# Jlam1.:i,ta11 v. 7 lu .~ta:t of j(f!IUl//z111

- **Citation:** [1962] 3 S.C.R. 604
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Case number:** Civil Appeals Nos. 30 to 32 of 1959
- **Bench:** HHC\"AXESHWAR PRASAD SrxnA, C .. J •• P.B. GAJE:>!Dt\AGADKAI\, itAGHl:BAR DAYAL
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jlam1-i-ta11-v-7-lu-ta-t-of-j-f-iul-z111-2462
- **Pages:** 18

## Headnote

Jfent control-Fi.ration of sta;u.{anl rent - .1faintai1tability
of app!iw.tion--Relotion of land and tenant, •f "'"'tial-Dellti
and Ajmer Rent Comrul Act, JVJi (3S of J[}ii:!), as. :?(c), i(g),
~(j), $, J~-l'unja/, Municipal Act, 1!1/1 (l'unJab Ill uf JUJJ),
ss.18, .J7.
'l'hc respondent ?vfunicipal Con1mittee, in pursuance of a
resolution pas~d by it, called for tenders and put the re~pon.
dents, y.·hu ntade the highest offers, into pos:;cssion of certain
shops and premises on a1nounts varying from lls. 135-S..U to
Rs. 520 p<1yable for every month. After they had continued
in possession for sorne years on payrncnt of the said amounts,
dcscriUed as reuts in the rt"Ccipts, the appellants applied under
s.H of the Deliti a11d • .\.jn1er !lent Control 1\cr,
1~52, for
stand.trdis.'ltion of rent.
fherc \\·ere ad1nittedly no contracts
of transfer in , .. ·riting signed and attc .. -,tcd in rhc rnanner
prescri!Jcd by s.47 of the Punjab Mu:iicipai Act, 1911.
The
respondent took the preH1ninary objection that the applications
y.·cre 11ot n1aintainable as there was no relation of landlord and
tenant between the parties withi?1 the 1neaning of the !lent
Control Act. The trial court found in favour of the appellants
Out the I-ligh Court in the exercise of its revi:;ional jurisdiction
set aside tile decision of the trial court.
field, that it \\'as evident" from the definitions of the
terms 'landlord', 'prcrnises and tenant' contained in ss. 2(c),
2(g) and 2(i) that the Delhi and Ajmer Rent Control Act,
19.52, that the Act applied only to such letting of premises as
created an intere~t iu the property, \vhatever its duration, and
gave rise to the relation of l;mdlord and tenant between the
parties ..
..
..
•
,(
-4
3 s,c.R.
SUPREME COURT REPORTS
605
It wa• not correct to say that the 'letting' contemplated
by the Act included not merely a transfer to a tenant but also
to a licensee, or that the use of the word 'rent' in receipts
precluded the landlord from pleading that there was no relation
of landlord and tenant between the parties.
Although s.18 of the Punjab Municipal Act, 1911, vested
power in a Municipal Committee to enter into contracts for
the transfer of its properties, the mandatory provisions of s.47
laid down the essential conditions of the exercise of it. Those
conditions were not in any way inconSistent with the provisions
of the Rent Control Act and did not come within the mischief
of s.38 of that Act.
Crook v. Cor'f- •ation of Seaford, (1871) L.R. 6 Ch. 551
and Deo v. Taniere, (lb'.q) 116 E.R. l 144, held inapplicable.
H. Young & Co. v. The Mayor and Corporation of Royal
Leamington Spa, (1883) L.R. 8 App. Cas. 517, referred to.
Where a statute makes a specific provision that a body
corporate has to act in a particular manner that provision is
mandatory, and not directory and must be strictly followed.
Consequently, in the instant cases, no relation of landlord and tenant was created between the parties and the
applications must fail.

## Text

Jlam1.:i,ta11
v.
7 lu .~ta:t of
j(f!IUl//z111
I Var.. /,ao J.
JfJCJ
604
SUPREME COUH.T REPOHTS
[ I9G2
circumstances which would justify the r<'dudion of
scntc,nce of death passed on Ramrntnn.
' ~
The appeal therefore fails and is hcn·by dismissed.
Appeal dism·isscd.
DR. H. ::;. IUKHY AXD OTHERS
i·.
THE NE\V DELIH illCNICIPAL CO:\Ii\HTTEE
(HHC\"AXESHWAR PRASAD SrxnA, C .. J ••
P.B. GAJE:>!Dt\AGADKAI\ and itAGHl:BAR DAYAL, ,JJ.)
Jfent control-Fi.ration of sta;u.{anl rent - .1faintai1tability
of app!iw.tion--Relotion of land and tenant, •f "'"'tial-Dellti
and Ajmer Rent Comrul Act, JVJi (3S of J[}ii:!), as. :?(c), i(g),
~(j), $, J~-l'unja/, Municipal Act, 1!1/1 (l'unJab Ill uf JUJJ),
ss.18, .J7.
