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TMI Blog1956 (11) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court on a certificate granted by the High Court of Judicature of the State of Punjab that the case involved a substantial question of law as to the legal status of the respondent vis a vis the Government. The sequence of events leading up to the institution of the suit by the appellant " The Fruit and Vegetable Merchants Union, Su bzimandi " a registered body under the Indian Trade Unions Act, giving rise to this appeal may shortly be stated as follows: By an agreement dated, March 31, 1937, (Exhibit D-5) between the Secretary of State for India in Council and the Delhi Improvement Trust, which will have to be set out in detail hereinafter and the construction of which is the main point in controversy between the parties, a certain area of the land admittedly belonging to Government was placed at the disposal of the Trust for the " orderly expansion of Delhi under the supervision of a single authority. " The said property was compendiously called " the Nazul Estate. " By a letter dated May 1/2, 1939 (not exhibited but filed in the High Court at the appellate stage) the Chairman of the Trust forwarded a copy of the resolution No. 551 dated April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derlined by us). In answer to this communication from the Trust, the Chief Commissioner sent the letter (Ex. D-8) dated May 13, 1939, sanctioning under s. 22-A of the Trust Law the scheme of the " New Fruit and Vegetable Market " as proposed in the resolution aforesaid at a cost not exceeding ₹ 4,73,186. The sanction is in terms made subject to the remarks (1) that "the whole of the land required for the construction of the new market is the property of the Government ", and (2) that "the trust will administer the new market on its completion." It will thus appear that it was clearly understood that the land on which the market was to be constructed would continue to be the property of the Government in modification of the proposal made by the Trust as aforesaid, the Trust only being vested with the power to administer the new market. On receipt of the letter aforesaid of the Chief Commissioner, the Chairman of the Trust requested the former to obtain the orders of the Government of India to place the additional land required for the market at the disposal of the Trust under s. 54-A of the United Provinces Town Improvement Act, VIII of 1919, (w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected by process of law." Paragraph 22 of the indenture aforesaid contains the following important aidmission:- that both the lessor and lessee agree that the premises in dispute are owned by the Government and the provisions of the Delhi Ajmer Merwara Rent. Control Act (1947) do not apply to the same." The effect of this admission is also one of the controversies between the parties and shall have to be adverted to later. It appears that during the pendency of the second lease aforesaid, negotiations had started between the parties for extension of the period of the lease. The plaintiff made an offer of a fresh lease for a further period of five years at an annual rent of rupees two lakhs. But the Trust by its resolution dated May 25, 1950, (Ex. D-12) aoreed only to extend the period by two years " on the existing conditions, subject to enhancement of rent to ₹ 2 lakhs per year." The plaintiff's case in the plaint is that these onerous terms successively enhancing the rent to ₹ 2 lakhs per year were agreed to by it as it had no other alternative in view of the plaintiff's need. The plaintiff has been paying the enhanced rent of ₹ 2 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India and the Trust, as also of the correspondence that passed between the Chief Commissioner of Delhi and the Trust, the land on which the market was constructed and the structure itself belonged to the Trust and that therefore the provisions of the Control Act were applicable to the tenancy created by the Trust in favour of the plaintiff; and that being so, the plaintiff could not be ejected by the defendant on the expiry of the term or the extended term of the lease. On the other hand, it has been argued on behalf of the defendant-respondent that the Trust is the statutory agent of the Government and has-to function in accordance with the provisions of the statute aforesaid, namely, the Improvement Act. The agency was created under the provisions of s. 54A (1) of the Improvement Act, the terms of the agreement being incorporated in the indenture, Ex. D-5, dated ;March 31 1937. The argument further is that in accordance with the scheme as embodied in the agreement the Government was to hand over to its agent, the Trust, Government property which vests in possession of the agent who has to manage and develop the property with funds made available to it by Government. Proper acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, that with a view to the orderly expansion of Delhi under the supervision of a single authority the Government agreed to place at its disposal " the Nazul Estate " (described in Schedule 1), with effect from April 1, 1937. One of the conditions stipulated was that the "Trust shall hold and manage the said Nazul Estate on behalf of the Government." These words cannot be construed as transferring title to the Nazul Estate from Government to the Trust. They amount to constituting the Trust as an agent of the Government to hold possession of the property and to manage the same for the purpose for which the Trust had been created. The Trust is enjoined to use its best endeavours for the improvement and -development of the said Nazul Estate in accordance with the provisions of the Improvement Act, " provided that no expenditure shall be incurred upon the purchase of land to be added to the said Nazul Estate unless the proposal to make the purchase has been specifically included in an Improvement Scheme sanctioned under section 42 of the said Act." Particular reliance was placed on behalf of the appellant on the following terms in the indenture to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in it. The vesting of such property is only for the purpose of executing any improvement scheme which it has undertaken and riot with a view to clothing it with complete title. As will presently appear, the term "vesting" has a variety of meaning which has to be gathered from the context in which it has been used. It may mean full ownership, or only possession for a particular-purpose, or clothing the authority with power to deal with the property as the agent of another person or authority. Coming back to the terms of the indenture with reference to the power of the Trust to sell or lease any land included in