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PETITIONER: STATE OF PUNJAB

       Vs.

RESPONDENT: LABH SINGH AND ANR.

DATE OF JUDGMENT02/08/1985

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) MISRA, R.B. (J)

CITATION:  1985 AIR 1380            1985 SCR  Supl. (2) 357  1985 SCC  (4)  52        1985 SCALE  (2)128

ACT:      Pepsu Tenancy  and Agricultural  Lands Act, 1955 (Pepsu Act 13  of 1955)  as amended  by the (Second Amendment) Act, 1956 sections  2(f), 32-A,  32-L and  32-M, scope of - Words and phrases - Construction of the word "transfer" in section 32-L -  Whether redemption  of  mortgaged  lands  amount  to transfer within the meaning of section 32-L.

HEADNOTE:      Labh Singh,  respondent No.1  was the  owner of certain agricultural  lands   in  three  villages  situated  in  the district of  Kapurthala, namely,  village  Karahal  Nauabad, village Isherwa  and village  Brindpur measuring in all 32-8 standard acres.  Of them  an extent of 7-4 standard acres of land situated  in village  Brindpur had  been mortgaged with possession by  him in favour of One Lachman Singh of village Khera Dona  before the  Pepsu Tenancy and Agricultural Lands Act, 1955  (Pepsu Act  13 of  1955)  came  into  force.  The mortgage was  subsisting when  Chapter IV-A  was inserted by the (Second  Amendment) Act,  1956 (Pepsu Act No.15 of 1956) by which  sections 32-A  to 32-N were introduced. Clause (f) of section 2 of the Act defines the expression "land owner". The explanation  added to  the said  clause provided that in respect of  land mortgaged  with  possession  the  mortgagee should be deemed to be the land owner. The permissible limit for the purpose of the Act was fixed at 30 standard acres of land by section 3 thereof. In view of the above, Labh Singh, being in  possession of  less than  30 standard  acres,  7-4 standard acres  being in  possession of  the  mortgagee  was treated as a small owner not liable to surrender any land as surplus land  under the  provisions of the Act. But on April 1, 1959,  Labh Singh got back the possession of 7-4 standard acres of  land by  redeeming the mortgage. On redemption the total extent  of land in his possession became 32-8 standard acres which  was in  excess of  30 standard  acres which had been prescribed by the Act as the permissible limit.      On coming to know that Labh Singh had in his possession land in  excess of  the permissible  limit, proceedings were started by  the Revenue  authorities to  declare the surplus land in his hands 358 and to  take possession  of the  surplus area. The Collector

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directed Labh  Singh to produce a list of Khasara Numbers to be surrendered as surplus land within a fortnight therefrom. Aggrieved  by   the  order  of  the  Collector,  Labh  Singh preferred an  appeal before  the Commissioner  of  Jullandur Division. That  appeal was unsuccessful. A revision petition filed before the Financial Commissioner, Punjab against that order also  failed. Labh  Singh, thereafter,  filed  a  writ petition before  the High  Court of Punjab and Haryana which was also  dismissed. In  the  Letters  Patent  Appeal  filed before the Division Bench of the High Court by Labh Singh it was held  (i) that the acquisition made by Labh Singh of 7-4 standard acres  of land on redemption amounted to a transfer within the meaning of that expression in section 32-L of the Act and  that being  so by  virtue of  sub-section 2 of that section the  transfer  by  which  Labh  Singh  had  acquired interest in that land must be deemed to be null and void and therefore non-existent;  and (ii)  the transfer  being  non- existent there  was no  acquisition in  the eye  of law  and consequently, the  transfer had  to be ignored and not to be taken into  consideration. Hence the State appeal by special leave.      Allowing the appeal, the Court ^      HELD: 1.1  Respondent No.1 Labh Singh was in possession of land in excess of the permissible limit after he redeemed the mortgage and he therefore became liable to surrender the surplus land,  that is, 2-8 standard acres to the Government by virtue  of section  32-A itself. Even though there was no express machinery  provided in  the Act at the relevant time to deal  with the  cases of  this type,  the  Court  is  not competent to  refuse to  give effect  to the  plain words of section 32-A. [365 G-H, 366 A]      1.2. The  scheme of  the Act  is that  no land owner or tenant can  hold land in excess of the permissible limit and every such  land owner  or tenant  holding land in excess of permissible limit  is liable  to surrender  the surplus land whatever may  be the  time at  which such  surplus  land  is acquired and  whatever  may  be  the  mode  of  acquisition. Chapter IV-A  of the Act is intended to place a ceiling upon the holding  of land for personal cultivation by a landowner or a tenant in excess of the permissible limit not merely on the date  on which it came into force but even subsequently. [363 G-H, 364 A]      Vidya Vati  v. The  State of  Punjab &  Ors.  [1968]  1 S.C.R. 646 followed. 359      2.1 In the context in which the word "transfer" is used in section  32-L of  the  Act  it  cannot  be  construed  of including within  its scope  the re-transfer  of land  which takes place on redemption. [364 H]      2.2 Even  though the mortgagee is liable to re-transfer the land  in favour  of the  mortgagor on  redemption of the mortgage such re-transfer cannot be treated as equivalent to transfer contemplated  under section 32-L of the Act. When a mortgagor mortgages  the land  with possession  he does  not cease to  be its owner. The equity of redemption still vests in him  and on  redemption he  gets back  possession of  the mortgaged land. The present case came within the mischief of section 32-A  of the Act, which was all pervasive. [364 F-G, 365 A]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2033 of

