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Pratapsinhji Naransinhji Vs. State of Bombay and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Appln. No. 2418 of 1956
Judge
Reported inAIR1957Bom155; (1957)59BOMLR339; ILR1957Bom656
ActsTenancy Law; Bombay Tenancy and Agricultural Lands Act, 1948 - Sections 1, 44, 45, 46, 46(4), 47, 48, 49, 50, 51, 52, 53, 54 and 56; Constitution of India - Articles 31, 31-B, 226, 245 and 363; Adaptation of Laws Order, 1950
AppellantPratapsinhji Naransinhji
RespondentState of Bombay and ors.
Appellant AdvocateJ.C. Bhatt, Adv. and ;Chunilal Shah and Co.
Respondent AdvocateAdv. General and ;R.L. Dalal, Adv., i/b., Little & Co., Attorneys
Excerpt:
.....of--manager whether can ascertain whether in fact there is debt or liability enforceable against estate.;the expression 'claims of the government' in section 51 of the bombay tenancy and agricultural lands act, 1948, includes all claims which may be made by state governments or by the central government of india. the expression 'government' in this section does not mean only the government of the state of bombay.;the power vested in the collector under section 56 of the bombay tenancy and agricultural lands act, 1948, to sanction the scheme includes the power to ascertain whether the debts and liabilities included in the scheme and finally determined by the manager have been properly included. the power also includes authority to ascertain whether there are any other debts which could..........are situate in the viramgaum taluka of the ahmedabad district. the petitioner claims to hold the estate by virtue of a resolution passed by the government of bombay dated 11-12-1903. on 14-5-1951, the government of bombay issued a, notification under section 44 of the bombay tenancy and agricultural lands act, 1948, assuming management of the patdi estate. by the operation of section 45 of that act the estate vested . in the state government. the government of bombay appointed the mamlatdar, viramggum taluka. to be the manager of the estate. in the month of august 1951, the manager published in the official gazette a notice calling upon all persons having claims against the estate to notify the some in writing to the manager. in pursurance to that notification several claims were.....
Judgment:

Shah, J.

1. The petitioner is the holder of 17 villages which are collectively known as the 'Patdi Estate'; some of these villages are situate in the Viramgaum Taluka of the Ahmedabad District. The petitioner claims to hold the Estate by virtue of a resolution passed by the Government of Bombay dated 11-12-1903. On 14-5-1951, the Government of Bombay issued a, notification under Section 44 of the Bombay Tenancy and Agricultural Lands Act, 1948, assuming management of the Patdi Estate. By the operation of Section 45 of that Act the estate vested . in the State Government. The Government of Bombay appointed the Mamlatdar, Viramggum Taluka. to be the manager of the estate. In the month of August 1951, the manager published in the official gazette a notice calling upon all persons having claims against the Estate to notify the some in writing to the manager. In pursurance to that notification several claims were lodged with the manager. Even though the claims were required to be lodged within two months from the date of the publication, it appears that claim of the Saurasthra State, as it then was, was lodged on 3-3-1953 by a letter No. PD/INV-29(1) addressed to the Manager. The claim of the Saurashtra Government was for Rs. 11,75,000/-asainat the Patdi Darbar, and it was requested by the letter that the claim may be considered in the liquidation scheme prepared by the Manager for Government sanction and payment may be made accordingly. It was stated in the letter that an agreement was arrived at between the Saurashtra Government and the Darbar Saheb of Patdi in regard to his private property consequent upon the integration of the Patdi Estate with the State of Saurashtra and in accordance with that agreement, the State Government of Saurashtra had agreed to consider the Patdi villages laying in Bombay State as Talukdari villages entirely and the Darbar Saheb had agreed to pay Rs. 12 lacs to the State of Saurashtra in respect of the share of the Saurashtra State in these villages as also in other immoveable properties of the Patdi Estate situate in Bombay, and that the Patdi Darbar Saheb had paid Rs. 25,000/- towards the amount due by him and had failed and neglected to pay the balance though repeatedly admitting liability for the same.

