(1) These petitions raise a short but interesting question of construction of Section 43 of the Bombay Tenancy and Agriculatural Lands Act, 1948 (hereinafter referred to as the Act), Though the question of law which arises in these petitions is common, the facts are not identical and it is therefore, necessary to state the facts of each petition separately.
2. Petition No. 372 of 1967:- Prior to 1st April 1957, the petitioner's a predecessor -in-title of the third respondent was the tenant of survey No. 228 statute in village Rander, Taluka Chorashi, District Surat. By reason of Section 32 of the Act, the predecessor-in-title of the third respondent became the deemed purchaser of the said survey number on 1st April 1957 and in an inquiry held under Section 320, the Agriculatural Lands Tribunal fixed the purchase price of the said survey number at Rs. 12,000/- by an order made on 31st October 1963. The purchase price was payable in twelve equal annual instalments of Rs. 1000/- each together with interest at four and one half per cent per annum but it appears that the entire purchase price together with accrued interest was deposited by the third respondent with the Agricultural Lands Tribunal by 26th April 1965 and a certificate of purchase was accordingly issued by the Agricultural Lands Tribunal in favour of the third respondent on 28th April 1965. The petitioner in the meantime came to learn that the third respondent was negotiating for sale of the said survey number to the fourth respondent for a price of over Rs. 1,30,000/- and the petitioner therefore, addressed letters to the Chief Minister, the Revenue Minister and the Collector protesting against the intended transfer of the said survey number by the third respondent as such a large profit. The record does not show whether any reply was received by the petitioner from the Chief Minister, the Revenue Minister or the Collector but it is clear that an agreement dated 29th July 1965 was entered into by the third respondent with the fourth respondent for sale of the said survey number at the price of Rs. 1,32,391/-. Pursuant to a public notice issued by the fourth respondent inviting objections against the proposed purchase of the said survey number, the petitioner communicated his objections to the fourth respondent by a letter dated 21st May 1966 and the petitioner also on the same day wrote to the Assistant Collector inquiring whether any application for sanction was received by him. The Assistant Collector replied by his letter dated 4th June 1966 stating that no application for sanction had been received till then from the third respondent. The petitioner thereafter had an interview with the Revenue Minister and according to him, he was assued by the Revenue Minister that no sanction would be granted for sale of the said survey number by the third respondent to the fourth respondent. The Assistant Collector however, by an order dated 23rd December 1966 granted sanction to the third respondent to sell the said survey number to the fouth respondent for the price of Rs. 1,32,391.30 on condition that the third respondent paid to the State Government fifty per cent of the profit resulting to him from the sale, namely, Rs. 60,195.65np. pursuant to the sanction granted by the Assistant Collector, the third respondent sold the said survey number to the fourth respondent for the price of Rs. 1,32,391.30 on 30th December 1966 and paid a sum of Rupees 60,195.65 representing fifty per cent of the excess of Rs. 1,32,391.30 over Rs. 12,000/- to the State Government. This led to the filing of Petition No. 372 of 1967.
3-5. x x x x x
6. Each of these petitions impugned the validity of the order of the Collector granting sanction for sale of the respective lands as also of the sale effected by the tenant pursuant to the sanction so granted. There were in the main two contentions on which the challenge was based. The first contention was that on a true construction of Section 43, the Collector could grant sanction to the tenant for sale only on condition that the tenant agreed to make payment of the amount determined by the Government to the landlord and since the order granting sanction did not contain any such condition, it was illegal and void. It was also urged on behalf of the petitioner in each petition - and that was the second contention - that on a proper interpretaion of Section 43, payment to the landlord of an amount to be determined by the State Government was a condition of the sale and since this condition was not satisfied, the sale effected by the tenant in each of the four petitions was valid. The respondents disputed the validity of both these contentions and they urged that there was nothing in Section 43 which required the Collector to make it a condition of the grant of sanction for sale that the tenant should make payment of the amount determined by the State Government to the landlord and though it was no doubt true that under Section 43 the sale could not be effected by the tenant except on payment of the amount detrmined by the State Government, this condition was satisfied for the payment contemplated was payment to the State Government and not to the landlord and fifty per cent of the net profit so determined by the State Government in the Government Resolution dated 17th January 1961 was paid by the tenant in each case to the State Government. These rival contentions raised an interesting question of construction which we shall now proceed to consider.
