Civil Appeal No 309 of 1976
Appeal by Special Leave from the Judgment and Order dated the 22nd January 1975 of the Bombay High Court in Appeal No 106 of 1969 in Misc
Petition No 320 of 1964
7 502 SCI77 526 I N Shroff and HS Parihar for the Appellants
MN Shroff for Respondents 1 and 2
VP Ram an Addl
Genl KJ John and Shri Narain for Respondent No 3
The Judgment of the Court was delivered by GUPTA J
Ahmedabad Jupiter Spinning Weaving and Manu facturing Company Limited was the owner of 5900 Sq
yds of land forming part of its mill premises at Lower Parel in Bombay which was sought to be acquired by the Maharashtra Government for a municipal school
Notifications under sections 4 and 6 were issued on June 19 1961 and May 29 1964 respectively
The company filed a petition in the Bombay High Court challenging the validity of the notifica tions on several grounds
A single Judge of the High Court having dismissed the writ petition on August 11 1969 the company preferred a letters patent appeal
During the pendency of the appeal the management of the company was taken over by the Central Government on October 8 1972 under the Industries Development and Regulation Act 1951
On September 21 1974 an ordinance called the Sick Textile Undertakings Nationalisation Ordinance 1974 was promulgated by virtue of which the textile undertaking of the company the management of which had been taken over by the Central Government vested absolutely in the Central Government with effect from the appointed day which was April 1 1974 and immediately thereafter stood transferred and vested in the National Textile Corporation
The Ordi nance was later replaced by the Sick Textile Undertakings Nationalisation Act 1974 hereinafter referred to as Sick Textile Act
Sections 3 and 4 of the Act are as follows Acquisition of rights of owners in respect of sick textile undertakings
1  On the appointed day every sick textile taking and the right title and interest of the owner in relation to every such sick textile undertakings shall stand transferred to and shall vest absolutely in the Central Government
2 Every sick textile undertaking which stands vested in the Central Government by virtue of sub Section 1  shall immediately after it has so vested stand transferred to and vested in the National Textile Corpora tion
General effect of vesting 4
1  The sick textile undertaking referred to in section 2 shall be deemed to include all assets rights leaseholds powers authorities and privileges and all property movable and immovable including lands buildings workshops stores instru ments machinery and equipment cash balances cash on hand reserve funds investments and book debts and all other rights and interests in or arising out of such property as were immediately before the appointed 527 day in the ownership possession power or control of the owner of the sick textile undertaking whether within or outside India and all books of account registers and all other documents of whatever nature relating thereto and shall also be deemed to include the liabilities and obligations speci fied in sub section 2 of section 5
2 All property as aforesaid which have vested in the Central Government under sub section 1 of section 3 shall by force of such vesting be freed and discharged from any trust obligation mortgage charge lien and all other incumbrances affecting it and any attachment injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn
 The other sub sections of section 4 are not relevant for the present purpose
The National Textile Corporation applied to the High Court for being substituted in place of the original appel lant in the letters patent appeal which was pending and the application was allowed
The main contention on behalf of the substituted appellant in the High Court was that the two notifications under sections 4 and 6 of the Land Acqui sition Act must be held to have become ineffective in view of section 42 of the Sick Textile Act which provides that all property which vests in the Central Government under section 31 does so free from all incumbrances affecting it
 The High
Court dismissed the appeal hold ing that the notifications under the Land Acquisition Act were not incumbrances within the meaning of section 42 of the Sick Textile Act
In the appeal before us filed with special leave obtained from this Court the National Textile Corporation questions the correctness of the view taken by the High Court
Thus the only question for determination in the appeal is whether the notifications issued under the Land Acquisi tion Act are incumbrances within the meaning of the word as used in section 42 of the Sick Textile Act
Section 3 and the first two sub sections of section 4 of the Sick Textile Act are the only provisions relevant in this context
Section 3 provides that on the appointed day every sick textile undertaking shall vest absolutely in the Central Government and then in the National Textile Corporation
Subsection 1  of section 4 states that the undertakings vesting in the Central Government under section 3 shall be deemed to include all assets rights and interests in the ownership possession or control of the owners of such undertakings immediately before the appointed day
Sub section 2 of section 4 provides that all property vesting in the Central Government under section 3 shall by force of such vesting be freed and discharged from any trust obligation mortgage charge lien and all other incum brances affecting it and any attachment injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been with drawn
Counsel for the appellant argues that sub section 2 of section 4 is intended to vest the sick textile undertakings in the Central Govern 528 ment free from all fetters and the notifications issued under the Land Acquisition Act which had the effect of freezing the price of the land were fetters falling in the category of other incumbrances mentioned in section 42 of the Sick Textile Act
