Fruit and Vegetable Merchants Union Vs.
Delhi Improvement Trust [1956] INSC 65 (6 November 1956)
SINHA, BHUVNESHWAR P.
JAGANNADHADAS, B.
IMAM, SYED JAFFER
CITATION: 1957 AIR 344 1957 SCR 1
ACT:
Ejectment-Market constructed by Improvement
Trust on Government land with Government money Whether market Government
Premises-Whether lessee of market Protected from ejectment Connotation of the
word 'vest'-Delhi and Ajmer Rent Control Act, (XXXVIII Of 1952), s. 3(a)-U. P.
Town Improvement Act, (U. P. Act VIII of 1919) as extended to Delhi, s. 54A(2).
HEADNOTE:
Under an agreement the Government placed
certain lands belonging to it at the disposal of the Improvement Trust for the
construction of a market. The Trust constructed the market with funds advanced
by the Government by way of loan at interest. Under the agreement the Trust had
to pay a certain fixed sum by way of revenue on the property; the income from
the market had to be applied to the payment of interest on the money advanced
by Government, and to the payment of expenses for the management of the market
and the surplus had to be placed at the disposal of, Government to be spent
according to its directions. The lessee of the market from the Trust filed a
suit for a declaration that it was protected from ejectment by the provisions
of the Delhi and Ajmer Rent Control Act. It was contended by the lessee that
the market was the property of the Trust to which the Act applied. It was
further contended by the lessee relying upon the language of s. 54A(2) of the
U. P. Town Improvement Act, that the market vested in the Trust for otherwise
it could not upon transfer by the Trust vest in the Chief Commissioner as
provided by this section.
Held, that upon a proper construction of the
terms of the agreement between the Trust and the Government, the Trust was in
the position of a statutory agent of the Government and that the market was
Government premises to which the provisions of the Delhi and Ajmer Rent Control
Act were not applicable by virtue Of s. 3(a).thereof, and consequently the
lessee was liable to ejectment upon termination. of the period of the lease.
The word 'vest' has not got a fixed
connotation, meaning in all cases that the property is owned by the person or
authority in whom it vests. It may vest in title, or it may vest in possession
or it may vest in a limited sense.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 32 of 1955.
Appeal from the judgment and decree dated May 5, 1954, of the High Court of Punjab at Chandigarh in Regular First Appeal No. 115 of
1953 arising out of the decree dated -June 6, 1953, of the Court of the Subordinate Judge, 1st Class, Delhi, in suit No. 26 of 1953.
Dewan Chaman Lal and Ratan Lal Chawla, for
the appellant.
M. C. Setalvad Attorney-General for India, Porus A. Mehta and R. H. Dhebar, for the respondent.
1956. November 6. The Judgment of the Court
was delivered by SINHA J.-The main question for determination in this appeal
from the concurrent decisions of the courts below is whether the Delhi and
Ajmer Rent Control Act, XXXVIII of 1952 (which hereinafter will be referred to
as the Control Act) is applicable to the premises in question. The courts below
have come to the conclusion that in view of the provisions section 3(a) of the
Control Act the market called the New Fruit and Vegetable Market, Subzimandi,
under the administration the respondent, the Delhi Improvement Trust, (which
hereinafter will be referred to as the Trust) is Government property to which
the provisions of the Act are not attracted. This appeal has been brought to
this Court on a certificate granted by the High Court of Judicature of the
State of Punjab that the case involved a substantial question of law as to the
legal status of the respondent vis a vis the Government.
