State of
Karnataka Vs. Shankara Textiles Mills Ltd.
[1994] INSC 524 (18
October 1994)
Sawant,
P.B. Sawant, P.B. Agrawal, S.C. (J)
CITATION:
1995 AIR 234 1995 SCC (1) 295 JT 1994 (6) 567 1994 SCALE (4)559
ACT:
HEAD NOTE:
The
Judgment of the Court was delivered by SAWANT, J.- The respondent is a public
limited company and owned a total land of 49 acres and 38.25 guntas in Davanagere Village. At the relevant time, it had its factory in an area of 13
acres and 32.25 guntas which was converted into non-agricultural land under
Section 95(2) of the Karnataka Land Revenue Act (hereinafter referred to as the
'Revenue Act'). The remaining land, viz., 36 acres and
6.5 guntas
was not converted into non-agricultural land (hereinafter referred to as the
'disputed land') with the result that for the purposes of the Revenue Act, it
continued to be considered as agricultural land.
2.Improvement
Board, Davanagere, sought to acquire land to the extent of 28 acres and 14 guntas
from the disputed land for the purpose of 'Devraj Urs Layout'. The acquisition
proceedings were started under the provisions 297 of Karnataka Improvement
Boards Act, 1976. In pursuance of the final notification issued in the year
1977, the possession of the land was taken by the Improvement Board on 9-8-1978. Since the Land Acquisition Officer did not make the
award in respect of the acquired land, the respondent- Company approached the
High Court for relief by a writ petition in which an order was passed on 4-2-1983 directing the Land Acquisition Officer to pass the
award. The appeal filed by the Improvement Board against the said order was
dismissed on 13-11-1983. Thereafter, the Land Acquisition
Officer made his award. Since, however, the amount payable under the Award
exceeded Rs one lakh, the award was referred to the Divisional Commissioner, Bangalore for approval as provided under the
rules on the subject. The Divisional Commissioner did not approve of the award.
Hence the Company filed another writ petition seeking a direction to the
Divisional Commissioner to deal with the award in accordance with law. That
writ petition was allowed on 19-7-1984 and
the Divisional Commissioner was directed to dispose of the proceedings arising
out of the award within a period of two months from the date of receipt of the
order of the Court. In spite of this direction, the Divisional Commissioner did
not pass any order in the said proceedings.
3.During
the pendency of these proceedings, the respondent- Company filed a declaration
under Section 79-B(2)(a) of the Karnataka Land Reforms Act, 1961 (for short
'the Act') stating therein that it held the entire disputed land as
agricultural land. It further appears that the respondent- Company claimed
exemption from the provisions of the said Section 79-B, under Section 81(1)(b)(ii)
of the Act on the ground that the disputed land was mortgaged to the Mysore
State Financial Corporation on 3-6-1982. The
Special Deputy Commissioner passed an order exempting the disputed land from
the provisions of Section 79-B. Against the said order, the State preferred an
appeal before the Appellate Tribunal which was allowed with the direction to
take action under Section 79-B of the Act.
4.Against
the said order of the Appellate Tribunal, the respondent Company approached the
High Court by way of a writ petition. The High Court by the impugned decision
allowed the writ petition by holding that the Improvement Board as an agency of
the Government having taken possession of the land under Section 16 of the Land
Acquisition Act, in the acquisition proceedings, the land had vested in the
Government free from all encumbrances. Hence the question of the Government
exercising its power to withdraw from acquisition of the land did not arise.
