Case: Shivdev Singh Vs. The State Of Punjab(And Connected Petition)

The petitioners in Petition No. 261 are landowners in village Dhamo Majra, District Patiala, in the State of Punjab. They are running an agricultural farm on a mechanised scale and the area of the farm measures 421 acres. This area is a compact block of land and it is said that some part of the area is potentially of high productivity whereas other area is of inferior quality and less productive capacity by reason of the presence of alakine (sic) patches of soil therein. The land was originally scrub jungle and was uneven and extensive reclamation was carried on by the petitioners at heavy cost. They spent a large mount for terracing and levelling the land, constructing bundhs, water channels approach roads and in standardising the area of the fields. Two wells were constructed for providing irrigational facilities and the petitioners have their own electric station for the purpose. They have also constructed manure pits and have made permanent structural improvements in the shape of construction of roads, servant quarters, tractor sheds, cattle-sheds and stores, and have in all incurred expenses over rupees three lacs for all these purposes. The petitioners are carrying on farming on the basis of scientific cultivation practices, sowing practices and manure practices and because of the use of modern technique the overall yield per acre is very high keeping in view the fertility and nature of the soil.

Court's reasoning:
We cannot agree with this contention. It is true that the Commission would have to decide whether a farm is entitled to the benefit of S. 32K. If no rules had been framed the matter would have been left at large for determination of the Commission to the next of its ability. It is true that the Commission consists of a Chairman who is or has been a Judge of the High Court and two members to be nominated by the State Government having special knowledge or practical experience of land or agricultural problems, even so we do not think that the Act did not contemplate framing of rules which will give certain objective guidance to the Commission in carrying out its duties. We do not think that in evolving the marking system as provided in R. 31 the Commissions discretion has been fettered and its independent judgment made illusory. So long as the marking system takes into account what is required under S. 32-K (1) (iv) in order to claim exemption from ceiling it cannot be said that the marking system that has been evolved is something beyond what was contemplated by the legislature. A perusal of Sch. B. to R. 31 shows that items I to IX which deal with lay-out, cultivation practices, sowing practices, manure practices, soil conservation practices, development of irrigation facilities, plant protection measures, keeping of records and miscellaneous items (like quality of draught and milch animals and their maintenance, arrangements for storage of produce, small orchards, home poultry farm, apiculture, sericulture, participate in co-operative associations, treatment with labour etc.) are all meant to evaluate the first three conditions in S. 32-K (1) (iv) as indicated by us above. We have been pointed out only one item in Sch. B. Under head "lay-out" which seems to be out of place and which carries 9 marks out of 500 marks. That item is voluntary consolidation and the criticism on behalf of the petitioners is that so long as the area in compact it is immaterial how that compactness has been achieved, whether voluntarily or otherwise. Barring this item all the other items appear to carryout the first three conditions mentioned by us above and therefore the Commission will have a standard when it considers the question of exemption of farms. It has full discretion to evaluate the various features set out in Sch. B items I to IX and has full power to give such marks as it thinks fit. It cannot therefore be said that by providing the marking system in Sch. B the rule has in any way fettered the discretion and judgment of the Commission, and affected its independence. Further item X in Sch. B is with respect to yields and carries 500 marks out of a total of 1000 marks. Thus the system behind Sch. B is that half the total number of marks is provided for the first three conditions and the other half is provided for the yields. We have already mentioned that the fourth condition under S. 32-K (1) (iv) shows that one of the main qualifications for exemption from ceiling under S. 32K is that the production of the farm should be such that its break-up shall lead to a fall in production. In the circumstances we do not think that it can be said that the allotment of half the total number of marks to yields in Sch. B is in any manner contrary to the intention of the legislature. We cannot therefore accept the contention of the petitioner that the marking system which has been evolved in Sch. B is in any way foreign to the purposes of the Act or in any way fails to carry out the object behind S. 32-K (1) (iv). The marking system only gives guidance to the Commission in the task assigned to it by S. 32-P (4) (c).The attack on R. 31 on the ground that the marking system evolved therein is foreign to the purposes of S. 32-K (1) (iv), mustshall refer to this division later in another connection; but here it may be remarked that in order that an A class farm be deemed under R. 31 (2) to be an efficiently managed farm that requires only 80 per centum of the total marks, so that when we apply the yields fixed under Sch. C we have to scale them