor in due course.And thirdly, there was an agreement to sell the mills and the factory to the appellants in certain events and subject to certain conditions. There was also a clause for referring the disputes between the parties to arbitration.2. In pursuance of this agreement, the appellants were put in possession of the mills and the factory on 31-8-1952. On 12-2-1954 the respondent issued a notice to the appellants, Exhibit C, wherein he set out that the appellants had systematically committed breaches of the various terms on which the properties had been leased to them, and called upon them to show cause why the lease should not be cancelled and why they should not be evicted.The notice then went on to state that the respondent considered it necessary to issue certain directions for the "preservation of the demised premises and the goods and stock in trade, etc., lying in the demised premises", and the appellants were accordingly required not to remove the stock or raise any money on the security thereof, and to end daily reports to the Custodian of the transactions with reference thereto. Presumably, these directions were given under S. 10 of the Act.On 13-2-1954 the appellants appeared before the respondent, and contended that he had no authority to issue the notice in question under S. 12, and that it was therefore illegal. Apprehending that the lease might be cancelled, and that they might be evicted, the appellants filed on 16-2-1954 the application out of which the present appeal arises, for a writ of "certiorari" for quashing the notice, Exhibit C, and for a writ of prohibition restraining the respondent for taking any further action pursuant thereto.In support of the petition, appellants urged that S. 12 under which the respondent purported to the act authorised the cancellation of only leases granted by the evacuee and not by the Custodian himself, and that no directions could be given under S. 10 as it applied only to properties of the evacuee, and that by reason of the sales, the movables in question had become the property of the appellants. The petition was heard by Tendolkar J., who stated the points for determinations thusr the Custodian has power under S. 12 of the Administration of Evacuee Property Act, 1950 to terminate a lease granted by himself, and(2) Whether the directions given by the Custodian are beyond the jurisdiction conferred upon him by S. 10 of the said Act?" On the first question, he held that S. 12 applies only to leases granted by the evacuee and not by the Custodian, and that therefore the notice, Exhibit C, was ultra vires the powers of the Custodian under that section. On the second question, he held that S. 10 applied only to properties of the evacuee, and that the moveables on respect of which irrections were given, ceased to be the property of the evacuee by reason of the sale in favour of the appellants, and that in consequence, the irrections with reference to them were unauthorised. In the result, the application was allowed.The respondent took the matter in appeal, and that was heard by Changla C. J. and Dixit J. By their judgment dated 13-4-1954, they held that on the plain language of S. 12 it would apply whenever there was a lease, and that lease was in respect of property belonging to the evacuee, that there was no warrant for imposing a further limitation on that section that lease should also have been granted by the evacuee, and that accordingly the Custodian had power to issue the notice, Exhibit C, for cancelling the lease.As regards movables, however, they agreed with Tendolkar J., that for the reasons given by him the Custodian had no authority under S. 10 to issue to directions with reference thereto. The appeal was accordingly allowed in so far as it related to the least but dismissed as regards movables.5. Against this judgment, the appellants have preferred this appeal on a certificate granted by the High Court under Art. 133(1) (b),

Court's reasoning:
. Desai, learned counsel for the appellants, concedes that this amendment which is retrospective in operation would govern the rights of the parties in the present appeal,and that under the section as it now stands, the Custodian has the power - and had always the power - to cancel leases created not merely by the evacuees but also by himself.But he contends that this power could be exercised only so as to override a bar imposed by any law but not the contract under which the lease is held, and this result flows according to him from the language of the non- obstante clause, which is limited to "anything contained in any other law of the time being in force", and does not include "or any contract between thewas a contention which was open to the appellants on the terms of the section as it stood even before the amendment, but it was not put forward at any stage prior to the hearing of this appeal and that by itself would be sufficient ground for declining to entertain it which it may be noted is now sought to be raised by a supplemental proceedings under O. 16 Rs. 4 of the Supreme Court Rules. On the merits also is without any substance. The Section expressly authorises the custodian to vary the terms of the lease, and that cannot be reconciled with the contention of the appellants that it confers no authority on him to go back upon his own contracts.The operative portion of the section which confers power of the Custodian to cancel a lease or vary the terms thereof is unqualified and absolute, and that power cannot be abridged by reference to the provision that it could be exercised "notwithstanding anything contained in any other law for the time being in force".This provision is obviously intended to repeal a possible contention that section 12 does not by implication repeal statutes conferring rights on lessees, and cannot prevail as against them and has been inserted ex abundant cautela.It was next contended by Mr. Desai that even if the Custodian had the power under S. 12 to cancel the lease in favour of the appellants, he had no power under that Section to cancel the agreement to sell the mills and the factory to them, which was one of the matters contained in Exhibit A, that the notice, Exhibit C, was to that extent without jurisdiction, and that the respondent should accordingly be prohibited from cancelling that portion of Exhibit A in pursuance of Exhibitquestion of the rights of the appellants in so far as they related to the purchase by them of the mills and the factory was not raised in the petition,and no contentions were put forward in support thereof at any stage of the proceedings.It is for the first time in the argument before us that those rights are sought to be agitated. Under the circumstances, we must decline to consider them.It will be sufficient if we observe that the rights of the appellants, if any, other than those arising out of the lease, are left open to the determination of the appropriate authorities, and that nothing in our decision should be taken as a pronouncement on those rights.