Appeal No327 of 1955
Appeal by special leave from the judgment and order dated January 311955 of the Bombay High Court in Special Civil Application No 1100 of 1954
V M Limaye section N Andley J B Dadachanji and Rameshwar Nath for the appellants
N P Nathwani K L Hathi and R H Dhebar for the respondent
December 7
The Judgment of the Court was delivered by section E Das J
section K DAS J
This is an appeal by special leave from a decision of the High Court of Bombay dated January 31 1955 by which it dismissed with costs a writ application No 1100 of 1954 made by the petitioners therein who are now appellants before us
It raises for consideration and decision a land revenue 395 problem of some complexity which resulted from the enactment of the Bombay Taluqdari Tenure Abolition Act 1949 Bombay Act LXII of 1949 hereinafter referred to as the Abolition Act
The problem is if the appellants holders of certain lands known as Lalliti  lands are liable to the State Government concerned for payment of land revenue under the provisions of the Bombay Land Revenue Code 1879 Bombay Act V of 1879 hereinafter referred to as the Revenue Code  after the enforcement of the provisions of the Abolition Act
The problem has to be considered in the light
of certain incidents of taluqdari tenures in the Ahmedabad district of Gujrat with special reference to the changes through which those tenures had gone in the past by legislation or otherwise
For the purposes of this appeal it is not necessary to give a full history of taluqdari estates in Gujrat but it is necessary to explain what is meant by  Lal liti lands
We get from such books as Baden Powell s Land systems of British India  and Dandekar s  The law of Land Tenure in the Bombay Presidency  from both of which learned counsel for the parties have extensively quoted before us a short history of the Taluqdars of Gujrat and of their estates
Shortly stated the history is this Taluqdars of Gujrat they were not known as Taluqdars then because the name was given much later originally occupied the position of Chiefs or Rulers
This was before the Mahomedan rule in Gujrat
When the Mahomedans invaded Gujrat they found the country partitioned out into estates of large or small Chiefs whom they forcibly deprived of all but one fourth of their possess ions and the portion thus left took the name of wanta  divided
Some wantas  were free of payment of pent or revenue other wanta  estates paid a tribute in the shape of an  udhad jama  fixed sum
After the Moguls came the Marathas
The accession and domination of the Marathas made no substantial difference to the position of these semi independent chiefs except that the annual payments varied under the Maratha rule
Then came the British who for sometime continued 396 to realise annual payments according to past years but very soon a significant change took place and the nature of the payment was altered and instead of tribute the Government assumed it to be rent or revenue
The rent or revenue was also increased by about 50 per cent
and the result was that the holders of these lands fell into pecuniary embarrassment and became impoverished and needy
A system of annual leases was then introduced this remedy however proved worse than the disease and it was sought to improve the position of the Taluqdars by legislation it is not necessary for our purpose to refer to the details of that legislation till we come to the Gujrat Taluqdars  Act 1888 Bombay Act VI of f888 which was a landmark in the history of Taluqdari tenures
We shall have occasion later to refer to some of the provisions of this Act
It is sufficient to state here that by the time the aforesaid Act was passed the Taluqdars of certain districts of Gujrat including Ahmedabad had really become mere owners of proprietary estates who held lands directly from Governmentand the Act provided inter alia for the revenue administration of their estates
Under the provisions of the Act the Settlement Registers were prepared for each village which served the purpose of the Record of Rights in those estates
In these estates large areas of lands were granted presumably by the Taluqdars to cadets widows of the family and relations for maintenance and to village servants and others either in reward for past services or as remuneration for services to be performed
The holders of these transferred lands paid no revenue either to the Taluqdar or to Government generally
These grants fell into three categories i those made prior to British rule  ii those made between 1818 and 1888 that is after the introduction of British rule and before the passing of the Gujrat Taluqdars  Act 1888  and iii those made after 1888
The lands thus transferred were called  Lal liti  lands because they were recorded inred ink in the old faisal patrakas  and in the Settlement Registers also they were recorded in red ink but were shown as subject to  jama land revenue 397 liabilities of varying character