'l'hc respondent ?vfunicipal Con1mittee, in pursuance of a
resolution pas~d by it, called for tenders and put the re~pon.
dents, y.·hu ntade the highest offers, into pos:;cssion of certain
shops and premises on a1nounts varying from lls. 135-S..U to
Rs. 520 p<1yable for every month. After they had continued
in possession for sorne years on payrncnt of the said amounts,
dcscriUed as reuts in the rt"Ccipts, the appellants applied under
s.H of the Deliti a11d • .\.jn1er !lent Control 1\cr,
1~52, for
stand.trdis.'ltion of rent.
fherc \\·ere ad1nittedly no contracts
of transfer in , .. ·riting signed and attc .. -,tcd in rhc rnanner
prescri!Jcd by s.47 of the Punjab Mu:iicipai Act, 1911.
The
respondent took the preH1ninary objection that the applications
y.·cre 11ot n1aintainable as there was no relation of landlord and
tenant between the parties withi?1 the 1neaning of the !lent
Control Act. The trial court found in favour of the appellants
Out the I-ligh Court in the exercise of its revi:;ional jurisdiction
set aside tile decision of the trial court.
field, that it \\'as evident" from the definitions of the
terms 'landlord', 'prcrnises and tenant' contained in ss. 2(c),
2(g) and 2(i) that the Delhi and Ajmer Rent Control Act,
19.52, that the Act applied only to such letting of premises as
created an intere~t iu the property, \vhatever its duration, and
gave rise to the relation of l;mdlord and tenant between the
parties ..
..
..
•
,(
-4
3 s,c.R.
SUPREME COURT REPORTS
605
It wa• not correct to say that the 'letting' contemplated
by the Act included not merely a transfer to a tenant but also
to a licensee, or that the use of the word 'rent' in receipts
precluded the landlord from pleading that there was no relation
of landlord and tenant between the parties.
Although s.18 of the Punjab Municipal Act, 1911, vested
power in a Municipal Committee to enter into contracts for
the transfer of its properties, the mandatory provisions of s.47
laid down the essential conditions of the exercise of it. Those
conditions were not in any way inconSistent with the provisions
of the Rent Control Act and did not come within the mischief
of s.38 of that Act.
Crook v. Cor'f- •ation of Seaford, (1871) L.R. 6 Ch. 551
and Deo v. Taniere, (lb'.q) 116 E.R. l 144, held inapplicable.
H. Young & Co. v. The Mayor and Corporation of Royal
Leamington Spa, (1883) L.R. 8 App. Cas. 517, referred to.
Where a statute makes a specific provision that a body
corporate has to act in a particular manner that provision is
mandatory, and not directory and must be strictly followed.
Consequently, in the instant cases, no relation of landlord and tenant was created between the parties and the
applications must fail.
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 30 to 32 of 1959.
App~_.la irom the judgment and order dated
April 25, 1956, of the Punjab High Court in Civil
Revision Applications Nos.186, 187 and203 ofl954.
M. G. Setalva,d, Attorney-General for
India,
Anoop Singh
n,nd
R. Gop1lalcrishnan,
for
the
appellants.
G. /(. Da7ihtary,
8olicitor-Genera.l of India,
R. Ganapathi lyer and G. Gopalalcrishnan, for the
respondents.
1961. September 13. The Judgment of the
Court was delivered by
.
SINHA, C. J.--The question for determination
m these three appeals, on certificates of fitness
granted by the High Court of Punjab under
A;r~.133(1 )(c) of the Constitution, is whether the prov1s10ns of s. 8 of the Delhi and Ajmer Rent Control
Act (38 of 1952) (which hereinafter will be referred
1961
Dr. H. S. Rikhy
v.
The }{ew Delhi
Municipal Commilt11
Sinh• C. J.
1g6;
D,, II S. Rilhy
"
Tiu ]l/tw Dtlhi
\11mic,pal Comm•Utt
Sir.ha C. }.
G06
SUPRE!lfE COURT REPORTS
[1962]
to as the Act) npply to the trnnsnctions in question
between the nppellants in each case and the New
Delhi llfunicipal Committee (which for the sake of
brevity we shall call 'the Committee' in the course
of this judgment).
It is necessary to state the following facts
in ordrr to bring out the nature ancl scope of
tho controversv. It is not necessarv to refer in
detail to the 'facts of each ~ase separately for the
purpose of those appea.ls. The Committee built in 1945
what is known as the Central Municipal Mark•:t
Lodi Colony.
This Market has 3~ shops, with resickntial
flat.~ on 28 of them. In April 1945, the
Committee, in purnuance of a resolu~ion passed by
it, invitPd tendPrs from inten<ling bidders for thos()
sJiops and premisPs.
On receipt of tenders, the
high1·st bidders were allotted ,-arious shops on rents
Ynryi11g from Rs. 135-8-0 to Rs. 520 per menscm.
The :dlottees occupied the shops and tho premises
in accordance with the allotments made by the
Committee and continued to p:ty the rcspecti\·e
amounts, which m".y be chamctcriscd as n•nts, without prejudice to our decision on the question whether
it was legally a 'rent', because as will presently
appe"r, one of the controversies between the parties
is whether it is 'rent' within the meaning of the Act.
