{"id":50571,"date":"1957-10-04T00:00:00","date_gmt":"1957-10-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/bombay-salt-chemical-industries-vs-l-j-johnson-ors-on-4-october-1957"},"modified":"2017-06-09T19:51:56","modified_gmt":"2017-06-09T14:21:56","slug":"bombay-salt-chemical-industries-vs-l-j-johnson-ors-on-4-october-1957","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/bombay-salt-chemical-industries-vs-l-j-johnson-ors-on-4-october-1957","title":{"rendered":"Bombay Salt &amp; Chemical Industries vs L.J. Johnson &amp; Ors on 4 October, 1957"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Bombay Salt &amp; Chemical Industries vs L.J. Johnson &amp; Ors on 4 October, 1957<\/div>\n<div class=\"doc_bench\">Bench: S.R. Das (Cj), T.L.V. Aiyyar, S.K. Das, A.K. Sarkar, V. Bose<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  406 of 1956\n\nPETITIONER:\nBOMBAY SALT &amp; CHEMICAL INDUSTRIES \n\nRESPONDENT:\nL.J. JOHNSON &amp; ORS.\n\nDATE OF JUDGMENT: 04\/10\/1957\n\nBENCH:\n<a href=\"\/doc\/266114\/\">S.R. DAS (CJ) &amp; T.L.V. AIYYAR &amp; S.K. DAS &amp; A.K. SARKAR &amp; V. BOSE\n\nJUDGMENT<\/a>:\n<\/pre>\n<p>JUDGMENT<\/p>\n<p>1958 AIR (SC)  289<\/p>\n<p>The Judgment was delivered by : A. K. SARKAR<\/p>\n<p>A. K. SARKAR, J. : This appeal by special leave granted by this Court under<br \/>\nArt. 136 of the Constitution is from an order passed on 20-4-1956, by the<br \/>\nChief Settlement Commissioner appointed under the Displaced Persons&#8217;<br \/>\n(Compensation and Rehabilitation) Act, 1954. It is principally concerned<br \/>\nwith that Act.\n<\/p>\n<p>2. The appellants are a firm of which the partners are displaced persons<br \/>\nwithin the meaning of the Act. There are certain salt pans in Wadala,<br \/>\nBombay, known as Salamati Salt Factory. The salt pans were evacuee property<br \/>\nand formed part of the compensation pool constituted under the Act. On<br \/>\n7-11-1950, a lease of the salt pans was granted to the appellants for a<br \/>\nperiod of three years. This lease was renewed from time to time, and on<br \/>\n2-12-1955, it was renewed for a period ending on 13-2-1956. On 23-12-1955,<br \/>\nthe Regional Settlement Commissioner, an officer appointed under the Act,<br \/>\nwho is respondent No. 3 in this appeal, advertised that the salt pans<br \/>\nshould be sold by public auction on 6-1-1956. The appellants moved the High<br \/>\nCourt at Bombay under Art. 226 of the Constitution challenging the validity<br \/>\nof the proposed sale on the ground that the value of the property did not<br \/>\nexceed. Rs. 50, 000 and consequently it could not, under the provisions of<br \/>\nthe Act, be sold without first offering it to the appellants in lieu of<br \/>\ncompensation payable to them under the Act. The High Court stayed the sale<br \/>\npending the hearing of the application. On 2-2-1956, the lease to the<br \/>\nappellants was renewed for the last time for a further period ending on<br \/>\n15-4-1956. Thereafter, the application under Art. 226 of the Constitution<br \/>\ncame up for hearing and was dismissed. The appellants filed an appeal in<br \/>\nthe same Court from the order of dismissal and again applied for a stay of<br \/>\nthe sale. The Court however, refused to stay the sale further and only<br \/>\nordered that the sale was not to be confirmed for a week and expedited the<br \/>\nhearing of the appeal. On 31-3-1956, the property was put up to auction and<br \/>\nParvatibai Wadhumal and Kakanbai Tulsimal, respondents Nos. 4 and 5 who<br \/>\noffered a bid of Rs. 4, 40, 000 were declared the highest bidder. At the<br \/>\nsale the appellants themselves had bid up to Rs. 4, 39, 000. Thereafter on<br \/>\n6-4-1956 the appellants withdrew the appeal pending in the High Court at<br \/>\nBombay. They state that they did so as it involved disputed or<br \/>\ncontroversial questions of fact as to the value of the property which would<br \/>\nnot have been decided by the Court in an application under Art. 226. The<br \/>\nsale had not till then been confirmed.