'954 Srimati Ashalata Debi and Others v. Sri Jadu Nath Roy and Others. BhagwatiJ. May 13 [1955J regard to the payment of the revenue and the cess as also the second instalment under the new decree.
The contention which was therefore urged on behalf of the appellants that there was no default committed by the mortgagors also could not be sustained. The High Court of Judicature at Calcutta was there-
fore rightly seized of the appeal . and it had jurisdiction to decide whether the mortgagors had committed default in carrying out the terms of the new decree. The appeal being a mere rehearing the appellate Court
was entitled to review the judgment of the trial Judge and declare th~t it was wrong . and that the decree- holder. was entitled to re-restoration. The question whether he would be able to obtain possession of the
immovable properties in fact was foreign to such an enquiry. By appropriate proceedings in another juris- diction he may be able to do so ; but this difficulty could not be a deterrent to the High Court passing the
necessary orders for re-restoration of the properties. The appeal therefore fails and must stand . dismissed. There will be no order as to costs. Appeal dismissed. TOLARAM RELUMAL AND ANOTHER
v. THE STATE OF BOMBAY. [MEHR CHAND MAHAJAN C.J., MuKHERrEA, VIVIAN BosE, BHAGWAn and VENKATARAMA AYYAR JJ."I "—· ,, Bombay Rents, ·Hotel and Lodging House Rates Control Act~ 1947, (Bombay Act LVII of 1947)-Section 18(1)-Words "in res- pect ·af"-Meaning of-Receipt of nioney 'by landlord 01· any person on his behalf-On executory 'co'fitract-W hether punishable under
the Act. Section 18(1) of the Bombay Rents, ………. Control Act 1947 provides:- "If any landlord either himself or through any person actin& " j or r.urporting to act on his .behalf . ……… receives any fine, pre·- /
mium Or other like sum or deposit or any cO~sideration, other tha,n S.C.R. the standard rent. ……. in respect of the grant, renewal or continuance of a lease of any premises …… such
landlord or person shall be punished ………. " in the manner indicated by the section. Held, that the words "renewal or continuance of a lease" dearly suggest that there must be a renewal or continuance of a subsisting lease.
They would not cover an ex~cutory contract to grant a lease. Giving the words "in respect of" their widest meaning, viz., "relating to" or "with reference to" it is plain that this relation-
ship must be predicate<! of the grant, renewal or continuance of a lease and unless a lease comes into existence· simultaneously or nearabout the time that the money is received it cannot be said
that the receipt ·was "in respect of" the grant of a lease. The relationship of landlord and tenant does not . c0me into existence till a lease comes into existence, in other words, there is no rela-
tionship of landlord and tenant until there is a demise of the pro- perty which is capable of being taken possession of. The section does not 11:\ake the intention punishable, it makes
an act punishable which is related to the existence of a lease. It does not make receipt of money on an executory contract punishable. London· and North Eastern Railway Co. v. Berriman (1946
A.C. 278, 295) referred to. CRIMINAL APPELLATE JuRISDICTION: Criminal Appeal No. 18 of 1953. Appeal under article 134 ( 1) ( c) of the Constitution of India from the Judgment and Order dated the 18th
February, 1953, ·of the High Court of Judicature at Bombay in Criminal Appeal No. 592 of 1952 arising out of the Judgment and Order dated the 21st May, 1952, of the Court of the Presidency Magistrate,
19th Court, Bombay, in Case No. 147/P/1951. B. H. Lulla and Rajinder Narain for the appel- lants. Porus A. Mehta for the respondent. 1954. May 13. The Judgment of the Court was delivered by
MEHR CHAND MAHAJAN C.J.-The appellants were charged under section 18(1) of the Bombay Rent Res- triction Act, 1947, for receiving from Shankar Das ~ 1- , Gupta through Mathra Das, accused No. 3, on .23rd
November, 1950, a sum of Rs. 2,400 as premium or T olaram Relumal and Another v. The State of Bombay. T olaram Rtlumal and Another v. The State Of Bombay. Mehr Chand Mahajan C. J.
