Case: P. C. Cheriyan Vs. Barfi Devi

The plaintiff-respondent let out the accommodation in dispute at a rent of Rs. 850/- per annum to the defendant who was doing the business of retreading of tyres in the said premises. The defendant defaulted in payment of rent. The plaintiff, therefore, sent one months notice to the defendant terminating his tenancy. Thereafter, the plaintiff instituted a suit for recovery of arrears of rent and ejectment against thesuit was resisted, inter alia, on the ground that the premises in dispute had been let out to him for manufacturing purposes and in view of Section 106, Transfer of Property Act, therefore, the lease cold be terminated by the landlady only b y six months notice expiring with the end of the year of tenancy, and since the plaintiff had served only 30 days notice, the same was invalid and ineffective to terminate thetrial Court and the First Appellate Court concurrently decreed the suit for arrears of rent as well as foronly ground urged before the First Appellate Court and the High Court was that the tenancy being for manufacturing purpose, could not be terminated by one months notice. All the courts below negatived this contention and have concurrently held that the retreading of tyres, is not a manufacturing purpose and, therefore, 30 days notice given by the plaintiff to the defendant for terminating his tenancy, was valid.

Court's reasoning:
The broad test for determining whether a process is a manufacturing process, is whether it bring s out a complete transformation for the old components so as to produce a commercially different article or commodity.In our opinion, this finding of the courts below is unassailable. The retreading of old tyres does not bring into being a commercially distinct or different entity. The old t yre retains its original character, or identity as a tyre. Retreading does not completely transform it into another commercial article, although it improve its performance and serviceability as a tyre. Retreading of old tyres is just like resoling of old shoes. Just as resoling of old shoes, does not produce a commercially different entity having a different identity, so from retreading no new or distinct article emerges. The old tyre retains its basic structure and identity. The courts below were therefore, right in holding that the lease in the present case was not for manufacturing purposes, and the tenancy had been rightly terminated by thirty days notice.Before parting with this judgment, we may sound a note of caution, that definitions of "manufacture" given in other enactments, such as, in the Factories Act or the Excise Act should not be blindly applied while interpreting the expression "manufacturing purposes" in Section 106, of the Transfer of Property Act. In some enactments, for instance in the Excise Act, the term "manufacture" has been given an extended meaning by including in it "repairs", also.