Judgment
As delivered
PETITIONER:DR. H. S. RIKHY AND OTHERS
Vs.
RESPONDENT:THE NEW DELHI MUNICIPAL COMMITTEE
DATE OF JUDGMENT:13/09/1961
BENCH:SINHA, BHUVNESHWAR P.(CJ)BENCH:SINHA, BHUVNESHWAR P.(CJ)GAJENDRAGADKAR, P.B.DAYAL, RAGHUBAR
CITATION:1962 AIR 554 1962 SCR Supl. (3) 604
ACT:Rent control--Fixation of standard rent-Maintainability ofapplication-Relation of land and tenant, if esseatial-Delhiand Ajmer Rent Control Act, 1952 (38 of 1952), ss. 2(c),2(g), 2(j), 8, 38-Punjab Municipal Act, 1911 (Punjab III of1911), ss.18, 47.
HEADNOTE:The respondent Municipal Committee, in pursuance of aresolution passed by it, called for tenders and put therespondents, who made the highest offers, into possession ofcertain shops and premises on amounts varying from Rs.135-8-0 to Rs.520 payable for every month. After they hadcontinued in possession for some years on payment of thesaid amounts, described as rents in the receipts, theappellants applied under s.8 of the Delhi and Ajmer RentControl Act, 1952, for standardisation of rent. There wereadmittedly no contracts of transfer in writing signed andattested in the manner prescribed by S.47 of' the PunjabMunicipal Act, 191 1. The respondent took the preliminaryobjection that the applications were not maintainable asthere was no relation of landlord and tenant between theparties within the meaning of the Rent Control Act. Thetrial court found in favour of the appellants but the HighCourt in the exercise of its revisional jurisdiction setaside the decision of the trial court.Held, that it was evident from the definitions of the termslandlord', 'Premises and tenant contained in ss. 2(c), 2(g)and 2(j) that the Delhi and Ajmer Rent Control Act, 1952,that the Act applied only to such letting of premises ascreated an interest in the property, whatever its duration,and gave rise to the relation of landlord and tenant betweenthe parties.605It was not correct to say that the letting' contemplated bythe Act included not merely a transfer to a tenant but alsoto a licensee, or that the use of the word 'rent' inreceipts precluded the landlord from pleading that there wasno relation of landlord and tenant between the parties.Although s. 18 of the Punjab Municipal Act, 191 1, vestedpower in a Municipal Committee to enter into contracts forthe transfer of its properties, the mandatory provisions ofs.47 laid down the essential conditions of the exercise ofit. Those conditions were not in any way inconsistent withthe provisions of the Rent Control Act and did not comewithin the mischief of s.38 of that Act.Crook v. Corporation of Seaford, (1871) L.R. 6 Ch. 551 andDeo v. Taniere (1848) 116 E.R. 1144, held inapplicable.H. Young & Co. v. The Mayor and Corporation of RoyalLeamington Spa, (1883) L.R. 8 App. Cas. 517, referred to.Where a statute makes a specific provision that a bodycorporate has to act in a particular manner that provisionis mandatory, and not directory and must be strictlyfollowed.Consequently, in the instant cases, no relation of landlordand tenant was created between the parties and theapplications must fail.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 30 to 32of 1959.
Appeals from the judgment and order dated April 25, 1956, ofthe' Punjab High Court in Civil Revision Applications Nos.186, 187 and 203 of 1954.