[1955} pugree in respect of the grant of lease of Block No. 15 in a building under construction. The magistrate found the appellants guilty of the charge and sentenced each of them to two months' R.I. and a fine of Rs. 1,200.
Mathra Das was convicted and sentenced to one day's S.I. and a fine of Rs. 100. The fourth accused, Roshan- lal Kanjilal, was acquitted. Mathra Das preferred no appeal against his conviction and sentence. The appel-
lants preferred an appeal to the High . Court against their conviction. 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 Rs. 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 Judges said as follows :- "In the present case the work regarding the build- ing which still remained to be done ' was so important that both the parties agreed that the complainant
should get into possession after the said work was completed. In such a case unless the building is com- pleted the tenant has no right which can. be .enforced in a Court of law. If the landlord finds it impossible
for any reason to complete the building, what is the right which an intending ten~nt can enforce against him. Therefore, in our opinion, there is considerable force in the contention urged by Mr. Lulla that in the
present case even if it be held that the accused had received Rs. 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 agreements of this kind." A contrary view had been expressed in ·Criminal Revision No. 1178 of 1949, by another Bench of the High Court on the construction of section 18 ( 1 ). The
S.C.R. matter was therefore referred to the Full Bench. The question framed for the consideration of the Full Bench was in these terms :- "If as owners of an incomplete building the appel-
lants accepted Rs. 2,400 from the complainant in res- pect of an agreement between them that the appellants were bound to give and the complainant 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 Rs. 75 per month, did the acceptance of Rs. 2,400 by the appellants fall within the mis.chief of section 18 of Bombay Act L VII 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 but it amounted to an agreement to grant a lease in future, and that the receipt of consideration for an executory agreement was within the mischief of section 18(1) of the Act. The Full Bench
expressed its opinion in these terms :- "What the Legislature has penalized is the receipt of a premium by the landlord and the Legislature has also required a nexus between the receipt by the land-
lord of a premium and the grant of a lease of any pre- mises. Therefore a receipt alone by a landlord would not constitute an offence, but that receipt must be con- nected 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 res- pect of" the grant of a lease. Therefore the key words according to us in this section are "in respect of." It is relevant to observe that the Legislature
has advisedly not used the expression "for" or "in consideration of" or "as a condition of" the grant of a lease. It has used an expression which has the widest connotation and the expression used is "in respect of." "In respect of"
Tolaram Relumal and Another v. The State of Bombay. Mehr Chand Mahajan C. T olaram Relumal and Another v. The State of Bombay. "Mehr Chand Mahajan C. J. [1955] means m its plain meaning "connected with or attri-
butable to," and therefore it is not necessary that there must be simultaneous receipt by the landlord with the grant of the lease. So long as some connection is esta- blished 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 impossi- ble to contend that in the present case there was no con- nection whatever
between ths 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 premium was to enter into a contract with his tenant to grant a lease in future. But the object of the landlord in receiving the premium and the object of the tenant in paying the premium was undoubtedly on
the part of the landlord the letting of the premises and on the part of the tenant· the securing . of. the premises. Therefore the object of both the landlord and the tenant was the grant of the lease of the premises concerned
and that object was achieved partly and to start with by an oral agreement being arrived at between the land- lord and the tenant with regard to the granting of this lease, the lease being completed
when delivery of possess.ion of the premises would be given. Therefore, in our opinion, on the facts of this case it is not possi- ble to contend that the payment of the premium receiv-
ed by the landlord was unconnected with the grant of a lease of any pr~mises. The fact that no grant was made at the time when the premium was received, the fact that there was merely an agreement to
grant a lease, the fact that the lease would come into. existence -only at a future date, are irrelevant facts so long as the connection between the receiving of the premium and the granting of the lease is established."
On return from the Full Bench, the Division Bench considered the other contentions raised on behalf of the appellants and held that tht;re were no merits in any one of those points and in the result the appeal was
dismissed. It was certified that the case involved a substantial question of law and was a fit . one for appeal to this Court. This appeal is before us on that certificate. S.C.R.
