Skip to content


Sayedabad Tea Co. Ltd. Vs. State of Bihar - Court Judgment

LegalCrystal Citation
Overruled BySyedabad Tea Company Limited Vs. State of Bihar Dated:30.11.1982
SubjectProperty; Civil
CourtPatna High Court
Decided On
Case NumberA.F.O.O. Nos. 283 and 285 of 1963
Judge
Reported inAIR1969Pat165; 1969(17)BLJR912
ActsBihar and West Bengal (Transfer of Territories) Act, 1956 - Section 17, Bihar and West Bengal (Transfer of Territories) Act, 1956 - Section 47; Code of Civil Procedure (CPC), 1908
AppellantSayedabad Tea Co. Ltd.
RespondentState of Bihar
Advocates:R.S. Chatterji and H.R. Das, Advs.
Excerpt:
.....and decrees passed in the aforesaid three land acquisition cases. thereafter, the bihar and west bengal (transfer of territories) act 1956 (act xl of 1956) was passed by the parliament by virtue of which the portion of purnea district where the acquired lands are wholly situated, was transferred to the state of west bengal with effect from the appointed date i. e. november 1, 1956. the aforesaid three first appeals of the state of bihar were pending in the patna high court on the appointed date. they were subsequently decided by the high court on march 8, 1960 and the appeals were dismissed with costs. the appellants, thereafter, filed money execution cases nos. 1, 2 and 3 of 1951 in the court of the additional district judge, purnea, for the recovery of the amount of compensation.....
Judgment:

B.N. Jha, J.

1. These three miscellaneous first appeals by the decree-holder, which arise out of three execution cases, are directed against the order of the District Judge, Purnea, dated July 9, 1963, dismissing the execution cases filed by the appellants.

2. Proceedings were started sometime before 1951 by the Special Land Acquisition officer. North Bihar Range, Muzaffarpur, for the acquisition of three pieces of land belonging to the decree-holder for the purposes of the Assam Access Road. The lands appertained to touzi No. 30 of the Purnea Collectorate, situated in village Madati. The Land Acquisition Officer determined the compensation payable to the appellant in respect of its lands but it was not satisfied with the valuation made by the said officer. Hence it filed three applications under Section 18 of the Land Acquisition Act for making reference to the court for the determination of the amount of compensation which gave rise to the three lands acquisition cases Nos. 22, 23 and 24 of 1951 of the Court of the Additional District Judge, Purnea. The appellant withdrew the compensation money as determined by the Land Acquisition Officer.

The Additional District Judge increased the compensation in respect of the lands of the appellant by his judgment and decree dated May 7, 1954. The State of Bihar filed three first appeals; namely, F. A. Nos. 358, 360 and 359 of 1954 in the High Court against the judgment and decrees passed in the aforesaid three land acquisition cases. Thereafter, the Bihar and West Bengal (Transfer of Territories) Act 1956 (Act XL of 1956) was passed by the Parliament by virtue of which the portion of Purnea district where the acquired lands are wholly situated, was transferred to the State of West Bengal with effect from the appointed date i. e. November 1, 1956. The aforesaid three first appeals of the State of Bihar were pending in the Patna High Court on the appointed date. They were subsequently decided by the High Court on March 8, 1960 and the appeals were dismissed with costs. The appellants, thereafter, filed money execution cases Nos. 1, 2 and 3 of 1951 in the Court of the Additional District Judge, Purnea, for the recovery of the amount of compensation which was determined by the Additional District Judge, payable to the appellant over and above the compensation as determined by the Land Acquisition Officer together with costs and interest as allowed by the Additional District Judge and the High Court.

The respondent, State of Bihar, filed objections to the execution of the decrees under Section 47 of the Code of Civil Procedure which gave rise to miscellaneous cases Nos. 85, 86 and 87 of 1962. The contention of the respondent was that the territory within which the acquired lands lay, had been transferred to the State of West Bengal and, as such, the State of Bihar was not liable for the amount of compensation and costs in respect of those lands. The learned District Judge upheld the contention of the respondent, allowed the miscellaneous cases and dismissed the three execution cases filed by the decree-holder appellant. Hence the decree-holder has filed the three miscellaneous appeals in this Court.

As common question of law and facts arose to be determined by the Court below in the three miscellaneous cases, they were tried together and one Judgment was passed in respect of all of them. In this Court also the three appeals have been heard together and this judgment will govern them all.

3. Learned counsel for the appellant submitted that the executing court had no jurisdiction to go behind the decrees. The three decrees under execution show that the appellant is the decree-holder and the State of Bihar is the judgment-debtor which is liable to pay the decretal amount to the appellant. Hence the court below should have executed the decrees as they are, and it is not justified in refusing to execute the decrees. It is difficult for me to accept this contention of learned counsel for the appellants. It is no doubt true that the executing court has no jurisdiction to go behind the decree and it has to execute it as it stands, but for the purpose of executing the same, the court has to construe the decree.

