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PETITIONER: KUMAR PASHUPATI NATH MULLAH (DEAD) BY L. RS.

       Vs.

RESPONDENT: STATE OF WEST BENGAL

DATE OF JUDGMENT05/03/1974

BENCH: ALAGIRISWAMI, A. BENCH: ALAGIRISWAMI, A. MATHEW, KUTTYIL KURIEN

CITATION:  1974 AIR  663            1974 SCR  (3) 556  1974 SCC  (1) 696

ACT: West Bengal Estate Acquisition Act, 1953, s. 5A-Scope of.

HEADNOTE: Under s. 5A, West Bengal Estates Acquisition Act, 1953 if it was found after an enquiry that a transfer made after May 5, 1953, was not bonafide, the transfer shall stand  cancelled. Under 5A (7), a transfer shall be held to be not bonafide if it  was  made principally or partially with  the  object  of increasing the amount of land which a person may retain,  or with  the  object of increasing the amount  of  compensation payable.  Under s. 6, an intermediary, holding land under  a trust may retain such land; and under s. 16, in  determining the   net  income  of  an  intermediary,  for  purposes   of determining  the  compensation payable to him,  one  of  the items  to  be deducted from the gross income is  the  amount payable  intermediary to a religious or chair  table  trust, out of the income of the estate. In  1928, a charge had been created upon an estate  for  the maintenance  and  seva puja of a family deity  and  for  the performance  of certain specified charitable  purposes.   In October 1953, the appellant, who had inherited a half  share of  the estate executed a document whereby a half  share  in his  share of the estate was set apart exclusively  for  the purpose  for which the charge had been created  earlier  and the  rest  of the property was to be treated  as  absolutely free  and  absolved  from  the  claims  in  respect  of  the religious and charitable purposes.  The appellant  appointed him  self as a trustee in respect of the property set  apart for  the religious and charitable purposes.  He  transferred his  interest in the remaining portion of the estate to  his son  and wife.  The Settlement Officer held, under the  Act, that  the  1953-document executed by the appellant  was  not bonafide..  His  appeal,  and petition in  the  High  Court, failed Allowing the appeal to this Court, and remanding the  matter to the High Court for disposal afresh, HELD  : (1) If the substance of the transaction of  1953  by which  properties  are  endowed in favour of  the  deity  is looked  into there is no reason what should not be called  a gift.  Therefore, the transaction was a transfer within  the meaning of the Act [539 B-C]

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Champa Bibi v. Panchiram Nahata AIR 1963 Cal. 551 approved. (2)  The  High  Court  and the authorities  below  erred  in holding that the transfer was not bonafide. (a)  The Settlement Officer found that the total expenditure on   seva  and  charitable  purposes  was  Rs.  30,000   and appellant’s  share  therein would be Rs. 15,000/-.   It  was also   found  that  the  income  of  the   land   absolutely transferred for the religious and charitable purposes  under the deed of 1953, is Rs. 23,000/-.  But for the execution of the document the appellant would have been in possession  of the  whole  of his share of the estate with  only  a  charge amounting to Rs. 15,000/- But the result of the document was that   land  yielding  a  larger  income   was   transferred absolutely  to  the  deity  the  Settlement  Officer  should therefore, have given his reason as to how he arrived at the conclusion  that the transfer would enable the appellant  to retain  a larger extent of land or entitle him to  a  larger amount of compensation.  The Special Judge in appeal and the High  Court  did not go into the question at  all.  [539F-H, 540B] (b)  Whether the appellant was entitled to free a portion of the estate from the charge and confine the charge to only  a portion  of the estate does not affect the question  whether the transfer was bonafide in terms of the Act. [539H] (c)  Merely because he transferred ’the remaining portion to his  son  and wife could not establish want of  bona  fides. [539H] 537 (3)  No question under S. 6(1) (i) of the Act arises on  the facts of this case.[540 B-C] Fazlul  Rabbi Pradhan v. State of West Bengal [1965]  3  SCR 307, followed.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1838  of 1967. Appeal  by special leave from the Judgment and  Order  dated the 23rd May, 1967 of the Calcutta High Court in Civil  Rule No. 11 19 of 1962. Purshottam Chatterjee and Ganpat Rai for the appellant. P. K. Chakrabarty and G. S. Chatterjee for the respondent. The Judgment of the Court was delivered by ALAGIRSWAMI,  J.  Gobinda Prasad Pandit, the founder of  the Searsole  Raj Estate died in the year 1861 leaving  a  will. After  his  death in a suit between his  widow  and  certain other  claimants  regarding the title to the estate  it  was held  that a charge had been created upon the entire  estate for  the maintenance and seva puja of the family  deity  and for   the  performance  of  certain   specified   charitable purposes.   In  1928 the appellant, his  brother  and  their father who succeeded to the estate executed an arpannamah in favour of the family deity reiterating the charge created by Gobinda  Prasad Pandit.  On October 12, 1953  the  appellant executed  a document whereby a half share in a part  of  the estate  was set apart exclusively for the purpose for  which the  charge  had been created earlier, and the rest  of  the property  was to be treated as absolutely free and  absolved from  the claims in respect of the religious and  charitable purposes.   The appellant appointed himself as the  trustee. The  West  Bengal Estates Acquisition Act,  1953  came  into force on 12-2-1954.  Under that Act, the main provisions  of which,  in so far as they are relevant for the  purposes  of this  appeal, we shall refer to later, the estate vested  in

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the State on 14-4-1955.  Subsequently the Act was amended by introducing  section  5A therein with  retrospective  effect from  5-5-1953,  the date prior to that on which  the  bill, which later became the West Bengal Estates Acquisition  Act, was  published  in  the  Gazette.   After  an  enquiry   the Settlement  Officer held that the document executed  by  the appellant on October 12, 1953 was not bona fide.  The appeal against  this  decision to the Special Judge failed  and  so also  a petition filed before the High Court under Art.  227 of  the  Constitution.   This  appeal  has  been  filed   in pursuance of the special leave granted by this Court. We shall now set forth the provisions of the Act in brief Under S. 4(1) of the Act a notification may be issued by the State  Government that all estates and the rights  of  every intermediary  in  each such estate shall vest in  the  State free  from  all  encumbrances.   Under  S.  5(1)  upon   the publication  of  such  a notification the  estates  and  the rights  of intermediaries in the estates shall vest  in  the State free from all encumbrances.  It may be stated even  at this stage that the appellant is an intermediary.  Under  S. 5A the State Government 6-M45Sup.C.I./75 538 may  enquire  into any case of transfer of any  land  by  an intermediary  made between the 5th day of May, 1953 and  the date  of  vesting, if in its opinion there are  prima  facie reasons  for believing that such transfer was not  bonafide, and if after such an enquiry the State Government finds that singh transfer wag not bona fide, it shall make an order  to that effect and thereupon the transfer shall stand cancelled as  from the date on which it was made or purported to  have been made.  Against an order passed by the State  Government an appeal lies to a Special Judge.  Sub-section (7) of. this section  lays down that a transfer shall be held to  be  not bona  fide if it was made principally or partially with  the object  of increasing the amount of laid which a person  may retain,  or  principally  or partially with  the  object  of increasing  the amount of compensation payable.   ’Transfer’ means a transfer by sale, mortgage, lease, exchange or gift. Under  section  6  an intermediary  is  entitled  to  retain various categories of land. of which it is only necessary to refer  to the category mentioned in section 6(1)  (i)  which reads :               "  where the intermediary is a corporation  or               an  institution established exclusively for  a               religious or a charitable purpose or both,  or               is  a  person  holding under  a  trust  or  an               endowment or legal obligation exclusively, for               a purpose which is charitable or religious  or               both-land held in khas by such corporation  or               institution,  or  person,  for  such   purpose               including land held by any person, not being a               tenant,   by   leave  or   license   of   such               corporation or institution or person;" Section 16 provides for the calculation of the gross  income and  the  net income of an intermediary.  Amends  the  items which have to be deducted from the gross income in order  to Arrive  at the net income is the on.-. under  section  16(1) (b) (vi) when reads as follows :               " any sum payable by such intermediary out  of               the income of an estate or interest which  has               vested  in  the State under section  5,  to  a               corporation  or  an  institution   established               exclusively  for a religious or  a  charitable               purpose or both or to a person’ holding  under

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             a  trust  or  an  endowment  or  other   legal               obligation exclusively for a purpose of  which               is charitable or religious or both, where such               estate  or  interest  was held  partly  for  a               religious or charitable purpose and partly for               a purpose other than religious or charitable." Section  17  provides for the amount of the  amount  of  the income sensation payable to intermediaries. The  Settlement Officer held that a charitable trust is  ex- hypothesi  a  voluntary transfer by way of gift and  it  has been  held that one of the various modes of giving  property for  religious  purpose is to give it to the  trustees"  and therefore  it was a transfer.  Before the Special  Judge  it was argued that there was no  transfer at all inasmuch as it was  not  an act of conveying the property from  one  living person  to another, and that it was not at all a gift  since there was no transfer 539 The learned Special Judge rejected that contention.  Similar arguments  were  repeated before the High Court  which  also rejected  that contention.  We are of opinion that the  High Court  as well as the authorities below were right  in  this conclusion.  The definition of the term ’transfer’ does  not attract  all  the  definitions. given  in  the  Transfer  of Property  Act  for  the transactions which  are  defined  as transfers  in the Act.  If the substance of the  transaction by  which  properties are endowed in favour of  a  deity  is looked  into we do not see why it cannot be called  a  gift. In Champa Bibi v. Panchiram Nahata (AIR 1963 Calcutta 551) a Division  Bench  of  the Calcutta High Court  held  that  ’a transfer  of  property by dedication to a Hindu deity  is  a transfer by gift within the meaning of s. 5A(7)(iii) of  the West Bengal Estates Acquisition Act. As  regards the second point whether the transfer  was  bona fide or not the Settlement Officer did not apply his mind to the  provisions  of the Act which lay  down  what  transfers would  be  held to be not bona fide.  He, did  not  consider whether the transfer was made principally or partially  with the  object  of  increasing the amount  of  land  which  the transferor   may   retain  or  increasing  the   amount   of compensation   payable   to   him.   He   only   took   into consideration  the fact that certain lands were  transferred to  the  appellant’s son and his wife and held that  it  was clear  from  them  that the deed  was  made  principally  or partially  with the object of increasing the amount of  land which the appellant could retain, and also, with the  object of  increasing the amount of compensation payable under  the Act.   He did not go into the facts of the case  but  merely repeated  the words of the section.  It is found  from  that order  itself  that the total expenditure on  the  seva  and charitable  purposes  was Rs. 30,000/- and  the  appellant’s share  therein would be Rs.15,000/-. It is also  found  that the income of the land absolutely transferred under the deed of October 12, 1953 is Rs. 23,000/-.  But for the  execution of the document the appellant would have been in  possession of  the whole of the estate with only a charge amounting  to Rs.  15,000/-.  As a result of the document land yielding  a larger income was transferred absolutely to the deity.   The Settlement Officer should, therefore, have given his reasons as to how he arrived the conclusion that the transfer  would enable  the appellant to retain a larger extent of  land  or entitle him to a larger amount of compensation.  The Special Judge merely considered that it was difficult to  understand how  the  appellant who inherited the moiety  share  of  the estate subject to the charge was legally competent to free a

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portion of the estate from the charge and confine the charge to  only a portion of the estate.  But that does not  affect the question whether the transfer was bona fide in terms  of the 540 Act.  He took the view that the Act considered alongwith the fact  that  the appellant transferred his  interest  in  the remaining portion of the estate to his son and wife  clearly established want of bona fides on the part of the appellant, and  that it was done to defeat the purpose of  legislation. It  would  be  noticed that he has also not  gone  into  the question  whether  the  impugned  transaction  enables   the appellant  to  retain  a larger extent of land  or  claim  a larger  amount of compensation.  The High Court did  not  go into this question at all. We  do  not consider that the facts of this case  raise  any question under section 6(1) (i) at all.  That can arise only with  regard  to  the situation as  it  existed  before  the execution  of the impugned document and under the  unamended Act.   The  earlier document of 1928 as well  as  the  prior decree would not bring the lands under this section at  all, as  was held by this Court in Fazlul Rabbi Pradhan v.  State of West Bengal [1965] 3 SCR 307. In  the result this appeal is allowed.  The High Court  will dispose of the matter a fresh in accordance with law.  There will be. no; order, as to costs. V.P.S. Appeal allowed. 541