The Court further held that there was no automatic vesting of the disputed land
in the State under Section 79-B of the Act, since the vesting under the said
provision could take place only upon a declaration by notification under
Section 79-B(3) of the Act. For this purpose, the Court relied upon its earlier
decision in Mysore Feeds Ltd. v. State of Karnataka1. The Court held, relying upon the said decision, that the land which is
agricultural may cease to be agricultural by 1 (1988) 1 Kar LJ 310 (Kant) 298
its usage for a non-agricultural purpose although there is no order under the
Revenue Act permitting the conversion of the agricultural land into
nonagricultural land. The Court, therefore, held that looking to the usage of
the entire land which was in the possession of the respondent-Company, even the
disputed land had no longer remained agricultural within the meaning of Section
2(18) of the Act and hence the direction given by the Appellate Tribunal to the
Special Deputy Commissioner to take action under Section 79-B of the Act, could
not be sustained. It is aggrieved by the said decision that the State has
preferred the present appeal.
5.Two
questions arise in this appeal. The first is whether the land can be deemed to
have been permitted to be converted for non-agricultural use merely because it
was used for non-agricultural purposes although, admittedly, no permission
under Section 95(2) of the Revenue Act was taken, to do so. The second question
is whether under Section 79-B of the Act, the land vests in the State
Government prospectively from the date of the notification or retrospectively
from the date of the coming into operation of the Act. The first question has
been answered by the High Court in the affirmative while on the second
question, the High Court has taken the view that the land vests in the
Government from the date of the notification. According to us, both the answers
are wrong in law.
6.
Section 95(2) of the Revenue Act at the relevant time read as follows:
"95.
Uses of agricultural land and the procedure for use of agricultural land for
other purposes.-(1) (2)If any occupant of land assessed or held for the purpose
of agriculture wishes to divert such land or any part thereof to any other
purpose, he shall apply for permission to the Deputy Commissioner who may,
subject to the provisions of this section and the rules made under this Act,
refuse permission or grant it on such conditions as he may think fit:"
7. The
obvious purpose of this section is to prevent indiscriminate conversion of
agricultural land for non- agricultural use and to regulate and control the
conversion of agricultural land into non-agricultural land. Section 83 of that
Act provides for different rates of assessment for agricultural and
non-agricultural land. That provision strengthens the presumption that
agricultural land is not to be used, as per the holder's sweet will, for
nonagricultural purposes. This is also clear from the absence of any provision
under that Act requiring permission to convert non-agricultural land into
agricultural land. In a country like ours, where the source of livelihood of
more than 70 per cent of the population, is agriculture, the restriction placed
by the Revenue Act is quite understandable. Such provisions and restrictions
are found in the Revenue Acts of all the States in the country. The provision
has, therefore, to be construed as mandatory and given effect to as such.
8. The
High Court has obviously ignored the mandatory nature of the said provision. On
this point, after referring to an earlier decision of the same Court in Mysore Feeds
Ltd. case1 the Court has held as follows:
299
"As held in the above case, land which is agricultural may cease to be
agricultural for various reasons. Theoretically such land may fall within the
definition of 'Land' in Section 2(18) of the Act. However, in the absence of
any specific finding regarding the nature or usage of the land as agricultural,
the Special Deputy Commissioner cannot treat it to be an agricultural land
merely on account of the fact that permission for conversion of the land under
Section 95(2) of the Karnataka Land Revenue Act was sought.
Even
otherwise, admittedly, the land in question does not satisfy any of the
characteristics as required under aforesaid definition investing Respondent 2
with the jurisdiction to take proceedings under Section 79-B of the Act.
