dedol-hf/india-case-legal-rag huggingface dataset:
List  of the Government of India Act, 1935, and  that,    in
any  event as he did not employ any labour and was also  the
manager  of the shop he cannot be convicted in view  of  the
provisions of clauses (i) and (j) of s. 2-A of the Act.
Held, by the Full Court--(i) that the provincial  Government
could  under  item  No. 27 in List 1I  regulate  the  hours,
place,  date   and manner of sale of any commodity and s.  7
of  the Act was   not ultra vires; the matter could also  be
brought  under  item 27   in List III  "welfare  of  labour;
conditions of labour ;"
  (ii)  clause (j) of s. 2-A did not protect  the  appellant
because the   conviction was not for the sale by the son but
for  the  appellant   having kept the shop open on  a  close
day;
(iii)  the appellant  was not entitled to be exempted  under
el. (i) of s. 2-A even though he was himself the manager  of
the    shop, because his capacity and liability as an  owner
must  be  kept    distinct from that of a  manager  for  the
purposes of the Act.
JUDGMENT:
     CRIMINAL  APPELLATE  JURISDICTION:  Criminal Appeal No.
11 of 1950.
     Appeal  under Art. 134 (1) (c) of the  Constitution  of
India  against the Judgment and Order dated the 10th  April,
1950,  of the High Court of Judicature at Simla in  Criminal
Revision  No. 449 of 1949.  The facts of the case appear  in
the judgment.
Kundan  Lal  Arora for the appellant. S.N.  Chopra  for  the
respondent.
     1951.  May 23. The Judgment of the Court was  delivered
by
     Bose  J. --This is a criminal appeal against a  convic-
tion  under  section 16 of the Punjab Trade  Employees  Act,
1940, as amended in 1943, read with section 7(1).
The appellant is a shopkeeper who owns and runs a  shop
in the Cantonment Area of Ferozepore.  He has no "employees"
within the meaning of the Act but is assisted by his son  in
running the shop. The shop is
673
divided into two sections.  In one, articles of haberdashery
are sold; in the other, articles of stationery.
Section 7(1) of the Act as amended requires that       "Save
as otherwise provided by this Act, every shop  ......  shall
remain  closed  on a close day."
Sub-section (2)(i) states  that--
The  choice  of  a close day shall rest with  the  owner  or
occupier  of a shop  ......  and shall be intimated  to  the
prescribed authority within etc."
    The  appellant made the following choice. He elected  to
close the haberdashery section on Mondays and the stationery
section  on Saturdays and gave the necessary  intimation  to
the prescribed authority to that effect.
    On  Monday, the 17th of May, 1948, the  appellant's  son
sold a tin of boot polish to a customer from the  haberdash-
ery,  section  of  the shop. The appellant  was  present  in
person  at the time of the sale. Monday was a close day  for
the haberdashery section and so the appellant was prosecuted
under section 16 read with section 7. The trying  Magistrate
held that in selling the article of haberdashery on a  close
day and in not observing Monday as a close day the appellant
had infringed the provisions of section 7(1) of the Act.  He
accordingly  convicted him and imposed a fine of Rs.  20.  A
revision  application  to the High Court failed.   The  High
Court held that as the appellant had failed to keep his shop
closed  one  day in the week, his conviction was  proper.  A
certificate for leave to appeal to this Court, on the ground
that  a substantial question of law relating to the  Govern-
ment of India Act, 1935, was involved, was granted and  that
is how we come to be seized of the matter.
The  learned  counsel for the appellant  contended  that
section 7 of the Act is ultra vires in that it does not fall
under  any  of  the items in either the  Provincial  or  the
Concurrent Legislative Lists in the Government of India Act,
1935. In our opinion, the matter can come either under  item
No. 27 in List II or item No. 27 in List III.
674
Item No. 27 in List II covers "trade and commerce within
the  Province."  In  our opinion,  a  Provincial  Government
could, under that entry, regulate the hours, place, date and
manner  of sale of any particular commodity or  commodities.
It could, for example, state that the sale of explosives  or
other dangerous substances should only be in selected areas,
at  specified times or on specified days when extra  precau-
tions for the general safety of the public and those direct-
ly concerned could be arranged for. That would appear to  be
obvious.  In the same way, it could, if it so  pleased,  say
that  there  shall be no sales on a particular  day,  say  a
Sunday or a Friday, or on days of religious festivals and so
forth. Instead of doing that, it has chosen to regulate  the
internal trade of the Province in this manner which is  only
one of the various ways in which it could have acted.