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 execu-
tory contract to grant a lease of a building under cons- truction falls within the mischief of section 18 ( 1) of the Act? Section 1§(1) provides: "If any landlord either himself or through any
person acting or purporting to act on his behalf ……. . receives any fine, premium or other like sum or deposit or any consideration, other than the standard rent …. . . . . . . . . . . . . in respect of the grant, renewal or continuance of a lease of any premises …… such landlord or person
shall be punished ………. " in the manner indicated by the section. Under the section the· money must be received by the landlord in respect of the grant of a lease. The section refers to
the "grant, renewal or continuance of a lease." Prima f acie, 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 ten- ancy after its termination ; and continuance seems
to contemplate continuance of a tenancy which is existing. Whether or not an executory agreement for grant of a lease comes within the ambit of the section by reason of the use of the words "in respect of" would be exa-
mined hereinafter. Before doing so it may be stated that an instrument is usually construed as a lease if it contains words of present demise. It is construed as an executory agreement, notwithstanding that it con-
tains words of present demise, where certain things have to be done by the lessor before the lease is grant- ed, such as the .completion or repair or improvement 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 Tolaram Relumal and Another
v. The State of Bombay. Mehr Chand Mahajan C. J. T o/aram Relumal and Another v. The State of Bombay. Mehr Chand Mahjan C.j. [1955J 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 Bombay Land Requisition Act XXXIII of 1948, as amended, the appellants could not let out the building even after its completion unless on a proper notice being given
the Controller of Accommodation did not exercise his powers under that Act. It so happened that as soon as the building was completed the Controller of Accom- modation requisitioned it,
and thus no occasion arose for giving effect to the executory contract. The question that needs our determination in such a situation is whether section 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 from penalty rather than the one which imposes penalty. It is not competent to . the Court to stretch the meaning of an expression used by the Legislature in order to carry out the intention of the Legislature.
As pointed out by Lord Macmillan in London and North Eastern Radway Co. v. Berriman('), "where penalties for infringement are imposed it is not legitimate to stretcl1 tl1e language of a rule, however beneficient
its intention, beyond the fair and 'ordinary meaning of its language." The High Court took the view that without stretch- ing the language of section 18(1) beyond its fair and ordinary meaning, the very
comprehensive expression "in respect of" nsed by the Legislature could lead to only one conclusion, that the Legislature wanted the (r) [1946] A.C. 278, 295. S.C.R. 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 "in respect of" in the context of the section. Giving the words "in
respect of" their widest meaning, viz., "relating to" or "with reference to'', it is plain that this relationship must be predicated of the grant, renewal or continu- ance of a lease, and unless a lease comes into existence
simultaneously or nearabout the time that the money is received, it cannot be said that the receipt was "in respect of" the grant of a lease. The relationship of landlord arid 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 con- sideration other
than the standard rent in respect of the lease or an agreement of lease of the premises, such landlord or person shall be punished" in the manner indicated in the section. The section does not make
the intention punishable ; it makes an act punishable which act is related to the existence of a lease. It does not make receipt of money on an executory contract punishable ; on the other hand it only makes receipt of
money on the grant, renewal or continuance of the lease of any premises punishable and unless the lease comes into existence no offence can be said to have been com- mitted by the person receiving the money. It is
diffi- cult to hold that any relationship of landlord and tenant comes into existence on the execution of an 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 execution of such an agreement. It may well be that if a lease actually .comes into existence then any receipt of money which has a nexus with that lease may fall within the
mischief of section 18 (I), but it is unnecessary to ex- press any final opinion on the question as in the present T olaram Relumal and Another v. The State of Bombay. Mehr Chand Mahajan C. J.