The sequence of events leading up to the
institution of the suit by the appellant " The Fruit and Vegetable
Merchants Union, Subzimandi " a registered body under the Indian Trade
Unions Act, giving rise to this appeal may shortly be stated as follows:
By an agreement dated, March 31, 1937,
(Exhibit D-5) between the Secretary of State for India in Council and the Delhi
Improvement Trust, which will have to be set out in detail hereinafter and the
construction of 3 which is the main point in controversy between the parties, a
certain area of the land admittedly belonging to Government was placed at the
disposal of the Trust for the " orderly expansion of Delhi under the
supervision of a single authority. " The said property was compendiously
called " the Nazul Estate. " By a letter dated May 1/2, 1939 (not
exhibited but filed in the High Court at the appellate stage) the Chairman of
the Trust forwarded a copy of the resolution No. 551 dated April 24,1939,
(Exhibit D-15) to the Chief Commissioner of Delhi. The resolution sets out the
scheme for the construction of the new Subzimandi Fruit Market on a gross area
of 10.87 acres including certain lands which till then did not vest in the
Trust. The Chairman asked for administrative sanction of the Government of
India to place the additional area at the disposal of the Trust on the same
terms as those applicable to the Nazul Estate aforesaid held under the
agreement, Ex. D-5. The resolution aforesaid sets out the object and history of
the scheme. It contains the categorical statement that " Government is the
owner of all the land included in the scheme. The position according to the
revenue records is given in the statement on the next page. " The scheme
then sets out in great detail the several structures to be constructed and the,
profit and loss figures. Under the heading " Computation of revenue
surplus " occur the following significant statements very much relied upon
by the appellant:"The revenue surplus of Rs. 4,530/is made up as follows;
and is based on the recommendation that the
Trust shall own and maintain the market.
Under the heading " Future Jurisdiction
" the following significant passage occurs: At this stage, if the
suggestion is accepted that the, Trust should own and run the market at least
until it is firmly established, and in view of the fact that Government are
-the sole owners of the land, no difficulty is anticipated due to divided
territorial jurisdiction of the two local authorities and no change is
proposed.
4 The letter enclosing the resolution of the
Trust as aforesaid contains a summary of the scheme, a portion of which is as
follows:
" An estimated capital expenditure of
Rs. 4.73 lakhs is involved. On this capital expenditure there will be a capital
deficit of Rs. 4.20 lakhs and a recurring revenue surplus of Rs. 4,530. This
financial result assumes ownership and management of the market by the Trust,
and takes into account all charges on maintenance and day-to-day management
which would otherwise fall to a local body. The scheme involves no acquisition
of land, but assumes transfer free of charge of an area of 10.87 acres of
Government land, all of which except for 1,510 square yards, falls within the
limits of the Civil Lines Notified Area Committee." (Underlined by us).
In answer to this communication from the
Trust, the Chief Commissioner sent the letter (Ex. D-8) dated May 13, 1939,
sanctioning under s. 22-A of the Trust Law the scheme of the " New Fruit
and Vegetable Market " as proposed in the resolution aforesaid at a cost
not exceeding Rs. 4,73,186.
The sanction is in terms made subject to the
remarks (1) that "the whole of the land required for the construction of
the new market is the property of the Government ", and (2) that "the
trust will administer the new market on its completion." It will thus
appear that it was clearly understood that the land on which the market was to
be constructed would continue to be the property of the Government in
modification of the proposal made by the Trust as aforesaid, the Trust only
being vested with the power to administer the new market.
On receipt of the letter aforesaid of the
Chief Commissioner, the Chairman of the Trust requested the former to obtain
the orders of the Government of India to place the additional land required for
the market at the disposal of the Trust under s. 54-A of the United Provinces
Town Improvement Act, VIII of 1919, (which will hereinafter be referred to as
the Improvement Act) as extended to the Province of Delhi, "on the same
terms applicable to other Nazul Estate held under the agreement between the
Trust and the Government of India" (Ex. D-7). By his letter dated 5 August
10, 1939, (Ex..D-6) the Chief Commissioner forwarded the orders dated June 21,
1939, of the Government of India agreeing to the proposal aforesaid of the,
Trust placing the additional area at the disposal of the Trust on the original
terms aforesaid. This is the genesis of the New Fruit and Vegetable Market,
Subzimandi, which hereinafter will be referred to as the Market, for a period
of six years with effect from May 25, 1942, at an annual rent of Rs. 35,000
rising every year by Rs. 2,000 to Rs. 45,000 in respect of the sixth year of
the lease. In anticipation of the termination of the lease period aforesaid the
Trust advertised the auction of the market for a fresh settlement. That
occasioned the suit for an injunction by the plaintiff against the Trust in the
Court of the Senior Subordinate Judge of Delhi, instituted on March 18, 1948.
The Court granted the plaintiff an interim injunction restraining the defendant
from putting the market to auction. The said ex parte order of injunction was
contested by the Trust with the result that the trial Court dissolved that
injunction.
