SONAPUR TEA CO., LTD. versus MUST. MAZIRUNNESSA

April 4.

SONAPUR TEA CO., LTD. v.

MUST. MAZIRUNNESSA

(P. B. GAJENDRAGADKAR, A. K. SARKAR,

K. N. WANCHOO, K. c. DAS GUPTA and N. RAJAGOPALA AYYANGAR, JJ.)

land Holding-Fixation of ceiling-Enactment, if colourable legislation-Constitutional validity-Assam Fixation of Ceiling on Land Holding Act, r957 (Assam r of r957), ss. 4, 5, r6, r8-Assam Land and Revenue Regulation, r886 (Regulation I of r886). ss. 3(g), 9-Constitution of India, Art. JIA(z)(b).

These appeals arose out of two petitions filed in the High Court under Art. 226 of the Constitution challenging the consti-tutional 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 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 rela-tion 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 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 expres-sion.

Thakur Raghubir Singh v. The State of Ajmer, [1959] Supp. l S.C.R. 478, Sri Ram Ram Narain Medhi v. The State of Bombay, [1959] Supp. l S.C.R. 489 and Atma Ram v. The State of P.unjab, [1959] Supp. l S.C.R. 748, referred to.

colourable legislation is one in which the Legislature transgresses the lawful limits of its legislative powers and con-ceals its real purpose under the cover of apparently legitimate and reasonable provisions and thus seeks to do indirectly what it cannot do directly.

K. G. Gajapathi Narayan Deo v. The State of ,Orissa, [1954] S.C.R. 1, referred to.

1 S.C.R. SUPREME COURT REPORTS

It was not correct to say that the impugned Act was colourable legislation whose concealed purpose was to make profit by disposing of land in the manner provided ~y Ch. III or that by pith and substance it was profit makmg measure or that ss. 16 and r8 of the Act were devices to that end. This is broadly contradicted by the whole object of the Act which is measure of agrarian reform, writ large on all its pro-visions and clearly negatived bys. 4 of the Act which provides that in no case can the payment made by the tenant m gettrng the settlement exceed the amount of compensation payable by the Government in acquiring the land.

Sonapur Tea Co., Ltd. v. Must. M azirunnessa

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 235 and 236 of 1960.

Appeals from the judgment and decree dated Janu-ary 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. Chaudhuri, 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 Gajendragadkar ]. 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 Vil-lage Bhoknamari, District Kamrup, in which they challenged the validity of the Assam Fixation of Ceil-ing on Land Holdings Act I of 1957 (hereafter called the Act). The said writ petitions have been dismiss-ed by the Assam High Court substantially on the ground that since the impugned Act falls within the protection of Art. 31A the challenge made by the two appellants to th"e 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,

and so it is with the said certificates that the two appeals have been brought to this Court.

Sonapur Tea co., Ltd. v. Must.

It is not necessary to set out the material facts lead-ing 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 ar 1 'K [the ][respondent ]ll" [Deputy ]h [Commissioner ]t . [and ][Collector ]. . [of ]amrup ca mg upon t em o su m1t return g1vrng the particulars of all their lands in the prescribed form and stating therein their 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.

Mazfrunnessa

dk a1en [. ][d ]raga

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 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 fea.

tures 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 he held by 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 ceiling on existing holding by s. 4. The Act extends to the seven Districts specified in s. 1(2), and from its opera ti on are excepted the lands specified in els. (a) to (e) of s. 2. These clauses refer to !"ands belonging to any religious or charitable institution of public nature, lands held for special cultivation of tea or pur-poses ancillary thereto and lands exceeding 150 highas utilised for large scale cultivation of citrus in a. c0m-pact block by any person before January 1, 1955, lands

1 S.C.R. SUPREME COURT REPORTS

utilised by efficiently managed farms on which heavy r96r investments or permanent structural improvements have been made and whose break np is likely to lead Sonapu. Tea to fall in production, and lands held by sugar fac-Co.,vud. tory or co-operative farming society for cultivation Must. of sugarcane for the purpose of such factory .. It Mazirunnessa would thus be noticed that the measure of agrarian . --reform introduced by the Act has made exceptions in Ga1endragadkar J . regard to lands which it thought should be left out of the operation of the Act in the interest of the eco-nomy 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 subser-vient thereto and includes the sites of buildings appur-tenant to such land. Under s. 3(g) the word 'land-holder' has the meaning assigned to it in the Assam Land and Revenue Regulation, 1886 (Regulation I of 1886). 'Landlord' under s. 3(h) is person immediately under whom tenant holds but does not include the Government; and 'owner' under s. 3(i) includes pro-prietor, 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 person who holds land under another person and is, but for specfal contract would be, liable to pay rent for that land to the other person, and includes person who cultivates the land of another person on condition of delivering 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 pres-cribes ceiling on existing holding. The limit prescrib-ed is 150 bighas in the aggregate subject to its pro-visos. Section 5 empowers the appropriate authori-ties to call for submission of returns by persons hold-ing lands in excess of the ceiling. Section 8 empowers the State Government to acquire such excess lands by publishing in the official gazette 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 pres-cribed by s. 8 is followed by the vesting of the said