Furthermore, since vesting could take place only on a declaration being made as
provided under sub-section (3) of Section 79-B of the Act, a declaration by the
holder at some earlier point of time in respect of the land cannot vest the
authority with the jurisdiction to pass an order of vesting notwithstanding the
fact that the land by then had ceased to be an agricultural land and treated as
such since long. This view is also in conformity with the scheme of the Act,
inter alia, regarding disposal of surplus land vesting in the State as provided
under Section 77 of the Act." 9.Thus the High Court has proceeded on the
basis that there is no specific finding regarding the nature and usage of the
land as agricultural and hence, the Special Deputy Commissioner could not treat
it to be an agricultural land merely on account of the fact that permission for
conversion of the land under Section 95(2) of the Revenue Act was sought (but
admittedly not given). Secondly, it has proceeded on the footing that the land
in question does not satisfy any of the characteristics as required under the
definition of 'land' in Section 2(18) of the Act, i.e., Karnataka Land Reforms
Act investing the authorities with the jurisdiction to take proceedings under
Section 79-B of the Act. We are afraid that the High Court has misread the
facts on record. The consistent stand taken by the authorities is that the land
was never converted for non- agricultural use as required by the provisions of
Section 95(2) of the Revenue Act. The mere fact that at the relevant time, the
land was not used for agricultural purpose or purposes subservient thereto as
mentioned in Section 2(18) of the Act or that it was used for non- agricultural
purpose, assuming it to be so, would not convert the agricultural land into a
non-agricultural land for the purposes either of the Revenue Act or of the Act,
viz., Karnataka Land Reforms Act. To hold otherwise would defeat the object of
both the Acts and would, in particular, render the provisions of Section 95(2)
of the Revenue Act, nugatory. Such an interpretation is not permissible by any
rule of the interpretation of statutes. What is further, the respondent-Company
had itself filed a declaration under Section 79-B(2)(a) of the Act stating
therein that the entire disputed land was agricultural land and had claimed
exemption from the provisions of the said Section 79-B under Section 109 of the
Act on the ground that the land was mortgaged to the Mysore State Financial
Corporation. We are, therefore, unable to agree with the view taken by the High
Court on the point.
300
10.It
is for these reasons that we do not approve of the decision in Mysore Feeds
Ltd. case1 which stands expressly overruled.
11.Coming
now to the second question, here again, the High Court has missed the wood for
the tree. The object of the Act, viz., the Karnataka Land Reforms Act which
came into force on 2-10-1965 is, among other things, to confer ownership on
tenants, to place ceiling on land holdings and to distribute the surplus land
among the members of the Scheduled Castes and Scheduled Tribes, dispossessed
tenants unregistered as occupants, displaced tenants having no land, landless
agricultural labourers, landless persons whose gross annual income does not exceed
Rs 4800 and ex-military personnel whose gross annual income does not exceed Rs
12,000, and among the released bonded labourers and other persons residing in
villages, whose gross annual income does not exceed Rs 2000.
12.Chapter
V relating to "Restrictions on (Holding or) Transfer of Agricultural
Lands" was inserted in the Act by Act 1 of 1974 and came into effect from 1-3-1974. It contains Sections 79-A, 79-B and 79-C, among
others.
Section
79-A, inter alia, prohibits acquisition of land by certain persons. It states
that on and from the commencement of the Amendment Act, i.e. Act 1 of 1974, no
person who or a family or a joint family which have an assured annual income of
not less than Rs 50,000 (earlier Rs 12,000) from sources other than agricultural
lands shall be entitled to acquire any land whether as landowner, landlord,
tenant or mortgagee with possession or otherwise or partly in one capacity and
partly in another.
13.Sub-section
(3) of Section 79-A states that every acquisition of land otherwise than by way
of inheritance or bequest in contravention of the section shall be null and
void.
14.Section
79-B which falls for consideration in the present case reads as follows:
"79-B.
Prohibition of holding agricultural land by certain persons.- (1) With effect
on and from the date of commencement of the Amendment Act, except as otherwise
provided in this Act,- (a) no person other than a person cultivating land
personally shall be entitled to hold land; and (b) it shall not be lawful for,
(i)an
educational, religious or charitable institution or society or trust, other
than an institution or society or trust referred to in sub-section (7) of
Section 63, capable of holding property;
(ii)a
company;
(iii)an
association or other body of individuals not being a joint family, whether
incorporated or not; or
(iv)a
cooperative society other than a cooperative farm, to hold any land.