The  matter  can also be brought under item 27  in  List
III:   "welfare  of labour; conditions of labour."  The  im-
pugned section is a general one and applies to all kinds  of
shops; that is to say, to those in which labour is  employed
as  well as to those which are run by the owners  and  their
families.   The Act in which the section occurs is  directed
at  regulating  the hours of employment of persons  who  are
employed in the business  of  shops or commercial establish-
ments.  Therefore, in so far as section 7 covers  establish-
ments  where  labour is employed, it  is  undoubtedly  intra
vires. But it was argued that the section can have no appli-
cation  to  shops which an owner runs with  or  without  the
assistance  of his family.  Reliance for this was placed  on
section  2-A (i) and (j) which is as follows: "2-A.  Nothing
in this Act shall apply to--
(i) persons employed in a  managerial capacity  ......
and
(j)  the  members  of the family of the  employer."  It  was
argued  that the sale was by the son. He is not affected  by
the Act. Therefore. he was entitled to sell and he could not
sell unless the shop was kept
   675
open to enable him to do so.  So also as regards the  appel-
lant, the owner, who was there in a managerial capacity.  In
our opinion, this is fallacious because the conviction  here
is not for the sale but for keeping the shop open on a close
day.  Section 2-A (j) does not give the son a right to  keep
the  shop open or, for that matter, a right to sell. All  it
says is that he, being a member of the family, shall not  be
affected by the provisions of the Act. Section 7(1), on  the
other  hand, is directed against the owner of the shop,  not
against  his family.  It compels the owner to keep his  shop
closed one day in a week.
    It  was  then contended that if a person employed  in  a
managerial capacity cannot be affected by the Act, then  the
appellant who was there in that capacity cannot be compelled
to close the shop under section 7. This is also  fallacious.
It happens in the present case that the owner and the manag-
er are the same but the Act obviously makes provision for  a
class  of  case in which they are different.  The  owner  is
obliged  to  close the shop one day in a  week,  though  the
manager  of the shop can work without, for  example,  having
the  twenty-four consecutive hours of rest every week  which
section  7-A  enjoins. The appellant's capacity  as  manager
will  have to be separated from his character as  owner  for
this  purpose.   Section 2-A(i) does not control  section  7
(1).
    Lastly,  it was argued that the scheme of the Act  makes
it  plain  that  it is for ameliorating  the  conditions  of
labour employed in shops. It cannot therefore apply to shops
in which no labour is employed, particularly when the family
of the "employer" is expressly excluded from the purview  of
the Act. For this reason also, it cannot fall under item  27
in List III. We are of opinion that such a narrow  interpre-
tation cannot be placed upon the entry. The legislature  may
have felt it necessary, in order to reduce the possibilities
of  evasion to a minimum, to encroach upon the liberties  of
those  who would not otherwise have been affected.  That  we
think it had power to do. Further, to require a  shopkeeper,
who employs one or two men, to close and
676
permit his rival, who employs perhaps a dozen members of his
family, to remain open, clearly places the former at a grave
commercial disadvantage. To permit such a distinction  might
well  engender  discontent  and in the end  react  upon  the
relations  between  employer  and employed.  All  these  are
matters of policy into which we cannot enter but which serve
to  justify a wide and liberal interpretation of  words  and
phrases in these entries.
The appeal fails and is dismissed.
Appeal dismissed.
Agent for the appellant: Vidya Sagar.
Agent for the respondent: P.A. Mehta.
PETITIONER:
KARNANI INDUSTRIAL BANK, LIMITED
        Vs.
RESPONDENT:
THE PROVINCE OF BENGAL AND OTHERS
DATE OF JUDGMENT:
14/05/1951
BENCH:
FAZAL ALI, SAIYID
BENCH:
FAZAL ALI, SAIYID
MUKHERJEA, B.K.
AIYAR, N. CHANDRASEKHARA
CITATION:
 1951 AIR  285            1951 SCR  560
ACT:
    Transfer  of  Property  Act  (IV  of  1882),  ss.   106,
116--Lease for a term--Acceptance of rent for further period
before  expiry of term--New tenancy--Necessity of notice  to
quit--Lessee's  property  becoming  property  of  lessor  by
failure   to   remove  within  time--   Injunction   against
removal--Whether can be granted.
