1 Lpa 134/10 with Lpast.15273/10 & CAs. Ash IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE SIDE JURISDICTION LETTERS PATENT APPEAL NO. 134 OF 2010 IN WRIT PETITION NO. 10224 OF 2009 WITH CIVIL APPLICATION NO. 208 OF 2010 ( for Stay ) IN LETTERS PATENT APPEAL NO. 134 OF 2010 IN WRIT PETITION NO. 10224 OF 2009 The Saswad Mali Sugar Factory Limited. .. Appellant Vs Prabhakar Tulshiram Palakhe & Ors. .. Respondents -- WITH LETTERS PATENT APPEAL ( ST.) NO. 15273 OF 2010 IN WRIT PETITION NO. 10224 OF 2009 Rajiv Gopalrao Navale & Ors. .. Appellants. Vs Prabhakar Tulshiram Palakhe & Ors. .. Respondents -- Shri N.H. Seervai, Sr. Counsel with Shri Ranbir Singh i/by Shri A.B. Shah for Appellant in LPA No.134 of 2010 with Civil Application. Shri Akhil Sibal with Shri P.A. Kabadi i/by M/s. Doijode and Associates for Appellant in LPA St. No.15273 of 2010 with Civil Applications. Shri M.L. Patil for Respondent No.1. Shri A.I. Patel, AGP for Respondent Nos.2 and 4. -- 2 Lpa 134/10 with Lpast.15273/10 & CAs. CORAM : MOHIT S. SHAH, CJ & S.C. DHARMADHIKARI, J DATE : 28TH JULY, 2010 P.C. . These appeals under Clause 15 of the Letters Patent are directed against the judgment and order dated 1st February, 2010 of the learned Single Judge by which the learned Single Judge, after giving reasons, has directed that pending fresh inquiry, without correction of revenue records further transfers of the lands in question to grant marketable title to the transferees cannot be permitted. 2. The facts leading to filing of these two appeals are taken substantially from the judgment dated 22nd December, 2006 of a Division Bench of this Court in Writ Petition No.3238 of 1989 and connected matters, are as under and are not in serious dispute :- 2.1 The Saswad Mali Sugar Factory Limited had purchased 1500 to 1600 acres of perennially irrigated land in ( appellant in LPA No.134 of 2010), hereinafter referred to as “the Company”, and it had also taken about 5,000 acres of land on lease from about 200-250 land holders of 4 different villages. As the company had taken this land for the purpose of production of sugar-cane, which could be used as a raw material in the factory, it was not feasible for the company to cultivate whole of the land itself. Therefore, 3 Lpa 134/10 with Lpast.15273/10 & CAs. barring the actual possession and cultivation of 600 acres of land out of about 6500 acres of land, the remaining land was given by this company to 125 sub-lessees. Every year by passing resolutions, the Board of Directors of the Company used to sub- lease the land to same sub-lessees. However, every time, the agreement was for 11 months only. This continued upto 1962. When the Ceiling Act came into force in 1962 and the cut off date for submitting returns of holdings was declared to be 4th August, 1959, these sub-lessees, who were either the directors or shareholders of the company or the relatives, found themselves in difficulty and immediate danger of their holdings being declared as surplus, as each of them was holding between 50 to 500 acres land while the ceiling for irrigated land was only 18 acres. Taking into consideration 125 sub-lessees, the company and its sub-lessees could retain not more than 2250 acres of land and the remaining about 3750 acres of land would be liable to be declared surplus and such surplus land could be restored back to the landholders who were holding within the limit of ceiling in view of Section 19 of the Ceiling Act and the remaining surplus land could be distributed among the landless persons or could be utilized for other public purposes. In view of the imminent danger of about 3,750 acres of land being declared surplus, the directors, shareholders and employees of the company as well as some employees of the 4 Lpa 134/10 with Lpast.15273/10 & CAs. Revenue Department destroyed the records for the period from 1959 to 1962 and on the basis of forged and fabricated documents, prepared a false record and destroyed and altered the original lavanchitthis registers as well as the revenue records. 2.2 There is no dispute that in all 384 persons claiming to be the sub-lessees of the company submitted their returns under the Ceiling Act and after enquiry under the provisions of Section 14 of the Ceiling Act, holdings of all those persons were declared to be within ceiling limits and no land was declared surplus. It is also admitted fact that the appeals were preferred in some of the matters and those appeals were also dismissed in the year 1977. 