The plaintiff carried an appeal to the High
Court of Punjab at Simla. During the pendency of the appeal a settlement was
arrived at between the parties and the plaintiff's offer of Rs. 1,50,000 as
annual rent of the market on the expiry of the lease was accepted by the Trust.
This settlement is evidenced by the resolution of the Trust dated February 24,
1949 (Ex. D-13). In pursuance of that settlement a fresh lease was executed. By
the indenture(Ex.D-4)dated April 22, 1949, the plaintiff was granted a fresh
lease for the period May 25, 1948, to March 31, 1950, at an annual rent of Rs. 1,50,000.
One of the terms of the' lease, which is a registered document, was" That
the lessee shall on expiry of the lease or on its determination by the lessor,
vacate the premises and deliver its peaceful possession to the lessor. If the
lessee fails to do so, he shall be liable to pay double the rent as liquidated
damages for the unauthorised period of occupation till such time as he vacates
it or he is ejected by process of law." Paragraph 22 of the indenture
aforesaid contains the following important aidmission:6 that both the lessor
and lessee agree that the premises in dispute are owned by the Government and
the provisions of the Delhi Ajmer Merwara Rent. Control Act (1947) do not apply
to the same." The effect of this admission is also one of the
controversies between the parties and shall have to be adverted to later.
It appears that during the pendency of the
second lease aforesaid, negotiations had started between the parties for
extension of the period of the lease. The plaintiff made an offer of a fresh
lease for a further period of five years at an annual rent of rupees two lakhs.
But the Trust by its resolution dated May 25, 1950, (Ex. D-12) aoreed only to
extend the period by two years " on the existing conditions, subject to
enhancement of rent to Rs. 2 lakhs per year." The plaintiff's case in the
plaint is that these onerous terms successively enhancing the rent to Rs. 2
lakhs per year were agreed to by it as it had no other alternative in view of
the plaintiff's need. The plaintiff has been paying the enhanced rent of Rs. 2
lakhs per year in view of the resolution aforesaid of the Trust but has all the
same started proceedings under s. 8. of the Control Act, for fixation of
standard rent in respect of the market. The Trust got an advertisement inserted
in the Hindustan Times, New Delhi, dated March 5, 1953, inviting tenders for
the lease of the market for a period of three years from April 1, 1953. The
plaintiff's case in the plaint is that the tenancy in favour of the plaintiff
still subsisted and had not been terminated in accordance with law. That was
the cause of action for the plaintiff to institute the present suit on March 9,
1953. The plaintiff's prayer in the plaint is that a decree for a permanent
injunction may be passed in favour of the plaintiff restraining the defendant
from evicting the plaintiff from the market.
The suit was contested by the Trust on the
allegations that the market had been constructed on Nazul land under the authority
of the Delhi State Government with Government funds, that the market was
Government property and was only being managed by the defendant on behalf of
the Government, that the 7 Control Act by virtue of s. 3 (a) thereof was not
applicable to the premises in question and that therefore the plaintiff was
liable to be ejected as the term of its lease had expired. Reliance was also
placed on behalf of the defendant on the provisions of the Government Premises
(Eviction) Act, XXVII of 1950, read with the Requisitioning and Acquisition of
Immovable Property Act, XXX of 1952.
On those pleadings a number of issues were
joined between the parties of which the most important is issue No. 1"
Whether the property in dispute belongs to the Government within the meaning of
s. 3 (a) of the Rent Control Act, 1952 ?" Both the courts below have
answered that issue in the affirmative, that is to say, in favour of the
defendant.
The plaintiff prayed for and obtained the
necessary certificate from the High Court that the case involved substantial
questions of law as to the interpretation of the relevant statute and the
agreement (Ex. D-5) between the Government of India and the Delhi Improvement
Trust. Hence this appeal.
It has been contended on behalf of the
appellant that on a true construction of the provisions, particularly s. 54A of
the Improvement Act as applied to the Province of Delhi and the agreement (Ex.