7. The Act as originally enacted in 1948 was intended to regulate the relationship of landlord and tenant with a view to giving protection to the tenant against exploitation by the landlord but in 1956 a major amdnment was made in the Act introducing a radical measure of agrarian reform. The Legislature decided that the tiller of the soil should be brought into direct contact with the State and the intermediary landlord should be eliminated and with that end in view, the Legislature introduced a fasciculus of sections from Section 32 to S. 32-R and S. 43. These senctions came into force on 13th December 1956 and they provided for the tenant becoming deemed purchaser of the land held by him as tenant. Section 32 said that on 1st April 1957 every tenant shall, subject to certain exceptions which are not material for the purpose of the present petitions, be deemed to have purchased from him landlord, free from all encumbrances subsisting thereon on the said day, land held by him as tenant provided he was cultivating the same personally. If the landlord bona fide required the land either for cultivating personallity or for any non-agricultural purpose, he could after giving notice and making an application for possession as provided in Section 31, sub-section (2), terminate the tenancy of the tenant subject to the conditions set out in Sections 31-A to 31-D but if he did not take steps for terminating the tenancy of the tenant within the time prescribed in Section 31, the tenant became the deemed purchaser of the land on 1st April 1957. If the landlord gave notice and made an application for possession within the time prescribed in Section 31, the tenant would not become the deemed purchaser of the land on 1st April 1957 but he would have to await the decision of the application for possession and if the application for possession was finally rejected, he would be the deemed purchaser of the land on the date on which, the final order of rejection was passed. Now if the tenant becomes deemed purchaser of the land, there would be no difficulty, for the intermediary landlord would then be eliminated and direct relationship would be established between the State and the tiller of the soil. But what is to happen if the tenant expresses his unwillingness to become deemed purchaser of the land? The Legislature said that in such a case the tenant cannot be permitted to continue as a tenant he would have to go out of the land. If the tenant is permitted to continue as a tenant, the object and purpose of the enactment of the legislation, namely, to eliminate the middleman, would be defeated. The Legislature therefore, provided in Section 32-P that if the tenant expresses his unwillingness to become deemed purchaser of the land and the purchase consequently becomes ineffective, the Collector shall give a direction providing that the tenancy in respect of the land shall be terminated and the tenant summarily evicted. The land would then be surrendered to the landlord subject to the provisions of Section 15 and if the entire land or any portion thereof cannot be surrendered in accordance with the provisions of Section 15, the entire land or such portion thereof, as the case may be, shall be disposed of by sale according to the priority list. The priority list consists of persons who would personally cultivate the land and the sale of the land to them would ensure that the tiller of the soil becomes the owner of it and there is no intermediary or middleman to share the profits of his cultivation. Since the tenant is made the deemed purchaser of the land in order to effectuate the policy of agrarian reform to eliminate the intermediary landlord and to establish direct relationship between the State and the tiller of the soil so that soils of his cultivation are not shared by an intermediary or middleman who does not put in any labour, the Legislature insisted that the tenant must personally cultivate the land of which he is made the deemed purchaser. The tenant, said the Legislature, would continue to remain owner of the land only so long as he personally cultivated it; he must make use of the land for the purpose of which it was given to him as owner. If the tenant failed to cultivate the land personally either by keeping it fallow or by putting it to non-agricultural use, he would lose the land under Section 32B and the land would be given away to others for personal cultivation in accordance with the provisions of Section 84-C.