'9[[6]]' lands in the State nnder s. 9. On publication of the Sonapur Tea notification under s. 8 all such excess lands ~hall stand o., Ltd. transferred to the State Government from the date of v. the publication of the said notification free from en-Must. cumbrances by their original owner or owners. Under Mazirunnessa s. 11 the Collector is authorised to take possession of a;en raga [. ][a--dk ]ar 1 . [the said lands. Section ]. . [12 ][prescribes ][the ][principles ][of ]compensat10n 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 provi~ions in Chapter II which deals with ceiling on existing holding and acquisition of excess land.Chapter III deals with the disposal of excess land. Under s. 16(1) 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 prescribed period on the following con-ditions, 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 instalments not exceeding five an amount fixed by it but not ex-ceeding 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 pro-visions of the Act against an equal amount which he is liable to pay under cl. (b). Section 16(2) provides that on payment of full amount under sub-section (1) above the land shall be settled with tenant with the status of landholder. Under s. 18 it is provided that if 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 ejected. Chapter IV deals with excess land under annual lease and provides for its taking over. Chapter V puts ceiling on future

acquisition, and Chapter VI provides for ceiling for r96r resumption of land from tenants for personal cul ti va-.c Sonapur Tea tion by the land l or . hapter VII provi es ..:or t Co. Ltd. establishment of Land Reform Board, and lays v. down its functions, while Chapter VIII contains mis-Must. cellaneous provisions. That briefly is the scheme of Madnrnnessa the Act. . . h' . . . . Ga1endrngadka' Th . quest.ton w 10 arises 1or our e01s10n IS w e-ther this Act is protected under Art. 31A of the Con-stitution. This Article has been construed by this Court on several occasions iu dealing with legislative measures of agrarian reforms. The object of such reforms generally is to abolish the intermediaries bet-ween 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 acquisi-tion by the State of any estate or of any rights there-• in'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 way or abridges any of the rights conferred by Art. 14, Art. 19 or Art. 31, provided that, where such law is law made by the Legislature of 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 amend-ing Act which subsequently modified some of the provisions of the original Act, aud 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 Ql' abridged constitute rights in relation to an "estate" as 'aefined by Art. 31A(2)(b).

Ga1endrngadka' . J ·

vVe have already seen the definitions of land, land-holder, 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

r96r to rights in relation to an "estate"? For deciding this question it would be necessary to consider the provi-sonapur Co. Ltd. Tea sions o t existing aw re 1 1 ating to tenure in iorce in v. Assam at the relevant time. The existing law relating Must. to land tenure is to be found in the provisions of the Mazirunnessa Assam Land and Revenue Regulation, 1886 (Regula-. --tion I of 1886). Section 3(g) of the said Regulation Ga;endragadkar J. provides that 'landholder' means any person deemed to have acquired the status of landholder under s. 8. Now, when we turn to s. 8 we find that it provides the manner in which the status of landholder can be acquired; and s. 9 provides for the rights of such landholders. Under s. 9 landholder shall have permanent, heritable and transferable right of use and occupancy in his land 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 very wide • amplitude and as such the 'context requires that it must receive very liberal interpretation. Thus consi-dered 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 con-ceded that having regard to the decisions of this Court in Thakur Raghubir Singh v. The State of Ajmer (Now llajasthan) ([1]), Sri Ram Ram Narain Medhi v. The State of Bombay(') and Atma Ram v. The State of P.unjab ([3]) he would not be able to contend that the view taken by the High Court is erroneous.

Faced with this difficulty Mr. Chatterjee attempted to argue that tho Act is colourable piece of legisla-tion and should be struck down as such. His argument is that though ostensibly it purports to be 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) [1959] Supp. r S.C.R. 478. (2) [1959] Supp. I S.C.R. 489.

(3) [1959] Supp. r S.C.R. 748.

I S.C.R. SUPREME COURT REPORTS

· same in the manner provided by Chapter III. Mr. r96r Chatterjee seemed to suggest that the Legislature shou Id not ave ma it [. ]necessary or t tenants to Sonapur Tea Co. Ltd. exercise an option for taking settlement under s. 16 v. because the exercise of the said option involves the Must. liability to pay the prescribed amount though in five Mazirunnessa instalments, and that, according to Mr. Chatterjee, . -indicates that the State wanted to make profit out of Ga;endragadkar f. the bargain. Mr. Chatterjee's grievance is against the provisions of s. 18 also under which tenant who does not opt for settlement is liable to be evicted. We are not impressed by this argument. The doctrine of colourable 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 reasona-• ble provisions (Vide: K. G. Gajapati Narayan Dea 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 protit? That is the question which calls for our deci-sion. 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 settl-ing the lauds 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 instalments not exceeding five-will never exceed the compensation payable by the State Government for acquisition

(1) [1954] S.C.R. t.

thereof. This provision clearly negatives the assump-Tea tion made by Mr. Chatterjee that any profit is intend-ed to be made in the matter of disposal of excess lands. The State is paying compensation to the per. sons dispossessed under the principles prescribed by s. 12; amongst the persons entitled to sunh compensa-tion tena.nts are included, and when the State pro-]. cee s to se t an s on tenants t l ] 1t . expects t em to pay fair amount of price for the land and puts ceiling on this price that it shall never exceed the amount of compensation payable in respect of the said land. In our opinion this provision is very fair and reasonable and it would be idle to attack it as piece of colour. able 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 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 ground that it is colourable 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 of hearing.

Sbnapur Tea Co. Ltd. v. Must. Maziruunessa --Gajendra"adkar ].

Appeals dismissed.