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1971.      K.C. Dua and S.K. Bagga for the Appellant.      R.K. Bhatt for the Respondents.      The Judgment of the Court was delivered by      VENKATARAMIAH, J.  Labh Singh,  respondent No.1 herein, was  the  owner  of  certain  agricultural  lands  in  three villages situated  in the  district of  Kapurthala,  namely, village  Karahal   Nauabad,  village   Isherwa  and  village Brindpur measuring  in all  32-8 standard  acres. Of them an extent of  7-4 standard  acres of  land situated  in village Brindpur had been mortgaged with possession by him in favour of one  Lachman Singh of village Khera Dona before the Pepsu Tenancy and  Agricultural Lands  Act, 1955  (Pepsu Act 13 of 1955) (hereinafter  referred to  as  ’the  Act’)  came  into force. The  mortgage was  subsisting when  Chapter IV-A  was inserted by the Pepsu Tenancy and Agricultural Lands (Second Amendment) Act,  1956 (Pepsu  Act No.  15 of  1956) into the Act.  Chapter  IV-A  of  the  Act  which  provided  for  the imposition of  ceiling on  land and acquisition and disposal of surplus area consisted of Sections 32-A to 32-NN. Section 32-A of the Act read as follows:           "32-A.  Ceiling   on  land-   (1)  Notwithstanding           anything to the contrary in any law, custom, usage           or agreement,  no person  shall be entitled to own           or hold  as land  owner or  tenant land  under his           personal  cultivation   within  the   State  which           exceeds in the aggregate the permissible limit. 360           (2) For  the purposes of computing the permissible           limit  under  sub-section(1),  the  provisions  of           clauses (d)  and (e) of sub-section (2) of section           3 shall not apply."      The permissible  limit for  the purposes of the Act was fixed at  30 standard  acres of  land by  Section 3 thereof. Section 32-B  of the Act provided that any person who on the commencement of  the Pepsu  Tenancy and  Agricultural  Lands (Second Amendment)  Act, 1956  owned or held as landowner or tenant land  under his  personal cultivation,  which in  the aggregate exceeded  the permissible  limit should  within  a period of  one month  from the  commencement  of  the  Pepsu Tenancy and  Agricultural Lands  (Amendment) Ordinance, 1958 furnish to  the Collector a return giving the particulars of all his  lands in the prescribed form and manner and stating therein his  selection of  the parcel or parcels of land not exceeding in  the aggregate  the permissible  limit which he desired to  retain and  the lands  in respect  of  which  he claimed exemption  from the  ceiling under the provisions of Chapter IV-A  of the  Act. It was further provided that such person should  state in  the return  any transfer  or  other disposition of  land made by him after 21st August, 1956 and where  a   person  had   furnished  a   return  before   the commencement of  the Pepsu  Tenancy and  Agricultural  lands (Amendment) Ordinance,  1958 he  should within the aforesaid period intimate  to the Collector any such transfer or other disposition of  land made by him. Clause (f) of section 2 of the Act  defined the expression ’landowner’. The explanation added to  the said  clause provided  that in respect of land mortgaged with  possession the mortgagee should be deemed to be the landowner. In view of the above definition the extent of 7-4  standard acres of land which was under mortgage with possession of  the commencement  of the  Act was  not to  be included in  the holding  of  Labh  Singh  for  purposes  of determining the  surplus land  in his hand but the mortgagee had to  be treated as the landowner in respect of that land. Consequently, the remaining extent of land in the possession

