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PETITIONER: STATE OF U.P.

       Vs.

RESPONDENT: ZAHOOR AHMAD & ANR.

DATE OF JUDGMENT08/08/1973

BENCH: SIKRI, S.M. (CJ) BENCH: SIKRI, S.M. (CJ) PALEKAR, D.G.

CITATION:  1973 AIR 2520            1974 SCR  (1) 344  1973 SCC  (2) 547  CITATOR INFO :  RF         1977 SC2328  (80)

ACT: Transfer  of  Property  Act, 1882, s.  116,  and  Government Grants Act, 1895 Ss. 2 & 3-Lease of reserved forest in  U.P. whether not governed by S. 116 T.P.Act because of provisions of Government Grants Act.

HEADNOTE: The appellant State was the proprietor of a reserved forest. The  respondent took on lease from the appellant a  plot  of land  for industrial purposes in the said forest  area.   As found by the High Court the lease was originally granted for one  year  in  1947 at an annual rent of Rs.  100.   It  was renewed   in  1948  and  1949  for  one  year.   After   the termination  of  the  lease in  March  1949  the  respondent continued  to  be in possession of the land  and  agreed  to abide by the, terms to be fixed by the appellant.  Under the terms fixed by the appellant the respondent was required  to pay  Rs. 100 as annual rent for the occupation of  the  land till  July 15, 1950.  The respondent remained in  possession of the leased property after the determination of the  lease in 1950, for a further period of three years.  The appellant wanted  to enhance the rent to which the respondent did  not agree.   In the consequent suit filed by the  appellant  the trial court passed a decree in the suit allowing Rs. 6000 as rent  for  the  years 1950-51 and 1951-52 and  Rs.  5000  as damages  for 1952-53.  The High Court reversed  the  decree. It  held  that  no notice as required under s.  106  of  the Transfer  of  Property Act had been given and since  on  the facts the respondent must be deemed to have held over within the  meaning of s. 116 of the Transfer of Property Act,  the rent  was payable as under the previous lease, On this  view it  passed a decree in favour of the appellant for  Rs.  300 being  rent  at  Rs. 1000 per year for the  three  years  in question.   In  appeal by special leave to  this  Court  the appellant  State  contended that s. 116 of the  Transfer  of Property Act was not applicable to the case because of s.  2 of the Government Grants Act. Dismissing the appeal, HELD : The lease in the present case was for the purpose  of erecting  a  temporary rice mill and for no  other  purpose.

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The  mere  fact  that the State is the lessor  will  not  by itself make it a Government grant within the meaning of  the Government Grants Act.  There was no evidence in the present case  in the character of the land or in the making  of  the lease or in the content of the lease to support the plea  on behalf  of the State that it was a grant within the  meaning of the Government Grants Act. [347E-G] In  the present case the High Court correctly found  on  the facts  that  the respondent after the determination  of  the lease held over.  Even if the Government Grants Act  applied section 116 of the Transfer of Property Act was not rendered inapplicable.   The  effect of section 2 of  the  Government Grants  Act  is that in the construction  of  an  instrument governed  by  the  Government Grants  Act  the  court  shall construe  such grant irrespective of the provisions  of  the Transfer  of  Property Act.  It does not mean that  all  the provisions of the Transfer of Property Act are inapplicable. To  illustrate, in the case of a grant under the  Government Grants  Act section 14 of the Transfer of Property Act  will not apply because section 14 which provides what is known as the rule against perpetuity will not apply by reason of  the provisions in the Government Grants Act.  The grant shall be construed to take effect as if the Transfer of Property  Act does not apply. [348B-D] Section  3  of  the  Government  Grants  Act  declares   the unfettered  discretion  of  the Government  to  impose  such conditions and limitations as it thinks fit, no matter’ what the  general law of the land be.  The meaning of sections  2 and 3 of the Government Grants is that the scope of that Act is not limited to 345 affecting  the  provisions of the Transfer of  Property  Act only.,  The Government has unfettered discretion  to  impose any conditions, limitations, or restrictions in its. grants, and  the right, principles and obligations of’  the  grantee would  be  regulated according to the terms  of  the  grant, notwithstanding  any provisions, of any statutory or  common law. [348D-F] Jnanendra  Nath Nanda v’ Jadu Nath Banerje, I.L.R. [1938]  1 Cal. 626, and Secretary of State for India in Council v. Lal Mohan Chaudhuri, I..L.R. 63 Cal. 623, applied. Lala  Kishun  Chand v.  Sheo Dutta, I.L.R.  1958  All.  879, approved.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1718 of 1967 Appeal  by special.leave from the judgment and  Order  dated 23-10-64  of the Allahabad High Court at (Lucknow Bench)  in First Appeal No. 89 of 1957. G.   N. Dikshit and O. P. Rana, for the appellant. S.   S. Shukla, for respondent No. 1. The Judgment of the Court was delivered by RAY,  C.J.-This  is  an appeal by  special  leave  from  the judgment dated 23 October, 1964 of the Allahabad High Court. The  High  Court reversed the decree for Rs. 1  1,000/-  and passed a decree for a sum of Rs. 3,000/- with  proportionate costs in favour of the appellant State. The  appellant is the proprietor of the reserved  forest  in Uttar Pradesh.  The respondent took lease from the appellant of a plot of land at Chandan Chowki, Sonaripur Range in  the North  Kheri  Forest  Division  at an  annual  rent  of  Rs. 1,000/-. The High Court found these facts.  The appellant had granted

