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PETITIONER: VITHAL YESHWANT JATHAR

       Vs.

RESPONDENT: SHIKANDARKHAN MAKHTUMKHANSARDESAI

DATE OF JUDGMENT: 19/04/1962

BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS SARKAR, A.K. WANCHOO, K.N. AYYANGAR, N. RAJAGOPALA

CITATION:  1963 AIR  385            1963 SCR  (2) 285  CITATOR INFO :  RF         1971 SC 442  (13)  R          1989 SC2240  (20)

ACT: Watan  Lands-  Perpetual lease-Fixation of  higher  rent  by Government-Whether   Watandar  entitled  to  enhance   rent- Compulsory  acquisition--Apportionment  of   compensation-If Watandar  entitled only to capitalised value of  rent-Bombay Hereditary Offices Act, 1874 (Bom.  III of 1874), ss. 5  and 9.

HEADNOTE: In  1863,  the Watandar granted a permanent lease  of  watan lands  at a fixed rent of Rs. 727/- per year.  In  1907  the Watandar  applied under s. 9 of the Watan Act for  declaring the  lease  null and void and for possession of  the  lands. The  Collector  rejected  the application  but  directed  an additional  amount of rent to be paid.  The  Watandar  moved the  Government  and  by an order dated May  23,  1911  ,the Government  fixed  the rent at Rs. 1245/4/-.   Some  of  the lands  were  compulsorily aquired and the  compensation  was apportioned  between  the  Watandar and the  tenant  in  the proportion of 10 : 6. On appeal the High Court held that the Watandar  was entitled to claim that the tenant  should  pay enhanced rent and on that basis apportioned the compensation in the proportion of 55 : 45. Held, that the Watandar was not entitled to enhance the rent and  that he was only entitled to the capitalised  value  of the   rent  as  his  share  of  the  compensation.   In   an application  under s. 9 of the Watan Act the  Collector  has first to decide whether there are reasons for declaring  the alienation null,and void.  If he decides that there are good reasons he is to give the declaration and thereafter he  may either  transfer  the  possession to the  Watandar  or  take action under s. 9(2), maintain the possession of the alience and  collect from him the proper amount as the profits  from the land for payment to the Watandar.  In such a case, where the  alienation was a lease, the former lease ceased  to  be effective and the lessee henceforth continued in  possession on  the strength of the Collector’s permission.  But if  the

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Collector  found  no reasons to declare the lease  null  and void  he  could  take  no action  under  s.  9(2).   In  the proceeding of 1907 the Collector had refused the declaration and consequently he had no jurisdiction to make any 286 order  under s. 9(2) and his order directing the  tenant  to pay addition rent was without jurisdiction.  From this order it could not be inferred that he had declared the lease null and void.  Nor did the Government declare the lease of  1863 null  and  void; it merely ordered that the rent  should  be revised  and  fixed at Rs. 1245/4/-.  It  proceeded  on  the basis  that  the  lease  was subsisting  the  order  of  the Government was one giving sanction to the lease of the Watan lands  to  the  person in possession at  this  revised  rent keeping the other terms regarding the lease being  permanent and  the rent remaining fixed unaltered.  The action of  the Government must therefore be held to be under s. 5, and  not under s. 9 of the Act.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 379 of 1957. Appeal from the judgment and decree’ dated December 3, 1954, of the Bombay High Court in F. A. No. 287 of 1953. S.B.   Jather, E. Udayarathnam and B. P. Maheshwari,  for the appellant. S.G.  Patwardhan,  J.B.  Dadachanji,  S.  ,’V.    Andley, Rameshwar Nath and P. L. Vohra, for the respondent. 1962.  April 19.  The Judgment of the Court was delivered by DAS GUPTA, J.-This appeal arises out of a reference under s. 30 of the Land Acquisition Act as regards the  apportionment of  Rs. 35,102-10-0, the compensation awarded for two  plots of land numbered, Survey No. 37 Kambhapur and Survey No. 137 Narendra.  It is no longer disputed that these form part  of a  Watan.   The  dispute as regards  the  apportionment  has arisen  between  the  Watandar  and  the  person  in  actual possession of the land, the appellant before us. The   Land  Acquisition  Judge  made  an  order   that   the compensation  be  apportioned  in the ratio of  10,  6,  the 10/15th to be given to the landlord and the remainder to the tenant.  The correctness of 287 this  was challenged in appeal.  It was urged that the  rent was  fixed  in perpetuity and the landlord had no  right  to increase the rent, and so, the landlord should get only  the capitalised value of the rent payable for the acquired lands and  the remainder should go to the tenant.  The High  Court held  that  the  landlord had the right to  claim  that  the tenant   should   pay  enhanced  rent   and   directed   the compensation to be apportioned in the proportion of 55 to 45 between the landlord and the tenant. Against  this  decision this appeal has  been  preferred  on certificate granted by the High Court. The  real question in controversy is whether at the date  of the  acquisition, the landlord (the Watandar) had any  right to  enhance the rent in respect of these lands.  It  appears that  in  1963 a permanent lease was executed  by  the  then Watandar  in  favour of the appellant’s  predecessors.   The rent  also was permanently fixed by the lease at  Es.  727/- per year.  In 1907 the Watandar made an application under s. 9  of  the  Bombay Hereditary  Offices  Act,  1874-which  is described in short as the "Watan Act".  In this  application he asked for a declaration that the alienation by the  lease of 1863 be declared null and void and the Watandar be put in

