Vithal Yeshwant Jathar Vs.
Shikandarkhan Makhtumkhansardesai  INSC 155 (19 April 1962)
19/04/1962 GUPTA, K.C. DAS GUPTA, K.C. DAS
AYYANGAR, N. RAJAGOPALA
CITATION: 1963 AIR 385 1963 SCR (2) 285
RF 1971 SC 442 (13) R 1989 SC2240 (20)
Watan Lands- Perpetual lease-Fixation of
higher rent by Government-Whether Watandar entitled to enhance rent- Compulsory
acquisition--Apportionment of compensation-If Watandar entitled only to
capitalised value of rent-Bombay Hereditary Offices Act, 1874 (Bom. III of
1874), ss. 5 and 9.
In 1863, the Watandar granted a permanent
lease of watan lands at a fixed rent of Rs. 727/- per year. In 1907 the
Watandar applied under s. 9 of the Watan Act for declaring the lease null and
void and for possession of the lands.
The Collector rejected the application but
directed an additional amount of rent to be paid. The Watandar moved the
Government and by an order dated May 23, 1911 ,the Government fixed the rent at
Rs. 1245/4/-. Some of the lands were compulsorily acquired and the compensation
was apportioned between the Watandar and the tenant in the proportion of 10 :
6. On appeal the High Court held that the Watandar was entitled to claim that
the tenant should pay enhanced rent and on that basis apportioned the
compensation in the proportion of 55 : 45.
Held, that the Watandar was not entitled to
enhance the rent and that he was only entitled to the capitalised value of the
rent as his share of the compensation. In an application under s. 9 of the
Watan Act the Collector has first to decide whether there are reasons for
declaring the alienation null,and void. If he decides that there are good
reasons he is to give the declaration and thereafter he may either transfer the
possession to the Watandar or take action under s. 9(2), maintain the
possession of the alience and collect from him the proper amount as the profits
from the land for payment to the Watandar. In such a case, where the alienation
was a lease, the former lease ceased to be effective and the lessee henceforth
continued in possession on the strength of the Collector's permission. But if
the Collector found no reasons to declare the lease null and void he could take
no action under s. 9(2). In the proceeding of 1907 the Collector had refused
the declaration and consequently he had no jurisdiction to make any 286 order
under s. 9(2) and his order directing the tenant to pay addition rent was
without jurisdiction. From this order it could not be inferred that he had
declared the lease null and void. Nor did the Government declare the lease of
1863 null and void; it merely ordered that the rent should be revised and fixed
at Rs. 1245/4/-. It proceeded on the basis that the lease was subsisting the
order of the Government was one giving sanction to the lease of the Watan lands
to the person in possession at this revised rent keeping the other terms
regarding the lease being permanent and the rent remaining fixed unaltered. The
action of the Government must therefore be held to be under s. 5, and not under
s. 9 of the Act.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 379 of 1957.
Appeal from the judgment and decree' dated
December 3, 1954, of the Bombay High Court in F. A. No. 287 of 1953.
S.B. Jather, E. Udayarathnam and B. P.
Maheshwari, for the appellant.
S.G. Patwardhan, J.B. Dadachanji, S. ,'V.
Andley, Rameshwar Nath and P. L. Vohra, for the respondent.
1962. April 19. The Judgment of the Court was
delivered by DAS GUPTA, J.-This appeal arises out of a reference under s.
30 of the Land Acquisition Act as regards the
apportionment of Rs. 35,102-10-0, the compensation awarded for two plots of
land numbered, Survey No. 37 Kambhapur and Survey No. 137 Narendra. It is no
longer disputed that these form part of a Watan. The dispute as regards the
apportionment has arisen between the Watandar and the person in actual
possession of the land, the appellant before us.
The Land Acquisition Judge made an order that
the compensation be apportioned in the ratio of 10, 6, the 10/15th to be given
to the landlord and the remainder to the tenant. The correctness of 287 this
was challenged in appeal. It was urged that the rent was fixed in perpetuity
and the landlord had no right to increase the rent, and so, the landlord should
get only the capitalised value of the rent payable for the acquired lands and
the remainder should go to the tenant. The High Court held that the landlord
had the right to claim that the tenant should pay enhanced rent and directed
the compensation to be apportioned in the proportion of 55 to 45 between the
landlord and the tenant.
Against this decision this appeal has been
preferred on certificate granted by the High Court.
