Gwalior Sugar Co.Ltd. Vs Anil Gupta .

02 November 2012
Supreme Court
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GWALIOR SUGAR CO.LTD. Vs ANIL GUPTA .

Bench: P. SATHASIVAM,RANJAN GOGOI
Case number: C.A. No.-007760-007760 / 2012
Diary number: 1002 / 2008
Advocates: BINA GUPTA Vs B. S. BANTHIA

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 7760 of 2012 (Arising out of SLP (Civil) No. 1861 of 2008)

Gwalior Sugar Co. Ltd. & Anr. … Appellant(s)

Versus

Anil Gupta and Ors. … Respondent(s)

J U D G M E N T

RANJAN GOGOI, J.

Leave granted.

2. This appeal is directed against the judgment and

order dated 01.12.2007 passed by the High Court of

Madhya Pradesh in a Public Interest Litigation

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registered and numbered as Writ Petition

No.1773/2006. By the order impugned in the present

appeal, directions have been issued by the High Court

for demarcation of the surplus land of the appellant –

Company both under the provisions of the Urban Land

Ceiling Act, 1976 (since repealed) (hereinafter

referred to as ‘the Urban Land Ceiling Act’) as well as

the provisions of the Madhya Pradesh Ceiling on

Agriculture Holding Act, 1960 (hereinafter referred to

as “the Ceiling on Agricultural Holding Act). After the

demarcation of the excess land in terms of the

directions issued by the High Court, further directions

have been issued for vesting of the excess land, both

urban and agricultural, in the Government.

Furthermore, the appellant – Company has been

restrained from affecting any transfers of the urban

land allotted to it and all such transfers as may have

been made have been declared as null and void by the

High Court.

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3. A brief resume of the relevant facts in which the

above noted directions have been issued by the High

Court may now be set out:

The appellant, a private limited company, is the

owner of a sugar mill located at Dabra, district

Gwalior in the State of Madhya Pradesh. A total of

215 bighas (approximately) of land was allotted to the

appellant – Company in Samvat 1998 (corresponding

to English Calender year 1941) on the basis of 6

pattas issued by Zamindar in whom the land had come

to be vested. The pattas specified that the land was

meant for setting up of the sugar factory and any kind

of agricultural operations therein was prohibited. The

pattas also specified that the same would be valid till

the existence of the factory. After setting up of the

sugar mill the Company appears to have run into

certain financial difficulties and for the upkeep of the

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sugar mill and for modernization thereof the Company

by a Resolution decided to sell/transfer some parts of

the vacant land allotted to it. In fact some surplus

land stood transferred by way of sale to certain

individuals and the area so transferred is roughly

about 9 bighas. In these circumstances, the Writ

Petition in question was filed as a Public Interest

Litigation contending that surplus land has been

transferred contrary to the terms of the patta in

connivance and collusion with the officials of the State

Government. According to the petitioner more such

transfers were contemplated.

4. The stand of the officials – respondents, initially,

was that land measuring about 178 bighas stood

recorded in the name of the appellant – Company in

the revenue record of Samvat 2013. In the said

records the name of the appellant was recorded as a

“pucca tenant” under Section 54 (vii) of the Madhya

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Bharat Land Revenue and Tenancy Act, Samvat 2007

(hereinafter referred to as ‘the Tenancy Act’).

Thereafter with the coming into force of the MP Land

Revenue Code in the year 1959 the name of the

appellant – Company was recorded as a ‘bhumiswami’

in respect of the aforesaid land. The revenue records

in support of the above facts were in fact enclosed to

the return filed before the High Court on behalf of the

State. A report dated 2.5.2003 of the primary revenue

authority i.e. Naib Tehsildar reciting the above facts

and the fact that the appellant Company was

exempted from the operation of the provisions of the

Ceiling on Agricultural Holding Act by an order dated

8.1.1976 passed by the competent authority was also

enclosed to the said return. Subsequently, however,

an additional return dated 7.8.2007 was filed on

behalf of the state wherein the right of the appellant

to transfer the land contrary to the terms of the pattas

issued to it was questioned, notwithstanding, its

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status as a Bhumiswami under the Land Revenue

Code, 1959.