HEADNOTE:
   The  context  in which the provision for  acceptance  of
rent finds a place in s. 116 of the Transfer of Property Act
shows that what is contemplated is that the payment of  rent
should  be  made at such time and in such manner  as  to  be
equivalent to the landlord assenting to the lessee  continu-
ing  in  possession. Where payment is made at  a  time  when
there  was no question of the lessor assenting to  the  les-
see's continuing in possession and neither party treated the
payment  as  importing such assent the case  does  not  fall
within s. 116.
    A lease deed was executed on the 17th February, 1928, in
respect of a land for a period of ten years from 24th Febru-
ary,  1928,  the annual rent of Rs. 6,000 being  payable  in
advance every year. In April, 1937, a cheque for Rs.  6,000,
being  the rent from 1st April, 1937, to 31st  March,  1938,
was  sent  by the lessee and accepted by the  lessor:  Held,
that as the rent was paid before the expiry of the lease and
neither  party  treated  the payment of  rent  as  importing
assent on the part of the lessor to allow the lessee
561
to  continue in possession as a lessee after the  period  of
the  lease, no new tenancy was created under s. 116  of  the
Transfer of Property Act.  The utmost that could be said was
that by implied consent the period of the lease was extended
up to the 31st March, 1938, and even then no notice under s.
106 of the Transfer of Property Act was necessary for termi-
nating the lease.
     K.B. Capadia  v. Bai Jerbai Warden  and Another  [1949]
F.C,R. 262 distinguished.
     Where  in accordance with the terms of a  lease  bricks
and other materials manufactured by the lessee on the leased
premises  had become the property of the lessor as they  had
not  been removed by the lessee within the period  fixed  by
the lease: Held, that the lessor was entitled to ask for  an
injunction restraining the lessee from removing the  materi-
als  even  though  he was not in possession  of  the  leased
premises.
     Rathnasabhapathi  Pillai and Others v. Ramaswami  Aiyer
(I.L.R. 33 Mad, 452), Bhramar Lal Banduri & Others v. Nanda-
lal Chowdhuri (24 I.C. 199) and Valia Thamburatti v. Parvati
and Others (I.L.R. 13 Mad. 455) distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION. Civil Appeal No. 58
of 1950.
     Appeal  against the Judgment and Decree dated the  13th
February, 1948, of the High Court of Judicature at  Calcutta
(Mitter  and Sharpe JJ.) in Appeal No. 117 of  1942  arising
out of Decree dated the 24th November, 1941, in Suit No.  85
of 1938.
     N.C.  Chatterjee and Harish Chandra (K. C.  Chopra  and
G.C. Mathut, with them) for the appellant.
Chandra Sekhar Sen (C. N. Laik, with him) for  respond-
ent No. 1.
     1951. May 4. The Judgment of the Court was delivered by
     FAZL  ALI J.  The principal question for  determination
in this appeal is whether a certain lease had validly termi-
nated by efflux of time or whether there was "holding  over"
by  the lessee of the leasehold property as contemplated  in
section  116 of the Transfer of ,Property Act.  The  circum-
stances  under  which this question and  several  subsidiary
questions to which reference will be made later have  arisen
may be briefly stated as follows:
562
    The Province of Bengal, (hereinafter referred to as  the
respondent No. 1 or plaintiff) is admittedly the owner of an
area of 1125 bighas and odd of land in village Akra.  On the
17th  February, 1928, the respondent No. 1 executed a  lease
(exhibit  a) in respect  of the said land for 10  years  for
manufacture  of  bricks  in favour of the  appellant,  at  a
rental  of Rs. 6,000 a year. The lease was to commence  from
the  24th February, 1928, and a year's rent was  payable  in
advance.  By  the terms of the said lease,  the  lessee  was
prohibited from assigning or subletting the premises or  any
part  thereof without the consent of the lessor except to  a
limited  company  and  the lease also  contained  a  general
provision  that  the lessee would at the expiration  of  the
lease restore to the lessor the demised premises in as  good
condition  as  it was at the date of the  lease,  reasonable
wear  and tear excepted. Two further clauses in  the  lease,
which  are material for the decision of this appeal, may  be
reproduced verbatim :--
Clause 11 of Part I of the Schedule.
    "The Secretary of State reserves the right to  terminate
the  lease at any time subject to six months' notice in  the
event  of the lessee's failing to observe and  duly  perform
the  conditions hereinbefore and after mentioned and  it  is
hereby agreed that the lessee shall before the expiration or
prior  termination  of the lease hereby granted  remove  his
boilers  engines trucks kilns railway and tram lines  bricks
tools and plant and all other materials whatsoever and yield
up the said demised premises unto the Secretary of State and
that  those bricks tools and plant and other materials  that
shall not be removed before such expiration or prior  termi-
nation shall become the property of the Secretary of State."