\n<\/p>\n<p>3. On 11-4-1956, the appellants made an application to the Chief Settlement<br \/>\nCommissioner who is respondent No. 1 in this appeal, for the following<br \/>\norders :\n<\/p>\n<p>(a) that the confirmation of the sale in pursuance of the auction held on<br \/>\n31-3-1956, be stayed;\n<\/p>\n<p>(b) that they be given an opportunity to substantiate their case on the<br \/>\nmerits;\n<\/p>\n<p>(c) that they be not evicted till the disposal of their case;\n<\/p>\n<p>(d) that the lease granted to them be extended till end of the working<br \/>\nseason.\n<\/p>\n<p>The grounds on which this application was made were two, namely,<\/p>\n<p>(1) Under S. 29 of the Act, the appellants who were in lawful possession of<br \/>\nthe property had statutory immunity from eviction for a period of two<br \/>\nyears.\n<\/p>\n<p>(2) That the property was not liable to be sold but should be allotted to<br \/>\nthe appellants at its value did not exceed Rs. 50, 000.\n<\/p>\n<p>The Chief Settlement Commissioner granted a stay of the confirmation of the<br \/>\nsale pending the hearing of the application. On 15-4-1956, the lease<br \/>\nexpired and thereafter on 20-4-1956, the Chief Settlement Commissioner made<br \/>\nan order dismissing the application but giving the appellants 14 days time<br \/>\nto remove the salt lying in the pans. The order also stated that the sale<br \/>\nto respondents Nos. 4 and 5 was confirmed and possession of the salt pans<br \/>\nshould be given to them forthwith. On 25-4-1956, the Managing Officer of<br \/>\nEvacuee Property, also an officer appointed under the Act, and respondent<br \/>\nNo. 2 in this appeal, wrote to the appellants that the possession of the<br \/>\nproperty would be taken over from them immediately and requiring the<br \/>\nappellants to make over possession forthwith and further stating that in<br \/>\ndefault they would be evicted from it with such force as might be<br \/>\nnecessary. It appears that on the same day the appellants were forcibly<br \/>\nejected from the property and respondents Nos. 4 and 5 were put in<br \/>\npossession. Thereafter, the appellants applied to this Court for leave to<br \/>\nappeal from the order of the Chief-Settlement Commissioner, dated<br \/>\n20-4-1956, and such leave was granted on 28-5-1956.\n<\/p>\n<p>4. Mr. Purshottam Trikamdas appearing in support of the appeal contended<br \/>\nthat it was S. 19 of the Act alone which gave a power to evict by force,<br \/>\nbut that section had no. application in the present case and therefore, the<br \/>\neviction of the appellants was illegal and should be set aside. That<br \/>\nsection provides that subject to the rules made under the Act the Managing<br \/>\nOfficer may terminate a lease under which any evacuee property is held and<br \/>\nwhere by reason of such termination any person has ceased to be entitled to<br \/>\npossession of any evacuee property, he shall on demand surrender possession<br \/>\nthereof and that if he fails so to surrender possession, the Managing<br \/>\nOfficer may eject such person and take possession and may for such purpose<br \/>\nuse such force as may be necessary. The section as summarised above is as<br \/>\nit stood prior to its amendment by Act LXXXVI of 1956. We are not concerned<br \/>\nwith the amendment because it came into force long after the appellants had<br \/>\nbeen evicted. Mr. Pursushottam Trikamdas pointed out that there had been<br \/>\nno. cancellation of the appellants&#8217; lease in this case and that, therefore,<br \/>\nthe section had no. application. Hence he said, the eviction of the<br \/>\nappellants was illegal and should be set aside.\n<\/p>\n<p>5. This, however, is not a point that arises on the facts of this case. The<br \/>\ncase is not concerned with any eviction under S. 19. In their application<br \/>\nto the Chief Settlement Commissioner the appellants had not made a case<br \/>\nunder S. 19 nor could they make one. At the date of the auction and also of<br \/>\nthe application the lease was running and there was no. question of the<br \/>\nManaging Officer terminating it under S. 19 or at all. The appellants had<br \/>\nnot then been evicted nor threatened with any eviction under S. 19. In<br \/>\nfact, in the application the appellants had asked that they should not be<br \/>\nevicted because the property should not have been sold but allotted to them<br \/>\nas its value was less than Rs. 50, 000 and that, even if the sale was good,<br \/>\nthey could not be evicted because of the provisions of S. 29 of the Act.