Muncipal Corporation For Greater Bombay vs Lala Pancham Of Bombay and Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 134 of 1964

Decision Date: 1 October 1964

Coram: J.R. Mudholkar, P.B. Gajendragadkar, K.N. Wanchoo, M. Hidayatullah, Raghubar Dayal

In the matter titled Municipal Corporation for Greater Bombay versus Lala Pancham of Bombay and others, a judgment was delivered on 1 October 1964 by a five‑judge bench of the Supreme Court of India. The bench comprised Justice J.R. Mudholkar, Chief Justice P.B. Gajendragadkar, Justice K.N. Wanchoo, Justice M. Hidayatullah and Justice Raghubar Dayal. The petition was filed by the Municipal Corporation for Greater Bombay and the respondents were Lala Pancham of Bombay together with other parties. The case was reported in the 1965 volume of the All India Reporter at page 1008 and in the 1965 Supreme Court Reports (1) at page 542. The citation also appears in the 1974 Supreme Court case reporter as reference SC2069 (5). The statutory framework involved sections 354R and 354RA of the Bombay Municipal Corporation Act, 1888, together with Schedule GG, clause (2) of the same Act, and the provisions of the Code of Civil Procedure, 1908, Order XXI, rule 27, which were considered for the scope of amendment of the plaint and admission of additional evidence in a Letters Patent Appeal. The pivotal question concerned the constitutional validity of the statutory provisions and whether tenants of premises within a declared clearance area could be regarded as “persons aggrieved” capable of challenging the clearance order.

The Court observed that the interest of tenants in the demised premises fell within the definition of “property” protected by Article 19(1)(f) of the Constitution. Although the statutory scheme under sections 354R and 354RA, together with Schedule GG, allowed tenants an opportunity to object to a clearance order, the Court concluded that the restrictions imposed on the tenants’ right to hold property were not unreasonable and therefore the provisions were constitutionally valid. Consequently, the Court held that tenants qualified as “persons aggrieved” under Schedule GG, clause (2), and were entitled to prefer an appeal to the Judge of the City Civil Court. The Court explained that once a clearance order received confirmation by the Government and was published, its finality could be challenged only through the permitted appeal; no separate suit could be maintained by a tenant who alleged grievance from the order. The Court further found that the High Court erred in allowing the amendment of the plaint to introduce a fresh allegation of fraud by the landlords and in remitting the matter for a de facto retrial. Since the amendment sought to raise a new cause of action that was not part of the original suit, the High Court’s direction was held to be beyond its jurisdiction.

The Court observed that the limitations on a tenant’s right to hold property imposed by sections 354R and 354RA were not unreasonable, and consequently the statutory provisions were held to be valid. In light of that conclusion, the Court further determined that the plaintiffs were entitled to prefer an appeal under clause (2) of Schedule GG to the Judge of the City Civil Court, because the tenants qualified as “persons aggrieved” within the meaning of that clause. The Court explained that a clearance order becomes final only after it has been confirmed by the Government and published, and that the only avenue for challenge is the appeal expressly provided for in the statute. Accordingly, if no such appeal is filed, or if an appeal is filed and subsequently dismissed, a tenant who claims to be aggrieved by the clearance order has no remedy by way of suit. The Court then turned to the conduct of the High Court and held that the High Court erred in permitting the amendment of the plaint and in remitting the suit for what amounted to a new trial. By amending the plaint, the plaintiffs introduced a fresh allegation of fraud that had no foundation in the original pleading. The Court noted that the power granted by Order XLI, rule 27 of the Code of Civil Procedure is limited to curing a gap in the evidence and does not empower a appellate court to admit entirely new evidence when it could already render a judgment on the existing record. Moreover, the High Court exceeded its jurisdiction by directing that certain persons be examined as witnesses, effectively compelling a party to call specific witnesses, which is beyond the appellate court’s competence.

