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PETITIONER: KRISHAN MALHAR MIRASDAR (DEAD) BY LRS.

       Vs.

RESPONDENT: SASWAD MALI SUGAR FACTORY LTD. & ORS

DATE OF JUDGMENT:       13/01/1998

BENCH: S.B. MAJMUDAR, M. JAGANNADHA RAO.

ACT:

HEADNOTE:

JUDGMENT:                           W I T H CIVIL APPEAL NOS. 921 922, 923, 924, 925, 926, 1005, 1004, 1665, 1733 AND 1734 OF 1991.                       J U D G M E N T S.B. Majmudar. J:      In this  group of  appeals a  short question arises for consideration which runs as under:-      Whether  the   sub-lessees  of  the      lessee, Saswad  Mali Sugar  Factory      Ltd,   and    which   was   earlier      functioning as Saswad Mali Sahakari      Sakhar Karkhana in Solapur District      of Maharashtra  State were entitled      to be  treated as deemed purchasers      of agricultural lands cultivated by      them   in    the   light   of   the      notification issued  on 8.2.1978 by      the   State   of   Maharashtra   in      exercise  of   its   powers   under      Section  43A(3)   of   the   Bombay      Tenancy and Agricultural Lands Act,      1948   (Act    No.67    of    1948)      (hereinafter to  be referred  to as      ‘the Act’).      A Division  Bench of  the  Bombay  High  Court  in  the impugned judgments  has upheld  the said  right of  the sub- lessees. That  is how  the present  appeals on special leave have been filed by the original owners of the lands.      A few  relevant facts  leading to  these appeals may be noted at  the outset.  The lands in question were originally leased out  by the  appellants to  the aforesaid factory for the purpose  of growing  sugarcane. Under  the  lease  deeds which were  renewed from time to time the sugar factory, the original lessee  was permitted  to sub-lease  the said lands and accordingly,  the sub-lessee  came to occupy these lands at the  relevant time  when the  leases  were  granted.  The provisions of  the Act  did not apply to such leases in view of Section  88(1) (b)  as it  stood at the relevant time. As per the  said section, the Act was not applicable as a whole to leases  entered into  for the  benefit of  industrial and

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commercial undertakings.  There is  no dispute  between  the parties that  the leases  of the  lands granted to the sugar factory were covered by the sweep of this exemption clause.      Later on  by Section  30 of  the Bombay  Act 13 of 1956 which amended  the parent  Act, Section  43A was inserted in the principal  Act by  way of Chapter III-A which dealt with special provisions  for lands held on lease by industrial or commercial undertakings  and  by  certain  persons  for  the cultivation of  sugarcane and  other  notified  agricultural produce. Section  43A with  its sub-sections is relevant for decision in the present appeals. It is profitable to extract it in extenso as under:-      "CHAPTER III-A           SPECIAL PROVISIONS  FOR  LANDS      HELD  ON  LEASE  BY  INDUSTRIAL  OR      COMMERCIAL  UNDERTAKINGS   AND   BY      CERTAIN PERSON  FOR THE CULTIVATION      OF  SUGARCANE  AND  OTHER  NOTIFIED      AGRICULTURAL PRODUCE.           43A  (1)   The  provisions  of      section 4B,  6, 9,  9A, 9B, 9C, 10,      10A, 14,  16, 17, 17A, 17B, 18, 27,      31 to  31D (both  inclusive), 32 to      32R  (both  inclusive),  33A,  33B,      33C, 43,  63, 63A, 64 and 65, shall      not apply to -           (a) land  leased to or held by      any   industrial    or   commercial      undertaking  other   than   a   Co-      operative  Society   which  in  the      opinion  of  the  State  Government      bona fide carries on any industrial      or commercial  operations and which      is   approved    by    the    State      Government.           (b) leases  of land granted to      any bodies  or persons  other  than      those mentioned  in clause  (a) for      the cultivation of sugarcane or the      growing of fruits of flowers or for      the breeding of livestock;           (c) to lands held or leased by      such co-operative  societies as are      approved in  the prescribed  manner      by the  State Government which have      for their  objects the  improvement      or   the    economic   and   social      conditions of  peasants or ensuring      the full  and efficient use of land      for    agriculture    and    allied      pursuits.           (2) The  State Government  may      by  notification  in  the  Official      Gazette in  this behalf direct that      the provisions of the said sections      shall not  apply to a lease of land      obtained by  any person for growing      any  other  class  of  agricultural      produce to  which it  is  satisfied      that it  will not  be expedient  in      the public  interest to  apply  the      said provisions.  Before the  issue      of  such  notification,  the  State      Government shall  direct in inquiry      to be made by an officer authorised