2.3 Prior thereto, sometime in 1964, the original land holders, from whom the lands were taken on lease by the company discovered the fraud. They made complaints to the Anti Corruption Bureau (ACB for short). In 1964 itself, the ACB took up the investigation and seized the records. It appears that in 1970 oral directions were given by the Government to ACB to stop investigation. However, ACB sought permission to complete the investigation and did complete the same in 1974. Thereafter, charge sheets were filed against the Directors and employees of the 5 Lpa 134/10 with Lpast.15273/10 & CAs. company and others concerned including beneficiaries of manipulation and forgery in the revenue records. The accused, which included some revenue officers, were charged for offences punishable under sections 468, 468(6), 471, 477(A), 120B and 109 of IPC. On the basis of these charge sheets, criminal cases bearing Nos. 2, 5, 6 and 7 of 1975 were tried by the Special Judge, Solapur. The accused were convicted and sentenced for different offences. All the accused preferred criminal appeals sometime in the year 1977. These appeals were disposed of by four different judgments of this Court. This Court concluded that the evidence led by the prosecution proves beyond reasonable doubt that offences of fraud and forgery were committed by the Directors of the Company in collusion with and with assistance of some employees of the Company and Revenue Department of Government of Maharashtra. Thus, the conviction of some of the accused were maintained, while those who were not having knowledge or intention to commit crime, though, they were signatories to the returns and documents, came to be set aside and they were acquitted. Those convicted preferred Special Leave Petitions in the Supreme Court which also came to be dismissed. 6 Lpa 134/10 with Lpast.15273/10 & CAs. 2.4 The judgments in the appeals were delivered by this Court from February to April 1985. These judgments were forwarded to the Government by ACB pointing out the findings of the Court about fraudulent declarations made by the accused persons in proceedings under the Ceiling Act. The ACB requested the Government to initiate enquiry and take appropriate action. On 21st October 1986, the Government forwarded the judgments in Criminal Appeals to the Collector for appropriate enquiry and to take action to determine as to what would be the surplus land in these cases. Initially, the Collector directed enquiry into four original khatas which were fraudulently converted into 44 bogus khatas or accounts. Therefore, the original land holders made representations to the Government and ACB with a request to make enquiry about the land holders and occupants pertaining to about 6000 acres of land. On 15th March 1988, ACB submitted three lists of bogus khatas which covered almost the entire land. On 7th August, 1989, Government directed SDO, Pandharpur to make enquiry under section 14(4) of the Ceiling Act pertaining to a list of 30 persons. On 31st October, 1989 two orders were issued by the Government in respect of the land holders and the lands held by them in Ahmednagar and Solapur Districts. 7 Lpa 134/10 with Lpast.15273/10 & CAs. 2.5 In these facts, Writ Petition No.3238 of 1989 was filed in this Court by one Babu Maruti Dukare and 28 others. These petitioners claiming to be original land holders or their descendants, entitled to retain the land in view of the Ceiling Act. They claimed to be victims of fraud and forgery of the Directors, Shareholders, their relatives and employees of the company. 2.6 The beneficiaries of the orders passed under Ceiling Act claimed that the enquiry about surplus land was already completed and had achieved finality. According to them, the Government could not give suo-motu direction to the Collector to re- open the enquiries for two reasons. Firstly, against the order of the Tribunal/Additional Tahsildar, appeals were preferred and the appeals were dismissed. When the appeals were preferred and the same were dismissed, the Government cannot suo motu re-open the cases and secondly, if appeal is not preferred then the State can suo-moto call the records and to satisfy itself about the legality or propriety of such orders, within a period of 3 years after the determination or completion of enquiry or proceeding under Section 21. It is contended that in view of the provisions of Section 45(2) neither the State Government could suo-motu give such directions nor such directions could be given beyond a period of 3 years after the decision had attained finality. 