Case: Vithal Yeshwant Jathar Vs. Shikandarkhan Makhtumkhansardesai

1. This appeal arises out of a reference under S. 30 of the Land Acquisition Act as regards the apportionment of its, 35,10210-0, the compensation awarded for two plots of land numbered, Survey No. 37 Kambhapur and Survey No. 137 Narendra. It is no longer disputed that these form part of a Watan. The dispute as regards the apportionment has arisen between the Watandar and the person in actual possession of the land, the appellant before us.2. The Land Acquisition Judge made an order that the compensation be apportioned in the ratio of 10:6, the 10/16th to be given to the landlord and the reminder to the tenant. The correctness of this was challenged in appeal. It was urged that the rent was fixed in perpetuity and the landlord had no right to increase the rent, and so, the landlord should get only the capitalised value of the rent payable for the acquired lands and the remainder should o to the tenant. The High Court held that the landlord had the right to claim that the tenant should pay enhanced rent and directed the compensation to be apportioned in the proportion of 55 to 45 between the landlord and the tenant.3. Against this decision this appeal has been preferred on certificate granted by the High Court.The Assistant Collector, before whom the application came up for hearing rejected the application and refused to put the Watandar in possession or to cancel the lease of 1863. On appeal the Collector by his order dated March 16, 1908, maintained the Assistant Collectors order with the modification that he directed an additional amount of rent equal to the cess paid on the land to be paid by the lessees. An appeal to the Commissioner was unsuccessful. Then the Watandar moved the Government of Bombay. The Government made an order on May 23, 1411 fixing the rent payable for the lands covered by the lease at Rs. 1245/4/- The effect of this order by the Government requires careful consideration.6. It is to be mentioned, however, that in the year 1926 the Watandar again moved the Government for a further increase of the rent, or for the restoration of the lands; and thereupon the Government made an order in 1927 fixing the rent at Rs. 4300/- and also directing that the rent leviable should be revised periodically at intervals of 10 years.7. In 1928 the tenant brought a suit against the Secretary of State for indict and the Watandar in the Court of the First Class Subordinate Judge, Dharwar, praying for a declaration that the land mentioned in the Schedule to the plaint - which are the lands in respect of which the orders mentioned above were made by the government - did not form part of the Watan lands, that in any case the plaintiffs had acquired the status of Watandars and further that the Government resolution of 1911 and of 1927 were ultra vires. The learned Subordinate Judge held that the lands did form part of the Watan and that the Watan Act was applicable to these lands. He also held that the order of the Collector in 1908, though defective in form was in substance one under S. 9, sub-s.(2) of the Watan Act and therefore it could not be said to be ultra vires. He also held however that the order of Government in fixing rent at Rs. 1,245/4/- which was well above what the Collector had fixed was ultra vires; but that the plaintiff was not entitled to any declaration that the Government resolution of 1911 was ultra vires because of the law of limitation. The learned Judge further held that the government resolution of 1927 was ultra vires. Accordingly he made an order directing the first defendant, the Secretary of State for India in Council not to levy a rent higher than Rs. 1,245/41- in enforcement of the resolution of 1911 and declaring that the higher rent levied by the Collector purporting to be under the 1927 resolution was unauthorised. He also made an order directing the realisation of the excess amount of Rs. 4,582-2-0 from defendants Nos. 1 and 2.8. Against this decision, the Secretary of State for India, the defendant No. 1 as also the Watandar, the defendant No. 2 appealed to the High Court. No appeal was however preferred by the plaintiff. The High Court (Beaumont, C. J. and Wassoodew, J.) dismissed the appeal, except as regards the order directing both the defendants Nos. 1 and 2 to pay the excess amounts. The learned Judges altered this to a direction that the amount should be recovered from the defendant No. 2, the Watandar, only. Except for this they dismissed the appeal. They held in agreement with the learned Subordinate Judge that the Governments order of 1927 was ultra vires. The learned Judges were of opinion: (1) that the order by government in 1911 was not an order under S. 9 and could only be considered to be legal on the basis that it was a grant of a fresh lease by the Watandar at the rent of Rs. 1,245/4/- with the sanction of government under S. 5 of the Watan Act; and (2) that in any case making the order in 1927 the Government was acting beyond their powers as any action under S. 9 of the Watan Act must in the first instance be taken by the Collector and could not be taken initially by the Government.9. The result is that as between the parties, viz., the Watandar and the tenant it can no longer be disputed that the Government resolution fixing the rent of the Watan lands at Rs. 1, 245/4/- is legally binding. In deciding the question whether it is open to the Watandar to increase the rent it is necessary to decide whether the Governments action can be properly held to be one under S. 9 or sanctioning a fresh lease at Rs. 1,245/4/10. Before the High Court it was urged on behalf of the tenant- appellant that the earlier decision of that Court, which has been mentioned above, that the order of the government fixing the rent at Rs. 1,245, 4/- was not an order under S. 9 and amounted in law to the sanction of the government to the grant of a fresh lease at Rs 1,245/4/- to the former tenant operated as res judicata between the parties. The learned Judges of the High Court have rejected this contention in the view that what the Court said on the earlier occasion was obiter.

