Rai Bahadur Kanwar Raj Nath& Ors Vs.
Pramod C. Bhatt, Custodian of Evacuee Property  Insc 64 (10 November
AIYYAR, T.L. VENKATARAMA MUKHERJEE, BIJAN KR.
(CJ) IMAM, SYED JAFFER
CITATION: 1956 AIR 105 1955 SCR (2) 977
Evacuee Property-Lease granted by
Custodian-Notice to can- cel-Custodian's power-Administration of Evacuee
Property Act, 1960 (XXXI of 1950), s. 12(1).
By s.,12, sub-s. 1, of the Administration of
Evacuee Property Act, 1950 (XXXI of 1950) as amended by Act XLII of 1954,
notwithstanding anything contained in any other law for the time being in
force, the Custodian may cancel any allotment or terminate any lease or amend
the terms of any lease or agreement under which any evacuee property is held or
occupied by a person, whether such allotment, lease or agreement was granted or
entered into before or after the commencement of this Act".
The respondent who was the Custodian of
evacuee property granted a lease to the appellants and subsequently issued a
notice to them, among other things, calling upon them to show cause why the
lease should not be cancelled for committing breaches of the conditions on
which the properties had been leased to them. The appellants contended that the
respondent had no power to cancel the lease on the ground that under s. 12(1)
of the Act the power of the Custodian to cancel the lease could be exercised
only so as to override a bar imposed by any law but not the contract under
which the lease was held and relied on the language of the non-obstante clause
contained in the section.
Held, that the operative portion of the
section which confers power on the Custodian to cancel a lease is unqualified
and absolute and could not be abridged by reference to the non-obstante clause
which was only inserted ex abundanti cautela with a view to repel a possible
contention that the section does not by implication repeal statutes conferring
rights on lessees.
Observations in Aswini Kumar Ghose v.
Arabinda Bose ( S.C.R. 1, 21, 24) and Dominion of India v. Shrinbai A.
Irani ( 1 S.C.R. 206, 213), on the scope of a non-obstante clause, relied
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 205 of 1954.
On appeal from the judgment and order dated
the 978 13th April 1954 of the Bombay High Court in Appeal No. 49 of 1954
arising out of the order dated the 31st day of March 1954 of the said High
Court exercising its Ordinary Original Jurisdiction in Misc. Petition No. 55 of
K. T. Desai, P. N. Bhagwati, Rameshwar Nath
and Rajinder Narain, for the appellants.
C. K. Daphtary, Solicitor-General of India,
(Porus A. Mehta and B. H. Dhebar, with him), for the respondent.
1955. November 10. The Judgment of the Court
was delivered by VENKATARAMA AYYAR J.-This appeal raises a question as to the
powers of a Custodian of Evacuee Property to cancel a lease granted by him
under section 12 of the Administration of Evacuee Property Act (XXXI of 1950),
hereinafter referred to as the Act. Messrs Abdul Karim and Brothers owned,
along with certain other properties which are not the subject- matter of the
present appeal, three mills with bungalows and chawls at Ambernath in Thana
District and the Bobbin Factory at Tardeo in Bombay. They having migrated to
Pakistan, these properties were declared by a notification dated 12-9- 1951
issued under section 7 of the Act as evacuee property, and under section 8(1)
of the Act, they became vested in the respondent as the Custodian for the
State. The appellants are displaced persons, and on 30-8-1952 the respondent
entered into an agreement with them, Exhibit A, which is, as aptly
characterised by learned counsel for the appellants, of a composite character,
consisting of three distinct matters. There was, firstly, a demise under which
the mills and the factory in question were leased to the appellants for a
period of five years on the terms and conditions set out therein. Secondly,
there was a sale of the stock of raw materials, unsold finished goods, spare
parts, cars, trucks and other movables which were in the mills and the factory,
with elaborate provisions for the determination and payment of the price
therefor in 979 due course. And thirdly, there was an agreement to sell the
mills and the factory to the appellants in certain events and subject to
certain conditions. There was also a clause for referring the disputes between
the parties to arbitration.
In pursuance of this agreement, the
appellants were put in possession of the mills and the factory on 31-8-1952. On
12-2-1954 the respondent issued a notice to the appellants, Exhibit C, wherein
be set out that the appellants had systematically committed breaches of the
various terms on which the properties bad been leased to them, and called upon
them to show cause why the lease should not be cancelled and why they should
not be evicted. The notice then went on to state that the respondent considered
it necessary to issue certain directions for the "preservation of the
demised premises and the goods and stock in trade, etc., lying in the demised
premises", and the appellants were accordingly required not to remove the
stock or raise any money on the security thereof, and to send daily reports to
the Custodian, of the transactions with reference thereto. Presumably, these
directions were given under section 10 of the Act. On 13-2-1954 the appellants
appeared before the respondent, and contended that he had no auth- ority to
issue the notice in question under section 12, and that it was therefore
illegal. Apprehending that the lease might be cancelled, and that they might be
evicted, the appellants filed on 16-2-1954 the application out of which the
present appeal arises, for a writ of certiorari for quashing the notice,
Exhibit C, and for a writ of prohibition restraining the respondent from taking
any further action pursuant thereto.
