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Jerome Fernandes Vs. the Be-be-rubber Estate Ltd. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKerala High Court
Decided On
Case NumberS.A. No. 1307 of 1966
Judge
Reported inAIR1973Ker45
ActsKerala Land Reforms Act, 1964 - Sections 2(44), 3(1) and 13; Travancore Cochin Compensation for Tenants Improvements Act, 1956 - Sections 17
AppellantJerome Fernandes
RespondentThe Be-be-rubber Estate Ltd.
Appellant Advocate K. George Varghese and; Thomas V. Jacob, Advs.
Respondent Advocate P.K. Kurien and V. Desikan, Advs.
DispositionAppeal dismissed
Cases ReferredPeter v. Rama
Excerpt:
.....purpose of grant to enable lessee to carry on 'rubber or other more profitable cultivation' on land - lease granted for cultivation - it is not proper to deny benefit of fixity of tenure to lessees who might have taken on lease extensive waste lands - intention of legislation to restrict scope of exemption to leases of lands which were 'plantations' on date of transactions - transaction by lease does not fall within scope of section 3 (1) (viii) - held, defendants entitled to fixity of tenure and plaintiff not entitled to recovery of possession of property. - - we fail to see how such a lease can be regarded as one granted for 'industrial or commercial' purposes. the legislature when it enacted act 4 of 1961 must certainly have had before it the earlier enactments which were..........(appellant):--'3. exemptions. (1) nothing in this chapter shall apply to--* * * * *(iii) leases of land or of buildings or of both specifically granted for industrial or commercial purposes: or* * * * *(viii) tenancies in respect of plantations exceeding thirty acres in extent.' the expression 'plantation' is defined thus in section 2(44):--' 'plantation' means any land used by a person principally for the cultivation of tea, coffee, cocoa, rubber cardamom or cinnamon (hereinafter in this clause referred to as plantation crops') and includes-- (a) land used by the said person for any purpose ancillary to the cultivation of plantation crops or for the preparation of the same for the market(b) land contiguous to or in the vicinity of or within the boundaries of the area.....
Judgment:

Balakrishna Eradi, J.

1. This second appeal arises out of a suit filed by the appellant herein for recovery of possession of the plaint schedule property with arrears of rent up to the date of suit and future mesne profits. The suit is in respect of an extent of 224 acres 56 cents which forms part of a larger area of 259 acres 56 cents which had been leased out by the plaintiffs pre-decessor-in-office in favour of one A. C. M. Anthraper (deceased) as per a lease deed dated the 17th December. 1926, evidenced by Ext. P1. The leasehold right of Anthraper in respect of 224 acres 56 cents included in the plaint schedule was transferred to the defendant company on the 8th May. 1937, under the assignment deed Ext. P2. The lease Ext. P1 was for a term of 35 years and the said period expired on the 17th December. 1961. Thereafter the plaintiff made demands on the defendant for surrender of possession and since the defendant did not comply with the said demand the present suit has been instituted seeking the reliefs aforementioned.

2. The defendant company pleaded that it is entitled to fixity of tenure in respect of the holding under the provisions of the Kerala Land Reforms Act 1963 (Act 1 of 1964), hereinafter referred to as the Act, and that therefore the suit for recovery of possession is not maintainable. In the alternative, it was also con-tended that extensive improvements exceeding Rs. 30 lakhs in value have been effected on the Property and that in any event the defendant is entitled to be paid fully compensation in respect of those improvements as a condition before it is called upon to surrender possession of the property.

3. Both the lower courts disallowed the Plaintiff's prayer for recovery of possession and sranted him a decree only for arrears of rent an'd future rent till date of passing the decree. They concurrently held that the defendant-respondent is entitled to fixity of tenure under Section 13 of the Act and that the transaction of lease, under which the property is held by the defendant, is not taken out of the purview of Chanter II of the Act sincp it does not fall within any of the exempted categories enumerated in Section 53 of the Act. In this second appeal the plaintiff challenges the correctness of the aforesaid conclusion arrived at by the courts below. Though the trial court rejected the plaintiff's prayer for thp relief of recovery of possession it entered a finding on issue 2 relating to the defendant's claim for value of improvements, that if the prayer for recovery of possession was to be granted the defendant would be entitled to be paid compensation only in respect of the improvements effected on the property subsequent to 31-10-1956 on which date the Compensation for Tenants Improvements Act (T. C. Act 10 of 1956) came into force and that the defendant is not entitled to the value of any improvements effected on the property prior to that date.