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    Government  and   shall  give   all      persons  who   are  likely   to  be      affected by  such notification,  an      opportunity   to    submit    their      objections.           (3)  Notwithstanding  anything      contained in  sub-sections (1)  and      (2), it  shall be  lawful  for  the      State  Government   to  direct,  by      notification   in    the   Official      Gazette that the lease or lands, as      the  case   may  be  to  which  the      provisions of  sub-sections (1) and      (2) apply, shall be subject to such      conditions as  may be  specified in      the notification, in respect of -      (a) the duration of the lease;           (b)  the  improvements  to  be      made on  the land and the formation      of co-operative  farming  societies      for  that   purpose  and  financial      assistance to such societies;           (c)  the   payment   of   land      revenue,  irrigation   cess,  local      fund cess  and  any  other  charges      payable to  the State Government of      any local authority; or           (d) any  other matter referred      to in  sections mentioned  in  sub-      section (1)".      The aforesaid  sub-section (1)  of Section  43A clearly indicates that  though earlier  because of  Section 88(1)(b) Sections 1  to 87  were not applicable to such leases, after insertion of  Section 43A(1)  by  Bombay  Act  13  of  1956, certain sections  of the  parent  Act  only  were  not  made applicable thereafter  to those  lands leased.  Rest of  the sections got  applied. We are concerned with lands leased to commercial undertaking  like  Saswad  Mali  Sahakari  Sakhar Karkhana as  such sugar factory is a commercial undertaking. It is  not in  dispute between  the parties that those lands are covered  by Section  43A(1) (a)  as the State Government has approved  Saswad Mali  Sahakari Sakhar  Karkhana for the applicability of the said provision. Once the said provision applied  to   the  respondent-sugar   factory,  consequences mentioned in  sub-section  (1)  of  Section  43A  would  get attracted. However,  there is a power available to the State Government in  sub-section (3)  thereof under  which it  can issue notification  to the  effect that  the leases  or  the lands, as the case may be, to which sub-sections (1) and (2) would apply  shall be  subject to  such conditions as may be notified in  the notification.   The  State  of  Maharashtra issued two  notifications in  exercise of  that  power.  The first one  was issued  on 14.2.1958. It dealt with the lands covered by  clause (b) of sub-section (1) of Section 43A. We are strictly  not concerned  with the said notification. The relevant notification which would apply in the present batch of appeals is one of even date issued in connection with the lands leased  to sugar factories which have been approved by the State  Government under clause (a) of sub-section (1) of Section 43A.  The said  notification as  initially issued in 1958 did  not confer  any right  to the  sub-lessees of  the factories to  become deemed  purchasers of the lands. On the contrary, it  tried to apply the provisions of Section 14 of the Act  for the first time to the lessee factories. As laid down therein  such leases shall not be terminated unless the

