K.C Agarwal, J.:— Bungalow No. 17, Kanpur Road, Allahabad belongs to the Methodist Church, Allahabad. This was allotted to Dr. (Smt.) D. Kaur in 1954. Dr. (Smt.) D. Kaur was employed as Medical Officer Incharge, Dufferin Hospital, Allahabad in that year. Subsequently, she resigned from government service in or about the year 1956, and started her private practice.

2. Smt. Kanti Khare, the petitioner, filed an application under Section 16 read with Section 12 of the U.P Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as Act XIII of 1972) (for the allotment?) of the aforesaid bungalow. She alleged that Dr. (Smt.) D. Kaur had constructed a residential building for herself at Nyaya Marg known as ‘Poorab Paschim’. Hence, the accommodation in dispute would be deemed to have fallen vacant under Sec. 12(3) of U.P Act XIII of 1972. The application made by the petitioner was referred for enquiry under Rule 8 to the Rent Control and Eviction Officer, who found that there was no vacancy. The Rent Control and Eviction Officer, thereafter, rejected the application on November 28, 1977 on the ground of being barred by principle of res judicata. The Petitioner filed a revision before the District Judge which was transferred to the Additional District Judge, Allahabad and was dismissed on May 23, 1978. Against the aforesaid order, the petitioner filed the present writ. The writ was allowed by Hon. S.J Hyder, J., on May 7, 1981 and the case was remanded to the Rent Control and Eviction Officer for fresh decision in accordance with the observations made in the aforesaid judgment. Being aggrieved, Dr. (Smt.) D. Kaur filed an appeal to the Supreme Court which was allowed on August 10, 1981 and the writ petition was sent back to this court for a fresh decision. The relevant portion of the judgment of the Supreme Court asking the High Court to decide the writ afresh, is quoted below:

“The learned single Judge of the High Court has taken the view that an applicant for allotment of accommodation on the ground of deemed vacancy is entitled to be heard before an order is made by the Rent Control and Eviction Officer but this view taken by the learned single Judge seems to be contrary to the decision of another single Judge of the High Court in Munnoo Lal v. District Judge decided on 6th April, 1979 (reported in 1979 All Rent Cas 334). It is, therefore, necessary that so far as this particular question is concerned, the conflict between the decision of two judges of the High Court should be resolved by a Division Bench of the High Court. Moreover, we find that the High Court has laid down certain guidelines for the purpose of deciding whether the accommodation in the present case is residential or non-residential and remand the case to the Rent Control and Eviction Officer for the purpose of deciding that question in accordance with such guidelines. We are of the view that the High Court need not have remanded the case to the Rent Control and Eviction Officer but should have decided the question itself on the basis of evidence which was already led by the parties. We would, therefore, set aside the decision of the High Court and remand the case to the High Court with a direction that the matter may be disposed of anew by a Division Bench of the High Court according to law in the light of the observations contained in this judgment”.

3. Pursuant to the judgment of the Supreme Court, this bench was constituted for deciding the writ petition. The first question that arises for our decision is whether the view taken by Hon. B.N Sapru, J. in Munnoo Lal v. District Judge (1979 All Rent Cas 334), lays down the law correctly. For deciding this question, it is necessary to mention a few more facts. Earlier, the application giving rise to the present writ petition, the petitioner had applied to the Rent Control and Eviction Officer for allotment of bungalow No. 17, Kanpur Road, Allahabad, on May 4, 1977. This application was referred for enquiry to Rent Control Inspector, who made an ex parte inspection and gave his report on July 29, 1977. The report of the Inspector was that there was no vacancy. The Rent Control and Eviction Officer dismissed the application for allotment by an order dated July 30, 1977.

4. The argument was that as the first application had been rejected, the second application for allotment on which the impugned order was passed, was not maintainable. This argument of the counsel found favour with the Rent Control and Eviction Officer and the Additional District Judge. But Hon. S.J Hyder, J. did not agree with the aforesaid view and set aside the same. His opinion was that as the order dated 30th July, 1977 was passed behind the back of the petitioner, the same was void and could not operate as res judicata. In that connection, the learned Judge held that the principles of natural justice required giving of an opportunity to the petitioner before the order dated 30th July, 1977 was passed. As this opportunity had not been given, the order was a nullity. The submission made before us was that there was a statutory obligation on the Rent Control and Eviction Officer to give an opportunity to the petitioner to substantiate his case for allotment. This argument was controverted by the learned counsel for the respondent that there was no statutory provision requiring giving of an opportunity, hence, the Rent Control and Eviction Officer had jurisdiction to decide the application without hearing the petitioner.