8 Lpa 134/10 with Lpast.15273/10 & CAs. 2.7 On behalf of the original landholders, it was contended that the orders passed by the revenue authorities under the Ceiling Act were based on forged and fabricated records and were a result of fraud played by such beneficiaries on the revenue authorities and, therefore, such decisions based on the fraudulent acts, forged and fabricated documents were nullity and liable to be set aside. It was also further contended that restrictions provided by Section 45 of the Ceiling Act on suo- motu revisional power of the Government cannot be applicable where a fraud was committed and fraudulently orders were obtained. According to them, the Government could direct re-opening of the enquiries when it was brought to its notice that the orders were obtained by playing fraud on the basis of forged and fabricated records. 2.8 After hearing the arguments of learned counsel for the parties, the Division Bench dismissed the writ petition and gave the following findings. “In the present matters it is clear that a massive fraud was committed against the State as well as the original landholders and the poor cultivators who could be allotted some agricultural land out of the surplus land. By committing frauds and by making use of forged and fabricated documents and records the petitioners and their other culprits avoided declaration of about 3750 acres of perennially irrigated 9 Lpa 134/10 with Lpast.15273/10 & CAs. land as surplus. The original owners who were holding the lands less than the ceiling limit prescribed by the law would have been entitled to restoration of the some of the lands which would be rendered surplus. Similarly, if whole of the surplus land would not be restored to its original owners, some of it could certainly be allotted to the landless or poor people for cultivation. In the present matter, even though fraud was committed and forged and fabricated records were prepared sometime in 1961-62 or thereafter, it appears that from 1964 itself, complaints about the same were made by the original landholders. It appears that the A.C.B. commenced the investigation but by using their influence with the powers that be, the perpetrators of the crime could delay the investigation for a period of almost 10 years. It appears that on one hand, the A.C.B. was investigating the cases and charge-sheets were filed and on the other hand, the Special Divisional Officer holding the appellate powers under the Ceiling Act dismissed the appeals on the basis of record, which was forged and fabricated and on the basis of which culprits were convicted. In view of this, period of limitation prescribed under Section 45(2) can not come in a way of the State Government and can not deter it from invoking its suo motu revisional power, which was absolutely essential to do justice to the poor original landholders and other landless people and to undo the results of the frauds, forgeries and fabrications. In fact, the State Government would be failing in its duties and responsibilities, if it would not exercise its suo motu reivisional jurisdiction. Otherwise also as pointed out earlier appeals against the convictions were decided in 1985 and thereafter, the 10 Lpa 134/10 with Lpast.15273/10 & CAs. accused persons had preferred Special Leave Petitions which came to be dismissed. If period of limitation is counted from the conclusion of the criminal prosecution, the action taken by the Government appears to be clearly within the limitation of 3 years. The impugned orders passed from 1986 to 1989 to re-open and make enquiries afresh were clearly passed by invoking suo motu revisional power under Section 45(2), though the said section is not specifically mentioned in the impugned orders, which makes no difference.” 2.9 In Writ Petition No.3238 of 1989, the original landholders had sought certain directions for appropriate enquiry and implementation of the orders passed by the Government for fresh enquiry. This Court held that the Deputy Commissioner, Pune Division, was sufficiently senior and competent officer to hold such an enquiry and that taking into consideration the huge fraud, forgeries and the large number of people involved in the matter, the Enquiry Officer needed some time, and therefore, the Court even, while granting six months’ time to complete the enquiries, specifically directed that the Enquiry Officer should fully concentrate and dispose off the said enquiries, and he should not be burdened with any other work. 3. Aggrieved by the above judgment of the Division Bench of this Court, Madhukar Sabha Shivarkar, one of the present holder of 11 Lpa 134/10 with Lpast.15273/10 & CAs. one portion of land and a few other present land holders approached the Apex Court by filing Special Leave Petition No.9710 of 2007 with other connected matters. Hence, on 10th July, 2007, the Apex Court passed the following order:- “SLP(C) Nos.9710, 9816 and 11179 of 2007 - It is stated by Mr. Harish N. Salve, learned senior counsel that his clients are neither accused or acquitted accused and allegations of forgery was not pending against them. Issue notice returnable within six weeks. Status quo as of today shall be maintained in the meantime. Ms Anagha S. Desai, learned counsel waives notice on behalf of State of Maharashtra. Mr. Rajeev B. Masodhkar, learned counsel waives notice on behalf of respondent Nos.8 and 23. I.A. No.1 in & SLP (C) ..CC No.5156/2007. Mr. U.U. Lalit, learned senior counsel states that his clients are neither accused or acquitted accused and allegations of forgery was not pending against them. Permission to file SLP is granted. Issue notice returnable within six weeks. Status quo as of today shall be maintained in the meantime.” 