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possession of the land leased. The Assistant Collector, before whom the application come up for hearing rejected the application and refused to put  the Watandar  in possession or to cancel the lease of 1863.   On appeal  the  Collector  by his order dated  March  16,  1908 maintained   the  Assistant  collector’s  order   with   the modification  that he directed an additional amount of  rent equal  to  the  case  paid on the land to  be  paid  by  the lessees.   An appeal to the Commissioner  was  unsuccessful. Then  the  Watandar  moved the Government  of  Bombay.   The Government,  made an order on May 23, 1911, fixing the  rent payable 288 for  the  lands covered by the lease at Rs.  1245/4/-.   The effect  of  this order by the  Government  requires  careful consideration. It  is to be mentioned, however, that in the year  1926  the Watandar  again moved the Government for a further  increase of  the  rent,  or for the restoration  of  the  lands;  and thereupon  the Government made an order in 1927  fixing  the rent at Rs. 4300/- and also directing that the rent leviable should be revised periodically at intervals of 10 years. In  1928 the tenant brought a suit against the Secretary  of State  for India and the Watandar in the Court of the  First Class Subordinate Judge, Dharwar, praying for a  declaration that the lands mentioned in the Schedule to the plaint-which are the lands in respect of which the orders mentioned above were made by the government-did not form part     of     the Watan lands, that in any case the  plaintiffs  bad  acquired the  statue  of Watandars and further  that  the  government resolutions  of  1911  and of 1927 were  ultra  vires.   The learned SubordiNate Judge held that the lands did form  part of the Watan and that the Watan Act was applicable to  these lands.   He  also hold that the order of  the  Collector  in 1908, though defective in form was in substance one under s. 9,  sub-s. 2 of the Watan Act and therefore it could not  be said to be ultra vires.  He also held however that the order of  Government in fixing rent at RS. 1245/4/which  was  well above that the Collector had fixed was ultra vires; but that the  plaintiff was not entitled to any declaration that  the Government resolution of 1911 was ultra wires because of the law of limitation.  The learned Judge further held that  the government resolution of 1927 was ultra vires.   Accordingly he  made  an  order  directing  the  first  defendant,   the Secretary of State for India in 289 Council,  not  to  levy a rent  higher  than  Re.  1245/4/in enforcement of the resolution of 1911 and declaring that the higher rent levied by the Collector purporting tobe   under the 1927 resolution was unauthorised. He   also  made   an order directing the realisation of the excess amount of  Rs. 4582.2-0 from defendants Nos.  1 and 2. Against  this decision, the Secretary of’, State for  India, the defendant No. 1 as also the Watandar, the defendant  No. 2  appealed  to  the  High Court.   No  appeal  was  however preferred by the plaintiff.  The High Court (Beaumont C.  J. and  Wassoodew J.) dismissed the appeal, except  as  regards the order directing both the defendants Nos.  1 and 2 to pay the  excess  amount.  The learned Judges altered this  to  a direction  that  the  amount should be  recovered  from  the defendant  No. 2, the Watandar, only.  Except for this  they dismissed  the  appeal.   They held in  agreement  with  the learned  Subordinate  Judge that the government’s  order  of 1927 was ultra vires.  The learned Judges were of opinion  : (1)  that the order by government in 1911 was not  an  order