The appeal before the Supreme Court was filed as Civil Appeal No. 134 of 1964, taken by special leave from the judgment and order dated 28 September 1962 of the Bombay High Court in L. P. Appeal No. 85 of 1961. Counsel for the appellant consisted of senior advocates, while counsel for respondents numbered 7, 8 and 9 and counsel for respondent 4 appeared on the other side. The judgment was delivered by Justice Mudholkar. The central issue for determination was whether the suit instituted by the plaintiffs in the City Civil Court, Bombay, was maintainable. The plaintiffs were a group of tenants occupying various rooms in a complex of buildings known as Dhobi Chawls, also referred to as the Colaba Land Mill Chawls, located on Lala Nigam Road in Colaba, Bombay. Numerous other tenants lived or conducted business in the same chawl, and the plaintiffs filed the suit in a representative capacity on behalf of all such tenants. The first defendant was the Municipal Corporation of Greater Bombay, and defendants two through four were the landlords of the plaintiffs. The buildings and the land on which they were situated were owned by the Colaba Land Mill Co., Ltd., Bombay, pursuant to an agreement dated 16 May 1956.

In the agreement, identified as the Demolition Agreement, defendants numbered two to four promised, for a specified consideration, to demolish the buildings that were admitted to be in a dilapidated state after obtaining permission from the Rent Controller of Bombay. Clause seven of that agreement provided that defendants two to four would be placed in possession of the buildings and the land on which they stood, subject to a licence and leave granted by the Company. The agreement also required those defendants to pay an annual sum of Rs. 20,221‑8‑0 to the Company until the demolition was completed, after which they would hold the land as tenants at will of the Company.

Until such demolition occurred, the defendants were entitled to collect the rents payable by the tenants occupying the buildings, and they were also obligated to discharge the monthly taxes, insurance premiums, and other dues relating to the buildings. Upon completion of demolition, the agreement stipulated that defendants two to four would acquire all materials and debris resulting from the demolition, provided that they paid Rs. 40,000 to the Company as the price for those materials; of that amount the defendants had already paid Rs. 10,000 at the time the agreement was executed.

The plaintiffs argued that the buildings had remained in a dilapidated condition for many years and that, between August 1951 and May 1956, as many as one hundred thirty‑eight notices had been served on the Company demanding that repairs be carried out, but the Company had taken no action in response to any of those notices. The plaintiffs further asserted that, between November 1956 and 29 January 1960, eleven additional notices had been served on defendants two to four for the same purpose, and that those defendants likewise failed to act on any of the notices. The plaintiffs also pointed out that the Company and defendants two to four had been prosecuted seventy‑one times for failing to comply with the notices, yet those prosecutions had proved ineffective.

According to the plaintiffs, both the Company and the defendants deliberately avoided undertaking the repairs because they intended to demolish the buildings, and they had even invited the various notices issued by the Corporation and the prosecutions launched by it in order to facilitate that objective.

The plaintiffs conceded that the Corporation, exercising the powers granted by section 354R of the Bombay Municipal Corporation Act, 1888, had declared the area containing the buildings to be a clearance area and, under section 354RA of the same Act, had issued a clearance order that was subsequently confirmed by the State Government. However, the plaintiffs contended that those statutory provisions were ultra vires Articles 19(1)(f) and (g) of the Constitution. They further alleged that the first defendant had abused the provisions of the Act and that the action taken by the first defendant was motivated by mala fide intent, although the plaint did not set out any specific particulars of that alleged mala fides.

The defendants denied that the statutory provisions were ultra vires and also denied that the clearance order had been issued mala fide. They further maintained that the present suit was barred by the provisions of clause two of Schedule GG to the Act and also barred by limitation.

The trial court had dismissed the suit on the ground that it was barred by the provisions of clause (2) of Schedule GG to the Act and also by limitation. The plaintiffs appealed this decision to the High Court, where the appeal was dismissed summarily by Justice Datar on 25 August 1961. On the same day the plaintiffs instituted an appeal under the letters patent, which was heard by a Division Bench consisting of Justices Patel and Palekar. The learned judges allowed the plaintiffs to amend their plaint, overriding the objections raised by the defendants. In their judgment the bench held that the suit was not time‑barred and therefore could proceed. The judges then turned to the allegation of mala fides. They observed that the plaintiffs had indeed pleaded mala fides but had failed to provide specific particulars. It was further noted that the plaintiffs had not produced any evidence before the trial court, and that ordinarily they would not be permitted to introduce fresh evidence at that stage, let alone during a letters‑patent appeal. Nevertheless, the judges remarked that the existing record contained certain documents which, if left unexplained, “support in a large measure the contention of the plaintiffs that defendants 2, 3 and 4 obtained an order by fraud and also that the order was mala fide.” After referring to some of those documents, the bench stated: “Though therefore no evidence is led on the question of mala fides or fraud committed upon them, it prima facie leads to such an inference, and it would not be proper to decide the question without requiring further evidence.” The judges added an unusual direction, stating: “We particularly want the Commissioner and the City Engineer and the defendants to be examined on this question.” Consequently, the case was remitted to the City Civil Court for the recording of additional evidence, and the court was directed to certify the evidence and its findings by the end of November 1962. After special leave was granted to the appellants, the proceedings before the City Civil Court were stayed.