The real question in controversy is whether
at the date of the acquisition, the landlord (the Watandar) had any right to
enhance the rent in respect of these lands. It appears that in 1963 a permanent
lease was executed by the then Watandar in favour of the appellant's
predecessors. The rent also was permanently fixed by the lease at Es. 727/- per
year. In 1907 the Watandar made an application under s. 9 of the Bombay
Hereditary Offices Act, 1874-which is described in short as the "Watan
Act". In this application he asked for a declaration that the alienation
by the lease of 1863 be declared null and void and the Watandar be put in
possession of the land leased.
The Assistant Collector, before whom the
application come up for hearing rejected the application and refused to put the
Watandar in possession or to cancel the lease of 1863. On appeal the Collector
by his order dated March 16, 1908 maintained the Assistant collector's order
with the modification that he directed an additional amount of rent equal to
the case paid on the land to be paid by the lessees. An appeal to the Commissioner
Then the Watandar moved the Government of
Bombay. The Government, made an order on May 23, 1911, fixing the rent payable
288 for the lands covered by the lease at Rs. 1245/4/-. The effect of this
order by the Government requires careful consideration.
It is to be mentioned, however, that in the
year 1926 the Watandar again moved the Government for a further increase of the
rent, or for the restoration of the lands; and thereupon the Government made an
order in 1927 fixing the rent at Rs. 4300/- and also directing that the rent
leviable should be revised periodically at intervals of 10 years.
In 1928 the tenant brought a suit against the
Secretary of State for India and the Watandar in the Court of the First Class
Subordinate Judge, Dharwar, praying for a declaration that the lands mentioned
in the Schedule to the plaint-which are the lands in respect of which the
orders mentioned above were made by the government-did not form part of the
Watan lands, that in any case the plaintiffs bad acquired the statue of
Watandars and further that the government resolutions of 1911 and of 1927 were
ultra vires. The learned SubordiNate Judge held that the lands did form part of
the Watan and that the Watan Act was applicable to these lands. He also hold
that the order of the Collector in 1908, though defective in form was in
substance one under s. 9, sub-s. 2 of the Watan Act and therefore it could not
be said to be ultra vires. He also held however that the order of Government in
fixing rent at RS. 1245/4/which was well above that the Collector had fixed was
ultra vires; but that the plaintiff was not entitled to any declaration that
the Government resolution of 1911 was ultra wires because of the law of
limitation. The learned Judge further held that the government resolution of
1927 was ultra vires. Accordingly he made an order directing the first
defendant, the Secretary of State for India in 289 Council, not to levy a rent
higher than Re. 1245/4/in enforcement of the resolution of 1911 and declaring
that the higher rent levied by the Collector purporting tobe under the 1927
resolution was unauthorised. He also made an order directing the realisation of
the excess amount of Rs.
4582.2-0 from defendants Nos. 1 and 2.
Against this decision, the Secretary of',
State for India, the defendant No. 1 as also the Watandar, the defendant No.
2 appealed to the High Court. No appeal was
however preferred by the plaintiff. The High Court (Beaumont C. J.
and Wassoodew J.) dismissed the appeal,
except as regards the order directing both the defendants Nos. 1 and 2 to pay
the excess amount. The learned Judges altered this to a direction that the
amount should be recovered from the defendant No. 2, the Watandar, only. Except
for this they dismissed the appeal. They held in agreement with the learned
Subordinate Judge that the government's order of 1927 was ultra vires. The
learned Judges were of opinion :
(1) that the order by government in 1911 was
not an order under s. 9 and could only be considered to be legal on the basis
that it was a grant of a fresh lease by the Watandar at the rent of Rs.
1245/4/- with the sanction of government under s. 5 of the Watan Act; and (2)
that in any case in making the order in 1927 the government was acting beyond
their powers as any action under s. 9 of the Watan Act must in the first
instance be taken by the Collector and could not be taken initially by the
The result is that as between the parties,
viz., the Watandar and the tenant it can no longer be disputed that the
government resolution fixing the rent of the Watan lands at Rs. 1245/4/- is
legally binding. In deciding the question whether it is open to the Watandar to
increase the rent it is necessary to decide whether the government's 290 action
can be properly held to be one under s. 9 or sanctioning a fresh lease at Rs.
Before the High Court it was urged on behalf
of the tenant- appellant that the earlier decision of that Court, which has
been mentioned above, that the order of the government fixing the rent at Rs.
