Case: Gaurav Aseem Avtej Vs. U.P. State Sugar Corporation Ltd. and Ors

2. For the sake of convenience, the parties will be referred to as arrayed in Suit No. 212 of 19813. Suit No. 212 of 1981 was filed before the learned Munsif, Bijnor by Sh. Vinod Chandra Gupta and his mother Smt. Prakashwati seeking eviction of the Defendant-Corporation and for recovery of the arrears of rent. The learned Munsif refused to decree the suit for eviction. However, the Defendant-Corporation was directed to pay Rs. 1700/- towards arrears of rent for the period 1979-81. Both the Plaintiffs and the Defendant-Corporation filed appeals against the judgment of the Trial Court. The First Appellate Court dismissed the appeal filed by the Defendant-Corporation and allowed the Plaintiffs appeal. Consequently, the suit was decreed in favour of the Plaintiffs and eviction was ordered. The second appeals filed by the Defendant-Corporation before the High Court challenging the judgment of the First Appellate Court were allowed. The High Court reversed the judgment of the First Appellate Court and dismissed the suit. Aggrieved by the said judgment, the present appeals are filed4. In the plaint it was averred that the first Plaintiff along with his father, Sh. Ram Narain Gupta, were bhumidars of an area admeasuring 4 bighas 3 biswas in Mauza Rashidpur, Garhi Pargana, Bijnor. According to them, the land was grove land. 3 bighas 8 biswas from the said land which is adjacent to M/s. Shiv Prasad Banarasi Das Sugar Mills, Bijnor was given on lease for being used to park vehicles. It was averred that the lease was in existence for a considerably long period. As the period of the earlier lease expired in 1976, another lease deed was executed by the father of Plaintiff No. 1 on 25.06.1976 for a period of five years. It was stated in the plaint that the lease was determined by a notice dated 10.07.1979 and that the Defendant-Corporation was also in arrears of rent for the period 1979-1980. On the basis of the said pleadings, relief of eviction and recovery of arrears of rent was sought. The Defendant-Corporation filed a written statement in which it was stated that the Plaintiffs have lost all rights in respect of the land as they could not have leased out agricultural land. It was also urged that the Plaintiffs cannot derive any benefit from the declaration made by the competent authority Under Section 143 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (the 1950 Act) that the land was used for non agricultural purposes. The Defendant-Corporation submitted in the written statement that the land in dispute vested with the State Government by virtue of the Uttar Pradesh Sugar Undertakings (Acquisition) Act, 1971 (the 1971 Act) and Defendant No. 1 became the title holder of the property after the scheduled undertaking was transferred to it. The Defendants further pleaded that they have made permanent construction on the land which was being used for the purpose of the factory and they had become permanent lessees. The Trial Court relied upon the order passed by the S.D.O. Bijnor Under Section 143 of the 1950 Act on 20.01.1972 declaring that the land in dispute was not agricultural land. On the basis of the said order, the Trial Court held that the land was not agricultural land and the Plaintiffs had the right to lease out the land. The Trial Court found that the land did not vest in the State Government under the 1971 Act as, according to the Trial Court, only the leasehold interest in the land vested with the State Government. The Trial Court refused to grant a decree of eviction on the ground that the notice dated 10.12.1979 was not proved to have been served on the concerned person. The Plaintiffs were held to be entitled for recovery of arrears of rent for the years 1979-19815. The Appellate Court affirmed the findings of the Trial Court regarding interpretation of the 1971 Act and held that it was only the leasehold interest in the land that stood vested in the Government. The First Appellate Court recorded a finding that Section 111 of the Transfer of Property Act would apply to the instant case as the lease was for a fixed period between 1976-1980 and the lease stood determined automatically on 30.06.1980. The First Appellate Court decreed the suit by allowing the appeal filed by the Plaintiffs. The appeal filed by the Defendant-Corporation was dismissed6. The High Court allowed the appeals filed by the Defendants and dismissed the suit by holding that the land stood vested in the State Government under the 1950 Act as the lease executed by the Plaintiffs in favour of the Defendants was in violation of Section 156 of the 1950 Act. The High Court also relied upon Section 167 of the 1950 Act to hold that the Plaintiffs lost their rights over the land and as a consequence of void transfer, the land stood vested with the State Government free from all encumbrances. The High Court further observed that by virtue of Section 3 of the 1971 Act the land which was occupied for the purposes of the factory stood vested in the State Government free from all encumbrances.

