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PETITIONER: THE STATE OF MADRAS AND ANOTHER

       Vs.

RESPONDENT: V. SRINIVASA AYYANGAR.

DATE OF JUDGMENT: 21/10/1955

BENCH: AIYYAR, T.L. VENKATARAMA BENCH: AIYYAR, T.L. VENKATARAMA BHAGWATI, NATWARLAL H. SINHA, BHUVNESHWAR P.

CITATION:  1956 AIR   94            1955 SCR  (2) 907

ACT: Madras Estates (Abolition and Conversion into Ryotwari) Act, (Madras  Act  XXVI  of  1948),  s.  1(3)(4),s.  3(b)--Madras Estates  Land Act I of 1908, s. 3(2)-Notification  under  s. 1(4)  of  Madras  Act  XXVI of  1948-Comprising  a  part  of village-Darmila  or  post-settlement  inam  in  respect   of portion of village-Whether the part vests in the State under s.  3(b)  of the Madras Act XXVI of 1948-Estate  within  the meaning  of s, 1(3) of Madras Act XXVI of 1948 read with  s. 3(2)  of Madras Act I of 1908-Whether includes part  of  the estate-Compensation  to Darmila Inamdar-Darmila minor  inam- Whether protected by s. 20 of the Act XXVI of 1948.

HEADNOTE: At the time of passing of the Madras Estates (Abolition  and Conversion  into Ryotwari) Act (Madras Act XXVI of 1948),  a 15/16th  portion  of village Karuppur  situated  within  the Zamindari of Ramanathapuram was hold by the inamdars under a pre-settlement  grant confirmed by the  British  Government, the estate being permanently settled in 1802.  The remaining one-sixteenth portion was held by the holders of darmila  or post-settlement inams made by the proprietor of the  estate. In exercise of the powers conferred by s. 1(4) of the Madras Act  XXVI of 1948 the State of Madras issued a  notification dated  22nd  August  1949 bringing the  Act  into  force  as regards  the Ramanathapuram estate from 7th September  1949, the   latter  Zamindari  including  one-sixteenth  part   of Haruppur  village.   The respondent-the holder of  the  one- sixteenth  inam-contended that under s. 1(3) of  the  Madras Act  XXVI  of 1948 the State of Madras bad power  to  notify only  what  would be estates as defined in s.  3(2)  of  the Madras  Estates  Land Act I of 1908 and  that  one-sixteenth part of the village of Karuppur included in the notification was  not  an  estate  as defined in  that  section  and  the notification was therefore ultra vires. Held  (repelling the contention) that when the darmila  inam does not relate to the entire village but only to a fraction of  it, it must be held to retain its character as  part  of the  estate in the hands of the inamdar and when the  estate is notified under s. 1(4) of the Madras Act XXVI of 1948 the inam will vest in the State under s. 3(b) of the Madras  Act