The pre British transfers were recognised by Mr Peile later Sir James Peile who was the Taluqdari Settlement Officer 1866 and the holders of these lands generally paid no  jama 
The 1818 1888 transfers were those which were not so recognised by prescription and when these lands reverted to the Taluqdar they became his ordinary lands liable to payment of full
 jama 
The post Act grants were covered by section 31 of the Gujrat Taluqdars  Act 1888 see in this connection  The Land Problems of Re organised Bombay State by Dr G D Patel pp 174 175
Such in brief is the history of Taluqdari estates and  Lal liti  lands so far as that history has a bearing on the problem before us
It is necessary now to state the facts which have given rise to the present appeal
In their writ petition to the High Court the appellants said that they were holders of  Lal liti  lands in villages Kharad and Rajka of the Dhanduka taluq of Ahmedabad district and were enjoying the lands without payment of any  jama  land revenue since the pre British rule though the circumstances in which their predecessors originally got the lands are lost in antiquity
They said inter alia that the exemption from payment of land revenue which they had all along enjoyed was not affected by the Abolition Act or by any later legislation like the Bombay Personal Inams Abolition Act 1952 Bombay Act LXII of 1953 and that the demand for payment of land revenue made by the State Government of Bombay for 1950 1953 was not authorised by law
In the alternative they also said that they were not liable to any assessment of land revenue till August 1953
Accordingly they prayed for appropriate writs a quashing the demands for payment of land revenue and b directing the State of Bombay the Collector of Ahmedabad and the Revenue Officer of Dhanduka who are now respondents before us to forbear from taking any steps to enforce payment of land revenue for the  Lal liti  lands held by them
A number of similar applications presumably filed by other holders of Lal liti lands were also pending in the High Court 51 398 So far as we can gather from the record before us there were three sets of such applications
The High court delivered its leading judgment on writ application No 1098 of 1954 and the application of the appellants herein No 1100 of 1954 was dismissed with costs on the grounds given in the leading judgment
The High Court held in effect that the holders of  Lal liti  lands were liable to payment of land revenue under section 5 of the Abolition Act read with the provisions of the Revenue Code and the objections raised thereto on their behalf were not legally valid
Having been unsuccessful in their application for a certificate under Article 1331c of the Constitution the appellants applied for and obtained special leave from this Court on June 29 1955
They then preferred the present appeal
Learned counsel for the appellants has challenged the correctness of the decision of the High Court on various grounds
It will be convenient to take these one by one
The first point urged is that the relevant provisions of the Abolition Act do not apply to  Lal liti  lands which are not  taluqdari lands  within the meaning of the Abolition Act and therefore no liability for payment of land revenue in respect of  Lal liti  lands can arise under section 5 thereof
At this stage we must read the relevant provisions of the Abolition Act
The expressions  Taluqdari land  and  Taluqdari tenure  are defined in section 2 clauses 3 and 4 Section 2        1      lA    2       3  Taluqdari land  means land forming part of a taluqdari estate and includes land forming part of such estate and held by a cadet of a taluqdar s family for the purpose of maintenance 4  Taluqdari tenure  means land tenure on which the taluqdari land is held Section 3 states  With effect from the date on which this Act comes into force 399 ithe taluqdari tenure shall wherever it prevails be deemed to have been abolished iisave as expressly provided by or under the provisions of this Act all the incidents of the said tenure attaching to any land comprised in a taluqidari estate shall be deemed to have been extinguished  Section 5 which is of great importance for the purpose of this appeal read as follows before it was amended in 1953
Section 5 1  Subject to the provisions of subsection 2 aall taluqdari lands are and shall be liable to the payment of land revenue in accordance with the provisions of the Code and the rules made there under and ba taluqdar holding any taluqdari land or a cadet of a taluqdari family any taluqdari land hereditarily for the purpose of maintenance immediately before the coming into force of this Act shall be deemed to be an occupant within the meaning of the Code or any other law for the time being in force
