T. Ramaprasada Rao, J.
1. The Authorised Officer, Land Reforms, Coimbatore, is the petitioner. One A.G. Dhamodaraswami Naidu, held on 6th April, 1960, an extent of 118.016 ordinary acres equivalent to 38.528 standard acres of agricultural land. As he was entitled only to hold 30 standard acres under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, action was taken by the statutory functionaries to fix the ceiling limit. On the publication of the draft statement under Section 10 (1) of the Act, Dhamodaraswami Naidu, who was alive on that date, filed objections thereto that the above extent reckoned by the statutory officers included his holding in an agricultural company known as Messrs A. G. D. (Private) Ltd. and if the extent of his shareholding in the agricultural company is deducted, there would be no excess in his hands for the same being declared as such and taken over by the Government under the provisions of Act LVIII of 1961. But the Authorised Officer held that Dhamodaraswami Naidu's shareholding in the limited company should also be taken into account for computing the excess. It also appears that Dhajtno-darawam.i Naidu transferred such shares in, the above company in favour of a trust. The Authorised Officer would rot take cognisance of such a transfer and ultimately declared the surplus for the holding of Dhamodaraswami Naidu at 8.528 standard acres. The appeal by the legal representatives of Dhamodaraswami Naidu to the Land Tribunal (The Subordinate Judge, of Coimbatore) was successful. It is as against this, the present civil revision petition has been filed by the State represented by the Authorised Officer, Land Reforms,, Coimbatore.
2. It is conceded by the learned Government Pleader that if the shareholding of the late Dhamodaraswami Naidu in Messrs. A. G. D. Private Limited, Appanaickenpatti, Coimbatore, is excluded for purposes of computing the ceiling limit, then, there would be no excess land in the hands of the respondents (the heirs of Dhamodaraswami Naidu) for being taken over by the State under Act. LVIII of 1961.
3. The only question argued before me is that the shareholding in an agricultural company should also be reckoned for purposes of calculating the excess in the hands of a land-holder and that the Authorised, Officer was right in having taken the one-fourth of the share capital held by Dhamodaraswami Naidu in the private limited company for purposes of computing the excess holding according to the Ceiling Act. On the other hand, the learned Counsel for the respondents would say that as no share-holding of a shareholder in a company could be valued as if it is owned by him or of which he is the proprietor, and as that could not be done under the provisions of the Companies Act of 1956, the process adopted by the Authorised Officer in including the shareholding of Dhamodaraswami Naidu, is obviously erroneous and against law and that, therefore, the order of the Land Tribunal is correct.
4. I have perused the certificate of incorporation and the memorandum of Articles of Association of Messrs A. G. D. Private Ltd., in which Dhamodaraswami Naidu was a shareholder. The objects for which the company was established are, to carry on the business of agriculture and to acquire by purchase, taking on lease or otherwise land suitable for cultivation and agricultural operations and to carry on other business to further the above objects of the company. The company is, therefore, an agricultural company within the meaning of Act LVIII of 1961.
5. I shall now briefly race through the relevant provisions of the Act to appreciate the respective contentions of counsel. Section 3, Clause (2) of Act LVIII of 1961 defines 'agricultural company' as meaning any company formed for the purpose of carrying on any business that has for 'its main object the acquisition of gain by the company' from agricultural land.
6. Section 3 (7) of the'! Act defines 'ceiling area' as meaning the extent of land which a person is entitled to hold under Section 3.
7. Section 3 (34) of the Act says that a 'person' includes any trust, company, family firm, society or association of Individuals, whether incorporated or not--or any private trust or public trust The 'company' under Section 3 (8) of the Act means a company as defined in Section 3 of the Companies Act, 1956. This is treated as an existing company. A company could also be formed and registered under the Ceiling Act. That would also come under the meaning of a company under Section 3 (8) of the Act.
8. Section 5 (3) (b) of the Act provides:
In calculating the extent of land held by a family or by an individual person, the share of the family or of the individual person in the land held by a firm, society or association of individuals (whether incorporated or not) or by a company (other than a non-agricultural company) shall be taken into account.
On the basis of the language of Section 5 (3) (b) of the Act, the learned Government Pleader says that the shareholding of the individual in the agricultural company in question should also be taken into account and that the same was rightly taken into consideration by the Authorised Officer.
9. The question, however, which arises for consideration is, whether a shareholder in a limited company whether private or public can claim a defined interest in the assets of the company, when the company is working and is in existence. The answer to this is found in the well-known principles which govern incorporated companies. Once a person becomes a shareholder in a company, his interest is so amalgamated with the other shareholders such that he cannot predicate at any point of time a divisible or a definable share in the assets of the company. The company is a juristic person and is distinct from the shareholders. The following passage from the decision of the Supreme Court in Bacha F. Gundar v. Commissioner of Income-lax, Bombay : 27ITR1(SC) , answers the query directly. The Supreme Court said that the shareholder by purchase of the share does not acquire any interest in the assets of the company till after the company is wound up and the position of a shareholder of a company is altogether different from that of a partner of a firm and that a company is a juristic entity distinct from the shareholders but the firm is a collective name or an alias for all the partners. The learned Judges also laid down the principle that there is no assumption that a shareholder, who buys shares, buys any interest in the property of the company and that the true position of a shareholder is that on buying shares he becomes entitled to participate in the profits of the company in which he holds the shares, as and when such dividends were declared, and his right to participate in the assets of the company would only arise after the company is wound up.
10. This being the settled legal position, it cannot be said that the shareholding of late Dhamodaraswami Naidu in the private limited company could be independently assessed and valued for purpose of reckoning the available surplus under the Ceiling Act The learned Land Tribunal was, therefore, right when he applied the above well-known principle to the facts of this case. As the shareholders cannot project any indefeasible right in the assets of the company on the only basis of their shareholding in it and as Dhamodaraswami Naidu has no legal or equitable interest thereon when the company is carrying on business in accordance with the memorandum of objects of the association it is clear that the inclusion of such shareholding on the basis that it could be independently evaluated is erroneous. The expression in Section 5 (iii) (b) that the extent of land held by an individual in a company shall be taken into account, should be understood as the land which could, legally be taken into account. As under the Companies Act, no shareholder can say what extent of interest he has in the assets of the company the shareholding cannot be the foundation for evaluating such an interest in the company itself.
11. Hesitantly an argument is also made that Section 4 of the Act overrides all other laws or contracts and, therefore, the acceptance of the above principle that a shareholder cannot claim a part of the assets of the company is subject to the above non-obstante section. There is a fallacy in it. Act LVIII of 1961, cannot override the provisions of the Companies Act. The Act when it included the share of a person in an agricultural company as an item which could be taken into account for the purpose of reckoning the available excess, it only meant that that calculation should be subject to the right in the shareholder to claim such a divisible right in the assets of the company. If, as already started, a shareholder cannot project such a divisible interest in the assets of a running agricultural company, it means that no value could be given to such shareholding in an agricultural company until the company is wound up and the assets of the company are ascertained. For the reason that the provisions of the Companies Act should prevail over Act LVIII of 1961 and also for the reason that the shareholding of a shareholder in a private limited company cannot be ascertained and separated in law, the order of the Tribunal is right and the Civil Revision Petition is dismissed. There will be no order as to costs.