The next issue for consideration was whether the High Court was justified in allowing the amendment to the plaint. By way of the amendment the plaintiffs introduced paragraph 8A, in which they attempted to summarise the correspondence that had taken place between the plaintiffs and the officers of the Corporation, as well as between the landlords and the Corporation. In that paragraph the plaintiffs alleged that defendants 2, 3 and 4 had fraudulently and wrongfully induced the first defendant to make the order in question. In the alternative, and in any event, the plaintiffs asserted that defendants 2, 3 and 4 had derided their responsibility to provide accommodation to all the tenants in the premises.

In the amended pleading, the plaintiffs asserted that the approval granted by the Improvement Committee to the order in question, and the later confirmation of that order by both the Municipal Corporation and the Government, had been made on the basis of a mistake of fact and under circumstances that were not supported by the requirements of section 354R or by the applicable law. The plaintiffs further contended that, because of this mistake, the orders issued by the first defendant pursuant to section 354R were issued in complete disregard of, and in violation of, the strict provisions contained in that statutory provision. They maintained that the first defendant had failed to take, and had neglected to consider, any measures—whether by arranging an alternative programme or by any other means—that might have minimized the hardship inflicted upon the tenants before issuing the order. On this basis, the plaintiffs argued that the orders were illegal, invalid and void. In the original plaint, specifically in paragraph 9, the plaintiffs had alleged mala‑fide conduct, stating that the action sought by the first defendant constituted a clear abuse of the Bombay Municipal Corporation Act and was therefore ultra vires the powers conferred upon that defendant by the Act; consequently, they claimed that the first defendant’s action was mala fide.

The earlier portions of the plaint challenged the validity of sections 354R and 354RA on two principal grounds. First, the plaintiffs argued that those provisions granted the Corporation and its officers unfettered and unchecked executive discretion. Second, they claimed that the provisions violated the plaintiffs’ constitutional rights under article 19 (1)(f) and (g). However, the plaint did not explain why the Corporation’s issuance of a clearance order amounted to an abuse of the statutory provisions. Later in paragraph 9, the plaintiffs observed that the Corporation had failed to provide them with a hearing, and they asserted that, had a hearing been afforded, they could have persuaded the Corporation that the premises in question did not require demolition. Accordingly, while the plaintiffs did characterize the Corporation’s action as mala fide, the reasons for that characterization appeared to be (a) the alleged unconstitutionality of sections 354R and 354RA, and (b) the Corporation’s failure to give the plaintiffs an opportunity to demonstrate that the premises did not need to be demolished.

By amending the plaint in accordance with the High Court’s order, the plaintiffs shifted their argument. They now alleged that the landlords had fraudulently and wrongfully induced the Corporation to issue the clearance order. In an alternative pleading, they contended that because the landlords had refused to assume responsibility for providing accommodation to all tenants in the new building planned for the site, the Corporation could not properly make a clearance order. This amendment and its new content were raised before the Court by counsel representing the plaintiffs.

It was submitted that the amendment introduced a completely new case and that the plaintiffs had introduced it only because the Court had suggested such a step. The counsel supporting this submission also pointed to the objection raised by Mr S V Gupte before the High Court, which argued that the plaintiffs had never filed an application seeking to amend the plaint. Further, relying on a passage in the judgment, he asserted that the Court had previously found the proposed amendment to be inadequate and that it was only at the Court’s prompting that the plaintiffs drafted the amendment, which now appears in the plaint as paragraph 8A. The counsel’s argument appears to have some merit; however, the fact that the plaintiffs pursued an amendment after a suggestion from the Court does not, by itself, justify refusing the amendment. The amendment could be disallowed only if it were shown that the plaintiffs had been compelled to file it against their will. That is not the case here. A Court that wishes to achieve justice may merely draw the parties’ attention to defects in their pleadings so that those defects can be corrected and the real dispute can be finally heard.