2Nothing in sub section 1 shall be deemed to affect athe right of any person to hold any taluqdari land wholly or partially exempt from payment of land revenue under special contract or any law for the time being in force bthe right of any person to pay Jama under any agreement or settlement recognised under section 23 or under a declaration made under section 22 of the Taluqdars  Act so long as such agreement settlement or declaration remains in force under the provisions of this Act Now the argument on behalf of the appellants has proceeded on the following lines learned counsel for them has submitted that the expression  Taluqdari land  is defined as land forming part of a taluqdari estate but the expression  taluqdari estate is not defined though the expression  Taluqdari tenure  is defined therefore taluqdari estate can only mean 400 such land or estate in which the taluqdar has some subsisting interest but in  Lal liti  lands at least of the taluqdar retains no interest after the grant and therefore  Lal liti  land is not taluqdari land within the meaning of section 5 of the Abolition Act
We have now to consider the soundness of this line of argument
In the High Court as also before us an attempt was made on behalf of the respondents to establish that the taluqdar retained a reversionary right to  Lalliti  lands in case the holder died without any heir
The High Court said rightly in our opinion that on the materials placed before it it could not be said that the respondents had established that position
The High Court then considered the meaning of the expression  taluqdari estate  and said that it was used in a descriptive sense and was not equivalent to the expression Taluqdar sestate 
Said the High Court  Therefore the expression  Taluqdari estate  is a comprehensive expression including all lands which at one time belonged to the Taluqdar
In the eye of the law although the lands might have been alienated by the Taluqdar they still form part of the estate
Therefore the expression is more an expression indicating a particular tenure rather than a particular interest enjoyed by the Taluqdar 
                              
Therefore if the lands the subject matter of the petition did at any time belong to the Taluqdar which he subsequently alienated they would be covered by the definition in the Act of 1949 not withstanding the fact that when the Act was passed the Taluqdar had no interst in those lands
 We are in agreement with the view thus expressed by the High Court
Having regard to the history of the gig Lal liti  lands to which we have earlier adverted and the provisions of the Gujrat Taluqdars  Act 1888 it is manifestly clear that  Lal liti  lands are lands which form part of a taluqdari estate even though no  jama  was actually paid for such lands to the taluqdar or to Government
It is necessary to refer here 401 to sections 4 5 and 22 of the Gujrat Taluqdars  Act 1888
Section 4 empowers the Government to direct a revenue survey of any Taluqdari estate section 5 lays down what particulars the Settlement Registers prepared by the Survey Officer in respect of a taluqdari estate shall contain
One of such particulars is  the name and description and the nature and extent of interest of every alienee and of every incumbrancer of the estate or any portion thereof together with a specification of i the aggregate area over which such interest extends ii the amount and nature of rent or land revenue if any payable or receivable by such alienee and incumbrancer etc
It is not disputed before us and the High Court has referred to it that in the Settlement Registers prepared in respect of the two villages in question under section 5 of the Gujrat Taluqdars  Act 1888 the interest of the appellants in the  Lal liti  lands held by them was shown as comprised within the Dhanduka Taluqdari estate
This clearly showed that these  Lal liti  lands formed part of a taluqdari estate apart altogether from the question what interest if any the taluqdar retained in them after the alienation
Section 22 of the Gujrat Taluqdars  Act 1888 also points the same way
It lays down how the  jama  of a taluqdar s estate is to be calculated it says that the aggregate of the survey assessments of the lands composing such estate minus such deduction if any as the Government shall in each case direct shall be the  jama 
Along with their petition the appellants filed an annexure marked A that annexure besides showing the lands of the appellants within a taluqdari estate also showed the Jama  payable for each plot of land
This again showed that whether the jama  be actually paid or not the  Lal liti  lands held by the appellants formed part of a taluqdari estate
We accordingly hold that learned counsel for the appellants is not right in his contention that  Lal liti  lands are not part of a taluqdari estate and therefore are not taluqdari lands  within the meaning of the Abolition Act