M. C. Setalvad, Attorney-General for India, Anoop Singhand R. Gopalakrishnan, for the appellants.C. K. Daphtary, Solicitor-General of India R. GanapathiIyer and G. Gopalakrishnaa, for the respondents.1961. September 13. The Judgment of the Court wasdelivered bySINHA, C. J.--The question for determination in these threeappeals, on certificates 'of fitness granted by the HighCourt of Punjab under Art. 133(1)(c) of the Constitution, iswhether the provisions of S. 8 of the Delhi and Ajmer RentControl Act (38 of 1952) (which hereinafter will be referred606to as the Act) apply to the transactions in question betweenthe appellants in each case and the New Delhi MunicipalCommittee (which for the sake of (tee brevity we shall callthe Committee' in the course of this judgment).It is necessary to state, the following facts in order tobring out the nature and scope of the controversy. It isnot necessary to refer in detail to the 'facts of each caseseparately for the purpose of those appeals. The Committeebuilt in 1945 what is known as the Central Municipal MarketLodi Colony. This Market has 32 shops, with residentialflats on 28 of them. In April 1945, the Committee, inpursuance of a resolution passed by it, invited tenders fromintending bidders for those shops and premises. On receiptof tenders, the highest bidders were allotted various shopson rents varying from Es. 135-8-0 to Rs. 520 per mensem.The allottees occupied the shops and the premises inaccordance with the allotments made by the Committee andcontinued to pay the respective amounts, which may becharacterised as rents, without prejudice to our decision onthe question whether it was legally a rent', because as willpresently appear, one of the controversies between theparties is whether it is 'rent' within the meaning of theAct. Towards the end of 1952, 30 of the occupants filedapplications under s. 8 of the Act praying for the fixationof standard rent in respect of the premises in theirrespective occupation. The Committee raised a preliminaryobjection to the maintainability of the aforesaidapplications on the ground that there was no relationship oflandlord and tenant between the applicants and theCommittee, within the meaning of the Act. The Trial Courtaccordingly framed the following issue for determination inthe first instance :
"Whether the relationship of tenant andlandlord exists between the parties,therefore, those applications are competentand the607Court has jurisdiction to fix the standardrent?"
The learned Subordinate Judge, who dealt with these cases inthe first instance, came to the conclusion that the severalapplicants were tenants within the meaning of the Act, andthat, therefore, the applications were competent. Thecommittee moved the High Court in its revisionaljurisdiction, and the learned Chief Justice, sitting singly,referred those cases to be heard by a Division Bench, asthey raised questions of general importance. The matter wasthus heard by a Division Bench composed of G. D. Khosla andDulat, 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 anelaborate judgment, on an examination of the relevantprovisions of the Act, came to the conclusion that there wasno relationship of landlord and tenant, between the parties,inasmuch as there was no letting', there being no properlyexecuted lease, and the doctrine of part performance was notattracted to the facts and circumstances of the case. Forcoming to the conclusion that there was no valid leasebetween the parties, the High Court relied upon theprovisions of s. 47 of the Punjab Municipal Act (Punjab ActIII of 1911). The High Court also negatived the contentionthat the Committee was estopped from questioning the statusof the applicants as tenants, having all along admittedlyaccepted rent from them. The appellants moved the HighCourt and obtained the necessary certificates of fitness forComing up in appeal to this Court. The certificates of theHigh Court are dated October 28, 1957. That is how thematter has come before this Court.
It has been argued on behalf of the appellants that theTransfer of Property Act does not apply to the transactionsin question, and that therefore, the High Court was notjustified in insisting upon a registered lease, or even awritten lease, executed608between the parties. It was enough that the tenants in eachcase had given a written Kabuliyat from which the terms ofthe respective tenancies could lee be ascertained. It wasalso contended that the High Court was in error in relyingupon the provisions of s. 47 of the Punjab Municipal Actwhich, it was contended, was subject to the provisions ofthe Act, in view of the overriding provisions of s. 38 ofthe Act. It was further contended that the definitions oflandlord' [s. 2(c)], of 'premises'[s. 2(g)]. and of tenant'[s. 2 (j)] in the Act were comprehensive enough to take inthe transactions between the appellants and the Committee.Reference was also made to s. 3 of the Act to show that apublic body like the Committee was not intended to beexcluded from the opt-ration of the Act.
On the other hand, the learned Solicitor General, appearingfor the Committee, contended that the essential element of'letting' becomes apparent from the consideration of theprovisions of the Act, with particular reference to thedefinitions of landlord', 'Premises' and 'tenant'. Hiscontention was that the key word 'letting' should be equatedwith the creation of an interest in immovable property by avalid contract; hence, if there was no valid contract, therewas no transfer of property, and, therefore, no letting. Ifthere was no letting, the relationship of landlord andtenant was not created between the parties and the amountreceived by the Committee as rent was legally not rent inthe strict sense of the term. Though the Act (lid notprescribe any form of 'letting', the provisions of s. 47 ofthe Municipal Act applied, and as the provisions of thatsection are not in direct conflict with any of theprovisions of the Act, there was no inconsistency betweenthem. That being so S. 38 of the Act was 'out the way ofthe Committee. The Committee, being a corporation, has nocapacity to contract or to transfer property except inaccordance with the provisions of s. 47.