Though a memorandum of cross-Objections was filed by the defendant before the lower appellate court challenging the said finding of the trial court the learned Additional District Judge considered it unnecessary to so into the said question in view of his conclusion that the plaintiff is not entitled to recover possession of the suit property. Since the question of recoverability of the property is being agitated by the plaintiff before this court in second appeal, the defendant also has filed a memorandum of cross-objections challenging the finding entered by the trial court disallowing compensation in respect of improvements effected prior to 31-10-1956.

4. The principal point that arises for decision in this appeal is whether the transaction evidenced by Ext. P1 where-under the suit property is held by the defendant is one in respect of which the provisions of Section 13 of Chapter II of the Act conferring rights of fixity on the lessee are attracted. That the defendant is a 'tenant' as defined in Section 2(57) of the Act admits of no doubt. Section 13 which occurs in Chapter II of the Act confers upon all tenants fixity of tenure in respect of their holdings except in cases covered by Sub-section (2) thereof which relates only to leases granted by the members of Armed Forces while serving as such, members within a period of three months immediately before they joined the Armed Forces-Section 3 (1) of the Act, however lays down that nothing contended in Chapter II of the Act shall apply to the categories of transactions referred to in Clauses (i) to (xii) of the said section. The contention of the plaintiff is that the suit transaction falls within the scope of Clauses (iii) and (viii) of Section 3 (1) and it is therefore exempt from the operation of Chapter II of the Act wherein is contain-ed Section 13 which confers fixity of tenure on tenants. We shall extract the relevant Portion of Section 3 (1) inclusive of the two clauses relied on by 'the plain-tiff (appellant):--

'3. Exemptions. (1) Nothing in this Chapter shall apply to--

* * * * *(iii) leases of land or of buildings or of both specifically granted for industrial or commercial Purposes: or

* * * * *(viii) tenancies in respect of plantations exceeding thirty acres in extent.'

The expression 'plantation' is defined thus in Section 2(44):--

' 'plantation' means any land used by a person Principally for the cultivation of tea, coffee, cocoa, rubber cardamom or cinnamon (hereinafter in this clause referred to as Plantation crops') and includes--

(a) land used by the said person for any purpose ancillary to the cultivation of plantation crops or for the preparation of the same for the market

(b) land contiguous to or in the vicinity of or within the boundaries of the area cultivated with plantation crops not exceeding twenty per cent of the area so cultivated and reserved by the said person and fit for the expansion of such cultivation:

(c) agricultural lands interspersed within the boundaries of the area cultivated by the said person with plantation crops, not exceeding such extent as may be determined by the Land Board as necessary for the protection and efficient management of such cultivation.

Explanation. -- Lands used for the construction of office buildings, godowns, factories, quarters for workmen, hospitals, schools and play grounds shall be deemed to be lands used for the purposes of Sub-clause (a).'

Before we proceed to examine the scope of the aforesaid provisions and their applicability to the present case it is necessary to set out in brief the relevant terms of Ext. P1. Paragraph 1 of the document says that the lease was being granted since the lessee wanted a lease of the properties 'for rubber or other more profitable cultivation.' The term of the lease was fixed as 33 years from the date of delivery and an annual rent of Rs. 750/- inclusive of Government tax was to be Paid by the lessee in three Instalments of Rs. 250/- each in the months of April. August and December during the first 8 years. After the lapse of 8 years from the date of Ext. P1 the lessee was to pay an additional rent of Rs. 5/- per annum for every acre of the entire area comprised in the lease. After the expiry of the period of 35 years or in the event of earlier cancellation of the lease by the lessor on the lessee committing default in the payment of rent for two consecutive years the leasehold property 'together with all the improvements and buildings thereon are to be surrendered by the lessee to the lessor without any compensation for such improvements. The schedule to the document shows that the leasehold property was described as consisting of garden lands and wet lands, the larger Dart being garden.

5. We may first of all dispose of the appellant's contention based on Clause (iii) of Section 3 (1) of the Act- The applicability of this clause is confined to leases of lands or of buildings specifically granted for industrial or commercial purposes. We have already extracted above the relevant recital in Ext. P1 mentioning the purpose for which the lease was granted. It savs that the purpose of the grant was to enable the lessee to carry on 'rubber or other more profitable cultivation' on the land. The lease was thus one granted for cultivation, it being left to be decided by the lessee in its discretion what kind of cultivation should be carried on in the land. We fail to see how such a lease can be regarded as one granted for 'industrial or commercial' purposes. The said contention of the appellant is totally devoid of merit and will therefore stand rejected.