D-5) between the Government of India and the Trust, as also of the
correspondence that passed between the Chief Commissioner of Delhi and the
Trust, the land on which the market was constructed and the structure itself
belonged to the Trust and that therefore the provisions of the Control Act were
applicable to the tenancy created by the Trust in favour of the plaintiff; and
that being so, the plaintiff could not be ejected by the defendant on the
expiry of the term or the extended term of the lease. On the other hand, it has
been argued on behalf of the defendant-respondent that the Trust is the
statutory agent of the Government and has-to function in accordance with the
provisions of the statute aforesaid, namely, the Improvement Act. The agency
was created under the provisions of s. 54A (1) 8 of the Improvement Act, the
terms of the agreement being incorporated in the indenture, Ex. D-5, dated
;March 31 1937. The argument further is that in accordance with the scheme as
embodied in the agreement the Government was to hand over to its agent, the
Trust, Government property which vests in possession of the agent who has to
manage and develop the property with funds made available to it by Government.
Proper accounts have to be kept by the Trust of the monies thus advanced by
Government in a separate account. The Trust has also to pay a certain fixed sum
by way of revenue on the property placed at its disposal. The income from the
property in the hands of the Trust has to be applied to payment of interest on
money advanced by Government at a specified rate, as also to expenses for the
management and improvement of the property and any surplus left over out of the
income of -the property in the hands of the Trust after meeting all the
outgoing has to be placed at the disposal of Government to be spent according
to its directions. Thus the case of the respondent is that no legal title was
created in favour of the Trust and the land, as also the structures constructed
by the Trust with the monies thus advanced by Government are the property of
the Government. The Trust as the statutory agent has only to manage and develop
the property in accordance with schemes sanctioned by Government. Consequently,
it was argued that the market in question belongs to Government and is not
governed by the Control Act.
The question as to in whom the title to the
market in question vests may be discussed in two parts, (1) title to the land
on which the market is situate, and (2) title to the buildings admittedly
constructed by the Trust.
Adverting first to the question of title in
respect of the land, it is common ground that before it was placed at the
disposal of the Trust it was Government property. The question, therefore,
naturally arises whether either by the provisions of section 54A relied upon by
both the parties in this connection, or by virtue of the terms of the indenture
aforesaid or by the combined operation of the two, title to the land has become
vested in 9 the Trust. The appellant contends it is so vested. The respondent
contests this proposition and contends that there are no words in the statute
or in the agreement which either separately or together can be said to have
transferred the pre-existing title of the Government to the Trust. It is
pointed out on behalf of the respondent that section 54A only authorises
Government to place the land in question " at the disposal of the
Trust" which has to hold it in accordance with the terms agreed upon
between them, as evidenced by the indenture Ex. D-5. Let us examine those
terms. The agreement provides, inter alia, that with a view to the orderly
expansion of Delhi under the supervision of a single authority the Government
agreed to place at its disposal " the Nazul Estate " (described in
Schedule 1), with effect from April 1, 1937. One of the conditions stipulated
was that the "Trust shall hold and manage the said Nazul Estate on behalf
of the Government." These words cannot be construed as transferring title
to the Nazul Estate from Government to the Trust. They amount to constituting
the Trust as an agent of the Government to hold possession of the property and
to manage the same for the purpose for which the Trust had been created. The
Trust is enjoined to use its best endeavours for the improvement and
-development of the said Nazul Estate in accordance with the provisions of the
Improvement Act, " provided that no expenditure shall be incurred upon the
purchase of land to be added to the said Nazul Estate unless the proposal to
make the purchase has been specifically included in an Improvement Scheme
sanctioned under section 42 of the said Act." Particular reliance was
placed on behalf of the appellant on the following terms in the indenture to
show that the title to the Nazul Estate vested in the Trust:
" The Trust may sell or lease any land
included in the said Nazul Estate in pursuance of the provisions of an
Improvement Scheme sanctioned under section 42 of the said Act.
