Case: Raja Bahadur Kamakshya Narainsingh And Others  Vs. The Collector And Deputy Commissioner Of Hazaribagh And Others

Petitioner No. 1 in his individual capacity was at one time the owner of the disputed properties which lie within Touzi No. 28 of the Collectrate of Hazaribagh. On 29-12-1947 petitioner No. 1 as owner leased out the disputed properties to a Company known as Mineral Development Ltd., (hereinafter referred to as the company). The Company book possession of the disputed properties and has been paying rent.On 7-4-1949 petitioner No. 1 in his individual capacity executed a deed of settlement whereby he transferred the disputed properties to three trustees, namely, himself and petitioners 2The Company has been paying rent to the trustees since then. The Act came into force on 25-9-1950. On 3-11-1951 the State Government issued a notification under S. 3(1) of the Act declaring that the estate of petitioner No. 1 in his individual capacity specified therein had passed to and become vested in the State.One 26-10-1953 a notice under S. 4(h) of the Act was issued by the Collector to the Company, and on 4-3-1954 the State Government issued a notification under S. 3(1) of the Act purporting to vest in the State the properties covered by the above-mentioned deed of settlement and another deed of settlement with which we are not concerned. The Company instituted a title suit No. 33 of 1951 against the State of Bihar in the Court of the Subordinate Judge, Hazaribagh basing its claim on a mining lease executed by petitioner No. 1 in his individual capacity the genuineness of which was challenged by the State. Petitioner No. 1 in his individual capacity was made a party to this suit.The Company also instituted a title suit No. 9 of 1954 against the State of Bihar to which petitioner No. 1 in his individual capacity was made a party challenging the legality of the issue of notice dated 26-10-1953 under S. 4(h) of the Act. On 11-11-1954 the State of Bihar filed title suit No. 53 of 1954 to which the Company, petitioner No. 1 in his individual capacity, the three trustees and others were made parties. By this suit the State of Bihar challenged the genuineness of the lease is favour of the Company and the deed of settlement in favour of the trustees.

Court's reasoning:
3.In our opinion, it is of little consequence in the present case whether the notified estate vested in the State by reason of the publication of the notification under S. 3 or by virtue of the provisions of S. 4 of the Act, because in either case a vesting did take place. Although the word land is used in the definition of estate, the provisions of Ss. 4, 5 and 7 show the necessary intention to include something more than the land when an estate vests in thebecomes, therefore, necessary to interpret the word "used" occurring in S. 4(a).If on due inquiry the Collector is satisfied that such transfer was made with the object of defeating the provisions of the Act or causing loss to the State or obtaining higher compensation, then the Collector may, after giving notice to the parties concerned and hearing them and with the previous sanction of the State Government, annual the transfer and dispossess the person claiming under it.These provisions clearly indicate that if any building was used primarily as office or cutchery for the collection of rent and such building had been transferred after the first day of January, 1946, the transfer could be annulled if the circumstances mentioned in S. 4(h) had been established.That is to say, under these provisions the use to which the building was put previous to its transfer after the first day of January, 1946 and not thereafter was what the Collector was concerned with and not to what use it had been put after its transfer after the first day of January,To hold otherwise would be to make the provisions of S. 4(h)would be unreasonable to construe the provisions of S. 4(a) in the way suggested by Mr. Chatterjee. The scheme of the Act has to be borne in mind and the provisions of Ss. 4(a) and 4(h) have to be readour opinion, if as a result of the inquiry under S. 4(h) the transfer of the disputed properties by the petitioner No. 1 is annulled the disputed properties must be regarded as having vested in the State, because they were used as office or cutchery for the collection of rent previous to the transfers made by the petitioner No.Collector was left with absolute power to annul a transfer and to dispossess a person in possession thereunder.Section 4(h), however, does direct the Collector to give reasonable notice to the parties concerned and to hear them. Such annulment to dispossession which he may order must be with the previous sanction of the State Government and he is compelled to do so on terms which may appear to him fair and equitable. The power is, therefore, not quite so absolute or arbitrary as suggested.Assuming however, that the Collector has very wide powers, it is to be remembered that S. 4(h) is a part of the law of acquisition of estates as enacted by the Act and is an integral part of the machinery by which acquisition of an estate takes place. The Act is a valid law of acquisition and its whole purpose may be defeated unless there was some such provision as contained in S. 4(h). The Act being a law for acquisition of estates the question of it or S. 4(h) of it imposing any unreasonable restriction on the fundamental rights of the petitioners does not arise. In any event in Act including S. 4(h) is protected by Article 31-A of thethis clause the words "used primarily as office or cutchery for the collection of rent of such estate" must be read in the light of the provisions of S. 4(h) where similar words are employed.