12 Lpa 134/10 with Lpast.15273/10 & CAs. 4. We are informed at the bar that the said order of status quo which was passed on 10th July, 2010 continues to operate even now. It is further stated that all the respondents in the said Special Leave Petition are not served and that the matter is still pending before the Apex Court at that stage. Leave to appeal is not yet granted. The petition giving rise to the present appeal is directed against the order dated 25th August, 2009 of the Minister (Revenue) of the State Maharashtra. 5. By the orders passed by the Collector, Solapur on 31st March, 1997 and thereafter on 26th July, 2000, the Collector directed that during pendency of the enquiry, it will be necessary for the landholders to seek permission from the District Collector before making sale and/or purchase of the land. The said directions of the Collector cover all the lands which are mentioned as Gat number/ Survey numbers on pages 3 to 25. 6. By the order dated 25th August, 2009, the Minister (Revenue) of the State of Maharashtra set aside the above orders of the Collector. 7. One of the original landholders, aged 75 years, has filed the writ petition in which the learned Single Judge has passed the interlocutory order which is challenged in the present appeal. The learned Single Judge has observed that in view of the orders of conviction passed by the Criminal Court convicting the officers of the appellant- company and others for offences of forgery and fabrication of revenue records, pending further inquiry, the present landholders cannot be permitted to transfer the lands. 13 Lpa 134/10 with Lpast.15273/10 & CAs. 8. Shri Seervai, learned senior counsel for the appellants – the Saswad Mali Sugar Factory Ltd. and Shri Sibal, learned counsel for some of the present landholders ( appellants in LPA St. No.15273 of 2010) have assailed the interlocutory order of the learned Single Judge by raising the following contentions:- (i) Neither the petitioner, complainant, the Collector nor the learned Single Judge have indicated the provisions of law under which the impugned action has been taken and restriction has been imposed by which the parties must move the Collector to seek prior permission before making sale of any of the lands in question. (ii) The impugned order of the Collector as well as the order of the learned Single Judge in appeal proceed on the premise that there is an express power vested in the Collector to impose any such restriction against transfer of land. Such an implied power cannot be assumed, when there is no express power vested in support of which such implied power is being invoked. (iii) The purported application of the doctrine of implied power is unsustainable in the teeth of Sections 8 and 10 of the Maharashtra Agriculture (Ceiling on Holding ) Act, 1961. This submission is made without conceding 14 Lpa 134/10 with Lpast.15273/10 & CAs. but assuming that it is under the Ceiling Act, 1961 that such implied power is available. (iv) Reliance is placed on the decisions of the Apex Court in The Sub-Divisional Officer, Sadar, Faizabad v. Shambhoo Narain Singh, 1969(1) SCC 825 (Pr.8), Shail Kumari Devi & Anr. v. Krishan Bhagwan Pathak Alias Kushun B. Pathak, (2008)9 SCC 632 (Pr.25) and Union of India & Anr. v. Paras Laminates (P) Ltd., (1990)4 SCC 453 (Pr.8) in support of their contention that such implied power cannot be invoked when there is no express provision to support any doctrine of implied power. (v) The provisions of Sections 8 and 10 of the Ceiling Act of 1961 do contemplate that the transfer may take place during pendency of the proceedings under the Ceiling Act and on conclusion of the ceiling proceedings, if any finding is given that any surplus land was transferred by the original landholders, such transfer would be invalid but such a provision more than supports the appellants’ case, rather than the order of the Collector and the learned Single Judge, that no restriction can be imposed upon transfer of land pending an inquiry. 