2 10 The Trust may, otherwise than in
pursuance of an Improvement Scheme sanctioned under section 42 of the said Act,
sell any land included in the said Nazul Estate." In order to appreciate
the true legal position it is necessary here to examine some of the provisions
of the Improvement Act bearing on this aspect of the case. Section 22-A
occurring in Chap 111-A vests the Trust with the power to undertake any works
and incur any expenditure for the improvement or development of the area to
which the Act may have been extended. Section 23 in Chap. IV sets out in detail
what is meant by "An improvement Scheme." It lays down that the
acquisition by purchase, exchange or otherwise of any property necessary for or
affected by the execution of the scheme, the construction or reconstruction of
buildings. the sale, letting or exchange of any property comprised in the
scheme and doing of all incidental acts necessary for the execution of the
scheme may be undertaken by the Trust. Section 24 sets out the different types
of improvement schemes including a general improvement scheme, a re-building
scheme, a re-housing scheme, a development scheme etc., and the sections
following s. 24 lay down in detail the scope of the different types of
improvement schemes enumerated in s. 24. Section 42 requires the Chief
Commissioner to announce an improvement scheme sanctioned by him by
notification and thereupon the Trust embarks upon the execution of the scheme.
Then comes Chap. V dealing with the powers and duties of the Trust when a
scheme has been sanctioned. In this chapter occur ss. 45 to 48 which provide
for the vesting of certain properties in the Trust.
Section 45 lays down the conditions and the
procedure according to which any building, street, square or other land vested
in the Municipality or Notified Area Committee may become vested in a Trust.
Similarly, s. 46 deals with the vesting in the Trust of properties like a
street or a square as are not vested in a Municipality or Notified Area
Committee. These sections, as also ss. 47 and 48 make provision for
compensation and for empowering the Trust to deal with such property 11 vested
in it. The vesting of such property is only for the purpose of executing any
improvement scheme which it has undertaken and riot with a view to clothing it
with complete title. As will presently appear, the term "vesting" has
a variety of meaning which has to be gathered from the context in which it has
been used. It may mean full ownership, or only possession for a
particular-purpose, or clothing the authority with power to deal with the
property as the agent of another person or authority.
Coming back to the terms of the indenture
with reference to the power of the Trust to sell or lease any land included in
the Nazul Estate, certain conditions are laid down for the exercise of the
aforesaid power to transfer. The Trust is empowered to sell any land included
in the Nazul Estate on its own authority only in cases where the sale is for
full market value and which does not exceed Rs. 25,000/-. -In other cases the
transaction has to be sanctioned either by the Chief Commissioner or by
Government and in every case the forms of conveyances and leases by the Trust
have to be approved by Government. It would thus appear that the power to
transfer by way of sale, lease or otherwise, vested in the Trust is not an
unlimited or an unqualified power but a power circumscribed by such conditions
as the Government or the Chief Commissioner, as the case may be, thought fit to
impose. The imposition of those conditions is not consistent with the title to
the property vesting absolutely in the Trust. On the other hand, the imposition
of those conditions is more consistent with the proposition contended for by the
learned Attorney-General on behalf of the respondent that the Trust was only
constituted a statutory agent on behalf of the Government in accordance with
the provisions of the Improvement Act and the terms of the indenture, Ex. D-5.
It is noteworthy that there are no provisions either in the Improvement Act or
in the indenture, Ex. D-5, to the effect that the title to the Nazul Estate
vested in the Trust. It must, therefore, be held that no grounds have been made
out for holding that title to the land on which the market stands was conveyed
by Government to the Trust.
12 We turn now to the question whether apart
from title to the land, title to the building standing upon the land is vested
in the Trust. In order to examine the contentions raised on behalf of the
appellant-it is necessary to set out the remaining portion of the terms of the
indenture aforesaid.
The Trust was to assume full liability for
all expenditure to be incurred upon works of improvement and to arrange for the
completion of those works to the satisfaction of Government. The Trust is also
enjoined to maintain in accordance with the statutory rules separate accounts
of all revenue realised from, and all expenditure incurred upon, the said Nazul
Estate and to pay to Government the sum of Rs. 2 lakhs being the equivalent of
the net annual revenue in respect thereof subject to certain conditions, not
material to this case. Then follows the. most important clause in these terms:-Any
surplus funds in the Nazul Development Account remaining at the end of each
financial year when the said sum has been paid shall be put at the disposal of
Government and shall be applied until further orders of Government to the
further improvement and development of the said Nazul Estate and/or to the
repayment of loans made to the Trust as Government may direct." Government
on its part undertook to finance either in part or in whole such schemes as may
be agreed between the parties and also to advance loans at interest equal to
Government rates for the time being for loans to Local Authorities. It was in
pursuance of the terms aforesaid that the scheme of the building of the market
in question was put through at an estimate. cost of a little less than five
lakhs of rupees.