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lessees, amongst  others, have sub-let the lands contrary to the provisions  of the lease without the previous permission of  the   Mamlaidar.  Consequently,   initially  when   this notification operated, any lawful sub-lease was liable to be terminated and  even lessee was liable to be evicted if such sub-lease was  effected contrary  to the  provisions of  the lease. It  is not in dispute between the parties that in the present cases,  the lease  documents under  which the  sugar factory was  given lease,  gave express  permission  to  the lessee  to   sub-let.  Therefore,   strictly  speaking   the prohibition mentioned  in clause (4) of the notification did not apply  and hence  the landlord  did not  object to  sub- letting of  lands by the sugar factory in favour of the sub- lessees concerned  who are  respondents in the present batch of appeals.  It is  also to be noted that when the aforesaid notification applied,  the provision  of Section  14 to  the extent laid  down by  clause (4)  of the notification became applicable. Section  14 by itself attracted Section 27 which prohibited even  lawful and  permissible  sub-leases.  While clause (4)  applied the  provisions of  Section  14  to  the limited extent  of its  applicability to  only non-permitted sub-lessees.  Consequently,   Section  27   could  not   get attracted to  such  permitted  sub  lessees  by  the  leases covered by  Section 43A(1)(a).  We have  also to  note  that Section 4  of the  Act applied  to such  leases by virtue of Section 43A(1)  as it was not one of the sections enumerated as excluded from their applicability to such leases. When we turn to Section 4, it is found clearly provided therein that a person  lawfully cultivating any land belonging to another person shall  be deemed  to be  a tenant if such land is not cultivated personally by the owner and if such person is not - (a)  a member  of the  owner’s family; or (b) a servant on wages, payable  in cash  or kind  but not in crop share or a hired labourer  cultivating  the  land  under  the  personal supervision of  the owner  or  any  member  of  the  owner’s family; or (e) mortgage in possession. Thus, the sub-lessees of the  sugar factory  straighaway came  with the  scope  of protective umbrella  of Section  4 of  the  Act  and  became deemed tenants  as it  cannot be  said that  they  were  not lawfully cultivating these lands. They were in possession of the lands  as lawful  sub-lessees of the sugar factory which was entitled  by virtue  of the  express permission  granted under the  lease  deeds  by  the  landlords  to  sub-let.  A Constitution Bench  of this Court in the case of Dahya Lal & Ors. vs.  Rasul Mohammed  Abdul Rahim  reported in [1963 (3) SCR 1] while interpreting Section 4 of the Act held that the Act affords  protective umbrella  to all  persons  who  hold agricultural lands  as contractual  tenants, and  subject to the exceptions  specified all  persons lawfully  cultivating the lands  belonging to  others whether  their authority  is derived directly  from the  owner of the land or not must be deemed to be tenants of the land.      However, learned  senior counsel  for  the  appellants, invited our  attention to  a decision  of this  Court in the case of  Gopala Genu Wagale vs. Mageshwardeo Patas Abhishekh Anusthan Trust  reported in [(1978) 2 SCC 47] wherein it has been held  by a  Bench of  two learned  Judges of this Court that before  Section 4  of the  Bombay Tenancy  Act  can  be pressed in  service by  any one,  it must  be found that the person concerned  was lawfully  cultivating the  land and in case of  sub-tenant covered  by Section  14(1) (a) (iii) and Section 27  of the  Tenancy Act,  protection of Section 4 of the Act  would not  be available, as he cannot be said to be lawfully cultivating  the lands.  In our view, this decision cannot be  of any  avail to  the appellants  in the  present

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cases for  reasons, firstly,  in that decision the Court had clearly held  that in  a reference  under Section 85A of the Tenancy  Act  about  the  status  of  the  person  concerned claiming to  be a  sub-tenant of  the  land  vis-a-vis  head tenant, no  further question  about deemed  tenancy survived for consideration.  Having held  so in  paragraph 4  of  the report, further observations were made in paragraph 5 of the report  on   the  interpretation   of  Section  4.  Strictly speaking, they  were not  required for  the decision  of the case and  were obiter. But even that apart, as seen from the facts of  that case  Section 4 was construed in the light of Sections 14  and 27 and on a conjoint reading thereof a view was  taken   that  even  if  a  sub-tenant  is  inducted  by permission of  the  landlord,  Section  27  would  hit  such permitted sub-lessee  and hence sub-tenants cannot urge that they were  lawfully cultivating  the lands.  In the  present case, such  a situation  does not emerge as both Sections 14 and 27 are excluded by Section 43A(1) & (2) and Section 4 on the other  hand is  made applicable  without the  fetters of Sections 14  AND 27. Therefore, in case of leases covered by Section 43A,  the provisions  of Section 4, would operate on their  own.  Consequently,  lawful  sub-lessees  of  lessees covered by  Section 43A  cannot be  held to  be in  unlawful cultivation. Once  this conclusion  is  reached,  Section  4 would operate on its own and once it operates on its own the sub-tenants  who  are  lawfully  cultivating  the  lands  by express permission  to sub-let  granted by  the landlords to the lessees  could be  said to be deemed tenants. Therefore, the ratio  of the  decision in  Gopala  Genu  Wagale’s  case (supra) will not apply to the facts of the present cases. On the contrary,  the ratio of the decision of the Constitution Bench of  this Court  in [1963 (3) SCR 1) would strictly get attracted. It was clearly held by J.C. Shah, J. speaking for the Constitution  Bench that  Section 4 operates on its own. That person  lawfully cultivating  lands of  another and not covered by the excluded categories mentioned in sub-sections (a), (b)  and (c)  will automatically  get the  status of  a deemed tenant.  It was  observed that  Section  4  seeks  to confer the  status  of  a  tenant  upon  a  person  lawfully cultivating land  belonging to  another. By  that provision, certain persons  who are  not tenants under the ordinary law are deemed  to be  tenants for purposes of the Act. A person who is deemed to be a tenant by Section 4 is manifestly in a class apart  from the  tenant who  holds lands on lease from the owner.  Such person would be invested with the status of a tenant,  if the  three conditions mentioned in the section are fulfilled.  Consequently, the law laid down in [(1976) 2 SCC 47]  cannot be  of any  assistance to the appellants and the said decision was, therefore, rightly not applied to the facts of  the present  appeals by  the  High  Court  in  the impugned judgment.      Now remains  the question  as to  what is the scope and ambit of the further notification under Section 43A(3) dated 8.2.1978. The  said notification  lays down other conditions in connection  with leases  in respect  of lands  leased  to sugar factories  which were approved by the State Government under sub-section  (1) of  Section  43A.  The  notification, amongst  others,   laid  down   conditions  permitting   the landlords to  terminate such  leases as  per clauses (4) and (4A) (1).  Amongst others,  the said  notification lays down additional conditions,  one of  them  being  condition  no.7 which is relevant for our consideration.      "7(1). Where  the  lease  land  has      been  sub-leased   by   the   sugar      factory, the  sub-lessee unless his