Nevertheless, there exists a second and more compelling reason for refusing the amendment. The plaintiffs now seek to establish a claim of fraud, a claim that finds no support in the original plaint. The mere inclusion of the term “mala fide” in the original pleading does not, by itself, create a basis for allowing a new amendment. The context in which “mala fide” is used shows that the plaintiffs intended to describe the Corporation’s order as one made with arbitrary power, an order that adversely affected the plaintiffs’ rights under Article 19(1)(f) and (g) of the Constitution, and consequently as an abuse of the statutory provisions, i.e., as mala fide. The High Court recognised the legal principle that a party should not be permitted to generate a new cause of action through amendment. In addressing this issue, the High Court observed:

“This brings us to the course which we must adopt in the present case and the amendment application. In the plaint, the plaintiff alleged that the order was mala fide and that it was obtained for collateral purposes.”

The learned judges erred in interpreting the original plaint as alleging that the landlords had obtained the clearance order or that the Corporation had issued the order for a collateral purpose. This misapprehension appears to have prompted the High Court to adopt an unusual procedural approach in this matter. The High Court also noted that no evidence had been produced by the plaintiffs before the City Civil Court to show that the order was passed fraudulently or for a collateral purpose.

The Court noted that the plaintiffs had failed to present any evidence before the City Civil Court indicating that the order had been obtained through fraud or for a collateral purpose. It observed that the legal principle required a party not to be permitted to introduce new evidence at the appellate stage, and certainly not at the stage of a letters‑patent appeal. The Court then recorded its own observation, stating that if the case had rested solely on the material already before it, the matter would have been straightforward apart from the amendment application. However, the Court expressed the view that the existing record did not enable a satisfactory disposal of the dispute. It pointed out that certain documents on file, if left unexplained, would substantially support the plaintiffs’ allegation that defendants numbered two, three and four had obtained the order by fraud and that the order was issued mala fide. The Court further considered that, if the High Court had based these observations on the provisions of Order XLI, Rule 27 of the Code of Civil Procedure, it should not have ignored the mandatory requirement contained in clause (b) of sub‑rule (1) of that rule. The Court acknowledged that Rule 27 authorises a court to permit the production of a document and the examination of a witness, but emphasised that such authority must be exercised only where the court deems the evidence necessary for pronouncing a judgment. The provision, the Court held, does not allow an appellate court to admit fresh evidence simply because a judgment could be rendered without it, nor does it permit the admission of new material solely to achieve a particular outcome. In other words, the power to admit additional evidence is intended only to fill a genuine gap in the evidential record. The Court observed that the High Court had not identified any such lacuna in the present case. Instead, the High Court had merely asserted that some documentary evidence on the record, taken in a large measure, endorsed the plaintiffs’ claim of fraud and mala fides. Before analysing those documents, the Court emphasized that the authority in clause (b) of sub‑rule (1) of Rule 27 may be exercised to augment the existing record only on the specific grounds enumerated in the rule. If the documents already on file were pertinent to the issue of fraud, the Court could consider them and decide the matter on that basis. The High Court’s remark that certain documents would support the plaintiffs’ allegation of fraud only if they remained unexplained indicated that, in its view, those documents constituted prima facie evidence of fraud. The Court found no indication that any of the defendants had sought an opportunity to explain the documents, and it further concluded that the High Court’s intention was not confined merely to providing the defendants a chance to comment on the documents.

In this case, the Court observed that the High Court had sent the matter back to the City Civil Court. The High Court’s own judgment concluded with an order that read, in substance, “In the result, we remit the case to the City Civil Court for receiving additional evidence as directed by us in the judgment and also to allow evidence on the amendment. We direct that the defendants file their written statement within three weeks from today, or at any earlier time they can, in answer to the amendment permitted to be made. Discovery and inspection shall be carried out forthwith, within a week thereafter. After these formalities are completed, the case shall be placed on the board for a final hearing to take evidence on the issue of mala fide and the issues that arise on the amended pleadings between the parties.” This language demonstrates that the High Court, in effect, ordered a fresh trial of the suit.