It is clear upon the terms of the agreement
shortly set out above that the market was constructed by the Trust on
Government land with Government funds advanced by way of loan at interest. On
those facts what is the legal position of the Trust vis-a-vis the Government in
respect of the ownership of the property ? It is important, therefore, to
determine the true nature of the initial relationship between the Government
and the Trust. The learned counsel for 13 the appellant conceded that
relationship could not be described in terms of ordinary legal import, that is
to say, in, terms of mortgagor and mortgagee, or lessor and lessee, or licensor
and licensee. He contended that it was a peculiar relationship which could not
be defined in exact legal phraseology, but all the same, that the Trust was the
owner of the market, especially in view of the fact that, as admitted by the
defendants counsel at the trial, the Trust had repaid the entire amount of five
lakhs odd advanced by Government for the construction of the market. This
result, it was further contended, follows from the terms of s. 54A of the
Improvement Act. The Attorney-General appearing on behalf of the respondent
also strongly relied upon the terms of that section for his contention that the
relationship between the Trust and the Government was that of agent and
principal. It is therefore necessary to examine closely the provisions of that
section which is in these terms:" (1) The Government may, upon such terms
as may be agreed upon between the Government and the Trust, place at the disposal
of the Trust any properties, or any funds or dues, of the Government and
thereupon the Trust shall hold or realise such properties, funds and dues in
accordance with such terms.
(2) If any immovable property, held by the
Trust under subs. (1) is required by the Government for administrative
purposes, the Trust shall transfer the same to the Chief Commissioner upon
payment of all costs incurred by the Trust in acquiring, reclaiming or
developing the same, together with interest thereon at such rate as may be
fixed by the Chief Commissioner calculated from the day on which this Act comes
into force or from the date on which such costs were incurred, whichever is the
later.
The transfer of any such immovable property
shall be notified in the gazette and such property shall thereupon vest in the
Chief Commissioner from the date of the notification." The section quoted
above finds place in Chap. VA, headed " Government Property Held by
Trust." It is 14 manifest upon a reading of the entire section that there
are no express words of conveyance whereby title is transferred by Government
to the Trust either absolutely or upon certain conditions. As applied to the
present case, sub-s. (1) only provides that the Government would place the
property in question at the disposal of the Trust which shall hold the same in
accordance with the terms as may be agreed between them, that is to say, in
accordance with the terms of the agreement aforesaid, (Ex. D-5). Placing the
property " at the disposal of the Trust " does not signify that
Government had divested itself of its title to the property and transferred the
same to the Trust. Clause 12 of the agreement (Ex. D-5) to the effect that
"Government may at any time on giving six months' notice terminate this agreement
" clearly indicates that the Government had created this agency not on a
permanent basis. but as a convenient mode of having its schemes of improvement
implemented by a single agency with wide powers of management and expenditure
of funds placed at its disposal, either by way of income from the property or
by way of advance from Government funds. Sub-s. (1). therefore, does not in
express terms or by necessary implication confer any title on the Trust in
respect of the market. The Trust only holds the market and realizes the income
there from which is disbursed in accordance with the terms of the agreement and
the rules framed by the Chief Commissioner in exercise of the powers conferred
on him by cl. (e) of sub-s. (1) of s. 72. Our attention was called to some of
those statutory rules, particularly rules, 21, 36, 38 and 156 read along with
the forms and the Appendix. It is not necessary to discuss those rules in
detail because on a consideration of those rules we are satisfied that they are
more consistent with the Trust being a statutory agent of the Government, which
has to maintain separate accounts in. respect of nazul property. Any re appropriation
from nazul to non-nazul or vice-versa could not be made by the Trust without
the prior sanction of the Chief Commissioner. The method of keeping accounts in
respect of the nazul estate would show that the Trust had to function as 15 the
statutory agent of the Government in the matter of the administration of the
Trust funds with particular reference to the nazul estate with which we are
immediately concerned.
But it has been argued on behalf of the
appellant that subs. (2) of s. 54A quoted above postulates that the Trust is
the owner of the property' otherwise the sub-section would not speak of the
Trust having to transfer immovable property held by it to the Chief
Commissioner in certain contingencies, upon payment of all costs incurred by
the' Trust in acquiring, reclaiming or developing that property together with
interest calculated in the way set out in that subsection. It should be noted
in this connection that what the Government was required to pay was not the
market value of the property but only the cost incurred by the Trust.