the Nazul Estate, certain conditions are laid down for the exercise of the aforesaid power to transfer. The Trust is empowered to sell any land included in the Nazul Estate on its own authority only in cases where the sale is for full market value and which does not exceed ₹ 25,000/-. -In other cases the transaction has to be sanctioned either by the Chief Commissioner or by Government and in every case the forms of conveyances and leases by the Trust have to be approved by Government. It would thus appear that the power to transfer by way of sale, lease o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the parties and also to advance loans at interest equal to Government rates for the time being for loans to Local Authorities. It was in pursuance of the terms aforesaid that the scheme of the building of the market in question was put through at an estimate. cost of a little less than five lakhs of rupees. It is clear upon the terms of the agreement shortly set out above that the market was constructed by the Trust on Government land with Government funds advanced by way of loan at interest. On those facts what is the legal position of the Trust vis-a-vis the Government in respect of the ownership of the property ? It is important, therefore, to determine the true nature of the initial relationship between the Government and the Trust. The learned counsel for the appellant conceded that relationship could not be described in terms of ordinary legal import, that is to say, in, terms of mortgagor and mortgagee, or lessor and lessee, or licensor and licensee. He contended that it was a peculiar relationship which could not be defined in exact legal phraseology, but all the same, that the Trust was the owner of the market, especially in view of the fact that, as admitted by the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) to the effect that "Government may at any time on giving six months' notice terminate this agreement " clearly indicates that the Government had created this agency not on a permanent basis. but as a convenient mode of having its schemes of improvement implemented by a single agency with wide powers of management and expenditure of funds placed at its disposal, either by way of income from the property or by way of advance from Government funds. Sub-s. (1). therefore, does not in express terms or by necessary implication confer any title on the Trust in respect of the market. The Trust only holds the market and realizes the income therefrom which is disbursed in accordance with the terms of the agreement and the rules framed by the Chief Commissioner in exercise of the powers conferred on him by cl. (e) of sub-s. (1) of s. 72. Our attention was called to some of those statutory rules, particularly rules, 21, 36, 38 and 156 read along with the forms and the Appendix. It is not necessary to discuss those rules in detail because on a consideration of those rules we are satisfied that they are more consistent with the Trust being a statutory agent of the Government, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyment than to the obtaining of a right. But I am willing to accede to the argument that was pressed at the bar, that by long usage ' vesting' ordinarily means the having obtained an absolute and indefeasible right, as contra-distinguished from the not having so obtained it. But it cannot be disputed that the word ' vesting' may mean, and often does mean, that which is its primary etymological signification, namely, vesting in possession." Similarly with reference to the provisions of a local Act (5 Geo. 4, c. Ixiv), it was held that the word "vest" did not convey a freehold title but only a right in the nature of an easement. The following words of Willes, J. in Hinde v. Charlton((1866-67) C.P. Cases 104 at 116. ) are relevant:- words, which in terms vested -the freehold in persons appointed to perform some public duties, such as canal companies and boards of health, have been held satisfied by giving to such persons the control over the soil which was necessary to the carrying out the objects of the Act without giving them the freehold ' " In the case of Coverdale v. Charlton ((1878-79) 4 Q.B.D. 104.), the Court of Appeal on a consideration of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppoint a receiver for the property of the insolvent and further provides that " such property shall thereupon vest in the receiver." The property vests in the receiver for the purpose of administering the estate of the insolvent for the payment of his debts after realising his assets. The property of the insolvent vests in the receiver not for all purposes but only for the purpose of the Insolvency Act and the receiver has no interest of his own in the property. On the other hand, ss. 16 and 17 of the Land Acquisition Act. (Act I of 1894), provide that the property so acquired, upon the happening of certain events, shall " vest absolutely in the Government free from all encumbrances'. In the cases contemplated by ss. 16 and 17 the property acquired becomes. the property of Government without any conditions or limitations either as to title or possession. The legislature has made it clear that the vesting of the property is not for any limited purpose or limited duration. It would thus appear that the word "vest" has not got a fixed connotation, meaning in all cases that the property is owned by the person or the authority in whom it vests. It may vest in ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property of the lessor and the lessee took a lease on that footing." In our opinion, therefore, it cannot be said that either under the provisions of the Improvement Act or in accordance with the terms of the agreement (Ex. D-5) or the two taken together, the market became the property of the Trust. We have already noticed the relevant portions of the correspondence that passed between Government and the Trust to show that though at the initial stages the Trust proposed that the ownership of the market should vest in the Trust, the final terms agreed between the parties in accordance with the provisions of s. 54A left the ownership with Government. We have come to this conclusion without reference to the admission of the plaintiff contained in para. 22 of the indenture (Ex. D-4) quoted above. It is therefore not necessary for us to consider the question raised by the learned Attorney-General that the plaintiff was bound by that admission or whether that admission is vitiated by any pressure of circumstances or duress as pleaded by the plaintiff. Certainly that admission is a piece of evidence which could be considered on its merits even apart from the question of estopped wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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