IDANDAS versus ANANT RAMCHANDRA PHADKE DEAD BY L. RS.

Citation: [1982] 1 S.C.R. 1197 · Decided: 20-11-1981 · Supreme Court of India · Bench: S. MURTAZA FAZAL ALI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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IDANDAS 
v. 
ANANT RAMCHANDRA PHADKE DEAD BY L. RS. 
November 20, 1981 
[$. MURTAZA FAZAL ALI AND R. B. MISRA, JJ.J 
Transfer of Property Act-Section 106-"manufacturing purpose" tests/or 
deciding-Wheat changed into flour by application of labour and machinery-
Whtther er manufacturing purpose''. 
A piece of open land belonging to the plaintiff (respondent) was given on 
lease to the defendant (appellant). The appellant installed a flour mill on that 
land. He did not use it for any purpose other than running the flour mill. 
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In his suit for eviction of the tenant from the land, the plaintiff claimed 
that the tenancy was from month to month and that a month's notice given by 
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him to terminate the tenancy was sufficient. 
The trial court, on the basis of receipts produced by the plaintiff, held that 
rent was paid on an yearly basis. 
Upholding the view of the District Judge that the lease was not for a 
''manufacturing purpose'', the High Court held that the tenancy was rightly 
terminated by giving a valid notice. 
On further appeal to this Court it was contended on behalf of the tenant 
that the lease was for a "manufacturing purpose", and that under ~ection 106 of 
the Transfer of Property Act it could be terminated only by giving six months' 
notice. 
Allowing the appeal, 
HELD : The lease was from year to year and was for a Hmanufacturing 
purpose", and, therefore, a month's notice was not legal. The suit for ejcctment 
should have failed on this ground. [1201 H] 
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When the country is making rapid strides in various spheres of industrial 
activity the term "manufacturing purpose" must be given the most liberal inter· 
pretation so as to subserve the object of the statute. So interpreted the tests for 
deciding whether a lease was for a "manufacturing purpose" arc (i) that a certain 
commodity is produced; (ii) that the process of production would involve either 
labour or machinery and (iii) that the end product coming into existence after 
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the manufacturing process is complete, should have a different name and should 
be put to a different use. [1200 B 1201 D-E] 
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1J98 
SUPREME COURT REPORts 
[198i] l s.c.R.. 
In the instant case all the three tests have been satisfied because wheat was 
transformed into flour by the use of labour and machinery making it fit 
for human consumption and, therefore, the lease was for a manufacturing 
purpose". [1201 FJ 
Al/enburry Engineers Private Ltd. v. Ran1akrishna Dalmia and Ors. [1973] 2 
S.C.R. 257 followed. 
Joyanti Hosiery Mills 'v. Upendra Chandra Das, A.I.R. 1946 Calcutta 317 
and John Augustine Peter Mirande and Anr. v. N. Datha Naik, A.l.R, 1971 
Mysore 365 approved. 
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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2383 of 
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1977. 
Appeal by special leave from the judgment and order dated 
18th November, 1976 of the Bombay High Court in Civil Appln. 
No. 1741 of 1976. 
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Gobind Ram Bhatia, R. C. Bhatia and P. C. Kapoor for the 
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Appellant. 
Nemo for the Respondent. 
The Judgment of the Court was delivered by 
FAZAL Au, J. This appeal by special leave is directed against 
the judgment of the High Court of Bombay dated December 24, 
1975. 
The short point of law involved in this case is whether the 
lease in question granted by the landlord to the appellant-tenant 
was a lease for manufacturing purposes. In case the lease was for a 
purpose of manufacture then it is manifest that under section 106 
of the Transfer of Property Act the lease could be tenninated only 
by giving six months notice. 
The suit was contested by the defendant-tenant. The plaintiff's 
case was that the tenancy was from month to month and, therefore, 
a month's notice to terminate the tenancy was sufficient and the 
provision under section 106 of the Transfer of Property Act was 
not attracted. The plaintiff also denied that the lease was for a 
manufacturing purpose. The High Court upheld the judgment of 
the District Judge holding that the lease was not for a manufacturing 
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IDANDAS v. ANANT RAMCHANDRA (Pazal Ali, J.) 
1199 
purpose and held that the tenancy was rightly terminated as the 
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notice was valid. 
Mr. Gobind Ram Bhatia, learned counsel for the appellant· 
tenant, has submitted a short point of law before us. 
He submits 
that having regard to the process of manufacturing carried on by the 
defendant, there can be no doubt that the lease was for a manu-
facturing purp)se and could 
be terminated only by six months 
notice under Sect

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