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XXVI  of  1948 and therefore one-sixteenth  portion  of  the village of Karuppur forming a darmila inam will vest in  the State. Under  the  provisions of the Madras Act XXVI  of  1948  the darmila minor inamdar is entitled to claim compensation  for the transfer of his portion of the estate to the Government. 115 908 Darmila minor inam is not protected by s. 20 of the Act. Brahmayya v.  Achiraju ([1922] I.L.R. 45 Mad. 716) and Nara- yanaraju v. Suryanarayudu ([1939] 66 I.A. 278), referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 219 of 1954. On  appeal from the Judgment and Order dated the 4th day  of April  1952 of the Madras High Court in Civil  Miscellaneous Petition No. 8302 of 1950. V.   K.  T. Chari, Advocate-General of Madras (R.  Ganapathy Iyer and P. G. Gokhale, with him) for the appellant. R.   Kesava  lyengar, (M.  S. K. Iyengar, with him) for  the respondent. 1955.  October 21.  The Judgment of the Court was  delivered by VENKATARAMA  AYYAR  J.-This  appeal  raises  a  question  of considerable  importance  as  to the rights  of  holders  of darmila  or post-settlement inams of portions of  a  village under  the  Madras Estates (Abolition  and  Conversion  into Ryotwari)  Act, 1948 (Madras Act XXVI of 1948),  hereinafter referred  to as the Act.  The subject-matter of this  appeal is  an  one-sixteenth  share  in  the  village  of  Karuppur situated  within  the ambit of the Zamindari  of  Ramanatha- puram.   The holders of this ancient Zamindari were,  during the  18th Century, the virtual rulers of that part of  South India,  and  were  known  as Sethupathis  or  the  Lords  of Rameswaram  and  the adjacent isles and seas.In  1757  Muthu Vijaya  Ragunatha, the then Rajah of Ramanathapuram, made  a grant of the whole of the village of Karuppur to a number of persons  for  various  charitable purposes.   In  1802,  the estate  was permanently settled, and an istimrari sanad  was issued in favour of the Rajah.  Before that date, the donees under the grant of 1757 representing an one-sixteenth  share had abandoned the village, and in consequence, the inam  had eo extanti been resumed.  At the permanent settlement,  this one-sixteenth part was included in the assets of the 909 Zamindari,  and taken into account in fixing  the  peishkush thereon.   Subsequent to the permanent settlement,  on  some date which does not appear on the record, Rani Mangaleswari, the then holder of the Zamindari, made a fresh grant of  the one-sixteenth  part which had been resumed, to the  inamdars who held the remaining 15/16th portion of the village  under the  grant  of 1757.  On 31-12-1863  the  Inam  Commissioner confirmed the grant of 1757, and issued an inam  certificate in  respect  of  the 15/16th portion of  the  village.   The position, therefore, when the Act was passed was that  while a  15/16th  portion was held by the inamdars  under  a  pre- settlement  grant confirmed by the British  Government,  the remaining   one-sixteenth  portion  was  held  under   post- settlement grant made by the proprietor of the estate. The Act came into force on 19-4-1949.  Under section 1(4) of the Act, certain sections thereof were to come into force at once  and the other sections on such date as the  Government might  by notification appoint in respect of any  zamindari,

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under-tenure, or inam estate.      In exercise of the powers conferred by this section,    the    appellant   issued    a notification on 22-8-1949     bringing the Act into force as regards the Ramanathapuram estate from 7-9-1949.  Among  the villages  mentioned  as  comprised  in  the  Zamindari   was "Karuppur  (part)"  described  as an  under-tenure.   It  is common ground that the part referred to in this notification is the one-sixteenth part, which forms the subject-matter of this appeal. The respondent who represents the holders of this inam filed the  application  out of which the  present  appeal  arises, under  article  226  of  the  Constitution  for  a  writ  of certiorari  quashing  the notification  dated  22-8-1949  as ultra vires.  The ground of attack was that under section  1 (3)  of  the Act, the State had power to  notify  only  what would  be estates as defined in section 3(2) of  the  Madras Estates  Land Act 1908 (Madras Act I of 1908), and that  the part of the village of Karuppur included in the notification was not an estate as defined in that section.  Section  3(2) of Act I of 1908, so far as is material, is as follows; 910 "Estate" means- (a)  any permanently settled estate or  temporarily  settled zamindari; (b)  any  portion  of  such permanently  settled  estate  or temporarily settled zamindari which is separately registered in the office of the Collector; (c)  any unsettled palaiyam or jagir; (d)  any  inam  village of which the grant  has  been  made, confirmed   or   recognised  by  the   British   Government, notwithstanding  that subsequent to the grant,  the  village has been partitioned among the grantees or the successors in title of the grantee or grantees. *                 *              *                 * (e)  any  portion consisting of one or more villages of  any of the estates specified above in clauses. (a), (b) and  (c) which is held on a permanent under-tenure". The  contention of the respondent was that as the  grant  in question  related only to a fraction of a village, it  could not  be notified as an under-tenure, as under section 3  (2) (e) an under-tenure would be an estate only if it related to a  whole village or villages.  The appellant  conceded  that the  inam in question was not an under-tenure as defined  in section  3 (2) (e), as it comprised only part of a  village, but  contended  that  even though it was not  in  itself  an estate,  it  was,  nevertheless, part of  the  Zamindari  of Ramanathapuram, being a post-settlement grant of portion  of a  village comprised therein, and that when that estate  was notified, the entirety of it including the inam in  question must  vest in the Government under section (b) of  the  Act. The respondent demurred to this contention.  In addition, he raised  the further contention that even if  post-settlement minor inams were within the operation of the Act, they would be  protected  by  section  20 of the  Act,  which  runs  as follows: "20(1)  In cases not governed by sections IS and 19,  where, before the notified date, a landholder has created any right in any land (whether by way of lease or otherwise) including rights in any forest,   911 mines  or  minerals,  quarries, fisheries  or  ferries,  the transaction shall be deemed to be valid; and all rights  and obligations  arising  thereunder, on or after  the  notified date, shall be enforceable by or against the Government:

