Case: STATE OF BIHAR (NOW ST.OF JHARKHAND) THROUGH THE SUB DIVISIONAL OFFICER Vs. TATA IRON

2. Land was acquired and conveyed to the Respondent between the years 1912-1929 under the Land Acquisition Act, 1894 for setting up an industry. The Respondent established an integrated steel plant, allied manufacturing units, township, civic amenities for its staff, hospitals, schools, parks, etc. The entire township came up gradually which was renamed as Jamshedpur.3. The Bihar Land Reforms Act was enacted in the year 1950 (for short ?the BLR Act?) and by a Notification dated 01.01.1956 all lands of the Respondent Company stood vested in the State Government. Section 2B was inserted in the BLR Act in the year 1961 Vide Bihar Land Reforms (Amendment) Act, 1960, Act 02 of 1961. exempting the lands which were acquired for an industrial undertaking from the application of the BLR Act. By virtue of the said amendment, the Respondent?s lands were exempted from vesting under the BLR Act. Thereafter, Section 2B of the BLR Act was deleted in the year 1972 vide the Bihar Land Reforms (Amendment) Act, 1972 Act No.5 of 1972 (for short ?Amendment Act, 1972?). Consequently, the lands of the Respondent again stood vested in the State. Amendment Act, 1972 was assailed by the Respondent by way of a writ petition in this Court. The implementation of the Amendment Act, 1972 against the Respondent was stayed by this Court. Later, the Writ Petition was withdrawn by the Respondent and the State of Bihar amended the BLR Act in the year 1982 by enacting the Bihar Land Reforms (Amendment) Act, 1982 (for short ?Amendment Act, 1982?). Sections 7D and Section 7E of the BLR Act were substituted by the Amendment Act, 1982 and the Respondent was treated as the deemed lessee of the State Government for the lands held by it subject to the payment of fair and equitable rent which was to be determined by the State Government.4. An Agreement for lease was entered into between the Appellant and the Respondent on 01.08.1984. It was agreed that the lands together with the buildings and structures as were being used for the purposes of factories or mills or godowns by the Respondent were saved to the company under Section 7 of the BLR Act on payment of rent at the rate of Rs.200/- per acre per year effective from 01.01.1956. Clause (xii) of the Agreement provided that all rents and dues from the Respondent company to the State Government for the period from 01.01.1956 to 31.03.1984 particularly in respect of clauses (i), (ii), (iii), (v), (vi), (ix) and (x) therein shall be paid in three equal annual installments with interest. The first installment had to be paid on or before 31.12.1984 and the interest would be calculated at the rate of 9.5% from 01.01.1956 to 31.12.1974 and at the rate of 13% from 01.01.1975 to 31.03.1984. According to Clause (xv), the existing hats, Melas, Bazaars, Jalkars, fisheries and other Sairats were to be settled by the State Government with the Respondent company on a fixed jama for a period of five years at a time and the Respondent had to carry on the management and administration thereof on payment of the entire amount of the fixed jama to the State Government. The entire amount realized towards the above mentioned items by the Respondent for the period between 01.01.1956 and 31.03.1984 was agreed to be paid by the Respondent to the State Government in three equal installments with the first of such installment due on or before 31.12.1984. The interest on such dues was to be paid at the rate of 9.5% per annum for the period between 01.01.1956 and 31.12.1974 and at the rate of 13% per annum for the period between 01.01.1975 and 31.03.1984.5. A formal lease deed was executed on 01.08.1985 incorporating the terms of the Agreement for Lease dated 01.08.1984 (for short ?Lease Deed?). A demand was raised by the State Government for payment of Rs.1.95 Crores as rent along with interest as per Clause (xii) of the Lease Deed on 11.09.1985. A further demand of Rs.2.19 Crores was made on 18.10.1985 towards rent coupled with interest in terms of Clause (xv) of the Lease Deed. The Respondent complied with the demand and made the payments.6. On 29.10.1993, a letter was written by the Secretary, Department of Revenue and Land Reform, Bihar (for short ?the Secretary?) to the Deputy Commissioner, Jamshedpur in which it was stated that the Government was suffering heavy losses due to the absence of the words ?per annum? for calculation of interest in Clause (xii) of the Lease Deed. After obtaining legal opinion, the Secretary directed the Deputy Commissioner, Jamshedpur to re-calculate the interest on the arrears of rent payable under Clause (xii) of the Lease Deed on a yearly basis in the same manner as done for the rent on the lands under Clause (xv) and realize the same from the Respondent. A certificate proceeding was issued by the District Collector, Jamshedpur under the Bihar and Orissa Public Demands Recovery Act, 1914 (for short ?Public Demands Act?) by which the Respondent was directed to pay Rs.5.97 Crores towards interest calculated on per annum basis in respect of the lands under Clause (xii) of the Lease Deed. The Respondent filed a Writ Petition against the said demand before the High Court of Bihar, Ranchi Bench (now Jharkhand). The contention raised on behalf of the Respondent that the demand cannot be said to be a public demand under the Public Demands Act was rejected by the learned Single Judge of the High Court. The learned Single Judge observed that the demand for the payment of interest on rent payable under the Lease Deed entered into pursuant to the BLR Act would certainly fall within the sweep of Item (vii) of Schedule I read with Section 6(3) of the Public Demands Act. Writ Petition No. 2761 of 1994 was dismissed as being not maintainable but liberty was granted to the Respondent to raise all objections relating to their liability to pay in accordance with the