<br \/>\nThey had asked for a stay of the eviction not because of S. 19 but because<br \/>\nthey felt that their lease would run out before the application could be<br \/>\ndecided. None of the grounds, therefore, on which they sought to resist<br \/>\neviction turned on S. 19 of the Act. It is not the respondents&#8217; case either<br \/>\nthat possession was taken from the appellants under S. 19. Whether the<br \/>\neviction was illegal or not for any other reason besides those on which the<br \/>\napplication is based is irrelevant. There had, in fact, been no. eviction<br \/>\nat the date of the application to the Chief Settlement Commissioner nor<br \/>\nwhen he made his order. This point of Mr. Purshottam Trikamdas, therefore,<br \/>\nfails.\n<\/p>\n<p>6. We come now to the first point on which the application was based,<br \/>\nnamely, that the property being of a value lower than Rs. 50, 000 should<br \/>\nhave been allotted to the appellants and not sold. This point was not<br \/>\npressed in this Court.\n<\/p>\n<p>7. The next question to be considered is the contention based on S. 29 of<br \/>\nthe Act. That section reads thus :\n<\/p>\n<p>29. (1) Where any person to whom the provisions of this section apply, is<br \/>\nin lawful possession of any immovable property of the class notified under<br \/>\nsub-section (2) which is transferred to another person under the provisions<br \/>\nof this Act, then, notwithstanding anything contained in any other law,<br \/>\nsuch person shall, without prejudice to any other right which he may have<br \/>\nin the property, be deemed to be a tenant of the transferee on the same<br \/>\nterms and conditions as to payment of rent or otherwise on which he held<br \/>\nthe property immediately before the transfer :\n<\/p>\n<p>Provided that notwithstanding anything contained in any such terms and<br \/>\nconditions, no. such person shall be liable to be ejected from the property<br \/>\nduring such period not exceeding two years as may be prescribed in respect<br \/>\nof that class of property, except on any of the following grounds, namely :\n<\/p>\n<p>&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.\n<\/p>\n<p>&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.\n<\/p>\n<p>Mr. Purshottam Trikamdas and that under this section the appellants were<br \/>\nentitled to continue in possession of the property as tenants of<br \/>\nrespondents Nos. 4 and 5 and were not liable to be ejected for a period of<br \/>\n2 years, that being the period prescribed by R. 121 of the Rules made under<br \/>\nthe Act. It was not disputed that the appellants were persons to whom the<br \/>\nprovisions of the section applied, nor that the property was of the class<br \/>\nnotified under sub-sec. (2) S. 29, nor further that none of the grounds on<br \/>\nwhich an ejectment was permitted by the section existed. Mr. Purshottam<br \/>\nTrikamdas had, however, to show that there was a transfer of the salt pans<br \/>\nand that his clients were in lawful possession of them. The learned<br \/>\nSolicitor-General opposing the appeal contended that there had been no.<br \/>\ntransfer of the property and that the appellants were not in lawful<br \/>\npossession of it. First then, was there a transfer of the property? Mr.<br \/>\nPurushottam Trikamdas said that the auction on 31-3-1956, was a sale to<br \/>\nrespondents Nos. 4 and 5 and amounted to a transfer. We have to decide if<br \/>\nhe is right.\n<\/p>\n<p>8. The power to sell is given by S. 20 of the Act which provides as follows<br \/>\n:\n<\/p>\n<p>Subject to any rules that may be made under this Act the managing officer .<br \/>\n. . . . may transfer any property out of the compensation pool &#8211;\n<\/p>\n<p>(a) by sale of such property to a displaced person or any association of<br \/>\ndisplaced persons, whether incorporated or not; or to any other person<br \/>\nwhether the property is sold by public auction or otherwise.