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Provided that the transaction was not void or illegal  under any law in force at the time: Provided further that any such right created on or after the 1st  day of July 1945 shall not be enforceable  against  the Government, unless it was created for a period not exceeding one year: Provided also that where such right was created for a period exceeding one year, unless it relates to the private land of the landholder within the meaning of section 3, clause (10), of  the Estates Land Act, the Government may, if,  in  their opinion,  it is in the public interest to do so,  by  notice given  to  the person concerned, terminate  the  right  with effect from such date as may be specified in the notice, not being earlier than three months from the date thereof". The  argument of the respondent was that  a  post-settlement minor inam would be a right in land created by a  landholder falling  within  section 20, that the  notification  of  the estate  under section 1(3) would not ipso facto  divest  the inamdar  of  his title to the lands, and that  he  would  be entitled  to  hold  them subject to any  action  that  might properly be taken by the State under section 20. The learned Judges of the Madras High Court agreed with  the appellant  that post-settlement minor inams fell within  the operation  of the Act; but they accepted the  contention  of the respondent that they were governed by section 20 of  the Act.   As  it  was  common ground that  the  State  had  not proceeded   under   that  section,  they   held   that   the notification  was ultra vires, and accordingly  quashed  the same in so far as it related to the inam forming part of Ka- ruppur village.  The appellant applied to the High Court for leave  to  appeal to this Court against this  decision,  and though  the  value of the subject-matter was far  below  the appealable  limit, the learned Judges granted a  certificate under article 133(1)(c) on the 912 ground  that the question involved was one of  great  public importance.  That is how the appeal comes before us. Two  questions  arise for decision in this appeal:  (1)  Are post-settlement  minor inams within the operation of  Madras Act  XXVI  of 1948? (2) If they are, are  they  governed  by section 20 of the Act? On  the first question, the appellant does not contend  that the  inam in question is in itself an estate as  defined  in section  3(2) of the Madras Estates Land Act and  liable  as such  to be notified under the Act.  His contention is  that when the Zamindari of Ramanathapuram was notified-and  there is  no  dispute that it was validly notified, as  it  was  a permanently  settled estate falling within section 3(2)  (a) of  the Madras Estates Land Act-minor post-settlement  inams of  lands  within the Zamindari would vest in the  State  as part  of  the  Zamindari  under section  3(b)  of  the  Act. Section 3(b) is, omitting what is not material, as follows: "With  effect  on  and from the notified date  and  save  as otherwise expressly provided in this  Act................... the entire estate. shall stand transferred to the Government and vest in them, free of all encumbrances". The  point  for decision is  whether  post-settlement  minor inams  are  parts  of  the estate out  of  which  they  were granted.  If they are, then they will vest in the Government under  section  3(b).   If they are not,  they  will  remain unaffected by the notification of the parent estate. The status of holders of these inams had been the subject of considerable  divergence of judicial opinion in  the  Madras High  Court.  To appreciate this, reference must be made  to the following definition of ’landholder’ in section 3(5)  of