2. It appears that the Manager considered this claim of the Saurashtra State together with the other claims made before him and prepared on 12-3-1956 a scheme under Section 54 of the Act which included the claims of the Saurashtra Government for Rs. 11,75,000/-, The Manager, prepared a scheme and submitted the same to the Collector of Ahmedabad for his sanction. The Collector by letter dated 18-7-1956 informed the Darbar Saheb of Patdi that 31-7-1956 was fixed as the date for hearing the claim of the Saurashtra Government against the Patdi Estate and he was requested the latter to appear with the necessary documents. On 31-7-1956 the Darbar Saheb whom I will hereafter refer to as the petitioner appeared before the Collector and raised a preliminary objection against the maintainability of the claim of the Saurashtra Government. The petitioner says that he contended that the Collector had no jurisdiction to entertain and proceed to investigate the claim of the Saurashtra Government and that the same 'was hopelessly out of time' and was accordingly not entertainable. The petitioner further -says that the Collector disregarded the contentions raised by him and directed him to file his reply to the claim of the Saurashtra Government on or before 20-8-1956. It appears that the reply of the petitioner was not filed on or before 20-8-1956. But the proceedings could not be continued before the Collector on account of local disturbances in Ahmedabad. The petitioner then applied by this application for a writ in the nature of certiorari or other writ or direction under Article 226 of the Constitution against the State of Bombay or the Collector of Ahmedabad or the Manager, Patdi Estate, calling for the records of the case and after making inquiries and looking into the same and going into the question of legality thereof to quash the proceedings commenced by the Collector in connection with that claim and to set aside the directions given by the State of Bombay to the Collector of Ahmedabad to entertain the claim and enter into the liquidation scheme and quash the report of the Manager proposing the inclusion of the claim of the State of Saurashtra in the liquidation scheme.

3. The application has been resisted on behalf of the State of Bombay, the Collector of Ahmedabad and the Manager.

4. Before dealing with the various contentions which have been advanced before us in support of the petition, it would be pertinent to refer to certain relevant provisions of the Bombay Tenancy and Agricultural Lands Act. By Section 44 of the Act the State Government is authorised, notwithstanding any law for the time being in force, usage or custom or the terms of contract or grant, when it is satisfied that on account of neglect by a landholder or for other causes the cultivation of his estate has seriously suffered, or when it appears to the State Government that it is necessary for the purpose of ensuring the full and efficient use of land for agriculture to assume management of any landholder's estate, to issue a notification, announcing that intention. Section 44 makes such notification conclusive. On the publication of the notification the estate is by operation of Section 45 vested in the State Government, and continues to remain vested so long as the management enures. Section 46 of the Act provides that on the issue of a notification, certain consequences shall ensue. The proceedings pending in the Civil Court in respect of the debts and liabilities enforceable against the estate are stayed and the operation of all processes, executions and attachments in force for or in respect of such debts and liabilities are suspended. So long as the management continues, no fresh proceedings, processes, executions or attachments can be instituted in or issued, enforced or executed by any Civil Court in respect of any debts and liabilities; and the holder of the estate is rendered incompetent to enter into any contract or to mortgage, charge, lease or alienate the property under management or any part thereof, or to grant valid receipts for the rents and profits arising or accruing therefrom. By Sub-section (4) of Section 46 the Manager alone is competent to mortgage, charge, lease or alienate the estate or any part thereof. By Section 47 certain powers are conferred upon the Manager and by Section 48 the Manager is authorised to pay the costs of management and to pay the Government revenue and all debts and liabilities due or incurred to the Government in respect of the property under management, and also to pay the rent, if any, due to any superior holder in respect of the estate and to make periodical allowance as the Collector may from time to time fix. Section 49 confers upon the Manager the power to publish in the Official Gazettee a notice calling upon all persons having claims against the estate under management to notify the same in writing to the Manager within two months from the date of the publication. Section 50 prescribes the manner in which claims are to be preferred by claimants against the estate. Section 51 provides:

'Every such claim other than the claim of the Government not informed to the Manager within the time and in the manner required by such notice shall, except as provided hereinafter, be deemed for all purposes and on all occasions, whether during the continuance of the management or afterwards, to have been duly discharged'.

By the proviso to that section the Manager is authorised to extend the time for lodging a claim by two months in certain circumstances. Section 52 authorises the Manager to determine debts and liabilities after holding an inquiry into the history and merits of every claim received under Section 51. Section 53 authorises the Manager 'to rank debts and liabilities' and to fix the interest to be paid thereon. Section 54 then provides for the preparation of a scheme for liquidation of the debts and liabilities which have been finally determined by the Manager, and Section 55 provides for certain additional provisions which may be made in the scheme. Under Section 56 the Collector is authorised to sanction the liquidation scheme and to notify the sanction in the manner prescribed by the State Government by rules. On the publication of the scheme, all proceedings, processes, executions and attachments stayed or suspended under Section 46 are for ever barred and every debt or liability due or owing to any person which was provable before the Manager is extinguished and the creditors are entitled to receive under the liquidation scheme only those amounts which are awarded to them under the scheme in respect of the debt or liability. These provisions evidently operate seriously to restrict the right to property of holders of estates and their creditors and may prima facie be regarded as inconsistent with the guarantee of right to property conferred by Article 31 of the Constitution. But by Article 31B and the Ninth Schedule to the Constitution the provisions of this Act are expressly saved from the operation of Part III of the Constitution.