·Tolaram Relumal and Another v. The State of -Bombay. Mehr Chand Mahajan C. J. [1955] case admittedly no lease ever came into existence and the relationship of landlord and tenant was never
created between the parties. The landlord never be- came entitled to receive the rent from the tenant and the tenant never became liable to pay the rent. There was no transfer of interest in the premises from the
landlord to the tenant. On its plain, natural, gram- matic 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 pay- ment 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- ture intended to punish persons receiving . pugree on merely executory contracts
it should have made its intention clear by use of clear and unambiguous language. The construction we are placing on the section 1s borne out by the circumstance that it occurs in Part II
of the Act. Section 6 of this · Part provides that "in areas specified in Schedule I, this Part shall apply to premises let for residence, education, business, trade or storage." This Part relates to premises let, in other
words, 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 iP.to being. The definition of the expression "landlord"
also sug- gests 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 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 tenant ………. " It is obvious that on the basis of an executory agreement the appellants would not be enti- tled to receive any rent. They would only be entitled to receive rent after the lease is
executed and actual . ..,.,.. .. S.C.R. demise of the premises or their transfer is made in favour of the complainant. The definition of the expression "tenant" 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 apiy to .any payment made under any agreement entered mto before the first day of September, 1940, or to any pay-
ment made by any person to a landlord by way of a loan, for the purpose of financing the erection of the whole or part of a residential building or a residential section of a building on the land held by him as an
owner, a lessee or in any other capacity, entitling him to build on such land; under an agreement which shall be in writing and shall, notwithstanding anything con- tained in the Indian Registration Act, 1908, be regis-
tered. Such agreement shall inter alia include the following conditions, namely, (1) that the landlord is to let to such person the whole or part of the building when completed for the
use of such person or any member of his family …… " It was suggested that but for this exception the executory agreement would be included within the mischief of section 18(1) and that unless such agree-
ments were within the mischief of the section there would have been no point in exempting them from its provisions. In our view, this contention is not sound. In the first place, the exception was added to the sec-
tion by Act 42 of 1951, subsequent to the agreement in question, and for the purposes of this case section 18(1) should ordinarily be read as it stood in the Act, at the time the offence is alleged to have been commit•
ted. Be that as it may, it appears that sub-section (3) was added to the section by reason of the fact that some Courts construed section 18(1) in the manner in which it has been construed by the Full Bench in this
case, and the Legislature by enacting clause (3) made it clear that agreements of the nature indicated in the T olaram Relumal and Another v. The State of Bomba)'. Mehr Chand MajanC.J.
T olaram Relumal and Another v. The State of Bombay. Mehr Chand /vfaha}an C. J. April 5. [1955] sub-section Vl'ere In our opinion, much assistance section 18(1). never intended to be included therein.
the language of that section is not of in construing the main provisions of The result therefore is that in our view the receipt of money by the appellants from the complainant at
the time of the oral executory agreement of lease was not made punishable under section 18(1) of the Act and is outside its mischief, and the Presidency Magistrate was in error in convicting the appellants and the High
Court was al>o in error in upholding their conviction. We accordingly allow this appeal, set aside the convic- tion of the appellants and order that they be acquitted. Appeals allowed.
M. K. GOPALAN AND ANOTHER v. THE STATE OF MADHYA PRADESH. [MuKHERJEA, SuDHI RANJAN DAs, BHAGWATI, JAGANNADHADAS and VENKATARAMA AYYAR JJ.J Constitutt°on of India-Article 14-Criminal Procedure Code
(Act V of 1898), Section 14 and 197(1) and (2)-Section 14 whether ultra vires article 14 of the Constitution-Scope of power under sec~ tion 197(2) and section 14-Whether the word "Court" in section 197 (2) means the same thing as ward "person" in section 14.
The petitioner, an officer of the Madras Government, was employed in Central Provinces and Berar for the purchase of grains on behalf of the Madras Government. He along with many others, was under prosecution before a Special Magistrate, Nagpur (Madhya Pradesh), on charges for offences under section 420 of the Indian Penal Code etc. for causing loss to the Madras Government. The
Special Magistrate trying the case was appointed by the Madhya Pradesh Government under section 14 of the Code of Criminal Procedure and as the petitioner was a servant of the Government
of Madras, the prosecution against him was initiated with the sanction given by the Government of Madras under section 197(1) of the Code of Criminal Procedure. Held, (i) that section 14 of the Criminal J>rocedure
Code in so far as it authorises the Provincial Government to confer upo'n any person all or any of the powers conferred or conferrable by or under the Code on Magistrates of the first, second or third class in l