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of Labh  Singh being  less than  30 standard  acres  he  was treated as  a small  landowner not  liable to  surrender any land as surplus land under the provisions of the Act. But on April 1,  1959, Labh  Singh got  back the  possession of 7-4 standard  acres  of  land  by  redeeming  the  mortgage.  On redemption the total extent of land in his possession became 32-8 standard acres which was in excess of 30 standard acres which had  been prescribed  by the  Act as  the  permissible limit. Labh  Singh did  not file  any return  informing  the authority  concerned  that  his  holding  had  exceeded  the permissible limit. But on coming to 361 know that Labh Singh had in his possession land in excess of the permissible  limit,  proceedings  were  started  by  the Revenue authorities to declare the surplus land in his hands and to take possession of the surplus area. The Collector by his order  dated April  25, 1967  declared that 2-8 standard acres of  land in  the hands  of Labh Singh was surplus area which he  had to  surrender. The Collector, however, did not impose any  penalty on  Labh Singh  for not  submitting  his return in  time on  the ground  that he  being an illiterate person was not aware of the stringent provisions of the Act. Labh Singh  was directed to produce a list of Khasra Nos. to be surrendered as surplus land within a fortnight therefrom. Aggrieved  by   the  order  of  the  Collector,  Labh  Singh preferred an  appeal before  the Commissioner  of  Jullandur Division. That  appeal was unsuccessful. A revision petition filed before  the Financial  Commissioner,  Punjab,  against that order  also falled.  Labh Singh thereafter filed a writ petition  before  the  High  Court  of  Punjab  and  Haryana questioning the  correctness of  the  order  passed  by  the Financial Commissioner,  Punjab, contending  that  the  land which was  under mortgage at the commencement of the Act and which was  redeemed subsequently  could not  be  taken  into consideration for  determining surplus  area in the hands of the landowner.  The learned  Single Judge who heard the writ petition did  not agree  with the contention urged on behalf of Labh Singh and dismissed it. In the Letters Patent Appeal filed before  the Division  Bench of  the High Court by Labh Singh against  the judgment  of the  learned Single Judge it was held  that the  acquisition made  by Labh  Singh of  7-4 standard acres  of land on redemption amounted to a transfer within the meaning of that expression in section 32-L of the Act and  that being  so by virtue of sub-section (2) of that section the  transfer  by  which  Labh  Singh  had  acquired interest in that land must be deemed to be null and void and therefore  non-existent.   It  was  further  held  that  the transfer being  non-existent there was no acquisition in the eye of law. Consequently, the transfer had to be ignored and not to  be taken  into consideration.  The Division Bench of the High  Court which  decided the  appeal observed that the "so-called acquisition  is hit  by section 32-L of the Pepsu Act and  is therefore  non-existent in  the eye of law being null and  void, and  does not have the effect of making Labh Singh the owner of an area exceeding the permissible limit." In that  view of  the matter  the appeal was allowed and the orders passed  by the Revenue authorities culminating in the order of Financial Commissioner and the order of the learned Single Judge  were set  aside. The  High Court  declined  to consider the effect of section 32-M of the Act on the case. 362 This appeal by special leave is filed by the State of Punjab against the judgment of the Division Bench of the High Court in the Letters Patent Appeal.      In order  to appreciate  the contentions of the parties