5. Undoubtedly the State of Saurashtra did not submit the claim within two months from the date of publication of the notice under Section 49. The claim was submitted, after two years after the date on which the notice was published; and but for the provision of Section 51 it may be regarded as discharged. But Section 51 expressly excludes the claims of the Government even though they are not preferred within the time prescribed and in the manner required by Section 50.

6. It has been urged before us by Mr. Bhatt that the claims of the Government if they are not submitted to the Manager in the manner prescribed by Sections 49 and 50 must be regarded as discharged and that in any event the claims of the Government which are saved by Section 51 are only the claims of the Government of the State of Bombay and no other claims. We are unable to accept these contentions. The Legislature has, it is true, enacted that claims which are not preferred within the prescribed period, and in the manner prescribed shall stand discharged, but from that prevision the claims of the Government have been expressly excluded. That being so, even if the claim of the Government has not been preferred within two months as required by Section 49 or has not been preferred in the manner required by Section 50, it would still be admissible by the Manager. We are also unable to agree that the expression 'Government' means the Government of the State of Bombay. In this connection it may be noted, that before the expression 'Government' was included in Section 51, by the Adaptation of Laws Order, 1950, the Legislature had used the word 'Crown' and all the claims of the 'Crown' were exempt from the operation of Section 51. It was by the Adaptation of Laws Order, 1950, that the word 'Crown' was substituted by the word 'Government'. It is true that the expression 'Government' is not preceded by the word 'any', but that in our view, makes no difference to the connotation of the expression Government. We are of the view that the expression 'claims of the Government' includes all claims which may be made by State Governments or by the Central Government of India. Wherever the Legislature intended to refer to the State Government of Bombay the expression 'State Government' appears to have been used, see, for instance, Sections 44, 45 and 56. It must, therefore, be held that the claim of the Saurashtra Government, if any, is not discharged merely because it has not been preferred within two months from the date on which the notice under Section 49 was published or that it was not preferred in the manner required by Section 50 of the Act.

7. But the more important question which we have to consider is whether the Collector was authorised to call upon the petitioner to remain present at the hearing of the claim of the Saurashtra Government against the Patdi Estate and to call for the documents, if any, with the petitioner. It is urged on behalf of the petitioner with some force that the power to investigate into the claim and to inquire into the history and merits or every claim against an estate of which management is assumed under Section 46 is vested exclusively in the Manager and the Collector is not invested with that power. It is submitted that the Collector in assuming the power of investigating the claim of the Saurashtra Government and in calling upon the petitioner to produce documentary evidence has arrogated to himself jurisdiction which he does not possess and therefore interference by this Court with attempted exercise of that jurisdiction is called for. It is true, from the scheme of Sections 49 to 55, that it is the Manager who notifies the claims and who considers the claims and ascertains what amount is justly due to the several claimants. It is the Manager who after consideration of the claims can rank the debts, fix the interest and prepare a scheme of liquidation after finally determining the debts due by the estate to the private claimants as well as to the Government and the Collector docs not enter into the picture at that stage. The Legislature having conferred the power upon the Manager to prepare a scheme after holding the requisite inquiry, it may be safe to hold that the power to hold the inquiry and to ascertain the debts due and to prepare a scheme is vested in the Manager alone. Against the orders passed by the Manager and the scheme prepared by the Manager no appeal lies to the Collector or any other authority. But the Legislature has provided that after the scheme is prepared by the Manager it shall be submitted to the Collector and the Collector is given the authority to sanction the scheme. Admittedly the Collector has authority to sanction the scheme, find that necessarily involves the power to refuse to sanction the scheme and to remit the scheme to the Manager if he thinks that course to be appropriate. It has not been contended before us that the Collector is bound to sanction the scheme submitted by the Manager. The Collector is given the power to sanction the scheme, i.e. to approve the scheme, and in exercise of that power the Collector may alter, amend or modify the scheme, or remit it to the Manager. It is true that the power to inquire into the history and merits of the claims, to determine the amounts of the debts and liabilities and to ascertain what debts are justly due to the claimants and thereupon to rank the debts due and fix interest is the power of the Manager alone but after that power has been exercised and the scheme is submitted to the Collector, that officer acquires a plenary jurisdiction to deal with the scheme.