301
(2)Every such institution, society, trust, company, association, body or
cooperative society,- (a) which holds lands on the date of commencement of the
Amendment Act and which is disentitled to hold lands under sub-section (1),
shall, within ninety days from the said date furnish to the Tahsildar within
whose jurisdiction the greater part of such land is situated a declaration
containing the particulars of such land and such other particulars as may be
prescribed; and (b) which acquires such land after the said date shall also
furnish a similar declaration within the prescribed period.
(3)The
Tahsildar shall, on receipt of the declaration under subsection (2) and after
such enquiry as may be prescribed, send a statement containing the prescribed
particulars relating to such land to the Deputy Commissioner who shall, by
notification, declare that such land shall vest in the State Government free
from all encumbrances and take possession thereof in the prescribed manner.
(4)In
respect of the land vesting in the State Government under this section an
amount as specified in Section 72 shall be paid.
Explanation.-
For purposes of this section it shall be presumed that a land is held by an
institution, trust, company, association or body where it is held by an
individual on its behalf." 15.Section 79-C provides for penalty for
failure to furnish a declaration under Section 79-A or Section 79-B and for
furnishing a false declaration. Section 80 bars transfer of agricultural land
to non-agriculturists.
Section
81 states that the provisions of Sections 79-A, 79-B and 80 shall not apply to
(a) the sale, gift, or mortgage of any land or interest therein in favour of
the Government (b) the mortgage of any land or interest therein in favour of (i)
a cooperative society and (ii) a financial institution, among others. It is not
necessary to refer to the other provisions of the said Chapter.
16. It
will thus be clear from these provisions that no person is permitted to acquire
or hold agricultural land except as provided in the Act with effect from 1-3-1974.
There
is no dispute in the present case that the respondent Company filed a declaration,
as required under Section 79- B(2)(a), stating therein that the disputed land
which was an agricultural land was in its possession.
17.A
reading of the provisions of sub-section (3) of Section 79-B shows that after a
declaration is received by the Tahsildar, he has to make an enquiry and send a
statement containing the prescribed particulars relating to the land in
question, to the Deputy Commissioner, and it is the Deputy Commissioner who
thereupon issues a notification declaring that the land shall vest in the State
Government and takes possession thereafter of such land. The enquiry to be held
by the Tahsildar, the act of sending of the statement pertaining to the land to
the Deputy Commissioner and the issuance of notification by the Deputy Commissioner
thereafter, are all acts 302 consequent upon the filing of the declaration by
the landholder. Where no declaration is made by the holder of the land or the
declaration made by him is false, the Tahsildar has to issue under Section 79-C
a notice to him to show cause as to why the penalty specified in the notice
should not be imposed upon him. If the Tahsildar, after considering the reply,
if any, comes to the conclusion that the failure to furnish the declaration was
without any reasonable cause, or that the false declaration was made knowingly,
he is empowered to impose a penalty and also to require such person to furnish
the declaration within a period of one month from the date of his order. If
tile person fails to comply with the said order of the Tahsildar, his right,
title and interest in the land concerned is liable to be forfeited to the State
Government as and by way of penalty. A combined reading of Sections 79-B and
79-C, therefore, shows that the crucial date of vesting of the land in the State
Government is the date on which Sections 79-B and 79-C came into operation,
i.e., 1-3-1974.
Otherwise,
the date of vesting in the Government would vary according to the acts and
omissions of the holder of the land in making the declaration and the consequent
acts and omissions of the Tahsildar and the Deputy Commissioner. In cases where
the holder of the land files a declaration within the initially stipulated time
and where the Tahsildar and the Deputy Commissioner act promptly, the. land
would vest in the State Government on a date earlier than in cases where either
the holder of the land or the Tahsildar or the Deputy Commissioner commits
defaults or delays in their obligations and duties at the relevant stages. It
is against the scheme of the Act to hold that the date of the vesting of the
land in the State Government should be variable according to the acts or
omissions of the individuals concerned. That would make nonsense of the
relevant provisions of the Act. It is, therefore, both in conformity with the
object of the Act as well as the true intent of the provisions of Section
79-B(3) to hold that whatever the date of notification of the Deputy
Commissioner, the date of vesting of the land will be the date on which the
said provision came into operation, viz., 1-3-1974. It is necessary in this
connection to remember that the relevant expression in sub-section (3) of
Section 79-B reads as "... the Deputy Commissioner ... shall, by
notification, declare that such land shall vest in the State Government......
