1. The petitioner in this case is the Katras Jharia Coal Co. Ltd. a company incorporated under the Indian Companies Act. Mousas Seebpore and Koithi, Sub-registry Ranigunj, thana Ranigunj in the district of Burdwan, appertained to the zamindary of the Maharaja of Burdwan. In the year 1864-65 it was granted as a patni tenure to one Ram Krishna Chatterji by a patta. By the year 1895, after many devolutions, the interest came to be held by one Purno Chandra Daw. By an Indenture of Lease dated the 26th July, 1895 Purno Chandra Daw demised the lands and collieries mentioned in the said Indenture of Lease to the Katras Jharia Coal Co. Ltd., upon a permanent lease. The Indenture of Lease purports to demise to the petitioner company, the lands hereditaments and premises known as the 'Seebpore and Koithi Collieries' together with all lands of every description and tenure, belonging to or held with, the Seebpore and Koithi Collieries, as also all mines beds and seams of coals and other mines and minerals whatsoever situated or lying in or under the said lands, and the other rights mentioned in the said Indenture of Lease. By an agreement dated 1st June, 1901 as modified by a further agreement dated 30th. March, 1955 the petitioner granted and demised by way of a sub-lease to the Seebpore Coal Co. Ltd. a part and parcel of the coal mining rights in Mouza Koithi comprising an area of 986 bighas. So far as the surface lands of the said collieries are concerned, the petitioner company created a large number of under-tenures and Ryoti interests. As regards the colliery rights, the position is that the petitioner company has leased out by way of sublease, a part of the Koithi Colliery to the Seebpore Coal Co. Ltd., who have since 1901 been working the same. The rest of the collieries are being worked by the petitioner company itself. It seems that in 1908, certain litigations started and on or about 28th August, 1917 the petitioner company acquired a confirmatory lease from the Maharaja of Burdwan. The reason why such a confirmatory lease became necessary is briefly as follows: Prior to the year 1910, the question as to whether a lease of lands granted by a Zamindar carried with it the underground rights, that is to say, rights in mines and minerals underneath the surface, was a disputed question. In some leases, there was an express grant by the Zamindar of such rights, but in other cases tile lessee claimed the under-ground rights by way of an implied grant. Upon this point there was a long stream of litigation culminating in the Privy Council decision, Kumar Hari Narayan Singh v. Sriram Chakravarti, 37 Ind App 136 (PC) more commonly known as the 'petana' case. It was held by the Judicial Committee that where a village was shown to be a mal village of the plaintiff's zamindary estate, he must be presumed to be the owner of the under-ground rights as well. Where he has granted a lease, and has not expressly parted with the under-ground rights, he must be taken to have retained the same. After the law was thus clarified, lessees founded their claims upon an express grant or else took a confirmatory lease from the Zamindar, granting them such rights. In this case, such a confirmatory lease was taken by the petitioner company, so that no question arises about the petitioner being a lessee with regard to the under-ground rights. The position therefore was that the Seebpore Coal Co, Ltd., the sub-lessee, paid rent to the Katras Jharia Coal Co. Ltd. and the Katras Jharia Coal Co. Ltd. the lessee, paid rent to the Maharaja of Burdwan, the Zamindar ot the estate. The West Bengal Estates Acquisition Act, 1953 being West Bengal Act I of 1954 (hereinafter referred to as the 'Act') came into operation on the 12th February, 1954. Under Section 4 of the Act, upon a notification being issued by the State Government, all estates and the rights of every intermediary in each such estate, situated in any district or part of a district specified in the notification, vested in the State free from all incumbrances. Such a notification was issued in respect of the lands in question on the 15th April, 1955, Under the Act as originally promulgated, the word 'intermediary' was defined as follows:
'Section 2(i) 'Intermediary' means a proprietor, tenure-holder, under-tenure-holder or any other intermediary above a raiyat or a non-agricultural tenant'.
2. The word, 'estate' or 'tenure' has not been defined, but under Sub-section (p) of Section 3, expressions used in the Act and not otherwise defined, would have, in relation to areas where the Bengal Tenancy Act, 1885 applied, the same meaning as in that Act. That the interest of the Maharaja of Burdwan, which was a zamindary interest, came within the definition of the word, 'intermediary', is admitted. In other words, it is not disputed that the rights of the Zamindar, including his underground rights have passed to the State of West Bengal. The question that has been raised is as to the position of the lessee and the sub-lessee of mines and minerals. In other words, the question is as to whether the State has taken the property free from the rights of the lessee and sub-lessee, and if not, what are their present status in law. In order to ascertain this, it is necessary to consider a few more facts. On the 8th December, 1954 the Land Reforms Commissioner, Board of Revenue, West Bengal, wrote to Messrs. Andrew Yule and Co. Ltd. (Ex. 'B' to the petition) to the effect that the West Bengal Estates Acquisition Act did not provide tor the acquisition of the interests of lessee of a mine and that such a lessee was not an 'intermediary' as defined in the said Act. The opinion was expressed that after the vesting of the rights of all intermediaries in the State, mining lessees will hold their leases directly under the State, and no return was required to be furnished by them under Rule 16 (1) of the Estates Acquisition Rules (Ext. 'A' to the petition). On 11-4-1955 a communication was received from the Board of Revenue, by the Collector of Burdwan, being Order No. 4196 dated 11-4-55 to the effect that a lessee of mines was not an 'intermediary' for the purpose of the Act and his status will not be altered even if he has granted any sub-lease for working mines, either in whole or in part. Such a lessee did not also become an intermediary by sub-letting any surface lands included in the mining lease. On 11-11-1955 a communication was received by the Additional Collector, Estate Acquisition, Burdwan from the Secretary, Board of Revenue, West Bengal (Ex. 'C' to the petition) to the effect that under Section 29 of the Estates Acquisition Act, leases of mines and minerals granted by an intermediary and subsisting immediately before the date of vesting, shall with effect from such date, be deemed to have been granted by the State, on the same terms and conditions as in the subsisting lease, with certain additional conditions mentioned therein. Thus, lessees of mineral rights were to pay royalty and other dues to the State Government, irrespective of the fact whether they have let out any part of the property by way of a sublease. On or about 3rd March, 1956 the Additional District Magistrate, Burdwan, issued a memorandum, the relevant part whereof runs as follows :
'The question of payment of royalty by different mining interests has been raised before me from time to time. For the information of such interests I am giving below the correct position by citing an example.