Learned counsel for the appellants referred us to certain decisions of the Bombay High Court as to the 402 meaning of the expression  Taluqdar s estate  in section 31 of the Gujrat Taluqdars  Act 1888 and contended that it meant an estate held by the Taluqdar as a Taluqdar and on the same analogy he urged that land forming part of a taluqdari estate must also mean land in which the taluqdar has some interest as a taluqdar Khoda Bhai vs Chaganlal 1 Bichesbha Mansangji vs Vela Dhanji Patel 2 and Taluqdari Settlement Officer vs Chhagan Lal Dwarkadas 3 
We do not think that those decisions are of any help to the appellants for the simple reason that the analogy does not apply we are concerned here not with the meaning of the expression  taluqdar s estate  occurring in section 31 of the Gujrat Taluqdars  Act 1888 but with the meaning of a different expression viz  taluqdari estate  in section 23 of the Abolition Act
Moreover in some of the decisions relied on by the learned counsel it was recognised that there was a distinction between taluqdar s estate  and taluqdari estate
We were also addressed at some length on the effect of the relinquishment of his land by the taluqdar in favour of the Collector Nathuram Hiraram Thakur vs The Secretary of State for India4 or the effect of an attachment of the village under section 144 of the Revenue Code on failure of the taluqdar to pay the assessment Tulla Sobharam Pandya vs The Collector of Kaira 5
We do not think that it is necessary in the present case to consider those questions
We now go to the second point urged on behalf of the appellants
This point was not urged before nor considered by the High Court in the writ application in which it gave its leading judgment
The appellants wished to urge the point in the High Court on their own application but were told that if the decision of the High Court in Writ Application No 1098 of 1954 was wrong it could be corrected only by this Court
The argument on this point is based on section 51 of the Abolition Act which we have quoted earlier and is in two parts firstly it is contended that if clauses a 1 2 3 191O 4 5 403 and b of sub section 1 of section 5 are read together the only reasonable conclusion is that clause a is merely declaratory and clause b is the operative clause and according to that operative clause the persons who become liable for payment of land revenue are only two in number namely 1 a taluqdar holding any taluqdari land and 2 a cadet of a taluqdari family holding any taluqdari land with hereditary rights for the purpose of maintenance immediately before the coming into force of the Abolition Act and therefore the holder of  Lal liti  lands assuming them to be taluqdari lands has no liability under section 51 secondly it is contended that even if clauses a and b of subsection 1 of section 5 are read distributively the holder of Lal liti  lands has still no liability because cl
a makes taluqdari lands liable to the payment of land revenue in accordance with the provisions of the Revenue Code and there is no provision in that Code under which a  Lal liti  holder can be made liable to the payment of land revenue
We take the first part of the argument first
How should we read clauses a and b of sub section 1 of section 5 of the Abolition Act  Learned counsel for the appellants states that if clause a is also read as a clause which operates to charge all taluqdari lands with liability for payment of land revenue then clause b becomes a wholly unnecessary surplusage
On the other hand learned counsel for the respondents points out that if the intention was to fasten liability on two categories of persons only taluqdars and cadets then clause a was really unnecessary
We think that both the clauses have a meaning and purpose
Clause a makes all taluqdari lands liable to the payment of land revenue in accordance with the provisions of the Revenue Code
Section 3 of the Abolition Act abolishes taluqdari tenure and extinguishes all its incidents
If there was only abolition of taluqdari tenures without anything more there would have been a void
Obviously enough it was necessary to say what would happen to taluqdari lands after abolition of the taluqdari tenure
Therefore clause a states that all taluqdari lands shall be liable 404 to the payment of land revenue in accordance with the provisions of the Revenue Code
What then is the meaning of clause b It is a deeming provision by which the taluqdar and his cadet shall be deemed to be an occupant within the meaning of the Revenue Code and I occupant  under the Revenue Code means a holder in actual possession of unalienated land The word alienated  has also a special meaning in the Revenue Code it means I transferred in so far as the rights of Government to payment of rent or land revenue are concerned wholly or partially to the ownership of any person 