Clause 1 of Part 111 of the Schedule.
    "The  lessee  shall be at liberty to keep  on  the  said
premises  hereby demised for three months after the  expira-
tion or prior termination of the term of this
563
  lease  any  bricks boilers engines  trucks  kilns  railway
and  tram lines and all other materials whatsoever  as   may
have been manufactured by him in the premises  in accordance
with  the conditions of these presents but  any  bricks  and
other  materials  left in contravention  to  this  condition
shall  become  the absolute property  of  the  Secretary  of
State without payment."
  It may be stated here that at the time of the execution of
the lease, the lessee had purchased from the  lessor for Rs.
50,000" all the boilers, engines trucks,  kilns, railway and
tramway  lines  and all other movable  property,  plant  and
machinery on the demised  premises."
     The case of the respondent No. 1, who is the  plaintiff
in the present litigation, is that the appellant  (defendant
No.  1)  had, in contravention of the terms  of  the  lease.
sublet  the  brickfield to defendants-respondents  2  to  18
without the consent of respondent No. 1. and they had caused
serious  damage to the brickfield in general and  failed  to
maintain  the  embankments, sluices, etc. in  proper  repair
resulting  in  a total loss of Rs. 16,840.  It  was  further
alleged  that the defendants had refused to deliver  posses-
sion  though  the  lease had terminated, and  they  had  not
removed  the bricks, pugmills and other materials  within  3
months from the termination of the lease.  On these  allega-
tions, the respondent No. 1 prayed for the following reliefs
:--
  (a) a decree for ejectment and khas possession over  the
brick field;
    (b)  damages amounting to Rs. 4,000 for the  period  be-
tween  the termination of the lease and institution  of  the
suit and mesne profits for the subsequent period;
(c)  a decree for Rs. 16,840 for damages caused  to  the
field; and
    (d)  a decree for permanent injunction  restraining  the
defendants  from  removing  or otherwise  disposing  of  the
bricks, pugmills, etc. which were claimed to have become the
property of the plaintiff.
    The suit was contested by the appellants, and the  other
defendants, and their defence was that the
564
appellants  had  held over with the implied consent  of  re-
spondent  No. 1, and hence the lease had not validly  termi-
nated,  that  no damage or injury had been  caused   to  the
land, that the respondent No. 1 was not entitled to  forfeit
the  properties  of the appellants lying in  the  brickfield
inasmuch as the term in the lease to that effect was by  way
of penalty and as such unenforceable, and that the  respond-
ent No. 1 was not entitled to the relief of injunction.
    The trial Judge by his judgment dated the 24th November,
1941, held that there was no holding over with the assent of
the plaintiff and both parties were under a mistaken  belief
that  the lease had expired on the 23rd February,  1938.  He
however  held that the evidence did not show that there  was
any damage or injury caused to the property. On these  find-
ings, the suit was decreed in part, and the respondent No. 1
was  directed to be put in possession of the brickfield  and
was also granted a decree for Rs. 4,000 as mesne profits  up
to the date on which the respondent No. 1 was put in posses-
sion. The prayer for damages for injury alleged to have been
caused  to  the  field and the prayer  for  injunction  were
however disallowed.  The trial Judge allowed the  appellants
3  months'  time" to remove their belongings from  the  Akra
brick field including kilns, pugmills, bricks, coals and any
other brick-making material that may be lying there "; after
this  period  these properties, if any, left in  the  field,
were  to  become the absolute properties of  the  plaintiff.
The  appellants thereafter  preferred an appeal to the  High
Court at Calcutta, and the respondent No. 1 also preferred a
cross-objection  claiming  that  the prayer  for  injunction
should  have been allowed and the claim for  damages  should
have been decreed in full.  The  learned Judges of the  High
Court  who  heard the appeal; by their  judgment  dated  the
13th  February, 1948, dismissed the appellants'  appeal  and
allowed the cross-objection of the respondent No. 1 in part.
They  held that on the facts established in the  case  there
was no holding over, and that the clause in the lease  stat-
ing that if the
565
appellants  did  not remove the bricks etc  from  the  field
within  3  months after the termination of  the  lease  they
would  become the property of respondent  No. 1, was  not  a
clause  by  way of penalty and should  be given  effect  to.
They  further held that the claim  of respondent No.  1  for
damages  for injury caused to  the demised premises was  not
established.  The present ' appeal is directed  against  the
judgment of the High Court.