A. An intermediary within the meaning of Section 2(1) of the Estates Acquisition Act
D. Sub-lessee actually working the mines. Royalty payable by B to A will, from the date ot vesting be payable to Government, Royalty by D to C and C to B will continue to be paid as before. This position will not in any way be affected if either B or C owns any other interest in land as an intermediary as defined in the Estates Acquisition Act, (Ext. 'D' to the petition)'.
3. On the 23rd August, 1956 a memorandum was issued by the S.D.O. Asansole, Estate Acquisition Branch, addressed to the Indian Mining Federation, stating that all previous instructions were to be considered as superseded, because Government had decided that Section 29 of the Act clearly provided that the word 'intermediary' includes a lessee or a sub-lessee and that, retention as under a lease, or a sub-lease, was permissible in law in the case of persons actually holding land and working the mines. Therefore, such parties were thenceforth to pay royalty dues according to the terms of the lease or sub-lease, as the case may be, direct to the Government. It is clear therefore that after the passing of the Act it was at first considered that the lessee should pay rent and royalty to the State Government, but that the sub-lessee would continue to pay his rents and royalties to the lessee, witli which, the State Government will not be concerned,. By 1956, this view of Government came to be modified. A different construction came to be put upon the provisions of the Act, and briefly speaking, Government claimed the rents and royalties, not only from the lessee but also from the sub-lessee. Being conscious of the fact that such a stand might not be within the limits of the existing law, it was not long before the law itself was sought to be altered. On 16-1-1957 an Ordinance was passed, being the 'West Bengal Ordinance No. 1 of 1957' altering the definition of the word, 'intermediary' in. Section 2 of the said Act. This was followed by an amending Act, being West Bengal Act No. IV of 1957. The definition of the word, 'intermediary', as amended, stands as follows:
'Section 2(1)--'intermediary' means a proprietor, tenure-holder, under-tenure-holder, or any other intermediary above a raiyat or a non-agricultural tenant and includes a service tenure-holder, and in relation to mines and minerals, includes a lessee and sub-lessee'.
This definition was to be deemed as being contained in the Act from the very inception. There has been no consequential amendments effected in the body of the Act. After the issue of the Ordinance, the Subdivisional Land Reforms Officer, Asansole, demanded from all lessees and sub-lessees, the immediate payment of all arrears of rents and royalties, together with interest. So far as the lessees are concerned, the State Government does not propose to disturb their position so far as the collieries worked by them are concerned. Government however claims direct payment of the rents or royalties payable by the sub-lessees and the under-tenure-holders, direct and with retrospective effect. The difficulties confronting the, lessees are at once discernible. When the Act came into operation and the vesting took place on 15-4-1955 lessees and sub-lessees were not included within the definition of the word 'intenmediary'. In their letters and departmental orders the Governmental authorities plainly took up the position that the lessees had become direct lessees under Government, but that the sub-leases were valid and Government had no concern with them. The sub-lessees therefore, continued to pay their rents and royalties to the lessees, which by 1957 amounted to a substantial sum. On or about 16-1-1957the law was suddenly changed. Lessees and sub-lessces were included within the definition of the word, 'intermediary' and the amendment was made (retrospective. If the date of vesting of the interests of lessees and sub-lessees was to relate back to the notification under Section 4 already issued in 1955, thenGovernment became entitled to receive the rent androyalties from the sub-lessees as from the date otthe said notification. Therefore, the question arises as to how this would affect the rents and royalties already paid by sub-lessees to the lessees, and towhom they should make payment in future. In fact, this seems to be the real point in this case. As regards the under-tenure-holders of surface lands, no dispute has been canvassed before me. That being the position, it is necessary now to consider the position of lessees and sub-lessees of mineral Tights under the Act. I have already referred to the 'definition of the word 'intermediary' in Section 2. The word, 'incumbrance' has been defined in Sub-section (h) of Section 2 but it is a negative definition and net comprehensive. I have also referred to the vesting section namely, Section 4. The estate of an intermediary and all his right in each such estate, vestedin the State on and from the date when the notification under Section 4 was issued in 1955. Section 5 of the Act lays down the effect of such a notification, the relevant part thereof runs as follows:
'5. Effect of notiiication. -- Upon the due publication of a notification under Section 4, on and from the date of vesting-
(a) the estates and the rights of intermediaries in the estates, to which the declaration applies, shall vest in the Stale free from all incumforances; in particular and without prejudice to the generality of the provisions of this clause, every one of the following rights which may be owned by an intermediary shall vest in the State, namely:
(i)' rights in sub-soil, including rights in mines and minerals,
4. The next thing to be considered are the provisions contained in Chapter IV of the Act, which is entitled 'Mines and Minerals'. This Chapter contains Sections 27 to 38. Section 27 lays down that the provision of Chapter IV shall have effect notwithstanding anything to the contrary contained elsewhere in the Act. The provisions of Sections 28 and 29 of the Act are of great importance.