The Court further held that such a fresh trial could not be ordered under Order XLI, Rule 27 of the Code of Civil Procedure. The High Court had not acted under Order XLI, Rule 25, because it had not found that the City Civil Court had failed to frame or try any issue, nor that it had failed to determine a fact essential to the proper decision of the suit. The High Court did not identify any specific issue that the trial court had omitted. If the High Court intended to say that a necessary issue had not been raised by the trial court, the rule required the High Court to first frame that additional issue and then remit the case for trial on that issue. Moreover, the matter had not been decided by the trial court on any preliminary point; consequently, a general remand permissible under Rule 23 could not be applied.

The Court noted that the only documents the High Court cited in support of the plaintiffs’ allegations of fraud and mala fides were two letters. The first was a letter dated 3 September 1959 written by the City Engineer to the Tenants’ Association. In that letter the City Engineer stated that the landlords had agreed to construct a building of single‑room tenements for letting at standard rents and that the landlords would provide alternative accommodation to bona‑fide residents either by temporarily shifting them to other premises or by arranging a phased program of demolition and construction as convenient. The Court found it difficult to see how such a letter could constitute evidence of fraud or mala fides. The second document was a letter dated 11 September 1959 from the Commissioner to the Improvements Committee, which was also referenced but not detailed. The Court affirmed that it was not contested that the landlords had built some chawls at Kurla and had offered to house the tenants of the Dhobi Chawls in those Kurla chawls temporarily.

It was not contested that the landlords had promised to erect new buildings after the demolition work was completed, and that the existing tenants would be given accommodation in those new buildings at standard rents. The High Court referred to paragraph three of the letter dated 11 September 1959, which recorded a representation from the tenants stating that the landlord should construct a new structure close to the clearance area rather than requiring the tenants to relocate to the Kurla chawls. The Court considered that the tenants’ request was not reasonable because the landlords did not possess any land in the immediate neighbourhood. The correspondence presented by Mr. Setalvad demonstrated that land values in Colaba were extremely high, ranging from rupees two hundred and fifty to rupees two hundred and seventy‑five per square foot, and therefore it was unreasonable to expect the landlords to purchase land for this purpose. In addition, no evidence showed that any vacant building site existed in the vicinity of the Dhobi Chawls at the relevant time. The High Court observed that only after the scheme had been finally approved by the Corporation, confirmed by the State Government, and the final orders of the City Civil Court had become operative, did the City Engineer write to the Tenants’ Association stating that the landlord had not given any undertaking. The Court noted that the High Court appeared to be referring to a letter dated 1 April 1960 sent by the City Engineer to the Tenants’ Association, identified in the paper book as item number thirty‑eight.

The letter of 1 April 1960 read as follows: “Gentlemen, Reference: your letter No. Nil, dated 19th February, 1960. The landlord of the above mentioned property has undertaken the responsibility of providing alternative accommodation to bona‑fide residential tenants at standard rent by constructing a building on one of the plots viz., plot No. 7 at the same site. The question of making the site available for the construction of the said building, either by the tenants shifting temporarily to other place or by the landlord arranging a phased programme of demolition and construction, is a matter which should be mutually arranged by the landlord and the tenants. The Municipality would facilitate towards arriving at any such arrangement between the two parties as indicated by you. No undertaking has been obtained by the Municipality from the landlord for any phased programme of demolition of the chawls. The landlord will be required to demolish the chawls in compliance with the Clearance Order after the same becomes operative. As there is no sufficient open space available at the above property, it does not seem feasible to provide temporary accommodation for the tenants at the same site. If the tenants are not in a position to make their own arrangement to shift from the place, they should temporarily shift to tenants at Kurla offered to them by the landlord with a view to facilitate speedy construction of the proposed building. Yours faithfully, Sd/- This.”

