Case: State of Madhya Pradesh Vs. Yakinuddin

Sinha, CJ.1. In these appeals the common question of law that arises for determination is whether the respective grants made by the outgoing proprietors in favour of the respondents convey any rights to them, which could be enforced against the appellant, the State of Madhya Pradesh, after the coming into effect of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (Madhya Pradesh Act I of 1951)-which will be referred to hereinafter as the Act.2. It is not necessary to state the facts of each case in any detail because they are not disputed, and nothing turns on the difference in facts. In Civil Appeal No. 229 of 1961, the respondent obtained, by virtue of registered documents, the grant of 24 villages in Balaghat and Mandla Districts, for propagating lac, the lease to expire on July 31,1955. In Civil Appeal No. 281 of 1961, by virtue of two unregistered agreements, the respondent obtained the right to collect tendu leaves in 37 villages upto July 31,1963. In Civil Appeal No. 282 of 1961, the respondent obtained similar rights from the proprietor by virtue of registered agreements, extending up to the end of the year1962. In Civil Appeal No. 283 of 1961, the respondent obtained the right to collect fruits and flower of Mahua trees from the proprietor, extending down to the year 1969, by virtue of three registered leases.3. On the coming into effect or the Act and the issue of the necessary notifications under S. 3 of the Act, the appellant, the State of Madhya Pradesh, took possession of all the villages comprised in the respective estates of the proprietors, who were the grantors of the several interests indicated above in favour of the respondents. The state refused to recognise the rights claimed by the respondents by virtue of the transactions aforesaid in their favour.4. In each case, the High Court relying upon the decision of this Court in Chhotabhai Jethabai Patel and Co. v. State of Madhya Pradesh,1953 S C R 476 : (AIR 1953 SC 108 ) granted the relief claimed by the respondents, and held that the several interests claimed by the respondents had not been affected by the coming into force of the Act. The High Court did not accept the contention raised on behalf of the State that as a result of the coming into operation of the Act, all these interests which were the subject matter of dispute in all these cases had been extinguished, in view of the provisions of S. 4 (1) (a) of the Act. Soon after the decision aforesaid of this Court, the matter was re-examined by this Court in the case of Shantabai v. State of Bombay, 1959 S C R 265 : (AIR 1958 SC 532 ) and in the case of Mahadeo v. State of Bombay, (1959) Supp (2) SCR 339 : (AIR 1959 SC 735 ).5. The earliest decision of this Court with reference to the Act is a decision of the Division Bench of three Judges in 1953 SCR 476 : (AIR l953 SC 108). In that case, which was a petition under Art. 32 of the Constitution, the petitioners had entered into various contracts and agreements with the proprietors of the estates, before the dates on which the estates vested in the State, under the Act, under which they were entitled to pluck, collect and carry away tendu leaves, and to cultivate, culture and acquire lac, as also to cut and carry away teak and timber. The petitioners had complained to this Court that the State of Madhya Pradesh had been interfering with their rights thus acquired from the outgoing proprietors. This Court held, on a construction of the contracts, that the grants in essence and effect were licences to the petitioners who were neither proprietors, nor persons having any interests in the proprietary rights through the proprietors, nor were their interests encumbrances within the meaning of that expression in S. 3 (1) of the Act. In that view of the matter, the court granted the writs in favour of the petitioners. Naturally, the High Court granted appropriate reliefs to the respondents in this batch of cases, relying upon this decision of this Court.6. In the case of 1959 SCR 265 : (A I R 1953 SC 532) the same question came up to be re-examined by a Constitution Bench of this Court. The petitioner in that case had obtained from the proprietor the right to take and appropriate all kinds of wood from certain forests in his estate, by an unregistered document. On the coming into effect of the Act, the State authorities interfered with the petitioners rights under the grant from the proprietor. The petitioner moved this Court under Art. 32 of the Constitution, complaining of interference by the State with those rights. This Court held that if the grant purported to transfer any proprietary interest in land, it would be ineffective because it was not evidenced by a registered document, and that under S. 3 of the Act all proprietary interest vested in the State. If it was a grant of profits a prendre it would partake of the nature of immovable property and would not be effective without a registered document evidencing the grant. If on the other hand it was a mere contract creating personal rights, the petitioner could not complain of any act on behalf of the State officials because the State had not taken possession of the contract, which remained the petitioners property. The State not being a party to that contract, would not be bound by it, and that, alternatively, if the State were bound by the terms of the contract, the petitioners remedy lay by way of suit for the enforcement of the contract. Hence, it was held that there was no question of the infringement of any fundamental right in that case.7. The provisions of the Act also came in for consideration in the case of (1959) Supp (2) S C R 339 : (AIR 1959 S C 735). In that case, the petitioners had obtained from the outgoing proprietors the right to collect tendu leaves and other forest produce in villages which formed part of the proprietors estates, before the coming into effect of the Act. Some of the agreements were registered whereas others were not. The State did not respect those grants and put those rights to auction, after