8. In E.H. Ginwalla v. State of Bombay : AIR1954Bom151 (A) this Court had to consider the ambit of the powers of the Collector under Section 58 of the Bombay Tenancy and Agricultural Lands Act and it was held that the power of the Collector under Section 56 is sufficiently Wide to include control over the action of the Manager not only in respect of settling the mode in which debts and liabilities should be discharged but also in respect of the actual determination Of the debts and liabilities and the power of the Collector is not confined merely to sanctioning the liquidation scheme but extends to refusing to accept the debts and liabilities as settled by the Manager. If the Collector can refuse to sanction the scheme on the view that he is not satisfied about due proof of a debt or liability as settled by the Manager, he can also hold that there is some debt or liability of the estate which has not been included in the scheme by the Manager and for that or any other reason set aside the scheme, direct a fresh hearing and order that a fresh scheme be framed. Evidently by the operation of Section 51, a debt due to the Government is not discharged even if no claim has been submitted within the period provided in the notice under Section 49. The claim will still be outstanding and if, after the scheme framed by the Manager is submitted, the Collector has, prima facie evidence to show that there is some debt which has not been considered by the Manager, the Collector has in our judgment, power to refuse to sanction the scheme; and if satisfied on prima facie evidence about the existence of such a claim to remit the scheme to the Manager for holding an inquiry into the history and merits of the claim.

9. We have, been informed at the Bar that the Manager had included the claim of the Saurashtra Government to the extent of Rs. 11,75,000/-In the scheme framed by him, but the scheme has not been produced before this Court. It is admitted that of the claim made by the Saurashtra Government no notice was given to the petitioner and if any inquiry was made into the history or merits of the claim it was without the knowledge of the petitioner. If the Manager has held an inquiry into the existence of this debt and has included it in the scheme without notice to the petitioner, the Collector is justified before sanctioning the scheme to ascertain whether there was prima facie evidence that there was such a debt and to set aside the scheme prepared by the Manager and to direct the Manager after notice to the petitioner to hold an inquiry into the existence, history and the merits of the debt. If the debt has not been included and there are before the Collector sufficient materials to show that there is prima facie evidence as to the existence of the debt, in our Judgment the Collector is entitled to set aside the scheme and to remit it to the Manager for holding the inquiry contemplated by Section 52. The power vested in the Collector under Section 56 to sanction the scheme includes the power to ascertain whether the debts and liabilities included in the scheme and finally determined by the Manager have been properly included. The power also includes authority to ascertain whether there are any other debts which could lawfully have been included in the scheme and if for any reason the scheme framed by the Manager suffers from infirmity in including debts, which the Collector is of the view are not duly proved, or in failing to include debts which ought to have been included, the Collector has power under Section 56 to set aside the scheme.

10. It is true that in the present case the Collector has issued a notice dated 18-7-1956 calling upon the petitioner to remain present at the hearing of the claim of the Saurashtra Government against the Patdi Estate. But we are not prepared to hold that the Collector himself proposed to make a final inquiry into the merits and history of the claim. As I have already pointed out the Collector had the power to ascertain whether there was prima facie evidence in support of that claim and the notice issued by the Collector is clearly referable to the exercise of that jurisdiction. We are unable therefore to hold that the Collector was seeking to arrogate to himself power which he did not possess in holding an inquiry into the claim of the Saurashtra Government against the Patdi Estate, as intimated in the notice dated 18-7-1956. There is nothing in the notice which, suggests that the Collector intended to make a final adjudication in that behalf.

11. It may be pointed out that the petitioner has approached this Court at an interlocutory stage of proceedings pending before the Collector. That the Collector was properly clothed with authority to sanction or not to sanction the scheme is not and cannot be disputed. A contention was raised that the Collector had no power to enter upon an investigation of the claims of the Saurashtra Government against the Patdi Estate and the Collector having refused to accede to the re-quest of the petitioner to stay his hands this application has been filed. Except on proof of clear and patent want of jurisdiction this Court does not normally entertain an application before any final adjudication has been made by a subordinate tribunal, judicial or quasi-judicial. It was strenuously urged that the Collector had no authority whatever to embark upon this inquiry Which he intended to hold. For reasons already mentioned we are unable to accept that contention. The Collector had the authority and the power to hold, for the purpose of ascertaining whether he should sanction the scheme, the requisite inquiry to satisfy himself about the existence and legality of the debts and also to ascertain whether all the debts were included in the scheme; and for that purpose he was competent to ascertain whether there was prima facie evidence to show that the Saurashtra Government had a claim against the Patdi Estate. As I have already pointed out, the power to hold an inquiry into the merits and history of a debt and to determine the existence of the debt is vested in the Manager. It is after the Manager holds the inquiry settles the precedence of the debts and frames a scheme that the Collector steps in and sanctions or refuses to sanction the scheme or gives directions to the Manager in connection with that scheme. In the present case in our view the Collector is exercising jurisdiction for the purpose of considering whether he should or should not sanction the scheme which had been framed by the Manager. There was therefore nothing irregular or illegal in the attempted exercise of his powers by the Collector which calls for interference by this Court. On that ground the application filed by the petitioner must fail.