6. We shall now proceed to consider whether Clause (viii) of Section 3 (1) of the Act is attracted to this case. By that clause tenancies in respect of plantations exceeding 30 acres in extent are exempted from the operation of the provision of Chapter II of the Act. The Question is whether the transaction under Ext. P-1 is one creating a tenancy in respect of a plantation exceeding 30 acres in extent. The expression 'plantation' has been defined in Clause (44) of Section 2 (already extracted supra) as mainly denoting any land used by a person Principally for the cultivation of tea, coffee, cocoa., rubber, cardamom or cinnamon and as including also lands used by the said person for any purpose ancillary to the cultivation of plantation crops or for preparation of the same for the market. Going by the said statutory definition only land which is actually used by any person principally for the cultivation of 'plantation crops' or for ancillary purposes connected with such cultivation can be regarded as a 'plantation.' In the present case it is not disputed that on the date of Ext. P-l the lands covered by the said lease were not being put to any such use. But it is argued on behalf of the appellant that the determinative factor for the applicability of Clause (viii) of Section 3 (1) is not the character of the land or the use to which it was being put at the time of granting the lease but its nature and use at the time of the commencement of the Act. According to the appellant, Clause (viii) will apply in all cases where on the date of commencement of the Act a tenant is in Possession of land exceeding 30 acres in extent and the said land is used by him principally for the cultivation of any one of the plantation crops referred to in Section 2(44), whatever might have been the nature of the land or the type of use to which it was being put at the time of creation of the tenancy. In support of this argument great stress is laid by the appellant's counsel on the fact that the wording employed by the legislature in Clause (viii) for describing the exempted category of transactions is 'tenancies in respect of plantations.' It is argued that if the intention of the legislature was to confine the scope of the exemption to transactions of leases of lands which are already under cultivation with plantation crops and which thereby fulfil the definition of 'plantation.' then the clause could have been worded as 'leases of plantations' as has been done with respect to private forests in Clause (vii). According to the appellant's contention the legislature has deliberately used the words 'tenancies in respect of plantations' with the object of bringing within the scope of the exemption all transactions whereunder there is a subsisting tenancy in respect of land which satisfies the definition of a plantation on the date of coming into force of the Act.

7. For testing the soundness of the above arguments advanced on behalf of the appellant an examination of the wording used in the remaining clauses of Section 3 (1) of the Act is helpful. It is convincingly disclosed by such a scrutiny that no special significance can be attached to the occurrence of either the word 'tenancies' or the expression 'in respect of' in Clause (viii).

The said expressions have been employed in some of the other clauses also wherein thp context is such that the reference can only be to a transaction whereby the property satisfying the description given in the concerned clause has been leased out. For example, Clause (v) deals with 'tenancies in respect of land or of buildings or of both created by mortgagees in possession .....' and Clause (vi) refers to 'tenancies in respect of land or of buildings or of both created by persons having only life Interest or other limited interest in the land or in the buildings.' Reference may also be made to Clause (ix) which deals with 'tenancies in respect of kaval padase-kharams of Kuttanad area' and Clause (x) which deals with 'tenancies in respect of sites, tanks and premises of any temple, mosque or church .....'

There can be no doubt that the exemptions granted under the aforesaid clauses will be attracted only if the transaction of tenancy was even at its inception one in relation to property of the nature specified therein. We do not find any warrant for assuming that the legislature Intended to use the same words 'tenancies in respect of' in any different sense while enacting Clause (viii) which forms Part of the very same section.

8. In this connection we think, if will be useful to refer briefly to the corresponding provisions dealing with the brant of exemption to plantation leases which were contained In the earlier tenancy legislations in force In this State. The relevant provision in the Malabar Tenancy Act 1929 was Section 2 (1) which was in the following terms:--

'2. Exemption. --- Nothing in this Act shall apply to:

(1) lands transferred by a landlord for felling timber or for fugitive cultivation or for planting tea, coffee, rubber, cinchona or any other special crop prescribed by a rule made by the Local Government, or the erection of any build-ing for the purpose of, or ancillary to the cultivation of such crop, or the preparation of the same for the market: *****'

Section 3 (e) of the Kerala Stay of Eviction Proceedings Act. 1957 (Act 1 of 1957) was couched in almost identical language and it ran thus:--

'3. Application -- Nothing in this Act shall apply to:--

* * * * *(c) lands transferred for felling timber or for planting tea, coffee, rubber or any other special crop prescribed by a rule or order made by the Government or the erection of any building for the purpose of or ancillary to the cultivation of such crop or the Preparation of the same for the market.'