The court below has construed the decree in the light of Sections 17 and 47 of the Bihar and West Bengal (Transfer of Territories) Act, 1956. (hereinafter referred to as the Act) and has come to the conclusion that though the State of Bihar figured as the judgment-debtor in the decrees under execution and is liable for the payment of compensation but in substance, the State of West Bengal is the actual judgment-debtor under the three decrees and the appellant should have executed the decrees in a Court within the jurisdiction of the State of West Bengal and not in a court in the State of Bihar. Section 47 of the Act runs as follows:--

"Where immediately before the appointed day the State of Bihar is a party to any legal proceedings with respect to any property, rights or Liabilities transferred to the State of West Bengal under this Act, that State shall be deemed to be substituted for the State of Bihar as a party to those proceedings, or added as a party thereto, as the case may be, and the proceedings may continue accordingly."

4. Learned counsel for the respondent submitted that the use of the words "shall be deemed to be substituted for the State of Bihar" is very significant. An imaginary state of things was created by making such provision in the Act Though the State of Bihar was the appellant in the first appeals before the High Court on November 1, 1956, it would be read as the State of West Bengal by legal fiction. Fiction as defined in Corpus Juris, Volume 25, page 1036, is:

"A legal assumption that a thing is true which is either not true or which is probably false as true; as assumption or supposition of law that something which is or may be false is true, or that a State of fact exists which has never really taken place, an allegation in legal proceedings that does not accord with the actual facts of the case, and which may be contradicted for every purpose, except to defeat the beneficial and for which the fiction is invented and allowed."

By such legal fiction the executing Court has to treat the decrees as decree between the appellant as decree-holder and the State of West Bengal as the judgment-debtor and, thereafter, all the consequences of the imaginary state of things would follow. Hence, learned counsel for the respondent submitted that the court below was right in giving effect to the deeming provision made under Section 47 of the Act. Such deeming provision, as made here, has been the subject matter of judicial interpretation in many cases. Learned counsel referred to the decision of the Supreme Court in State of Bombay v. Pandurang Vinayak, AIR 1953 SC 244 at p. 246 wherein it was pointed out that 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 the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion. The Supreme Court quoted with approval, the famous pronouncement of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council, 1952 AC 109 which reads 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 consequences and incidents 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."

3. Learned counsel for the respondent drew our attention to another decision of the Supreme Court in Commissioner of Income Tax, Delhi v. S. Teja Singh, AIR 1959 SC 352 where it was pointed out that it is a rule of interpretation well settled that in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate.

6. The provision of Section 26N of the Bihar Tenancy (Amendment) Act, 1934 (B. & O. Act VIII of 1934) runs as follows:--

"Every person claiming an interest as landlord in any holding or portion thereof shall be deemed to have given his consent to every transfer of such holding or portion by sale, exchange, gift or will made before the first day of January, 1923, and in the case of the transfer of a portion of a holding to have accepted the distribution of the rent of the holding as stated in the instrument of transfer, or if there is no such instrument, as settled between the transferor and the transferee."

Before the amendment, occupancy holding was not transferable and the landlord was not bound to accept the transfer or the distribution of rent if any portion of the holding was transferred. By the aforesaid provision of Section 26N, even though the landlord had not given his consent to the transfer, or to the distribution of rent, but the Act provided that if the transfer was before January 1, 1923, consent of the landlord to such transfer or distribution of rent, as the case may be, would be assumed by legal fiction. In K.C. Mukherjee v. Ramratan Kuer, 63 Ind App. 47= (AIR 1936 PC 49) their Lordships of the Privy Council interpreted the aforesaid provision on the basis of such deeming provision as retrospective in effect and it was held therein that after the amendment of 1934, the landlord must be assumed to have given his consent to the transferor and his suit for ejectment against the transferee must fail in limine.

7. Such deeming provision is very often made when the legislature creates rights or liabilities on imaginary existence of facts which never existed in fact or when the Act is intended to give retrospective effect to the provisions of the Act. The words "shall be deemed to be substituted" came for consideration before a Division Bench of this court in Md. Obais v. The State, 1959 BLJR 61 in connection with the effect of the amendment made in the Bihar Panchayat Raj Act (7 of 1948). Original Section 50 of the Panchayat Raj Act provided three years from the date of his election as the term of office of every punch. On April 18, 1957, the Governor of Bihar promulgated Bihar Ordinance No. 1 of 1957. Section 3 of the Ordinance runs as follows:--

"Substitution of new section for section 50 of Bihar Act VII of 1948: For Section 50 of the said Act, the following section shall be substituted and shall be deemed always to have been substituted namely:--

'50. Term of office of Panches: The term of office of every Panch shall be three years from the date of election of the Mukhiya of the Gram Panchayat and shall include any further period which may elapse between the expiration of the said three years and the date of election of the next mukhiya'".