Tmrnrde the end of 195~. 30 Qf the occupants flied
applications under s. S of the Act prnying for tho
fixation of stand.ml rent in respect of the premises
in their respective occupntion. The Committee
rniscd n. preliminary objection to the maintain• bility
of the afores'Lid applications on the ;.;round thn.t
there was no relntionship of landlord and tenant
between thr applicants and the Committee, within
the meaning of the Act. The Trial Court aec01·dingly
fram1'<l the following issue for determination in the
first instance :
"Whether the relationship of tenant and
landlord exists L>etween the parties, thrrcforc,
those applications aro competent and the
... --
•
J
~-'
..
•
3 S.C.R.
SUPREME COURT REPORTS
607
Court has jurisdiction. to. fix the standard
rent?"
The learned Subordinate Judge, who dealt with these
cases in the first instance, came to the conclusion that
the several applicants were tenants within the meaning of the Act, and that, therefore, the applications
were competent. The committee moved the High
Court in its revisional jurisdiction, and the learned
Chief Justice, sitting singly, referred those cases to
be heard by a Division Bench, as they raised questions of general importance. The matter was thus
heard by a Division Bench composed ofG. D. Khosla
and Dulat, JJ. The High Court, by its judgment
dated April 25, 1956, set aside the aforesaid finding
of the Trial Court, but made no order as to costs.
The High Court in an elaborate judgment, on an
examination of the relevant provisions of the Act,
came to the conclusion that there was no relationship of landlord and tenant between the parties,
inasmuch as there was no 'letting', there being no
properly executed lease, and the doctrine of part
perform >nee was not attracted to the facts and
circumst:mccs of the case. For coming to the conclusion that there was n'l valid lease between the
parties, the High Court relied upon the provisions
of s. 47 of the Punjab Municipal Act (Punjab Act
III of 1911 ).
The High Court also negatived the
contention th:;t the Committee was estopped from
questioning the status of the applicants as tenants,
having all along admittedly accepted rent from
them. The '.tppellants moved the High Court and
obtained the necessary certificates of fitness for
coming up in appeal to this Court. The certificates
of the High Court are dated October 28, 1957. That
is how the matter has come before this Court.
It has been argued on behalf of the appellants
that the Transfer of Property Act does not apply to
the transactions in question, and th<tt, therefore,
the High Court was not justified in insisting upon
a registered lease, or even a written lease, executed
1961
Dr. H. S Rikhy
v.
The )few Delhi
Municipal Committet
Sinha C. ].
1961
Jh. Ii .\'_ RilJ11
'·
7k .\',u· D,fhi
.11i..t:idpal Cnmmit1u
Sir,ha r. ].
608
SUPREME COURT REPORTS
(1962]
betwPen the par'ties. It was enough that the tenants
in each case had given a written Kabuliy11t from
which the term8 of th~ respecth·e tenanciBs could
be asnertaincd.
It was also contended that tho
High Court was in error in relying upon the provi·
sions of s . .J7 of tlw Punjab Municip:d Aet which,
it wa' conten·Jed, wa8 8ubject to the provisions of
the Art, in view of the O\'Crri<ling prodsions of s. 38
of the Act. It was further eontendl'<l that the
definitions of 'landlord' [s. 2(c)J, of'pn·rniseH' [s. 2(g)].
and (1f 'tPna11t' [s. 2 (j)J in the Act wcrn comprchen·
sive f•nough to take in the transactions betwet•n tho
appeliants and t.he Curnmittec.
Heferenco was also
nrndn to H. 3 of the Act to show that a public body
like the Commitlee was not inte11de<l to be excluder!
from the opt·ration of the Act.
On the other hand, th'! learned Solicitor
General, appearing for tho Committee, contended
that the essenti1d
~lcmcnt of 'letting' b••comes
appan•nt from the ('Onsideration of tllf\ proYisions of
tlw Act, "ith partieu!ar n•forencc to tho definitions
of 'landlord'. 'premi,es' ancl 'tf'nant'.
His conten·
tion was that tho lwy word 'letting' should be
equated with tho crC'ation of an interest in immo,·ahle property by a valid contract; hf'nce, if there \ms
no valid <'ontract, there was no transfrr of propei ~y.
and, thcreforP, no letting. If there w11-s no lettiug,
the relationship of landlord 1md tC'nant was not
crl'al"d
betwc('n the parties
nud
the nrnount
recci\•erl bv tho Committee as rent was l<'gallr 11ot
rent in ti1e strict st•11,;c of the term. Tiiough the
Act r!id not prescribe any fnrm of 'lctt.ing', tho
provisions of s. 4i of the i\Iunicip1>l Ad applit•d, nncl
as t.h•· prodsions of that s1'etion are not in direc'.
conflict "·ith any of the provisions of the Act, there
nas no inconsistency betw1•en th1·m.
That ht·ing
so, s. :)8 of the Act was out of the \\'&}' of the Cummittf e.
The Comir.ittC'P, being a corporlLlion, has
•10 cnpacity to contract or to transff'T propt•rty
·:ccpt in accordance with the provisions of s. 4i.