having taken possession of those estates, when they had vested in the State under S.3 the Act. The petitioners then moved this Court under Art. 32 of the Constitution, complaining of the infringement of their rights to property. It was held by this Court that the agreements required registration, and in the absence of registered documents could not confer any rights, which were some interest in land. It was also held that rights conveyed to the petitioners under the agreements were proprietary rights which, under the provisions of Ss. 3 and 4 of the Act became vested in the State. Alternatively, if the interests created by the agreements were not in respect of proprietary rights, it was held that in those interests the State was not interested, as the State was not bound by the agreements entered into by the outgoing proprietors.8. It would thus appear that in view of the two later decisions of this Court, the High Court was in error in granting any relief to the respondents. But it has been contended on behalf of the respondents that certain aspects of the controversy had not been brought to the notice of the Court on the previous occasion, and that the respondents were entitled to the benefit of S. 6 of the Act. It was contended that the respondents rights were not in the nature of mere licences, but were in the nature of profits a prendre, which were saved to them in view of the provisions of S. 6.9. In our opinion, there is no substance in the contention raised on behalf of the respondents. Under S. 3 of the Act, from the date of the notification by the State, all proprietary rights in an estate vesting in a proprietor of such an estate or in a person having interest in such proprietary rights through the proprietor, shall vest in the State for the purposes of the State, free from all encumbrances. The consequences of such a vesting are laid down in S. 4, which runs into several clauses and sub-sections. Section 4 (1) (a) is the relevant provision of the Act which determines this controversy entirely against the respondents. It provides that "when the notification under S. 3 in respect of any area has been published in the Gazette, then, notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force, and save as otherwise provided in this Act, the consequences as hereinafter set forth shall . . . ensue, namely, (a) all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), grass land, scrub jungle, forest, trees ..shall cease and be vested in the State for the purposes of the State tree of all encumbrances . . ," (We have omitted the words which are not necessary for the purposes of the present appeals). It is clear on a bare reading of the provisions of cl. (a) of S. 4 (1) that whatever rights the proprietor, or a person claiming interest through him, had in the trees, scrub jungle, forest, etc., ceased on the vesting of the estate in the State.10. But it was contended on behalf of the respondents that S. 6 (1) saves their rights from the operation of S. 4 (1) (a), because, it is argued, S. 4 (1) (a) is subject to the provisions of S. 6 (1). Section 6 (1) runs as follows:"6 (1) Except as provided in sub-section (2), the transfer of any right in the property which is liable to vest in the State under this Act made by the proprietor at any time after the 16th March 1950 shall, as from the date of vesting, be void."In our opinion, there is no substance in this contention. Section 6 refers to those transactions of transfer of any right which is liable to vest in the State as being void. It does not lay down that a transfer made before 16th March 1950, shall be binding upon the State. The transfers which have been saved by S. 6 (1) from being void may be recognised by the State for which the transferee may be entitled to claim some compensation in accordance with the provisions of the Act. But S. 6 does not save that interest from being vested in the State as a result of the notification under S. 3, read with S. 4 (1) (a). The scheme of the Act is that it provides for the acquisition by the State of all interests in the estate of the proprietor himself or of an intermediary, except the tiller of the soil. This it does by vesting all proprietary rights in the State, of whatever grade, by issuing the notification under S. 3, vesting it in the State for the purposes of the State free from all encumbrances. Section 4 lays down in great detail the rights which become extinguished on the vesting of the estate as aforesaid. What is saved to the proprietor or any other person claiming through him is set out in S. 5, cls. (a) to (h), on such terms and conditions as may be determined by the State. Hence any person claiming some interest as a proprietor or as holding through a proprietor in respect of any proprietary interest in an estate has got to bring his interest within S. 5, because on the date of vesting of the estate, the Deputy Commissioner takes charge of all lands other than occupied lands and homestead, and of all interests vesting in the State under S. 3. Upon such taking over of possession, the State becomes liable to pay the compensation provided for in S. 8 and the succeeding sections. The respondents have not been able to show that their interests come under any of the clauses aforesaid of S. 5.11. A great deal of argument was advanced on behalf of the respondents showing the distinction between a bare licence and a licence coupled with grant or profits a prendre. But, in our opinion, it is not necessary to discuss those fine distinctions because whatever may have been the nature of the grant by the outgoing proprietors in favour of the respondents those grants had no legal effect as against the State, except in so far as the State may have recognised them. But the provisions of the Act leave no manner of doubt that the rights claimed by the respondents could not have been enforced against the State, if the latter was not prepared to respect those rights and the rights created by the transactions between the respondents and their grantors did not come within any of the saving clauses of S. 5.

