Chimandas Bagomal Sindhi vs Jogeshwar And Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 201/60

Decision Date: 8 November 1962

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta, J.C. Shah

In the case titled Chimandas Bagomal Sindhi versus Jogeshwar and Another, the judgment was delivered on 8 November 1962 by the Supreme Court of India. The opinion was authored by Justice P. B. Gajendragadkar, and the bench comprised Justices P. B. Gajendragadkar, K. N. Wanchoo, K. C. Das Gupta and J. C. Shah. The petitioner was Chimandas Bagomal Sindhi and the respondents were Jogeshwar and another individual. The citation for this decision is 1963 AIR 1233 and 1963 SCR Supplement (1) 968. The dispute involved provisions of the Letting of Houses and Rent Control Act, specifically the sections dealing with the collection of information, the letting of accommodation, the construction of the term “displaced person,” and the Central Provinces and Berar Letting of Houses and Rent Control Order of 1949, clauses 22, 23, 24 and 24A, as well as clause 13 and sub‑clause 2(2). The factual background recorded that the respondent had leased his house to a firm and subsequently obtained permission from the Rent Control Authority to terminate that tenancy because of arrears of rent. While the tenant informed the respondent by telegram that he had vacated the premises, the appellant, before receiving that telegram, applied to the Additional Deputy Commissioner requesting that the premises, which were expected to become vacant, be allotted to him on the basis that he was a displaced person. A provisional allotment was made in the appellant’s favour and he remained in possession of the premises thereafter. The respondent then sought cancellation of that allotment, asserting that he required the premises for his own use. The Additional Deputy Commissioner, however, confirmed the allotment in favour of the appellant. Consequently, the respondent filed a writ petition in the High Court seeking cancellation of the order; the High Court set aside the order and remanded the matter for disposal according to law. The appellant responded by filing a Letters Patent Appeal. On remand, the Additional Deputy Commissioner again confirmed the earlier order, prompting the respondent to file another writ petition before the High Court. Both the Letters Patent Appeal and the subsequent writ petition were heard together, and the High Court allowed the respondent’s writ petition, setting aside the allotment to the appellant on the ground that once it became apparent that the appellant possessed his own place of business, he no longer qualified as a displaced person within the meaning of clause 23(1) and the related provisions. The Court held that clause 23(1) refers to persons who fall within the specified categories and empowers the Deputy Commissioner to make an allotment order in their favour. There are no explicit time limits attached to those categories, and the scheme of the relevant provision does not appear to contemplate any such limitation. Moreover, clause 23(1) together with clauses 24 and 24A do not automatically exclude persons described therein merely because they already have accommodation of their own; the High Court was therefore in error in assuming that the provisions of clauses 23(1), 24 and 24A impliedly required that the persons belonging to the respective categories must be without any prior accommodation.

The Court observed that the categories mentioned in the relevant provisions were not limited to persons who lacked any prior accommodation; therefore, the assumption that allotment could be granted only to those without a dwelling of their own was erroneous. Further, the Court held that after the matter was remanded, the Additional Deputy Commissioner failed to appreciate fully the scope and effect of the provision contained in the applicable clause. The Commissioner adopted an unduly narrow interpretation of the extent of the inquiry he was required to conduct under the remand order, and this limited approach compromised the correctness of his final conclusion. The judgment proceeds under the heading CIVIL APPELLATE JURISDICTION. It concerns Civil Appeal No. 201/60, filed by special leave against the judgment and order dated 18 June 1958 of the Bombay High Court at Nagpur in Miscellaneous Petition No. 391 of 1956. Counsel for the appellant included the Attorney‑General for India and two other advocates, while counsel for respondent No. 1 comprised three advocates. The judgment was delivered on 8 November 1962 by Justice Gajendragadkar. The appeal presented a concise question regarding the construction of clauses 23, 24 and 24‑A of The Central Provinces and Berar Letting of Houses and Rent Control Order, 1949 (referred to as the Order). The respondent, Jogeshwar, son of Parmanand Bhishikar, owned a property known as Bhishikar Bhawan in Nagpur. Block No. 2A of this building had been leased to a firm called Dayalbagh Stores for business purposes. Because the tenant fell into rent arrears, the respondent obtained permission from the Rent Control Authorities to terminate the tenancy. The tenant subsequently informed the respondent by telegram on 24 July 1955 that it had vacated the premises on that date. Prior to receiving the telegram, on 15 July 1955, the appellant, Chimandas Bagomal Sindhi, submitted an application to the Additional Deputy Commissioner of Nagpur, asserting that the premises were likely to become vacant and requesting that they be allotted to him as a displaced person within the meaning of the Order. The Additional Deputy Commissioner issued a provisional allotment order in favor of the appellant on the same day, and the appellant has remained in possession of the premises ever since. Upon learning of this provisional allotment, the respondent notified the Additional Deputy Commissioner that he required the premises for his own use and consequently moved for cancellation of the provisional order. On 23 July 1956, the Additional Deputy Commissioner, purporting to act under clause 23(1) of the Order, confirmed the provisional allotment in favor of the appellant. The respondent then approached the Nagpur High Court by filing Writ Petition No. 307 of 1955 seeking cancellation of the order. On 10 April 1956, Justice Bhutt set aside the allotment order and remanded the case for disposal in accordance with law, thereby concluding the first stage of the dispute. After the remand, the Additional Deputy Commissioner again confirmed the earlier order, holding that the respondent did not need the premises for his own occupation and that there was no reason to revoke the provisional allotment previously granted to the appellant.

