Case: Gwalior Sugar Co.Ltd Vs. Anil Gupta

The appellant, a private limited company, is the owner of a sugar mill located at Dabra, district Gwalior in the State of Madhya Pradesh. A total of 215 bighas (approximately) of land was allotted to the appellant – Company in Samvat 1998 (corresponding to English Calender year 1941) on the basis of 6 pattas issued by Zamindar in whom the land had come to be vested. The pattas specified that the land was meant for setting up of the sugar factory and any kind of agricultural operations therein was prohibited. The pattas also specified that the same would be valid till the existence of the factory. After setting up of the sugar mill the Company appears to have run into certain financial difficulties and for the upkeep of the sugar mill and for modernization thereof the Company by a Resolution decided to sell/transfer some parts of the vacant land allotted to it. In fact some surplus land stood transferred by way of sale to certain individuals and the area so transferred is roughly about 9 bighas. In these circumstances, the Writ Petition in question was filed as a Public Interest Litigation contending that surplus land has been transferred contrary to the terms of the patta in connivance and collusion with the officials of the State Government. According to the petitioner more such transfers were contemplated.4. The stand of the officials – respondents, initially, was that land measuring about 178 bighas stood recorded in the name of the appellant –Company in the revenue record of Samvat 2013. In the said records the name of the appellant was recorded as aer Section 54 (vii) of the Madhya Bharat Land Revenue and Tenancy Act, Samvat 2007 (hereinafter referred to as ‘the TenancyThereafter with the coming into force of the MP Land Revenue Code in the year 1959 the name of the appellant – Company was recorded as ain respect of the aforesaid land. The revenue records in support of the above facts were in fact enclosed to the return filed before the High Court on behalf of the State. A report dated 2.5.2003 of the primary revenue authority i.e. Naib Tehsildar reciting the above facts and the fact that the appellant Company was exempted from the operation of the provisions of the Ceiling on Agricultural Holding Act by an order dated 8.1.1976 passed by the competent authority was also enclosed to the said return. Subsequently, however, an additional return dated 7.8.2007 was filed on behalf of the state wherein the right of the appellant to transfer the land contrary to the terms of the pattas issued to it was questioned, notwithstanding, its status as a Bhumiswami under the Land Revenue Code, 1959.5. The appellant – Company and its principal Director who were impleaded respondent Nos.12 and 13 in the PIL, in their return, placed before the High Court copies of the original pattas granted by the then Zamindar in Samvat 1997-98 (English Calender year 1941-42). It was claimed that on the basis of the entries in the revenue records, namely, Khasra of village Dabra, Samvat 2007 (equivalent to English calendar year 1950) the status of the appellant – Company in respect of the land in question was recorded as ‘GairThe appellant – Company had contended that with the coming into force of the Tenancy Act, w.e.f. 15.8.50, by virtue of the provisions of Section 54 (vii), the status of the appellant – Company became that of a. Thereafter, on the coming into force of the Land Revenue Code in the year 1959, the status of the appellant – Company was that of a bhumiswami which vested in the appellant – Company a right of transfer of the land under Section 165 (1) of the Code. The bar imposed on such transfer by sub-section (4) of section 165 did not apply to the case of the appellant – Company in view of the fact that the land that it was holding was non-agricultural land. The appellant – Company, in its return before the High Court, had also referred to an order dated 22.11.1993 of the Under Secretary to the Government of India, Ministry of Law Justice and Company Affairs (Department of Company Affairs) which had noticed all the above facts including the reasons for the transfers of some of the lands held by the appellant – Company already made or proposed. It was contended that by virtue of the aforesaid order dated 22.11.93 approval of the Central Government for commencement of business of sale of surplus land by the company was granted. Another significant fact that was mentioned by the appellant – Company in its return is a proceeding before the High Court of Madhya Pradesh in Second Appeal No.482 of 2002 which stood concluded by order dated 25.8.03 holding that the appellant – Company had acquired the status of Bhumiswami in respect of the land allotted to it.6. On a consideration of the respective cases pleaded by the contesting parties and on due consideration of the materials on record the High Court had thought it fit to pass the impugned directions, details of which have already been noticed. Aggrieved, this appeal has been filed.

Court's reasoning:
12. At the very outset, it must be made clear that the provisions of the Zamindari Abolition Act, 1951, have been pressed into service for the first time in the present appeal. Neither in the pleadings nor in the arguments made before the High Court on behalf of the State, the facts now asserted and the legal issues now raised had been urged. However, the question raised being with regard to the effect of a statutory enactment we have considered the same. In the absence of any pleading that the procedure for grant of a fresh lease contemplated under section 39 of the Zamindari Abolition Act had not been followed by the appellant by making the requisite application as contemplated by section 101 of the Tenancy Act, no adverse consequence can be attributed to the appellant as contended on behalf of the State. Rather, the status of the appellant as a bhumiswami recorded in the revenue records of the later years, in the absence of any contrary material, will have to be understood to be pursuant to the grant of a fresh lease under section 39 of the Zamindari Abolition Act read with the provisions of section 101 of the Tenancy Act. Infact, acceptance of the acquisition of the status of bhumiswami by the appellant in the aforesaid manner will render it unnecessary for us to go into the basis of the acquisition of the said status as argued by the learned counsel for the appellant, which, in any case, appears to be contrary to the provision of section 1(2) of the Tenancy Act. The said provision clearly excludes the villages settled under the Zamindari system from the purview of the operation of Part II of the Tenancy Act, which part of the Act, inter alia, also deals with the acquisition of the status ofby a tenant. However obliteration of Part II of the Tenancy Act by operation of section 1(2) thereof does not extinguish the different denominations of tenancy including the status of Bhumiswami which can very well be acquired by grant of such status by a fresh lease under sections 101 of the Tenancy Act read with section 39 of the M.B. Zamindari Abolition Act.13. The rights of a bhumiswami are clearly enumerated by Section 165 of the MP Land Revenue Code which encompasses a right to transfer. The bar imposed on the right to transfer does not apply to non-agricultural lands and, hence, would not be relevant to the present case. If the right of transfer has been conferred on the appellant by the provisions of a statute and the bar contemplated does not apply to the appellant, we do not see how a clause or a condition in the original patta granted by the Zamindar in samvat 1978-79 (corresponding to English Calender year 1940-41) can restrict such a right. In any case, there is no specific clause or condition in any of the original pattas prohibiting or even restricting the right of the appellant to transfer any part of the land allotted to it that may be lying vacant. Neither any material has been placed before us to enable us to take the view that under terms of the lease granted under Section 101 of Tenancy Act and Section 39 of Abolition of Zamindari Act any restriction or bar had been imposed on the appellant – Company from making such a transfer.14. In view of the aforesaid conclusions the issue with regard to applicability of the Urban Land Ceiling Act and the Ceiling on Agricultural Holding Act, need not detains us, save and except to hold that the provisions of either of the aforesaid Acts, ex-facie, do not apply to the case of the appellant – Company. We would further like to observe on the view taken by us it is not necessary to go into the question as to whether the decree affirmed by the High Court of Madhya Pradesh in S.A. No.482 of 2002 binds the State or whether the same is in respect of the entire land holding of the appellant – Company or only a part thereof.