5. The scheme of these two sections appears to be as follows: Where a mine was being actually worked by an intermediary on the date of vesting, then he would be deemed to be a lessee in respect of it, under the State Government. The terms and conditions were to be agreed upon between the parties, or in default settled by the Mines Tribunal. The provisions to Sections 28 and 29(i) are however very important. As will be pointed out in greater detail hereinafter, the subject of mines and minerals is a Central subject, and various statutes have been passed and rules promulgated by the Centre in respect thereof. Obviously, no mining operation could be carried on, except in accordance with the terms and conditions imposed by such Acts, Rules and Regulations promulgated by the Centre. That is why the provisos have been introduced. While Section 28 deah with the case of an, intermediary, which in the context of the original definition of 'intermediary' in the Act, plainly refers to the Zamindar, Section 29 dealt with leases in respect of mines and minerals granted by such an intermediary. In all such cases, the law contemplated that the parties actually working the collieries would not (be disturbed. Where there was a lease, but the lessee had done no prospecting or development work, he was given one year's time, as gi'ace. If the prospecting or development work lias been done in any part of the estate, then three years' time is granted as grace. Where the lessee does not engage himself in active mining operation within the period of grace, the lease is terminated and the land is resumed by Government after giving three months' notice. Under Sub-section ( 2) ot Section 29, provision has been made for payment of compensation, where the lease is terminated and the land is resumed. Section 30 makes provisions for lands, buildings, machineries etc. relating to such mines. Where the lease continues, this may be held by the lessee upon the payment of a fair rent. Section 31 lays down the method of calculating compensation. Where there are mines and minerals on lands which have vested in Government, either developed or undeveloped, Sections 32 to 38 deal with the question of compensation in all its aspects. Therefore, even in the Act as it originally stood, the subject of mines and minerals was included. The estate of an intermediary, or his rights therein, so far as mines and minerals are concerned, would vest in the State but subject to the provisions of Chapter IV. Where the intermediary or his lessee was actually working the mines and minerals, the position is quite clear. They are to be allowed to continue as lessees under the State Government. Chapter IV makes no specific provisions for sub-lessees. The interpretation that is sought to be made is that under the original Act, sub-lessees were not dealt with in Chapter IV, and therefore, they continue to be sub-lessees under the lessees and the State has no concern with them. So far as the position, after the amendment is concerned, if the amendment is valid and governs the provision of Chapter IV, then the case of both the lessee and the sub-lessee had now suffered considerable alteration and both such interests vest in the State subject to the provisions of the Act. The first point of attack made by Mr, Das, appearing on behalf of the petitioner, is that the word 'intermediary' as used in the body of the Act, cannot be taken to include a lessee or a sub-lessee, in spite of the fact that the definition of the word, 'intermediary' has been now amended so as to include them. The way that he propounds his case is as follows: He says that the law on the subject is laid down by the provisions to be found in the body of the Act, and not by the definition section. When the Act was first promulgated, the definition of the word, 'intermediary' did not include a lessee or a sublessee. The body of the Act was framed upon the basts of the definition as it originally stood. He points out that quite suddenly, and after a period of about three years from the date when the Act came into operation, the definition section was changed so as to include lessees and sub-lessees within the meaning of the word, 'intermediary'. Nevertheless, the body of the Act was not amended, and no consequential: changes were introduced therein. It is argued that the result is that no effect can be given to the altered definition, because it would make the body of the Act unworkable. He has cited several English authorities which I shall now proceed to consider. The first case is Lindsay and Co v. Gundy, (1876) 1 QBD 348. In this case, Blackburn J., was speaking about the effect of an interpretation clause. In statutes 24 and 25 Vict. c 96, the term 'property' was defined and included not only such properties as were originally in the possession or control of the party, but also any property into which the same may have been converted or exchanged, or anything acquired by such conversion or exchange. Blackburn J., stated that an interpretation clause -
'is a modern innovation and frequently does a great deal of harm because it gives a non-natural sense to words which are afterwards used in a natural sense, without noticing the distinction'.
The learned Judge held that to give such a wide meaning to the word 'property' would be to make a very great change in the law, with results which reached the border-line of absurdity. In othet words, the learned Judge did not think that it was fight, or possible, to interpret the word property' in Section 100, as liberally as would be required if the interpretation clause was app'ied to it. The next case cited is a decision of the House of Lords, George Robinson v. Barton Eccles Local Board, (1883) 8 AC 798. Here also, the point that arosa was about an interpretation clause. According to this clause, the word, 'street' included any highway and any road, or lane whether a thoroughfare or not. The question was whether the word 'street'' meant something more than a road-way that is to say, a street with houses on both sides. Lord Sel-born said that an interpretation clause of this kind was not meant to prevent words being used in their ordinary, popular or natural sense whenever that would be properly applicable.
6. In ex parte Walton (1881) 17 Ch. D 746 it was held by James L. J. that a statute may be construed contrary to its literal meaning, when a literal construction would result in an absurdity or inconsistency, and the words are susceptible of another construction which will carry out its manifest intention. When a statute lays down that something shall be deemed to have been done, which in fact and truth was not done, the Court is entitled and bound to ascertain, for what purpose and between what persons the statutory fiction is to be resorted to. In this case the learned Judge actually added something to the wording of the statute as it was necessary--'To prevent the most grievous injustice and the most revolting absurdity'.
7. In Jobbins v. Middlessex County Council, (1949) 1 KB 142 Scott L. J. held that Sub-section (3) of Section 40 of the Local Government Superannuation Act, 1937 was merely an interpretation sub-section and unless there was clear language having the opposite effect, and there was no such language, that sub-section should be construed as not cutting down the main provision of the operative part, of the Act. Mr. Das strongly relies on this case inasmuch as he has attempted to establish that a literal application of the amended definition of the word 'intermediary' would render the working of certain provisions in the body of the Act unworkable, and give rise to absurdities. He, therefore, invites me to ignore the amended definition as including lessees and sub-lessees, within the meaning of the word 'intermediary'. He also points out that inasmuch us there is a deeming provision, making the amendment retrospective in operation, there is an admission that originally the term, 'intermediary' did not include lessees and sub-lessees. Queen v. Commissioner of Inland Revenue, (1891) 60 LJ QB 376 at pp. 378-380. These principles have been enumerated in Craies on Statute Laws, 5th Edn pages 197-200. The learned author points out that the practice oi; inserting an interpretation clause in a statute has met with judicial censure. In Wakefield Board of Health v. West Riding Railway, (1866) 6 B and S 794 at p. 801 Cockburn C. J. said 'I hope the time will come when we shall see no more of interpretation clauses, for they frequently lead to confusion'. In Mayor of Portsmouth v. Smith, (1885) 10 AC 364 at p. 374 Lord Blackburn supported the objection of the old school of draftsmen to the introduction of an interpretation clause. Interpretation clauses frequently fall under severe judicial criticism from failure to observe the valuable rule never to enact under the guise of definition, which is their chief detect. In R. v. Commissioners under the Boilers Explosion Act, 1882 (1891) 1 Q B 703 Lord Esher M.R. said--'This ..... is a peculiar bad specimen of the method of drafting, which enacts that a word shall mean something which in fact it does not mean'. And the same learned Judge said in Bradley v. Baylis, (1881) 8 QBD 195 at pp. 210-230-
'it seems to me that nothing could be more difficult, nothing more involved, than this statute, and that the difficulty arises from the fact of Parliament insisting upon saying that things are what they are riot'.
In Dean of Ely v. Bliss, (1852) 2 De G M and G 459 at p. 471: Lord St. Leonards said:
'it has been very much doubted, and I concur in that doubt, whether these interpretation clauses which are of modern origin have not introduced more mistakes than they have avoided, for they have attempted to put a general construction on words which do not admit of such a construction in the different senses in which they are introduced in the various clauses and Acts of Parliament'.