down to 80 per centum, for even if yields are at 80 per centum the farm will be wholly entitled to exemption under R. 31(2). Therefore, though the yield fixed is 30 maunds for irrigated land and 10 maunds for unirrigated land in theory, the practical effect of R. 31 (2) is that if a farm produces 24 maunds per acre of irrigated land and 8 maunds per acre of unirrigated land it will pass the test prescribed by S. 32-K (1) (iv).We have therefore to compare this yield with the other figures which have been brought to our notice by either side, to decide whether the yield fixed in Sch. C has been deliberately fixed so high as to be unattainable with the object of making the provision of S. 32-K (1) (iv) nugatory. The burden of proving this and so establishing the mala fides of the State Government is on thein order that a farm may comply with the condition that its break-up would result in a fall of production it is obvious that its production must be higher than the average yield for the whole of the Punjab. We have already pointed out that so far as unirrigated land is concerned the fixing of the standard at 8 maunds per acre does not appear to be too high in view of the figures to be found in the bulletin published by the Board of Economic Inquiry Punjab (India), even though the figures relates to the period after October 30, 1956.As to the irrigated area it seems that the average production has reached up to about 16 maunds per acre. The standard fixed in Sch. C is 30 maunds which when reducted to 80 per centum comes to 24 maunds. On the materials that have been provided by either side on this record, we would hesitate to say that the standard of 24 maunds per acre for irrigated land of the best quality would be too high. Therefore, if the standard fixed in Sch. C is to be taken to apply to the best quality irrigated land and that standard is reduced to 80 per centum is view of R. 31(2) we would hesitate to say that Sch. C had fixed an unattainable standard and so was a mala fide exercise of power to frame rules with the object of defeating the intention of the legislature contained in S. 32K (1) (iv).We have already said that we propose to take the figures supplied to us with reference to wheat only and we shall assume, as the learned counsel for the petitioners ask us to assume that what is true about wheat would be equally true about other crops. We would therefore hesitate in the case of other produce also to say that the yields are too high and unattainable, if they are taken to be the yields from the best quality irrigated land in one case and the best quality unirrigated land in the other. The contention therefore that the Schedule has been framed mala fide in the sense mentioned above must fail, as the petitioners have failed to establish that. But this in our opinion does not end the matter and we shall now proceed further to deal with other aspects which have been urged before us.11. Rule 31(2) provides for the criterion for deciding whether the farm is efficiently managed etc. and has created three classes of farms, namely, A, B and C, depending upon the marks awarded, 80 per centum or more in the case of class A, 60 per centum or more but below 80 per centum for class B, and below 60 per centum for class C. It is further provided that an A class farm shall be deemed to be efficiently managed while 50 per centum of the area under a farm of class B shall, subject to the choice of the landowner be deemed to be efficiently managed but farm of class C shall not be considered efficiently managed. Now the contention on behalf of the petitioners is that this division into three classes is beyond the purview of S. 32-K and is therefore ultra vires. Section 32-K, as we have already indicated, lays down that provisions of S. 32A shall not apply to efficiently managed farms etc. so that when the Commission considers the question whether a particular farm is efficiently managed under S. 32K it has only to decide one of two things: namely, whether the farm is efficiently managed etc. or is not efficiently managed. If it is efficiently managed, the provisions of S. 32A shall not apply to the entire farm; if on the other hand, it is not efficiently managed, the provisions of S. 32A will apply to the entire farm. There is no scope in S. 32K for the creation of three classes of farms, as has been done by cl. (2) of R. 31. In other words there is no scope for the creation of class B farms in the rule on the terms of S. 32K. The rule therefore in so far as it creates an intermediate class of farms, half the area of which is deemed to be efficiently managed is clearly beyond the provisions of S. 32K (1) (iv). The creation of class B farms of R. 31 (2) being beyond the provisions of S. 32K must be held to be ultra vires that section. The question then arises whether in view of the creation of class B farms by R. 31 the whole of that rule must go. We are of opinion that the creation of class B farms is so integrated with the whole of R. 31 that it would not be possible to excise class B farms only from that rule and leave the rest of the rule unaffected. It is impossible to say what the form of R. 31 would have been if the rule making authority thought that it could not provide for class B farms. We are therefore of opinion that the whole of R. 31 along with Schedules B and C must fall, as soon as it is held that the creation of class B farms under the rule is beyond the rule-making power. This is one ground on which R. 31 must be struck down as ultra vires of the provisions of the Act, particular]y S.are of opinion that there is force in the second contention, though not in the first Section 32P (4) and (5) lay down that the State Government will be advised by the Commissioner with regard to exemption under S. 32K and the advice of the Commissioner would be binding on the State Government. Rule 31 (3) as it stands does not however provide for advice by the Commission there under. It is also not clear whether the Commission under S. 32P is a permanent Commission. It is however urged on behalf of the State that R. 31 (3) must be read subject to the Act and therefore if the Act requires that the Commission must be consulted in the matter of exemption the Government will be bound to consult the Commission even when it proceeds to revise the classification under R. 31 (3).We accept the submission on behalf of the State and hold that though R. 31 (3) does not specifically provide for consultation with the Commission at the time of revision that rule must be read subject to S. 32P (4) and eves at the time of revision the Government is bound to take the advice of the Commission and is bound to act32K lays down that the provisions of S. 32A will not apply to efficiently managed farms etc. Once therefore it is held that a farm comes within S. 32K (1) (iv) the provisions of S. 32-A relating to ceiling will not apply to it. There is nothing in Chapter IV-A to suggest that once an efficiently managed farm is taken out of the provisions of S.32A on the advice of the Commission it can be subjected again to those provisions. Nor have we found anything in the Act which gives power to the State Government to subject a farm to which S. 32A does not apply in view of S. 32K to the provisions S. 32A later. We realise that it may be possible for a farm which was efficiently managed when the Act came into force in 1956 to be so mis-managed later that it no longer remains an efficiently managed farm within the meaning of S. 32-K-(I) (iv) and it does seem reasonable in those circumstances that the provisions of S. 32A should apply later to such a mis-managed farm. But that in our opinion has not been provided in the Act itself. Once the farm as it was on October 30, 1956, gets the benefit of S. 32-K (1) (iv), such a provision in our opinion cannot be made by a rule, for in that case the rule would be going beyond the purview of the Act and would be ultra vires. That is another reason why R. 31 (3) must be struck down as ultra vires of the Act.14. Besides the attack on Sch. C based on fixing unattainable standards mala fide, the Schedule is further attacked on the ground that it goes beyond the intention behind S. 32K (1) (iv) inasmuch as it provides for a mathematical formula irrespective of various other considerations which have a great play in the matter of yield. We have already pointed out that Sch. C only provides for two classes of lands, namely, irrigated and unirrigated. Further the proviso to R. 31(4) (b) lays down that in allotting marks for yields, the Commission shall apply the standard yields given in Sch. C. This means that if the yield of a particular farm of irrigated land is, for example, 15 maunds of wheat per acre, the Commission would be bound under the proviso to give 50 per centum of the marks provided for yields in Sch. B. i.e., the Commission will have to award 250 out of 500 marks to such a farm. Now if land whether irrigated or unirrigated was of one quality and if there were no other factors to be taken into consideration in judging the yield in a particular area the application of a mathematical formula would have been justified. But there is no doubt that irrigated and unirrigated lands are not all of the same quality and that quality of land does affect production. There are other factors also to which we shall later refer which have to be taken into account in considering the yield; but those factors have all been ignored in Sch. C. Turning to the quality of land, we find from Sch. A to the Rules, which has been framed with respect of R. 5 for conversion of ordinary acres into standard acres, that there are eight qualities of land in the State of which five are under the head "irrigated," (namely, Chahi, Chahi-Nehri, Nehri perennial, Nehri non-perennial and Abi) and three under the head "unirrigated" (namely, Sailabi, Barani and Bhud).The highest quality is Nehri perennial and it is marked as 100 meaning thereby that one ordinary acre of Nehri perennial is equal to one standard acre. The lowest qualify of irrigated land is Nehri non-perennial, which is remarked as 75, meaning thereby that four ordinary acres of Nehri non-perennial are equal to three standard acres. This means that the yield of the lowest quality of irrigated land would be 25 per centum less than the best irrigated land. Now if the standards fixed in Sch. C are with reference to the best land, the best irrigated land is expected to produce 30 maunds minus 20 per centum i.e., 24 maunds. The lowest quality of irrigated land will be expected to produce 22 1/2 maunds (i.e. 75 per centum of the best land) minus 20 per centum, equal to 18 maunds. This shows that unless some account is taken of the quality of land, Sch. C is bound to work harshly on those farms where the quality of the irrigated land is of the lowest type. It may be said, however, that Sch. C is based on averages. Even if that is so, there is bound to be inequality where all the irrigated land of the farm is of the lowest quality. The same applies to unirrigated land. The best unirrigated land is Sailabi, which has 62 per centum yield as compared to the Nehri perennial, meaning thereby that roughly 10 acres of sailabi land are equal to six standard acres. Barani land is rated at 50 per centum of the best and thus two acres of barani land will be equal to one standard acre. Bhud is the worst and rate at 25 per centum and four acres of bhud are equal to one standard acre. Thus if the valuation given in Sch. A is accepted, bhud is only half as productive as sailabi.Therefore when Sch. C fixes one standard for unirrigated land without regard to quality it is bound to work inequality between farms and farms. It has been urged on behalf of the State that the Commission would be entitled to take into account these differences in quality. There is however nothing in R. 31 which permits the Commission to take into account this difference in the quality of land. The proviso to R. 31(4) (b) definitely lays down that in allotting marks the Commission shall apply the standard yield given in Sch. C, so that the Commission is bound to apply those yield in every case and there is nothing in R. 31 which permits the Commission to take into account the difference in quality of land. Now when S. 32K (1) (iv) read with S. 32-P provided for the appointment of a Commission to advise on the question of exemption under S. 32K (1) (iv), the intention of the legislature obviously was that the Commission will take into account all factors which should be properly taken into account in giving its advice. Quality of land is one such factor which should be properly taken into account by the Commission; but as the proviso to R. 31(4) stands, the Commission is bound to apply Sch. C on a mathematical basis without consideration of other factors. We are therefore of opinion that the proviso to R. 31 (4) (b) inasmuch as it obliges the Commission to apply Sch. C on a mathematical basis goes beyond the provisions of S. 32 K. It was certainly suggested in argument before us that it would be open to the Commission to take into account the difference in the quality of land. But there is nothing in the reply of the State to suggest this and we cannot accept what is suggested to us in argument in the face of the proviso to R. 31 (4) (b). The proviso therefore must be struck down as going beyond the rule-making power inasmuch as it is ultra vires the provisions of S. 32 K (1) (iv).There are other factors which govern the yield of land and these also have not been taken into account in R. 31. These factors may be grouped under the head "natural calamities" as for example, pests, locusts, excessive rain, floods and drought. There is nothing in R. 31 which gives a discretion to the Commission when applying the proviso to R. 31 (4) (b) to take into account these factors. Obviously, the intention behind the provision in S. 32K (1) (iv) was that in evaluating whether a farm was efficiently managed, the Commission will take all those factors which properly require consideration in the matter of yield into account. It was however suggested that the Commission was entitled to take these factors into account when judging the matter of yields; but we find nothing in the reply of the State Government to this effect and in any case if the proviso to R. 31 (4) (b) is interpreted as it stands it may not be possible for the Commission to take these factors into account when advising the State Government under S. 32K (1) (iv). It is not even clear which year before October 30,1956, the Commission will take into account in advising the Government, whether a particular farm is entitled to the benefit of S. 32K (1) (iv). If, for example the base year is one immediately- preceding October 30, 1956, and if in that year there was some natural calamity, the Commission cannot take that into account and must apply Sch. C as the proviso to R. 31(4) (b) seems to intend. The intention of the legislature therefore behind S. 32 K (1) (iv) would be subverted because of this proviso. That is another reason why this proviso should be struck down as going beyond the intention of the legislature in S. 32K(1)(iv).Lastly, there is another factor which is also very relevant in the matter of yields, namely, the rotation of crops which requires all good farmers to leave some part of their lands low by turns for a whole year in order that the fertility of the soil can be preserved. Again there is nothing in the proviso which allows the Commission to take into account this factor and make calculations only on the actual area of a farm which is cultivated and leave out of account such reasonable area as may not be cultivated in order to preserve the fertility of land on the principle of rotation of crops.As the proviso stands, the Commission is to apply Sch. C over the entire area of the farm without taking into account the factor of rotation of crops which necessitates that some reasonable portion of the land must be left follow for the whole year in order to preserve the fertility of the soil. Here again it is urged on behalf of the State in argument that the Commission can do so. But again that is not to be found in the reply of the State and as the proviso stands it obliges the Commission to apply Sch. C to the entire area of a farm in order to judge whether it is an efficiently managed farm. This is therefore another reason why the proviso goes beyond the intention of the legislature contained in S.32K (1)(iv).The proviso therefore to R. 31(4) (b) must he struck down as beyond the rule making power of the State Government. As soon as the proviso is struck down it would be impossible to work R.31 properly; therefore, the entire R. 31 must fall on this ground also.