\n<\/p>\n<p>Mr. Purushottam Trikamdas contended that under this section the sale could<br \/>\nbe by auction and that is what had happened in the present case. He said<br \/>\nthat the sale was complete as soon as respondents Nos. 4 and 5 were<br \/>\ndeclared the highest bidder at the auction and thereupon the property stood<br \/>\ntransferred to them. We are unable to agree that because the section<br \/>\npermits a sale by auction, whenever there is an auction the sale must be<br \/>\ndeemed to be complete. Whether there is a transfer or not depends on the<br \/>\nconditions of the auction and these have to be examined to find out when a<br \/>\ntransfer of the property auctioned takes place. There may be a sale by<br \/>\nauction where the sale is not complete till, for example, a document is<br \/>\nexecuted. The section, furthermore, states that the transfer under it would<br \/>\nbe subject to the rules made under the Act. Turning to the Rules we are<br \/>\nunable to say that the declaration of a bidder at the auction as the<br \/>\nhighest bidder amounts to a completed sale and to a transfer of the<br \/>\nproperty to be sold. Rule 90 of the rules framed under the Act lays down<br \/>\nthe procedure of sale by public auction. Sub-rule (3) of R. 90 provides<br \/>\nthat a notice of the intended sale shall be given fifteen days before the<br \/>\nproposed sale and such notice shall state among other things the terms and<br \/>\nconditions of the sale. Sub-rule (8) provides that the person declared to<br \/>\nbe the highest bidder at the auction shall pay immediately on the fall of<br \/>\nthe hammer a deposit not exceeding 10 per cent. of the amount of his bid<br \/>\nand in default of such deposit the property may be resold. Sub-rule (10)<br \/>\nstates that the bid in respect of which the initial deposit has been<br \/>\naccepted shall be subject to the approval of the Settlement Commissioner or<br \/>\nan officer appointed by him for the purpose &#8211; provided that no. bid shall<br \/>\nbe approved until after the expiry of 7 days from the date of the auction.<br \/>\nSub-rule (11) provides that the intimation of the approval of a bid or its<br \/>\nrejection shall be given to the highest bidder, thereafter referred to in<br \/>\nthe Rules as the auction purchaser, and the auction purchaser shall when<br \/>\nthe bid has been accepted, be required within 15 days of the issue of such<br \/>\nintimation to send or produce a Treasury challan in respect of the deposit<br \/>\nof the balance of the purchase money. Sub-rule (15) provides that when the<br \/>\npurchase price has been realised in full from the auction purchaser, the<br \/>\nManaging Officer shall issue to him a sale certificate in the form<br \/>\nspecified in appendix 22 or 23 as the case may be. Form 23 relates to a<br \/>\nsale of lease-hold property and with this we are not concerned. Form 22 is<br \/>\nin respect of freehold properties and is in these terms :\n<\/p>\n<blockquote><p>    &#8220;This is to certify that . . . . . . has been declared the purchaser at<br \/>\n    a sale by public auction held in pursuance of the powers conferred upon<br \/>\n    me under section 20 of the Displaced Persons (Compensation and<br \/>\n    Rehabilitation) Act, 1954 (XLIV of 1954) on the . . . . . day of . . .<br \/>\n    . . . . 195 of the property described in the schedule.&#8221;\n<\/p><\/blockquote>\n<p>By virtue of Rs. 15, this certificate has to be signed by the Managing<br \/>\nOfficer.\n<\/p>\n<p>9. In this case certain conditions of the auction sale had been imposed and<br \/>\nset out in the notice of sale. Imposition of such conditions is permitted<br \/>\nby R. 90 (3) already referred to . The notice stated that the sale was<br \/>\nsubject to the provisions of the Act, and the Rules. Condition No. 2<br \/>\nprovided that no. initial deposit was required from bidders who were<br \/>\ndisplaced persons but that they would have to file an Indemnity Bond while<br \/>\nothers had to pay the initial deposit. It also provided that the filing of<br \/>\nthe Indemnity Bond or the receipt of the initial deposit constituted no.