Vinodchandra Sakarlal Kapadia vs State of Gujarat and Ors.

43 & 14, 17, 17B, 27, 29, 32, 32A, 32B, 32F, 32H, 32I, 32O, 32P, 32PP, 32PPP, 32QQ, 32R, 32U, 33(1), 63A, 64, 84C, 88B, 88E – Agricultural land was in the cultivating possession of a tenant, who became deemed purchaser under the Act as he was cultivating the land on tiller’s day – Land bequeathed through Will in favour of appellant – However, it was found that the appellant was not an agriculturist and the disposal by way of Will in his favour was contrary to s.63 – Land was declared to be vested in the State – Division Bench inter alia held that s.63 bars the transfer of agricultural land to a non-agriculturist for non-agricultural purpose unless permission is obtained from Collector/authorised officer – Held: Provisions of the Act intend to confer the advantage of statutory purchase upon a cultivating tenant, and see that “the tiller of the land” is conferred ownership w.r.t the lands cultivated by him as well as the dwelling house occupied by him – In cases where the tenant is unable to exercise the right of purchase because his holding would go beyond ceiling limit, the land would not revert to the landlord, but in terms of s.32P, it must come to the persons or entities listed in the priority list (includes agricultural labourers, landless persons) – If a tenant or any other person from the priority list is conferred ownership in respect of the agricultural land or when a landlord is allowed to retain the land surrendered by his tenant, each of them is obliged to cultivate the land personally – In case any of them is unwilling, the land must be given to those who principally depend upon agricultural operations for their sustenance – If a person is a beneficiary of such statutory purchase and wishes to transfer his holding, the law obliges that he must take prior sanction from the Collector – A transfer inter vivos would normally be for consideration where the transferor may get value for the land but the legislation requires previous sanction of the concerned authority so that the transferee can step into the shoes of transferor and carry out all the obligations – As against this, if a testamentary disposition which does not have the element of consideration is to be permitted, and if it is assumed that ss.43 & 63 do not get attracted, the land can be bequeathed to a total stranger and a nonagriculturist who may not cultivate the land himself leading to engagement of somebody as a tenant on the land – Legislative intent to do away with absentee landlordism; to protect the cultivating tenants and to establish direct relationship between the cultivator and the land would then be rendered otiose – In the context of the entire scheme, the term “assignment” used in s.43 must include testamentary disposition as well – View taken by Division Bench is correct – In pith and substance, the legislation and the concerned provisions are completely within the competence of State Legislature – Interpretation of Statutes – Doctrine of pith and substance – Indian Succession Act, 1925 – Land Laws and Agricultural Tenancy. Dismissing the appeals, the Court

HELD: 1.1 A) In terms of Section 32, on the tillers’ day every tenant satisfying the requirements spelt out in Section 32(1), and upto the ceiling limit as laid down in Section 32A, is deemed to have purchased from his landlord, free from all encumbrances, the land held by him as tenant.

B) The purchase price payable by the tenant for such deemed purchase is to be determined in terms of Section 32H, according to which, in case of a permanent tenant the purchase price has to be equal to six times the rent, while in case of other tenants, the purchase price would not be less than 20 times the assessment, and not more than 200 times the assessment. C) In case the proceedings for eviction of the tenant are pending, the deemed date of purchase will stand postponed in terms of the first proviso to Section 32.

D) Even if the tenant had lost the possession before the tillers’ day, in certain cases the possession can be restored to him and the benefit of statutory purchase can be enjoyed by him as stipulated in sub-sections (1A) and (1B) of Section 32. The benefit of statutory purchase is also made available to tenants in areas within the limits of Municipal Boroughs, or within the limits of Municipal Districts as contemplated by Section 32(4) of the Act.

E) If the landlord is under a disability, as stated in Section 32F, the right to purchase the land can be exercised after cessation of disability. In such cases, the period within which the right to purchase could be exercised was initially a fixed period, but facility is given in Section 32F(1A) that even if the period had expired, the tenant is still deemed to have purchased the land. F) Even a sub-tenant of a permanent tenant is entitled to the right of deemed purchase in terms of Section 32I and all the provisions concerning deemed purchase are to apply to such sub-tenant. The shares of purchase price are then to be allocated in terms of Section 32I (3).