8. So also and for the same reasons, the Legislature by enacting Section 43 placed an embargo on the tenant transferring the land deemed to be purchased by him. If the tenant were free to transfer the land to anyone he liked, the object and purpose of making him the deemed purchaser of the land would be frustrated. Section 43 therefore, provided that no land purchased by a tenant under Section 32 shall be transferred by sale, gift, exchange, mortgage, lease or assignment or partitioned without the previous sanction of the Collector and except on payment of such amount as the State Government may by general or special order determine. The general rule enacted in sEction 43 was that the tenatn shall not transfer the land by sale, gift, exchange, mortgage, lease or assignment or partition it, for it is given to him as owner for personal cultivation. But the Legislature recognised that there may be cases where it may be necessary or expedient to transfer the land to some other person and the Legislature therefore, provided that the transfer may be made by the tenant after obtaining the previous sanction of the Collector and on payment of such amount as the State Government may by general or special order determine. These two conditions are clearly and indubitably conditions of a valid transfer of the land by the tenant and if either of those two conditions is not fulfilled, the transfer would be invalid.
The first condition requires that there must be previous sanction of the Collector before land can be transferred by the tenant. This requirement is introduced in order to ensure that the general rule inhibiting transfer is not departed from except under justifying circumstances. When an application is made to the Collector for sanction, the Collector will examine the facts and circumstances of the case and decide whether, consistently with the policy of the Act and the exigencies of the situation, the tenant should be permitted to transfer the land. If the land is sought to be transferred by the tenant for a non-agricultural purpose the Collector will have to consider whether the necessity or expediency of transfer is so great that, despite the policy of the statute that the land must be personally cultivated by the tenant, it should be allowed to be transferred by the tenant to another for a non-agricultural purpose. It is not a power to be exercised lightly; it is a power which must be exercised with great care and circumspection having regard to the policy of the statute and also bearing in mind the fact that the landlord has been deprived of his ownership of the land for the purpose of making the tiller of the soil and owner of it. The Collector will therefore, take into account various circumstances relating to the proposed transfer and decide whether he should grant permission or not but there is nothing in Section 43 which requires that he should make it a condition of sanction that the tenant shall pay the amount determined by the State Government. The requirement that the tenant shall pay 'such amount as the State Government may by general or special order determine' is introduced by the second condition and that is quite independent of the first; there is no reason on principle why it should be incorporated in the sanction to be granted by the Collector. The sanction granted by the Collector in each of the petition cannot therefore be assailed as invalid on the ground that it did not make payment of the amount determined by the State Government a condition of the sanction.
9. Turning to the second condition, there can be no doubt that it is of a mandatory character. The negative language of the section: 'No land ................. shall ................. be transferred ............. except on payment of such amount............' clearly indicates that payment is obligatory in order that the transfer should be valid; only the amount is left to be determined by the State Government by general or special order. The question then arises, to whom is the payment required to be made; is it to the landlord as contended by the petitioner in each petitin or is to the State Government as claimed by the respondent? The section does not in so many terms mention to whom the payment is to be made and hence the debate or controversy between the parties. We are of the view that the construction contended for on behalf of the respondents is correct and the payment contemplated by the section is payment to the State Government and not to the landlord and our reasons for saying so are as follows:
10. In the first place, it must be realised that as soon as the tenant becomes the deemed purchaser of the land, whether under Section 32 or under any of the other sections referred to in Section 43, the landlord ceases to have any interest in the land and goes out of the picture altogether. He ceases to have any concern with the land and what the tenant does with the land thereafter is a matter between the tenant and the State Government, with which he is not concerned. The tenant becomes the deemed puchaser of the land and if there are any conditions or restrictions affeting his occupancy of the land under the Act, it is for the State and not for the landlord to see that those conditions and restrictions are observed. The landlord fades out of the picture once the deemed purchase is effected and it is difficult to see why the Legislature should have provided that when the tenant transfers the land, such amount as may be determined by the Government shall be paid to the landlord. The transfer may be effected by the tenant at any point of time in the future; it may be after ten years or fifteen years or twenty years; the association of the landlord with the land would by that time be merely a historical association. If that be so it is difficult to imagine any reason which should have induced the legislature to introduce a provision that when the landlord, who