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PETITIONER: STATE OF ASSAM AND ORS.

       Vs.

RESPONDENT: RAMESHWAR AGARWALA AND  ORS.

DATE OF JUDGMENT06/01/1971

BENCH: SHAH, J.C. (CJ) BENCH: SHAH, J.C. (CJ) HEGDE, K.S. GROVER, A.N.

CITATION:  1971 AIR  674            1971 SCR  (3) 306  1971 SCC  (1) 269

ACT: Assam  Land  Revenue Regulations-Rule 40  framed  thereunder Determination   by  Government  of  premium   payable   upon settlement  of  land for "special  cultivation"-If  rate  of premium  must be fixed for locality or can be fixed for  tea garden-If  premium  can  be fixed  according  to  commercial value.

HEADNOTE: The  first  respondent applied to the  Deputy  Commissioner, Lakhimpur  for  settlement  of a  Tea  Garden  for  "special cultivation of tea".  In March, 1964 the Government of Assam permitted  the  settlement on payment of Rs. 3.86  lakhs  as premium.  Upon the respondent failing to make payment of the amount, the State Government directed the auction of the tea garden.  The first respondent thereafter moved a petition in the  High Court for a declaration inter alia that the  State Government  had  acted  illegally in fixing  the  amount  of premium.   The High Court allowed the petition holding  that the order fixing the premium was not in conformity with rule 40  framed  under the Assam Land Revenue  Regulations  which required the State Government to fix the rate of premium for a particular locality; it did not empower the Government  to fix  the  premium  payable  by  an  intending  holder  in  a particular case.  On appeal to this Court, HELD  :  The High Court was in error in  setting  aside  the order  passed by the Government of Assam and  in-  declaring that  the offer to settle the tea garden on payment  of  the amount  specified  Rs. 3,86,000 was not in  conformity  with rule 40. There  was no warrant for the assumption made by  the  _High Court that in settling the premium to be fixed in respect of its own property, the Government is bound to fix the premium generally in respect of a region.  The Government is by  the Act or the Rules not disqualified from fixing the premium to be  paid  in respect of an individual tea  garden.   In  the absence  of any indication to the contrary a tea garden  may appropriately  be regarded as a locality within the  meaning of  Rule 40.  The rate of premium may be fixed by the  State Government acccording to its commercial value.

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JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 658 of 1967. Appeal  from the judgment and order dated June 27,  1966  of the  Assam and Nagaland High Court in Civil Rule No. 296  of 1964. Naunit Lal, for the appellants. Sarjoo Prasad and S. N. Prasad. for the respondent. 307 The Judgment of the Court was delivered by shah,  C.  J.  On  October  24,  1957  Rameshwar   Agarwala- hereinafter called the respondent applied to the Deputy Com- missioner,  Lakhimpur,  for settlement of a tea  garden  for "special cultivation of tea".  By order dated March 11, 1964 the  Government  of Assam permitted settlement  of  the  tea garden  for  special  tea cultivation  on  payment  of  Rs-. 3,86,008/-  as  premium.  The respondent failed to  pay  the amount  demanded.   The State of Assam then put up  the  tea garden for auction.  The respondent  moved a petition in the High  Court of Assam for an order declaring that  in  fixing the  amount of the premium at Rs. 3,86,008/the  State  acted illegally, and that the order was void and unenforceable  at law  because in fixing the amount of the- premium the  State acted  without jurisdiction and the order directing  auction of the tea garden for not depositing the amount demanded was also  illegal.   The High Court, upheld the  contention  and ordered the State of Assam not to, give effect to the  order dated March 31, 1964 calling upon the respondent to pay  the amount  due  within two months of the order  and  the  order dated November 26, 1964 directing that the tea garden be put up for auction.  With certificate granted by the High Court, the State of Assam has appealed .to this Court. The tea garden belonged to the State of Assam.  The  Govern- ment  of  Assam  in the absence  of  any  binding  statutory provision,  could settle the tea garden on  such  commercial terms it could reasonably obtain.  The respondent applied to the Deputy Commissioner for settlement of the tea garden and requesting  the State Government for early fixation  of  the amount  of  premium..  When the premium  was  fixed  by  the Government  the  respondent protested, contending  that  the action of the State was illegal Before the High Court it was contended  by  the Respondent that the power  of  the  State Government  to fix the premium for which it could lease  the tea garden was restricted by Rule 40 framed under the Assam, Land Revenue Regulations.  The Rule reads               "In addition to the land-revenue payable under               rule 17 and value of the timber assessed under               rule  37,  an applicant to whom  a  lease  for               special cultivation is granted shall be liable               to pay premium.  The rate of premium shall  be               fixed  by  the State Government from  time  to               time for each locality.               The reasons which persuaded the High to upheld               the plea, raised by the respondent may be  set               out in their own words :               "The only power which the Government has  got,               is to fix the rate of premium under Rule 40 of               the Rules               308               under  the  Land Revenue  Regulation  and  the               question  for  us to consider is  whether  the               order of the Government fixing the premium for               settlement   of   this   land   for    special               cultivation  is  an order in  conformity  with