G) If the tenancy is created after the tillers’ day, in terms of Section 32O, as it stood before its deletion (vide Gujarat Act No.10 of 2009), a tenant could exercise the right of purchase within one year from the commencement of his tenancy. H) If the purchase has become ineffective or there was failure on the part of the tenant to exercise the right of purchase, the Collector under Section 32P either suo motu, or on an application, can pass appropriate directions in terms of Section 32P(2). In such cases, the land is to be disposed of to the persons in the priority list. At the top of the priority list is the tenant himself, in case he is willing to accept the offer of sale, followed by various entities and persons including agricultural labourers, land-less persons, small holders and persons belonging to Scheduled Castes and Scheduled Tribes.

I) If none of those persons in the priority list come forward to purchase the land, the land is to vest in the State Government, whereupon in terms of Section 32P(4) the purchase price can be determined, which will then be paid to the owner of the land.

J) Where the purchase in favour of persons from the priority list in terms of Section 32 is effected, the price will be determined in terms of Section 32P(5) read with other provisions, to be paid in annual instalments not exceeding six.

K) If any land was surrendered to the landlord before the specified date and the possession of the land was taken by the landlord, in terms of Section 32P(7), the landlord will be entitled to the use and occupation of the land so long as he cultivates the land personally. In such cases, by virtue of Section 32P(8) no land as described in Section 32P(7) can be transferred by sale, mortgage, lease or assignment without the previous sanction of the Collector.

L) Even in cases where the land is at the disposal of the Collector under Section 32P, by virtue of Sections 32PP, 32PPP additional opportunities are granted to the tenant to avail of the benefit of statutory purchase. Even where the tenant had failed to deposit the purchase price, in cases covered by Section 32QQ the amount will be deposited on his behalf by the State Government.

M) Upon payment of the last instalment, a certificate of purchase is issued to the tenant or sub-tenant or such other person(s)/entities in the priority list, as the case may be. The certificate of purchase is conclusive evidence of the ownership of such purchaser.

N) A right was conferred upon the tenant with respect to a dwelling house under Section 17 whereunder the tenant was given the first option of purchasing the site at a value, to be determined by the tribunal. However, by virtue of the newly incorporated Section 17B, every tenant is deemed to have purchased from his landlord the site on which the dwelling house occupied by such tenant is built and the land immediately appurtenant thereto and necessary for the enjoyment of dwelling house. O) If the landlord intends to sell any land, he must apply to the tribunal in terms of Section 64 which may thereafter determine the reasonable price, and the offer has to be made in terms of Section 32P to the concerned persons.

P) Section 88B had granted exemption from the provisions pertaining to statutory purchase and determination of price in respect of lands held by a University or a trust for an educational purpose, a hospital, punjarapol or Gaushala and to lands donated by any person for the purposes of rendering any services to the community. However, in terms of Section 88E, such exemption ceased to operate from the specified date, and the tenants of such lands are also deemed to have purchased the land on the specified date, and all the relevant provisions regarding statutory purchase would then apply to such land.

Q) Section 32R obliges the purchaser of land to cultivate the land personally, and in case of failure, the land can be disposed of in terms of Section 84C of the Act.

The aforesaid provisions deal with matters pertaining to and arising out of proceedings related to statutory purchase. Sections 14 and 29 do not belong to that category. In terms of Section 14, if the land “is assigned” in contravention of Section 27, the tenancy of the tenant is liable to be terminated. Section

27 states in clear terms that “assignment of any interest” in the land by a tenant shall not be valid. The decision of this Court in Bhavarlal has stood the test of time which clearly states that a tenancy governed by a statute which prohibits assignment, cannot be willed away to a total stranger. The expression “assignment” in Sections 14 and 27, if understood in light of the decision of this Court in Bhavarlal which has consistently been followed, must include testamentary disposition. There is nothing in the provisions of the Act to suggest that the expression “assignment” must carry a different meaning in Sections 14 and 27 on the one hand, and Section 43 on the other. [Paras 20, 21][977-H; 978-AH; 979-A-H; 980-A-E] Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal Intawala (1986) 1 SCC 571 : [1986] 1 SCR 1 – affirmed.