''#-'·
. ·-
...
••
....
3 S.C.R.
SUPREME COURT-REPORTS
Admittedly the provisions of s. 47 have-not' been
complied with.
Therefore, the Committee is not
bound· to reeognise the transactions in question as
creating an interest in immovable property; there
being no interest in immovable property in favour
of,the a.ppellants, they cannot be called 'tenants'
within the meaning of the Act, and as only a tenant
can invoke the provisions of s. 8, the applications
must be held to be incompetent. There could be
no question of estoppel because both parties knew
that under the law there had to be a transfer of
property by the Committee in accordance with the
provisions of s. 4 7 of tho Municipal Act. It is well
settled law that there cannot be an estoppel against
the provisions of a Statute.
The question whether the petitions under s. 8
of the Act were competent, it is common ground,
m11st depend on whether or not there was relation·
ship of landlord and tenant between the parti08'.
The learned Attorney General, who appeated in
support of these appeals contended in the first place,
that the definitions of 'landlord', 'premises', and
'tenant' in s, 2, cls.(c), (g) and (j) respectively, of
the Act, make it clear that the person for the time
being receiving rent is the landlord and the person
who is paying the rent is the tenant of the premises.
These definitions are as follows :
" 'landlord' means a person who, for. the
time being is receiving, or is entitled to receive
the rent of any premises, whether on his own
account or on account of, or on behalf of, or
for the benefit of, any other person or as a
trustee, guardian or receiver for any other
person, or who would so receive the rent or
be entitled to receive the rent, if the premises
were let to a tE:nant; ...
'premises' . meani> any building or part of
<i. building which is, or is intended; to be
)et Beparatel:Y for use as residence er f<:>f
19UZ
'
-~
(Ir. H. S. :lt;,t;.
v.
~itfi'~dJl!ta;;
s-.. -t.J.
/9Gl
fl•t Jt.-S.111kfly
<:'·•·• ·v.·
.
~·
'f"ht_JVtw . . Dtlhi
~~2~f""":C:
·~":l:
610,
SUPREME COURT REPORTS
[l!J62]
commercial use or for any other purpose, and
ino!udes-
'-4(:·
( i) the garden grounds and outhouse's
if any, appertaining to such building or
part of a building;
(ii) any furniture supplied hy the
landlord for use in such building or part
of a building;
~
but docs not include a room in .a:
hotel or lodging house ...
't('nant' muans any pcrnon by whom or on
whose account rent is payable foranyprrmisca
and includes such sub-tenants nnd other pcrBOns as ha"Ve derived title .under a tenant
under the provision5 of any law before the
commencement of this Act...".
The argument is that the Act has he<>n enacted 'to
provide for the control of rents ancl evictions' and
that in mnking these provisions for safeguarding
the interests of tenants under tho Aet th<· provisions
of other enactments n·lating to the creation of the
relationHhip of landlord and t<·nant and regulating
the incidence of tenancy and grounds of ov iction,
the Act ha,i; pro\·ided for a simple rule that without paying any r<'gard to formalities, the fact of
receiving rent by n person constitutes him the landlord and the payer of the rent the tenant, within
the meaning of the Act.
The Act does not stop to
co1rnider
wheth•~r there is a lease, and if so, what
are the terms contained in the lease regulating the
relationship of landlonl nnd tenant., and that if
there is any inconsistency between the pro\·isious
of tho Act and any other law for the time being in
force, the former shall prevail, as laid down in
s. :~8 0f the Act.
Tim section reads as follows :
"The provisions of this net and the rules
rn1de th~reunder shall have effect notwith-
, ilt1mding anything inconsistent there\\ ith contained in any other law for the time being
....
tr·
J
--~
in force or in any instrument having effect by
virtue of any such law."
.With reference to the terms of the section, just
quoted, it has been contended, that the provisions
'of the Transfer of Property Act regulating th(J
grounds of eviction, or even the pro visions of tha
Municipal Act, particularly s. 47, have _no legal
_effect in so far as they are . inconsistent with the
provisions of. the Act.
In this connection, it is
asserted that the formalities required by s. 4 7 of the
Municipal Act, in order to invest binding force to
the transfer of property or the contract made by
the Committee, are inconsistent with the provisions
of the Act, namely, . the definitions of 'landlord'
,_
'fonant' and 'premises'. . With reference to s. 4 7 of
the Municipal Act, it is further contended that the
section does not confer capacity ·to contract or to
transfer property but only prescribes the mode for
entering into a contract or for making a transfer of
property by the Committee, and that therefore, s.47-
'\. • cannot have the effect of rendering null and void
what was done by the Committee, namely, advertising the premises for being allotted to the highest
bidders on terms and conditions as contained in the
Kabuliyat given by the tenants. In this connection
reliance was placed upon Crook v. Corporation of
---' ~ 8,eaford (1 ) and Deo v. Taniere('). It has also been
r urged that the 'letting' contemplated by the Act
/
does not necessarily connote a transfer of property,
~ but simply permitting the tenant to occupy the
premises for a sum of money. In other words, even.
a licensee, as distinguished from a lessee, would
come within the purview of the Act. In this connection.. reference was made to the Shorter Oxford .