5. The question that arises for decision is whether there was any statutory obligation on the Rent Control and Eviction Officer to hear the petitioner before rejecting the application. If not, did the rule audi alteram partem make it necessary on the Rent Control and Eviction Officer to give an opportunity to the petitioner. R. 8 deals with ascertainment of vacancy. The relevant portion of this rule is as under:—

“The District Magistrate shall, before making an order of allotment or release in respect of any building which is alleged to be vacant under S. 12 or to be otherwise vacant or to be likely to fall vacant, get the same inspected.”

6. Under R. 8(2), the Inspector, is required to inspect the building as far as possible in the presence of the parties and submit his report after eliciting the necessary facts. The conclusion of the report is then to be notified by pasting on the notice board fop general information. Under R. 8(3), an objection to the notification of the vacancy has to be decided considering the evidence that the objector or any other person may adduce.

7. Counsel for the petitioner placed reliance on Section 34(8) and R. 27 of the Rules in support of his submission. R. 27 deals with local inspection. It lays down that where the District Magistrate proposes to inspect a building for purposes of deciding any case or for purposes of ascertaining whether any facts referred to in S. 12 exists, the Prescribed Authority should give notice of the same to the parties or their agents. In the Proviso appended to sub-r. (2) of R. 27, a provision has been made for not giving of such a notice if the purpose of inspection is likely to be frustrated by the giving of such notice. This Rule is indicative of the requirement of serving notice on the parties. The expression “parties” used in R. 27 and R. 8(3) cannot be confined only to landlord, tenant and occupier. It has to be given a natural meaning which should, in our opinion, include a person applying for allotment as well. Justice cannot be done in the case of deemed vacancy if the person applying for allotment is not heard.

8. Sri Raja Ram Agarwal, learned counsel for the contesting respondent urged that R. 8 confers power of filing objection if a vacancy is declared upon the landlord, the tenant and the occupier. It does not confer any right of filing any objection to the applicant for allotment against the report of the Inspector notifying that there was no vacancy. Counsel urged that as there are only three classes of persons who have been given the right to file objection, the Court cannot create a fourth class for holding the right of filing objection by a person who had applied for allotment. The rule of interpretation well established is that it should be a reasonable one which carries out the intention and object for which a provision of law is enacted. Under S. 16 an application can be filed for allotment when there is actual vacancy or there is deemed vacancy. The person who applies for allotment is known as applicant for allotment. It is at his instance that the machinery starts. He may not have a right to get allotment, but he can bring, necessary evidence before the Rent Control and Eviction Officer that a vacancy, exists. He is not a stranger who can be shown the gate on the ground of having no interest in the matter. In the event of the report of the Inspector that there is no vacancy, the duty cast on the Rent Control and Eviction Officer is to hear the application for allotment and dispose it of on merits in accordance with law. It cannot be contended that the report of the Inspector is a last word and has to be taken as a gospel truth. The purpose of the report is only to ascertain the facts as existing on the spot. The report was not made final otherwise there was no need to make a provision of inviting objections by posting the same on the notice board. If an objection can be filed lawfully by taking an action against notification of vacancy, there is no reason to think that an objection against the report of the Inspector that no vacancy exists is barred. The object of local investigation is not so much to collect the evidence which can be taken any way but to obtain evidence which from its peculiar nature can only be had on the spot and to elucidate any point which is left doubtful on the evidence taken before the Court. A report of the Inspector is merely to assist the Rent Control and Eviction Officer. It is not in any way binding on him who can arrive at its own conclusion, which may be at variance with such report. The Rent Control and Eviction Officer is empowered to take into due consideration the report submitted by the Inspector. He cannot dispose of the application made for allotment by accepting the report behind the back of the person applying for allotment treating the report as final. The value of the report submitted by the Inspector is certainly open to question. We are, therefore, of opinion that the construction of R. 8 did not justify the action of the Rent Control and Eviction Officer dropping the case of allotment.

9. Although we have found on interpretation of R. 8 itself that it had not been complied with, the order of the Rent Control and Eviction Officer dated 30th July, 1977 is void. We are otherwise also of opinion that even if there was no statutory obligation, the principle of natural justice made it obligatory on the Rent Control and Eviction Officer to give an opportunity to the petitioner to submit her case, and non-compliance of the said Rule has rendered the said order to be invalid. It did not make the order final and binding.