That provision apparently was made for the
purpose of accounting between the different branches of the Trust activities.
If title really vested in the Trust, it would be entitled to receive from
Government the price of the property and not merely required to be reimbursed
in respect of the actual expenditure on the scheme. Particular reliance was
placed upon the words " and such property shall thereupon vest in the
Chief Commissioner." It was argued that unless the property previously
vested in the Trust it could not upon the transfer contemplated by sub-s. (2) vest
in the Chief Commissioner. This argument assumes that the word " vest
" necessarily signifies that title to the property resides in the Trust.
But the word "vest" has several meanings with reference to the
context in which it is used. In this connection reference may be made to the
following observations of Lord Cranworth in Richardson v. Robertson (1) :
" ...The word 'vest' is a word, at least
of ambiguous import. Prima facie 'vesting ' in possession is the more natural
meaning. The, expressions 'investiture' -'clothing'-and whatever else be the
explanation as to the origin of the word, point prima facie rather to the
enjoyment than to the obtaining of a right. But (1) (1862) 6 L.T. 75, at P. 78.
16 I am willing to accede to the argument
that was pressed at the bar, that by long usage ' vesting' ordinarily means the
having obtained an absolute and indefeasible right, as contra-distinguished
from the not having so obtained it.
But it cannot be disputed that the word '
vesting' may mean, and often does mean, that which is its primary etymological
signification, namely, vesting in possession." Similarly with reference to
the provisions of a local Act (5 Geo. 4, c. Ixiv), it was held that the word
"vest" did not convey a freehold title but only a right in the nature
of an easement. The following words of Willes, J. in Hinde v. Charlton(1) are
relevant:words, which in terms vested -the freehold in persons appointed to
perform some public duties, such as canal companies and boards of health, have
been held satisfied by giving to such persons the control over the soil which
was necessary to the carrying out the objects of the Act without giving them
the freehold ' " In the case of Coverdale v. Charlton (2), the Court of
Appeal on a consideration of the provisions of the Public Health Act, 1875 (38
and 39 Vict. c. 55) with particular reference to s. 149, has made the following
observations at p. 116:What then is the meaning of the word 'vest' in this
section ? The legislature might have used the expression transferred' or
'conveyed', but they have used the word 'vest'. The meaning I should like to
put upon it is, that the street vests in the local board qua street; not that
any soil or any right to the soil or surface vests, but that it vests qua
street." Referring to the provisions of s. 134 of the Lunacy Act, 1890 (53
& 54 Vict. c. 5) in the case of In re Brown (a lunatic)(3) it has been laid
down by Lindley, L. J., that the word "vested" in that section
included the right to obtain and deal with; without being actual owner of the
lunatic's personal estate.
(1) (1866-67) C.P. Cases 104 at 116.
(2) (1878-79) 4 Q.B.D. 104.
(3) (1895) 2 Ch. 666.
17 In the case of Finchley Electric Light
Company v. Finchley Urban District Council(1), adverting to the provisions of
s. 149 of the Public Health Act, 1875, (supra) Romer, L.J., has made the
following observations at pp. 443 and 444:"Now, that section has received
by this time an authoritative interpretation by a long series of cases. It was
not by that section intended to vest in the urban authority what I may call the
full rights in fee over the street, as if that street was owned by an ordinary
owner in fee having the fullest rights both as to the soil below and as to the
air above. It is settled that the section in question was only intended to vest
in the urban authority so much of the actual soil of the street as might be
necessary for the control, protection, and maintenance of the street as a
highway for public use. For that proposition it is sufficient to refer to what
was said by Lord Halsbury, L. C., and by Lord Herschell in Tunbridge Wells
Corporation v. Baird(2) I.......... That section has nothing' to do with title;
it is not considering a question of title. No matter what the title is of the
person who owns the street, the section is only considering how much of the
street shall vest in the urban authority........
That the word "vest" is a word of
variable import is shown by provisions of Indian statutes also. For example, s.