Clause b merely clarifies the position of the taluqdar and his cadet under the Abolition Act it does not in any way derogate from clause a nor does it cut down the width of amplitude of clause a
We are of the view that clauses a and b should be read together but not in the sense suggested by the learned counsel for the appellants
Clause b clarifies the position as respects two categories of persons but that does not mean that if a third category of persons properly come under clause a they will not be liable to payment of land revenue on a specious and unwarranted assumption that clause b as the operating clause cuts down the amplitude of clause a
The true view is that clause a is a general provision and applies the Revenue Code to all taluqdari lands while clause b is a particular deeming provision with regard to the taluqdar and his cadet
Now as to the second part of the argument
It is necessary to read here section 1361 of the Revenue Code  Section 136 1 In the case of unalienated land the occupant and in the case of alienated land or taluqdari land the superior holder shall be primarily liable to the State Government for the payment of the land revenue including all arrears of land revenue due in respect of the land
Joint occupants and joint holders who are primarily liable under this section shall be jointly and severally liable
 The question is if the holder of  Lal liti  lands is after the Abolition Act an occupant of unalienated 405 land within the meaning of section 136 if he is then he is liable to the payment of land revenue under section 51a of the Abolition Act read with section 136 of the Revenue Code
In dealing with this question which has caused us some anxiety we must remember the meaning of the expressions  occupant  and alienated  used in the Revenue Code
The argument on behalf of the appellants is that a  Lal liti  holder is not an occupant of unalienated land the respondents contend that he is after the enforcement of the Abolition Act
On a careful consideration of the question we have come to the conclusion that the contention of the respondents is correct
In respect of  Lal liti  lands Government made no separate settlement with the holder of such lands the settlement was made with the taluqdar within which settlement  Lal liti  lands were included
The right of Government to payment of land revenue was never transferred to the holder of  Lal liti  lands though it is true that some of the taluqdars got a deduction under section 22 of the Gujrat Taluqdars  Act 1888 for the  Lal liti  lands
We have been addressed at some length as to what was the position of taluqdars and  Lal liti  holders previous to the Abolition Act
On behalf of the respondents it has been submitted that one characteristic of the taluqdari tenure was that the taluqdari estate was neither alienated nor unalienated within the meaning of the Revenue Code because the taluqdars were not grantees of the British but enjoyed proprietary rights in their estates even before the advent of British rule
As to  Lal liti  lands they were not generally taken into account at the time of calculating the  jama  payable by the taluqdars to Government and as a result they were not covered by the Settlement guarantee operating in favour of the taluqdar
Therefore so the argument on behalf of the respondents has proceeded holders of Lal liti lands became liable to payment of full assessment on the footing that they became occupants 52 406 of unalienated land with effect from the date on which the Abolition Act came into force
Learned counsel for the respondents has also drawn our attention to the list of amendments in the Revenue Code made by Schedule 1 of the Abolition Act in support of his contention that the taluqdars and all taluqdari lands have been brought into the scheme of the Revenue Code by the necessary amendments of section 136 and other sections of the Revenue Code
The narrow question before us is as we have stated earlier whether a  Lal liti  holder is an occupant  of unalienated land  within the meaning of the Revenue Code
We are of the view that whatever may have been his position earlier on the abolition of the taluqdari tenure by the Abolition Act he became a holder in actual possession of land in respect of which the Government had not transferred its rights to the payment of revenue wholly or partially to the ownership of any person
Therefore the second point urged on behalf of the appellants fails in both parts
We need notice very briefly three other points urged on behalf of the appellants because we are in such complete agreement with the High Court with regard to them that it is unnecessary to re state in detail the reasons which the High Court has already given