15 Lpa 134/10 with Lpast.15273/10 & CAs. (vi) The land holding of about 700 people is being frozen by the impugned order and, therefore, balance of convenience is in favour of the appellants and other landholders and against the respondents/petitioners. (vii) As far as the writ petitioner is concerned, even if at the conclusion of the inquiry, everything will be held against the appellants, only 36 acres of land would be available over which the writ petitioner can make any claim. 9. On the other hand, learned counsel for the respondent no. 1/ writ petitioner has supported the order of the learned Single Judge and submitted that the fact that fabricated documents and forgery of the revenue records were resorted to defeat the provisions of the Ceiling Act is not in the realm of conjectures but the criminal court has given finding to that effect and fixed the responsibility on the shareholders of the company and that the Division Bench of this Court has also in terms held that a massive fraud has been committed against the original landholders and the State and the poor cultivators who could be allotted some agricultural land out of the surplus land. He submitted that when such an enquiry is pending for the purpose of reconsideration of the land records and the appellants have obtained an order of status quo from the Apex Court under which they are claiming that no inquiry can be proceeded under the Ceiling Act of 1961 and, on the other hand, they are claiming power to transfer the lands and if such transfer is permitted, the inquiry would become infructuous or at 16 Lpa 134/10 with Lpast.15273/10 & CAs. least equities would be claimed by the purchasers of large number of tracts of land, if permitted to be transferred during pendency of the inquiry, which has already been delayed since 1989, on account of injunctions granted by this Court in the writ petitions at the instance of the appellants, when injunctions were unfortunately vacated in December, 2006 and the appellants are contending that inquiries can not proceed because of the ad-interim orders of status quo passed by the Apex Court on 10th July, 2007. Once the landholders are permitted to make transfers during pendency of the inquiry, the inquiry would be dragged for a further decades. The writ petitioner, who is aged about 75 years, will not be able to see the fruits of all endeavours made and the judgments of this Court which are against the appellant. 10. Having heard the learned counsel for the parties, we are of the view that when on the one hand, there is an order of status quo passed by the Apex Court in the Special Leave Petitions filed by the persons who claim to be landholders and it is also contended on their behalf that on account of status quo order, the inquiry under the Ceiling Act of 1961 cannot proceed, it will not be equitable to hold that notwithstanding the interim order of status quo, the landholders can go on transferring the lands. The inquiry is to be held by the officer not only under the Ceiling Act, 1961 but also under the Maharashtra Land Revenue Code, 1966 and the Bombay Tenancy and Agricultural Lands Act, 1948 because what is being inquired into is not only the extent of holding under the Ceiling Act, 1961, but also whether the lands belonged to 125 persons who were holding the land as sub-lessees from the appellant/company or whether the lands were being held by 374 persons. This inquiry has been necessitated on account of the findings given by the Criminal Court and by this Court that the forged and fabricated documents were used. When the inquiry 17 Lpa 134/10 with Lpast.15273/10 & CAs. is being held into this aspect, it cannot be said that the inquiry is merely under the Ceiling Act, 1961, and therefore, cannot be proceeded with under the orders of the Apex Court. 11. The appellants have not filed any writ petition challenging the order of Minister (Revenue) or the order of revenue authorities under which inquiry has been directed to be held under the Ceiling Act, 1961, under the Bombay Tenancy and Agricultural Lands Act, 1948 as well as Maharashtra Land Revenue Code, 1966. In fact, the order of status quo granted by the Apex Court is merely to restrain the authorities from divesting the SLP writ petitioners from their title to the land or taking away possession of the lands lying with the SLP writ petitioners. The order of status quo passed by the Apex Court does not preclude the authorities from proceeding with the inquiry because the Apex Court has not granted interim or ad-interim stay of the judgment dated 22nd December, 2006 of the Division Bench of this Court in Writ Petition No.3238 of 1989. The fact remains that convictions have been recorded by the Criminal Court and confirmed by this Court and by the Apex Court in the matters of forgery and fabrication of the