Dictionary, which contains the following words,.
inter alia, under the word 'let':
"to grant the temporary pos8ession and;
. . . use of in consideration .of rent or hire" .
•
• .• '. (I) (1871) L.R. 6 Ch. 551.
·
· (2). (JMB) 116 E. R. II, -H ••..
--·
-
• .• --· -·
··---"'• '- .. iJ --·..I·-~··
\,~
;_;>·-··
-
.. ...,, t;,_._,._, ......
HS~I
·D~,·:H. S.R;Jiby
.v .
. TJie N<W JJdhi
-M11nUipGl Co'!Ufrittti,
Sinhi< C. J.
· 1111
DJ;• u.s: Rlllly
v.
.. J1- 1.lllt.;
Ir . ' it ' 'C....,.
'
stlPR'!ME OOUBT-m:PORTS
(1962]
If this coJJtention i~' oorreot, then there ea.nnot be
the least doubt that a licen1ee would also come
within tho ambit of the Act. But wo a.re not pre·
paTcd to hold that tho Act, by its torms, intended to
be' so comprehensive as to include within its sweep
not only tenants properly so ca.lied, but a'1so lioon.
seos, It is, true that the dictionary manning applie11
the term 'Jetting' to inducting a tenant and deli·
v,ering p<>l!Bession to him as s-.ich, of tho promisee
for a consideration which can be characterised aa
'rent', or a licemeo who has been permitted to
occupy the promises for a consideration which may
be' called 'II.ire'. If the argument is correct, then a
penon hiring a room in a hotel as a licensee would
also' come within the purview of the Act. But the
Act, in terms, has excluded a room in a hotel or
a lodging !rouse from the definition of 'premises'.
It was also contended that it was admitted by
tho r<lBpondcnt that rent was received and receipts
tor rent were granted by its a.gents.
Tho use of tho
-
word 'rent' is not conclusive of the matter. It may
~
be used in the legal sense of recompense paid by the '-..
tenant to tho landlord for tho exclusive posseesion of
-•
premil!E's occupied by him. It may also be used 1
in the l{eneric
sense,
without importing
the
legal significance aforesaid, of compensation for use
and occupation. 'Rent' in the legal sense can only be
-
reservt1d OD a demise of immovable property. Reference may be made in this connection t<:> paragraphs
IL 9a and 1194 of Hulsbury's Laws of England (Third
""'
Edition, VoL 23) at pages 536-537. Hence, the use
of the term 'rent' cannot preclude tho landlord from
pleading that thero wa.B no relationship of landlord
and tenant. The question must, therefore, depend
upon whother or not there was a relationship of
landlord and tenant in tho sense that thero was a
transfer of interest by the landlord in favour ot' the
tenant.
.....
Jn our opinion, tho Act appHes only to tbat
61>ecle1J of •lettiDg'- b~ ""~icP, t)le 1el11-tionehip of ~nd·
....
•
'
a.s.o.~ .
lord and tenant is created, that is to:say, by which
an interest in the property, .howl').vtir limitJ)d in
duration, is created.
Having held that the Act applies to 'letting'
which creates an interest in immovable property,
we have to determine the question whether in these
cases there was a contraet creating such a relationship. Now, under the Punjab Municipal Act, s. 18, a
Committee is a
corporate body with perpetual
succession and a common seal, with power to acquire
and hold property and to tran~fer any property held
by it "subject to the provision of this Act, or of any
rules thereunder". Section 18, therefore, contains
the. authorisation in favour of the committee to enter
into contracts and to transfer property belonging
to it. This power is subject to the other provisions
of the Act. Thus, in so far as the Committee's power
to enter into a contract or to transfer a prope1·ty is
concerned the power may be delegated in accordance
~
with the provisions of s. 46.
The contract to transfer property has to satisfy the conditions laid down
in s. 46 (2) of the Municipal Act if the vstluc or
amount thereof exceeds Rs. 500. No such contract
can be made until it has been sanctioned at a meeting of the Committee. That condition has been
satisfied in these cases. But we have to consider
the provisions of s. 4 7 which have been very stroi;igly
relied upon on behalf of the Committer. The se9fo;in
is in these terms :
"47.
(1) Every contract made by or on
behalf of the Committee of any municipality
of the first class whereof the value or amount
exceeds one hundred rupees, and made by or
on behalf of the Committee of 11ony munici,pality of the second and third class whei:<Pof
the value or amount exceed,$ fifty rupe.es, .shall
be in writing, .and must b.e signed ~y two
members, of whom the president or ·1:1 vic.cprellident ,shall be one, and .countersjgMd Ji;y
the. secr.eta.ey :
-
L, •. J:s . .a:;.v
v.
!Eltai,,., I/"11.i
~Q
11"•
--
196I.
Dr· H. S. •iliJ
v.
Tiu Nn»"•Dellri
Munitil'dl c.mnuittt
snw. c, J.
..