The Court observed that after the case was remanded, the respondent informed the Additional Deputy Commissioner that the appellant did not require the premises for his own occupation and that there was no justification for overturning the earlier provisional allotment in favour of the appellant. The Additional Deputy Commissioner therefore confirmed the earlier order, holding that the respondent had no need for the premises and that the provisional order should remain in effect. The respondent challenged this second order by filing another writ petition in the Nagpur High Court, identified as writ petition No. 391 of 1956. At the same time, the appellant had filed a Letters Patent Appeal, numbered 95 of 1956, contesting the decision of Justice Bhutt on the earlier writ petition filed by the respondent. By mutual agreement, the Letters Patent Appeal and the respondent’s subsequent writ petition were heard together before a Division Bench of the High Court. The Division Bench set aside the allotment order that had been made in favour of the appellant and allowed the respondent’s later writ petition. The appellant then approached this Court by way of a special leave petition against that judgment.

It appeared that, after the remand, the respondent drew the Additional Deputy Commissioner’s attention to the fact that the appellant owned a one‑fourth share in the Hind Vastra Bhandar and therefore possessed a location where he could conduct his business. The respondent repeated this allegation in his second writ petition and argued that, because the appellant already had a place of business, he was not entitled to the accommodation granted by the impugned order. The appellant responded by asserting that the business referred to by the respondent had been dissolved. The appellant’s affidavit indicated that he indeed held a share in Hind Vastra Bhandar as well as in Krishna Watch Co., both of which were partnerships operating in Nagpur, but that these partnerships had been dissolved on 8 April 1957. Consequently, after that date there was no longer any place of business to which the appellant could lay claim. To support this contention, the appellant produced the deed of dissolution of the partnerships. The High Court, after reading the definition of “displaced person” contained in clause 2(2) together with the relevant clause of the Order under which the allotment had been made, concluded that the appellant did not qualify as a displaced person and therefore was not entitled to the allotment. The principal issue for determination in the present appeal, therefore, was the construction of the relevant clauses of the Order. The Order had been issued by the Government of the Central Provinces and Berar pursuant to the powers conferred by section 2 of the Central Provinces and Berar Act No. XI of 1946. Sub‑clause (2) of clause 2 defines a “displaced person” as any individual who, because of the establishment of the Dominions of India and Pakistan, or because of civil disturbances or fear of such disturbances in any area now forming part of Pakistan, had been displaced from or had left his place of residence in that area after 1 March 1947 and who subsequently resided in India.

In the definition of a displaced person, the Court explained that a person who, because of the creation of the Dominions of India and Pakistan, or because of civil disturbances or the fear of such disturbances in any area that presently forms part of Pakistan, was forced to leave his place of residence in that area after the first day of March 1947, and who subsequently took up residence in India, qualified as a displaced person. The appellant asserted that he fell within this description and therefore claimed the status of a displaced person. Clause 13 of the relevant Order, inter alia, stipulated that a landlord could seek the ejectment of a tenant if the landlord demonstrated a genuine need for the house or a part of it for his own bona‑fide residence, on the condition that the landlord was not already occupying another residential house of his own in the same city or town. The clause further allowed a landlord to obtain ejectment of a tenant where it was shown that the tenant had secured alternative accommodation or had remained absent from the area for a continuous period of four months and did not have a reasonable need for the house. The Court then turned to clauses 22 to 27, which formed Chapter III dealing with the collection of information and the letting of accommodation. Clause 22(1) required every landlord of a house situated in an area to which Chapter III applied to give notice of any impending vacancy in the manner specified in sub‑clauses (a) and (b). Clause 22(2) prohibited any person from occupying any house covered by Chapter III unless the occupation was authorized by an order under sub‑clause (1) of clause 28 or clause 24, or by an assurance from the landlord that the house was being permitted to be occupied in accordance with sub‑clause (2) of clause 23. Consequently, the Court noted that all vacancies in houses governed by Chapter III had to be filled according to the procedure laid down in clause 22(2). Clause 23(1) provided that upon receipt of the notice required by clause 22, the Deputy Commissioner could, within fifteen days of receiving such notice, direct the landlord to let the vacant house to any person holding an office of profit under the Union or State Government, to any person holding a post under the Madhya Pradesh Electricity Board, to a displaced person, or to an evicted person. The Deputy Commissioner’s order was to be complied with irrespective of any contrary agreement, and the landlord was required to place the designated person in possession immediately if the house was vacant, or as soon as it became vacant. The proviso to clause 23(1) granted the landlord the right to plead his own need for the house; if the Deputy Commissioner accepted this plea, the landlord would be allowed to occupy the house himself, and in such cases the order under clause 23(1) would not be made against him. Clause 23(2) was consequently applicable in situations where the Deputy Commissioner did not issue an order directing the landlord to let the house to any of the categories mentioned in clause 23(1).

