Sonapur Tea Co., Ltd. Vs. Must.
Mazirunnessa  INSC 77 (4 March 1961)
GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA
CITATION: 1962 AIR 137 1962 SCR (1) 724
CITATOR INFO :
R 1965 SC 632 (11) R 1972 SC 425 (32) E 1990
SC1771 (12) RF 1991 SC1792 (6)
Land Holding-Fixation of ceiling--Enactment,
if a colorable legislation-Constitutional validity --Assam Fixation of Ceiling
on Land Holding Act, 1957 (Assam 1 of 1957), ss. 4, 5, 16, 18 Assam Land and
Revenue Regulation, 1886 (Regulation 1 of 1886), ss. 3(g), 9-Constitution of
India, Art. 31A(2)(b).
These appeals arose out of. two petitions
filed in the High Court under Art. 226 of the Constitution challenging the
constitutional validity of the Assam Fixation of Ceiling on Land Holding Act,
1957. The High Court in dismissing the petitions held that the impugned Act was
protected by Art, 31A of the Constitution. The Act was a measure of agrarian
reform and imposed limits on land to be held by persons in order to bring about
its equitable distribution. The Act as originally passed as also its subsequent
amendment received the assent of the President and this satisfied the
requirement of the proviso to Art. 31A(1)(a) of the Constitution. The question,
therefore, was whether the rights of the appellants which were taken away or
abridged by the impugned Act were "rights" in relation to an estate
within the meaning of Art. 31A(2)(b) of the Constitution.
Held, that the expression "'rights', in
relation to an estate" in Art. 31A(2)(b) of the Constitution is of a very
wide amplitude and construed liberally, as it must be, and considered in the
light of the provisions of ss. 3(g) and 9 of the Assam Land and Revenue
Regulation, 1886, the existing law relating to tenures, and the relevant
definitions contained in the impugned Act, there could be no doubt that the
rights of the petitioners, which the impugned Act extinguished, fell within the
Thakur Raghubir Singh v. The State of Ajmer,
 Supp. 1 S.C.R. 478, Sri Ram Reim Narain Medhi v. The State of Bombay,
 Supp. 1 S.C.R. 489 and Atma Ram v. The State of Punjab,  Supp. 1
S.C.R. 748, referred to.
A colourable legislation is one in which the
Legislature transgresses the lawful limits of its legislative powers ,and
"conceals its real purpose under the cover of apparently legitimate and
reasonable provisions and thus seeks to do indirectly what it cannot do
K. G. Gajapathi Narayan Deo v. The State of
 S.C.R. 1, referred to.
725 It was not correct to say that the
impugned Act was a colourable legislation whose concealed purpose was to make
profit by disposing of land in the manner provided by Ch. III or that by pith
and substance it was a profit making measure or that ss. 16 and 18 of the Act
were devices to that end. This is broadly contradicted by the whole object of
the Act which is a measure of agrarian reform, writ large on all its provisions
and clearly negatived by s. 4 Of the Act which provides that in no case can the
payment made by the tenant in getting the settlement exceed the amount of
compensation payable by the Government in acquiring the land.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 235 and 236 of 1960.
Appeals from the judgment and decree dated
January 23, 1959 of the Assam High Court at Gauhati in Civil Rules Nos. 138 and
139 of 1958.
N. C. Chatterjee, Amjad Ali and K. R.
Chaudhari, for the appellant (in C. A. No. 235 of 1960).
D. N. Mukherjee, for the appellant (In C. A.
No. 236 of 1960).
S. M. Lahiri, Advocate-General, Assam and
Naunit Lal, for the respondents.
1961. April 4. The Judgment of the Court was
delivered by GAJENDRAGADKAR, J.These two appeals arise out of two writ
petitions Nos. 138 and 139 of 1958 filed respectively by the two appellants,
Sonapur Tea Co. Ltd., of 15-D Sambhunath Pandi Street, Calcutta 9, and Musst.