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under  s. 9 and could only be considered to be legal on  the basis  that it was a grant of a fresh lease by the  Watandar at the rent of Rs. 1245/4/- with the sanction of  government under  s.  5 of the Watan Act; and (2) that in any  case  in making  the order in 1927 the government was  acting  beyond their powers as any action under s. 9 of the Watan Act  must in  the first instance be taken by the Collector  and  could not be taken initially by the Government. The  result  is  that  as between  the  parties,  viz.,  the Watandar  and the tenant it can no longer be  disputed  that the government resolution fixing the rent of the Watan lands at  Rs.  1245/4/-  is  legally  binding.   In  deciding  the question whether it is open to the Watandar to increase  the rent it is necessary to decide whether the government’s 290 action  can  be  properly  held to be  one  under  s.  9  or sanctioning a fresh lease at Rs. 1245/4/-. Before the High Court it was urged on behalf of the  tenant- appellant that the earlier decision of that Court, which has been  mentioned  above,  that the order  of  the  government fixing the rent at Rs. 1245/4/- was not an order under s.  9 and amounted in law to the sanction of the government to the grant of a fresh lease at Rs. 1245/4/- to the former  tenant operated  as res judicata between the parties.  The  learned Judges  of the High Court have rejected this  contention  in the  view that what the Court said on the  earlier  occasion was  obitor.   The correctness of this  view  is  challenged before us by the appellant.  It is urged that the fact  that another  ground was given by the High Court (on the  earlier occasion)  for its conclusion that the government  order  of 1927  could not stand does not alter the position that  this ground that the government order of 1911  was not  one under s.  9,  sub-s. 2 but amounted to a sanctioning  of  a  fresh lease  was  also  decided  as  a  basis  for  the   ultimate conclusion.   It is well settled that if the final  decision in  any  matter at issue between the parties is based  by  a Court on its decisions on more than one point-each of  which by itself would be sufficient’ for the ultimate decision-the decision  on each of these points operates as  res  judicate between  the  parties.  (Vide Kishori  Lal  v.  Devi  Prasad Annammalai v.Lakshmanan; (2) It  was  pointed out, however, on behalf of  the  respondent that  the tenant did not file any appeal at all against  the Subordinate Judge’s decision refusing to interfere with  the government’s order and so before the High Court no  question as regards the government’s order of 1911 was at issue.  For that  reason, it is argued the High Court’s decision on  the earlier occasion as regards the nature of the order of  1911 cannot operate as res judicata. (1) A. I. R. (1950) Pat. 50.  (2) A.I.R. (1939) Mad. 433. 291 We  do not propose to investigate the question  whether  the High Court’s earlier decision that the government’s order of 1911  amounted in law to sanctioning a fresh lease  operate; as  res  judicata or not,, as, quite independently  of  that decision,  we think it proper to hold that the  government’s order  of 1911 is not an order under s. 9 (2) of  the  Watan Act but amounted only to a sanction of a fresh lease. Section 9 of the Watan Act is in these words               "(1) Whenever any watan or, any part  thereof,               or   any  of  the  profits  thereof,   whether               assigned  as  remuneration of an  official  or               not, has or have, before the date of this  Act               coming  into force, passed otherwise  than  by               virtue  of,  or in execution of, a  decree  or