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the Madras Estates Land Act: "Landholder" means a person owning an estate or part thereof and  includes every person entitled to collect the rents  of the  whole  or any portion of the estate by  virtue  of  any transfer  from the owner or his predecessor-in-title  or  of any order of a competent 913 Court or of any provision of law". Leaving  out the inclusive portion of the definition as  not relevant  to  the  present question, it will  be  seen  that owners of parts of an estate would also be landholders.  The question  then  arose  for decision  whether  darmila  minor inamdars were landholders as defined in section 3 (5) of the Estates Land Act.  If they were., the tenants would  acquire occupancy  rights under section 6, and  proceedings  against them  could be taken only in the revenue courts and  not  in the civil courts, and in general, the rights and obligations of  the  inamdar and the tenants would be  governed  by  the provisions  of  the Madras Estates Land Act.  One  view  was that  as  the inamdars had to pay quit rent or jodi  to  the grantors,  their  status  could not be that  of  owners  and therefore they could not be said to own parts of an  estate. The  contrary view was that the inamdars were  in  substance owners of the lands granted to them, and that the  liability to  make a fixed annual payment did not detract  from  their character  as owners, and they would be  landholders  owning parts  of an estate.  In view of this conflict  of  opinion, the question was referred to the decision of a Full Bench in Brahmayya  v.  Achiraju(1), which held by  a  majority  that minor  darmila  inamdars  were  landholders  as  defined  in section  3(5)  of the Estates Land Act.  This  decision  was based  both  on  the ground that the inamdars  were  in  the position of owners of parts of an estate and that they  were also persons entitled to collect rent, within the  inclusive portion of the definition. In  Narayanaraju v. Suryanarayudu(2), the  question  whether the  grantee  of a portion of a village  subsequent  to  the settlement was a landholder as defined in section 3(5)  came up  for decision before the Privy Council.  After  reviewing the authorities and the conflicting views expressed therein, the Board agreed with the opinion expressed by the  majority of the learned Judges in Brahmayya v. Achiraju (1), and held that the grantee of a post-settlement minor inam would be  a landholder on both the grounds mentioned in their (1) [1922] I.L.R. 45 Mad. 716. (2) [1939] 66 I.A. 278. 914 judgments.  They discarded "the doctrine that so long as the zamindar  reserves any interest, however insignificant,  the permanent  grantee  from  him  cannot  be  the  owner",  and observed  that the words "part of the estate"  occurring  in the definition must be given their prima facie meaning.  The Board felt greater difficulty in accepting the view that the inamdar was a landholder entitled to collect rent within the inclusive  portion  of the definition.  But  they  expressed themselves  satisfied on either ground that "the Full  Bench decision  of  1922  represents  a  careful  and   reasonable solution  of  a stubborn ambiguity in the Act, and  that  it ought  not  now to be overruled having regard  to  the  time which  has  elapsed and to the character  of  the  interests affected  thereby".  Thus, it was settled law in  Madras  at the time when Act XXVI of 1948 was passed that minor darmila inamdars  were  owners of parts of  an  estate.   Construing section 3(b) in the light of the law as then accepted,  when a  notified estate vests in its entirety in the State  under