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a  lease to the respondent for one year from 18 March,  1947 at  an annual rent of Rs. 100/-.  The lease was renewed  the following  year on 10 June, 1948 with effect from 18  March, 1948 for one year.  The lease was renewed again in 1949  for one  year.  The lease expired on 18 March, 1950.  After  the termination  of  the  lease in March,  1949  the  respondent continued  to  be in possession of the land  and  agreed  to abide by the terms to be fixed by the appellant.  Under  the terms fixed by the appellant the respondent was required  to pay  Rs. 1,000/- as annual rent, for the occupation  of  the land till 15 July, 1950. The respondent remained in possession of the leased property after the determination of the lease on 15 July, 1950.   The appellant  allowed  the respondent to be in  occupation  for three  years beyond 15 July, 1950.  The respondent  did  not agree to give any undertaking after 15 July, 1950 as in  the year  1949  to  agree  to  abide  by  the  decision  of  the Government.   The appellant was on the one hand  anxious  to charge  as: high rent as possible and the respondent on  the other  was  willing to pay reasonable rent.  On  27  August, 1951  the  Forest  Officer of the- appellant  wrote  to  the respondent  for discussion regarding the rent for  the  year 1950-51.   There is no evidence as to whether there was  any such discussion.  This is however a letter of the  appellant dated 4 Decem 346 ber,  1951 to the respondent where the respondent was  asked to pay Rs. 3000/- for the year 1950-51 and if the respondent did not agree to pay the amount the rent would be reduced to Rs.  1800/-  but the miff would not be allowed to  have  the lease  in  future in any circumstance.  The  respondent  was allowed to continue in occupation of the land with- out  any agreement  as to the amount of rent payable for  the    year 1950-51.On  29 October, 1952 the Conservator of  Forests  on part  of the appellant sent a notice to the respondent  that the  appellant  offered to allow the respondent to  run  the miff  beyond  15  July, 1950 for three  years  provided  the respondent  paid Rs. 3000/- per annum and for one year  only in  case the respondent was prepared to pay Rs. 1800/-  with the  further condition-that the lease would not be  renewed. The notice ’further stated that since the respondent had not executed  any lease incorporating the terms  the  respondent was a mere licensee.  The respondent was asked to remove the plant within one month of the date of receipt of the  notice and to pay Rs. 6000/- as damages for use and occupation.  If the  respondent did not do so the appellant gave  notice  of filing  a  suit for recovery of damages at the rate  of  Rs. 50001- per annum for future use and occupation. On  the  facts  found  by the High  Court,  the  High  Court concluded  that the respondent continued in occupation  with the  consent of the appellant without any agreement  as  to the  amount  of rent or without any undertaking  that  the respondent  would pay the rent fixed by the appellant.   The appellant,  therefore, after the determination of the  lease on  15 July, 1950 assented to the respondent  continuing  in possession.  The lease was for industrial purposes.   Under the  terms  of section 106 of the Transfer of  Property  Act such lease is from year to year.  Therefore, there being  no agreement to the contrary the continuance by the respondent in possession of the leased premises amounted to renewal  of the  lease from 16 July, 1950 as a lease from year to  year. It  would  be a  lease terminable  by  six  months  notice expiring with the end of the year of the tenancy.  There was no such notice expiring with the end of a year of tenancy in 1952.  The renewed tenancy therefore continued and was  not