The letter, far from indicating that either the Corporation or the landlords had withdrawn the assurance of providing alternative accommodation to the tenants, actually reaffirmed that assurance. The letter further stated that the municipality had not obtained any undertaking from the landlords that a phased programme of demolition of the chawls would be carried out. The City Engineer pointed out that the manner of demolition was a matter to be negotiated between the landlords on the one side and the tenants on the other. Having already arranged alternative temporary housing for the tenants, the City Engineer asserted that no further responsibility rested on either the Corporation or the landlords to take any additional action. The High Court, however, adopted a different view and observed that, although no evidence had been produced on the question of mala fides or fraud, the material on record prima facie led to such an inference and that it was not proper to decide the question without further evidence. The Court noted that, in those circumstances, the High Court possessed no power to admit additional evidence or to direct that further evidence be taken. Counsel for the plaintiffs referred the Court to two architects’ reports in which the architects stated that repairs to the existing buildings would cost Rs 2 lacs, whereas constructing new buildings would cost Rs 3 lacs, and that, accordingly, the most sensible course for the landlords was to approach the Corporation for a clearance order so that new construction could eventually be undertaken on the site. Counsel argued that this circumstance, taken together with the deliberate avoidance by the landlords and the owners of the Colaba Land Mill Co., Ltd. to comply with the Corporation’s notice to undertake repairs, demonstrated collusion between the landlords and the Corporation and therefore supported the allegation of fraud set out in paragraph 8A. The Court observed that the High Court had not referred to this material and that, although the landlords may have deliberately allowed the buildings to become unfit for human habitation or a danger to the safety of the tenants, such circumstances did not, in themselves, indicate any collusion between the landlords and the Corporation. Consequently, the Court held that the High Court was in error in allowing the amendment to the plaint and in remitting the suit to the trial court for a virtual retrial. Moreover, the High Court had further directed that the Commissioner, the City Engineer and the defendants be examined on the question of breach of the assurance given to the tenants. While the Court acknowledged that the High Court’s motive in making that direction might have been laudable, it concluded that the High Court ought to have kept within the limits imposed by law on the powers of a court in dealing with a case.

The Court explained that a court does not have the authority to force a party to adopt a particular form of pleading or to require that party to amend his pleading, and in the same way the court lacks the power to compel a party to examine any specific witness. The observation made by the High Court was not expressed in the language of an absolute command, yet the parties could not safely assume that the High Court’s direction could be treated as optional. The Court stressed that while a court of law has a duty not only to do justice but also to assure that justice is actually done, it must exercise that duty strictly within the limits of the law and not beyond them. The matter then arose as to whether the case should be remitted to the High Court for a determination of the constitutionality of sections 354R and 354RA. It was noted that the High Court had not rendered any finding on that specific issue. Ordinarily, the Court would have sent the case back to the High Court for that decision. However, the Court observed that the clearance order under dispute had been issued by the Corporation on 7 May 1959 and was subsequently confirmed by the State Government on 23 January 1960. In addition, there was a real concern that the High Court, because of a heavy docket, might not be able to consider an appeal within a reasonable time. For those reasons, the Court considered it appropriate to hear the parties on the question of the validity of the statutory provisions and to decide it itself. Mr Shroff’s argument was summarized as follows: the plaintiffs and the occupants of the buildings possess an interest in the premises because they are tenants, and the clearance order would render them liable to eviction from their respective tenements. Accordingly, he contended that the Corporation could not lawfully issue such an order without first giving the tenants a chance to show cause against it. He further maintained that sections 354R and 354RA do not provide for any opportunity to be afforded to tenants before a clearance order is made, and therefore those provisions exceed the powers granted to the Corporation. Moreover, he argued that the suit was not barred by clause (2) of Schedule GG because the tenants could not be described as “persons aggrieved” by the clearance order, and consequently they lacked any right to prefer an appeal before a Judge of the City Civil Court, Bombay from that order. In addition, he pointed out that the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 imposes restrictions on a landlord’s right to evict a tenant in the city. Section 12 of that Act provides that a tenant shall not ordinarily be evicted as long as he continues to pay the standard rent and any permitted increases, irrespective of the length of his tenancy under the original agreement, thereby conferring a specific right on the tenant.