Lakhminia Gram Panchayat was the subject matter of the criminal revision, the panches of which ceased to exist after June 28, 1953 on the expiry of their term. On the interpretation of the words "shall be deemed always to have been substituted" this court held that though the term of the office of the panches of Lakhminia Gram Cutchery had expired and ceased to function on June 28, 1953, a legal fiction was created and, as such, it was assumed that the Gram Cutchery had continued to function all along because the term of office of the panches stood extended. It was further held in that case that the newly substituted section was intended to give retrospective effect.

8. Section 6(1) of the Bihar Land Reforms Act, 1950, provides:

"On and from the date of vesting all lands used for agricultural or horticultural purposes, which were in khas possession of an intermediary on the date of such vesting, including ..... shall, subject to the provisions of Sections 7A and 7B be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold them as a raiyat under the State having occupancy rights in respect of such lands subject to the payment of such fair and equitable rent as may be determined by the Collector in the prescribed manner ....."

Though the State, after the vesting did not settle the lands in khas possession of the Intermediary but the provision is made in the section that such settlement in favour of the ex-intermediary by the State of Bihar will be assumed by the words "shall be deemed to be settled by the State" and a new relationship of landlord and tenant between the State of Bihar and the ex-intermediary was created.

9. While interpreting the provision of Section 6(1) of the Bihar Land Reforms Act the Full Bench of this court in Sukhdeo Das v. Kashi Prasad, AIR 1958 Pat 630 held that a statutory settlement with the intermediary by the State of Bihar of the bakasht land in his khas possession on the date of the vesting of the estate is assumed to be made.

10. Learned counsel for the respondent placed before us several decisions wherein the question of legal fiction was considered. It is not necessary to refer them here. It is now well settled that where deeming provision is made in the statute, the state of things will have to be assumed, though such things do not exist and the rights of the parties will have to be determined on such imaginary things.

11. It is not disputed that the Patna High Court had jurisdiction to decide the first appeals Nos. 358, 359 and 360 of 1954 pending before it on November 1, 1956, by virtue of Section 17 of the Act. Therefore, the decrees passed by the High Court in the aforesaid first appeals are good decrees to be given effect to. Learned counsel for the appellant submitted that there was no legal proceeding pending at the appointed date. The land acquisition cases Nos. 22, 23 and 24 of 1951 had been already decided on May 7, 1954 and as such, section 47 of the Act has got no application in the present case.

This argument of learned counsel loses sight of the fact that the decrees passed in the land acquisition cases Nos. 22, 23 and 24 of 1951 were still sub judice in the High Court as the State of Bihar filed first appeals against the aforesaid decrees and as such, the decrees had not become final till the High Court pronounced its judgment on March 8, 1960. It is true that the High Court dismissed the appeals with costs but the decrees of the court below merged into those of the High Court which are now to be executed.

12. For the reasons stated above, in my opinion, the learned District Judge while refusing to execute the decrees did not go behind them but considered whether the decree-holder has got a right to execute the decree against the State of Bihar on the construction of the decree in the light of Section 47 of the Act and he was right in holding that the State of West Bengal will have to be read in the decrees under execution in place of the State of Bihar.

13. Learned counsel for the appellant contended that there is no provision in the Act as to the liabilities of the State of West Bengal in such circumstances. In my opinion, it is not necessary to make any such provision in the Act. The rights and liabilities with regard to any property transferred to the State of West Bengal are created by the decrees of the High Court, under the provisions of the Code of Civil Procedure and by the relationship of decree-holder and judgment-debtor between the parties. The appellant being decree-holder is entitled to recover the decretal dues from the judgment-debtor but now the question arises as to who is the judgment-debtor in these cases. On the construction of Section 47 of the Act I have held above that the State of West Bengal would be deemed to be the judgment-debtor in these cases and as such, it is the State of West Bengal which is liable to pay the decretal dues of the appellant decree-holder.

