http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: RAI BAHADUR KANWAR RAJ NATHAND OTHERS

       Vs.

RESPONDENT: PRAMOD C. BHATT, CUSTODIAN OFEVACUEE PROPERTY.

DATE OF JUDGMENT: 10/11/1955

BENCH: AIYYAR, T.L. VENKATARAMA BENCH: AIYYAR, T.L. VENKATARAMA MUKHERJEE, BIJAN KR. (CJ) IMAM, SYED JAFFER

CITATION:  1956 AIR  105            1955 SCR  (2) 977

ACT: 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).

HEADNOTE: 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 ([1963] S.C.R. 1, 21, 24) and Dominion of India v. Shrinbai A. Irani ([1955]  1 S.C.R. 206, 213), on the scope of a  non-obstante clause, relied on.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

JUDGMENT: 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 1954. 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

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 thus: (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 allowed. 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,  J. 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

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  juris,diction,  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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

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 argu- (1) [1953] S.C.R. 1, 21, 24. (2) [1955] 1 S.C.R. 206, 213. 983 ment before us that those rights are sought to be  agitated. Under  the circumstances, we must decline to consider  them. 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.