Case: The Collector Of Bombay Vs. Nusserwanji Rattanji Mistri &amp; Others

In April 1942 the appellant acting under the provisions of Bombay Act No. II of 1876, issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein, and calling for their representation. In their reply, the respondents denied the right of the appellant to assess the lands to revenue, and followed it up by instituting two suits before the Revenue Judge for establishing their rights. In their plaints, they alleged that under the provisions of the Foras Act the maximum assessment leviable on the lands was 9 reas per burga, and that the Government had no right to enhance it; that the effect of the land acquisition proceedings between 1864 and 1867 was to extinguish the right of the State to levy even this assessment, and that further, having purchased the properties absolutely from the Governor-General under Exhibit A, they were entitled to hold them without any liability to pay revenue thereon. They accordingly prayed for a declaration that the Government had no right to levy any assessment on these lands, or, in the alternative, that such assessment should not exceed what was payable under Bombay Act No. VI ofThe appellant contested the suit. The Revenue Judge held that as a result of the land acquisition proceedings between 1864 and 1867, the lands vested in the Government freed from any liability to pay assessment, and that when the Governor-General transferred them under Exhibit A without reserving the right to assess them, the purchasers had the right to hold them without any liability to pay revenue. He accordingly granted a declaration that the appellant had no right to levy assessment, and that the notices issued by him under Act No. II of 1876 were illegal. On appeal by the defendants to the High Court of Bombay, it was held by Chagla, C.J., Bhagwati, J. concurring, that Act No. VI of 1851 imposed a specific limit on the right of the Government to levy assessments on the lands in question, that, further, by reason of the land acquisition proceedings the right to the Provincial Government to levy assessment even within the limits prescribed by Act No. VI of 1851 was extinguished, and that when the lands were transferred by the Central Government to Lady Pochkhanawalla and others, they got them as revenue-free lands. In the result, the appeal was dismissed. This appeal by special leave is directed against this decision.The statutory authority under which the appellant seeks to levy assessment on the lands is section 8 of Bombay Act No. II of 1876, and it is as followsshall be the duty of the Collector, subject to the orders of Government, to fix and to levy the assessment for land revenue.When there is no right on the part of the superior holder in limitation of the right of Government to assess, the assessment shall be fixed at the discretion of the Collector subject to the control of Government.When there is a right on the part of the superior holder in limitation of the right of Government, in consequence of a specific limit to assessment having been established and preserved, the assessment shall not exceed such specificwas on the footing that the respondents were superior holders as defined in the Act, that the appellant issued notices to them in April 1942. In their reply notices and in the plaints, the respondents did not dispute that position, but only contended in terms of section 8 that they had a specific right in limitation of the right of the Government to assess the lands; and the entire controversy in the Courts below was whether they had established that right. No contention was raised that they were not superior holders as defined in the Act, and that, in consequence, no assessment could be imposed on the lands under section 8 of thethe argument before us, the contention was sought to be raised for the first time by the learned Attorney-General that the proceedings taken by the Collector under section 8 were incompetent, as that section would apply only to lands held by superior holders, that the definition of superior holder in section 3(4) as meaning "the person having the highest title under the Provincial Government to any land in the City of Bombay" would take in only persons who held on a derivative tenure from the Government that persons who acquired lands from the Government under an outright sale could not be described as superior holders within section 3(4), and that the lands held by the respondents were therefore outside the operation of section 8.On behalf of the appellant, the learned Solicitor-General objected to this question being allowed to be raised at this stag of the proceedings, as that would involve investigation of questions of fact and of law, such as whether under the tenures in the City of Bombay, owners held the lands as superior holders, whether under Indian jurisprudence what was paid by the occupier of land was rent or revenue, whether the prerogative right of the Crown to assess lands subsisted in the Presidency Towns of Calcutta, Bombay and Madras and several other questions, for the decision of which there were not sufficient materials. This objection must be upheld. In view of the fact that the respondents have, at all stages, claimed immunity from assessment on the basis of section 8, we do not consider that it would be proper to allow them now to change their front, and take up a stand wholly inconsistent with what they had taken, when that involves an investigation into facts which has not been made. We must, therefore, proceed on the footing that the respondents are superior holders as defined in section 3(4) of Act No. II of 1876, and that their rights are to be determined in accordance with section 8 of the Act.