In this case the Court observed that the landlord’s right to own and possess his property exists independently of any municipal power and that the Corporation could not undermine that right by issuing a clearance order without the tenant’s knowledge. The Court noted that, under clause (hh) of sub‑section (1) of section 13, a landlord may recover possession of the premises when a local authority or other competent authority requires it. Nevertheless, the Court held that this provision also furnishes the tenant with a statutory opportunity to show cause against any proposed clearance scheme, because the tenant would be bound by the clearance order in any possession proceeding brought by the landlord under section 13(1). The Court affirmed that a tenant possesses, under both the Transfer of Property Act and section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, an interest in the demised premises that falls squarely within the term “property” in sub‑clause (f) of clause (1) of Article 19 of the Constitution. However, that constitutional right is subject to clause (5) of Article 19, which permits the State to impose reasonable restrictions in the public interest. The Bombay Municipal Corporation Act was in force at the commencement of the Constitution, but sections 354R to 354RA were later inserted by section 18 of the Bombay Act 34 of 1954, replacing earlier provisions. Accordingly, the Court must determine whether the present law imposes a reasonable restriction on the tenant’s right to occupy the premises. To make that determination the Court examined the provisions that empower the Corporation to make a clearance order. Section 354R(1) provides that if, in the Commissioner’s opinion, residential buildings in any area are unfit for human habitation, dangerous, or injurious to health, and if the conditions can be effectively remedied by demolishing all the buildings without an improvement scheme, the Commissioner may define the area and submit a draft clearance scheme for the Corporation’s approval. Upon approval the Corporation may pass a resolution declaring the defined area to be a clearance area. Section 354R(2) further requires the Corporation to ascertain the number of persons likely to be displaced and to take practicable measures to minimise hardship to those persons, after which the resolution must be forwarded to the State Government. Section 354R(4) states that as soon as the Corporation has declared any area a clearance area, the Commissioner shall, in accordance with the Act, secure the clearance either by ordering demolition of the buildings, by acquiring the land on behalf of the Corporation and effecting demolition, or by a combination of both methods. Section 354RA(1) obliges the Corporation to submit the clearance order to the State Government for confirmation, and section 354RA(4) provides that before submitting the order to the

In accordance with the statute, the corporation must first determine the number of persons who are likely to be dishoused in such area and thereafter take such measures as are practicable to ensure that as little hardship as possible is inflicted on those dishoused. Once the corporation has passed a resolution declaring the area as defined and approved by it to be a clearance area, that resolution is required to be forwarded to the State Government. Section 354R(4) provides that, as soon as the corporation has declared any area to be a clearance area, the Commissioner shall, in accordance with the appropriate provisions later contained in this Act, proceed to secure the clearance of the area in one or other of the following ways, or partly in one and partly in the other: (a) by ordering the demolition of the buildings in the area; or (b) by acquiring on behalf of the corporation land comprised in the area and undertaking or otherwise securing the demolition of the buildings thereon. Section 354RA(1) requires the corporation to submit the clearance order to the State Government for confirmation. Section 354RA(4) further mandates that before submitting the order to the State Government, the Commissioner shall (a) publish simultaneously in the Official Gazette and in three or more newspapers circulating within Greater Bombay a notice stating the fact of such a clearance order having been made, describing the area comprised therein, and naming a place where a copy of the order and of the plan referred to therein may be seen at all reasonable hours; and (b) serve on every person whose name appears in the Commissioner’s assessment book as primarily liable for payment of property tax leviable under this Act on any building included in the area to which the clearance order relates, and, so far as it is reasonably practicable to ascertain such persons, on every mortgagee thereof, a notice stating the effect of the clearance order, that it is about to be submitted to the State Government for confirmation, and specifying the time within and the manner in which objections thereto can be made to the Commissioner. Under subsection (5) any objections, if any, received by the Commissioner are to be submitted to the Improvements Committee, and that Committee is entitled under subsection (6) to make such modifications in respect of the order as it may think fit. The matter then proceeds to the corporation and thereafter to the State Government. Subsection (7) provides that the provisions of Schedule GG to the Act shall have effect with respect to the validity and date of operation of a clearance order. The remaining provisions of Section 354RA are not relevant to the present discussion. Clause (1) of Schedule GG provides that as soon as the clearance order is confirmed by the State Government the Commissioner has to publish, in the same manner as a notice under Section 354RA(4), a notice stating that the order has been confirmed. Clause (2) is important and is reproduced as follows: “Any person”