Another important rule with regard to the effect of an interpretation clause is, that an interpretation clause is not to be taken as substituting one set of words for another, or as strictly defining what the meaning of a term must be under all circumstances but rather as declaring what may be comprehended within the term where the circumstances require that it should be so comprehended. If, therefore, an interpretation clause gives an extended meaning to a word, it does not follow as a matter of course that if that word is used more than once in the Act, it is on each occasion used within the extended meaning, and it may be always a matter for argument whether or not the interpretation clause is to apply to the word as used in the particular clause ot the Act, which is under consideration. See R. v. Cambridge Shire JJ. (1838) 7 A and E 480 at p. 491; The question is whether these principles are applicable to the facts of this present case and to what extent. Mr. Das has drawn my particular attention to the fact that Section 2, the defining section, is prefaced by the words, 'unless there is anything repugnant in the subject or context''. In short, the argument is that the word 'intermediary' was previously defined so as not to include 'lessees' and 'sub-lessees'. The body of the Act, and in particular Section 5 and Sections 27 to 38 contained in Chapter IV of the Act, were drawn up on the basis of this definition. By the amending Act, simply the definition clause was extended so as to include 'lessees'' and 'sub-lessees' within the term, 'intermediary'. This was done without making any alteration and consequential amendments in the body of the Act. Mr. Das argues that if we read the expression 'intermediary' in these sections in Chapter IV, as including lessees and sub-lessees, then the most absurd situations will arise. From this, he argues that here is an attempt to legislate through a definition clause, which 5s not permissible. According to Mr. Das the body of the Act is not affected in any way by the amendment and remains as before. I must now set out the inconsistencies and absurdities which Mr. Das claims, would arise if the amended definition is given effect to.
8. The scheme of the Act is that the State Government issues a notification under Section 4(1) declaring that from the date mentioned in the notification, all estates and the rights of every intermediary in each such estate, situated in any district or part of a district specified in the notification, shall vest io the State free from all incumbrances. Under subsection (2), the date mentioned must be the commencement of an agricultural year. Under subsection (3) the notification is to be published in the first instance in at least two issues of each of two newspapers (one of which must be in the Bengali language) circulating in West Bengal and also by affixing at each police-station and sub-registry office within the district or part of the district specified in the notification and by beat of drums and in any other manner as may be prescribed. Under Subsection (4), after such publication, the notification has to be issued in the Official Gazette. Under Subsection (6) an intermediary may at any time before 15-2-1955 apply to the State Government to have all his estates, tenures, undertenures and other rights, vested in the State and the Government may order such vesting. Under Section 5A, an enquiry may be made into any transfer by an intermediary made between the 5th day of May, 1953 and the date ot vesting, and i the transfer is not bona tide, it may be cancelled after an enquiry is made in accordance with the provisions of Sub-section (5) of Section 5A, Under Sub-section (6) of Section 5A an appeal lies against such an order. Under Section 6, notwithstanding anything contained in Sections 4 and 5, an intermediary is entitled to retain certain lands and other interests mentioned therein. For example, he is entitled to retain lands comprised in homesteads, or non-agricultural lands in his khas possession, not exceeding 15 acres, or agricultural land in his khas possession not exceeding 25 acres. The way that this retention is done is that in the declaration made in the prescribed form, an intermediary claims the quantity of lands etc. that he claims to retain, and. the Estates Acquisition Authorities determine whether it falls within the prescribed limits, and the notice tor, possession is issued by the Collector after the determination of such rights. Also, the record-of-rights is drawn up accordingly. Mr. Das argues that under the original provisions of the Act, the interests of lessees and sub-lessees did not vest in Government, and consequently, in respect of such interests, no notification under Section 4 had ever been issued. It is admitted that after the amendment no fresh notification under Section 4 has been issued. That being the position, it is argued that in the absence of a notification under Section 4, such interests have not vested at all. Assuming however that the notification already issued was sufficient, then it is extremely unjust, because upto the date of the amendment everybody knew that leases and sub-leases were not included within the mischief of the Act and no effort was made, and indeed could not have been made, to bring home to the lessees and sub-lessees that their interests also had vested in Government. In other words, Mr. Das argues that the idea of issuing and the publication of a notification was to inform the particular intermediary concerned, that he had lost his proprietary right in the estate, leaving him to take steps to retain such portions thereof as the law permitted. Not only has this notification to be issued but the law prescribes various precautions to get the information conveyed to the parties concerned. As I have stated above, there has to be publication in the Official Gazette, newspapers, police station etc. Mr. Das argues that the issue of this notification and the publication thereof are essential ingredients of the operation of vesting. He asks me to visualise what has happened to lessees and sublessees as a result of this amendment. In 1954, when the Act was passed, or in 1955 when the vesting took place, everybody knew that lessees and sublessees were not included within the word 'intermediary'. Government Officials indicated in their official communications that such was the case. Consequently, lessees and sub-lessees continued their existence as before, excepting that the Zamindar was replaced by the State Government. Sub-lessees continued as before to pay their rents and royalties to the lessee. In this particular case, large sums have been paid and/or received by the petitioner from their sub-lessees. Now suddenly, in 1957 it is said that the estates of lessees and sub-lessees and/or their rights in such estates had vested in Government from 1955. The result is that all payments in the interval would become unauthorised and the sublessees would have to pay over again to Government. Mr. Das argues that it can never be said that in the case of these unfortunate persons, the Act contemplated that no notification should be issued. He says that it is absurd to consider the original notification as being the necessary notification under Section 4 so far as lessees and sub-lessees are concerned. When it was published in 1955, nobody considered it as a notification affecting lessees and sub-lessees of mines or minerals except as provided in Chapter IV of the Act. They could not be expected to anticipate that three years after the issue of the notification, it would be made applicable to them with retrospective effect. In other words, he says that you can amend the definition but you cannot make a notification retrospective, because that notification is a condition precedent for vesting and can only notify a fact which existed at the time when the notice was, in fact, issued. Mr. Das then comes to the provisions of Chapter IV of the Act which deals with mines and minerals. He points out that Section 28 deals with the rights of intermediaries directly working mines, whereas Section 29 deals with leases ot mines and minerals granted by an intermediary. He says that in the original Act, the intention was quite clear. The intermediary was the Zamindar. Section 28 conferred on a Zamindar who was actually working a mine, the right to retain it as a lessee under Government. Section 29 dealt with leases granted by the Zamindar. Such lessees, if they, in their turn were actually working a mine, became lessees directly under the Government. If we now attempt to interpret the word 'intermediary' so as to include not only a Zamindar but also lessees and sub-lessees under him, then not only the sequence of the sections in the Act is disturbed but the provisions in Sections 28 and 29 become conflicting. Section 28 would then mean that not only Zamindars but also lessees and sub-lessees working mines would become direct lessees under the Government. Section 29 again would mean that all leases of mines and minerals granted by, not only a Zamindar, but a Zamindar, lessee or sub-lessee would be affected by its provisions, and they would become lessees under Government on terms and conditions mentioned therein. This is claimed to be inconsistent with the provisions of Section 28, which has already provided for the same, but in a slightly different manner. In Section 28 the intermediary actually working a mine would hold as a lessee on terms and conditions as shall be agreed upon between him and the State Government or as may be settled by the Mines Tribunal. Under Section 29, the very same set of persons, in the very same circumstances, would hold a lease upon the same terms and conditions as of the subsisting lease, but with additional condition mentioned therein. Mr. Das argues that it is plain that if you read the amended definition into these two sections there is inconsistency, overlapping and absurdity. The solution, according to him, is not to read the amended definition into the provisions of these two sections, but to interpret them according to the old definition. He says that it was not the intention of the legislature to affect these two sections and such a presumption should be drawn on the strength ot the principles enunciated in the English decisions mentioned above, which have clearly laid down that you cannot legislate on the strength of a definition clause. Mr. Das also draws my attention to the following aspects: Section 29(1)(i) deals with the case where the holder of a lease had not done any prospecting or development work before the date of vesting. In such a case he is allowed one year's time from the date of vesting to begin prospecting or development work and if he fails to do so, the lease may be resumed. There is similar provision in Clause (ii) where the period of grace is three years from the date of vesting. Let us now contemplate the case of a sub-lessee who has not done any prospecting or development work. If the date of vesting is 1955 then the period of grace granted under clause (i) has long ago expired. He has therefore, no rights at all under that clause in 1957, when by the amendment his interest is sought to be affected. The position is the same with regard to Clause (ii). I do not say that such is the position in the present case. Mr. Das however argues that in order to test the legality of an enactment you must consider all possible cases and not the facts of a particular case. Next he points out that under Section 5A the State may avoid transfers made between 5-5-1953 and the date of vesting. Under Section 5B, on and from the 1st day ot June, 1954 there is a provision prohibiting certain sales. Since upto 1957 everybody knew that the interests of lessees and sub-lessees had not vested in the Slate, they were at liberty to enter into transactions of mortgage or sale or the creation ot incumbrances in favour of third parties. Mr, Das assures me that within this interval, a large number of such transactions have in fact taken place. If the amendment is given effect to, then all these transactions are affected. Third parties in whose favour incumbrances have been created or sales affected are at once hit. The Act makes no attempt to grant compensation to such persons. Mr. Das argues that it could not have been the intention of the legislature to affect such vested interests without expressly saying so in the body of the Act. Mr. Das points out that the time fixed for the payment of compensation under Section 12 has passed long ago and if it was intended to include lessees and sub-lessees in the term, 'intermediary', specific provisions would have been made for fixing the date of payment oi compensation to them. Mr. Das approaches the question from another point of view. He points out that the definition section is prefaced with the expression 'unless there is anything repugnant in the subject or context'. Therefore, it is not as if you are compelled to apply the definition as propounded, into every section contained in the body of the Act. If in the process of such application you come across any repugnancy then in that event it is the provision in the body of the Act that must prevail. Indeed, even if such qualifying words did not exist, they would have to be implied. The words used in a statute must take their colour from the context, and need not have the same meaning in every section. Knightsbridge Estate Trust Ltd. v. Byrne, (1940) AC 613, Kartick Chandra Mallick v. Rani Harsha Mukhi Dasi : AIR1943Cal345 . Mr. Das says that the inconsistencies and absurdities that he has already pointed out, indicate that if you apply the amended definition into the body of the Act, then there is repugnancy. Consequently, you must avoid such application. In other words, he says that in 1954 when the Act was lirst promulgated, it was contemplated that the estate and the rights in an estate of an intermediary would vest in the State, but not the estate of a lessee or sub-lessee. A lessee became a lessee directly under the State, but the sub-lessee was entirely unaffected. In 1957, the definition was amended and was deemed to have come into effect from the commencement of the Act. Nothing was done in the body of statute. It was not stated that under Section 4 of the Act, the interests of lessees and sub-lessees should be deemed to have vested from the date of the original notification. Therefore, we should not read into Section 4 any such change, which is not only unjust, but affects vested interests including the interests of innocent third parties, unless we are compelled to do so. According to Mr. Das, all that the legislature intended was that lessees and sub-lessees should be brought into the picture, but without doing violence to the provisions contained in the body of the Act. Where they can be fitted in without doing violence to the provisions already contained in the body of the Act, then it could be done but not otherwise. According to learned counsel, the introduction of lessees and sub-lessees into the provisions of Chapter IV would be doing violence to its provisions.
9. This has been the main argument of Mr. Das in this case, but he has made a number of other points to support his case. The first point is a constitutional point. The way that he propounds it is as follows: Article 31(2) of the Constitution lays down that no property shall be compulsorily acquired save for a public purpose and save by authority of a law which provides for compensation or lays down the principles for calculating such compensation. This provision in the Constitution has been the subject-matter of progressive amendments. When the State began to take over Zamindaries, various objections were raised as to the constitutional detects in statutes passed for that purpose, including the plea that there was want of public purpose and/or that the- compensation was inadequate. The leading case on this subject is State of Bihar v. Kameswar Singh of Darbhanga (hereinafter referred to as the 'Darbhanga case'). The courts had held that the compensation that was to be awarded should be just compensation, and that the matter was justiciable. The result was that the Constitution was amended. Firstly, it was laid down in Article 31 that no such law shall be called in question in any Court on the ground that the compensation provided by the law was not adequate. This was done by the Constitution ( 4th Amendment) Act, 1955. Then, we have Article 31A in which, Clause 1 has now been substituted by the 4th Amendment Act, 1955. As it now stands, it is a further whittling down of the rights conferred by Article 31(2). Under this constitutional provision, no law providing lor the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of such right thereunder or the extinguishment or the modification of any right accruing by virtue of any agreement, lease or license for the purposes of searching for, or winning any mineral, or the premature termination or cancellation of any such agreement, leases or licenses shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by articles 14, 19 or 31. In this background I have to consider the following arguments advanced by Mr, Das:
1. That the interests of a lessee and a sublessee of mining rights, or at least the interest of a sub-lessee, which is sought to be acquired, is a mere right to receive a certain sum of money. The acquisition of such a right is not a 'public purpose' and would thus violate the provisions of Article 31(2) of the Constitution.