The section does not leave it to the Deputy Commissioner to mention the date
from which the land shall vest in the State Government. That is as it should
be. If the intention was otherwise, nothing prevented the legislature from
providing that the Deputy Commissioner would by notification declare that the
land shall vest in the State Government "from such date as may be stated
in the notification". There is no such provision in the said sub- section
(3).
18.Shri
Javali, the learned counsel for the respondent- Company invited our attention
to certain provisions in the Act to contrast the language of the said
provisions with that of Section 79-B(3). We find that far from helping his
contention, the language of the said provisions militate against it.
19.Section
15(6) of the Act provides for resumption of land by soldier or seaman.
Sub-section (6) thereof states:
303
"Where the Tahsildar on application by the tenant or otherwise and after
such enquiry ...
is
satisfied ... he shall, by notification declare that with effect from such date
as may be specified in the notification, the land leased shall stand
transferred to and vest in the State Government (emphasis supplied) 20.Section
44 provides for vesting of land of the tenants in the State Government for
conferment of ownership on them.
Sub-section
(1) thereof provides that:
"All
lands held by or in the possession of tenants ... immediately prior to the date
of commencement of the Amendment Act, ... with effect on and from the said
date, stand transferred to and vest in the State Government." (emphasis
supplied) 21.Section 67 provides for surrender of lands in certain cases.
Subsection (3) thereof states that:
"If
the person concerned files declaration ...
the
Tribunal may ... pass an order approving the surrender and the said land shall,
thereupon be deemed to have been surrendered by such person." (emphasis
supplied) 22.Section 68 provides for vesting of land surrendered by limited
owner. It reads as follows:
"Where
the land surrendered under Section 67 is by an owner (other than a limited
owner), the State Government may take over such land on the service of the
order under Section 67 and such land shall thereupon vest in the State
Government....." (emphasis supplied) 23.Section 71 provides for vesting of
land surrendered by tenant. Sub-section(3) thereof reads as follows:
"In
cases where possession of the land surrendered by a tenant does not revert to
the owner ... the State Government may take over the land on the publication of
the notification under Section 73 and the land shall thereupon vest in the
State Government (emphasis supplied) 24.Section 79-A, as stated earlier,
provides for prohibition of acquisition of landby certain persons. Sub- section
(5) thereof reads as follows:
"The
Tahsildar shall ... send a statement containing ... to the Deputy Commissioner
who shall, by notification, declare that with effect from such date as may be
specified in the notification, such land shall stand transferred to and vest in
the State Government. ... From the date specified in such notification the
Deputy Commissioner may take possession of such land in such manner as may be
prescribed." 25.It will thus be noticed that the Legislature had taken
pains to mention in the other provisions the specific dates from which the
consequences in question will follow. There is a reason for doing so. Unless
the land to be vested in the State Government is first ascertained, no date of
vesting of such land could be fore-determined. That is not the case under Section
79-B, since it provides for the vesting in the Government of all agricultural
lands held by 304 certain persons like the respondent-Company. This is apart
from the fact that the provisions of the other sections cannot help the
interpretation of Section 79-B(3) the language of which is self-evident and is
in conformity with the intent of Section 79-B and the Act.
26.It
is for this reason that we are unable to agree with the decision of the High
Court in Mysore Feeds Ltd. case1 on which the impugned decision of the High
Court has also kept reliance and the said decision stands overruled on this
point as well.
27.In
the result, we set aside the impugned decision of the High Court, restore that
of the Appellate Tribunal and allow the appeal. In the circumstances, there
will be no order as to costs.
Back