10. In Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664 : AIR 1981 SC 818, the observations made are (para 25):—

“But two fundamental maxims of natural justice have now become deeply and indelibly ingrained in the common consciousness of mankind, as pre-eminently necessary to ensure that the law is applied impartially…………………”

11. In Maneka Gandhi's case, ((1978) 1 SCC 248 : AIR 1978 SC 597, Bhagwati J. observed:—

“Natural justice is a great humanising principle intended to invest law with fairness and to secure justice and over the years it has grown into a widely pervasive rule affecting large areas of administrative action. The inquiry must, always be: does fairness in action demand that an opportunity to be heard should be given to person affected? (para 58). The law must now be taken to be well settled that even in an administrative proceeding, which involves civil consequences, the doctrine of natural justice must be held to be applicable.” (Para 61).

12. Another decision of the Supreme Court which has a bearing on the controversy in hand is Mohinder Singh Gill v. Chief Election Commissioner, New Delhi, (1978) 1 SCC 405 : AIR 1978 SC 851. It was observed (Para 75):

“Fair hearing is thus a postulate of decision-making cancelling a poll, although fair abridgement of that, process is permissible. It can be fair without the rules of evidence or forms of trial. It cannot be fair if appraising the affected and appraising the representations is absent. The philosophy behind natural justice is, in one sense, participatory justice in the process of democratic rule of law.”

13. In the instant case, we think that he petitioner was entitled to a hearing being given before the application was rejected.

14. Sri Raja Ram Agarwal, learned counsel for the respondents, however, urged that as the statute is silent on the requirement of giving hearing to such a person, it must follow as a necessary implication that the rule making authority did not want any right of hearing to be conferred on such a person. It is indisputable that the rules of natural justice can operate only in area not coveved by any law validly made (per Hegdey J. in A.K Kraipak v. Union of India, ((1969) 2 SCC 262 : AIR 1970 SC 150). If, therefore, a statutory provision either expressly or by necessary implication excludes natural justice then the Court cannot ignore the mandate of law. Whether or not the application of principles of natural justice in a given case has been excluded, wholly or in part, depends upon the language and basic scheme of the provisions conferring the power, the nature of power, the purpose for which it is conferred and the effect of the exercise of that power, (See Union of India v. J.N Sinha, (1970) 2 SCC 458 : AIR 1971 SC 40).

15. After examining the scheme of the Act and the Rules made thereunder, the purpose for which Section 12 had been enacted, we are of opinion that it is not possible to hold that the legislature has expressly or impliedly barfed the giving of opportunity to the person who applies for allotment. To hold that such a right has been excluded would not be possible to be done in the instant case. The necessary result of what we have said above, is that the order dated 30th July, 1977 was void and nullity. It had no effect in the eye of law.

16. For the reasons given above, we are unable to agree with the learned Judge who decided Munnoo Lal v. District Judge (1979 All Rent Cas 334) (supra). To us, it appears that the learned Judge was not right in holding that since the petitioner does not have any-constitutional right and the application moved by him does not involve civil consequences, he was not entitled of the hearing being given. The learned Judge has also distinguished Maneka Gandhi v. Union of India, ((1978) 1 SCC 248 : AIR 1978 SC 597). It is true that it was a case of impounding the passport. But the law laid down in this case is of wide application. Its applies ability could not be excluded by confining its operation to the facts of that case.

17. In Mohinder Singh's case, ((1978) 1 SCC 405 : AIR 1978 SC 851), the Supreme Court considered the import of expression “civil consequences.” Applying the law laid down therein, we think that the rejection of the application of the petitioner for allotment was such which involved civil consequences. “Civil Consequences” cover infraction of not merely property or personal rights but of civil liberties, material deprivation and non-pecuniary damages. In his comparative (comportment?) every citizen in his civil life inflicts a civil consequence. The rejection of the application, without hearing the petitioner, affected his right to get the allotment conferred by U.P Act No. XIII of 1972. This is a right capable of being enforced or redressed by the machinery provided in the Act.

18. It was admitted by the counsel for the contesting respondent that under S. 18 of U.P Act No. XIII of 1972 a person, whose application has been rejected for allotment, has a right to file revision. He, however, urged that as the limited right of filing revision is conferred, this court should not hold that such a person applying for allotment has a right to be heard in the allotment proceedings. We are unable to subscribe to the said view. The fact of conferment of right of revision goes a long way to demonstrate that the legislature did not prohibit or exclude the hearing to be given to an applicant for allotment. If he is entitled to file a revision, there is no reason to think that why should he not be heard in the allotment proceedings. Such a revision, if filed, is not likely to serve any purpose as the applicant has filed no evidence on the record proving the case.