1245/4/- was not an order under s. 9 and amounted in law to the sanction of the
government to the grant of a fresh lease at Rs. 1245/4/- to the former tenant
operated as res judicata between the parties. The learned Judges of the High
Court have rejected this contention in the view that what the Court said on the
earlier occasion was obitor. The correctness of this view is challenged before
us by the appellant. It is urged that the fact that another ground was given by
the High Court (on the earlier occasion) for its conclusion that the government
order of 1927 could not stand does not alter the position that this ground that
the government order of 1911 was not one under s. 9, sub-s. 2 but amounted to a
sanctioning of a fresh lease was also decided as a basis for the ultimate
conclusion. It is well settled that if the final decision in any matter at
issue between the parties is based by a Court on its decisions on more than one
point-each of which by itself would be sufficient' for the ultimate
decision-the decision on each of these points operates as res judicate between
the parties. (Vide Kishori Lal v. Devi Prasad Annammalai v.Lakshmanan; (2) It
was pointed out, however, on behalf of the respondent that the tenant did not
file any appeal at all against the Subordinate Judge's decision refusing to
interfere with the government's order and so before the High Court no question
as regards the government's order of 1911 was at issue. For that reason, it is
argued the High Court's decision on the earlier occasion as regards the nature
of the order of 1911 cannot operate as res judicata.
(1) A. I. R. (1950) Pat. 50. (2) A.I.R.
(1939) Mad. 433.
291 We do not propose to investigate the
question whether the High Court's earlier decision that the government's order
of 1911 amounted in law to sanctioning a fresh lease operate;
as res judicata or not,, as, quite
independently of that decision, we think it proper to hold that the
government's order of 1911 is not an order under s. 9 (2) of the Watan Act but
amounted only to a sanction of a fresh lease.
Section 9 of the Watan Act is in these words
"(1) Whenever any watan or, any part thereof, or any of the profits
thereof, whether assigned as remuneration of an official or not, has or have,
before the date of this Act coming into force, passed otherwise than by virtue
of, or in execution of, a decree or order of any British Court and without the
consent of the Collector and transfer of ownership in the Revenue records, into
the ownership or beneficial possession of 'any person not a watandar of the
same watan, the Collector may, after recording his reasons in writing declare
such alienation to be null and void, and order that such watan, or any part
thereof, or any of the profits thereof, shall from the date of such order
belong to the watandar previously entitled thereto, and may recover and pay to
such watandar any profits thereof accordingly.
(2)If such part of a watan be land, it shall
be lawful for the Collector, instead of transferring the possession of the
land, to demand and recover the full rent ordinarily paid by tenants of land of
similar description in the same locality, and the amount so recovered shall be
considered as the profits.
The decision of the Collector as to what is
the full rent shall be final" 202 The relief which a Watandar can obtain
under this section is in the first place a declaration that the alienation by
which a transfer of ownership or possession was effected was null and void.
When such declaration is given the Collector may do one of two things. He may
either transfer the possession of the land of the Watan to the Watandar as a
consequential relief of the declaration; or instead of transferring such
possession he may recover for the Watandar the profits of the land. The measure
of such profits would be the full rent ordinarily paid by tenants of land of
similar description in the same locality.
The first thing which the Collector has
therefore to decide when an application is made by a Watandar for relief under
s. 9 is : whether there are reasons for declaring the alienation null and void.
If he decides that there are no such reasons the application must be rejected.
If, on the contrary, the Collector is satisfied that there are good reasons for
declaring the alienation null and void he is to record his reasons and give a
declaration as prayed for that the alienation was null and void. Having made
such declaration he is then to decide whether the possession should transferred
to the Watandar or action should be taken under s. 9(2) that is, instead of
transferring the possession of the land, be should collect from the person in
possession the proper amount as the profits from the land, for payment to the
Watandar. It is important to notice that action under sub-section 2 can be
taken only on the basis that the alienation has ceased to have any legal force.
Thus where the alienation was by way of
lease, action under s.9(2) can be taken only on the basis that the lease is no
longer effective in law and the relationship of landlord and tenant has ceased
between the Watandar and the person in possession. Where the Collector takes
action under s. 9(2), the person 293 formerly in possession as a lessee,
continues in possession henceforth not as 'a lessee but on the strength of the
Collectors's permission only. In other words, in taking action under s.9(2) the
Collector is not creating a fresh lease in place of the lease that has been
declared null and void but only directs that the person in possession is to
continue in possession subject to the payment of such amount as he decides to
be the full rent ordinarily paid by tenants of land of. similar description in
the same locality.
The Assistant Collector, before whom the
application of the Watandars, predecessors of the present respondent under s.9
of the Watan Act came up for consideration rejected the application of
Matunkhan asking that the lands enjoyed by Bhaskarrao Jather on a perpetual
lease should be' fully restored to his possession cancelling the lease passed
in 1863." That is, he refused the prayer for a declaration that the
alienation was null and void necessarily refused the prayer for consequential
relief As has been already indicated, the Collector who heard the appeal was of
opinion that the order appealed against "was undoubtedly correct in the
main" but still he ordered '-an additional amount of rent equal to the
cess to be paid," There is no suggestion in the Collector's order that in
his view the Assistant Collector had been wrong in thinking that there are no
reasons for declaring the alienation to be null and void.