2. The provisions of Article 31A of the Constitution do not apply because of the following reasons:
(i) A lessee or a sub-lessee of a mining interest does not hold an 'estate' within the meaning ot that expression as used in Clause (1) of Article 31A and as explained in Clause 2 thereof.
A lessee or a sub-lessee is not an 'intermediary' within the meaning of Sub-clause (b) of Clause 2 of. Article 31A.
(ii) Acquisition by the State of the interests of a lessee or a sub-lessee of a mining right is not contemplated by Article 31A, because there is a specific provision in respect of mineral rights, namely Sub-clause (e) of Clause 1 of Article 31A which speaks of the 'extinguishment' or 'modification' of such a right, but not of its 'acquisition'.
(iii) to come within the definition of the word 'estate' as used in Article 31A, it must be an agrarian interest or right, and an interest in working a colliery by way of a lease or sub-lease is not an agrarian right, nor is it a tenure or an undertenure.
(iv) The object of the West Bengal Estates Acquisition Act, as indeed the object of all such Acts, is to introduce agrarian reforms and by abolishing the zamindars and other middlemen, to bring the State, lace to face with the tillers ot the soil. The acquisition of mining rights is foreign to the purpo.se of such a statute. The word 'estate' means agricultural or horticultural lands land does not include mines and minerals. A mining right is an incorporeal right whereas the right in an 'estate' is a corporeal right.
3. That the provisions contained in Chapter IV of the Actread with Section 5A(1)are ultra vires inasmuch as they contain restrictions on the subject of mines and minerals, which is a Central subject, and is thus an exclusive subject matter of legislation by Parliament. The State Legislature is, therefore, not competent to pass a law affecting such matters and the provisions of Chapter IV and particularly of Sections 28 and 29 are void because such provisions infringe the rights of Parliament and are inconsistent with statutes, rules, regulations and orders passed by the Central Government on the subject of mining and minerals.
4. Assuming that Article 31(2) applies, the acquisition of interests of the lessee or the sub-lessee is bad, because no compensation is provided in respect of such acquisition. At least there is no compensation provided for the acquisition ot the rights of the sub-lessee.
10. With regard to the first point, Mr. Das argues that Government is attempting to acquire by the amendment, nothing but a claim to a payment of money. He says that this is apparent from a petition filed by the State of West Bengal in Civil Rule No. 1252 of 1957 dated 29-7-1957 which is printed at page 58 of the Paper Book in Appeal No. 397 of 1958, which Paper Book has been filed before me and I direct that it should be made an exhibit. What happened there was as follows: The Indian Mining Federation and several, other collieries made an application before me and a Rule was issued, more or less agitating similar points. That is Civil Rule No. 1252 of 1957. On 3-5-1957 I issued the Rule and granted an interim order restraining the respondent in that case from realising rents and royalties upon an undertaking given by the petitioners in that application, not to dispose of their immovable properties pending disposal of the Rule, and upon their undertaking to idemnity the respondent for any damages that may be caused by the said interim, order. On the 29th July, 1957 an application was made by the respondent in that Rule to have the interim order vacated, on the allegation that more than 26 lakhs of rupees have become due to Government as rent and royalties and that many colliery owners are ready to pay the dues of the State which it cannot accept because of the said interim order. It was stated that the said sum was very heavy and there will be serious loss ot revenue resulting in stoppage of many grants and development work. Mr. Das argues that it is clear from this stand taken by Government that all it wants is payment of a sum of money. He further argues that in any event, the amount that is payable by the sub-lessee to the lessee who has parted with possession, is merely a right to the payment of a sum of money, and this cannot be acquired. Mr. Das has cited Cooley's Constitutional Limitation Vol.2 8th Edn. page 1118. Speaking about the right at 'Eminent Domain' vested in the State, the learned author says that money, or that which in ordinary use passes as such, and which the Government may raise by taxation, cannot be the subject matter of acquisition by the exercise of the right of Eminent Domain. It was held in Kaysville v. Elison, 43 LAA 81 that taking money under the right of Eminent Domain', when it must be compensated in money afterwards, was nothing but a forced loan. It would Only be justified as a last resort in time of extreme peril, where neither the credit of the Government nor power of taxation could be made available. Willis, in his treatise on 'Constitutional Law' page 816 says that property is in general subject to the exercise of the power of Eminent Domain but not money. In the Darbhanga case, (Supra) it was held that the Bihar Land Reforms Act did have a public purpose. The concentration of big blocks of land in the hands of a few individuals was contrary to the principles on which the Constitution of India is based. The purpose behind the Bihar Act was to bring about a reform in the land-distribution system of Bihar for the general benefit of the community. The Legislature was the best judge of what was good for the community. These observations however did not apply to the acquisition of arrears of rent. On the facts of the case, it was found that 50 per cent of such acquisition was meant for supplementing the revenues of the State or for securing means for payment of compensation to the Zamindars. Mahajan, J. said as follows:
'The learned Attorney General contended that the acquisition of arrears was an acquisition of choses in action and that the compensation paid for it was 50 per cent of the amount of arrears. I regret I am unable to accept this suggestion. It is a well-accepted proposition of law that property of individuals cannot be appropriated by the State under the power of compulsory acquisition for the mere purpose of adding to the revenues of the State'.
11. I now come to the second point made by Mr. Das mentioned above. Mr. Das points out that we are dealing here with the West Bengal Estates Acquisition Act. The object of the Act is to provide for the State acquisition of estates, of rights of intermediaries therein, and of certain rights of raiyats and: under-raiyats. The word, 'estate' has not been defined in the Act. Sub-section (p) of Section 2 however, lays down that the expressions used in the' Act but not otherwise defined, in relation to the-aieas to which the Bengal Tenancy Act applies bear the same meaning as in that Act. The word, 'estate' has been defined in Sub-section (4) of Section 3 of the Bengal Tenancy Act as follows:
'Estate means land included under one entry in any of the general register of revenue paying lands and revenue-free lands, prepared and maintained under the law for the time being in force by the Collector of a District, and includes Government Khas mohals and revenue-free lands not entered in any register'.