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that provision, a minor darmila inam which forms part of  it must also vest in it. Sri  R. Kesava lyengar, learned counsel for the  respondent, argued that decisions on section 3(5) of ’the Madras Estates Land Act on the meaning of the word ’landholder’ as  defined therein,  could not be usefully referred to  for  construing the  true scope of section 3(b) of Act XXVI of 1948, as  the definition in the Madras Estates Land Act was only for  pur- poses  of settling the rights of landlords and tenants,  and would  be  irrelevant  for determining  the  rights  of  the inamdar  as  against  the State.  But  the  ground  of  ,the decision  in  Brahmayya v. Achiraju(1) and  Narayanaraju  v. Suryanarayudu(2)  is that the grantee of the inam is in  the position  of an owner of the part of the estate  granted  to him,  and that would be relevant when the controversy is  as to  his  true  status, whether the dispute  is  between  the landlord  and  the  tenant or between the  inamdar  and  the State.  If the inamdar is owner in relation to his  tenants, it  would  be  illogical to hold that he  is  not  that,  in relation to (1) [1922] I.L.R. 45 Mad. 716.   (2) [1939] 66 I.A. 278. 915 the  State.  The question is, in our opinion,  concluded  by section 2(8) -of Act XXVI of 1948 which defines a landholder as  including  a darmila inamdar, and that  is  a  statutory recognition  of  the  doctrine laid  down  in  Brahmayya  v. Achiraju(1)   and  Narayanaraju  v.  Suryanarayudu(2)   that darmila  inamdars  are owners ,of parts of an  estate.   The result then is that when the darmila inam does not relate to the entire village but only to a fraction of it, it must  be held  to retain its character as part of the estate  in  the hands of the inamdar, and when the estate is notified  under section  1 (4) of the Act, the inam will vest in  the  State under -section 3(b). It  is next argued for the,, respondent that the Act  ,makes no  provision for award - of compensation to  minor  darmila inamdars  and  that as a statute is not to be  construed  as taking  away  the proper" of any -person unless there  is  a provision  for  payment of  compensation  therefor,,  these. inams should be -held to be outside the operation of the Act Reference  was made in this connection to section 45 of  the Act  under which the compensation payable in respect  of  an impartible  estate  and  Ramanathapuram  is  one  is  to  be apportioned after payment of debts among the members of  the family.   It is said that under this section the  respondent would  have  no right to share in it.   This  contention  is clearly erroneous.  The material provisions relating to  the award  of  compensation  ,are sections 25, 27,  37  and  44. Under  section 25, the compensation is to be determined  for the  estate  as a whole and not separately for each  of  the interests  therein.   Section  27 lays down  bow  the  basic income  in  the case of zamindaris is to  be  fixed.   Under section  27(i),  it has to include one-third  of  the  gross annual ryotwari demand in respect of all lands in the estate and  under  section 27(iv) "one-third of  the  average  -net annual miscellaneous revenue derived from all -other sources in the estate specified in section 3 (b) ". Thus, the income from  the lands comprised in the minor inam which is a  part of  the  estate  is  included in the  total  income  of  the zamindari.  Under section (1) [1922] I.L.R. 45 Mad. 716. (2) (1939] 66 I.A. 278. 116 916 37,  the  compensation payable in respect of  an  estate  is

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calculated  in  terms  of  the basic  income  on  the  scale prescribed therein.  Section 44 enacts that the Tribunal  is to   "apportion  this  compensation  among   the   principal landholder’ and any other persons whose rights or  interests in  the  estate stand transferred to  the  Government  under section   3(b)".   There  cannot  be  any  doubt  on   these provisions that the darmila minor inamdar is a person who is entitled  to  claim  compensation for the  transfer  of  his portion of the estate to the Government.  Then comes section 45  on  which  the respondent bases  his  contention.   That applies  only  to  the  distribution  of  the   compensation determined  under  section 44 as payable  to  the  principal landholder,  when he is the holder of an impartible  estate. It leaves untouched the rights of minor darmila inamdars  to claim compensation under section 44.  The contention of  the respondent  that the Act provides no compensation  to  them, and  that they should therefore be held to fall outside  the Act must accordingly be rejected. (2)That brings us on to the second question whether a  post- settlement  minor  inam  is a right in  land  created  by  a landholder  within the intendment of section 20 of the  Act. At  the very outset, it seems somewhat inconsistent to  hold that  a  darmila minor inam is part of an estate,  and  also that  it  is governed by section 20.  If it is  part  of  an estate,  it must automatically vest in the Government  under section 3(b).  But if it falls within section 20, the  title to it will continue to stand in the inamdar with a right  in the  Government  to  take action under  the  third  proviso, subject to the conditions laid down therein.  It was  argued for the respondent that section 3 operates on its own  terms only "save as otherwise expressly provided herein", and that section  20 was such a provision.  It is somewhat  difficult to  follow this argument, because if section 20  applied  to darmila  minor inams, then they could never fall within  the operation  of  section 3(b).  And how is this result  to  be reconciled with the conclusion that they are parts of  917 the  estate,  and  that  the inamdar  is  a  landholder  for purposes of the Act? But  it is argued for the respondent that the words  "rights in  land created by landlord" are of the widest  import  and would  take in darmila minor inams.  The point for  decision is  whether this contention is correct.  We start with  this that a darinila minor inamdar is a landholder as defined  in section  2,(8) of the Act, and he is that, by reason of  his being the owner of a part of the estate.  Can such a  person be held to be one who has obtained a right in the land  from the  landholder  within section 20?  The Act makes  a  clear distinction  between estates held by landholders and  rights and  interests  held by other persons in  or  over  estates. Section 3(b) enacts that when there is a notification  under section  1(4), the entire estate shall stand transferred  to the  Government and vest in it.  We have held that the  part of  the estate belonging to a darmila inamdar would vest  in the Government.  Section 3(c) provides that on  notification all rights in or over the estate shall cease and  terminate. Section 3(b) and section 3(c) deal with two distinct matters which  may  respectively  be described  in  broad  terms  as ownership  of  the estate and rights in or over  estate  not amounting  to  ownership,  and  these  two  categories   are mutually exclusive.  Now, turning to section 20, it protects rights  in land by way of lease or otherwise created by  the landholder  before the notified date.  In this context,  and having  regard  to  the distinction  between  estates  under section 3(b) and rights over estates under section 3(c), the