When the Kerala Agrarian Relations Act, 1960 (Act 4 of 1961) was enacted there was a marked change in the language used by the legislature while dealing with the above subiect. Under Section 3 (viii) Of Act 4 of 1961 'tenancies in respect of plantations exceeding thirty acres in extent' were exempted from the operation of Chapter II of that enactment, the expression 'plantation' being defined in Section 2 (39) of that Act in the same manner as has been done by the present Act (Act 1 of 1964). Whereas the earlier enactments declared that none of their Provisions will apply to lands transferred for planting tea, coffee, rubber or any other notified special crop, a totally different phraseology was used in Act 4 of 1961 as a result of which the scope of the exemption was considerably narrowed down. To that extent there was undoubtedly a change in the legislative policy in relation to the grant of exempt tion for plantations. The legislature when it enacted Act 4 of 1961 must certainly have had before it the earlier enactments which were being repealed and substituted by a more comprehensive legislation and hence it is only reasonable to think that there must clearly have been a definite purpose in departing from the wording that had been used in the same context in the earlier enactments and in couching the exemption clause in totally different terminology. It appears to us that the legislative intent underlying the change of wording is to confine the scope of the exemption to transactions where-under lands satisfying the statutory definition of 'plantation' and having an extent of more than 30 acres have been let out to tenants.

9. It may well be that the legislature thought that It will not be fair or proper to deny the benefit of fixity of tenure to lessees who might have taken on lease extensive Parambas or waste lands and might have in course of time by their hard toil developed them into plantations. Even under the provisions of the Malabar Tenancy Act such a tenant was entitled to fixity of tenure unless the lease itself was one granted specifically for the purpose of raising a plantation. If the interpretation of Section 3 (1) (viii) contended for by the appellant is to be accepted, even such tenants in Malabar who had pre-existing rights of fixity under the Malabar Tenancy Act would be divested of that valuable right and rendered liable to be evicted. We do not think that the legislature would have intended such an anomalous consequence. Thus going by the clues furnished by the statutory history Preceding this legislation and also by the express language used in Section 3 (1) (viii) we are clearly of opinion that it is more reasonable to conclude that the intention of the legislature was to restrict the scope of the exemption to leases of lands which were already 'plantations' on the date of the transactions.

10. In the light of the above discussion it is manifest that the transaction evidenced by Ext. P-1 whereunder the suit property is held by the defendant does not fall within the scope of Section 3 (1) (viii) of the Act. The Courts below were therefore perfectly right in holding that the defendant is entitled to fixity of tenure and in disallowing the plaintiff's prayer for recovery of possession of the plaint schedule property on that ground.

11. Inasmuch' as we have found that the defendant Is not liable to be evicted from the property it Is not strictly necessary for us to consider the question raised in the memorandum of cross-objections respecting the defendant's claim for compensation for the improvements effected prior to 31-10-1956. However, since the Doint has been argued before us by counsel on both sides we shall Proceed to record our conclusion on the said question as well. The finding of the trial Court that the defendant is entitled to set compensation only for the improvements effected on the property sub-sequent to 31-10-1956 was based entirely on the inline of a learned single Judge of this Court reported in Cheeramma v. Karthiavani. 1962 Ker LT 593. It was held therein that Section 17 of the Compensation for Tenants Improvements Act (T. C. Act 10 of 1956) had only prospective operation and that In regard to the improvements effected before the Commencement of the said Act the Parties will be governed only by their contract. The said decision (1962 Ker LT 593) was subsequently overruled by a Division Bench of this Court in Peter v. Rama-krishnan Nair. 1966 Ker LT 21. The Division Bench held that under Section 17 of the Compensation for Tenants Improvements Act the tenant has been conferred a right to receive compensation in respect of the improvements effected by him even from the date of commencement of the tenancy and that in adjudging claims for such compensation after the date of the Act the restrictive provisions in the contract should not be heeded. We are in respectful agreement with the above statements of the law. We accordingly hold that the trial Court was in error in disallowing the defendant's claim for the Improvements effected on the holding Prior to 31-10-1'956. The memorandum of cross-objections will stand disposed of accordingly.

12. In the result, the second appeal is dismissed, but in the circumstances of the case we direct the parties to bear their respective costs.


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