12. Mr. Das argues that the word, 'land' here: means agricultural or horticultural land, and cannot include mining rights. In other words, it is a corporeal right in respect of surface land. A mining right, that is to say, the right to excavate minerals out of mines is an incorporeal right. Mr. Das relers to the 'petana' case, 37 Ind App 136 (PC) where the question was whether, when a Zamindar created a tenure of land, he also must be taken to have granted the under-ground rights. The High Court decided in the affirmative. The Privy Council set aside the decision. Lord Collins said as follows;
'No decided case was cited in support of the view of the High Court, which seems practically to ignore the distinction between the mere tenure-holder and the Zamindar, and the law as laid down in, the passage cited from Mitra's 'Land Law of Bengal' does not appear quite in accord with the view of, Mr. Field in his admirable introduction to the Bengal Regulations page 36, where he says, 'the zamindars can grant leases either for a term or in perpetuity. He is entitled to rent for all lands lying within the limits of his zamindary, and the rights of mining, fishing, and other incorporeal rights are included in his proprietorship''. It would seem, therefore, that Mr. Field did not regard his letting the occupancy right as presumptive evidence of his having parted, with his property in the minerals'.
12a. In Thakur Girdhari Singh v. Meghlal Pandey, 44 Ind App 246: (AIR 1917 PC 163) a corporeal right has been explained as a right to the corpus which does not disappear by user. Therefore, rights in mines and minerals cannot be a corporeal right. In Ranigunj Coal Association Ltd. v. Judoonath Ghosh, ILR 19 Cal 489 it was held that a registered lease granted for a building purpose and tor establishing a coal depot does not come within the purview of the Bengal Tenancy Act, not being a lease for agricultural or horticultural purpose. Such a lease could not be described as a 'tenure'.
13. The next case cited is Umrao Bibi v. Mohammed Rojabi, ILR 27 Cal 205. In that case, the plaintiff was an ijaradar of a certain plot ot land within the Dacca Municipality. The action was one for rent. The question was whether the limitation prescribed by the Bengal Tenancy Act was applicable. Maclean C. J. held that it did not, because it applied to tenure-holders and a tenure holder within the contemplation of the Act must be a person who holds land which is used for agricultural or horticultural purposes.
14. The learned Judge points out that there must be some difference between the Bengal Tenancy Act and the Transfer of Property Act, and the difference lies in the fact of the land being agricultural or non-agricultural. It was held that as the land in dispute was not shown to be used for agricultural or horticultural purposes, the Bengal Tenancy Act had no application. In Alauddin Ahammed v. Tomiruddin Ahammed : AIR1937Cal587 it was held that the Bengal Tenancy Act applied only to a lease for an agricultural purpose, and not even to a lease which is a lease of agricultural lands. In Abdul Hossain v. Salimar Paint Colour and Varnish Co. Ltd. : AIR1947Cal36 the plaintiff company acquired by purchase an occupancy right in small parcels of land from raiyots. Then it took a mukurari mourasi lease from the superior landlord, with the object of having a factory site. Under the lease, however, it could use the land for any purpose it liked. A part of the land was let out for cultivating paddy. Held that the plaintiff company was a tenure-holder and was subject to the provisions of the Bengal Tenancy Act. Next, Mr. Das argues that the word 'intermediary' as used in Article 31A could only reEer to the holder of an interest in land, midway between the State and the actual tiller ot the soil. He argues that the estate or the rights in an esate of an intermediary cannot include a mining' interest or interest in minerals. He has first of all referred to the Darbhanga case, (supra) where Sastri, C.J., said as follows:
''The common aim of this statute referring to the Zamindary Abolition and Land Reforms Acts generally speaking, is to abolish zamindaries and other proprietary estates and tenures in the three States aforesaid so as to eliminate the intermediaries by means of compulsory acquisition of their rights and interests, and to bring the raiyots and other occupants of lands in those areas into direct relation with the Government'.
15. In Visweshwar Rao v. State of Madhya Pradesh, Mahajan, J., says as follows :
'Main purpose of the Act is to bring the actual tillers of the soil in direct contact with the State by the elimination of intermediary holders. In short the Act aims at converting malguzari into ryotwari land system. It also aims at giving to the Gram Panchayat the management of common lands treed from the grip of the proprietors'.
16. In K.C. Gajapati Narayan Deo v. State of Orissa, : 1SCR1 Mukherjea, J., said as follows:
'The Act, (Orissa Estates Abolition Act, 19521 so far as its main features are concerned follows the pattern of similar statutes passed by the Bihar, Uttar Pradesh and Madhya Pradesh Legislative Assemblies. The primary purpose of the Act is to abolish all zamindary and other proprietary estates and interests in the State of Orissa and after eliminating all the intermediaries to bring the raiyots and the actual occupants of the land in direct contact with the State Government'.
17. In Thakur Amar Singhji v. State of Rajasthan, : 2SCR303 Ayyar J., held that the object ot Article 31A was to save legislation which was directed to the abolition of intermediaries so as to establish direct relationship between the State and the tillers of the soil.
18. In Sri Ram Ram Narain Medhi v. State ot Bombay, : AIR1959SC459 it was held that the object of the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1956 was to do away with intermediaries and to establish direct relationship between the State and the tillers of the soil.
19. In Atma Ram v. State of Punjab, : AIR1959SC519 Sinha J. (as he then was) states as follows, regarding the meaning of the words 'any estate or of any rights therein' as used in Article 31A(1)(a):
'On the other hand, as indicated above, they have used the expression 'estate' in an all-inclusive sense. They have not stopped at that; they have also added the words 'or any rights therein'. The expression 'rights' is relation to an estate again has been used in a very comprehensive sense including not only the interest of proprietors or sub-proprietors but also of lower grade tenants,like 'raiyats' or 'under raiyats', and then they added, by way ot further emphasising their intention the expression 'other intermediary', thus clearly showing that the enumeration of intermediaries was only illustrative and not exhaustive. If the makers of the Constitution have, thus shown their intention of saving all laws of agrarian reform, dealing with the rights of intermediaries, whatever their denomination may be, in our opinion, no good reasons have been adduced in spite of the view that portions or shares in an estate are not within the sweep of the expression 'or any rights therein' .......''