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             order  of  any British Court and  without  the               consent  of  the  Collector  and  transfer  of               ownership  in  the Revenue records,  into  the               ownership  or  beneficial possession  of               ’any person not a watandar of the same  watan,               the Collector may, after recording his reasons               in writing declare such alienation to be  null               and  void, and order that such watan,  or  any               part  thereof, or any of the profits  thereof,               shall  from the date of such order  belong  to               the watandar previously entitled thereto,  and               may  recover  and  pay to  such  watandar  any               profits thereof accordingly.               (2)If  such part of a watan be land, it  shall               be  lawful  for  the  Collector,  instead   of               transferring  the possession of the  land,  to               demand  and recover the full  rent  ordinarily               paid by tenants of land of similar description               in  the  same  locality,  and  the  amount  so               recovered shall be considered as the  profits.               The decision of the Collector as to what is               the full rent shall     be final" 202 The relief which a Watandar can obtain under this section is in  the  first place a declaration that  the  alienation  by which a transfer of ownership or possession was effected was null and void.  When such declaration is given the Collector may  do  one  of two things.  He  may  either  transfer  the possession  of  the land of the Watan to the Watandar  as  a consequential  relief  of  the declaration;  or  instead  of transferring such possession he may recover for the Watandar the profits of the land.  The measure of such profits  would be  the  full  rent ordinarily paid by tenants  of  land  of similar description in the same locality. The first thing which the Collector has therefore to  decide when  an application is made by a Watandar for relief  under s.  9  is  : whether there are  reasons  for  declaring  the alienation  null and void.  If he decides that there are  no such  reasons the application must be rejected.  If, on  the contrary,  the  Collector is satisfied that there  are  good reasons for declaring the alienation null and void he is  to record his reasons and give a declaration as prayed for that the  alienation  was  null  and  void.   Having  made   such declaration  he  is then to decide  whether  the  possession should transferred to the Watandar or action should be taken under   s.  9(2)  that  is,  instead  of  transferring   the possession of the land, be should collect from the person in possession  the proper amount as the profits from the  land, for payment to the Watandar.  It is important to notice that action  under sub-section 2 can be taken only on  the  basis that  the  alienation has ceased to have  any  legal  force. Thus where the alienation was by way of lease, action  under s.9(2)  can be taken only on the basis that the lease is  no longer effective in law and the relationship of landlord and tenant  has  ceased between the Watandar and the  person  in possession.  Where the Collector takes action under s. 9(2), the person 293 formerly in possession as a lessee, continues in  possession henceforth  not  as  ’a lessee but on the  strength  of  the Collectors’s  permission  only.  In other words,  in  taking action  under s.9(2) the Collector is not creating  a  fresh lease in place of the lease that has been declared null  and void  but only directs that the person in possession  is  to continue in possession subject to the payment of such amount

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as he decides to be the full rent ordinarily paid by tenants of land of. similar description in the same locality. The Assistant Collector, before whom the application of  the Watandars, predecessors of the present respondent under  s.9 of  the  Watan Act came up for  consideration  rejected  the application  of Matunkhan asking that the lands  enjoyed  by Bhaskarrao  Jather  on a perpetual lease  should  be’  fully restored  to his possession cancelling the lease  passed  in 1863." That is, he refused the prayer for a declaration that the  alienation  was null and void necessarily  refused  the prayer   for  consequential  relief  As  has  been   already indicated, the Collector who heard the appeal was of opinion that the order appealed against "was undoubtedly correct  in the  main"  but still he ordered ’-an additional  amount  of rent  equal to the cess to be paid," There is no  suggestion in  the  Collector’s order that in his  view  the  Assistant Collector  had  been  wrong in thinking that  there  are  no reasons  for declaring the alienation to be null  and  void. On  the  contrary, the Collector’s order indicates  that  he agreed  with  the Assistant Collector in the view  that  the alienation  could  not be declared null and void.   To  read this appellate order as making by implication a  declaration that the lease of 1863 was null and void is not only to read into  it words which are not there but indeed to go  against the clear tenor of the words which have been actually  used. There is no  justification in our opinion, to hold that when the 294 Collector  made the order that an additional amount of  rent equal  to  the  cess be paid he must have had  in  mind  the provisions  of’  s.9(2) of the Watan Act and so  the  entire order  should  be  read as giving first,  by  implication  a declaration that the lease was null and void and,  secondly, making  an order for collection of profits on behalf of  the Watandar  from  the person in possession.  It is  true  that under  the law the Collector was not entitled to  make  this order  for  payment  of  additional  rent  unless  he  first declared  the  previous lease to be null and void  and  then found  that the previous rent together with  the  additional amount of rent represented the full rent ordinarily paid  by tenants of land of similar description in the same locality. From  the  mere  fact that this order was made  by  him  for payment  of additional amount of rent equal to cess,  it  is not  however permissible to work back and imagine  something which was not said ’by him.  When the matter came up to  the government after the Commissioner had dismissed the’  appeal from  the Collector’s decision the government also  made  no declaration that the lease of 1863 was null and void.   But, after setting out certain circumstances which seemed to show that at the time when the lease was granted the interests of the Watandar were not properly considered by the lessee  who held  a quasi fiduciary relation towards the  Watandar,  the government  ordered  :-"The  rent should  therefore  now  be revised  and fixed at Rs. 1245/4/- being a sum equal to  the present  a rental plus the   judi plus the local fund  cess. The government was thus clearly acting on the basis that the person  in possession was a tenant of the Watandar but  rent for the tenancy should be fixed at Rs.1245/4/-. Such  action can not by any stretch of imagination be considered to be an action  under  s.9 of the Watan Act.  The only  legal  basis that  can be found for the government’s action is in s.5  of the Watan Act. 295 That section provides that without the sanction of the State Government.......................................  it  shall