The judgment explained that Clause 23(1) stipulated that if the Deputy Commissioner failed to issue and serve an order on the landlord within the time limit specified in sub‑clause (1), the landlord would then be free to lease the vacant house to any person of his choosing. Clause 24 dealt with the penalty for a landlord’s failure to comply with the requirements of Clause 22(1). Under Clause 24, the Deputy Commissioner possessed the authority to direct the landlord to lease the house immediately to any person who fell within the categories enumerated in that clause. The Court observed that this power was essentially punitive, intended to punish the landlord for breaching Clause 22, and that, on its face, it seemed to deny the landlord an opportunity to demonstrate his own need for occupation as allowed by the proviso to Clause 23(1). Clause 24‑A addressed situations in which the Deputy Commissioner received information that a house was likely to become vacant or available for occupation by a specified date. In such circumstances, Clause 24‑A empowered the Deputy Commissioner to issue an order on the same basis as that provided in Clause 23(1). The provision further required the landlord to comply with the order unless the house did not actually become vacant or available within one month of the landlord’s receipt of the order, or unless the landlord applied for cancellation of the order by stating his grounds. Accordingly, an order made under Clause 24‑A could be contested by the landlord on the ground that he required the premises for his own use. This description summarized the operative scheme of the relevant statutory provisions.

The Court then turned to the High Court’s reasoning concerning the allocation of the premises to the appellant. The High Court had held that when the Additional Deputy Commissioner allotted the premises, he had failed to consider that, on 15 July 1955, the appellant already possessed a place of business. The appellant was described as a 4‑anna sharer in a partnership that maintained its own place of business. The High Court concluded that, once it became apparent that the appellant owned a place of business, he could no longer be regarded as a “displaced person” within the meaning of Clause 23(1) and the related provisions. This conclusion was based on the premise that, although the appellant might satisfy the definition of “displaced person” contained in Clause 2(2), that definition must be read in the context of Clause 23(1) and its meaning must be governed by that context. Clause 2 itself began by stating that, unless a conflict existed in the subject matter or context, the defined terms would retain the meanings assigned to them by their respective definitions. The Court noted that the overall purpose of empowering the Deputy Commissioner to make an allotment order for persons specified in the various categories was to provide accommodation to those who were without any accommodation of their own.

In this case the Court observed that the purpose of the provision was to assist those persons who were without any accommodation. Because that purpose is implicit in the relevant provision, the definition contained in the provision must be interpreted in light of that implicit assumption. The High Court set aside the impugned order on that basis. The Court acknowledged that, at first glance, the High Court’s view seemed attractive and reasonable. It appeared logical to assume that the provisions in Chapter III were intended to help persons belonging to the specified categories obtain accommodation, and that such an intention would implicitly require that those persons have no accommodation of their own to claim. However, the Court questioned whether the words of the provision were in fact ambiguous or whether their effect could be said to be doubtful. In the Court’s opinion the answer to both questions was negative. Clause 23(1) refers to persons falling within the specified categories and empowers the Deputy Commissioner to make an order of allotment in their favour. The provision contains no limiting terms that qualify those persons, and the overall scheme does not contemplate any such limitation. It is important to note that the persons are not entitled as a matter of right to an order of allotment; rather, clause 23(1) merely confers discretionary power on the Deputy Commissioner to make an order if he considers it expedient and fair in a particular case. Only when such an order is made does an obligation arise on the landlord to let the premises to the person named. Considering the language describing the persons and the categories, the provision clearly contemplated that a person belonging to one of those categories could claim its benefit on the ground that any accommodation already available to him was insufficient or unsuitable. When such a claim is made, the Deputy Commissioner must examine the contentions raised by the landlord as well as any claim by the landlord for personal occupation. The necessary enquiry is essentially an investigative one, and the power vested in the Deputy Commissioner must be exercised in a fair and just manner. The Court further held that clause 23(1) together with clauses 24 and 24A do not necessarily exclude persons falling within those categories merely because they already have accommodation that they can call their own, although such persons would undoubtedly have a stronger claim for accommodation if they can demonstrate that they have no accommodation at all.