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rights mentioned in section 20 can only refer to the  rights dealt  with in section 3(c), and not to ownership  which  is within  section 3(b).  When, therefore, the transaction  for which  protection is claimed under section 20 is  one  which vests  ownership of the estate or a portion thereof  in  the transferee,  it  will fall outside the  section.   In  other words,  section  20 has no application  to  transactions  by which  a person becomes a landholder by reason of  ownership of  even a part of the estate being transferred to him,  and that being the character of a, darmila minor inam it is  not pro- 918 tected by section 20. There  are  also indications in the language of  section  20 pointing  to  the same conclusion.  Section  20(2)  provides that  the  persons  whose rights are  terminated  under  the proviso  to section 20(1) shall be entitled to  compensation having regard to the value of the right which is  terminated and the unexpired portion of the period for which the  right is  created.   These words are more appropriate  to  connote rights which are to be exercised for specified periods, such as  lease  or  contract for the  exploitation  of  mines  or forests for a term than "ownership of the estate". There  is  one other consideration, which lends  support  to this  conclusion.   The object of the Act was  to  establish direct relationship between the State and the tillers of the soil,  and to abolish all intermediate tenures.  In  Madras, the  rights and obligations of intermediate  tenure  holders were  regulated  by the Madras Estates Land Act,  and  under that  Act  the intermediaries consisted not  merely  of  the holders  of the estates as defined in section 3(2)  of  that Act  but  also  holders of post-settlement  minor  inams  as settled  by  decisions  of the highest  authority.   If  the purpose  of  the Act is to be fully achieved,  it  would  be necessary  to  abolish  not merely  estates  as  defined  in section 3(2) of the Madras Estates Land Act but also darmila minor inams.  But if the contention of the respondent is  to be  accepted,  it is only the estates mentioned  in  section 3(2) that will, on notification, vest in the Government  and not the minor inams.  These will continue to be held by  the inamdars  under  section  20 until they  are  terminated  in accordance  with the proviso therein, and survive as  islets in  the  landscape even after the parent estates  have  dis- appeared  from  the  scene.  The legislation  must  to  this extent  be held to have failed to achieve its purpose.   And this  is  not all.  If the contention of the  respondent  is correct,  then  the  minor  inamdars  will  not  merely   be unaffected  by the Act but will actually be better  off  for it.  Under section 3(a) of the Act, the Madras Estates  Land Act stands repealed on and from the notified date, and as it is by virtue of this 919 Act  that the tenants became entitled to  occupancy  rights, the  inamdars  would,  on notification,  be  free  to  eject tenants,  and settle their own terms with them.   We  cannot accede  to  a  contention which results not  merely  in  the frustration  of the object of the Act but  further  produces consequences,  the  reverse of what were intended.   On  the other hand, the contention of the appellant that minor inams fall  outside section 20 and would vest straightaway in  the State   under   section  3(b)  will  have  the   effect   of extinguishing  the rights of the inamdars, and enabling  the State to issue ryotwari pattas to the tenants in occupation. We prefer to accept this contention, as it fully effectuates the  intention of the legislature.  In the result,  we  must

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hold  that  the  one-sixteenth portion  of  the  village  of Karuppur forming a darmila inam will vest in the  Government under  section 3(b) of the Act, and that the only  right  of the inamdars is to share in the compensation under the terms of the Act.  The petition of the respondent in so far as  it relates to this inam must be dismissed. This  appeal is accordingly allowed, and in accordance  with the  terms of the certificate granting leave, the  appellant will  pay  the costs of the respondent in this  Court.   The parties will bear their own costs in the court below.