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    lease is terminated under condition      4B shall have the right to purchase      the land  within one  year from the      expiry of  the period  during which      the lessor is entitled to terminate      the lease under section 14(1).      (2) The  provisions of  sections 32      to 32R  (both inclusive)  shall  so      far as  may be applicable, apply to      the  right   of  such   lessee   to      purchase  the   land   under   this      condition."      A look at the said provision shows that when the leased land has  been sub-leased  by the  sugar factory  such  sub- lessee, as  per  condition  no.7,  shall  have  a  right  to purchase the  land within  one year  from the  expiry of the period during  which the lessor is entitled to terminate the lease under Section 14(1).      The short  question is  whether this  condition can  be said to  be contrary  to the  scope  and  ambit  of  Section 43A(3). It may be noted that the vires of sub-section (3) of Section 43A  were challenged  neither before  the High Court nor before  us. It  was also  not submitted  that  the  said provision suffers  from excessive  delegation of legislative power. Consequently,  we have  only to  refer to the express provisions of  clause (7)  and the  field on  which it would operate. As  noted earlier,  sub-section (3)  of Section 43A startes  with   a  non-obstante  clause  and  provides  that notwithstanding anything  contained in  sub-sections (1) and (2), it  shall be lawful for the State Government to direct, by notification  in the  Official Gazette that the leases or lands, as  the case  may be, to which the provisions of sub- sections (1)  and  (2)  apply,  shall  be  subject  to  such conditions as  may  be  specified  in  the  notification  in connection with  such lands or leases which are the subject- matters of  Section 43A(1)  and (2).  It is  true that under Section 43A(3) such notification can be issued in connection with leases or lands covered by sub-sections (1) and (2) and conditions can  be laid  down by the State Government by the said notification  in respect  of  matters  referred  to  in clauses (a)  to (d)  thereof. Clauses  (a) to (c) of Section 43A(1) refer  to the  working of  such leases  and  monetary obligations flowing  therefrom. But  when  we  turn  to  the provisions of clause (d) of Section 43A(3), it becomes clear that the  State Government  is empowered  to provide for any further matter  in connection  with sections  referred to in sub-section (1)  of Section 43A. Sections 32 to 32R, amongst others, are  mentioned in  sub-section (1)  of Section  43A. Therefore, on  a conjoint  reading  of  Section  43A(1)  and clause (d)  of sub-section  (3) of  Section 43A,  it becomes clear that  the State of Maharashtra had power and authority to lay  down conditions  about the applicability of Sections 32 to  32R in connection with leases contemplated by Section 43A(1). As  the leases  in the  present case  are covered by Section  43A(1)(a),   the  notification  in  question  could legitimately apply  to Sections  32 to  32R subject  to  the conditions which  may be  laid down.  Such an  authority and power clearly  flow from  the express  language  of  Section 43A(3) especially clause (d) thereof. Learned senior counsel for the appellants would have been right if clause (d) would have only  provided that  the State  Government could  issue notification for laying down conditions ‘regarding any other matter referred  to in sub-section (1) of Section 43A but on the contrary  it empowers  the State  Government to lay down condition  ‘regarding   any  other  matter  referred  to  in