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             Rule 40.  .    .      .               In  our opinion, what Rule 40 provides  is  to               confer  upon the Government power to  fix  the               rate  of premium in every case which shall  be               payable for the settlement and it is only  the               Deputy  Commissioner  that  is  authorised  to               settle  the land.  The whole purpose, of  Rule               40 is to confer power on the Government to fix               the rate of premium which will be valid for  a               particular   locality  and  that  the   Deputy               Commissioner  has to make the settlement.   He               is  given  the power to  realise  the  premium               fixed by the Government from time to time  and               to  see  that no document of lease  is  issued               before  the  premium  has  been  paid  by  the               intending  holder.  But Rule 40 does  empower,               in  our opinion, the State Government  to  fix               the  amount  of  premium  in  the  case  of  a               particular   settlement   in   a    particular               locality.............               the rate of premium for a particular  locality               and  the  Legislature when framing  the  rules               never  intended that the Government should  be               empowered  to  fixing  the  total  amount   of               premium  payable by the intending holder.   In               our  opinion, therefore, the order  passed  by               the  Government directing the  authorities  to               offer  the  land for settlement  in  case  the               petitioners  pay  Rs.  3,86,000/-  is  not  in               conformity with Rule 40 and this order  cannot               be given effect-to." The  expression "locality" is not defined in the Act  or  in the Rules.  We see no warrant for the assumption made by the High  Court  that  in settling the premium to  be  fixed  in respect of its own property, the Government is bound to  fix the   premium  generally  in  respect  of  a  region.    The Government is by the Act or the Rules not disqualified  from fixing  the premium to be paid in respect of  an  individual tea  garden.   In  the  absence of  any  indication  to  the contrary  a tea garden may in our judgment be  appropriately regarded  as a locality within the meaning of Rule  40.  The power  to  settle a tea garden on payment of  land  revenue, value of the timber and premium is to be exercised according to the Rules.  The rate of premium may be fixed by the State Government  according  to  its  commercial  value.   In  the absence of any restriction imposed upon the State Government requiring that  a general rate shall be fixed  covering  a specified area larger 309 than a tea garden there is nothing which prohibits the State Government from fixing the rate of premium having regard  to the commercial value of the tea garden.  In the present case the  Sub-Divisional Officer reported that the price  of  the land  of the Dirpai tea garden be valued at Rs.1  500/-  per bigha  and on that basis the State Government computed  the- premium  to  be  paid in respect of  the  entire  Jokai  Tea Garden. Fixation of a rate of Rs. 5001- per bigha in respect of  the entire  area of the tea garden may be regarded as a  premium fixed for the locality of the tea garden.  The matter rested entirely  in contract between the Respondent and  the  State Government.   There  was  an offer  by  the  respondent  for settlement  of  the tea garden.  He agreed to pay  the  land revenue  payable  under r. 17.  He also agreed  to  pay  the value of the timber assessed under r. 37.  For settlement of

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the  tea garden for special cultivation the  respondent  was also liable to pay premium.  The quantum of liability to pay land  revenue was governed by r. 17 and value of the  timber was governed by r. 37.  The liability to pay premium had  to be  fixed  by the State Government.  In the absence  of  any restriction placed by the Rules upon the power of the St-ate Government,  we  do not think that the High  Court  had  any jurisdiction to compel the State to enter into a contract to settle  the  tea garden upon the respondent  on  payment  of premium after determining a general rate for a region larger than the tea garden. The  High  Court was in error  in setting  aside  the  order passed by the Government of Assam and in declaring that  the offer to settle the land of the Dirpai Tea Garden on payment of  Rs.  3,86,008/- was not in conformity with r.  40.   The High Court also erred in directing that auction of the  land for nonpayment of the premium shall be set aside. The  appeal  is  allowed  and  the  petition  filed  by  the respondent  will be dismissed.  The respondent will pay  the costs in this Court and in the High Court. R.K.P.S.                    Appeal allowed. 310