Decision:
1[ds]9. In our opinion, there is no substance in the contention raised on behalf of the respondents. Under S. 3 of the Act, from the date of the notification by the State, all proprietary rights in an estate vesting in a proprietor of such an estate or in a person having interest in such proprietary rights through the proprietor, shall vest in the State for the purposes of the State, free from all encumbrances. The consequences of such a vesting are laid down in S. 4, which runs into several clauses and sub-sections. Section 4 (1) (a) is the relevant provision of the Act which determines this controversy entirely against the respondents. It provides that "when the notification under S. 3 in respect of any area has been published in the Gazette, then, notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force, and save as otherwise provided in this Act, the consequences as hereinafter set forth shall . . . ensue, namely, (a) all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), grass land, scrub jungle, forest, trees ..shall cease and be vested in the State for the purposes of the State tree of all encumbrances . . ," (We have omitted the words which are not necessary for the purposes of the present appeals). It is clear on a bare reading of the provisions of cl. (a) of S. 4 (1) that whatever rights the proprietor, or a person claiming interest through him, had in the trees, scrub jungle, forest, etc., ceased on the vesting of the estate in theour opinion, there is no substance in this contention. Section 6 refers to those transactions of transfer of any right which is liable to vest in the State as being void. It does not lay down that a transfer made before 16th March 1950, shall be binding upon the State. The transfers which have been saved by S. 6 (1) from being void may be recognised by the State for which the transferee may be entitled to claim some compensation in accordance with the provisions of the Act. But S. 6 does not save that interest from being vested in the State as a result of the notification under S. 3, read with S. 4 (1) (a). The scheme of the Act is that it provides for the acquisition by the State of all interests in the estate of the proprietor himself or of an intermediary, except the tiller of the soil. This it does by vesting all proprietary rights in the State, of whatever grade, by issuing the notification under S. 3, vesting it in the State for the purposes of the State free from all encumbrances. Section 4 lays down in great detail the rights which become extinguished on the vesting of the estate as aforesaid. What is saved to the proprietor or any other person claiming through him is set out in S. 5, cls. (a) to (h), on such terms and conditions as may be determined by the State. Hence any person claiming some interest as a proprietor or as holding through a proprietor in respect of any proprietary interest in an estate has got to bring his interest within S. 5, because on the date of vesting of the estate, the Deputy Commissioner takes charge of all lands other than occupied lands and homestead, and of all interests vesting in the State under S. 3. Upon such taking over of possession, the State becomes liable to pay the compensation provided for in S. 8 and the succeeding sections. The respondents have not been able to show that their interests come under any of the clauses aforesaid of S.in our opinion, it is not necessary to discuss those fine distinctions because whatever may have been the nature of the grant by the outgoing proprietors in favour of the respondents those grants had no legal effect as against the State, except in so far as the State may have recognised them. But the provisions of the Act leave no manner of doubt that the rights claimed by the respondents could not have been enforced against the State, if the latter was not prepared to respect those rights and the rights created by the transactions between the respondents and their grantors did not come within any of the saving clauses of S. 5.