12. But before we pass final orders, we may refer to certain other arguments which were advanced by Mr. Bhatt on behalf of the petitioner. It was urged that the Saurashtra State had no claim against the estate of which superintendence was assumed by the State of Bombay but if at all against the petitioner personally and that claim could not be entertained and investigated even by the Manager. We do not think at this stage we will be justified in examining the merits of that argument. It is the Manager who has to inquire into the history and merits of every claim received and to determine the amount of the debt or extent of liability. Implicit in that power is the Dower to ascertain whether in fact there is a debt or liability which is enforceable against the estate. If the Collector is of the opinion in the inquiry proposed to be held by him that there is prima facie evidence as to the existence of the claim made by the Saurashtra Government and if the Collector sets aside the scheme and directs a re-investigation by the Manager, the Manager will be entitled to go into the question whether in fact there is a debt due by the estate and he will also inquire into the history and merits of that claim. The power to adjudicate upon the claim having been conferred upon the Manager, we cannot assume jurisdiction to adjudicate upon the validity, or otherwise of the claim made or its enforceability.

13. It was then, urged that there has been correspondence between the Collector of Ahmedabad, the Manager of the estate, the State of Bombay and the State of Saurashtra with regard to the alleged claim of the Saurashtra Government and the Manager and the Collector are acting in the matter of investigation of the claim under the direct orders of the State of Bombay and are not likely to act impartially in the performance of their duties and therefore this Court should order that the proceedings of the Collector and the Manager be quashed and that the investigation into the claim be made by this Court. The fact that there was correspondence between the Manager who holds the estate and manages the estate on behalf of the State of Bombay in whom legal title is vested is not a ground for assuming that the Manager will not act honestly in exercise of the quasi-judicial authority conferred upon him. In any event, the Legislature having conferred the power of investigation into the existence, the history and the merits of the debts upon the Manager, we cannot take upon ourselves the duty to hold that investigation as requested by Mr. Bhatt. The proceedings must be continued before the Manager and the Collector, and the jurisdiction of this Court can only be invoked for rectifying mistakes or errors committed by those officers after the claim has been investigated by those officers in the manner provided by law.

14. It was also contended that the claim made by the Saurashtra Government is one in respect of which by virtue of Article 363 of the Constitution the Manager and the Collector have no jurisdiction. Article 363 bars interference by Courts in disputes arising out of certain treaties, agreements, covenants, engagement, Sanads or other similar instruments entered into or executed before the commencement of the Constitution by, any Ruler of an Indian State and to which the Government of the Dominion of India or any of its predecessor Government was a party and which agreements have been in operation after the commencement of the Constitution. The jurisdiction of Courts having been barred to adjudicate upon a dispute arising out of any provision of a treaty, agreement, etc., a Civil Court may be incompetent to decide that dispute. But a Civil Court is not called upon to exercise jurisdiction in respect of a dispute arising out of a treaty, agreement, covenant, etc. The question to be decided by the Manager is whether there is a debt due by the estate to the Saurashtra Government under an agreement entered into by the petitioner and it is difficult to appreciate how there can be any bar of Article 363 of the Constitution to the maintainability of the proceedings before the Manager or the Collector for ascertaining the existence and liability of the debt.

15. Finally it was contended that in seeking, to exclude from the operation of Section51 of the Act the debt due to the Government of Saurashtra the Bombay Legislature was giving extra-territorial operation to the Bombay Tenancy and Agricultural Lands Act which it was incompetent to do. In our judgment that is a futile argument. The Bombay State is competent to legislate in respect of persons, objects and things within the limits of its territorial jurisdiction and the locus of a debt due by the estate within the state of Bombay cannot be regarded as outside merely because the creditor is outside its jurisdiction. Nothing has been pointed out to us from the Constitution which supports the contention that legislation which is otherwise within the competence of a State Legislature is ultra vires merely because it is likely to affect the rights of some person who is residing outside the limits of the State.

16. There is no substance in any of the contentions which have been raised on behalf of the petitioner.

17. We therefore discharge the rule, with costs.

18. Rule discharged.


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