Mazirunnessa, wife of Abdul Gafur of Village Bhoknamari, District Kamrup, in
which they challenged the validity of the Assam Fixation of Ceiling on Land
Holdings Act I of 1957 (hereafter called the Act). The said writ petitions have
been dismissed by the Assam High Court substantially on ground that since the
impugned Act falls within the protection of Art. 31A the challenge made by the
two appellants to the several provisions of the Act under Arts. 14, 19(1)(f)
and 31(2) cannot be entertained Having dismissed the writ petitions principally
on this ground the High Court granted certificates to both the appellants to
come to this Court in appeal, 726 and so it is with the said certificates that
the two appeals have been brought to this Court.
It is not necessary to set out the material
facts leading to the two writ petitions in any detail. It would be enough to
say that under s. 5 of the, impugned Act notices had been served on both the
appellants by the respondent Deputy Commissioner and Collector of Kamrup
calling upon them to submit a return giving the particulars of all their lands
in the prescribed form and stating therein the selection of plot or plots of
land (not exceeding in the aggregate the limits fixed under s. 4) which they
desired to retain under the provisions of the Act. The appellants contended
before the High Court that the impugned Act under which this notice had been served
on them was invalid and ultra vires and so they wanted the notice issued under
s. 5 to be quashed.
That is the only relevant fact which needs to
be stated for deciding the present appeals.
The Act received the assent of the President
on December 7, 1956, and was published in the official State Gazette on January
16, 1957. Subsequently it was amended by the amending Act XVII of 1957 and
assent was obtained to the amendment thus made on November 8, 1957. By a
notification issued by the State Government on February 7,1958, the amended Act
came into force on February 15, 1958.
It is relevant to consider briefly the broad
features of the Act. It has been passed because the Legislature deemed it
necessary to make provision for the imposition of limits on the amount of land
that may be held by a person in order to bring about an equitable distribution
of land. That being the object of the Act the principal provision of the Act
imposes a ceiling on existing holding by s.4. The act extends to the seven
Districts specified in s. 1(2), and from its operation are excepted the lands
specified in cls. (a) to (c) of s.2. These clauses refer to lands belonging to
any religious or charitable institution of a public nature, lands held for
special cultivation of tea or purposes ancillary thereto and lands exceeding
150 big has utilised for large scale cultivation of citrus in a compact block
by any person before January 1, 1955, lands 727 utilised by efficiently managed
farms on which heavy investments or permanent structural improvements have been
made and whose break up is likely to lead to a fall in production, and lands
held by a sugar factory or a co- operative farming society for cultivation of
sugarcane for the purpose of such factory. It would thus be noticed that the
measure of agrarian reform introduced by the Act has made exceptions in regard
to lands which it thought should be left out of the operation of the Act in the
interest of the economy of the State. Section 3 is the definition section. It
defines land as meaning land which is or may be utilised for agricultural
purposes or purposes subservient thereto and includes the sites of buildings
appurtenant to such land. Under s. 3(g) the word 'landholder' has the meaning
assigned to it in the Assam Land and Revenue Regulation, 1886 (Regulation I of
1886). 'Landlord' under s. 3(h) is a person immediately under whom a tenant
holds but does not include the Government; and 'owner' under s. 3(i) includes
proprietor, land-holder or settlement-holder as defined in s. 3 of the Assam
land and Revenue Regulation I of 1886 but it does not include Government.
Section 3(o) defines 'tenant' as meaning a person who holds land under another
person and is, but for a special contract would be, liable to pay rent for that
land to the other person, and includes a person who cultivates the land of
another person on condition of delivering a share of the produce. These are the
only definitions which are relevant for our purpose.
Section 4 which is the key section of the Act
prescribes ceiling on existing holding. The limit prescribed is 150 bighas in
the aggregate subject to its provisos. Section 5 empowers the appropriate
authorities to call for submission of returns by persons holding lands in
excess of the ceiling. Section 8 empowers the State Government to acquire such
excess lands by publishing in the official gazette a notification to the effect
that such lands are required for public purpose, and such publication shall be
conclusive evidence of the notice of acquisition to the person or persons
holding such lands. Acquisition of excess lands prescribed by s. 8 is followed
by the vesting of the said 728 lands in the State under s. 9. On publication of
the notification under s. 8 all such excess lands shall stand transferred to
the State Government from the date of the publication of the said notification
free from encumbrances by their original owner or owners. Under s. 11 the
Collector is authorised to take possession of the said lands. Section 12
prescribes the principles of compensation. and provides the manner in which the
said compensation should be apportioned between the owner and the tenant; and
s.13 provides for the manner of payment of such compensation. Under s. 14 ad
interim payment of compensation can be made as specified. These are the
relevant provisions in Chapter 11 which deals with ceiling on existing holding
and acquisition of excess land.