    The  admitted facts of the case are briefly  these.  The
appellants  duly paid Rs. 6,000 as rent to respondent No.  1
in  February, 1928.  In February, 1929, a sum of  Rs.  6,714
and  odd was paid by the appellants as rent for  the  period
17th February, 1929, to the 31st March, 1930, and thereafter
they  continued  to  pay Rs. 6,000 as rent  for  the  yearly
period, 1st April to 31st March of the succeeding year,  and
the  last  payment was made in April, 1937, by  means  of  a
cheque sent with a covering letter, the material portion  of
which runs as follows :--
    "We  beg to enclose herewith a cheque for Rs.  6,000  in
payment  of  rent of Akra brickfield for  the  year  1937-38
ending  31st  March,  1938, and shall thank  you  to  please
favour us with your formal receipt for the above."
  The  cheque was duly cashed and the amount was entered  in
the cash book of the plaintiff in the following terms :--
"5-4-37  (date of receipt)... Received  without  prejudice
from Karnani Industrial Bank Ltd. on account of yearly  rent
for Akra brickfield for the year ending 31st March, 1938."
On  the  27th August, 1937, the appellants  applied  to  the
Secretary to the Government of Bengal, Public Works  Depart-
ment,  for  renewing the lease for a further  period  of  10
years,  but  no  reply was received to  that  letter.  After
addressing several other letters,  the appellants received a
letter  dated  the 23rd February, 1938, with which  was  en-
closed a copy of an extract from as letter addressed by  the
Executive Engineer
73
566
Suburban  Division to the Assistant Engineer, No.  III  Sub-
division, which was as under:--
    "He  is  requested  to make  arrangements  with  Messrs.
Karnani Industrial Bank Limited for vacant possession of the
Akra  brickfield on the 24th instant as the lease  with  the
Bank will expire on the 23rd instant according to the  terms
of the agreement."
Ultimately,  on  the 17th March,  1938,  the  appellants
received  the  following communication  from  the  Executive
Engineer, Suburban Division :--
"I  would  inform you that it is not  the  intention  of
Government  in this Department to lease out the  brickfields
and  arrangement is being accordingly made to make over  the
lands  to the Government in the Revenue Department for  dis-
posal."
    In  a subsequent letter dated the 14th September,  1938,
the  Executive Engineer wrote to the appellants  as  follows
:--
    "I  am instructed to state that Government have  decided
that you cannot be allowed to continue in occupation of  the
premises  any  further  ........  However, as  a  matter  of
grace  Government will allow you time till the 30th  day  of
September  next,  to dismantle the kilns and to  remove  all
your bricks, boiler etc from the site, on which date Govern-
ment will take over possession of the property from you."
    The correspondence to which reference has been made does
not show that at any point of time the plaintiff had assent-
ed  to  the appellant's continuance of possession.   On  the
other  hand, some of the letters written by  the  appellants
show that, notwithstanding their having paid rent up to  the
31st March, 1938, they had proceeded all along on the  foot-
ing  that  the lease was to expire in February,  1938.   For
instance,  in  the appellants' letter of  the  23rd  August,
1937,  it is stated: "we are desirous of renewing the  lease
of the brickfield for a further period of 10 years from  the
date  of  the expiration of the period of  the  lease  dated
17-2-1928."   Again, in the letter dated the  23rd  October,
1937, reference is made to the appellants'
567
application for renewal of the lease for a further period of
10 years on its expiry. Even in the letter which was written
on  behalf of the appellants on the 3rd March,  1938,  after
the expiry of the date on which the  lease was to terminate,
the statement made in the  earlier letters was repeated, and
it was further stated: "we applied for renewal of the  lease
on  the 23rd August, 1937, six months prior to the  date  of
expiration  of  the lease". In this letter,  it  is  nowhere
suggested that the appellants were holding over by reason of
the  acceptance of rent up to the 31st March, 1938.  On  the
other hand, at the end of this letter, we find the following
statement :'-
    "We therefore pray that if the Government is not at  all
inclined  to renew the lease, time may be granted to us  for
dismantling and removing till the end of December, 1938, and
we  shall  pay the proportional rent to the  Government  for
seven months time in pursuance of the terms of the lease."
    The  reference to the period of 7 months shows  that  it
was assumed that the lease had expired in February, 1938.
    The letters written on behalf of the Government point to
the  same  conclusion, namely, that both  the  parties  were
acting on the assumption that the lease was to expire on the