1.2 The provisions hereinabove intend to confer the advantage of statutory purchase upon a cultivating tenant, and see that “the tiller of the land” is conferred ownership with respect to the lands cultivated by him as well as the dwelling house occupied by him. Thus, a cultivating tenant, if his holding is otherwise not beyond the ceiling limit, would be given the right to own the land cultivated by him. In cases where no purchase could be effected either on account of inability of the tenant to pay the purchase price, or on account of other situations, more than one attempt and opportunities are afforded to him. The statute goes to the extent of obliging the State Government to deposit the purchase price on his behalf. Even in cases where the tenant is unable to exercise the right of purchase because his holding would go beyond ceiling limit, the land would not revert to the landlord, but in terms of Section 32P, it must come to the persons or entities listed in the priority list. The priority list includes persons such as agricultural labourers and landless persons. The scheme is, therefore, to effectuate distribution of agricultural lands in such a way that the persons who are disadvantaged, would be conferred the ownership. After such purchase, the law obliges the purchaser to cultivate the land personally and not to transfer it. [Para 22][981-B-E]

1.3 If a tenant or any other person from the priority list is conferred ownership in respect of the agricultural land or when a landlord is allowed to retain the land which was surrendered by his tenant, each one of them is obliged to cultivate the land personally. In case any of them is unwilling, the land must be given to those who principally depend upon agricultural operations for their sustenance. If a person is a beneficiary of such statutory purchase and wishes to transfer his holding the law obliges that he must take prior sanction from the Collector. While granting such sanction, the authorities may essentially check whether the transferee is an agriculturist or an agricultural labour who otherwise fulfils the requirements and would carry out the obligation of cultivating the land personally; and that his holding would not go beyond the ceiling limit. Since the ownership itself was conferred as a result of the legislative scheme as discussed hereinabove, these conditions are inherent in the very conferral of ownership and, therefore, specifically incorporated in Section

43 with direct reference to the provisions named therein. A transfer inter vivos would normally be for consideration where the transferor may get value for the land but the legislation requires previous sanction of the concerned authority so that the transferee can step into the shoes of the transferor, and carry out all the obligations as a part of legislative scheme must be discharged. Thus, the screening whether a transferee is eligible or not, can be undertaken even before the actual transfer is effected. As against this, if a testamentary disposition which does not have the element of consideration is to be permitted, and if it is assumed that Sections 43 and 63 of the Act do not get attracted, the land can be bequeathed to a total stranger and a non-agriculturist who may not cultivate the land himself; which in turn may then lead to engagement of somebody as a tenant on the land. The legislative intent to do away with absentee landlordism and to protect the cultivating tenants, and to establish direct relationship between the cultivator and the land would then be rendered otiose. The construction put on the expression “assignment” appearing in Section 43, therefore, has to be consistent with the legislative scheme. In the context of the entire scheme, the term “assignment” used in Section 43 of the Act must include testamentary disposition as well. By adopting such construction, in keeping with the law laid down by this Court, the statute would succeed in attaining the object sought to be achieved. On the other hand, if it is held that the testamentary disposition would not get covered by the provisions of Section 43, a gullible person can be made to execute a testament in favour of a person who may not fulfil the requirements and be eligible to be a transferee in accordance with law. This may not only render the natural heirs of the tenant without any support or sustenance, but may also have serious impact on agricultural operations. In the circumstances the view taken by the Division Bench of the High Court in the present matter is absolutely correct and does not call for any interference. The decision is completely consistent with the law laid down by this Court in Sangappa and Jayamma and the other cases referred to hereinabove and must be accepted to be the correct exposition of law. [Paras 23-25][982-D-H; 983-A-E]

Sangappa Kalyanappa Bangi (Dead) through LRs. v. Land Tribunal, Jamkhandi and Others AIR 1998 SC 3229 : (1998) 7 SCC 294 : [1998] 1 Suppl. SCR 600; Jayamma v. Maria Bai (Dead) by proposed LRs and Another AIR 2004 SCW 4412 : (2004) 7 SCC 459 : [2004] 3 Suppl. SCR 175 – affirmed.