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it is  necessary to refer at this stage to sections 32-L and 32-M of the Act as they stood then. They read as follows:           "32-L. Ceiling on future acquisition of Land.- (1)           Notwithstanding anything  to the  contrary in  any           law, custom,  usage, contract  or agreement,  from           and after  the commencement  of the  Papsu Tenancy           and Agricultural  Lands  (Second  Amendment)  Act,           1956, no  person whether  as landowner  or tenant,           shall acquire  or possess  by transfer,  exchange,           lease, agreement or settlement any land which with           or without  the land already owned or held by him,           shall in  the  aggregate  exceed  the  permissible           limit.           (2) Any  transfer, exchange,  lease, agreement  or           settlement made in contravention of the provisions           of sub-section (1), shall be null and void.           32-M. Ceiling on future acquisition by inheritance           (1) If,  after  the  commencement,  of  the  Pepsu           Tenancy  Act   and   Agriculture   lands   (Second           Amendment)  Act,  1956,  any  person,  whether  as           landowner or tenant, acquires by inheritance or by           bequest or  gift from  a person  to whom  he is an           heir any  land which  with or  without  the  lands           already owned  or held  by  him,  exceeds  in  the           aggregate the  permissible limit,  then  he  shall           within  the   period  prescribed  furnish  to  the           Collector a  return in  the  manner  specified  in           Section 32-B  giving the  particulars to all lands           and selecting the land he desires to retain and if           the land  of such  person is situated in more than           one  Patwar   circle,  he  shall  also  furnish  a           declaration required by sub-section (1) of section           32-BB.           (1-A)  If   such  person  failed  to  furnish  the           declaration, the  provisions of  sub-sections  (2)           and (3) of section 32-BB shall apply.           (2) If  he fails  to furnish the return and select           his land  within the  prescribed period,  then the           Collector 363           may obtain the information and select the land for           him in the manner specified in section 32-C.           (3) The Collector shall then submit a statement to           the State  Government in  the manner  specified in           section 32-D  and  issue  a  notification  in  the           Official Gazette as required by that section.           (4) The  excess land  shall then vest in the State           Government in  accordance with  the provisions  of           section 32-E  and compensation therefore, shall be           payable in  accordance with the provisions of this           Chapter."      The learned  counsel for the State Government relies on section 32-A  of the  Act which  has been  already extracted above in  support of  his contention that on redemption Labh Singh became  the holder  of agricultural  land in excess of the permissible  limit  and  was  liable  to  surrender  the surplus land which was over and above the permissible limit. The learned  counsel on behalf of Labh Singh, however, urged that redemption  being a transfer of land from the mortgagee to the  mortgagor it  was hit by section 32-L of the Act and was therefore void under sub-section (2) thereof. It being a void transaction  could not  be taken into consideration for purposes of  determining the question whether Labh Singh was in possession  of any  land in  excess  of  the  permissible limit.

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    The case  put forward  on behalf of Labh Singh proceeds on the  assumption that section 32-A (1) which provides that notwithstanding anything to the contrary in any law, custom, usage or  agreement, no  person shall  be entitled to own or hold as  land  owner  or  tenant  land  under  his  personal cultivation within  the State which exceeds in the aggregate the permissible  limit operated  only at  the point  of time when the  said provision  came into  force and that it would not be applicable to lands acquired subsequently.      The scheme  of the  Act is that no land owner or tenant can hold  land in  excess of the permissible limit and every such  landowner   or  tenant   holding  land  in  excess  of permissible limit  is liable  to surrender  the surplus land whatever may  be the  time at  which such  surplus  land  is acquired and  whatever  may  be  the  mode  of  acquisition. Chapter IV-A  of the Act is intended to place a ceiling upon the holding of land for personal cultivation by a land owner or a tenant in excess of the permissible limit not 364 merely on  the date  on which  it came  into force  but even subsequently. In  Vidya Vati  v. The  State of Punjab & Ors. [1968]  1   S.C.R.  646,  in  which  the  Act  came  up  for consideration Shah,J. observed thus at page 650:           "Viewed in  the light  of that scheme, also, it is           impossible to  construe s. 32-A as being operative           only at  the point  of time  at which the Amending           Act incorporating  Ch.IV-A was brought into force,           for  the   words  of   the  section   contain   no           limitation, and the scheme of the Act indicates no           such implication.  It is  true that  under s. 32-B           every person  who owns  or holds  as land owner or           tenant  land   under  his   personal   cultivation           exceeding   the    permissible   limit    at   the           commencement of  the Act  is required  to  make  a           return in  respect of  his holding.  but  this  is           enacted with  a  view  to  provide  machinery  for           effectuating the  provisions imposing  the ceiling           on land  held at the date on commencement: it does           not  even  indirectly  suggest  that  s.  32-A  is           limited in  its operation  to the point of time at           which the  Act is  brought into force and is spent           thereafter. Failure on the part of the Legislature           to deal  with cases  in which at the date on which           the Act  was brought  into  force,  the  owner  or           holder  of  land  was  not  cultivating  the  land           because  he  was  not  in  cultivatory  possession           thereof but  was resorted to his possession during           the subsistence of the Act, cannot also be used to           limit the  operation of  s. 32-A(1)  only  to  the           point of  time at  which the  Act was brought into           force. In  our judgment the ban imposed by s. 32-A           operates whenever  he is found to own or hold land           in personal  cultivation exceeding the permissible           limit."      Moreover even  though the  mortgagee is  liable to  re- transfer the  land in  favour of the mortgagor on redemption of the  mortgage  such  re-transfer  cannot  be  treated  as equivalent to  transfer contemplated  under section  32-L of the Act. When a mortgagor mortgages the land with possession he does  not cease to be its owner. The equity of redemption still vests in him and on redemption he gets back possession of the  mortgaged land.  In the  context in  which the  word ’transfer’ is  used in  section 32-L of the Act it cannot be construed as  including within  its scope the re-transfer of land which takes place on redemption. The Division Bench did