The provision states that any person who is aggrieved by the clearance order, or by the State Government’s approval of a redevelopment plan or a new plan, may, within six weeks after the notice confirming the order or the approval of the plan is published, file an appeal to a Judge of the City Civil Court, Bombay, and that Judge’s decision shall be final. Counsel for the Corporation, and counsel for the landlords, argued that a tenant has the right to object to the making of a clearance order not only under clause (b) of subsection (4) of section 354RA but also in the appeal provided for in clause (2) of Schedule GG. Although the statutes do not expressly mention tenants, the requirement in clause (a) of subsection (4) of section 354RA to publish the clearance order suggests that the purpose of publication is to invite objections from persons who will be affected by the order. Because tenants would be affected, they fall within that class. Clause (b) of the same provision specifies that actual service of notice is required only for persons primarily liable for property tax and for mortgagees, and it further requires that the time and manner for making objections to the Commissioner be specified, yet it says nothing about tenants. If the Court were to hold that tenants or any other affected persons could not lodge an objection because the provision does not mention them, the requirement to publish the notice would become effectively meaningless. Tenants are undoubtedly persons who would be affected by the order. Sub‑section (2) of section 354R imposes certain duties on the Corporation towards persons who are likely to be displaced by the clearance order. From this, it is legitimate to infer that a corresponding right was intended to be given to tenants so that they may ensure the Corporation performs those duties. That right exists in addition to the tenants’ interest in the property itself, and therefore tenants should be considered persons who are entitled to lodge an objection to the proposed order. Counsel for the respondent, however, maintained that clause (b) of subsection (4) of section 354RA limits the right to object only to the persons named in that clause and that clause (a) contains no language from which a similar right for other persons can be deduced. The Court observed that, to give full effect to both clauses (a) and (b) of subsection (4), the words “and specifying the time within and manner in which objections” should be read as applying not only to clause (b) but also to clause (a).

In interpreting the provision that “the time within which and manner in which objections thereto can be made to the Commissioner,” the Court held that this wording, which appears at the conclusion of clause (b), must also be applied to clause (a). The Court explained that reading the words as limited only to clause (b) would be inconsistent with the legislative purpose, because if the legislature intended to grant an objection right solely to the persons listed in clause (b), sub‑section (5) would have limited the Commissioner’s submission to the Improvements Committee to objections received under clause (b) alone, rather than referring to objections received under sub‑section (4) generally. The Court further observed that clause (2) of Schedule GG, previously reproduced, makes the existence of a tenant’s right to lodge an objection unmistakably clear. The expression “any person aggrieved” in that clause was described as sufficiently broad to encompass not only a tenant but also any occupant of a building who might be displaced by a clearance order. Since the Act does not define “person aggrieved,” the Court said the term should be given its ordinary meaning, which includes anyone whose interest is affected by the order. The Court supported this view by citing the observations of James L. J. in Ex parte Sidebotham and by referring to the construction of a similar phrase in section 24(1) of the Administration of Evacuee Property Act, 1950, as decided in Sharifuddin v. R. P. Singh, where the judges held that the words possessed the widest possible amplitude and covered an assistant custodian of evacuee properties. The Court noted that clause (2) of Schedule GG confers a right to an aggrieved person to prefer an appeal against a clearance order before a Judge of the City Civil Court, a right that the Government has confirmed. Mr Shroff argued that the term “aggrieved person” should be read to mean only a party to the order, contending that ordinarily an appeal right attaches to parties to a proceeding. The Court responded that a typical appeal right is indeed limited to parties when the proceeding is strictly between two opposing sides, but the proceeding contemplated by section 354R is not a conventional adversarial suit. Instead, it involves the exercise of certain powers by the Corporation that affect the interests of many individuals or classes. Accordingly, clause (2) of Schedule GG grants any person whose legal right or interest is impacted by the Corporation’s action the ability to appeal. By construing section 354RA and Schedule GG reasonably, the Court concluded that tenants are indeed afforded an opportunity to object to the clearance order.

In the matter before the Court, it was observed that the limitations imposed on a tenant’s right to retain property by sections 354R and 354RA were not unreasonable, and consequently those statutory provisions were held to be valid. The counsel representing the respondents, Mr. Shroff, conceded that if the restrictions were indeed reasonable, his argument that the provisions were unconstitutional could not succeed. Based on the determination that the provisions were valid, the Court further concluded that the plaintiffs were entitled to file an appeal before a Judge of the Civil Court. The Court explained that a clearance order became final only after it had been confirmed by the Government and published in accordance with clause (2) of Schedule GG, and that finality was conditioned solely on the outcome of any appeal filed under the same clause by a person who was aggrieved. The Court noted that where no such appeal was lodged, or where an appeal was filed and subsequently dismissed, a tenant who claimed to be aggrieved could not obtain any remedy by way of a suit. Aligning with the judgment of the learned City Civil Court Judge, the Court held that the suit instituted by the plaintiffs was not maintainable. Accordingly, the Court set aside the judgment of the High Court and allowed the present appeal. No order as to costs was made, and the appeal was permitted.