In this case the Court explained that a person who belongs to one of the categories listed in the relevant provisions may be entitled to claim accommodation even if he already possesses some accommodation, provided that he can show that he has no accommodation at all or that the accommodation he has is insufficient or unsuitable. The Court further stated that even when a person of the specified category does have some accommodation, his claim cannot be dismissed simply because he possesses that accommodation. It is true that a person who has suitable and sufficient accommodation would normally not qualify for the benefit of clause 23(1), but the Court clarified that this issue must be examined by the Deputy Commissioner on the merits of each case. Consequently, the Court was satisfied that the High Court erred in assuming that clause 23(1) together with clauses 24 and 24A implicitly require that a person belonging to the specified categories can receive an allotment only if he has no prior accommodation of his own. Accordingly, the Court held that the appellant’s case could not be dismissed merely on the basis that he owned other accommodation through his partnership in two concerns, as had previously been indicated.

The Court observed, however, that this determination did not finally resolve the appeal because, after the remand order issued by Justice Bhutt, the Additional Deputy Commissioner had not acted in accordance with law. The Additional Deputy Commissioner appeared to adopt the view that, since a provisional order had already been passed, there was “no going back” on that order. He limited the enquiry after remand to the question of whether the respondent proved a need for the premises for his own occupation. While he mentioned that the appellant owned a one‑fourth share in a business carried on in Nagpur, he added that this fact did not prevent the appellant from obtaining a shop for a business exclusively his own. The Court found that this observation demonstrated that the Additional Deputy Commissioner had not properly appreciated the scope and effect of the relevant clause. Moreover, the Court concluded that the Additional Deputy Commissioner had taken an unduly narrow view of the limits of the enquiry required by the remand order, a view that vitiated his final conclusion. Therefore, the Court directed that the matter be sent back to the Additional Deputy Commissioner, Nagpur, with a clear instruction to reconsider the case on its merits afresh. The Court further clarified that the question of whether the appellant should be allotted the premises must be determined by the Additional Deputy Commissioner with reference to the factual position as it stood on 15 July 1955, because there was a controversy regarding the proper basis for deciding the appellant’s entitlement.

The Court noted that the appellant consequently lost any entitlement to the premises that formed part of the partnership estate, even though he had originally been a member of that partnership, because the partnership itself was alleged to have been dissolved on 8 April 1957. The learned Attorney‑General argued that, should the matter be returned to the Additional Deputy Commissioner, that officer ought to be permitted to take into account the events that occurred after the dissolution and to decide the appellant’s claim on the basis that he no longer held any share in the dissolved partnership. The Court was not inclined to accept this submission. It observed that the mere fact that the present proceedings had stretched over a long period did not give the appellant a right to compel the Additional Deputy Commissioner to consider subsequent events. The Court further pointed out that the dissolution of the partnership took place well after the appellant had obtained the provisional allotment from the Additional Deputy Commissioner, and it could not be said with certainty that, had the officer been informed at that earlier stage that the appellant possessed an independent place of business, the officer would have granted accommodation in the present premises on the same day the appellant was moved there. Accordingly, the Court was satisfied that the issue of whether the provisional order was proper and valid had to be examined based on the facts and circumstances that existed on the date the provisional allotment was made.

Counsel for the respondents then contended before the Court that, under clause 2(2), the appellant was not a displaced person on the relevant date, relying upon the fact that the appellant had been carrying on business at several locations throughout India since 1945. The Court observed that this argument had not been addressed by either the Additional Deputy Commissioner or the High Court. The Court indicated that, if the respondents chose to raise this point, they could present it to the Additional Deputy Commissioner, and the Court was confident that the officer would consider it in accordance with the applicable law. Consequently, the Court allowed the appeal, set aside the order that the High Court had passed on the writ petition, and remanded the matter to the Additional Deputy Commissioner of Nagpur with a directive to resolve the dispute between the parties afresh and in accordance with law. The Court further directed that the costs incurred by the parties up to the present stage would be included in the final order to be issued after the remand, and thus the appeal was allowed.