provisions of Section 9 of the Public Demands Act. The Certificate Officer was directed to consider the objections notwithstanding any delay in filing the same without being influenced by the observations made by the High Court. The judgment of the learned Single Judge was affirmed by the Division Bench in the LPA No.276 of 1995 (R) filed by the Respondent.7. On 23.01.1996, the Certificate Officer rejected the objections that were filed by the Respondent. Questioning the legality and validity of the demand and the Order of the Certificate Officer by which the objections were rejected, the Respondent filed a Writ Petition before the High Court of Bihar, Ranchi Bench (now Jharkhand). The High Court stayed the execution of the demand subject to the Respondent depositing Rupees One Crore before 30.03.1996 and furnishing a Bank Guarantee for the remaining amount. In compliance of the interim order of the High Court, we are informed by the learned Senior Counsel for the Respondent that an amount of Rupees One Crore was deposited in the High Court on 28.03.1996. The High Court by the impugned judgment allowed the Writ Petition filed by the Respondent and concluded as(i)The wording contained in clause (xii) and clause (xv) would clearly convey the meaning that clauses (xii) would indicate that interest in respect of the said clause can be calculated only on ?lump sum? basis and not ?per annum? basis as there is no use of words ?per annum? in clause (xii) like that of clause (xv) and therefore, the impugned demand for interest ?per annum? in respect of clause (xii) is illegal.(ii) The impugned demand is not a ?public demand? within the meaning of section 3(6) of the Bihar and Orissa Public Demands Recovery Act, 1914 as the demand in question is concerned with the interpretation of clause (xii) and hence the demand is not realizable in certificate proceedings.Guided by the decisions of this Court on the interpretation of contracts in Delhi Development Authority v. Durga Chand, (1973) 2 SCC 815 : AIR 1973 SC 2609   ¶19 and 21 Provash Chandra Dalui v. Biswanath Banerjee, (1989) 1 SCC Suppl. 487: AIR 1989 SC 1834  , 20 th Century Finance Corporation Ltd. v. State of Maharashtra, (2000) 6 SCC 12 &  para; 12 and Union of India v. Shiv Dayal Soin & Sons (P) Ltd., (2003) 4 SCC 695     the High Court was of the opinion that the contract must be construed as a whole and that the meaning of the words contained in the contract has to be formed on the facts and circumstances of each case in the light of the terms and conditions of the contract. According to the High Court, the words expressly mentioned in one place but not in another place must be taken to have been deliberately omitted on the well settled principle of Expressio Unius Est Exclusio Alterius. The High Court found that Clause (xii) and Clause (xv) pertain to two different types of lands. Clause (xii) relates to properties falling in Clauses (i), (ii), (iii), (v), (vi), (ix) and (x) of the Lease Deed wherein the Respondent developed the lands by setting up industries, buildings, structures, roads, civic amenities, hospitals, etc. whereas Clause (xv) dealt with the lands settled by the Government on a fixed jama on a period of five years at a time. Lands covered in Clause (xv) were being utilized for hats, bazaars, melas, Jalkars, fisheries and other Sairats from which the Respondent was earning money. T aking into account the difference in the nature of the lands and their utility, the High Court held that the word ?per annum? was intentionally included in Clause (xv) of the Lease Deed and excluded from Clause (xii) of the Lease Deed. The High Court observed that the State cannot travel beyond the terms and conditions of the Lease Deed and issue a demand for payment of interest under Clause (xii) by calculating the same on a yearly basis.9. The High Court accepted the submission made on behalf of the Respondent that the demand that was made by the Certificate Officer was not a public demand within the meaning of Section 3(6) of the Public Demands Act. The High Court remarked that Sections 7D and 7E of the BLR Act did not provide for payment of interest and the interest charged by the State of Bihar was pursuant to an agreement. As the demand was purely contractual, it cannot be termed as a ?public demand?, according to the High Court.

Court's reasoning:
A plain reading of the Lease Deed as a whole would make it clear that the payment of interest on rent chargeable under Clause (xii) is essentially different from that under Clause (xv). The principle of Expressio Unius Est Exclusio Alterius is squarely applicable to the facts of this case. For the above reasons, we are in agreement with the finding of the High Court that the District Collector, Jamshedpur was not right in issuing a demand for payment of Rs.5.97 Crores towards interest on the arrears of rent for the lands covered under Clause (xii) of the Lease Deed.16. However, the conclusion of the High Court that the demand does not fall within the sweep of the Public Demands Act is not correct. Being aware of the earlier decision of the High Court on this point, an error was committed by the High Court in taking a completely different view. If the High Court was not in agreement with the earlier decision, the only course open to it was to refer the matter to a larger Bench. That apart, in Clause (xx) of the Lease Deed, the Respondent and the Appellant agreed that recoveries of arrears of rent may be affected under the Public Demands Act. It is not open to the Respondent to contend that the demand made for payment of interest under the Lease Deed as not a public demand in view of Clause (xx) of the Lease Deed.Item No.7 of Schedule I covers any demand payable by a person holding any interest in land. Therefore, interest on rent payable for the lands would, in our opinion, be recoverable under Item No.7 of Schedule I read with Section 3(6) of the Public Demands Act.