. SUPRE~fE OOU.RT]{EPORTS
. [1!162]
· P1'ovided that, when the power of entering into any contract on behalf of the committee has been delegated under the last fore;
going section, tho signature or signatures of
tho member or members to whom the power
has been delegated shall be sufficient.
.
(2) Every transfer of immovable property belonging to any committee, must be
mado by an instrument in writing, executed
by the president
or vice-president,
and
by at least two other members of committee
whoso execution thereof shall be attcst-;d by
the secretary.
(3) No contract or transfor of the description mentioned in th is section executed
otherwise than in conformity with the provisions of this section shall be binding on the
committee."
Now in order that tho transfer of the property io
question should be binding on the Committee, it
~ms essential that it should have bePn made by an
instrument in writing executed by the President or
the Vice-President and at least two other members of
the Committee, and tho execution by them should
have been attested by tho Secretary.
If these
conditions arc not fulfilled, the contract of transfer
shall not be binding on the Committee. But it has
been contended on behalf of the appellants that
the non-complianoo with the provisions aforesaid
df s. 47, quoted above, would not render the contract of transfer of property void but only voidable.
In other words, where tho actings of the parties
have given effect to the transactions, as in the instant cases, by delivery of possession of the pro.
perty by the Committee and payment· of the rent
by
tho appellants, the absence of formalitios
would not render the trans:ictions of no legal ·effect
But it has to bo n·oted that it was not contended
on behalf of appellants that the provisfons of
s.47(3) oftho Municipal Act, all· P.ot mandatory antl
a·kc.R.
:13j5
_are merely directory. Such an argument was not arid
could not have been advanced because it is settled
·.rir.:·H. s:-RfH.y
-law that the provisions of a Statute in those
: 'T•; },;,,:J;>e1;;
peremptory terms could not but be construed as ··Municipal Commilfte
·mandatory.
·sinlu.<}: j.
But the learned counsel for the appellants
--"!"
placed. a great de<tl of reliance on the decisions in the
.cases of Crook v. Gorporation of Seaford (1) and Dea v.
Taniere (2). ln the first case, the suit was for specific performance of a contract by the Corporation
which was evidenced by a resolution of the Corporation; to let to the plaintiff a piece of land the
• .,
boundaries of 'vhich had not been fully determined.
-_,..
Though there was no contract under seal, Crook
iri pursuance of the contract built a wall and
terrace on parts of the land in question. The Corporation brought a suit for ejectment, and the
plaintiff thereupon filed a bill in Chancery for
' "specific
performance. It was held by the Lord
Chancellor, Lord Hatherley, confirming the decision
of the Vice-Chancellor, that though the agreement
was not under seal, the corporation, was bound by
'~
.licquiescence and must perform the agreement' to
'
.grant the lease. It must be remembered that was
•
·a suit to obtain a lease from the grantor, the Corporation, that is to say, it was an action in equity,
and the Court of Equity held, in the words ofthe
Lord Chancellor, that . "at a)l events, a Cour.t of
. _ .._
Equity could riot allow the ejectment to proceed
after the plaintiff had spent .so· much money hn
the wall". The decision was, therefore,
explicit~y
based on the . doctrine . of 'Standing by'. In that
case, there is no. reference to any statute, the
tl'.rms of which could said to have been infringed.
In the second case [Deo v. Taniere.(')] again there
.was no question of the infringement of any manda-
,tory: provision bf a Parliamentary statute. ·· That·.is
~-+-·. the case, qf. a grant .:of lease for' 99 .years,' .Quritt,illg
a covenant to build. It., ~YJ~B h\lld .t.h:i..to,whether
(l) (1871) L.R. 6 Ch. 551.
(2) (1848) 116 E.R. 1144.
"!
'
'
616
SUPREME COURT REPORTS
[1962]
-lilt
the lease was only voidable, -or void, receipt of
Dr,'H,S.RikfJY
_'rent without proof of any instrument under seal
v.
could raise a presumption of a demise from year
i .Th /'few Delhi
n,,;,;,;pai_s:omm;11,, to year. It is thus clear that neither of those
__ cases, strongly relied upon by the coumml for the
Si•"4 c. J.
· appellant, is an authority for the provisions that
·where the statute makes it obligatory that there
· • should be a contract under seal, the absence of such
'.a contract could be cured by mere receipt· of rent.
We· have here to determine whether the provisions
of s. 47 of the Municipal Act prevent the committee"from enterh1g into a contract or making a
transfer of property without_ complying with the
.conditions laid down in that section. - That the
·two· cases referred to above are no authority· on the
:question now
arising for determination in the
instant caseg is clear from the decision of the
House of Lords in Young & Co. v. The JJfayor and
Corporation of. Royal. Leamington Spa:('). In that
case, their Lordships, had -to consider the effect of
;s.174 of the Publfo Heath Act, 1875 (38 & 3\1
.Viet. c. 55) which required that every contract .made
by ·an urban authority of the value or amount
· exceeding £ 50 shall be in writing and sealed with
;the common seal· of the ·authority.· It was
held that the provisions of s. 174 were obligatory
and not merely directory and applied to an exeClited contract of which the urban authority had
taken full benefit and had been in
enjoyment
-.thereof. That was a .case which came ·before
· the ·Queen's . Bench Division on a. -reference. ·The
· g'uestion referred was whether the ·absence
of
the·_common seal of ·the Corporation ·required
by s. 174 of the Public: Health Act _aforesaid
.. wal! .fatal,. to the •plaintiff's . claim .to ·recover
from the_, Co~poration the costs .. of the works
constructed by the pbintiff at.the instance of.the
.Corporation.
.Th~ decision of the.Court of Appeal,
_ composed of Brett, Cotton and Lindley, L. JJ.',
. '(!) (1883) LR. a App. Cas. 517.
•
confirming
the judgment of the Queen's Bench
Division. is reported in 8 Q.B.D. 579. In the
House of Lords, Lord Blackburn made an exten·
siv.e quotation from tho judgment of Lindley, L.J.,
from which the following passage may be read.
"The cases on this subject
are very
numerous and conflicting, and they require
review and authoritative exposition by a
Court of
appeal but, in
my opinion,
the question thus raised does not require
decision in the present case. We have here to
construe and apply an Act of Parliament. The
Act draws a lino between contracts for more
than £ 50 and contracts for £ 50 and under.
Contracts for not more than £ 50 need not be
sealed, and can be enforced whether executed
or not and without reference to the question
whether they could be enforced at common
Law by reason of their trivial nature. But con·
tracts for
more than £ 50 are positively
required to be under seal; and in a case like
that before us, if we were to hold the dofen·
dants liable to pay for what has been done
under the contract. we should in effect be
repealing the Act of Parliament and depriving
the ratepayers of that
proteot~on which Par·
liament intended to secure for them."
It appears that in England there is a distinction
betlfeen contracts made under the Common Law
by Municipa:I Corporations which may not be
under iieal, and contracts made by them in pursuance of a statute like the one now under consi·
deration. The following excerpt frem the jud~
ment of Brett, L. J., quoted in the judgment 0f
'Lord Blackburn, is instructive from this point of
view:
"I ihQUld ;wish.to aa.y that I have come
w the llMlllil· \W,l;lclusion after weeks spent
1961
Dr .. Jl, s .. Ri/ifzy
v.
The Nerp D•lhi
Municipal CiJmmilJu
Sinha C; ]•
. • i9fii_
t,~~-fi. s. llikf!y
-
:. y.
-
!-
.'I:he :.Yew D~lhi ·
~it unit: ipaL-Commiu 1t
- ------
618
. "SUPREnIE COURT REPORTS
' .
. [l!J62]
in attempting to.come to auother. ·However,
·I come to the same ·conclusion as Lord
J usticc
Lindley -and · Lord . .T ustice
Cotton in this case, upon tho ground that,
although this was a municipal corporation,
yet in the transaction in question it was
acting asa board of health, and that therefore. it was bound by the statute, and that
. as to the construction of that statute we
are bound by a former decision of thia Court
which held that the enactment as to the necessity for a seal is mandatory and n.ot merely
d .
' ''
.
.
. Jrectory .
. · - - . ---~~ _. _ -·.
The same distinction . is very well brought out in
the following observations of Lord Bramwell at
page 528:
"As I think the case turm on the con·
struction of tho statute, I have not . thought
it necessary to go into the doubtful and
· conflicting. cases .governed by the Common
Law.'_' __
It is note-worthy that. neither of the two cases
discussed above was even referred to. at .the bar or
by their Lordship<> in the .course of their· judgment,
though many cases appear to have been cited-at the
bar. That was apparently for the reason that these
earlier cases, rather ancient, did not turn upon the
construction of any statute like the one .we are now
considering.
· ·
. '. ; Thus, the provisions of s. 4 7 being .mandatory
· and not merely directory, the. question which now
has to be determined is.:whether those provisions
are inconsistent with any of the_ provisions. g_f the
Act, as· contempla.ted by __ s, 38 __ o(Jhe.:_Act .. ,~· It
has_ no~ .b!)en:c;CQn~.\lAd<;>!,l, l:i:4we .11s,, !l}atffie;-e ... i~
anything in the Act which in terms is inconsis~~!lP -
with the provisions of s. 4 7 9f the niunicipal Act.
But it has been ;coritended.that· such' ari inconsistency is· im'plicit in the 'terms of-the' Act as they
appear from the definitions of 'landlord', 'premises'
and 'tenant'. ·In our opinion, there is no substance
-
•
... .
3 S.C.R.
SUPREME COuRT~REPORTS
in this contention. ·We ha~e already pointed·. out
that those definitions postulflte the· relationship of
landlord and tenant which can come into existence
. .only by a transfer of interest in immovable
property, in pursuance of a uontrac1' . These definitions are entirely silent as to the mode of creating
:the relationship of landlord and tenant. . Therefore,
.the question is wh.ether the complete silence as to
.the mode of creating the relationship between landlord and tenant can be construed as making a provision, by implication, inconsistent with the terms
of s. 4 7 of the Municipal Act. In our opinion, the
mere ·ab>ence . of such provisions does not . crea,te
any inconsistency as would attract the application
of s. 38 of the Act. It is note-worthy that th!.)
provisions of s. 38 of the Act were not relied upon
either in the High Court or in the Court of first
instance. In ·those Courts great reliance bad been
placed on the doctrine of part performance which
bas now been crystalised in s. 53A of the Transfer
of Property Act (IV of 1882) and which in terms
cannot apply. Rightly, therefore, no reliance was
placed on behalf of the appellants on the provisions
of s. 53A of the Transfer of Property Act.