has been an occupant of the land for a number of years, transfers it, some amount should be required to be paid to the landlord. Moreover, different kinds of transfer contemplated by the section include gift and mortgage. Now what object or purpose could possibly be intended to be served by requiring payment of some amount to the landlord when the tenant gifts the land or mortgages it for raising a loan? There would be no element of profit motive in the transaction and no profit could possibly arise to the tenant as a result of the transaction: why then should the tenant be compelled to pay any amount to the landlord? The section also refers to partition of the land. If the tenant has become the deemed purchaser of the land as manager and Karta of his joint family and he partitions the land, there is no reason why, as a condition of partition, some benefit should be provided to the landlord. The only argument on which the petitioner sought to justify provision for payment to the landlord was that it was introduced as a part of the scheme of social justice envisaged by the Act. The petitioner contended that the tenant was made the deemed purchaser of the land at a ridiculously low price because he was personally cultivating it and it was intended that he should continue to personally cultivate it. But if he wanted to act as the ordinary owner and take full advantage then the law required that he should make some extra payment to the landlord so that justice might also be done to the landlord. This was, according to the petitioner, a counter-balancing provision which was intended to effectuate justice to the landlord in those cases where the reason for giving the land to the tenant at a ridiculously low price ceased to exist. But this contention is without force. Where the tenant partitions the land amongst the members of the joint family and the land goes to the share of another member for personal cultivation, where does the necessity of compensating the landlord arise? So also, where the tenant mortgages the land for the purpose of raising a loan or where he exchanges the land for another land which he thinks he will be able to cultivate more efficiently there can be no necessity or justification for compensating the landlord. Moreover, if payment was intended to be made to the landlord in order to effectuate social justice, it would not have been left to the State Govt. To determine the amount in its absolute discretion. It may also be noticed that there is no reference to the landlord anywhere in the section and it therefore, stands to reason that if the Legislature intended that the payment should be made to the landlord, the Legislature would have said so in so many terms.
11. As the section stands there can be no doubt that it is implicit in the language used in the section that the payment contemplated is payment to the State Government. It must be remembered that the State is theoretically the owner of all land; all occupants hold under the State. If an occupant is not entitled to trnasfer his land without the permisson of the State, the state can very well say that the permission to transfer the land would be granted only if he pays a premium to the State as the sovereign owner of the land. As a matter of fact, such a provision is to be found in Section 73-B of the Bombay Land Revenue Code, 1879. That section which was introduced in the Code with retrospective effect by Gujarat Act 35 of 1965 provides that where any occupancy, by virtue of any conditions annexed to the tenure by or under the Code is not transferable or partible without the previous sanction of the State Government, the Collector or any other officer authorised by the State Government, such sanction shall not be given except on payment to the State Government of such sum as the State Government may by general or special order determine. The Legislature has also similarly provided in Section 43 that if the tenant who is otherwise under an inhibition to transfer, wnats to transfer the land, he shall do so only on payment of such amount as the State Government may by general or special order determine. That is the charge which the State makes for permitting transfer where the occupancy is not transferable as of right. It is no doubt true that the words 'to the State Government' are not to be found after the word 'payment' in Section 43 but that does not make any difference. These words were perhaps not explicity used by the Legislature as the Legislature might have felt that even without these words the meaning of the section was reasonably clear. Once the landlord goes out of the picture altogether and direct relationship exists only between the State and the tenant, any requirement for payment as a condition of the privilege to transfer must be construed as referable to payment to the State Government. It was in exercise of the power conferred by this section that the State Government made the Resolution dated 17th January 1961 determining different amounts to be paid to the State Government according as the land was sought to be transferred by sale, gift, exchange, mortgage, lease or assingment or partition. The amount that was determined to be payable to the State Government on transfer by sale was fifty per cent of the net profit resulting to the tenant from the sale and this amount was paid by the tenant in each petition before effecting the sale impugned in each petition. The second condition requiring payment of such amount as the State Government may by general or special order determine was also therefore, fulfilled in each of these four cases.
12. These were the only contentions urged in Petitions Nos. 372 of 1967, 1394 of 1965 and 294 of 1968 and since there is no substance in them, these petitions fail and the rule issued in each of these petitions stands discharged with costs.
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13. Rules discharged.