On the contrary, the Collector's order
indicates that he agreed with the Assistant Collector in the view that the
alienation could not be declared null and void. To read this appellate order as
making by implication a declaration that the lease of 1863 was null and void is
not only to read into it words which are not there but indeed to go against the
clear tenor of the words which have been actually used.
There is no justification in our opinion, to
hold that when the 294 Collector made the order that an additional amount of
rent equal to the cess be paid he must have had in mind the provisions of'
s.9(2) of the Watan Act and so the entire order should be read as giving first,
by implication a declaration that the lease was null and void and, secondly,
making an order for collection of profits on behalf of the Watandar from the
person in possession. It is true that under the law the Collector was not
entitled to make this order for payment of additional rent unless he first
declared the previous lease to be null and void and then found that the
previous rent together with the additional amount of rent represented the full
rent ordinarily paid by tenants of land of similar description in the same locality.
From the mere fact that this order was made
by him for payment of additional amount of rent equal to cess, it is not
however permissible to work back and imagine something which was not said 'by
him. When the matter came up to the government after the Commissioner had
dismissed the' appeal from the Collector's decision the government also made no
declaration that the lease of 1863 was null and void. But, after setting out
certain circumstances which seemed to show that at the time when the lease was
granted the interests of the Watandar were not properly considered by the
lessee who held a quasi fiduciary relation towards the Watandar, the government
ordered :-"The rent should therefore now be revised and fixed at Rs.
1245/4/- being a sum equal to the present a rental plus the judi plus the local
The government was thus clearly acting on the
basis that the person in possession was a tenant of the Watandar but rent for
the tenancy should be fixed at Rs.1245/4/-. Such action can not by any stretch
of imagination be considered to be an action under s.9 of the Watan Act. The
only legal basis that can be found for the government's action is in s.5 of the
295 That section provides that without the
sanction of the State Government....................................... it
shall not be competent to a Watandar to mortgage, charge, lease or alienate,
for a period beyond the terms of his natural life, any watan or any part
thereof, or any interest therein, to or for the benefit of any person who is
not a watandar of the same watan. By necessary implication this section
authorises the State Government to sanction the mortgage, charge, alienation or
lease, by a Watandar, for a period beyond the term of his natural life of any
watan, or any part thereof, or any interest therein. to or for the benefit of
any person who is not a watandar of the same watan, and on such sanction being
given the Watandar has power to act accordingly. It is known that after the
order of the government made in 1911., the former tenant continued in
possession and the Watandar received from him the rent fixed by the government,
that is Rs.1245/4/- for the Watan. In all these circumstances, it is reasonable
to hold that by the order of 1911 the government was giving its sanction to the
lease of the watan lands to the person in possession at this revised rent. In
consequence of the government's order therefore a lease came into existence at
the rate of Rs. 1245/4/- in place of the old lease of 1863.
If that be the position is the Watandar
entitled to increase his rent? There was no document in writing for the lease
which came into existence after the government's order of 191 1. It is quite
clear, however, from the order of the government that the only change it
sanctioned in the terms of the former lease was as regards rent. That was
changed from Rs.727/- to Rs.1245/4/-; but the other terms, namely , that the
lease was permanent and the rate of rent would remain fixed from the date of
creation of the lease remained unaltered. To use the words of Chief Justice 296
Beaumont in the earlier litigation between the parties: "the Government
resolution dated the 23rd May, 1911 amounts to an opinion to a confirmation of
the 1863 lease with a modification as to the rent." The Watandar had
therefore no right to increase the rent.
The result is that out of the amount of
compensation awarded for these lands, the respondent being the landlord, is
entitled to only the capitalised value of the rent. The rent for the entire
Watan, which is stated to be 400 acres of land, being Rs. 1245/4/- the
proportionate rent for the lands acquired, that is, 30 acres and 32 gunthas
works out at about Rs.95/9/-. The capitalised value of this at twenty- five
times, amounts to Rs-2389/1/-. The apportionment should therefore be that
Rs.2389/1/of the amount of compensensation be awarded to the respondent and the
remainder to the appellant.
For the reasons mentioned above, we allow the
appeal and direct the compensation to be apportioned in the manner mentioned above.
The .appellant will get his costs here and below.