20. Because of these reasons Mr. Das argues that the West Bengal Estates Acquisition Act was intended only to abolish the estate ot the intermediate owners between the State and the tillers of the soil. It is a measure of agrarian reform, and has nothing to do with incorporeal rights like rights in mines :and minerals and does not deal at all with a lessee or. sub-lessee of mines and minerals. Next, he says that in Article 31A, Sub-clause (a) of Clause (1) speaks of the acquisition by the State of any estate or of any rights therein or the extinguishment or .. modification of any such rights. The subject matter of minerals or agreements in respect thereof by way of lease or license is dealt with in Sub-clause (e) of Clause (1) and in this sub-clause the word 'acquisition' is dropped and what is dealt with is 'extinguishment' or 'modification' of such rights. Mr. Das argues that this distinction was deliberately made. Assuming therefore, that Article 31A deals with the subject matter of lease or license in respect of mines and minerals, then all that is saved is any law for the extinguishment or modification of such a right but not the acquisition thereof. We now come to the third point mentioned above, namely, that the provisions contained in Chapter IV of the Act read with Section 5A(1) are ultra vires inasmuch as they contain restriction on the subject of mines and minerals, which is a Central subject exclusively. It is argued that the State Legislature was not competent to pass an Act affecting such a subject, because it would clash with Central Acts, Rules and Regulations. On this point Mr. Choudhury, following Mr. Das, placed before me a long series of Central Acts, Rules and Regulations, in an attempt to show that the provisions in Sections 28 and 29 of the West Bengal Act were in conflict with the Central Acts, Rules and Regulations. That the subject of mines and minerals is a Central subject is not disputed. I think that for the purposes of this application it is not necessary for me to go in detail into all these Acts, Rules and Regulations. Roughly speaking, the argument is as follows: Under these Acts and Rules, the more prominent amongst them being (i) Mines and Minerals (Regulations and Development) Act, 1948, (ii) Mineral Concession Rules 1949 (in) Mining Leases (Modification of Terms) Rules 1956 and (iv) Minerals Conservation and Development Rules 1958--, it is provided that leases for mining purposes including sub-leases are to be effected under the control of the Central Government, in favour of approved persons and on terms approved or as laid down by the Central Government. It is argued that Sections 28 and 29 contain provisions contrary to the provisions contained in the Central Legislation. For example, it is stated in Section 28 of the Act that if the Zamindar was actually carrying on mining operations, he would become a lessee under the State Government on such ternis and conditions as may be agreed upon between them or in default, as settled by the Mines Tribunals. It is argued that the Zamindar concerned may not be an approved person in whose favour a license has feeen granted by the Central Government as is required under the Central Rules and the conditions agreed upon or settled by the Mines Tribunal may not be in consonance with the Central Rules. It is argued that the Central Rules recognise a sub-lessee, whereas, in Chapter IV of the Local Act a sublessee is ignored.
I shall now consider the answers to the points raised above, as given by the learned Advocate General. He starts by pointing out that the amendment of the definition of the word 'intermediary' in the Act has been expressly made retrospective. That is to say, the definition as amended is to be read into the Act from the date when it originally came into force. He says that the authorities cited to the effect that you cannot legislate by a definition section have no application to the facts of this case, because if logical effect is Riven to the retrospective operation of the amendment, there is no inconsistency or absurdity in the body of the Act. In order to establish this point it is necessary to consider the legal effect of such retrospective operation. The first case cited is a Full Bench decision of the Bombay High Court, Prabhakar Kondaji v. Emperor AIR 1944 Bom 119. The applicant was detained under Rule 26 of the Defence of India Rules. The Federal Court held that the detention order was bad because Rule 26 of the Defence of India Rules was invalid, being in excess of the powers conferred by a Rule made or deemed to have been made under Section 2 of the Defence of India Act, 1939. Thereupon, an Ordinance was passed by the Governor General whereby Section 2 was amended and it was provided that for Clause (x) of Sub-section (2) of Section 2 of the Defence of India Act, 1939 a certain clause shall be substituted and shall be deemed always to have been substituted. This, Ordinance was challenged. It was held by Beaumont C. J. that the meaning of these words was that the new clause was substituted in the place of the old clause from the date of its inception. In other words, the said substituted clause must be read as being contained in the Defence of India Act from its very inception. In the State of Bombay v. Pandurang Vinayak, : 1953CriLJ1049 Mahajan J., was considering the effect of a 'deeming clause'. He said as follows:
'When a statute enacts that something shall be deemed to have been done which in fact and truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons a statutory fiction is to be resorted to and full effect must be given to the statutory tiction and ib should be carried to its logical conclusion (vide Lord Justice James in (1881) 17 Ch. D 746 at p. 756). In East End Dwellings Co. Ltd. v. Finsbury Borough Council, (1952) AC 109 Lord Asquith while dealing with the provision of the Town and County Planning Act, 1947 made a reference to the same principles and observed as follows:
'If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as-real the consequence and incidence which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it ...... the statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs'.
21. The next case cited is Union of India v. Madan Gopal, : 25ITR58(SC) . The facts in that case were as follows: The respondent resided and carried on business in the district of Jodhpore in Rajasthan. The Rajputana States, including Jodhpore, integrated their territories into the United States of Rajasthan, which acceded to the Dominion of India by an Instrument of Accession dated 15-4-1949. Under that Instrument, the Dominion Legislature had no power to make any law imposing any tax or duty in the territories of the United States of Rajasthan, Under the Constitution, all Part B States including Rajasthan were brought into the Union. Parliament came to have exclusive powers under the Constitution to make laws with respect to tax on income other than agricultural income. Parliament enacted the Finance Act, 1950 which provided for the imposition of income-tax for the year beginning 1-4-1950. Section 3 of the Finance Act made certain amendments in the Indian Income-tax Act, with effect from that date. The most important amendment is the substitution of the present Clause (14A) in Section 2 in place of the old clause. By this amendment, 'taxable territories'' were defined to mean the whole of the territory of India excluding Jammu and Kashmir, as respects 'any period'. The scheme of the Indian Income-tax Act is to tax a person resident in the taxable territories during the previous year on all his income in that year, whether accruing within or without the taxable territory. If a person is not a resident in the taxable territory, he can only be taxed upon his income accruing within the taxable territory. It was argued that the assessee here was residing in a territory which during the year 1949-50 had no law providing for payment of income-tax, and since the amendment took effect from April, 1950 the income of the previous year could not be made taxable. This argument found favour with the High Court, but was rejected by the Supreme Court. It was held that r