·
On the question of the validity of the transfer, it is necessary to consider the further argument
raised on behalf of the appellants, . namely, that
the power Qf the Committee. is ctintained in s. IS
and not in s .. 4 7 of the M:u.nicipal Act, wliich only
lays down the moqe of exeputing qontracts and
transfer of property;·as appears from the marginal
note to the section i. e., the \vords . "Mode of
Executing Contract: and Tra.nsfor of .. Property".
It is true that s. 18 contains.the power to enter into
a contract and to transfer any property _held by the
Cqmmittee, but s. 4 7 lays .down, the e~se11tial conditlcm,s ofthe exe,rcis() oJtlr.eri'ower ~n<l un,le$s those
"conditio#s:are fp#i!ltJ!lJliere Coi.IW oC).no. contract
and no .. t_ra,nsfer • 0f ]>;t"Opitrty; · ·· :i:.n: thfa. qq:iii;11,1ction.
it was further argued" thilt sub s: ('3} ·ofs:· 47 only
J96J
D,. 71.. S. Ri<)ry
v.
-The JileU/ D~lhi
AfulliCifia_l' ,Cointnittte
Sinka c. J.
196)
D•. H. S •. RW.y
v.
7Jw Xtw v,u.;
Mwridj>al c.mmuw
SiwC.J.
'
says that a oontract or transfer of property contern·
plated in the section executed otherwise than in
accordance with the provisions of the section shall
not be binding 011 the Committee. Therefore, the
argument further is that tho con'ract may not be
binding on the Committee but it is not void. Now,
what iH tho legal eignificanee of tho expression
"shall not bo binding on the Committee"? It
simply means that it shall not be enforceable
against tho Committee, a.nd it is cloar beyond doubt
that an agreement not enforceable in law is void.
It must, therefore, be held that the provisions of
s. 4i aforesaid are essential ingredients of the power
contained ins. 18 of tho Act.
Tho same argument wa.s advanced in another Act
form, viz., that tho effect of s. 4 7 of the Munioipa.l
Act is not to render tho transactions in question
between the parti68 entirely void but it was only
declared to be not binding on the Committee. In
other words, tho argument is that a distinction haa
to be made between acts which are uUra vir~ and
those for the validity of which certain formalitie.s
.,
• ...
are necessary and have not been gone through.
,
This distinction assumes an importance where the 1
rights of third parties have come into existence and
those parties are not expected to know the true
facts as to the fulfilment of those formalities. That
it is so becomes cloar from the following statement
of tho law in Halsbury's Laws of England (3rd
edition, Vol. 15) paragraph 428 at page 22i:
"Di,etinction between ultra vires and irregular . acts. A distinction must be made
between acts which are ultra i·ires and those
for the validity of which certain formalities
are necessary. In the latter ease, persons
dealing without notice of any informality are
entitled to presume omnia rite esse a.eta.
Accordingly a company which, possessing tho
+--
requisite powers, so cond11cts itself in issui,l;lg
dehenttml as to repretlllnt to the public that
--.. ""
3 S.C.R.
SUPREME OOlJ'ltT REPOR'l'S
621
•
they are legally transferable, cannot set up
any irregularity in their issue against an equit·
able transfere& for value who has no reason
to suspect it."
In this connection, it is also convenient here to
notice the argument that the Committee is estopped
by its conduct from challenging the enfor.ceability
of the contract. The answer to the argument is that
where a statute makes a specific provision that a
body corporate has to act in a particular manner,
and in no other, that provision of law being mandatory and not
directory, has to be strictly
followed. The statement of the law in paragraph
427 of the same volumP of Halsbury's Laws of
England to the following effect settles the controversy against the appellants:
"Result must not be ultra vires-A party
cannot by representation, any more than by
other means, raise against himself an estoppal
so as to create a state of things which he is
legally disabled from creating. Thus, a corporate or statutory body cannot be estopped
from denying that it has entered into a
contract which it was ultra vires for it to
make. No corporate body can be bound by
estoppal to do something beyond its powers,
or to refrain from doing what it is its duty to
do ...... "
In view of these considerations it must be
held that there was no relationship of landlord and
tenant between the parties and that, therefore, the
applications under s. 8 of the Act made by the
appellants had been rightly dismissed by the High
Court as incompetent. The appeals are accordingly
dismissed with costs, one set of hearing fees.
Appeals dismissed.
---
11112 -·
Dr. H; S ltikhy
v.
Tiu N1w Delhi
Munfr;ijol Committ1t
Sinha C. ].