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not appreciate that its decision had the effect of 365 defeating the  purpose and  object of  the ceiling  law. The present case came within the mischief of section 32-A of the Act which  was all pervasive. The Division Bench of the High Court did not consider the effect of section 32-A of the Act and also  the decision  of this  Court in  Vidya Vati’s case (supra) referred  to above.  In that  case the  Court  while referring to  section 32-L and section 32-M observed thus at page 649:           "The entire  argument is  raised on  an assumption           that s.32 A (1) operates only at the date on which           the Act was brought into operation; that argument,           in our  Judgment is contrary to the plain terms of           sec. 32-A  (1). It  is true that ss. 32-L and 32-M           expressly   deal    with   certain    classes   of           acquisitions after the date of the commencement of           the Act, but on that account no restriction may be           imposed upon the connotation of the expression "no           person shall be entitled to own or hold" occurring           in s. 32-A of commencement and has no operation in           the future. It may be noticed that s. 32-L renders           all subsequent  acquisitions as  a result of which           the holding of a person of land under his personal           cultivation exceeds  thirty acres  "null and void"           and  s.   32-M  which   deals  substantially  with           involuntary acquisitions  (such as acquisitions by           inheritance or bequest) sets out the machinery for           making declarations  and the  manner in  which the           land in  personal cultivation  in  excess  of  the           ceiling will  be dealt  with.  By  an  appropriate           drafting device,  it may  have  been  possible  to           detail  of   these  provisions   into  the   other           sections,  but  if  in  the  interest  of  clarity           certain specific  cases are separately dealt with,           an intention  to restrict  the  operation  of  the           general provision  contained in s. 32-A (1) cannot           be implied."      It may  be added  here that section 32-M of the Act has since been  amended making  it applicable  to other kinds of acquisitions also.      Admittedly Labh  Singh was  in possession  of  land  in excess of  the  permissible  limit  after  he  redeemed  the mortgage and  he therefore  became liable  to surrender  the surplus land,  that is, 2-8 standard acres to the Government by virtue  of section  32-A itself. Even though there was no express machinery  provided in  the Act at the relevant time to deal with cases of this type, the 366 Court is not competent to refuse to give effect to the plain words of  section 32-A  as observed  in  Vidya  Vati’s  case (supra). The  judgment of  the Division  Bench of  the  High Court is  liable to  be set  aside and it is accordingly set aside. The  decisions of the learned Single Judge, Financial Commissioner and other Revenue authorities are restored. The authorities  under   the  Act  shall  now  proceed  to  take possession of  the extent of 2-8 standard acres of land from Labh Singh  but before doing so they are directed to give an opportunity to  Labh Singh  by  issuing  notice  to  him  to exercise his option as regards the parcel or parcels of land equivalent of  2-8  standard  acres  which  he  proposes  to surrender. If  he exercise  his option in that regard within one  month   from  the  date  of  such  notice  the  Revenue authorities shall  take only  those lands offered by him. If he falls  to do  so the authorities concerned themselves may

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proceed to take possession of the surplus land in accordance with law.      This  appeal   is  accordingly  allowed.  There  shall, however, he no order as to costs. S.R.                                         Appeal allowed. 367