Chapter III deals with the disposal of excess
land. Under s. 16(l) if there is any cultivating tenant in occupation of the
land acquired from an owner then he shall have the option of taking settlement
of such land within a prescribed period on the following conditions, namely,
(a) that the area of land so settled together with any other lands held by him
or any member of his family either as tenant or as owner shall not exceed in
the aggregate the limit fixed under s. 4, and (b) that he shall pay to the
State Government in one or more equal annual installments not exceeding five an
amount fixed by it but not exceeding the compensation payable by the State
Government for acquisition thereof, provided that he shall have the right to
adjust any amount which he is entitled to receive as compensation under the
provisions of the Act against an equal amount which he is liable to pay under el.
(b). Section 16(2) provides that on payment of full amount under sub-section
(1) above the land shall be settled with a tenant with the status of a
landholder. Under s. 18 it is provided that if a tenant in occupation of any
land acquired -under s. 8 does not take settlement of such land he shall
acquire no right, title and interest in the land and shall be liable to be
Chapter IV deals with excess land under
annual lease and provides for its taking over. Chapter V puts a ceiling on
future 729 acquisition, and chapter VI provides for ceiling for resumption of
land from tenants for personal cultivation by the landlord. Chapter VII
provides for the establishment of a Land Reform Board, and lays down its
functions, while chapter VII contains miscellaneous provisions. That briefly is
the scheme of the Act.
The question which arises for our decision is
whether this Act is protected under Art. 31A of the Constitution. This Article
has been construed by this Court on several occasions in dealing with legislative
measures of agrarian reforms. The object of such reforms generally is to
abolish the intermediaries between the State and the cultivator and to help the
actual cultivator by giving him the status of direct relationship between
himself and the State. Article 31A(l)(a) provides that, notwithstanding
anything contained in Art. 13, no law providing for the acquisition by the
State of any estate or of any rights therein or the extinguishment or
modification of any such rights, shall be deemed to be void on the ground that
it is inconsistent with or takes away or abridges any of the rights conferred
by Art. 14, Art. 19 or Art. 31, provided that, where such law is a law made by
the Legislature of a State, the provisions of this Article shall not apply thereto
unless such law, having been reserved for the consideration of the President,
has received his assent. We have already seen that the assent of the President
has been obtained both for the Act as it was originally passed and for the
amending Act which subsequently modified some of the provisions of the original
Act, and so the requirement prescribed by the proviso to Art. 31A(l)(a) is
satisfied. That raises the question as to whether the rights of the appellants
which are undoubtedly taken away or abridged constitute rights in relation to
an "estate" as defined by Art. 31A(2)(b).
We have already seen the definitions of land,
landholder, landlord and tenant prescribed by s. 3(f),(g),(h) and (o).
It is common ground that the lands sought to
be acquired fall within an "estate" as defined by Art. 31 A(2). Do
the rights vesting in the appellants amount 92 730 to rights in relation to an
"estate"? For deciding this question it would be necessary to
consider the provisions of the existing law relating to tenure in force in
Assam at the relevant time. The existing law relating to land tenure is to be
found in the provisions of the a Assam Land and Revenue Regulation, 1886
(Regulation I of 1886). Section 3(g) of the said Regulation provides that a
'landholder' means any person deemed to have acquired the status of a
landholder under s. 8. No hen we turn to s. 8 we find that it provides the
manner in which the status of a landholder can be acquired; and s. 9 provides
for the rights of such landholders. Under s. 9 a landholder shall have a,
permanent, heritable and transferable right of use and occupancy in island
subject to the payment of revenue, taxes, cesses and rates from time to time
legally assessed or imposed in respect of the land. The remaining two clauses
of this section need not be considered. It would be noticed that the expression
"rights in relation to an estate" is of a very wide amplitude and as
such the context requires that it must receive a very liberal interpretation.