<br \/>\ncommitment as to the acceptance of the bid which would be subject to the<br \/>\napproval of the Regional Settlement Commissioner and that such officer was<br \/>\nnot bound to accept the highest bid but the bidder would be held to his bid<br \/>\nfor a period of six months. Conditions No. 4 stated that within 15 days of<br \/>\nthe issue of the intimation of the approval of his bid the auction-<br \/>\npurchaser had to send a receipted Treasury challan in respect of the<br \/>\ndeposit of the balance of the purchaser money. Condition No. 7 was to the<br \/>\neffect that when the purchase price had been realised in full from the<br \/>\nauction-purchaser, the Managing Officer should transfer complete ownership<br \/>\nof the property and issue a sale certificate in the prescribed form.\n<\/p>\n<p>10. It is clear from the rules and the conditions of sale set out above<br \/>\nthat the declaration that a person was the highest bidder at the auction<br \/>\ndoes not amount to a complete sale and transfer of the property to him. The<br \/>\nfact that the bid has to be approved by the Settlement Commissioner shows<br \/>\nthat till such approval which the Commissioner is not bound to give, the<br \/>\nauction-purchaser has no. right at all. It would further appear that even<br \/>\nthe approval of the bid by the Settlement Commissioner does not amount to a<br \/>\ntransfer of property for the purchaser has yet to pay the balance of the<br \/>\npurchase money and the rules provide that if he fails to do that he shall<br \/>\nnot have any claim to the property. The correct position is that on the<br \/>\napproval of the bid by the Settlement Commissioner, a binding contract for<br \/>\nthe sale of the property to the auction-purchaser comes into existence.<br \/>\nThen the provision as to the sale certificate would indicate that only upon<br \/>\nthe issue of it a transfer of the property takes place. Condition of sale<br \/>\nNo. 7 in this case, furthermore, expressly stipulated that upon the payment<br \/>\nof the purchase price in full the ownership would be transferred and a sale<br \/>\ncertificate issued. It is for the appellants to show that the property had<br \/>\nbeen transferred. They have not stated that the sale certificate was<br \/>\nissued, nor that the balance of the purchase money had been paid. In those<br \/>\ncircumstances, it must be held that there has as yet been no. transfer of<br \/>\nthe salt pans to respondents Nos. 4 and 5. The appellants cannot therefore<br \/>\nclaim the benefit of S. 29 and ask that they should not be evicted. Mr.<br \/>\nPurshottam Trikamdas contended that the sale certificate will in any event<br \/>\nbe granted and that once it is granted, as the form of this certificate<br \/>\nshows, the transfer will relate back to the date of the auction. It is<br \/>\nenough to say in answer to this contention that assuming it to be right, a<br \/>\npoint which is by no. means obvious and which we do not decide, till it is<br \/>\ngranted no. transfer with effect from any date whatsoever takes place and<br \/>\nnone has yet been granted.\n<\/p>\n<p>11. In the view that we have taken on the question of transfer it is not<br \/>\nnecessary to decide the other point as to whether the appellants can be<br \/>\nsaid to have been in lawful possession. In the absence of a transfer the<br \/>\nquestion does not arise.\n<\/p>\n<p>12. The appeal, therefore, fails and is dismissed with costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Bombay Salt &amp; Chemical Industries vs L.J. Johnson &amp; Ors on 4 October, 1957 Bench: S.R. Das (Cj), T.L.V. Aiyyar, S.K. Das, A.K. Sarkar, V. Bose CASE NO.: Appeal (civil) 406 of 1956 PETITIONER: BOMBAY SALT &amp; CHEMICAL INDUSTRIES RESPONDENT: L.J. JOHNSON &amp; ORS. DATE OF JUDGMENT: 04\/10\/1957 BENCH: S.R. DAS [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-50571","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bombay Salt &amp; Chemical Industries vs L.J. 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