19. As the judgment of the Rent Control and Eviction Officer dated 30th July, 1977 rejecting the application was passed behind her back, the principles of res judicata did not apply. The second application was, therefore, maintainable.

20. The next submission of the learned counsel was on the applicability of principles of res judicata. The res judicata principle is that question directly in issue and decided by a court of competent jurisdiction cannot be re-litigated in future between the same parties or their successor-in-interest in the same court or another court of concurrent jurisdiction. The doctrine is that an existing final judgment rendered on merits, without fraud or collusion by a court of competent jurisdiction, is conclusive of right, questions and facts in issue, as to the parties. It is a rule of judicial administration grounded on the principle of bringing to an end the litigation. The petitioner's argument was that the nature of proceedings in the present case being quasi in rem, the decision even if was behind the back of the petitioner, would be treated to be a judgment about the status of building, viz that it was no; vacant and that it would be binding in all subsequent proceedings taken in respect of the said premises. We find no substance in this submission. The doctrine of res judicata is bottomed of the question that the party to be affected or some one with whom he is in privity has litigated. If a party who had no opportunity of litigating an issue, the judgment given in the said proceedings cannot operate against him. In the present case, the petitioner cannot be said to have relitigated a matter which has been previously determined in an action between himself and the contesting respondent. The Rent Control and Eviction Officer dropped the proceedings. The necessary result of dropping the proceedings was that no decision on merits was arrived at. As no decision was arrived at, nothing can be said to have been settled by the judgment relied upon by the contesting respondent. For applying the principle of res judicata, it is basic that the party sought to be debarred must have been also actually heard or by any fiction of law be deemed to be heard. Nothing of the sort happened in the present case. We are also not in agreement with the submission of the counsel for the other side that the nature of the proceedings in the present case was quasi in rem. It was a litigation between the two parties and the decision given thereon would be binding only on them. It did not involve any adjudication on the status of any particular subject matter. It was essentially a dispute between the parties claiming the right in controversy and does not directly or indirectly affect the status of the subject matter.

21. As a result of what we have said above, we find that the learned Additional District Judge wag in error in treating the earlier judgment as final and holding it to be binding on the parties. The learned Additional District Judge simply referred to the controversy on merits and gave no finding. His judgment mainly was that since the earlier proceedings had been dropped by the Rent Control and Eviction Officer on the report that a major portion of the premises was being used for clinic, hence, the second application was not maintainable. In the absence of any opportunity being given to the petitioner, to show cause against the report of the Inspector and file evidence in support of her case, no value could be attached to the said judgment.

22. The learned Additional District Judge had also made some observations on the merits of the case. We have noted above that the application had been made by the petitioner for allotment on the ground of deemed vacancy. The relevant portion of sub-sec. (3) of S. 12 is as under:—

“In the case of residential building, if the tenant or any member of his family builds or otherwise acquires in a vacant state or gets vacated a residential building in the same city, municipality, notified area or town area in which the building under tenancy is situate, he shall be deemed to have ceased to occupy the building under his tenancy.”

23. Section 16 of the Act confers right of allotment of premises. This section contemplates, two types of vacancies, viz., actual and deemed vacancy. S. 12 contemplates cases of deemed vacancy. Sub-sec. (3) of S. 12 lays down that if a tenant or any member of his family constructs residential building, he shall be deemed to have ceased to occupy the building under his tenancy. In the instant case, the petitioner filed the application for allotment on the basis of deemed vacancy. She asserted that the respondent had constructed a residential building at Nyaya Marg hence, she has ceased to occupy the building in question. The contesting respondent refuted the allegations of the petitioner and alleged that the house known as “Purab Paschim”, 29-B/2. Hastings Road (Nyaya Marg), was constructed by her son Dr. Kamal Kumar, M.B.B.S She has alleged further that since Dr. Kamal Kumar did not have sufficient finance, she only made contributions and thus, technically became a co-owner of the said building although it was exclusively made for Dr. Kamal Kumar. According to her case, after its completion, the house was occupied by Dr. Kamal Kumar, who was separate in mess, earning and living from his parents.

24. The next plea taken was that the house in question for which allotment application had been filed, was not a residential building, hence S. 12(3) did not apply.

25. The pleadings of the parties gave rise to the following questions which were as under:—

(i) Whether house No. 29-B/2 Nyaya Marg belonged to Dr. D. Kaur and had been built by her?