1.4 If the provisions referred to in Section 43 of the Act and allied provisions are considered in light of the settled principles extracted earlier, it emerges that the primary concern of those provisions is to see that the legislative scheme of granting protection to persons from disadvantaged categories and conferring the right of purchase upon them, and thereby ensure direct relationship of a tiller with the land. The provisions, though lay down a norm which may not be fully consistent with the principles of Indian Succession Act, are principally designed to attain and sub-serve the purpose of protecting the holdings in the hands of disadvantaged categories. The prohibition against transfers of holding without the previous sanction of the concerned authorities, is to be seen in that light as furthering the cause of legislation. Even if by the process of construction, the expression “assignment” is construed to include testamentary disposition, in keeping with the settled principles, the incidental encroachment cannot render the said provisions invalid. In pith and substance, the legislation and the concerned provisions are completely within the competence of the State Legislature and by placing the construction upon the expression “assignment” to include testamentary disposition, no transgression will ensue. The construction put by the Division Bench on the provisions that fell for consideration is accepted. The challenge to the view taken by the Division Bench must therefore be rejected. The decision of this Court in Mahadeo which had failed to notice the earlier decisions in Sangappa and Jayamma and which is inconsistent with the decisions referred to hereinabove and what the Court has concluded, must be held to be incorrectly decided. [Paras 31, 33][999-E-G; 1000-A-B]

Mahadeo (Dead through legal representatives) v. Shakuntalabai (2017) 13 SCC 756 – held incorrect law.

Girnar Traders (3) v. State of Maharashtra and Others (2011) 3 SCC 1 : [2011] 3 SCR 1 – followed.

Manchegowda v. State of Karnataka (1984) 3 SCC

301 : [1984] 3 SCR 502; Lingappa Pochanna Appelwar v. State of Maharashtra and another (1985) 1 SCC 479 : [1985] 2 SCR 224; Pandey Oraon v. Ram Chander Sahu and Others (1992) 2 Suppl. SCC 77; Amrendra Pratap Singh v. Tej Bahadur Prajapati and Others (2004) 10 SCC 65 : [2003] 6 Suppl. SCR 42; State of Rajasthan and Others v. Aanjaney Organic Herbal Private Limited (2012) 10 SCC 283 : [2012] 7 SCR 1148; Rajasthan Housing Board v. New Pink City Nirman Sahkari Samiti Limited and Another (2015) 7 SCC 601 : [2015] 5 SCR 365; Samatha v. State of A.P. and Others (1997) 8 SCC 191 : [1997] 2 Suppl. SCR 305; Welfare Association, A.R.P., Maharashtra and Another v. Ranjit P. Gohil and Others (2003) 9 SCC

358 : [2003] 2 SCR 139; State of Maharashtra v. Bharat Shanti Lal Shah and Others (2008) 13 SCC 5 : [2008]

12 SCR 1083 – relied on.

State of Punjab (now Haryana) and Others v. Amar Singh and Another (1974) 2 SCC 70 : AIR 1974 SC 994 : [1974] 3 SCR 152; Dayandeo Ganpat Jadhav v.

Madhav Vithal Bhaskar and Others (2005) 8 SCC

340 : [2005] 4 Suppl. SCR 439; Timmakka Kom

Venkanna Naik v. Land Tribunal (1987) 2 Kant LJ 337; State of W.B. v. Kailash Chandra Kapur (1997) 2 SCC

387 : [1996] 9 Suppl. SCR 398; S. Rathinam alias Kappamuthu and Others v. L.S. Mariappan and Others (2007) 6 SCC 724 : [2007] 7 SCR 568; Jaspal Singh v. Additional District Judge, Bulandshahr & Ors. (1984)

4 SCC 434 : [1985] 1 SCR 889; Dr. Anant Trimbak Sabnis v. Vasant Pratap Pandi AIR 1980 Bombay 69; Lincai Gamango and Others v. Dayanidhi Jena and Others (2004) 7 SCC 437 : [2004] 2 Suppl. SCR 825; Shamjibhai Keshavjibhai Kansagra (Patel) & Ors. v. Principal Secretary, Revenue Dept. (Appeals) & Ors. AIR 2011 Gujarat 55 – referred to.