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sections mentioned in sub-section (1)’. It necessarily means the  Legislature   permitted   the   delegate   to   provide appropriate conditions  for applicability  of  the  excluded sections expressly  mentioned in  Section 43A(1). Therefore, in view  of wide  scope of  the said  provision  of  Section 43A(3) (d)  it is  not possible to agree with learned senior counsel for  the appellants  that the notification could not have provided  for the  benefit of  deemed purchase  to sub- leases of  such factories.  Learned senior  counsel for  the appellants submitted  that on  the scheme  of the parent Act apart from  applicability of  Section 43A(1)  to  sub-tenant even if legally permitted by the lease deeds, the sub-tenant could not  be a  deemed purchaser  at least  till 1976  when condition no.7  was made  applicable in  its present form as during that time because of clause (4) of 1978 notification. Section 4 did not apply due to the applicability of Sections 14 and 27. Hence, even after 1978, he cannot get the benefit of Section  4 as  a deemed  tenant. It is difficult to agree with this  contention. The  reason is obvious. So far as the lands leased  to or  held by  any industrial  or  commercial undertaking are  concerned. Section  1 to  87 did  not apply initially. For  the first time, the legislature made some of the provisions  in the Act not applicable to such leases but applied the rest of them. While doing so, the Legislature in its wisdom  did not  exclude  Section  4.  Thus,  Section  4 without Sections 14 and 27 applied to such leases covered by Section 43A(1)  from the very inception of the applicability of the Act to such leases. Therefore, it cannot be said that the further  provision of deemed purchase for deemed tenants sub-leases  of  such  permitted  sub-lettings  as  per  1976 notification is  in any  way contrary  to the  scheme of the Act. On the contrary, as laid down by the Constitution Bench of this  Court in  the case  of Sri Ram Narain Medhi vs. The State of Bombay reported in [1959 Supp. (1) SCR 489] wherein the  constitutionality  of  deemed  purchase  provision  was upheld, the  object of  the amendment was to make the tiller of  the   soil  the   owner  thereof   and  to  exclude  the intermediary landlord so as to bring the tiller in direction relationship with  the State.  This being the scope and real purport of  the Act,  it cannot  be said  that by  inserting clause (7)  in the  notification of  1976  a  provision  was sought to  be made  which runs  counter to the scheme of the parent Act.  It is  also to be kept in view that sub-section (3)  of   Section  43A  empowers  the  State  Government  by notification to  lay  down  conditions  in  connection  with matters referred  to in  sub-sections (1)  and  (2)  thereof about the  leases or  lands that  would be  covered by  sub- sections (1)  and  (2).  So,  even  if,  the  industrial  or commercial undertakings  may be  themselves owing  the lands through tenants  the latter can be made deemed purchasers by issuance  of   such  notification   which  would   remain  a permissible  exercise.   Learned  senior   counsel  for  the appellants fairly  submitted that  so far  as the industrial concerns themselves  being owners,  had let out lands, their tenants can  be legally  brought within  the scope of clause (7) of  the notification  of 1976.  His grievance  was about sub-tenants only.  So far  as this  grievance goes,  on  the scheme of  the Act and the express provision made in Section 43A(8) (d),  it is  not possible  to countenance it. In that view of the matter, the decision of the High Court cannot be said to  be in  any way  erroneous of  going contrary to the scheme of the Act.      In the  result, the  appeals fall  and  are  dismissed. However, we  make it clear that we have examined the limited controversy which was posed for our consideration, as stated

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earlier and  especially the  validity of  condition no. 7 of the 1978  notification. Our  judgment, therefore,  does  not refer to any other controversies between the parties.