Court's reasoning:
It is common ground that the assessment payable on these lands at that time was 9 reas per burga, and Exhibit N shows that it was at that rate that the assessment was collected from 1858 until the lands were acquired by the Government in land acquisition proceedings. It is accordingly contended for the respondents that under the Act, the Government could not claim anything more than 9 reas per burga as assessment on the lands.It is urged for the appellant that the words "now severally payable" could not be construed as imposing a limitation on the right of the Government to enhance the assessment, as the occur in a saving clause, the scope of which was to reserve the rights of the Company and not to confer on the occupants rights in addition to what the body of the section had granted to them. It is true that the setting in which these words occur is more appropriate for reserving rights in favour of the Company than for declaring any in favour of the occupants. But to adopt the construction contended for by the appellant would be to render the words "now severally payable" and "which shall continue to be payable" wholly meaningless. Notwithstanding that the drafting is inartistic, the true import of the clause unmistakably is that while, on the one hand, the right of the Government to recover the assessment is saved, it is, on the other hand, limited to the amount then payable by the occupants. The contention of the respondents that under the Foras Act they acquired a specific right to hold the lands on payment of assessment not exceeding what was then payable, must, therefore, bethese observations, we are in entire agreement. When Government possesses an interest in land which is the subject of acquisition under the Act, that interest is itself outside such acquisition, because there can be no question of Government acquiring what is its own. An investigation into the nature and value of that interest will no doubt be necessary for determining the compensation payable for the interest outstanding in the claimants, but that would not make it the subject of acquisition. The language of section VIII of Act No. VI of 1857 also supports this construction. Under that section, the lands vest in the Government "free from all other estates, rights, titles and interests", which must clearly mean other than those possessed by the Government. It is on this understanding of the section that the award, Exhibit P, iscontention is that as the grant is of a freehold estate without any reservation it must, to take effect according to its tenor, be construed as granting exemption from assessment to revenue. But that will be extending the bounds of section 3 beyond its contents. The object of the Act as declared in the preamble is to remove certain doubts "as to the extent and operation of the Transfer of Property Act, 1882, and, as to the power of the Crown to impose limitations and restrictions upon grants and other transfers of land made by it or under its authority". Section 2 enacts that the provisions of the Transfer of Property Act do not apply to Crown grants. Then follows section 3 with a positive declaration that "all provisions, restrictions, conditions and limitations over" shall take effect according to their tenor. Reading the enactment as a whole, the scope of section 3 is that it saves "provisions, restrictions, conditions and limitations over" which would be bad under the provisions of the Transfer of Property Act, such as conditions in restraint of alienations or enjoyment repugnant to the nature of the estate, limitations offending the rule against perpetuities and the like. But no question arises here as to the validity of any provision, restriction, condition, or limitation over, contained in Exhibit A on the ground that it is in contravention of any of the provisions of the Transfer of Property Act, and there is accordingly nothing on which section 3 could takethe point for decision there was whether the Municipal Corporation of Bombay could acquire by prescription a right to hold the lands rent-free, they having entered into possession under a resolution of the Government that no rent would be charged. And the passage quoted above merely laid down that when title to the land was acquired by the Municipal Corporation by prescription, one of the rights acquired as part of the prescriptive title was the right to hold the lands revenue-free. But the question here is whether the right to hold the lands under a fixed assessment survived after the acquisition by the Government under the land acquisition proceedings, and that depends on the effect of section VIII of Act VI of 1857. If, as observed in the above passage, the liability to pay assessment was "an integral part or an inseverable incident of the tittle", then surely it was also extinguished along with the title of the occupants under section VIII of Act No. VI of 1857.There is another difficulty in the way of accepting the contention of the respondents. The Foras Act was repealed in 1870 by Act No. XIV of 1870 long prior to the date of Exhibit A, and therefore, even if we hold that the Foras tenure revived in the hands of the purchasers under Exhibit A, the rights under the Foras Act were no longer available in respect of the lands. Section 1 of Act No. XIV of 1870 saves rights "already acquired or accrued", and it is argued that the rights now claimed are within the saving clause. But as the lands had all been acquired under Act No. VI of 1857 between 1864 and 1867 there were no rights in respect of the lands which could subsist at the date of the repeal, and the rights now claimed by the respondents are not within the saving clause. In the result, it must be held that the right of the appellant to levy assessment under section 8 of Act No. II of 1876 is not limited by any right in the respondents.