56 of the Provincial Insolvency Act (V of 1920) empowers the court at the time
of the making of the order of adjudication or thereafter to appoint a receiver
for the property of the insolvent and further provides that " such
property shall thereupon vest in the receiver." The property vests in the
receiver for the purpose of administering the estate of the insolvent for the
payment of his debts after realising his assets. The property of the insolvent
vests in the receiver not for all purposes but only for the purpose of the
Insolvency Act and the receiver has no interest of his own in the property. On
the other hand, ss. 16 and 17 of the Land Acquisition Act. (Act I of 1894),
provide that the property so acquired, upon the happening of (1)[1903] 1 Ch.
437.
3 (2) [1896] A.C. 434.
18 certain events, shall " vest
absolutely in the Government free from all encumbrances'. In the cases
contemplated by ss. 16 and 17 the property acquired becomes. the property of
Government without any conditions or limitations either as to title or possession.
The legislature has made it clear that the vesting of the property is not for
any limited purpose or limited duration. It would thus appear that the word
"vest" has not got a fixed connotation, meaning in all cases that the
property is owned by the person or the authority in whom it vests. It may vest
in title, or it may vest in possession, or it may vest in a limited sense, as
indicated in the context in which it may have been used in a particular piece
of legislation. The provisions of the Improvement Act, particularly ss. 45 to
49 and 54 and 54A when they speak of a certain building or street or square or
other land vesting in a municipality or other local body or in a trust, do not
necessarily mean that ownership has passed to any of them.
The question of the ownership of the
structure built upon Government land by the Trust may be looked at from another
point of view. We have already held that the Trust was in the position of a
statutory agent of Government and had erected the structure with money belonging
to Government but advanced at interest to the Trust. In such a situation the
structure also would be the property of Government, though for the time being
it may be at the disposal of the Trust for the purpose of managing it
efficiently as a statutory body. Simply because the Trust erected the structure
in question and later on paid up the amount advanced by Government for the
purpose would not necessarily lead to the legal inference that the structure
was the property of the Trust. In this connection reference may be made to the
decision of this Court in Bhatia Co-operative Housing Society Ltd. v. D. C.
Patel(1). The case is not on all fours with the facts of the present case. But
the following observations of Das J. (as he then was) at p. 195 of the report
are pertinent:" It is true that the lessee erected the building at his own
cost but he did so for the lessor and on the (1) [1953] S.C.R. 185. 19 lessor's
land on agreed terms. The fact that the lessee incurred expenses in putting up
the building is precisely the consideration for the lessor granting him a
lease, for 999 years not only of the building but of the land as well at what
may, for all we know, be a cheap rent which the lessor may not have otherwise
agreed to do. By the agreement the building became the property of the lessor
and the lessor demised the land and the building which, in the circumstances,
in law and in fact belonged to the lessor.
The law. of fixtures under s. 108 of the
Transfer of Property Act may be different from the English law, but s. 108 is
subject to any agreement that the parties may choose to make. Here, by the
agreement the building became part of the land and the property of the lessor
and the lessee took a lease on that footing." In our opinion, therefore,
it cannot be said that either under the provisions of the Improvement Act or in
accordance with the terms of the agreement (Ex. D-5) or the two taken together,
the market became the property of the Trust. We have already noticed the
relevant portions of the correspondence that passed between Government and the
Trust to show that though at the initial stages the Trust proposed that the
ownership of the market should vest in the Trust, the final terms agreed
between the parties in accordance with the provisions of s. 54A left the
ownership with Government. We have come to this conclusion without reference to
the admission of the plaintiff contained in para. 22 of the indenture (Ex. D-4)
quoted above. It is therefore not necessary for us to consider the question raised
by the learned Attorney-General that the plaintiff was bound by that admission
or whether that admission is vitiated by any pressure of circumstances or
duress as pleaded by the plaintiff. Certainly that admission is a piece of
evidence which could be considered on its merits even apart from the question
of estopped which had not been specifically pleaded or formed the subject
matter of a separate issue.
In view of our finding that the market, as
also the land on which it stands, is the property of Government, the conclusion
follows that the operative provisions of 20 the Control Act do not apply to the
premises in question.
That being so, it must be held that there is
no merit in this appeal. It is accordingly dismissed with costs.
Appeal dismissed.
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