(ii) Whether Dr. Kamal Kumar was a member of the family of Dr. D. Kaur.

(iii) Whether Bungalow No. 17 Kanpur Road was a residential building?

26. A residential building is a building which is used for residential purpose, i.e in which the people reside or dwell. The word “residence” is equivalent to “residential” in contradiction to “business” and has reference to the use or mode of occupancy to which the property may be put. A building used as a place of abode, and in which no business is carried on, is used for residence purpose. In India, it is not unknown that a building is used both, for residence as well as for commercial purpose. In such an event the controversy required to be decided is as to what is the dominant or the main purpose. It is the dominant purpose which could determine the nature of building. S. 12(3) could apply only to a case of residential and not non-residential. Hence, a distinction has to be always kept in mind between the two buildings applying sub-sec. (3) of S. 12. The contesting respondent pleaded that she was occupying the building in dispute not for residential purpose but also for business purpose i.e for her profession. The case of the petitioner is that the petitioner is wholly, if not mainly, occupying the premises in question for residential purpose. The petitioner has claimed that Dr. D. Kaur has got her clinic at Zero Road and is not using the premises in question for her profession. In order, therefore, to find out the character what was necessary was that the premises was used mainly by Dr. D. Kaur for residential, purpose. If the premises to which S. 12(3) is sought to be applied is dominantly used for non-residential purpose, it is unreasonable to hold that the tenant has ceased to occupy the same. In Prem Chand v. District Judge, Dehradun, (1977) 1 SCC 254 : AIR 1977 SC 364, the Supreme Court was called upon to consider the applicability of Explanation IV. In that case, the portion let out consisted of two rooms in which the tenant with his wife two young sons and a daughter was residing. He was also running a tailoring shop in one of the rooms. The tenant contended that as business was also being done the premises was not a residential one. This argument was repelled by the High Court. The High Court's judgment was affirmed and the Supreme Court found that the fact that in one of the rooms, he was running a tailoring shop, was not sufficient to convert what otherwise to all intents and purposes was the residential building into a non-residential building. This decision would be helpful in taking the view that it is the main purpose or the dominant purpose which is the governing factor and not the subsidiary use of a house. In this connection reference may be made to a decision of the Supreme Court reported in Busching Schmilz Pvt. Ltd. v. P.T Menghani, (1977) 2 SCC 835 : AIR 1977 SC 1569. In that case the Supreme Court observed as under (Para 17):—

“Use or purpose of the letting is no conclusive lest. Likewise, the fact that many poor persons may sleep under bridges or live in large hume pipes or crawl into verandahs of shops and bazars cannot make them residential premises. That is a case of reduction ad absurdum.”

27. In the instant case, there are no facts on record to enable the High Court to decide the above question. If that fact that the house 29-B/2, Nyaya Marg did not belong to respondent No. 3, was found in her favour, Section 12(3) would not apply. Neither the Additional District Judge nor the Rent Control and Eviction Officer gave any finding on this controversy. Evidence was led in the case before the Rent Control and Eviction Officer. The respondent No. 3 was of the idea that the present proceedings were barred, hence evidence which could be produced by her was withheld. In the absence of the evidence on this controversy, it appears to be unjust to decide the same in favour of the one or against the other. The evidence is also required for deciding the other controversies. The affidavits filed by the parties were insufficient to assist this court to decide the points arising for adjudication. In this state of affairs, the guidelines alone would not be sufficient to decide the question whether the accommodation in the present case was residential or non-residential. We have no alternative but to remand the case to the Rent Control and Eviction Officer with a direction to permit the parties to lead evidence on the controversies, mentioned above and to decide the same thereafter in accordance with law.

28. Counsel for the contesting respondent placed reliance on Section 14 and asserted that as the said respondent has continued in occupation of the building with the consent of the landlord, she would be deemed to be an authorised tenant of the building. Section 14 is not applicable to the facts of the present case.

29. If the contesting respondent has built a residential house and other requirements for applying the same are established, she would be deemed to have ceased to occupy the premises in question. She would not be entitled to get the benefit of Section 14 of the Act which is meant for the different purposes.

30. For the reasons given above, the writ petition succeeds and is allowed. The orders and judgment of the learned Additional District Judge and that of the Rent Control and Eviction Officer are quashed. No order as to costs.

31. Since the impugned judgment is not final, and the case does not involve any substantial question of law of general importance, we refuse to grant leave for appeal to the respondent to the Supreme Court.

32. Petition allowed.