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not be competent to a Watandar to mortgage, charge, lease or alienate, for a period beyond the terms of his natural life, any  watan or any part thereof, or any interest therein,  to or  for the benefit of any person who is not a  watandar  of the  same  watan.   By necessary  implication  this  section authorises  the State Government to sanction  the  mortgage, charge,  alienation  or lease, by a Watandar, for  a  period beyond  the  term of his natural life of any watan,  or  any part thereof, or any interest therein. to or for the benefit of  any person who is not a watandar of the same watan,  and on  such sanction being given the Watandar has power to  act accordingly.   It  is  known that after  the  order  of  the government  made  in 1911., the former tenant  continued  in possession and the Watandar received from him the rent fixed by  the government, that is Rs.1245/4/- for the  Watan.   In all  these circumstances, it is reasonable to hold  that  by the order of 1911 the government was giving its sanction  to the lease of the watan lands to the person in possession  at this revised rent.  In consequence of the government’s order therefore  a  lease came into existence at the rate  of  Rs. 1245/4/- in place of the old lease of 1863. If that be the position is the Watandar entitled to increase his  rent?  There was no document in writing for  the  lease which  came into existence after the government’s  order  of 191  1.  It is quite clear, however, from the order  of  the government  that the only change it sanctioned in the  terms of  the former lease was as regards rent.  That was  changed from Rs.727/- to Rs.1245/4/-; but the other terms, namely  , that  the  lease was permanent and the rate  of  rent  would remain fixed from the date of creation of the lease remained unaltered.  To use the words of Chief Justice 296 Beaumont in the earlier litigation between the parties: "the Government resolution dated the 23rd May, 1911 amounts to an opinion  to  a  confirmation  of  the  1863  lease  with   a modification as to the rent." The Watandar had therefore  no right to increase the rent. The result is that out of the amount of compensation awarded for  these  lands,  the respondent being  the  landlord,  is entitled  to  only the capitalised value of the  rent.   The rent  for the entire Watan, which is stated to be 400  acres of  land, being Rs. 1245/4/- the proportionate rent for  the lands  acquired, that is, 30 acres and 32 gunthas works  out at about Rs.95/9/-. The capitalised value of this at twenty- five  times,  amounts  to  Rs-2389/1/-.   The  apportionment should   therefore  be  that  Rs.2389/1/of  the  amount   of compensensation  be  awarded  to  the  respondent  and   the remainder to the appellant. For  the  reasons mentioned above, we allow the  appeal  and direct  the  compensation to be apportioned  in  the  manner mentioned above.  The .appellant will get his costs here and below. Appeal allowed. 297