5. The appellant – Company and its principal

Director who were impleaded respondent Nos.12 and

13 in the PIL, in their return, placed before the High

Court copies of the original pattas granted by the then

Zamindar in Samvat 1997-98 (English Calender year

1941-42). It was claimed that on the basis of the

entries in the revenue records, namely, Khasra of

village Dabra, Samvat 2007 (equivalent to English

calendar year 1950) the status of the appellant –

Company in respect of the land in question was

recorded as ‘Gair Mairusi’. The appellant – Company

had contended that with the coming into force of the

Tenancy Act, w.e.f. 15.8.50, by virtue of the provisions

of Section 54 (vii), the status of the appellant –

Company became that of a “pucca tenant”.

Thereafter, on the coming into force of the Land

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Revenue Code in the year 1959, the status of the

appellant – Company was that of a bhumiswami which

vested in the appellant – Company a right of transfer

of the land under Section 165 (1) of the Code. The bar

imposed on such transfer by sub-section (4) of section

165 did not apply to the case of the appellant –

Company in view of the fact that the land that it was

holding was non-agricultural land. The appellant –

Company, in its return before the High Court, had also

referred to an order dated 22.11.1993 of the Under

Secretary to the Government of India, Ministry of Law

Justice and Company Affairs (Department of Company

Affairs) which had noticed all the above facts

including the reasons for the transfers of some of the

lands held by the appellant – Company already made

or proposed. It was contended that by virtue of the

aforesaid order dated 22.11.93 approval of the Central

Government for commencement of business of sale of

surplus land by the company was granted. Another

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significant fact that was mentioned by the appellant –

Company in its return is a proceeding before the High

Court of Madhya Pradesh in Second Appeal No.482 of

2002 which stood concluded by order dated 25.8.03

holding that the appellant – Company had acquired

the status of Bhumiswami in respect of the land

allotted to it.

6. On a consideration of the respective cases

pleaded by the contesting parties and on due

consideration of the materials on record the High

Court had thought it fit to pass the impugned

directions, details of which have already been noticed.

Aggrieved, this appeal has been filed.

7. We have heard Shri Ranjit Kumar, learned senior

counsel for the appellant and Shri B.S. Banthia,

learned counsel for the respondent Nos. 3-12. None

has appeared on behalf of the PIL petitioners who

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have been impleaded as the respondents 1 and 2 in

the present appeal.

8. Learned counsel for the appellant has contended

that in the revenue records pertaining to the land in

question, as existing prior to commencement of

Tenancy Act, the appellant – Company was recorded

as a ‘Gair Mairusi’. After coming into force of the

Tenancy Act w.e.f. 15.8.1950 the appellant – Company

acquired the status of a “pucca tenant” under Section

54(vii) of the Act. The said status entitled the

appellant – Company to the status of “bhumiswami”

once the MP Land Revenue Code, 1959 came into

force. The aforesaid position, it is pointed out, had

been accepted and acknowledged by the State

Government in the return filed by it before the High

Court. Learned counsel has also pointed out that the

status of the appellant – Company as a bhumiswami

had not been disputed in the additional return filed

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on behalf of the State – wherein the only contention

urged is that such status would not confer in the

appellant a right to transfer the land contrary to the

terms of the patta. Learned counsel has also referred

to the order of the Government of India, Ministry of

Law Justice and Company Affairs dated 22.11.1993 as

well as the judgment and order of the High Court of

Madhya Pradesh dated 25.08.2003 in Second Appeal

No. 480 of 2002 to contend that the transfers already

made or proposed by the appellant – company were

with due permission of the competent authority of the

Government of India and the right of the appellant –

company to affect such transfers, as a bhumiswami,

had attained finality in law by virtue of the judgment

passed in the proceedings of the Second Appeal

before the High Court. Learned counsel had

vehemently argued that the right of a bhumiswami to

transfer the land being a statutory right, the exercise

thereof cannot be curtailed by the conditions of the

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patta, as urged in the additional return dated 7.8.2007

of the State.

9. Proceeding further, learned counsel has pointed

out that the Urban Land Ceiling Act stood repealed

w.e.f. 22.3.1999 and thus was not in force on the date

of the judgment of the High Court. The provisions of

the said repealed Act, therefore, could not have been

applied to the case of the appellant. In so far as the

Ceiling on Agricultural Holding Act is concerned, it is

pointed out that in the report of the Tehsildar dated

02.05.2003 it has already been recorded that the

appellant – Company was exempted from the

provisions of the said Act. In such a situation the High

Court could not have invoked the provisions of either

of the enactments to the present case so as to justify

the directions under challenge.

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10. The State which had initially supported the case

of the appellant before the High Court had reiterated

before us the stand taken by it in the additional

counter filed before the High Court on 7.8.2007.

Shortly put, it is urged that the land held by the

appellant was allotted for the purpose of industry and

not agriculture. It is pointed out that after coming

into force of the Madhya Pradesh Zamindari Abolition

Act, Samvat 2003, w.e.f. 2.10.1951, the land stood

reverted to the Government. Under Section 39 of the

Zamindari Abolition Act it was incumbent on the

appellant to submit an application for grant of a fresh

lease to be issued by the State Government under

Section 101 of the Tenancy Act of 1950. It is

contended that no such application was filed nor any

fresh lease was granted by the State Government

under the aforesaid provisions of the two Acts in

question. The acquisition of the status of

bhumiswami, in the absence of a fresh lease under

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Section 101 of the Tenancy Act, has been questioned

on the aforesaid basis. It is also contended that the

order of the Government of India, Ministry of Law

Justice and Company Affairs dated 22.11.93 was not a

permission authorizing to the appellant – Company to

sell the land. In so far as the Civil Court decree is

concerned, it is contended that the said decree

pertains only to land covered by three specific khasra

Nos. i.e. 1760/1, 1755/1 and 1776/1 and not to the

entire area allotted. In any case according to the

State, the said decree would not be binding on it in as

much as it was not a party to the suit and the

resultant proceedings.

11. The provisions of section 101 of the Tenancy Act

and section 39 of the M.B. Zamindari Abolition Act

may be extracted herein below for the purpose of

necessary clarity in the discussions that will have to

follow:

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Section 101 of the Tenancy Act

“101. Leases for non-agricultural purposes – (1) The Government may grant leases of land to be used for other than agricultural purposes. The rights and liabilities of the lessee of such land shall be such as may be defined by the terms of his lease.

Special leases for agricultural purposes – (1) In order to develop and demonstrate farming by mechanical means or in view of the special circumstances of *1[any tract or piece of land] the Government may also grant leases of land for agricultural purposes on special and specified conditions. The rights and liabilities of the lessee of such land shall be such as may be defined by the terms of the lease.

(2) The Government may either generally or specially delegate any of its powers under this section to such officer as may be specified in this behalf.”

Section 39 of the M.B. Zamindari Abolition Act

“39. Grant of fresh lease for land given for purposes other than agriculture

A person who has taken land on lease from the proprietor for any purpose other than agriculture shall apply within six months from the date of vesting, to obtain from the Government a new lease under Section 101 (1) of Madhya Bharat Revenue Administration and Ryotwari Land Revenue and Tenancy Act, Samvat 2007, and the Government may grant a lease subject to such terms and conditions for securing the rent and utility of land as may be deemed proper. From the date of vesting up to the grant of new lease the person shall be deemed to be a lessee of the Government for that land on the same conditions on which the lease was granted to him by the proprietor. If the Government does not think it proper in the public interest to grant the lease,

1 The words “or place of land” are inserted by M.B. Act No. 18 of 1952.

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the amount of compensation shall be paid at market value.”

12. At the very outset, it must be made clear that

the provisions of the Zamindari Abolition Act, 1951,

have been pressed into service for the first time in the

present appeal. Neither in the pleadings nor in the

arguments made before the High Court on behalf of

the State, the facts now asserted and the legal issues

now raised had been urged. However, the question

raised being with regard to the effect of a statutory

enactment we have considered the same. In the

absence of any pleading that the procedure for grant

of a fresh lease contemplated under section 39 of the

Zamindari Abolition Act had not been followed by the

appellant by making the requisite application as

contemplated by section 101 of the Tenancy Act, no

adverse consequence can be attributed to the

appellant as contended on behalf of the State. Rather,

the status of the appellant as a bhumiswami recorded

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in the revenue records of the later years, in the

absence of any contrary material, will have to be

understood to be pursuant to the grant of a fresh

lease under section 39 of the Zamindari Abolition Act

read with the provisions of section 101 of the Tenancy

Act. Infact, acceptance of the acquisition of the status

of bhumiswami by the appellant in the aforesaid

manner will render it unnecessary for us to go into the

basis of the acquisition of the said status as argued by

the learned counsel for the appellant, which, in any

case, appears to be contrary to the provision of

section 1(2) of the Tenancy Act. The said provision

clearly excludes the villages settled under the

Zamindari system from the purview of the operation

of Part II of the Tenancy Act, which part of the Act,

inter alia, also deals with the acquisition of the status

of “pucca tenant” and “Bhumiswami” by a tenant.

However obliteration of Part II of the Tenancy Act by

operation of section 1(2) thereof does not extinguish

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the different denominations of tenancy including the

status of Bhumiswami which can very well be

acquired by grant of such status by a fresh lease

under sections 101 of the Tenancy Act read with

section 39 of the M.B. Zamindari Abolition Act.

13. The rights of a bhumiswami are clearly

enumerated by Section 165 of the MP Land Revenue

Code which encompasses a right to transfer. The bar

imposed on the right to transfer does not apply to

non-agricultural lands and, hence, would not be

relevant to the present case. If the right of transfer

has been conferred on the appellant by the provisions

of a statute and the bar contemplated does not apply

to the appellant, we do not see how a clause or a

condition in the original patta granted by the

Zamindar in samvat 1978-79 (corresponding to

English Calender year 1940-41) can restrict such a

right. In any case, there is no specific clause or

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condition in any of the original pattas prohibiting or

even restricting the right of the appellant to transfer

any part of the land allotted to it that may be lying

vacant. Neither any material has been placed before

us to enable us to take the view that under terms of

the lease granted under Section 101 of Tenancy Act

and Section 39 of Abolition of Zamindari Act any

restriction or bar had been imposed on the appellant –

Company from making such a transfer.

14. In view of the aforesaid conclusions the issue

with regard to applicability of the Urban Land Ceiling

Act and the Ceiling on Agricultural Holding Act, need

not detains us, save and except to hold that the

provisions of either of the aforesaid Acts, ex-facie, do

not apply to the case of the appellant – Company. We

would further like to observe on the view taken by us

it is not necessary to go into the question as to

whether the decree affirmed by the High Court of

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Madhya Pradesh in S.A. No.482 of 2002 binds the

State or whether the same is in respect of the entire

land holding of the appellant – Company or only a part

thereof.

15. In view of the foregoing discussions and

conclusions reached we allow this appeal and set

aside the judgment and order dated 01.12.2007 of the

High Court as well as the directions contained in the

said order.

...…………………………J. [P. SATHASIVAM]

........……………………J. [RANJAN GOGOI]

New Delhi, November 2, 2012.