609Admittedly the provisions of s. 47 have not been compliedwith. Therefore, the,, Committee is not bound to recognisethe transactions in question as creating an interest inimmovable property; there being no interest in immovableproperty in favour of the appellants, they cannot be called'tenants' within the meaning of the Act, and' as only atenant can invoke the provisions of s. 8, the applicationsmust be held to be incompetent. There could be no questionof estoppel because both parties knew that under the- lawthere had to be'& transfer of property by the Committee in-accordance with the provisions of s. 47 of the MunicipalAct. It is well settled law that there cannot be anestoppel against the provisions of a Statute.The question whether the petitions under s. 8 of the Actwere competent, it is common ground must depend on whetheror not there was relation. ship. of. landlord' and tenantbetween the parties The learned Attorney General, whoappeared in. support of these appeals contended in the firstplace, that:the definitions of landlord', premises,. and,tenant' in s. 2, cls.(c), (g) and (j) respectively, of theAct make it clear that the person for, the time. beingreceiving rent is the landlord and the, person who is;paying the rent is the tenant of the premises. Thesedefinitions are as follows:
"landlord' means a person who, for the timebeing is receiving, or is entitled to receivethe rent of any premises whether on his ownaccount or on account of, or on behalf of, orfor the benefit of, any other person or as a,trustee, guardian or receiver for any otherperson or who would so receive the rent or beentitled to;. receive the rent, if thepremises were let to a tenant;...'premises' .'moans any, building or Part of abuildings which is., or is intended' to be letseparately for use as residence or for610commercial use or for any other purpose, andincludes-
(i) the garden grounds and outhouses ifany, appertaining to such building or part ofa building ;
(ii) any furniture supplied by the landlordfor use in Such building or part of abuilding;
but does not include a room in a, hotel orlodging house...
'tenant' means any person by whom or on whoseaccount rent is payable for any premises andincludes such sub-tenants and other persons ashave derived title under a tenant under theprovisions of any law before the commencementof this Act...".
The argument is that the Act has been enacted ,to provide;for the control of rents and evictions' and that in makingthese provisions for safeguarding the interests of tenantsunder the Act the provisions of other enactments relating tothe creation of the, relationship of landlord and tenant andregulating the incidence of tenancy and grounds of eviction,the Act has provided for a simple rule that without payingany regard to formalities, the fact of receiving rent by aperson Constitutes him the landlord and the payer of therent the tenant, within the meaning of the Act. The Actdoes not stop to consider whether there is a lease, and ifso, what are the terms contained in the lease regulating therelationship of landlord and tenant, and that if there isany inconsistency between the provisions of the Act and anyother law for the time being in force, the former shallprevail, as laid down in s. 38 of the Act. The sectionreads as follows:
"The provisions of this act and the rules madethereunder shall have effect notwithstandinganything inconsistent therewith contained inany, other law for the ; time being611in force or in any instrument having effect byvirtue of any such law."
With reference to the terms of the section, just quoted, ithas been contended, that the provisions of the Transfer ofProperty Act regulating the grounds of eviction, or even theprovisions of the, Municipal Act, particularly s. 47, haveno legal effect in so far as they are inconsistent with theprovisions of the Act. In this connection it is, assertedthat the formalities required by s. 47 of the Municipal Act,in order to invest binding force to the transfer of propertyor the contract made by. the Committee, are inconsistentwith the provisions of the Act, namely, the definitions oflandlord' 'tenant' and 'Premises'. With reference to s. 47of the Municipal Act, it is further contended that the,section does not confer capacity to contract or to transferproperty but only prescribes the mode for-., entering into acontract or for making a transfer of property by theCommittee, and that therefore s 47 cannot have the effect ofrendering null and void what was done by the Committee,namely, advertising the premises for being allotted to thehighest bidders on terms and conditions as contained in theKabuliyat given by the, tenants. In this connectionreliance was placed upon Crook v. Corporation of Seaford (1)and Deo v. Taniere(2). It has also been urged that theletting' contemplated by the Act does not necessarilyconnote a transfer of property, but simply permitting thetenant to occupy the premises for a sum of money. In otherwords, even a licensee, as distinguished from a lessee,would come within the purview of the Act. In this con-nection reference was made to the Shorter Oxford Dictionary,which contains the following words, inter alia, under the'word let':
"to grant the temporary possession and use ofin consideration of rent or hire".
(1) (1871) L.R 6 Ch, 551. (2) (1848) 116 E.R. 11.44612If this contention is correct, then there cannot be the,least doubt that a licensee would also come within the ambitof the Act. But we are not prepared to hold that the Act,by its terms, intended to be so comprehensive as to includewithin its sweep not only tenants properly so called, butalso licensees. It is true that the dictionary meaningapplies the, term letting' to inducting a tenant and deli-vering possession to him as such, of the premises for aconsideration which can be characterized as "rent', or alicensee who has been permitted to occupy the premises for aconsideration which may be called 'hire', If the argument iscorrect, then a person hiring a room in a hotel as alicensee would also come -within the purview of the Act.But the Act, in terms, has excluded a room in a hotel orlodging house from the definition of 'premises'.It was also contended that it was admitted by the respondentthat rent *as received and receipts for rent were granted byits agents. The use of the word "rent' is, not conclusiveof the matter. It may be used in the legal sense ofrecompense paid by the tenant to the landlord for theexclusive possession of premises occupied by him. It mayalso be used in the generic, sense, without importing thelegal significance aforesaid, of compensation for use andoccupation. 'Rent' in the legal sense can only be reservedon a demise of immovable property. Reference may be made inthis connection to paragraphs II 93 and 11 94 of Halsbury'sLaws of England (Third Edition, Vol. 23) at pages 536-537.Hence, the use of the term -,rent' cannot preclude thelandlord from pleading that, there was no relationship oflandlord and tenant. The -question must, therefore, dependupon whether or not there was a relationship of landlord andtenant in the sense that there was a transfer of interest bythe landlord in favour of the tenant.
In our opinion, the Act applies only to that species of'letting' by which there relationship of land-
613lord and tenant is created, that is to say, by which aninterest in the property-, however limited in duration, iscreated.
Having held that the Act applies to 'letting' which createsan interest in immovable' property we have to determine thequestion whether in these cases there was a contractcreating such a relation. ship. Now, under the PunjabMunicipal Act-, s. 18, a Committee is a corporate body withperpetual succession and a common seal, with power toacquire and hold property and to transfer any property heldby it "subject to the provision of this Act, or of any rulesthereunder". Section 18, therefore, contains theauthorisation in favour of the committee to enter intocontracts and to transfer property belonging to it. Thispower is subject to the other provisions of the Act. Thus,in so far as the Committee's power to enter into a contractor to transfer a property is concerned the power may bedelegated in accordance with the provisions of s. 46. Thecontract to transfer property has to satisfy the conditionslaid down in s. 46 (2) of the Municipal Act if the value oramount thereof exceeds Rs. 500. No such contract can bemade until it has been sanctioned at a meeting of theCommittee. That condition has been satisfied in thesecases. But we have to consider he provisions of s. 47 whichhave been very strongly relied upon on behalf of theCommittee. The section is in these terms :
"47. (1) Every contract made by or on behalf of theCommittee of any municipality of the first class whereof thevalue or amount exceeds one hundred rupees,, and made by oron behalf of the Committee of any municipality of the secondand third class whereof the value or amount exceeds fiftyrupees shall be in writing, and must be signed by twomembers, of whom the president or a vice president shall beone, and countersigned by the secretary:
614Provided that, when the power of entering intoany contract on behalf of the committee hasbeen delegated under the last foregoingsection, the signature or signatures of themember or members to whom the power has beendelegated shall be sufficient.(2) Every transfer of immovable propertybelonging to any committee, must be made, byan instrument in writing, executed by thepresident or vice-president, and by at leasttwo other members of committee whoseexecutions thereof shall be attested by thesecretary.
(3) No contract or transfer of the des-
cription mentioned in this section executedotherwise than in conformity with the pro-
visions of this section shall be binding onthe committee."
Now in order that the transfer of the property in ,questionshould be binding on the Committee, it was essential that itshould have been made by an instrument in writing executedby the President or the Vice-President and at least twoother members of the Committee, and the execution by themshould have been attested by the Secretary. If theseconditions are not fulfilled, the contract of transfer shallnot be binding on the Committee. But it has been contendedon behalf of the appellants that the noncompliance with theprovisions aforesaid of s. 47, quoted above, would notrender the contract of transfer of property void but onlyvoidable. In other words, where the actings of the partieshave given effect to the transactions, as in the instantcases by delivery of possession of the pro. Perty by theCommittee and payment of the rent 'by" the appellants, theabsence of formalities would not render the transactions ofno legal effect But it has to be noted that it was notcontended on behalf of appellants that the provisions ofs.47(3) of the Municipal Act, are not mandatory and615are merely directory.. Such an argument was not 'and couldnot have been advanced, because it is settled Law. that. theprovisions of a Statute in those peremptory terms could notbut be construed as mandatory.
But the learned counsel for the appellants placed a greatdeal of reliance on the decisions: in the cases of Crook v.Corporation of Seaford (1) and Deo v. Taniere (2). In thefirst case, the suit was for specific performance of' acontract by the- Corporation which was evidenced by aresolution of the Corporation, to let to the plaintiff apiece of land the boundaries of which had not been fullydetermined. though there was no contract under seal, Crookpursuance of the contract built a wall and terrace on partsof the land in question. The Corporation brought a suit forejectment, and the plaintiff thereupon filed a bill inChancery for specific performance. It was held by the LordChancellor, Lord Hatherley, confirming the decision of theVice-Chancellor, that though the agreement was not underseal, the corporation, was bound by acquiescence and mustperform the agreement to grant the lease. It must beremembered that was a suit to obtain a lease from thegrantor, the Corporation, that is to say, it was an actionin equity, and the Court of Equity held, in the words of theLord Chancellor, that "at all events, a Court, of Equitycould not allow the ejectment to proceed after the plaintiffhad spent so much money on 'the wall". The decision was,therefore, explicitly based on. the doctrine of 'Standingby'. In that case there is no reference to any statute.,the terms of which could said to have been infringed. Inthe second case [Deo V. Taniere (2)] again there was noquestion of the infringement of any. mandatory provision ofa Parliamentary statute. That is the case of a grant oflease for 99 years, omitting a covenant to build. It washeld, that whether(1) (1871) L.R. 6 Ch. 551. (2) (1848) 116 E.R. 1144.
616 the lease was only voidable, or void, receipt of rent without proof of any instrument under seal could raise a presumption of a demise from seal to year. It is thus clear that neither of those cases, strongly relied upon by the counsel for the appellant is an authority for the provisions that where the statue 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 a. 47 of the Municipal Act prevent the committee from entering 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 cases is clear from the decision of the House of Lords in Young & Co. v., The Mayor and Corporation of Royal Leamington Spa (1). In that case, their Lordships had to consider the effect of s. 174 of the Public Heath Act, 1875 (38 & 39 Act c. 55) which required that every contract made by an urban authority of the value or amount exceeding pound 50 shall be in writing and sealed with the common seal of the authority. It was hold that the provisions of s. 174 were obligatory and not merely directory and applied to an executed 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 question referred was whether the absence of the common seal of the Corporation required by a. 174 of the Public Health Act aforesaid WA* fatal to the plaintiff's claim to recover from the Corporation the costs of the works constructed by the, plaintiff at the instance of the Corporation. The decision of the Court of Appeal, composed of Brett, Cotton and Lindley, L. JJ.
(1) (1888) L.R. 8 App. Cas. 517.
617 confirming the judgment of the Queens Bench Division is reported in. 8 Q.B.D. 579. In the House of Lords, Lord Blackburn made an extensive quotation from the 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 line between contracts for more than pound 50 and contracts for pound 50 and under. Contracts for not more than pound 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 contracts for more than pound 50 are positively required to be under seal; and in a case like that before us, if we were to hold the defendants 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 protection which Parliament intended to secure for them."