Reasoning:
12. We do not propose to investigate the question whether the High Courts earlier decision that the governments order of 1911 amounted in law to sanctioning a fresh lease operates as res judicata or not, as, quite independently of that decision, we think it proper to hold that the governments order of 1911 is not an order under S. 9(2) of the Watan Act but amounted only to a sanction of a freshhe decides that there are no such reasons the application must be rejected. If, on the contrary, the Collector is satisfied that there are good reasons for declaring the alienation null and void he is to record his reasons and give a declaration as prayed for that the alienation was null and void. Having made such declaration he is then to decide whether the possession should be transferred to the Watandar or action should be taken under S. 9(2), that is, instead of transferring the possession of the land, he should collect from the person in possession the proper amount as the profits from the land, for payment to the Watandar. It is important to notice that action under sub section (2) can be taken only on the basis that the alienation has ceased to have any legal force. Thus when the alienation was by way of lease, action under S. 9(2) can be taken only on the basis that the lease no longer effective in law and the relationship of landlord and tenant has ceased between the Watandar and the person in possession. Where the Collector takes action under S. 9(2), the person formerly in possession as a lessee, continues in possession henceforth not as a lessee but on the strength of the Collectors permission only. In other words, in taking action under S. 9(2) the Collector is not creating a fresh lease in place of the lease that has been declared null and void but only directs that the person in possession is to continue in possession subject to the payment of such amount as he decides to be the full rent ordinarily paid by tenants of land of similar description in the same locality.16. The Assistant Collector, before whom the application of the Watandars, predecessors of the present respondent uncle, S. 9 of the Watan Act came up for consideration rejected the application in these words: - "I reject the application of Matumkhan asking that the lands enjoyed by Bhaskarrao Jather on a perpetual lease should be fully restored to his possession cancelling the lease passed in 1863." That is, he refused the prayer for a declaration that the alienation was null and void and necessarily refused the prayer for consequential relief. As has been already indicated the Collector who heard the appeal was of opinion that the order appealed against "was undoubtedly correct in the main" but still he ordered "an additional amount of rent equal to the cess to be paid." There is no suggestion in the Collectors order that in his view the Assistant Collector had been wrong in thinking that there are no reasons for declaring the alienation to be null and void. On the contrary the Collectors order indicates that he agreed with the Assistant Collector in the new that the alienation could not be declared null and void. To read this appellate order as making by implication a declaration that the lease of 1863 was null and void is not only to read into it words which are not there but indeed to go against the clear tenor of the words which have been actually used. There is no justification in our opinion, to hold that when the Collector made the order that an additional amount of rent equal to the cess be paid he must have had in mind the provisions of S. 9(2) of the Watan Act and so the entire order should be read as giving first, by implication a declaration that the lease was null and void and, secondly, making an order for collection of profits on behalf of the Watantar from the person in possession. It is true that under the law the Collector was not entitled to made this order for payment of additional rent unless be first declared the previous lease to be null and void and then found that the previous rent together with the additional amount of rent represented the full rent ordinarily paid by tenants of land of similar description in the same locality. From the mere fact that this order was made by him for payment of additional amount of rent equal to cess, it is not however permissible to work back, and imagine something which was not said by him. When the matter came up to the government after the Commissioner had dismissed the appeal from the Collectors decision the government also made no declaration that the lease of 1863 was null and void. But, after setting out certain circumstances which seemed to show that at the time when the lease was granted the interests of the Watandar were not properly considered by the lessee who held a quasi fiduciary relation towards the Watandar, the government ordered: -"The rent should therefore now be revised and fixed at Rs. 1,245/41- being a sum equal to the present rental plus the judi plus the local fund cess." The government was thus clearly acting on the basis that the person in possession was a tenant of the Watandar but rent for the tenancy should be fixed at Rs. 1,245/4/-. Such action cannot by any stretch of imagination be considered to be an action under S. 9 of the Watan Act. The only legal basis that can be found for the governments action is in S. 5 of the Watan Act. That section provides that without the sanction of the State Government ------ -------- ------ it shall not be competent to a Watandar to mortgage, charge, lease or alienate, for a period beyond the terms of his natural life, any watan or any part thereof, or any interest therein, to or for the benefit of any person who is not a Watandar of the same watan.By necessary implication this section authorises the State Government to sanction the mortgage, charge, alienation or lease, by a Watandar for a period beyond the term of his natural life of any watan, or any part thereof, or any interest therein, to or for the benefit of any person who is not a Watandar of the same watan, and on such sanction being given the Watandar has power to act accordingly.It is known that after the order of the government made in 1911, the former tenant continued in possession and the Watandar received from him the rent fixed by the government, that is, Rs. 1,245/4/- for the Watan. In all these circumstances, it is reasonable to hold that by the order of 1911 the government was giving its sanction to the lease of the watan lands to the person in possession at this revised rent. In consequence of the governments order therefore a lease came into existence at the rate of Rs. 1,245/41- in place of the old lease ofwas no document in writing for the lease which came into existence after the governments order of 1913. It is quite clear, however, from the order of the government that the only change it sanctioned in the terms of the former lease was as regards rent. That was changed from Rs. 727/to 1,245/4/-; but the other terms, namely, that the lease was permanent and the rate of rent would remain fixed from the date of creation of the lease remained unaltered. To use the words of Chief Justice Beaumont in the earlier litigation between the parties: "the Government resolution dated the 23rd May, 1911, amounts to an opinion to a confirmation of the 1863 lease with a modification as to the rent." The Watandar had therefore no right to increase the rent.18. The result is that out of the amount of compensation awarded for these lands, the respondent being the landlord is entitled to only the capitalised value of the rent. The rent for the entire Watan, which is stated to be 400 acres of land, being Rs. 1,245/4/- the proportionate rent for the lands acquired, that is, 30 acres and 32 gunthas works out at about Rs. 95/9/-. The capitalised value of this at twenty-five times amounts to Rs. 2,389/1/-. The apportionment should therefore be that Rs. 2,389/1/- of the amount of compensation be awarded to the respondent and the remainder to the appellant.