14. Learned counsel for the appellant lastly submitted that the liabilities of the State of Bihar and the State of West Bengal are joint and several and the appellant is entitled to recover the decretal dues from either of them. In this case, it is admitted that the territory within which the acquired lands fall, has been wholly transferred to the State of West Bengal. Under the scheme of the Act, there is nothing to indicate that the liabilities of the two States in such a case would be joint and several. Learned counsel drew our attention to the observation made while construing section 87 of the States Reorganisation Act, 1956, by V.R. Newaskar, J., in State of Madhya Pradesh v. Syed Akbar Ali Syed Ahmad Ali, AIR 1964 Madh Pra 213 at p. 214 which runs as follows:--

"It may be that the deposit made by the plaintiff can fall in the category of civil deposit and the liability of the depositee State may also arise by reason of the very wide language used in the section but that does not exclude the liability which is created by Section 87. All that it will mean is that the depositor may either go to the existing depositee State and claim back the deposit under Section 84 or may go to the successor State and claim back the deposit on performance of the contract which had at least partly been performed after the Sironj Sub Division had been included in the successor State on the strength of Section 87. There are no words in either Section 87 or Section 84 to exclude the liability of the successor State with reference to a contract regarding deposits made in the existing State. After the plaintiff is given his dues it is open for the two States to adjust their mutual rights and obligations. The plaintiff ought not to be made to go from post to pillar for this."

In that case, their Lordships of the Madhya Pradesh High Court were construing the effect of Sections 84 and 87 of the States Reorganisation Act in regard to the contract made before the appointed date by the Divisional Forest Officer of Rajasthan State and under the terms of the contract a sum of Rs. 5130/-was deposited by way of cash security in the Rajasthan Treasury. After the appointed date, that territory fell in the State of Madhya Pradesh. The plaintiff brought a suit for the recovery of the aforesaid sum of Rs. 5130/- against the successor State of Madhya Pradesh. The matter came up for consideration before the High Court of Madhya Pradesh. The main judgment in that case was delivered by Sharma J. with which Newaskar, J. agreed, Sharma J. held as follows:

"Section 87 clearly lays down that where before the appointed day an existing State has made any contract in the exercise of its executive power for any purposes of the State, that contract shall be deemed to have been made in the exercise of the executive power of the successor State, in a case where there is only one successor State. The result would be that by a legal fiction the State of Madhya Pradesh is substituted as a party to the present contract from the point of time when the contract was made on behalf of the State of Rajasthan. In this context it appears to be clear that all the rights and liabilities which had accrued under the contract before the appointed day, have thereafter become the rights and liabilities of the State of Madhya Pradesh."

It was held in the case that the State of Madhya Pradesh was the successor State under the terms of Section 87 of the States Reorganisation Act. The observation made by Newaskar, J. is in the nature of obiter. Moreover, Newaskar, J. was considering the effect of Section 84 of that Act which provided as to which of the States would be liable for the deposit made before the appointed day.

No question of joint and several liabilities arises in the present case on the construction of the decrees under execution. The decision cited by learned counsel does not support his contention rather it supports the contention of the respondent that by legal fiction, the State of West Bengal is to be regarded as the judgment-debtor and the decree-holder has to execute the decree against the State of West Bengal in a court of competent jurisdiction and the decrees could not be executed in the court of the District Judge. Purnea. 15. Learned counsel drew our attention to a decision of the Supreme Court in Amar Chand Butail v. Union of India, AIR 1964 SC 1658 wherein it was pointed put that recognition of the claim made against the former Indian State by the successor State i. e. the Union of India can be proved by the claimant either by express acknowledgment or recognition or may even be established on relevant facts and circumstances which may lead to the inference of such recognition. In other words, recognition of such a claim can be either express or implied and in the latter class of cases the inference as to recognition may be drawn legitimately from facts and circumstances which reasonably support such an inference.

In that case, the question arose how far the claim against the former Indian State of Jabalpur could be enforced against the Union of India after its merger. It was held therein that it all depended upon how far the claim of the plaintiff was recognised by the Union of India which was the successor State. In the present case, the decree-holder's claim has not been recognised by the State of Bihar. It was submitted on behalf of the appellant that in the High Court, the State of Bihar never repudiated its liability in the three first appeals. In my opinion, it was not necessary to do so because the State of Bihar was fighting the battle of the State of West Bengal. The State of Bihar was disputing the claim of the decree-holder for increasing the amount of compensation and that was the subject matter of the first appeals. The mere fact that the State of Bihar did not repudiate the claim of the decree-holder, it cannot be said that the State of Bihar acknowledged the liability of the decree-holder. Hence, this case has got no application to the facts of the present case.

16. Learned counsel for the appellant also placed before us a decision of the Supreme Court in Firm Bansidhar Prem-sukhdas v. State of Rajasthan, AIR 1967 SC 40 where also a similar question arose as to the enforcement of claim against the native State of Bharathpur which subsequently merged in the Union of India against the successor State i. e. Union of India. It was held therein that the claim could only be enforced to the extent the successor State was prepared to honour the liability of the former State under the contracts entered into by it. Hence, this case has also Rot no application in this case.

17. In the result, all the contentions raised by learned counsel for the appellant fail and, accordingly, the appeals are dismissed but in the circumstances of the case, there will be no order as to costs.

Tarkeshwar Nath, J.

18. I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //