KUMARPASHUPATINATHMULLAH (DEAD)BY L. RS.

STATE OF WEST BENGAL

March 5, 1974 (K. K. MATHEW AND A. ALAGIRISWAMl, 1J.J

West Bengal Estate Acq,, i.ition .Act, 1953, s. SA-Scope of.

B Under s. SA, West Bengal Estates Acquisition Act, 1953, if it was found after an enquiry that a transfer made after May S, 1953, was not bonafidc, the transfer shall stand cancelled. Under SA (7). a transfer shall be held to be not bonafide if it was made principally or partially with the object of increasing the amount of land which a person may retan, or with the object of increasing the amount of compensation payable. Under s. 6, an intermediary, holding land under a trust may retain such land; and under s. 16, in determining the net income of an inter. mediary, for purposes of determining the compensation payable to him, one of the C items to be deducted from the gross income is the amount payable by the intermedi~ afY, to a re1igious or charitable trust, out Of the income of the estate.

In 1928, a charge had been created upon an estate for the maiiltenance and seva puja of a family deity and for the performance of certain specified charitable purposes. In October 1953, the appellant, whO had inherited a half share of the estate executed a document whereby a half share in his share of the estate was set apart exclusively for the purpose for which the charge had been created earlier and the rest of the property was to be treated as absolutely free and absolved from the D claims in respect of the religious and charitable purposes. The appellant appointed him self as a trustee in respect of the property set apart for the religious and charitable purposes. He transferred his interest in the remaining portif>n of the estate to bis son and wife. The Settlement Officer held, under the Act, that tlie 1953-document executed by the appellant was not bonafi.de. His appeal, and petition in the High Court, failed

Allowing the appeal to this Court, and remanding the matter to ihe High Court for disposal afresh, E

HELD : (1) Jf the substance of the transaction of 1953 by which properties are endowed in favour of the deity is looked into there is no reason why Jt should not be called a girt. Therefore, the transaction was a transfer within the meaning of the Act [539 B-C)~

Chan1pa Bibi v. Panchira1n Nallata AIR 1963 Cal. '51 approved.

(2) 'fhe High Court ; lnd the authorities below erred in holding thnt the transfer F was not bonafide.

(a) The Settlement Officer found that the total expenditure on seva and charitable purposes was Rs. 30,000 and appellant's share therein would be Rs. J 5,000/-. It was also found that the income of the land absolutely transferred for the religiou~ and charitable purposes under the deed of 1953, is Rs. 23,000(-. But ror the execution of the document the appellant would have been .in possession of the whole of his share of the estate with only a charge amounting to Rs. 15,000/-. But the result of the document was that land yielding a larger incoine was transferred absolutely G to the deity the Settlement Officer should therefore, have given his reason as to how he arrived at the conclusion that the transfer would enable the appellant to retain a lar_gcr extent of land or entitle him to a larger amount of compensation. The Special Judge in appeal and the High Court did not go into the question at all.

[539F-H, 5408]

(b) Whether the appellant was entitled to free a portion of the estate from the charge and confine the charge to only a portion Of the estate does not affect the question whether the transfer was bonafidl? in terms of the Act.

[539H] H

(c) Merely because he transferred 'the remaining~ portion to his son and wife could not establish want of bona tides. [539HJ

(3) No question under s. 6(1) (i) of the Act arises on the facts of this case.

(S40B-C] . .

Far/u/ Rabbi Pradhan v. State of Wm Ii<n1a/ (136S] 3 SCR 307, foollwed.

CIVIL APPELLATE JUR.ISDICTION : Civil Appeal No. 1838 of 1967.

Appeal by special leave from the Judgment and Order dated the 23rd May, 1967 of the Calcutta High Court in Civil Rule No. 1119 of 1962.

Purshottam Chatterjee and Ganpat Rai for the appellant,

P. K. Chakrabarty and G. S. Chatterjee for the respondent.

The Judgment of the Court was delivered by

ALAGIR.ISWAMI, J. Gobinda Prosad Pandit, the founder of the Scarsole Raj Estate died in the year 1861 leaving a will. Aller his death in a suit between his widow and certain other claimants regarding the title to the estate it was held that a charge had been created upon the entire estate for the maintenance and seva puja of the family deity and for the performance of certain pecified charitable purposes. In 1928 thc appellant, his brother and their father who succeeded to the estate executed an arpannamah in favour of the family deity reiterating the charge created by Gobinda Prosad Pandit. On October 12, 1953 the appellant executed a document whereby a half share in a part of the estate was set apart exclusively for the purpose for which the charge biid been created earlier,.and the rest of the property was to be treated as al>Solutely free and absolved from the claims in respect of the reli gious and charitable purposes. The appellant appointed himself as the trustee. The West Bengal Estates Acquisition Act, 1953 came into force on 12·2·1954. Under that Act, the main provisions of which, in so far as they arc relevant for the purposes of thi' appeal, we shall refer to later, the estate vested in the State on 14-4-1955. Subsequently the Act was amended by introducing section 5A therein with retrospective cffeot from 5-5-1953, the date prior to that on which the bill, . which later became the West Bengal fatales Acquisition Act, was published in the Gazette. After an enquiry the Settlement Officer held that the document executed by the appellant on Octobor 12, 1953 was not bona fide. The appeal against thb decision to the Special Judge failed and so also a petition filed befvre the High Court under Art. 227 of the Co'nstitution. This appeal ha' been filed in pursuance of the special leave granted by this Court.

We shall now set torth the provisions of the Act in brief :

Under s. 4(1) of the Act a notification may be issued by the State Government that all estates and the rights of every intermediary in each such estate shall vest in the State free from all incumbranccs .