Court's reasoning:
It is relevant to mention at the outset that the pleadings in this case are not very clear. After a detailed scrutiny of the material on record, we refer to the undisputed facts which are as follows:i. The land in dispute admittedly belongs to the Plaintiffs. They leased out the said land to M/s. Shiv Prasad Banarasi Das Sugar Mills, Bijnor prior to 1950ii. The land was being used for the purpose of parking of vehicles which brought sugarcane to the factoryiii. The 1950 Act came into force on 26 January, 1951iv. The S.D.O., Bijnor by an order dated 20.01.1972 declared the land as non agricultural land Under Section 143 of the 1950 Act. The said order was passed on the basis of a report submitted by the Tehsildar on 17.12.1970v. The Plaintiffs were unsuccessful in their challenge to the 1971 Act. Though the Act was passed in 1971, the possession of the scheduled undertaking was handed over only in the year 1979 to the Governmentvi. A notice of termination of the lease was issued on 10.12.1979. The suit filed by the Plaintiffs was partly decreed by the trial Court on 14.04.1982 and fully decreed by the First Appellate Court on 01.08.1984vii. During the pendency of the second appeal in the High Court, the Plaintiffs executed a sale deed in favour of the present Appellant on 29.11.2004. Notice was issued in the SLP on 20.07.2007 and leave was granted by this Court on 05.10.20098. The point of vesting of the lands under the 1971 Act was adjudicated by all the three Courts below. We are of the opinion that determination of this issue will set at rest the controversy in this case. The Trial Court and the First Appellate Court held that the land did not vest in the Government under the 1971 Act and it was only the leasehold interest in the land that vested in the Government. Whereas, the High Court held that the land vested in the Government. We areunable to agree. A detailed examination of the provisions of the Act would make it clear that the intention was to secure all assets which were being used for the purposes of the factoryThere is no dispute that, in the instant case, the land was held and occupied by the sugar factory for a long period of time pursuant to a lease deed executed by the Plaintiffs and was being used for the purpose of the factory. We areof the opinion that all lands including those which are held pursuant to a lease vest in the State. It is only ex abundant cautela that these words are included in the definition clause. The intention of the legislature is made very clear in the definition of scheduled undertaking by insertion of the words "including any leasehold interest." The words including any leasehold interest cannot be read in the manner that is canvassed by the Appellant which is that vesting is only of leasehold interest. A plain reading of Section 2(h) (vi) of the 1971 Act provides that a scheduled undertaking would comprise of all lands and buildings held or occupied for the purpose of the factory. The word including would clearly indicate that the lands held by way of lease are also part of a scheduled undertaking. In any case the words "including any leasehold interest therein" cannot be understood to have a limiting effect and result in the acquisition of only the leasehold interest in the land15. If the intention of the Legislature was to exclude leasehold lands it could have expressed the same by adding lands held on lease along with agricultural and grove lands. As per Section 2(h)(vi) all lands other than lands held or occupied for purpose of cultivation and grove lands are part of scheduled undertaking. In view of above, we are of the opinion that the land in dispute stood vested in the State Government on the appointed day i.e. 03.07.197116. The findings recorded above would have been sufficient to dispose of the controversy in this case. But it has become necessary for us to deal with the findings of the High Court that the Plaintiffs are not entitled for any compensation for their lands. The reason given by the High Court is that the lease executed by the Plaintiffs was contrary to Section 156 of the 1950 Act. And, the consequence of the violation of Section 156 is that the transaction is void and the Plaintiffs lost all rights in the property as per Section 167 of the Act17. Undisputedly, the lease of the land was entered into between the parties prior to the 1950 Act coming into force. The Act of 1950 is not applicable to the land which was being used for non agricultural purposes prior to 1950. Land as defined in Section 3 (14) of the 1950 Act means land, held or occupied for purposes connected with agriculture, horticulture or animal husbandry. Moreover, there is also a declaration Under Section 143 of the 1950 Act that the land was being used for non agricultural purposes. The said order Under Section 143 passed by the SDO, Bijnor on 20.01.1972 was on the basis of a report submitted by the Tehsildar made on 17.12.1970. In view of the above, we are of the opinion that the land did not vest in the Government under the 1950 ActWe arenot in agreement with the findings of the High Court regarding the vesting of the land in the Government under the 1950 Act due to which the Plaintiffs were held disentitled for any compensation. The land owners may resort to any remedy available to them for payment of compensation to which they are entitled to.