Tax Management India. Com
                            Law and Practice: A Digital eBook ...
TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals SMS News Articles Highlights
        Home        
 
Extracts
Home List
← Previous Next →

TOLARAM RELUMAL Versus STATE OF BOMBAY

1954 (5) TMI 20 - SUPREME COURT OF INDIA

CRL.A. 18 OF 1953 - Dated:- 13-5-1954 - MAHAJAN, MEHAR CHAND (CJ), MUKHERJEA, B.K., BOSE, VIVIAN, BHAGWATI, NATWARLAL H. AND AIYYAR, T.L. VENKATARAMA, JJ. JUDGMENT: For The Appellant : B. H. Lulla and Rajinder Narain For The Respondent : Porus A. Mehta MEHR CHAND MAHAJAN C.J.-The appellants were charged under section 18(1) of the Bombay Rent I Restriction Act, 1947, for receiving from Shankar Das Gupta through Mathra Das, accused No. 3, on 23rd November, 1950, a sum of ₹ 2,400 as premium o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nviction. This was heard by Gajendragadkar and Chainani JJ. on the 8th of October, 1952. It was contended, inter alia, that even if it were held that the appellants had -accepted the sum of ₹ 2,400 they could not be said to have committed an offence under section 18(1) of the Act inasmuch as the amount could not in law be held to be a premium in respect of the grant of -a lease. On this point the learned Judged said as follows :- " In the present case the work regarding the building w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Mr. Lulla that in the present case even if it be held that the accused had received ₹ 2,400 in the circumstances to which we have already referred that would not bring them within the mischief of section 18(1) because there has been no grant of a lease at all. There is only an agreement that the landlord would lease to the complainant a particular flat after the building has been fully and properly completed. It does appear that section 18 1 does not bring within its mischief executory ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lainant was entitled to take possession of flat No. 15 in the said building as soon as the said building was completed on the agreed rent of ₹ 75 per month, did the acceptance of ₹ 2,400 by the appellants fall within the mischief of section 18 of Bombay Act LVII of 1947 This question, if answered in the negative by the Full Bench, would have concluded the case. The Full Bench answered the question referred in the affirmative. It held that the oral agreement did not constitute a lease .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d not constitute an offence, but that receipt must be connected with the grant of the lease of any premises. Unless that connection is established no offence would be committed. The contention of Mr. Lulla on behalf of the accused is that the receipt of the premium must be simultaneous with the grant of the lease. If the lease comes into existence at a future date, then the receipt of a premium according to him is not "in respect of " the grant of a lease. Therefore the key words accor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he lease. So long as so me connection is established between the grant of the lease and the receipt of the premium by the landlord, the provisions of the section would be satisfied. In our opinion it is impossible to contend that in the present case there was no connection whatever between the landlord receiving the premium and his granting the lease of the premises. It is true that when he received the premium he did not grant a lease. It is true that all that he did when he received the premiu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eing arrived at between the landlord and the tenant with regard to the granting of this lease, the lease being completed when delivery of possession of the premises would be given. Therefore, in our opinion, on-the facts of this case it is not possible to contend that the payment of the premium received by the landlord was unconnected with the grant of a lease of any premises. The fact that no grant was made at the time when the premium was received, the fact that there was merely an agreement t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ial question of law and was a fit one for appeal to this Court. This appeal is before us on that certificate, The principal question to decide in the appeal is whether the answer given by the Full Bench to the question referred to it is right, and whether receipt of a sum of money by a person who enters into an executory contract to grant a lease of a building under construction falls within the mischief of section 18(1) of the Act Section 18(1) provides: " If any landlord either himself or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of a lease." Prima facie, it would not cover an executory agreement to grant a lease. The words " renewal or continuance of a lease " clearly suggest that there must be a renewal or continuance of a subsisting lease. In the context, grant of tenancy means the grant of new or initial tenancy; renewal of tenancy means the grant of tenancy after its termination; and continuance seems to contemplate continuance of a tenancy which is existing. Whether or not an executory agreement fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt of the premises, or by the lessee, such as the obtaining of sureties. (Vide Halsbury s Laws of England, Second Edition, Vol. 20, pp. 37-39). On the facts of this case therefore the Full Bench very rightly held that the oral, agreement made between the parties did not constitute a lease but it amounted to an agreement to grant a lease in future. It may further be pointed out that, in fact, in this case the lease never came into existence. Moreover, in view of the provisions contained in the Bo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

18(1) makes punishable receipt of money at a moment of time when the lease had not come into existence, and when there was a possibility that the contemplated lease might never come into existence. It may be here observed that the provisions of section 18(1) are penal in nature and it is a well settled rule of construction of penal statutes that if two possible and reasonable constructions can be put upon a penal provision, the Court must lean towards that construction which exempts the subject .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

its language." The High Court took the view that without stretching the language of section 18(1) beyond its fair and ordinary meaning, the very comprehensive expression " in respect of " used by the Legislature could lead to only one conclusion, that the Legislature wanted the penal consequences of section 18(1) to apply to any nexus between the receipt by a landlord of a premium and the grant of the lease. In our judgment, the High Court laid undue emphasis on the words "i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f landlord and tenant does not come into existence till a, lease comes into existence; in other words, there is no relationship of landlord and tenant until -there is a, demise of the property which is capable of being taken possession of If the Legislature intended to make receipts of money on executory agreements punishable, the section would have read as follows: " receives any fine, premium or other like sum or deposit or any consideration other than the standard rent in respect of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce no offence can be said to have been committed by the person receiving the money. It is difficult to hold that any relationship of landlord and tenant comes into existence on the execution of at agreement executory in nature or that the expression " premium " can be appositely used in connection with the receipt of money on the occasion of the executor of such an agreement, It may well be that if a leas( actually comes into existence then any receipt of money which has a nexus with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ural, grammatic meaning, the language of the section does not warrant the construction placed upon it by the Full Bench merely by laying emphasis on the words " in respect of." In our opinion the language of the section ; in respect of the grant, renewal or continuance of a lease " envisages the existence of a lease and the payment of an amount in respect of that lease or with reference to that lease. Without the existence of a lease there can be no reference to it. If the Legisla .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rds, premises demised or given on lease and not to premises that are promised to be given on lease and of which the lease may or may not come into being. The definition of the expression " landlord" also suggests the same construction. Landlord " as defined in section 5 of the Act means any person who is for the time being receiving, or entitled to receive, rent in respect of any premises whether on his own account or on account, or on behalf, or for the benefit, of any other pers .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot; also suggests the same construction. Mr. Mehta for the State, besides supporting the emphasis placed by the High Court on the words " in respect of," contended that that construction could be supported in view of the provisions of sub-section (3) of section 18 which is in these terms: " 18(3)-Nothing in this section shall apply to any payment made under any agreement entered into before -the first day of September, 1940, or to any payment made by any person to a landlord by wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.