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terminated. With regard to the amount of rent payable the provisions  of section  116 of the Transfer of Property Act  indicate  that the  renewal  of the ’lease would mean that  the  terms  and conditions would be the same as of the previous lease.   The High  Court, therefore, correctly found that in the  absence of any agreement to pay Rs. 3000/- as annual rent or in  the absence of any agreement and undertaking that the respondent would accept the amount fixed by the appellant as the  rent. The  appellant  was not entitled to anything more  than  Rs. 1000/-  a  year which was the amount of rent for  the  year 1949 to 1950. With regard to the claim of the State for Rs. 5000/- for the year  1952-53  as damages for use and  occupation  the  High Court  found  that  the respondent was  holding  over,  and, therefore,  the  renewal of the lease would be on  the  same terms and conditions. The  High Court, therefore, allowed the State Rs. 3000/-  at the  rate of Rs. 1000/- for each year for three years  1950- 51, 1951-52 and ’1952-53. 347 On  behalf  of  the appellant it  was  contended  that  the, provisions cc the Transfer of Property Act did not apply and therefore  the  respondent could not hold  over  within  the meaning  of  section 116 of the  transfer of  Property  Act. The  State relied on the Government Grants Act.Section 2  of the  Government  Grants  Act enacts that  nothing  in  their Transfer  of Property Act shall apply to any grant or  other transfer of land or of any interest therein in favour of any person,  but  every  such,.  grant  and  transfer  shall  be construed  and take effect as if the said Act had  not  been passed. An example of a Government grant within the meaning of  than Government  Grants Act occurs in the decision  in  Jnanendra NathNanda v. JaduNath Banerji I.L.R. (1938) 1 Cal. 626.  Two leases   of   two  lots  were  granted  by   the   Sunderban Commissioner on behalf of the Secretary of State.  The lands comprised  in the lows were waste lands of  the  Government. The waste lands of the Sunderbans were not the, property  of any subject.  The Sundebans were a vast impenetrable forest. It was the property of the East India Company.  It later  on vested  in the Crown in those days by virtue of an  Imperial statue.   The history of the legislation showed that  grants of Sunderbans lands which, were vested in the Crown at  that time  were  Crown Grants within the. meaning  of  the  Crown Grants Act as it then stood. On the other hand, there is an illustration of What is not a Government grant within the meaning of the Government Grants Act.   The  decision  in Secretary of  State  for  India  in Council v. Lal Mohan Chaudhuri I.L.R. 63 Cal. 523  furnishes that  illustration.   The Government in  that  case  granted lease  in  respect of Khas Mahal lands.  The lease  of  Khas Mahal was held not to fall within the category of grants  as contemplated in the then Crown Grants Act. The  lease  in  the  present case was  for  the  purpose  of erecting  a  temporary rice mill and for no  other  purpose. The  mere  fact  that the State is the lessor  will  not  by itself make it a Government grant within the meaning of  the Government Grants Act.  There is no evidence in the  present case  in the character of the land or in the making  of  the lease of in  the content of the lease to support the plea on behalf of the State that, it was a grant within the  meaning of the Government Grants Act. The  High  Court  in  the present case  relied  on  a  Bench decision  of  that Court.  That is the case of  Lala  Kishun

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Chand v. Sheo Dutta I.L.R. 1958 All. 879.  The land in  that case  belonged  to  the  Government  and  was  nazul.    The management thereof vested in the notified area of the  Bindi Board.  The land, was taken on lease by the defendant for  a period  of 1-1/2 years in the first instance and  thereafter for  4-1/2  years.   After  the  expiry  of  the  lease  the defendant  was  permitted  by  the  Board  to  continue   in occupation  as tenant and the rent used to be realised  from him.   In the mean time, the plaintiff obtained a  lease  in regard  to  the land from the Commissioner.   The  plaintiff could not get possession.  The plaintiff filed a suit in the city   civil  court.  The learned single Judge of  the  High Court  affirmed  the decision of the courts below  that  the defendant  was a trespasser and the defendant’s right  as  a lessee  came to an end at the expiry of the lease  in  1909. The High Court on 348 appeal held that the lessee remained in possession after the termination  of  the lease and therefore there  was  holding over  within the meaning of section 116 of the  Transfer  of Property  Act.   The  contention  which  was  advanced  that section  2  of  the  Government  Grants  Act  rendered   the provisions of the Transfer of Property Act inapplicable  was not  accepted.  The High Court correctly held that when  the court is called upon to construe an instrument granting land by  the  Government it shall construe  irrespective  of  the provisions of the Transfer of Property Act.  The  provisions of  section  116  of  the Transfer  of  ’Property  Act  were correctly  held  by the High Court to be operative  in  that case. In  the present case the High Court correctly found  on  the facts  that  the respondent after the determination  of  the lease held over.  Even if the Government Grants Act  applied section 116 of the Transfer of Property Act was not rendered inapplicable.   The effect of section 2 of  the  ,Government Grants  Act  is that in the construction  of  an  instrument ’governed  by  the  Government Grants Act  the  court  shall construe  such ,grant irrespective of the provisions of  the Transfer  of  Property Act.  It does not mean that  all  the provisions of the Transfer of Property Act are inapplicable. To  illustrate, in the case of a grant under the  Government Grants  Act section 14 of the Transfer of Property Act  Will not  ,apply because section 14 which provides what is  known as  the rule against perpetuity will not apply by reason  of the  provisions  in the Government Grants  Act.   The  grant shall  be  construed to take effect as if  the  Transfer  of Property Act does not apply. Section  3  of  the  Government  Grants  Act  declares   the unfettered  discretion  of  the Government  to  impose  such conditions and limitations as it thinks fit, no matter  what the  general law of the land be.  The meaning of sections  2 and 3 of the Government Grants is that the scope of that Act is  not limited to affecting the provisions of the  Transfer of  Property  Act  only.   The  Government  has   unfettered discretion   to  impose  any  conditions,  limitations,   or restrictions  in its grants, and the right,  privileges  and obligations  of the grantee would be regulated according  to the  terms of the grant, notwithstanding any  provisions  of any statutory or common law. For  these  reasons the decree of the High  Court  that  the respondent  held over within the meaning of section  116  of the  Transfer  of  Property Act is upheld.   The  appeal  is dismissed with costs. G.C. Appeal dismissed.

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