It a pears that in England there is a distinction between contracts made under the Common Law by Municipal Corporations which may not be under seal, and contracts made by them in pursuance, of a statute like the one now under consideration. The following except from the Judgment of Brett, L. J., quoted in the judgment of Lord Blackburn, is instructive from this point of view:
"I should wish to say that I have come to the same conclusion after weeks spent 618 in attempting to Come to another. However, I come to the same conclusion as Lord Justice Lindley and Lord Justice Cotton in this case, upon the ground that, although this was a municipal corporation, yet in the transaction in question, it was acting as a 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 this Court which held that the enactment as to the necessity for a seal is mandatory and not merely directory".
The same distinction is very we I brought out in the following observations of Lord Bramwell at page 528 :
"As I think-the case turns on the construction of the statute, I have not thought it necessary to go into the doubtful and conflicting cases governed by the Common Law."
It is noteworthy that neither of the two cases discussed above was even referred to at the bar or by their Lordships 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,47 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 of the Act, as contemplated by s. 38 of the Act. It has not been contended before us that there is anything in the Act which in terms is inconsistent with the provisions of s. 47 of the Municipal Act. But it has been contended that such an inconsistency is implicit in the terms of the Act as they appear from the definitions of landlord', 'premises' and 'tenant'. In our opinion, there is no substance 619 in this contention. We have already pointed' out that those definitions postulate the' relationship of landlord and tenant which can come into existence only by a' transfer of interest in immovable property, in pursuance of a contract. These definitions are entirely silent as to the mode of creating the relationship of landlord and tenant. Therefore, the question is whether 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. 47 of the Municipal Act. In our opinion, the mere absence of such provisions does not create any inconsistency as would attract the application of S. 38 of the Act. It is note- worthy that the 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 had been placed on the doctrine of part performance which has 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 of the Committee is contained in s. 18 and not in s. 47 of the Municipal Act, which only lays down the mode of executing contracts and transfer of property, as appears from the marginal note to the section i. e., the words "Mode of Executing Contract and Transfer of Property". It is true that s. 18 contains the power to enter into a contract and to transfer any property held by the Committee, but s. 47. lays down-the' essential conditions of the exercise of the Power and unless those conditions are fulfilled there could be no contract 'and no transfer of property. In this connection, it was further argued that sub s. (3) of s. 47 only 620 says that a, contract or transfer of Property contemplated in the section executed otherwise than in accordance with the provisions of the section shall not be binding on the Committee. Therefore, the argument further is that the contract may not be binding of it the Committee but it is not void. Now, what is the legal significance of the expression shall 'not be binding on the Committee"? It against the Committee, and it is clear beyond doubt that an agreement not enforceable in law is void. It must, therefore, be held that.the provisions of s. 47 aforesaid are essential ingredients of the power contained in s. 18 of the Act.
The same argument was advanced in another Act form, viz., that the effect of s. 47 of the Municipal Act is not to render the transactions in question between the parties entirely void but it was only declared to be not binding an the Committee. In other words, the argument is that a distinction has to be made between acts which are ultra vire's and those for the validity of which certain formalities are. necessary and have not been gone through. This distinction assumes an importance where the rights of third parties have come into existence and those parties tire not expected to know the true facts as to the fulfilment of those formalities. That it is so becomes clear from the following statement of the law in Halsbury's Laws of England (3rd edition, Vol. 15) paragraph 428 at page 227:
"Distinction between ultra vires and irregular acts. A distinction must be made between acts which are ultra vires and those for the validity of which certain formalities are necessary. In the latter case, persons dealing Without notice of any informality ate entitled to presume omnia rite esse acta. Accordingly a company which, possessing the requisite powers, so conducts it self in issuing debentures as to represent to the public that 621 they are legally transferable, cannot set up any irregularity in their issue against an equitable transferee 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 'enforceability of the contract. The answer lo 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 Volume 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, I any more than by other means, raise against himself an estoppel so as to create a state of things which he is legally disabled from creating. Thus, a cor- porate 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 estoppel 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.