1 As to the saving clause c of section 17 of the Abolition Act the High Court has rightly pointed out that it is the usual saving clause which says in effect that the repeal of the Gujrat  Taluqdars  Act 1888 shall not be deemed to effect any declaration made or any agreement or settlement recognised etc
under the provisions of the repealed Act
The aforesaid saving clause affords no protection against the liability imposed by section 5 of the Abolition Act
2 Learned counsel also relied on section 52a of the Abolition Act before its repeal by the Bombay Personal Inams Abolition Act 1952 Bombay Act 42 of 1953 and based his alternative claim thereon
Here again the High Court rightly pointed out that there was no special contract in favour of the appellants as to exemption from payment of land revenue 407 nor was there any law for the time being in force after the Abolition Act which granted the holder of  Lal liti lands exemption wholly or partially from pay ment of land revenue therefore the appellants were entitled to no protection under section 52a of the Abolition Act till August 1 1953
3 Lastly it was submitted that there was a settlement for thirty years with the taluqdari estate in question in 1925 26 and in the absence of any fresh settlement under the provisions of the Revenue Code a Lal liti holder was not liable to pay land revenue within that period
This point is completely answered by section 4 of the Abolition Act which in terms says that all revenue surveys or revised revenue surveys of taluqdari estates under section 4 of the Gujrat Taluqdars  Act 1888 and all settlement made shall be deemed to have been made under Chapters VIII and VIIIA of the Revenue Code and the settlement registers and other records prepared at such surveys shall be deemed to have been prepared under the corresponding provisions of the Revenue Code
We know that the Lal liti lands of this case were shown in the Settlement Registers prepared under the Gujrat Taluqdars  Act 1888
In view of the provisions of section 4 of the Abolition Act no fresh settlement was necessary
For the reasons given above we hold that the appellants have failed to show that the decision of the High Court is wrong
The appeal is accordingly dimissed with costs
Appeal dismissed


Summary:
The appellant company insured a car belonging to re spondent No 1 and issued a policy which contained inter alia the following terms  All differences arising out of this policy shall be referred to the decision of an arbitra tor to be appointed by the parties 
If the company shall disclaim liability to the insured for any claim here under and such claim shall not within twelve calendar months from the date of such disclaimer have been referred to arbitration then the claim shall have been deemed to have been abandoned and shall not be recoverable
 The car was lost and the company through its Branch Manager disclaimed liability on three different dates
The insured did not take any action in regard to the appointment of an arbitra tor until more than twelve months after the last disclaimer by the company
The case of the company was that the in sured must be deemed to have abandoned his claim by virtue of the contract of insurance policy while the respondent averred that there was never any valid disclaimer by the company of its liability as the Branch Manager had no au thority to disclaim the liability and it could have been disclaimed only by the resolution of the company
The company presented the present application under see
33 of the Indian Arbitration Act praying for a declaration that the reference to arbitration was illegal and the award if made by the arbitrator would not bind the company
It was contended on its behalf that the arbitration clause had ceased to be 65 502 operative and the question as to the existence and validity of the Arbitration agreement was triable by the court under sec
33 of the Arbitration Act and not by the arbitrator
Held i that the point on which the parties were in dispute was a difference arising out of the policy  because recourse to the contract by which both the parties were bound was necessary for the purpose of determining the matter in dispute between them as there was no contention raised in the present case by either of the parties that there was no contract entered into at all or that it was void ab initio and therefore the arbitrator had jurisdic tion to decide the matter referred to him
A contention that the arbitration agreement has ceased to be applicable or that it no longer subsists will not oust the jurisdiction of the arbitrator
ii No question of determining the effect of the arbitra tion within the meaning of sec
33 arose because there was no dispute between the parties as to what it meant
AM Mair and Co vs Gordhandas Sagarmull 1950 SCR 792 Heyman vs Darwins Ltd 1941 1 AER 337 Mecaura vs Northern Assurance Co 1925 AC 619 Stebbing vs Liverpool London and Globe Insurance Co Ltd 1917 2 KB 433 referred to