In support of the petition, the appellants
urged that section 12 under which the respondent purported to act authorised
the cancellation of only leases granted by the evacuee and not by the Custodian
himself, and that no directions could be given under section 10 as it applied
only to properties of the evacuee, and that by reason- of the sale, the
movables in question had become the property of the appel- 124 980 lants. The
petition was heard by Tendolkar, J., who stated the points for determination
(1) "Whether the Custodian has power
under section 12 of the Administration of Evacuee Property Act, 1950, to
terminate a lease granted by himself, and (2) Whether the directions given by
the Custodian are beyond the jurisdiction conferred upon him by section 10 of
the said Act?" On the first question, he held that section 12 applied only
to leases granted by the evacuee and not by the Custodian, and that therefore
the notice, Exhibit C, was ultra vires the powers of the Custodian under that
section. On the second question, he held that section 10 applied only to
properties of the evacuee, and that the movables in respect of which directions
were given, ceased to be the property of the evacuee by reason of the sale in
favour of the appellants, and that in consequence, the directions with
reference to them were unauthorised. In the result, the application was
The respondent took the matter in appeal, and
that was heard by Chagla, C.J. and Dixit, J. By their judgment dated 13-4-
1954, they held that on the plain language of section 12 it would apply
whenever there was a lease, and that lease was in respect of property belonging
to the evacuee, that there was no warrant for imposing a further limitation on
that section that that lease should also have been granted by the evacuee, and
that accordingly the Custodian had power to issue the notice, Exhibit C, for
cancelling the lease. As regards movables, however, they agreed with Tendolkar,
that for the reasons given by him the
Custodian had no authority under section 10 to issue any directions with
reference thereto. The appeal was accordingly allowed in so far as it related
to the lease but dismissed as regards movables.
Against this judgment, the appellants have
preferred this appeal on a certificate granted by the High Court under article
133(1) (b), and the only point that arises for determination therein is as to
whether the Custodian has the power under section 12 to 981 cancel a lease
granted by himself and not by the evacuee.
But that question is no longer open to
argument, as there has been subsequent to the decision of the court below
legislation which concludes the matter. Section 5 of the Administration of
Evacuee Property (Amendment) Act, 1954 (XLII of 1954) enacts the following
Explanation to section 12 of Act XXXI of 1950:
"In this sub-section 'lease' includes a
lease granted by the Custodian and 'agreement' includes an agreement entered
into by the Custodian".
And it provides that the Explanation
"shall be inserted and shall be deemed always to have been inserted"
in the section.
Mr. Desai, learned counsel for the
appellants, concedes that this amendment which is retrospective in operation
would govern the rights of the parties in the present appeal, and that under
the section as it now stands, the Custodian has the power-and had always the
power-to cancel leases created not merely by the evacuees but also by himself.
But he con- tends that this power could be exercised only so as to override a
bar imposed by any law but not the contract under which the lease is held, and
this result flows according to him from the language of the non-obstante
clause, which is limited to anything contained in any other law for the time
being in force", and does not include "or any contract between the
parties". This was a contention which was open to the appellants on the
terms of the section as it stood even before the amendment, but it was not put
forward at any stage prior to the bearing of this appeal and that by itself
would be sufficient ground for declining to entertain it which it may be noted
is now sought to be raised by a supplemental proceeding under Order 16, rule 4
of the Supreme Court Rules. On the merits also it is without any substance. The
section expressly authorises the custodian to vary the terms of the lease, and
that cannot be reconciled with the contention of the appellants that it confers
no authority on him to go back upon his own contracts. The operative portion of
the section which confers power on 982 the Custodian to cancel a lease or vary
the terms thereof is unqualified and absolute, and that power cannot be
abridged by reference to the provision that it could be exercised
"notwithstanding anything contained in any other law for the time being in
force". This provision is obviously intended to repel a possible
contention that section 12 does not by implication repeal statutes conferring
rights on lessees, and cannot prevail as against them and has been inserted ex
abundanti cautela. It cannot be construed as cutting down the plain meaning of
the operative portion of the section. Vide the observations in Aswini Kumar
Ghosh v. Arabinda Bose(1) and the Dominion of India v. Shrinbai A. Irani(1) on
the scope. of a non- obstante clause. We must accordingly bold that the
respondent was acting within his authority in 'issuing Exhibit C in so far as
it concerned the lease granted in favour of the appellants.
It was next contended by Mr. Desai that even
if the Custodian had the power under section 12 to cancel the lease in favour
of the appellants, be bad no power under that section to cancel the agreement
to sell the mills and the factory to them, which was one of the matters contained
in Exhibit A, that the notice, Exhibit C, was to that extent without jurisdiction,
and that the respondent should accordingly be prohibited from cancelling that
portion of Exhibit A in pursuance of Exhibit C. But the notice in terms refers
firstly to the lease which it is proposed to cancel, and secondly to the
movables in respect of which certain directions were given. In their petition
under article 226, it was the validity of the notice., Exhibit C, with
reference to these two matters that the appellants challenged. Tendolkar, J.
stated in his judgment-and quite correctly-that these were the two points that
&rose for determination. The question of -the rights of the appellants in
so far as they related to the purchase by them of the mills and the factory was
not raised in the petition, and no contentions were put forward in support
thereof at any stage of the proceedings. It is for the first time in the argument
before us that those rights are sought to be agitated.
Under the circumstances, we must decline to
It will be sufficient if we observe that the
rights of the appellants, if any, other than those arising out of the lease,
are left open to the determination of the appropriate authorities, and that
nothing in our decision should be taken as a pronouncement on those rights.
In the result, the appeal fails and is
dismissed with costs.