The term incumbrance  has not been defined in the Act
In Wharton s Law lexicon incum brance is described as being a claim lien or liability attached to property
This is the sense in which the term is ordinarily used
An incumbrance in this sense  has to be a liability attached to property it must be a burden or liability that runs with the land as the High Court has held
But a notification issued by the Government under the Land Acquisition Act is not a burden Or liability that is attached to the property
The sovereign right of the State to take proceedings for the acquisition of any land for public purpose is similar to its right to impose a tax on the land which is paramount to the ownership over the land and outside it
see The Collector of Bombay vs Nusserwanji Rattanji Mistri  others  at 1323
Under sub section 2 of section 4 of the Sick Tex tile Act all property which have vested in the Central Government under section 3 1 shall be freed and discharged from any trust obligation mortgage charge lien and all other incumbrances affecting it and any attachment injunction or decree or order of any court restricting the use of such property shall be deemed to have been withdrawn
Counsel for the respondent
State of Maharashtra submits that the term incumbrance should take colour from the dif ferent kinds of burden on the land specified in section 42 preceding the words all other incumbrancesit is argued that incumbrance in the context means  Some burden or li ability that is attached to the property like mortgage charge lien That this is so would also appear from what follows the words all other incumbrances affecting it
Having said that the vesting will be free from trust obligation mortgage charge lien and all other incum brances affecting it
sub section 2 goes on to add that any attachment
injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn upon vesting
If the appel lant s construction of the provision were correct and incumbrance meant any kind of fetter any attachment in junction or decree or order restricting the use of the property would be included in all other incumbrances and it would have been quite unnecessary to mention them sepa rately
This makes it clear that fetters on the property like attachment injunction or decree or order of any court restricting the use of the property which are deemed to have been withdrawn upon the property vesting in the Central Government are not really incumbrances within the meaning of the word as used in sub section 2 of section 4
We therefore agree with the High Court that the notifica tions issued under sections 4 and 6 of the Land Acquisition Act are not incumbrances and cannot be held to have become inoperative on the land in question vesting in the Central Government
The appeal is dismissed but in the circumstances of the case without any order as to cost
P BR Appeal dismissed


Summary:
The state Government issued two notifications under sections 4 and 6 of the Land Acquisition Act seeking to acquire certain land belonging to a textile mill
When the Letters Patent Appeal of the Textile mill was pending before the High Court the mill was taken over by the Central Government and later the appellant was substituted for the original appellant
By virtue of section 3 of the Sick Textile Undertakings Nationalisation Act 1974 the management of every sick textile mill vested absolutely in the Central Government and later in the appellant
Section 42 of the Act provides that all property which vested in the Central Government shall by force of such vesting be freed and discharged from trust obligation mortgage charge lien and all other incumbrances affecting it and any attachment injunction or decree or order of any court restricting the use of such property in any manner shall be deemed to have been with drawn
The appellants  contention that by reason of ss42the two notifications must be held to have become ineffective because the section provides that all property vested in the Central Government shall be free from all incumbrances affecting it was rejected by the High Court
Dismissing the appeal to this Court HELD  The High Court was right in its view that the notifi cations issued under ss 4 and 6 of the Land Acquisition Act were not incumbrances and could not be held to have become inoperative on the land vesting in the Central Government
528 B 1The term incumbrance has not been defined in the Act The dictionary meaning given to incumbrance is a claim lien or liability attached to property
An incum brance in this sense has to be a liability attached to property
a burden or liability that runs with the land
The notifications issued under the Land Acquisition Act are not a burden or liability attached to the property528 B 2
Incumbrance in the context of section 42 means some burden or liability attached to the property like mortgage charge lien etc
That this is so would appear from the words all other incumbrances affecting it
Having said that the vesting will be free from trust etc
 sub section
2 goes on to add that any attachment
injunction or decree  shall be deemed to be withdrawn upon vesting
If incumbrance meant any kind of fetter any attachment injunction or decree or order restricting use of the proper ty would be included in all other incumbrances and it would have been quite unnecessary to mention them separate ly
This means that fetters on the property like attach ment injunction or decree or order of any court restricting the use of the property which are deemed to have been with drawn upon
the property vesting in the Central Government are not really incumbrances within the meaning of the word as used in s42 528 E G