Under s. 5(1) upon the publication of such a notification the estates H and the rights of intermediaries in the estates shall vest in the State fret frC1m all it1eumbrances. It may bo stated even at thil stage that the appellant is an intermediary. Under s. SA the State Government 6-M45Sup.C.I.{7S

may enquire into any case of transfer of any land by an intermediary made botween the 5th day of May, 1953 and the date of vesting, if in its opinion there are prima facie reasons for believing that such transfer was not bona fide, and if after such an enquiry the State Government finds that such tramfer was not bona fide, it shall make an. order to that effect and thereupon the transfer shall stand cancdled as from the date on which it was made or purported to have been made: Against an order passed by the State Government an appeal lies to a Special . Judge. Sub-section (7) of this s.ction lays down that a transfer shall be held to be not bona fide if it was made principally or partially With the object of increasing the amourit of land which a person may retain,. or principally or partially with the object of increasing the amount of compensaJion payable. 'Transfer' means a transfer by sale, mortgage, lease, exchange or gift.

Under section 6 an intermediary is entitled to retain various categories of land. of which it is only mcessary to refer to the category mention.id in $ection 6(1) (i) which reads :

'_'where the intermediary is a corporation or an institution established exclusively for a religious or a charitable purpose or both, or is a person holding under a trust or an endowment or other legal obligation exclusively for apurpose which is charitable or religious or both-land held in khas by such corporation or institution, or person, for such purpose including land held by any person, not being a tenant, by leave or license of such corporation or institution or person;" •

Section 16 provides for the calculation of the gross income and the E .~ .net income of an interm>_diary. Among. the items which have to be deducted from the gro; s income in order to.arrive at the net income is • the one under section 16(1) (b) (vi) which reads as follows :

"any sum payable by such intermediary out of the income . of an estate or interest which has vested iii the State under section 5, to a corporation or an institution established exclusively for a religious or a charitable purpose or both, or to a person holding under a .. trust or an endowment or other legal obligation exclusively for a purpne which is charitable or religious or both, where such estate or interest wa~ [held partly for a religious or charitable purpose and partly for a purpose other than religious or charitable." .

Section 17 provides for the determination of the amount of compensation payable to intermediaries. ·

. The Settlement Officer held that "a charitable trust is ex-hypothesi a voluntary transfer by way of gift and it has been held that one of the various modes of giving property for religious purpose is to give it to the . trustees" and therefore it was a transfer. Before the . Special Judg! it wa> argued tli1t th!re was no tran>fer at all inasmuch as it was not an act of conveying the property from one living person to another, and that it was not at all a gift since there was no transfer •

H •

1 >..-.

• '

The. learned Special Judge rejected that contention. Similar rguments were repeated before the High Court which also -rejected that con tention. We are of opinion that the High Court as well as the authori~ ties below were right in this conclusion. The definition of the terni 'transfer' does not attract all the definitions given in the Tramfer of Property Act for th~ transactions hich are defined as transfers in the Act. If the substance of the transaction by which properties are endowed in favour of a deity is looked into we do not see why it cannot be called a gift. In Champa Bibi v. Panchiram Nahata (AIR 1963 Calcutta 551) a Division Bench of the Calcutta High Court held that 'a transfer of property by dedication to a Hindu deity is a transfer by gift within the meaning of s. 5A(7)(iii) of the West Bengal Estates Acquisition Act.

As regards the seoond point whether the transfer was bona fide or not the Settlement Officer did not apply his mind to ihe provisions of the Act which lay down what transfers would

0 be held to be not bona fide. He did not consider whether the transfer was made principally or partially with the object of increasing the amount of land which the transferor may retain or increasing the amount of compensation payable to him. He only took into consideration the fact that certain lands were transferred to the appellant's son and his wife and held that it was clear from them that the deed was made pnncipally or partially with the object of increasing the amount of land which the appellant could retain, and also with the object of increasing the amount of compensation payable under the Act. He did not go into the facts of the case 'but merely repeated the words of the section. It is found from that order itself that the total expenditure on the seva and charitable pur- poses was Rs. 30,000/- and the appellant's share therein would be

Rs.15,000/-. It is also found thattheincome of the land_absolutelytrans-. ferred under the deed of October 12, 1953 is Rs. 23,000/-. But for the

c execution of the document the appellant would have been in possession of the whole of the estate with only a charge amounting to Rs. 15,000/-.

As a reult of the document land yielding a larger income was trans- : ferred absolutely to the deity. The Settlement Officer should, therefore, have given his reasons as to how he arrived at the conclusion that the transfer would enable the appellant to. retain a larger extent of land or entitle him to a larger amount of compensation. The Special Judge merely considered that it was difficult to understand how the appellant who inherited the moiety share of the estate subject to the charge was legally competent to free a portion of the estate from the charge and confine the charge to only a portion of the estate. But that does not affect the question whether the transfer was bona fide in terms of the

Act. He took the view that the Act considered alongwith the fact that A the appellant transferred his interest in the remaining portion of the estate to his son and wife clearly established want of bona fides on the part of the appellant, and that it was done to defeat the purpose of legislation. It would be noticed that he has also not gone into the question whether the impugned transaction enables the appellant to retain a larger extent of land or claim a larger amount of compensation. The High Court did not go into this question at all. 8.

We do not consider that the facts of this case raise any question under section 6(1) (i) at all. That can arise only with regard to the situation as it existed before the execution of the impugned documen.t and under the unamended Act. The earlier document of 1928 as well as.the prior decree would not bring the lands under this section at all, as was held by this Co11rt in Faz/Ill Rabbi Pradhan v. State of West C Bengal [1965] 3 SCR. 307.

In the result this appeal is allowed. The High Court will dispose of the matte( a fresh in accordance with law. There will be no order as to costs.

V. P. S.

AppeaJ allowed •.