Thus considered there can be no doubt that
the rights of the appellants which have been extinguished undoubtedly
constitute "rights in relation to an estate" as defined by Art. 31A
(2) (b). Indeed this position is- not seriously disputed by Mr. Chatterjee who
fairly conceded that having regard to the decisions of this Court in Thakur
Raghubir Singh v. The State of Ajmer (Now Rajasthan) (1), Sri Ram Ram Narain
Medhi v. The State of Bombay(') and Atma Ram v. The State of Punjab (3 ) he
would not be able to contend that the view taken by the High Court is
Faced with this difficulty Mr. Chatterjee
attempted to argue that the Act is a colorable piece of legislation and should
be struck down as such. His argument is that though ostensibly it purports to
be a measure of agrarian reform its principal object and indeed its pith and
substance is to acquire the property covered by its provisions and make profit
by disposing of the (1)  Supp. 1 S.C.R. 478. (2)  Supp. 1 S.C.R. 489.
(3)  Supp. 1 S.C.R. 748.
731 same in the manner provided by Chapter
III. Mr. Chatterjee seemed to suggest that the Legislature should not have made
it necessary for the tenants to exercise an option for taking settlement under
s. 16 because the exercise of the said option involves the liability to pay the
prescribed amount though in five installments, and that, according to Mr.
Chatterjee indicates that the State wanted to make profit out of the bargain.
Mr. Chatterjee's grievance is against the provisions of s. 18 also under which
a tenant who does not opt for settlement is liable to be evicted. We are not
impressed by this argument. The doctrine of colorable legislation really
postulates that legislation attempts to do indirectly what it cannot do
directly. In other words, though the letter of the law is within the limits of
the powers of the Legislature, in substance the law has transgressed those
powers and by doing so it has taken the precaution of concealing its real
purpose under the cover of apparently legitimate and reasonable provisions
(Vide: K. G. Gajapati Narayan Deo v. The State of Orissa) This position is not
and can not be disputed.
Is Mr. Chatterjee, however, right when he
contends that the pith and substance of the Act and indeed its main object is
to acquire property and dispose of it at a profit? That is the question which
calls for our decision. In our opinion the answer to this question must
obviously be against the appellants. The whole object of the Act which is writ
large in all its provisions is to abolish the intermediaries and leave the
lands either with the tiller or the cultivator.
With that object ceiling has been prescribed
by s. 4, provisions have been made for the acquisition of excess.
lands, and disposal of excess lands in favour
of the tenants have been provided for. It is significant that in settling the
lands upon the tenants it is expressly provided that the payment which the
tenant may have to make -and that too in one or more easy installments not
exceeding five-will never exceed the compensation payable by the State
Government for acquisition (1)  S.C.R. 1 732 thereof. This provision
clearly negatives the assumption made by Mr. Chatterjee that any profit is
intended to be made in the matter of disposal of excess lands. The State is
paying compensation to the persons dispossessed under the principles prescribed
by s. 12; amongst the persons entitled to such compensation tenants are
included, and when the State proceeds to settle lands on tenants it expects
them to pay a fair amount of price for the land and puts a ceiling on this
price that it shall never exceed the amount of compensation payable in respect
of the Paid land. In our opinion this provision is very fair and reasonable and
it would be idle to attack it as a piece of colorable legislation. We have
already seen that the settlement of land on the tenants would make them
landholders and that is the basic idea of the Act. If a tenant does not agree
to take settlement it cannot be helped and so the land would then have to be
taken from him and given over to somebody else who would be prepared to take
settlement. It is thus clear that the object of putting ceiling on existing
holding is to take over excess lands and settle them on actual cultivators Or
tenants and that is the essential feature of agrarian reform undertaken by
several States in the country.
The Act conforms to the pattern usually
followed in that behalf and the attack against its validity on the around that
it is a colorable piece of legislation must therefore fail.
In the result we hold that there is no
substance in the two appeals. They are accordingly dismissed with costs-one set